SC 13D/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. 5)*

Norsat International Inc.

(Name of Issuer)

Common Stock, no par value

(Title of Class of Securities)

656512209

(CUSIP Number)

Privet Fund LP

Attn: Ryan Levenson

79 West Paces Ferry Road, Suite 200B

Atlanta, GA 30305

With a copy to:

Rick Miller

Bryan Cave LLP

1201 W. Peachtree St., 14th Floor

Atlanta, GA 30309

Tel: (404) 572-6600

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

May 13, 2017

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), (f) or (g), check the following box ¨.

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See § 240.13d-7 for other parties to whom copies are to be sent.

*             The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

SCHEDULE 13D

CUSIP No. 656512209 Page 2 of 14 Pages    

1	NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Privet Fund LP
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP	(a) þ (b) ¨
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)           ¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION     Delaware

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:	7	SOLE VOTING POWER 0
	8	SHARED VOTING POWER 1,015,320
	9	SOLE DISPOSITIVE POWER 0
	10	SHARED DISPOSITIVE POWER 1,015,320

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,015,320
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES þ
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 17.4%
14	TYPE OF REPORTING PERSON PN

SCHEDULE 13D

CUSIP No. 656512209 Page 3 of 14 Pages    

1	NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON  Privet Fund Management LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP	(a) þ (b) ¨
3	SEC USE ONLY
4	SOURCE OF FUNDS WC, AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)           ¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION     Delaware

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:	7	SOLE VOTING POWER 0
	8	SHARED VOTING POWER 1,027,170
	9	SOLE DISPOSITIVE POWER 0
	10	SHARED DISPOSITIVE POWER 1,027,170

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,027,170
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES ¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 17.6%
14	TYPE OF REPORTING PERSON OO

SCHEDULE 13D

CUSIP No. 656512209 Page 4 of 14 Pages    

1	NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON  Ryan Levenson
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP	(a) þ (b) ¨
3	SEC USE ONLY
4	SOURCE OF FUNDS AF
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)           ¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION     United States

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:	7	SOLE VOTING POWER 0
	8	SHARED VOTING POWER 1,027,170
	9	SOLE DISPOSITIVE POWER 0
	10	SHARED DISPOSITIVE POWER 1,027,170

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,027,170
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES ¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 17.6%
14	TYPE OF REPORTING PERSON IN

SCHEDULE 13D

CUSIP No. 656512209 Page 5 of 14 Pages    

1	NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON  Privet Capital Investments I, LP
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP	(a) þ (b) ¨
3	SEC USE ONLY
4	SOURCE OF FUNDS OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)           ¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION     Delaware

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:	7	SOLE VOTING POWER 0
	8	SHARED VOTING POWER 0
	9	SOLE DISPOSITIVE POWER 0
	10	SHARED DISPOSITIVE POWER 0

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 0
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES þ
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0%
14	TYPE OF REPORTING PERSON PN

SCHEDULE 13D

CUSIP No. 656512209 Page 6 of 14 Pages    

1	NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON  IRIS Holdings, LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP	(a) þ (b) ¨
3	SEC USE ONLY
4	SOURCE OF FUNDS OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)           ¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION     Delaware

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:	7	SOLE VOTING POWER 0
	8	SHARED VOTING POWER 0
	9	SOLE DISPOSITIVE POWER 0
	10	SHARED DISPOSITIVE POWER 0

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 0
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES þ
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0%
14	TYPE OF REPORTING PERSON PN

SCHEDULE 13D

CUSIP No. 656512209 Page 7 of 14 Pages    

1	NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON  IRIS Holdings, Inc.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP	(a) þ (b) ¨
3	SEC USE ONLY
4	SOURCE OF FUNDS OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)           ¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION     Delaware

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:	7	SOLE VOTING POWER 0
	8	SHARED VOTING POWER 0
	9	SOLE DISPOSITIVE POWER 0
	10	SHARED DISPOSITIVE POWER 0

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 0
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES þ
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0%
14	TYPE OF REPORTING PERSON CO

SCHEDULE 13D

CUSIP No. 656512209 Page 8 of 14 Pages    

1	NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON  IRIS Canada Acquisition Corp.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP	(a) þ (b) ¨
3	SEC USE ONLY
4	SOURCE OF FUNDS OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)           ¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION     British Columbia

NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:	7	SOLE VOTING POWER 0
	8	SHARED VOTING POWER 0
	9	SOLE DISPOSITIVE POWER 0
	10	SHARED DISPOSITIVE POWER 0

11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 0
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES þ
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0%
14	TYPE OF REPORTING PERSON CO

SCHEDULE 13D

CUSIP No. 656512209 Page 9 of 14 Pages    

Reference is hereby made to the statement on Schedule 13D filed with the Securities and Exchange Commission on February 11, 2015, as amended on March 31, 2015, September 19, 2016, March 17, 2017, and April 17, 2017 (the “Schedule 13D”), with respect to the common stock, no par value (the “Common Stock”), of Norsat International Inc., a company incorporated under the laws of British Columbia (the “Corporation”). Capitalized terms not otherwise defined herein are used as defined in the Schedule 13D. Unless otherwise indicated, all references to dollars or “$” refer to U.S. dollars.

Item 2. Identity and Background.

Item 2 is hereby amended and restated in its entirety to read as follows:

(a) This statement is being filed by (i) Privet Fund LP, a Delaware limited partnership (“Privet Fund”), (ii) Privet Fund Management LLC, a Delaware limited liability company and the general partner and investment manager of Privet Fund (“Privet Fund Management”), (iii) Ryan Levenson, the sole managing member of Privet Fund Management (“Mr. Levenson”), (iv) Privet Capital Investments I, LP, a Delaware limited partnership (“Privet Capital”), (v) IRIS Holdings, LLC, a Delaware limited liability company, all the equity of which is owned by Privet Fund and Privet Capital (“IRIS Holdings”), (vi) IRIS Holdings, Inc., a Delaware corporation and wholly owned subsidiary of IRIS Holdings (“Parent”), and (vii) IRIS Canada Acquisition Corp., a company organized under the laws of the Province of British Columbia and wholly owned subsidiary of Parent (“Purchaser”). Each of the foregoing parties is referred to herein as a “Reporting Person” and together as the “Reporting Persons”.

(b) The address of the principal offices of each of the Reporting Persons is 79 West Paces Ferry Road, Suite 200B, Atlanta, Georgia 30305.

(c) The principal business of Privet Fund Management is providing administrative and management services to Privet Fund. The principal business of Privet Fund is investing private funds in securities for its own account. The principal occupation or employment of Mr. Levenson is manager of Privet Fund Management. Purchaser is an investment vehicle formed for the purpose of acquiring the Corporation pursuant to the terms of the Arrangement Agreement (as defined below). Parent is a company formed for the purpose of holding equity in Purchaser. IRIS Holdings is a company formed for the purpose of holding equity in Parent. Privet Capital is a company formed for the purpose of holding equity in IRIS Holdings.

(d) During the last 5 years, none of the Reporting Persons have been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

(e) During the last 5 years, none of the Reporting Persons have been party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which such person or entity was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

(f) Mr. Levenson is a citizen of the United States.

SCHEDULE 13D

CUSIP No. 656512209 Page 10 of 14 Pages    

Item 3. Source and Amount of Funds or Other Consideration.

Item 3 is hereby amended to add the following:

This Amendment No. 5 to the Schedule 13D relates to the letter dated May 17, 2017 from Privet Fund Management (defined below) to the Board of Directors of the Corporation (the “Proposal”) proposing to acquire 100% of the fully diluted Common Stock of the Corporation not already owned by the Reporting Persons (defined below) (the “Transaction”) at a price of US$11.00 per share in cash pursuant to a proposed form of arrangement agreement by and among IRIS Holdings, Inc., IRIS Canada Acquisition Corp., the Corporation and, solely with respect to Section 5.3(2) thereof, Privet Fund Management (the “Arrangement Agreement”). The foregoing descriptions of the Proposal and the exhibits to the Proposal, including the Arrangement Agreement, do not purport to be complete and are qualified in their entirety by reference to the terms and conditions of the Proposal, a copy of which is filed as Exhibit 99.1, and the exhibits to the Proposal, copies of which are filed as Exhibit 99.2, Exhibit 99.3, Exhibit 99.4, Exhibit 99.5 and Exhibit 99.6, respectively, to this Schedule 13D and are incorporated by reference in their entirety into this Item 3. The Proposal and the exhibits to the Proposal described in and filed with this Schedule 13D reflect the negotiations of Privet Fund Management and the Board of Directors of the Corporation from May 13, 2017 through the date hereof.

The Debt Commitment Letters

Pursuant to a senior debt loan commitment letter and a subordinated debt loan commitment letter, in each case dated as of May 12, 2017 (together, the “Debt Commitment Letters”), respectively provided by Bank of Montreal (the “Senior Lender”) and Bank of Montreal d.b.a. BMO Capital Partners (the “Subordinated Lender,” and together with the Senior Lender, the “Lenders”) to Purchaser in connection with the consummation of the Transaction, the Lenders have committed, subject to certain terms and conditions, to provide aggregate acquisition financing of $30,871,000 (the “Transaction Financing”). The Transaction Financing consists of the following: (i) a senior revolving credit facility of up to $4,000,000 outstanding at any time, and (ii) a senior term loan facility of up to $18,968,000, each provided by the Senior Lender, and (iii) a secured subordinated term loan in the amount of $7,903,000 provided by the Subordinated Lender. The funding of the Transaction Financing is subject to the satisfaction or waiver of conditions precedent that generally replicate the conditions precedent set forth in the Arrangement Agreement as well as pro forma compliance with certain financial covenants by the Corporation. The foregoing description of the Debt Commitment Letters does not purport to be complete and is qualified in its entirety by reference to the terms and conditions of the Debt Commitment Letters, redacted copies of which are filed as Exhibit 99.4 and Exhibit 99.5 to this Schedule 13D and are incorporated by reference in their entirety into this Item 3.

The Equity Commitment Letter

Pursuant to a commitment letter (the “Equity Commitment Letter”) provided by Privet Fund and Privet Capital to IRIS Holdings, Privet Fund and Privet Capital have committed, subject to certain terms and conditions set forth in the Equity Commitment Letter, to purchase equity interests in IRIS Holdings for an aggregate amount not to exceed $18,620,000, which proceeds would be further invested in Parent in connection with the Transaction. Privet Fund may meet this funding obligation, in its discretion, directly or indirectly, through its affiliates and/or with other accredited investors selected by Privet Fund. The foregoing description of the Equity Commitment Letter does not purport to be complete and is qualified in its entirety by reference to the terms and conditions of the Equity Commitment Letter, a copy of which is filed as Exhibit 99.2 to this Schedule 13D and is incorporated by reference in its entirety into this Item 3.

SCHEDULE 13D

CUSIP No. 656512209 Page 11 of 14 Pages    

The Sponsor Guarantee

To induce the Corporation to enter into the Arrangement Agreement, Privet Fund has agreed to unconditionally guarantee to the Company (the “Sponsor Guarantee”) Parent’s obligations under Section 8.3(1) of the Arrangement Agreement to pay the Parent Termination Payment (as defined in the Arrangement Agreement). The foregoing description of the Sponsor Guarantee does not purport to be complete and is qualified in its entirety by reference to the terms and conditions of the Sponsor Guarantee, a copy of which is filed as Exhibit 99.3 to this Schedule 13D and is incorporated by reference in its entirety into this Item 3.

Item 4.   Purpose of Transaction.

Item 4 is hereby amended to add the following:

On May 13, 2017, Privet Fund Management informed the Board of Directors of the Corporation of a proposal by Privet Fund Management to acquire 100% of the fully diluted Common Stock of the Corporation not already owned by the Reporting Persons at a price of $11.00 per share in cash. On May 15, 2017, Privet Fund Management issued a press release announcing and describing the terms of the May 13, 2017 proposal, a copy of which is filed as Exhibit 99.8 to this Schedule 13D and is incorporated by reference in its entirety into this Item 4.

On May 17, 2017, Privet Fund Management sent the Proposal to the Board of Directors of the Corporation proposing to acquire 100% of the fully diluted Common Stock of the Corporation not already owned by the Reporting Persons at a price of $11.00 per share in cash pursuant to the proposed form of Arrangement Agreement.

Parent and Purchaser are prepared to execute a definitive Arrangement Agreement, including terms and conditions substantially similar to, and in some cases more favorable to shareholders of the Corporation than, those in the March 24, 2017 Arrangement Agreement with Hytera Communications Co., Ltd. (the “Existing Arrangement Agreement”), should the Board of Directors of the Corporation determine that Privet’s Proposal constitutes a “Superior Proposal” as defined in the Existing Arrangement Agreement.

The information set forth or incorporated by reference in Item 3 of this Schedule 13D, which describes the Equity Commitment Letter, Sponsor Guarantee and Debt Commitment Letters, copies of which are filed as Exhibit 99.2, Exhibit 99.3, Exhibit 99.4, and Exhibit 99.5, respectively, to this Schedule 13D, is incorporated by reference in its entirety into this Item 4.

Item 5   Interest in Securities of the Issuer.

Item 5(a) is hereby amended and restated in its entirety to read as follows:

(a) As of the date of this filing, the Reporting Persons beneficially owned the Shares, or approximately 17.6% of the outstanding Common Stock of the Corporation (calculated based on information included in the Form 6-K filed by the Corporation on May 3, 2017, which reported that 5,848,808 shares of Common Stock were outstanding as of March 31, 2017).

Item 6.  Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.

Item 6 is hereby amended and restated in its entirety to read as follows:

The information set forth or incorporated by reference in Item 4 of this Schedule 13D is incorporated by reference in its entirety into this Item 6.

SCHEDULE 13D

CUSIP No. 656512209 Page 12 of 14 Pages    

Other than as set forth in Item 4 above and the Amended and Restated Joint Filing Agreement dated May 15, 2017 by and among the Reporting Persons (“Joint Filing Agreement”), which is filed as Exhibit 99.7 hereto, none of the Reporting Persons nor, to the best of their knowledge, any of the other persons named in response to Item 2, if any, has any contract, arrangement, understanding or relationship (legal or otherwise) with any person with respect to any securities of the Corporation.

Item 7. Materials to be Filed as Exhibits.

Item 7 is hereby amended to add the following:

Exhibit 99.1        Proposal Letter from Privet Management LLC to the Board of Directors of the Corporation dated May 17, 2017

Exhibit 99.2        Equity Commitment Letter dated May 17, 2017

Exhibit 99.3        Privet Fund LP Sponsor Guarantee to Norsat International Inc. dated May 17, 2017

Exhibit 99.4        Senior Debt Loan Commitment Letter from Bank of Montreal to IRIS Canada Acquisition Corp. dated May 12, 2017 (Confidential information has been omitted and filed separately with the Securities and Exchange Commission)

Exhibit 99.5        Subordinated Debt Loan Commitment Letter from Bank of Montreal d.b.a. BMO Capital Partners to IRIS Canada Acquisition Corp. dated May 12, 2017 (Confidential information has been omitted and filed separately with the Securities and Exchange Commission)

Exhibit 99.6        Proposed Arrangement Agreement by and among IRIS Holdings, Inc., IRIS Canada Acquisition Corp., Norsat International Inc. and, solely with respect to Section 5.3(2) thereof, Privet Fund Management LLC (marked to reflect changes from the Arrangement Agreement dated March 24, 2017 by and among Hytera Communications Co., Ltd., Hytera Project Corp. and Norsat International Inc. as filed with the System for Electronic Document Analysis and Retrieval for the Canadian Securities Administrators)

Exhibit 99.7        Amended and Restated Joint Filing Agreement dated May 15, 2017

Exhibit 99.8        Press Release dated May 15, 2017

SCHEDULE 13D

CUSIP No. 656512209 Page 13 of 14 Pages    

Signature

After reasonable inquiry and to the best of my knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

Date:  May 17, 2017	PRIVET FUND LP
	By: Privet Fund Management LLC,
	its General Partner
	By:	/s/ Ryan Levenson
	Name: Ryan Levenson
	Title: Managing Member
	PRIVET FUND MANAGEMENT LLC
	By:	/s/ Ryan Levenson
	Name: Ryan Levenson
	Title: Managing Member
	/s/ Ryan Levenson
	Ryan Levenson

IRIS Holdings, LLC
By: Privet Fund Management LLC
its Manager
By:	/s/ Ryan Levenson
Name: Ryan Levenson
Title: Managing Member

IRIS Holdings, Inc.
By:	/s/ Ryan Levenson
Name: Ryan Levenson
Title: President

SCHEDULE 13D

CUSIP No. 656512209 Page 14 of 14 Pages    

IRIS Canada Acquisition Corp.
By:	/s/ Ryan Levenson
Name: Ryan Levenson
Title: Director
PRIVET CAPITAL INVESTMENTS I, LP
By: Privet Fund Management LLC,
its General Partner
By:	/s/ Ryan Levenson
Name: Ryan Levenson
Title: Managing Member

EX-99.1

Exhibit 99.1

May 17, 2017

CONFIDENTIAL

VIA EMAIL AND FEDEX

Members of the Board of Directors

Norsat International Inc.

Attention: Dr. Amiee Chan

Director, President and Chief Executive Officer

110-4020 Viking Way

Richmond, British Columbia

V6V 2L4 Canada

Dear Amiee and Members of the Board of Directors,

Privet Fund LP, acting through Privet Fund Management LLC (collectively, “Privet”), is currently the largest shareholder of Norsat International Inc. (“Norsat” or the “Company”), owning approximately 17.6% of the total outstanding shares of the Company. We are pleased to present this proposal (the “Proposal”) to acquire Norsat for US$11.00 per share in cash. We specifically highlight to the Board that our price is higher than the price in the Existing Arrangement Agreement (as defined below) by US$0.75 per share. As our Proposal provides increased consideration to shareholders on more advantageous terms¹, we are confident that the Proposal constitutes a “Superior Proposal” as defined in the Existing Arrangement Agreement.

Transaction Overview

Privet proposes to acquire 100% of the fully diluted shares of the Company for US$11.00 per share in cash, payable at closing. Privet anticipates the transaction will be structured as a plan of arrangement, pursuant to the Business Corporations Act of British Columbia, identical to the current structure agreed to by the Company pursuant to its existing March 24, 2017 Arrangement Agreement with Hytera Communications Co. (“Hytera”) (the “Existing Arrangement Agreement”).

Financing and Approvals

Privet will provide all of the equity capital necessary for the Proposal; please see the form of Equity Commitment Letter and Sponsor Guarantee, attached to this proposal as Exhibit A and Exhibit B, respectively. In addition, Privet has obtained a Debt Commitment Letter from Bank of Montreal, which is attached as Exhibit C to this Proposal. The Principals of Privet have approved the Proposal and Privet does not require additional internal or external approvals to move forward. We anticipate that the required regulatory approvals would

¹ Among other material differences, Privet’s proposal does not require internal approvals nor does it require approval from the People’s Republic of China. More significantly, Privet’s proposed transaction will not be subject to a condition that dissenter’s right not exceed a specified threshold. In fact, our proposed form of Arrangement Agreement contains a covenant by Privet to vote its entire 17.6% stake in favor of the deal, providing virtual certainty with respect to obtaining the required shareholder approval. Also of note, under the terms of our proposed Arrangement Agreement, the Company will not owe the $2 million termination payment if our Arrangement Agreement is terminated due to the transaction not closing by the Outside Date (absent a breach by the Company) or if the Arrangement Agreement fails to receive the requisite shareholder approval.

1   PRIVET FUND MANAGEMENT LLC       79 WEST PACES FERRY ROAD      SUITE 200B      ATLANTA  GA      30305

not materially impact the timing or certainty of the transaction² . Furthermore, given Privet’s substantial existing ownership we are highly confident that shareholder approval will be readily obtained.

Due Diligence and Timing

Privet and its advisors have been granted access to the Company’s data room and have completed applicable financial and legal diligence. We are prepared to move expeditiously to execute a definitive acquisition agreement that includes terms and conditions substantially similar to the Existing Arrangement Agreement. Our proposed form of Arrangement Agreement (the “Arrangement Agreement”) is attached as Exhibit D to this Proposal and we are prepared to deliver signature pages to the Arrangement Agreement and related documents if the Company’s Board of Directors determines that this Proposal constitutes a “Superior Proposal” (as defined in the Existing Arrangement Agreement).

In the event the Company’s Board of Directors (i) determines that this Proposal constitutes a “Superior Proposal”, and (ii) submits an application on behalf of Privet for SADI Approval, Privet agrees not to withdraw this Proposal while such SADI Approval is pending and until the Arrangement Agreement is executed; provided, however, Privet’s obligation under this sentence shall terminate on the earlier of the date on which (1) the parties mutually agree in writing, (2) the Industrial Technology Office of Innovation, Science and Economic Development Canada notifies the Company or Privet that it will not grant SADI Approval, (3) July 15, 2017 or (4) Hytera agrees to amend the terms of the Existing Arrangement Agreement and the Company determines that this Proposal no longer continues to be a Superior Proposal when assessed against the Existing Arrangement Agreement, as proposed to be amended.

Except as set forth in the foregoing sentence, for the avoidance of doubt, no binding obligation on the part of Privet or the Company shall arise with respect to this Proposal or any possible Transaction unless and until a definitive acquisition agreement satisfactory to Privet and the Company is executed and delivered.

We and our legal advisors are available to discuss this Proposal at your convenience. Please do not hesitate to contact any of the individuals below should you need any additional information or clarification.

² Concurrent with the delivery of this proposal, Privet’s counsel is providing Norsat’s advisors with previously requested materials relating to the SADI approval process.

2   PRIVET FUND MANAGEMENT LLC       79 WEST PACES FERRY ROAD      SUITE 200B      ATLANTA  GA      30305

Privet Fund Management LLC	Bryan Cave LLP
Ryan Levenson	Rick Miller
Managing Member	Partner
79 West Paces Ferry Road	1201 W. Peachtree St., NW
Suite 200-B	One Atlantic Center, 14th Floor
Atlanta, GA 30305	Atlanta, GA 30309
Telephone: 404.419.2670	Telephone: 404.572.6787
E-mail: ryanl@privetfund.com	E-mail: rick.miller@bryancave.com

SkyLaw Professional Corporation

Kevin R. West

Partner

3 Bridgman Avenue, Suite 204

Toronto, ON Canada  M5R 3V4

Telephone: 416.759.5299

E-mail: kevin.west@skylaw.ca

Sincerely,

Ryan Levenson

Managing Member

Privet Fund Management LLC

3   PRIVET FUND MANAGEMENT LLC       79 WEST PACES FERRY ROAD      SUITE 200B      ATLANTA  GA      30305

EX-99.2

Exhibit 99.2

EQUITY COMMITMENT LETTER

PRIVET FUND LP

79 West Paces Ferry Road

Suite 200-B

Atlanta, GA 30305

May 17, 2017

IRIS Holdings, LLC

c/o Privet Fund Management, LLC

79 West Paces Ferry Road

Suite 200-B

Atlanta, GA 30305

Ladies and Gentlemen:

The undersigned Privet Fund LP, a Delaware limited partnership (“Equity Sponsor”), and Privet Capital Investments I, LP, a Delaware limited partnership (“Investor”), are pleased to offer this commitment to purchase securities of IRIS Holdings, LLC, a Delaware limited liability (“IRIS Holdings”), subject to the terms and conditions herein, for an aggregate purchase price in cash equal to U.S.$18,620,000 (the “Aggregate Commitment”), which Aggregate Commitment will, in turn, be further invested in IRIS Holdings, Inc., a Delaware corporation (“Parent”) that is wholly-owned by IRIS Holdings. The Aggregate Commitment is being made pursuant to that certain Arrangement Agreement, (as it may be amended from time to time, the “Arrangement Agreement”), among Privet Fund Management, LLC, a Delaware limited liability company (“Privet Management”), Parent, IRIS Canada Acquisition Corp., a corporation existing under the laws of the Province of British Columbia (“Purchaser”), and Norsat International Inc., a company existing under the laws of the Province of British Columbia (“Norsat”), pursuant to which Purchaser will acquire all of the issued and outstanding Common Shares of Norsat not already owned by Equity Sponsor or its affiliates (the “Transaction”). We understand that Privet Management, Parent and Purchaser intend to finance a portion of the Transaction with approximately U.S.$26,871,000 of indebtedness (“Debt Financing”) which we understand will be sufficient to fund an all-cash Transaction and the payment of related fees and expenses.

Equity Sponsor hereby irrevocably commits and agrees to capitalize Investor with cash in an amount equal to the Aggregate Commitment and Investor hereby irrevocably commits and agrees to utilize the proceeds received from Equity Sponsor to acquire, securities of IRIS Holdings for an aggregate purchase price in cash equal to the Aggregate Commitment, subject to the terms and conditions herein; provided that, notwithstanding paragraph 5 hereof, Equity Sponsor may allocate all or a portion of its capital commitment to co-investors (including any affiliates), as long as such allocation does not adversely affect or delay the completion of the Debt Financing and in such an event, Equity Sponsor’s commitment hereunder will be reduced (on a dollar-for-dollar basis) by the amounts actually contributed to Investor by payment in cash by such co-investors on or before the Effective Date (as defined in the Arrangement Agreement) of the Transaction. The proceeds from Investor's investment in IRIS Holdings shall be used for funding the consummation of the Transaction, including the payment of related fees and expenses, and for no other purpose. Equity Sponsor shall not be obligated to fund the commitment evidenced hereby (and Investor shall not be obligated to acquire securities of IRIS Holdings) except in connection with the closing of the Transaction. Equity Sponsor shall not, under any circumstances, be obligated to

contribute to Investor more than the Aggregate Commitment and Investor shall not, under any circumstances, be obligated to contribute to IRIS Holdings more than the amount contributed to Investor by Equity Sponsor. To the extent that the aggregate Consideration (as defined in the Arrangement Agreement) required to be funded pursuant to the Arrangement Agreement at the consummation of the Transaction is less than the Aggregate Commitment plus the amount of Debt Financing, the Aggregate Commitment of Equity Sponsor to Investor and the Aggregate Commitment of Investor to IRIS Holdings shall be reduced by such difference.

The commitments of Equity Sponsor and Investor are also subject to all of the following terms and conditions:

1.             Conditions Precedent. The respective obligations of Equity Sponsor and Investor to consummate this commitment shall be conditioned upon:

a.       the satisfaction or waiver of all conditions precedent to the closing of the Transaction set forth in Sections 6.1, 6.2 and 6.3 of the Arrangement Agreement (except those conditions which by their nature cannot be satisfied except at the time of closing, provided that such conditions are actually satisfied or validly waived at the time of closing);

b.       Debt Financing has been funded (or will be funded at the closing of the Transaction in accordance with its terms, if the Aggregate Commitment is funded at the closing of the Transaction); and

c.       the substantially concurrent consummation of the Transaction in accordance with the terms of the Arrangement Agreement.

2.             Recourse. Notwithstanding anything that may be expressed or implied in this letter agreement, (a) IRIS Holdings has no right of recovery against, and no personal liability shall attach to and no recourse hereunder or under any documents or instruments delivered in connection herewith may be had against any officer, agent or employee of Equity Sponsor or Investor, any controlling person of Equity Sponsor or Investor, any direct or indirect holder of any equity interests or securities of Equity Sponsor or Investor (whether such holder is a limited or general partner, member, stockholder or otherwise), any affiliate of Equity Sponsor or Investor, or any former, current or future director, officer, employee, partner, stockholder, affiliate, member, manager, controlling person, agent or representative of any of the foregoing or any of their respective successors or permitted assigns (in each case, other than Equity Sponsor or Investor) (any such person or entity, a “Related Person”), whether by the enforcement of any judgment or assessment or by any legal or equitable proceeding, or by virtue of any statute, regulation or other applicable law, and (b) no personal liability whatsoever will attach to, be imposed on or otherwise be incurred by Related Persons under this letter agreement or any documents or instruments delivered in connection herewith or with the Transaction for any claim based on, in respect of or by reason of such obligations or by their creation.

3.             Effective Date; Expiration. The respective obligations of Equity Sponsor and Investor under this letter agreement, including the obligation to fund the Aggregate Commitment hereunder, are effective on the date hereof and such obligations will expire and terminate

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automatically and immediately (at which time the respective obligations of Equity Sponsor and Investor hereunder shall be discharged) upon the earliest to occur of (i) the Effective Time (as defined in the Arrangement Agreement), (ii) the termination of the Arrangement Agreement in accordance with its terms or (iii) the commencement by Norsat, any stockholder of Norsat or any person (as defined in the Arrangement Agreement) acting at the direction of or on behalf of Norsat, any stockholder of Norsat or any of their respective affiliates, agents or representatives of any lawsuit or action (whether in tort, contract or otherwise) asserting a claim under, or in respect of, or breach of the Arrangement Agreement, this letter agreement or the Guarantee (as defined below) or the transactions contemplated hereby or thereby (including in respect of any representations (whether written or oral) made or alleged to be made in connection herewith or therewith) against Equity Sponsor, Investor, IRIS Holdings or any of the Related Persons.

4.             Representations, Warranties and Covenants. Equity Sponsor and Investor each hereby represents and warrants as follows:

a.       it is a limited partnership, duly formed, validly existing and in good standing under the Laws of the State of Delaware and each has the requisite power and authority to own, lease and operate its assets and properties and to carry on its business as now conducted;

b.       the execution, delivery and performance of this Letter Agreement has been duly authorized by all necessary action and do not contravene or violate any provision of Equity Sponsor’s or Investor’s respective limited partnership agreement or any Law, regulation, rule, decree, order, judgment or contractual restriction binding on Equity Sponsor or Investor or their respective assets;

c.       this letter agreement constitutes a legal, valid and binding obligation of each of Equity Sponsor and Investor, enforceable against Equity Sponsor and Investor, as appropriate, in accordance with its terms, subject to (i) the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar Laws affecting creditors’ rights generally, and (ii) general equitable principles (whether considered in a proceeding in equity or at law); and

d.       Equity Sponsor has the financial capacity to pay and perform its obligations under this letter agreement and, for so long as this letter agreement shall remain in effect in accordance with Section 3 hereof, Equity Sponsor will at all times maintain Availability (as hereinafter defined) in an amount equal to or greater than the Aggregate Commitment. As used herein, the term “Availability” shall mean the sum of (i) the aggregate amount of the following unrestricted and unencumbered items held in the United States of America: cash, cash equivalents, and marketable and liquid investments, plus (ii) amounts available to be drawn by Equity Sponsor under one or more lines of credit, the proceeds of which draw are permitted to be used for the purpose of satisfying Equity Sponsor’s obilgation to fund the Aggregate Commitment.

5.             No Assignment. The commitment evidenced by this letter agreement shall not be assignable by IRIS Holdings, on the one hand, or Equity Sponsor or Investor, on the other hand, without the consent of IRIS Holdings, Equity Sponsor or Investor, as applicable, and the granting of such consent in a given instance shall be solely in the discretion of IRIS Holdings, Equity Sponsor or Investor, as applicable, and, if granted, shall not constitute a waiver of this requirement as to any subsequent assignment; provided, that the commitment evidenced by this letter agreement shall be assignable to subsidiaries or affiliates of Parent.

6.             Amendment. This letter agreement may not be amended except pursuant to a written document duly executed by each of Equity Sponsor, Investor and IRIS Holdings.

7.             Third Party Beneficiary. No person or entity other than IRIS Holdings shall be entitled to rely upon this letter agreement, and this letter agreement shall be binding upon and inure solely to the benefit of each party hereto and nothing herein, express or implied, is intended or shall confer upon any other person any rights, benefits or remedies whatsoever under or by reason of this commitment. In furtherance of the foregoing and for the avoidance of doubt, no creditor of Investor, IRIS Holdings or any of their respective affiliates shall have any right to enforce this letter or to cause Investor or IRIS Holdings to enforce this letter.

8.             Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS LETTER OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.

9.             Jurisdiction. Any dispute, controversy or claim between the parties hereto which arises out of, relates to or is in any manner connected with this letter agreement, including any question regarding the validity, termination of, or performance or non-performance under, this letter agreement, any breach of this letter agreement, or any other claim (including tort claims) which arises out of, relates to or is in any manner connected with this letter agreement or any documents or instruments delivered in connection herewith or with the Transaction shall be referred exclusively to the Delaware Court of Chancery and any state appellate court therefrom within the State of Delaware (or, if the Delaware Court of Chancery declines to accept jurisdiction over a particular matter, any state or federal court within the State of Delaware), and, by execution and delivery of this letter agreement, each of the parties hereto accepts the exclusive jurisdiction of such courts, and irrevocably agrees to be bound by any judgment

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rendered thereby in connection with this letter agreement. The foregoing consents to jurisdiction and appointments of agents to receive service of process shall not constitute general consents to service of process in the State of Delaware for any purpose except as provided above and shall not be deemed to confer rights on any person other than the parties hereto.

10.           Guarantee. Concurrently with the execution and delivery of this letter agreement, Equity Sponsor is executing and delivering to Norsat a limited guarantee (the “Guarantee”) relating to certain obligations of Privet Management, Parent and Purchaser under the Arrangement Agreement. Norsat’s remedies against Equity Sponsor under the Guarantee shall, and are intended to, be Norsat’s sole and exclusive direct or indirect remedy (whether by or through attempted piercing of the corporate veil, by or through a claim by or on behalf of Investor, IRIS Holdings, Parent or Purchaser against any Guarantor Affiliate (as defined in such Guarantee), by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute, regulation or applicable law, or otherwise) available to Norsat and its affiliates against Equity Sponsor or Investor or any of their respective affiliates and Norsat and its affiliates shall not have, and are not intended to have, any right of recovery (other than pursuant to the Guarantee) against Equity Sponsor or Investor or any Guarantor Affiliate for any liability, loss, damage or recovery of any kind arising under or in connection with any breach of the Arrangement Agreement (whether willfully, intentionally, unintentionally or otherwise) or of the failure of the Transaction to be consummated or otherwise in connection with the transactions contemplated hereby and thereby or in respect of any representations made or alleged to be made in connection therewith (written or oral and whether or not Privet Management’s, Parent’s or Purchaser’s breach is caused by the breach by Equity Sponsor or Investor of their respective obligations under this letter agreement).

11.           Confidentiality. This letter agreement shall be treated as strictly confidential and is being provided to IRIS Holdings solely in connection with the Arrangement Agreement and the transactions contemplated thereby. This letter agreement may not be used, circulated, quoted or otherwise referred to in any document, except with the written consent of Equity Sponsor and Investor. Notwithstanding the foregoing, this letter agreement may be provided to Norsat and its advisors who have been directed to treat this letter agreement as confidential.

[The remainder of this page is left blank intentionally. Signature page follows]

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If the foregoing is acceptable to you, please sign and return a copy of this letter agreement where indicated below. This letter agreement and the obligations hereunder shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the principle of conflict of laws.

Very truly yours,
PRIVET FUND LP
By:	Privet Fund Management LLC, its General
	Partner
By:	/s/ Ryan Levenson
	Ryan Levenson
	Managing Member
PRIVET CAPITAL INVESTMENTS I, LP
By:	Privet Fund Management LLC, its General Partner
By:	/s/ Ryan Levenson
	Ryan Levenson
	Managing Member

Acknowledged and agreed to this 17th day of May 2017

IRIS HOLDINGS, LLC

By:   Privet Fund Management LLC, its Managing Member

By:	/s/ Ryan Levenson
	Ryan Levenson
	Managing Member

[Signature Page to Equity Commitment Letter]

EX-99.3

Exhibit 99.3

PRIVET FUND LP

79 West Paces Ferry Road

Suite 200-B

Atlanta, GA 30305

May 17, 2017

Norsat International Inc.

110-4020 Viking Way

Richmond, British Columbia V6V 2L4 Canada

Ladies and Gentlemen:

This Letter Agreement is being delivered by Privet Fund LP ( “Guarantor”) to Norsat International Inc., a company existing under the laws of the Province of British Columbia (the “Company”), in connection with the execution of that certain Arrangement Agreement (as it may be amended from time to time, the “Arrangement Agreement”), between Privet Fund Management, LLC, a Delaware limited liability company (“Privet Management”), IRIS Holdings, Inc., a Delaware corporation (“Parent”), IRIS Canada Acquisition Corp., a company existing under the laws of the Province of British Columbia (“Purchaser”), and the Company, pursuant to which Purchaser will acquire all of the issued and outstanding Common Shares of the Company other than the Common Shares owned, directly or indirectly by Guarantor or its affiliates (the “Transaction”). Terms used in this Letter Agreement without definition are used as defined in the Arrangement Agreement.

Guarantor and the Company hereby agree as follows:

1. Obligations. To induce the Company to enter into the Arrangement Agreement, Guarantor hereby absolutely, unconditionally and irrevocably guarantees to the Company, on the terms and conditions set forth herein, the payment obligations of Parent under Section 8.3(1) of the Arrangement Agreement (the “8.3(1) Obligations”). The maximum amount payable hereunder shall not exceed U.S.$2,500,000.00 (such amount being referred to herein as the “Cap”). This Letter Agreement may not be enforced without giving effect to limitations on Guarantor’s liability for the 8.3(1) Obligations in the amount of the Cap.

2. Nature of the Obligations. The Company shall not be obligated to file any claim relating to the 8.3(1) Obligations in the event that Parent becomes subject to a bankruptcy, reorganization or similar proceeding, and the failure of the Company to so file shall not affect Guarantor’s obligations hereunder. In the event that any payment to the Company hereunder is rescinded or must otherwise be returned for any reason whatsoever, Guarantor shall remain liable hereunder with respect to the 8.3(1) Obligations as if such payment had not been made (subject to the terms hereof). This is an unconditional guarantee of payment and not of collectability.

3. Changes in Obligations, Certain Waivers. The Company may at any time and from time to time, without notice to or further consent of Guarantor, extend the time of payment of any of the 8.3(1) Obligations, and may also make any agreement with Parent or with any other person interested in the transactions contemplated by the Arrangement Agreement, for the extension, renewal, payment, compromise, discharge or release thereof, in whole or in part, or

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for any modification of the terms thereof or of any agreement between the Company and Parent or any such other person without in any way impairing or affecting Guarantor’s obligations under this Letter Agreement. Guarantor’s obligations hereunder shall not be released or discharged, in whole or in part, or otherwise affected by (a) the failure of the Company to assert any claim or demand or to enforce any right or remedy against Parent or any other person interested in the transactions contemplated by the Arrangement Agreement; (b) any change in the time, place or manner of payment of any of the 8.3(1) Obligations or any rescission, waiver, compromise, consolidation or other amendment or modification of any of the terms or provisions of the Arrangement Agreement or any other agreement evidencing, securing or otherwise executed in connection with any of the 8.3(1) Obligations (provided that any such change, rescission, waiver, compromise, consolidation or other amendment or modification shall be subject to the prior written consent of Parent to the extent required under the Arrangement Agreement); (c) the addition, substitution or release of any entity or other person interested in the transactions contemplated by the Arrangement Agreement, (provided that any such addition, substitution or release shall be subject to the prior written consent of Parent to the extent required under the Arrangement Agreement); (d) any change in the corporate existence, structure or ownership of Parent or any other person interested in the transactions contemplated by the Arrangement Agreement; (e) any insolvency, bankruptcy, reorganization or other similar proceeding affecting Parent or any other person interested in the transactions contemplated by the Arrangement Agreement; (f) the existence of any claim, set-off or other right which Guarantor may have at any time against Parent, whether in connection with the 8.3(1) Obligations or otherwise; (g) any change in the applicable Laws of any jurisdiction; or (h) the adequacy of any other means the Company may have in obtaining payment of any of the 8.3(1) Obligations. To the fullest extent permitted by Law, Guarantor hereby expressly waives any and all rights or defenses arising by reason of any Law which would otherwise require any election of remedies by the Company. Guarantor waives promptness, diligence, notice of the acceptance of this Letter Agreement and of the 8.3(1) Obligations, presentment, notice of non-performance, default, dishonor and protest, any right to require the marshaling of assets of Parent or any other person interested in the transactions contemplated by the Arrangement Agreement, and all suretyship defenses generally. Notwithstanding anything to the contrary contained herein, Guarantor may assert, as a defense to any payment by Guarantor under this Letter Agreement, (i) any claim, set-off, deduction or defense that (A) Purchaser or Parent could assert against the Company under the terms of the Arrangement Agreement or (B) Guarantor could assert based upon a breach by the Company of this Letter Agreement (including claims against the Company or any of its subsidiaries for fraud or willful misconduct) or (ii) any and all defenses which Parent may have to payment of the 8.3(1) Obligations. Guarantor acknowledges that it will receive substantial direct and indirect benefits from the transactions contemplated by the Arrangement Agreement and that the waivers set forth in this Letter Agreement are knowingly made in contemplation of such benefits.

The Company hereby covenants that it shall not institute, and shall cause its subsidiaries and Controlled Affiliates (as defined below) not to institute, and shall instruct each Affiliate that is not a Controlled Affiliate not to institute in the name of or on behalf of the Company or any other person, any proceeding or bring any other claim arising under, or in connection with, Section 8.3 of the Arrangement Agreement or the transactions contemplated thereby, against Guarantor, Parent, Purchaser or any Guarantor Affiliates (as defined below) except for claims against Guarantor under this Letter Agreement and, if and to the extent the Company is advised

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by counsel that a claim must also be asserted against Parent or Purchaser under the Arrangement Agreement in connection with such claim against Guarantor under this Letter Agreement, against Parent or Purchaser under the Arrangement Agreement; provided, however, that nothing contained herein shall operate or be construed as a waiver or release by the Company of its right to assert any defenses or counterclaims against Guarantor or, as applicable, Purchaser or Parent, in connection with any claims, defenses or counterclaims asserted by them against the Company. Guarantor hereby covenants that it shall not institute, and shall cause its Affiliates not to institute, any proceeding asserting that this Letter Agreement is illegal, invalid or unenforceable, in whole or in part. The Company shall not have any obligation to proceed at any time or in any manner against, or exhaust any or all of the Company’s rights against, any person liable for any 8.3(1) Obligations prior to proceeding against Guarantor hereunder. For purposes of this Letter Agreement, “Controlled Affiliate” of any person means any Affiliate that such person directly or indirectly controls (within the meaning of Rule 12b-2 of the 1934 Act) and, for purposes of this Letter Agreement, includes the directors and officers of such person. Guarantor hereby unconditionally and irrevocably waives, and agrees not to exercise, any rights that it may now have or hereafter acquire against Parent and Purchaser that arise from the existence, payment, performance, or enforcement of Guarantor’s 8.3(1) Obligations under or in respect of this Letter Agreement, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of the Company against Parent or Purchaser, whether or not such claim, remedy or right arises in equity or under contract, statute or Law, including, without limitation, the right to take or receive from Parent or Purchaser or such other person, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or right, unless and until the 8.3(1) Obligations and any amounts payable under the proviso to the last sentence of Section 8 of this Letter Agreement shall have been paid in full in cash. If any amount shall be paid to Guarantor in violation of the immediately preceding sentence at any time prior to the payment in full in cash of the 8.3(1) Obligations and any amounts payable under the proviso to the last sentence of Section 8 of this Letter Agreement, such amount shall be received and held in trust for the benefit of the Company, shall be segregated from other property and funds of Guarantor and shall forthwith be paid or delivered to the Company in the same form as so received (with any necessary endorsement or assignment) to be credited and applied to the 8.3(1) Obligations and any amounts payable under the proviso to the last sentence of Section 8 of this Letter Agreement, in accordance with the terms of the Arrangement Agreement, whether matured or unmatured, or to be held as collateral for any 8.3(1) Obligations and any amounts payable under the proviso to the last sentence of Section 8 of this Letter Agreement thereafter arising. Notwithstanding anything to the contrary contained in this Letter Agreement, the Company hereby agrees that to the extent Parent is relieved of its obligations under Section 8.3(1) of the Arrangement Agreement, Guarantor shall be similarly relieved of its obligations under this Letter Agreement.

4. No Waiver; Cumulative Rights. No failure on the part of the Company to exercise, and no delay in exercising, any right, remedy or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by the Company of any right, remedy or power hereunder preclude any other or future exercise of any right, remedy or power. Each and every right, remedy and power hereby granted to the Company or allowed it by Law or other agreement shall be cumulative and not exclusive of any other, and may be exercised by the Company at any time or from time to time.

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5. Representations, Warranties and Covenants. Guarantor hereby represents, warrants and covenants as follows:

(i) Guarantor is a limited partnership, duly formed, validly existing and in good standing under the Laws of the State of Delaware. Guarantor has the requisite power and authority to own, lease and operate its assets and properties and to carry on its business as now conducted;

(ii) the execution, delivery and performance of this Letter Agreement have been duly authorized by all necessary action and do not contravene or violate any provision of Guarantor’s limited partnership agreement or any Law, regulation, rule, decree, order, judgment or contractual restriction binding on Guarantor or its assets;

(iii) all consents, approvals, authorizations, permits of, filings with and notifications to, any governmental authority necessary for the due execution, delivery and performance of this Letter Agreement by Guarantor have been obtained or made and all conditions thereof have been duly complied with, and no other action by, and no notice to or filing with, any governmental authority or regulatory body is required in connection with the execution, delivery or performance of this Letter Agreement;

(iv) this Letter Agreement constitutes a legal, valid and binding obligation of Guarantor enforceable against Guarantor in accordance with its terms, subject to (A) the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar Laws affecting creditors’ rights generally, and (B) general equitable principles (whether considered in a proceeding in equity or at law); and

(v) Guarantor has the financial capacity to pay and perform its obligations under this Letter Agreement and for so long as this Letter Agreement shall remain in effect in accordance with Section 8 hereof, Guarantor will at all times maintain Availability (as hereinafter defined) in an amount equal to or greater than U.S.$2,500,000. As used herein, the term “Availability” shall mean the sum of (A) the aggregate amount of the following unrestricted and unencumbered items held in the United States of America: cash, cash equivalents, and marketable and liquid investments, plus (B) amounts available to be drawn by Guarantor under one or more lines of credit, the proceeds of which draw are permitted to be used for the purpose of satisfying the 8.3(1) Obligations.

6. No Assignment. Neither Guarantor nor the Company may assign its rights, interests or obligations hereunder to any other person (except by operation of law) without the prior written consent of the Company or Guarantor, as the case may be; provided, however, that Guarantor may assign all or a portion of its obligations hereunder to an Affiliate or to an entity managed or advised by an Affiliate of Guarantor; provided, further, that no such assignment shall relieve

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Guarantor of any liability or obligation hereunder except to the extent actually performed or satisfied by the assignee.

7. Notices. All notices and other communications hereunder shall be in writing in the English language and shall be given in the manner required by the Arrangement Agreement.

8. Continuing Obligation. This Letter Agreement shall not be withdrawn by Guarantor and shall remain in full force and effect and shall be binding on Guarantor, its successors and assigns, and on the Company, until the earlier of the date on which (a) all of the 8.3(1) Obligations have been paid in full, (b) the parties mutually agree in writing, (c) the Industrial Technology Office of Innovation, Science and Economic Development Canada notifies the Company or Privet Management that it will not grant SADI Approval (as defined in the Arrangement Agreement), (d) July 15, 2017 or (e) Hytera Communications Co. (“Hytera”) agrees to amend the terms of the existing March 24, 2017 Arrangement Agreement between the Company, Hytera and Hytera Project Corp. (the “Existing Arrangement Agreement”), and the Company determines that the Transaction as contemplated by the Arrangement Agreement no longer continues to be a Superior Proposal when assessed against the Existing Arrangement Agreement, as proposed to be amended. Notwithstanding the foregoing, this Letter Agreement shall terminate and Guarantor shall have no further obligations under this Letter Agreement as of the earlier of (a) the Effective Time, (b) the first anniversary of the termination of the Arrangement Agreement if the Arrangement Agreement is terminated by the Company pursuant to Sections 8.1(1)(iv)(b), 8.1(1)(iv)(c) or 8.1(1)(iv)(d), except as to a claim for payment of the 8.3(1) Obligations presented by the Company to Parent or Guarantor by such first anniversary, in which case the Letter Agreement shall terminate upon the satisfaction in full of such 8.3(1) Obligations or a final determination that such 8.3(1) Obligations are not owed, and (c) the termination of the Arrangement Agreement pursuant to any section of the Arrangement Agreement other than Sections 8.1(1)(iv)(b), 8.1(1)(iv)(c) or 8.1(1)(iv)(d). Notwithstanding the foregoing, in the event that the Company or any of its subsidiaries or Controlled Affiliates asserts in any litigation or other proceeding that the provisions of Section 1 hereof limiting the Guarantor’s liability to the Cap or the provisions of Section 3, this Section 8 or Section 9 hereof are illegal, invalid or unenforceable in whole or in part, or asserting any theory of liability against Guarantor or any Guarantor Affiliates with respect to the transactions contemplated by the Arrangement Agreement other than liability of Guarantor under this Letter Agreement or liability of Parent under the Arrangement Agreement, then (i) the obligations of Guarantor under this Letter Agreement shall terminate ab initio and be null and void, (ii) if Guarantor has previously made any payments under this Letter Agreement, it shall be entitled to recover such payments, and (iii) neither Guarantor nor any of its Affiliates shall have any liability to the Company with respect to the transactions contemplated by the Arrangement Agreement or under this Letter Agreement; provided, however, that if Guarantor (A) fails to pay the 8.3(1) Obligations when due and the Company seeks to collect the payment of such amounts through any litigation or other proceeding or (B) asserts in any litigation or other proceeding that this Letter Agreement is illegal, invalid or unenforceable in accordance with its terms, then, in each case, to the extent the Company prevails in such litigation or proceeding, Guarantor shall pay on demand all reasonable fees and out of pocket expenses of the Company in connection with such litigation or proceeding.

9. No Recourse. Notwithstanding anything that may be expressed or implied in this Letter Agreement or any document or instrument delivered contemporaneously herewith, and notwithstanding the fact that Guarantor may be a partnership, by its acceptance of the benefits of this Letter Agreement, the Company acknowledges and agrees that it has no right of recovery against, and no personal liability shall attach to, the former, current or future security holders, directors, officers, employees, agents, Affiliates, members, managers, general or limited partners or assignees of Guarantor or any of its Affiliates, or any former, current or future security holder, director, officer, employee, general or limited partner, member, manager, Affiliate, agent, assignee or representative of any of the foregoing (collectively, the “Guarantor Affiliates”), through Parent, Purchaser or otherwise, whether by or through attempted piercing of the

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corporate, partnership or limited liability company veil, by or through a claim by or on behalf of Parent or Purchaser against Guarantor, Guarantor Affiliates, or Purchaser’s Affiliates, by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute, regulation or applicable Law, or otherwise, except for (a) its rights to recover from Guarantor (but not the Guarantor Affiliates) the 8.3(1) Obligations under and to the extent provided in this Letter Agreement, subject to the limitations described herein and (b) the Company’s rights against Parent and Purchaser contained in the Arrangement Agreement prior to any termination of the Arrangement Agreement. Recourse against Guarantor under this Letter Agreement shall be the sole and exclusive remedy of the Company and all of its subsidiaries and Affiliates against Guarantor or Guarantor’s Affiliates in respect of any liabilities or obligations arising under, or in connection with, Section 8.3(1) of the Arrangement Agreement. Nothing set forth in this Letter Agreement shall be construed to confer or give to any person (including any person acting in a representative capacity) other than the Company and Guarantor any rights or remedies against any person other than the Company and Guarantor as expressly set forth herein.

10. Governing Law, Jurisdiction. This Letter Agreement shall be governed in all respects, including validity, interpretation and effect, by the Laws of the Province of British Columbia and the federal Laws of Canada applicable therein, without giving effect to any principles of conflict of Laws thereof that would result in the application of the Laws of any other jurisdiction. The Parties irrevocably attorn to the exclusive jurisdiction of the courts of the Province of British Columbia with respect to any dispute, claim or other matter arising under this Agreement.

11. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS LETTER AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.

12. Counterparts. This Letter Agreement may be executed and delivered (including by facsimile transmission) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same instrument.

[Signature Page Follows]

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Very truly yours,
PRIVET FUND LP
By:	Privet Fund Management LLC, its General Partner
By:	/s/ Ryan Levenson
Name: Ryan Levenson
Title: Managing Member

Confirmed as of the date of the Arrangement Agreement:

NORSAT INTERNATIONAL INC.

By:

Name: Amiee Chan

Title: Chief Executive Officer

[Signature Page to Private Guarantee]

EX-99.4

Exhibit 99.4

[EXPLANATORY NOTE: “***” indicates the portion of this exhibit that has been omitted and separately filed with the Securities and Exchange Commission pursuant to a request for confidential treatment.]

Norsat International inc.

Loan Commitment

(the “Senior Debt Loan Commitment”)

may 12, 2017

Subject to acceptance and execution of this Senior Debt Loan Commitment by the Company and the Lead Investor by no later than 5:00 p.m., Vancouver, British Columbia time, on May 19, 2017, Bank of Montreal, hereby confirms its commitment to provide the Company with financing on the basis of the terms and conditions and for the purposes set forth in this Senior Debt Loan Commitment. The undersigned has the authority to bind BMO.

Borrower:	IRIS Canada Acquisition Corp., a British Columbia corporation (the “Company” or the “Borrower”).  Upon consummation of the amalgamation of the Company with Norsat (the “Amalgamation”), Norsat, as survivor of the Amalgamation, will become successor Borrower in connection with the Facilities and will execute any and all joinders, assumption agreements and other documentation reasonably requested by the Lender for purposes of evidence such succession.
Lead Investor:	Privet Fund Management, LLC (“Privet” or the “Lead Investor”)
Guarantors:	Norsat International Inc., a British Columbia corporation (“Target” or “Norsat”) and all existing or hereafter acquired direct or indirect subsidiaries (the “Subsidiaries”) of the Borrower and Target, and IRIS Holdings, Inc., a Delaware corporation (the “Parent”) that will hold all the issued and outstanding shares of the Borrower (collectively, the “Guarantors” and each, a “Guarantor”).
Lender:	Bank of Montreal (the “Lender” or “BMO”).
Facilities:	1)    USD$4,000,000 revolving credit facility (the “Revolver”).
	2)    USD$18,968,000 non-revolving term loan (the “Term Loan”).
	3)    Treasury Risk Management Facility subject to a limit of USD$3,000,000
	4)    Corporate MasterCard for up to CAD$150,000
	(collectively, the “Facilities”)
Term/Maturity:	o    Facilities 1, and 2 mature *** years from Closing Date with repayment as set out below in the sections titled “Scheduled Repayments”, “Mandatory Prepayments” and “Voluntary Prepayments”.
	o    Facility 3 matures in accordance with the ISDA Master Agreement to be entered into in connection with this facility and is repayable in accordance with the ISDA Master Agreement and related contracts.
	o    Facility 4 matures and is repayable in accordance with the MasterCard

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NORSAT INTERNATIONAL INC. CONFIDENTIAL

      Agreement. This facility has a *** year market out clause.

Sources and Uses: (USD)	Sources	$		Uses	$
	Excess Cash on BS	12,627		Purchase Price	66,787
	Senior Revolver ($4.000M)	0
	Senior Term Debt	18,968
	Subordinated Debt	7,903
	Rolled Equity	11,169
	New Investor Equity	18,620		Transaction Costs	2,500
	Total Sources	$	69,287	Total Uses	$	69,287

Purpose:	1)    For general working capital and general corporate requirements. 2)    To finance the acquisition of Norsat by the Lead Investor through the Parent and the Borrower and to payout and refinance existing debt of the Target. 3)    To facilitate hedging of interest rate risk and foreign exchange risk. 4)    For general corporate requirements.
Availability:	Facilities 1 and 2: Available at the Borrower’s option by way of: o     US$ Base Rate loans. o     US$ LIBOR (“LIBOR”) with minimum draw of US$1,000,000 and multiples of US$1,000,000, with terms of 1, 2 or 3 months subject to market availability. o     Facility 1 also available by way of letters of credit in CAD, USD and other currencies agreed to by the Lender, up to a maximum of USD $1,000,000. Facility 3: Available to support: o    Interest Rate Swaps for a maximum term of *** years. o    Foreign exchange forward contracts for up to one year Facility 4:  Available pursuant to terms of MasterCard Agreement All advances, repayments and rollovers are subject to standard notice requirements.
Scheduled Repayments:	1)    Facility 1, Revolver – Repayable in full at the stated maturity, unless otherwise extended by the Lender. 2)    Facility 2, Term Loan – The Term Loan shall amortize monthly beginning the first full month post Closing Date to be structured with amortization of 50% over 5 years and a balloon payment due at maturity, based on the following amortization table o    Year 1 – ***% o    Year 2 – ***% o    Year 3 – ***% o    Year 4 – ***%

2

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NORSAT INTERNATIONAL INC. CONFIDENTIAL

	o    Year 5  - ***%
Mandatory Prepayments:	For Facility 2, Term Loan: 1.    Cash flow sweep - ***% of Excess Annual Cash Flow payable within 30 days after the delivery of year end audited financial statements, if Senior Funded Debt/EBITDA is greater than ***:***. 2.    100% of the net proceeds of (i) any sales or issuances of equity or debt securities by the Borrower or any Guarantor (with exceptions to be determined by the Lender), (ii) any sale or disposition of any assets (other than sales of inventory in the ordinary course of business) above a basket amount to be determined by the Lender, and not otherwise reinvested within 180 days and (iii) insurance and condemnation proceeds not otherwise reinvested within 180 days. 3.    All mandatory prepayments shall be applied to the Term Loan in inverse order of maturity until paid in full.
Voluntary Prepayments:	Loans bearing interest based on US$ Base Rate may be prepaid at any time without penalty with 1-3 days written notice. LIBOR cannot be prepaid. Unwind costs associated with Interest Rate Swaps are for the account of the Borrower.
Applicable Margins,	Facilities 1 and 2:  Applicable Margins and Interest Rates:

Interest Rates and Standby Fees:		LIBOR	US$ Base Rate	Standby
	Total Funded Debt/ EBITDA	Margin	Margin	Fee
	<***:***	***%	***%	***%
	>***:***<***:***	***%	***%	***%
	>***: ***	***%	***%	***%

Pricing to be adjusted quarterly upon receipt of compliance certificate. Pricing for LIBOR loans will not be amended until the next maturity of said tranche. LIBOR Floor of 1.00%.

Standby fees will be calculated daily and payable quarterly in arrears on the unused balance of Facility 1 only.

Interest is to be paid monthly in arrears on US$ Base Rate loans. LIBOR loan interest payments are payable the earlier of note maturity and quarterly.

Facility 3: Treasury Risk Management Facility: Market rates as determined by the Lender’s Treasury Department and/or Derivatives Group.

Facility 4: Corporate MasterCard: Standard as per Corporate MasterCard Agreement.

Note: 50%  of Facility 2 is to be fixed within 90 days of the Closing Date. Available

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NORSAT INTERNATIONAL INC. CONFIDENTIAL

	to be fixed via interest rate swap at the Borrower’s option. Note: Applicable margins and interest rates which would be otherwise applicable shall increase by *** bps upon the occurrence of and during continuance of an event of default. Note: All interest rates and fees shall be calculated on a 365 or 366 day basis as appropriate. All LIBOR advances shall be calculated on a 360 day year.
Arrangement Fee:	Refer to Fee Letter.
Security:	All debts, liabilities, and obligations of the Borrower and Guarantors under the Facilities shall rank pari passu and the Borrower and the Guarantors shall provide the usual and customary credit and security documents for transactions of this type (together with such other security as Lender, acting reasonably, may consider to be necessary or advisable in the circumstances having regard to the transaction and the results of the Lender’s due diligence) not inconsistent with the terms and provisions set forth herein and otherwise in form and substance satisfactory to the Lender and their counsel (collectively, the “Definitive Documents”), including, without limitation, the following: 1.    Credit Agreement, incorporating the Terms and Conditions outlined in this Senior Debt Loan Commitment and general terms and conditions usual and customary for facilities of this type which the Lender considers necessary or advisable in the circumstances (but not inconsistent with the terms and provisions set forth herein). 2.    Registered General Security Agreement (“GSA”) and/or such other documentation as required, providing the Lender with a first ranking security interest subject only to permitted liens approved by the Lender (“Permitted Liens”) over all of the tangible and intangible assets of the Borrower and the Guarantors whether now owned or hereafter acquired. 3.    Corporate Guarantees from each Guarantor. 4.    Pledge of all outstanding shares of the Borrower and the Guarantors. 5.    Assignment of other material contracts, permits, agreements, licenses, management agreements (to the extent assignable), at the discretion of the Lender. 6.    Landlords’ waivers, or, at a minimum, access landlord agreement on a best efforts basis post-closing. 7.    Assignment of all perils Insurance from the Borrower and the Guarantors with the Lender to be named as loss payee on business and fire insurance.

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NORSAT INTERNATIONAL INC. CONFIDENTIAL

	Insurance to include business interruption insurance. Certified copy of policy to be provided. Standard mortgage clause to be contained in the policy. 8.    Assignment of creditor insurance (if any), as approved by the Lender, in favour of the Lender (as required), with any required consents of insurance companies on a best efforts basis post-closing, and full insurance review within 60 days of closing and additional insurance as reasonably required by BMO. 9.    Assignment, Postponement, Subordination and Subrogation of all shareholders’ and related party loans. 10.    Executed intercreditor agreements with respect to any subordinated debt holders. 11.   If required by the Lender, title insurance in respect of each property owned by the Borrower or any Guarantor, at the time such property is mortgaged to Lender. 12.   A covenant and undertaking from the Lead Investor in favour of BMO agreeing, if called upon by BMO, to contribute or cause Privet Fund LP and/or Privet Capital Investments I, LP to contribute additional equity to the Borrower or Norsat (via the Parent) in an amount sufficient to satisfy any and all amounts paid or payable (whether by way of agreement, court order or judgment) for the shares of any shareholders of Norsat exercising their dissent rights in respect of the acquisition by the Borrower of all common shares of Norsat other than those common shares held by the Parent (the “Acquisition”). 13.    Environmental Indemnity with respect to all owned and leased real property. 14.    ISDA Master Agreement (as required). 15.    Solicitor’s letter of opinion over loan and security documentation.
Conditions Precedent (At or prior to Closing):	BMO’s commitment to fund the Facilities including the Term Loan shall be subject to the following conditions to be satisfied or waived by BMO on or prior to closing of the Acquisition:
	1.    Minimum cash equity contribution on closing of US $29,789,000 by the Parent, comprised of roll-over equity of US $11,169,000 by Privet Fund LP, and not less than US $18,620,000 by Privet Capital Investments I, LP, with the Lead Investor as the sole general partner of each of Privet Fund LP

5

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NORSAT INTERNATIONAL INC. CONFIDENTIAL

       and Privet Capital Investments I, LP, and the Borrower being a wholly owned, indirect subsidiary of Privet Fund LP and Privet Capital Investments I, LP on closing, 38.5% and 61.5% respectively.

2.    Execution, delivery and registration (where applicable, subject to the Certain Funds Provision) as a first ranking security interest subject only to Permitted Liens of all Definitive Documents or, in the case of security to be provided by Target and its subsidiaries, undertakings or arrangements satisfactory to BMO for such execution, delivery and registration of such security.

3.    receipt of favourable customary legal opinions from counsel to the Company and the Guarantors all in form and substance reasonably satisfactory to BMO and its counsel including without limitation opinions with respect to corporate existence, due authorization, execution and delivery, enforceability, registration, perfection, non contravention with applicable laws and constating documents, and that all material Regulatory Approvals and other governmental approvals and consents have been obtained with respect to the Acquisition and the execution, delivery and performance of the Definitive Documents;

4.    receipt by BMO and its legal counsel of fully executed copies of the arrangement agreement in the form attached hereto as Schedule E to this signed Senior Debt Commitment Letter (the “Acquisition Agreement”) and a disclosure letter from the Target addressed to the Borrower and Parent in the form attached hereto as Schedule E to this signed Senior Debt Commitment Letter (the “Disclosure Letter”) previously provided by the Target to Hytera Communications Co. Ltd. and Hytera Project Corp.;

5.    arrangements satisfactory to BMO for the completion of the acquisition, of the Target by the Borrower (the “Acquisition”) contemporaneously with the closing of the Facilities, on the terms provided in the Acquisition Agreement and the plan of arrangement attached as Schedule B to the Acquisition Agreement (the “Plan of Arrangement”);

6.    payment of all fees and expenses owing to BMO with respect to the Facilities;

7.    repayment and cancellation of the Target’s existing credit facilities upon Closing (excluding permitted indebtedness to be agreed);

8.    receipt of releases, discharges and postponements (in registrable form where appropriate) covering all encumbrances affecting the collateral charged or to be charged by the Definitive Documents which are not permitted

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NORSAT INTERNATIONAL INC. CONFIDENTIAL

	encumbrances, or undertakings satisfactory to BMO to provide such releases, discharges and postponements;
	9.    BMO shall be satisfied, acting reasonably, that the depositary agreement pursuant to which BMO net loan proceeds will be deposited with the Depositary (as defined in the Acquisition Agreement) pre-closing together with the additional cash funds required for closing,  provides for the unconditional and prompt return of such loan proceeds  to BMO  if the transaction does not complete for any reason whatsoever;
	10.   receipt of all information necessary in order for Lender  to comply with legal and internal requirements in respect of money laundering legislation, proceeds of crime legislation and “know your customer” requirements;
	11.   Delivery of compliance certificate at closing confirming pro forma compliance with the financial covenants described in items 1, 2 and 3 under “Financial Covenants” below; and
	12.  the additional conditions precedent set out in Schedule C hereto.
Financial Covenants:	Financial covenants will be tested quarterly and will be determined on a trailing 12 month basis (unless specified otherwise), in accordance with generally accepted accounting practices (‘GAAP’ or ‘IFRS’) and conditions normally applicable to transactions of this nature and will include, without limitation, the following: 1.    Maximum ratio of Total Funded Debt to EBITDA of: a.    ***:*** at closing; b.    ***:*** following closing until 2017 FYE; c.    ***:*** by 2018 FYE; d.    ***:*** by 2019 FYE; e.    ***:*** by 2020 FYE; f.    ***:*** by 2021 FYE. 2.    Maximum ratio of Senior Funded Debt to EBITDA of: a.    ***:*** at closing; b.    ***:*** following closing until 2017 FYE; c.    ***:*** by 2018 FYE; d.    ***:*** by 2019 FYE; e.    ***:*** by 2020 FYE; f.    ***:*** by 2021 FYE. 3.    Minimum Fixed Charge Coverage ratio of ***:***. 4.    Capital expenditures to be reviewed and approved annually by the Lender

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NORSAT INTERNATIONAL INC. CONFIDENTIAL

	based on the Borrower’s business plan.
Non-Financial Covenants:	Usual and customary non-financial covenants, including positive and negative covenants outlined in Schedule B, and not limited to: 1.    For Permitted Acquisitions: (1) target’s business must be in similar type of business to Borrower; (2) target must be located in Canada or the U.S.A.; (3) must contribute positive EBITDA for the Borrower and not be hostile; (4) maximum amount to be paid is CDN$2,000,000 per acquisition and CDN$5,000,000 per annum; (5) if not assets, Borrower must acquire control; (6) if real property, satisfactory environmental due diligence required; and (7) in 60 days, previous security (if any) over such acquisition to be released and new security taken. 2.    The Borrower shall maintain bank accounts at the Bank of Montreal during the life of the Facilities, and all cash management will be held with the Bank of Montreal. 3.    Restriction on payment of dividends, interest or principal on subrogated debt without the prior written consent of the Lender, subject to provisions of applicable subordination and intercreditor agreement. 4.    Limitations on additional indebtedness other than permitted indebtedness. 5.    Negative pledge under which the Borrower will not encumber mortgage or permit liens to be taken on any of its assets without the prior written consent of the Lender with the exception of permitted liens approved by the Lender. 6.    Prohibition on guarantees, financial assistance, investments, employee loans and affiliate transactions, except for those currently held and in amounts approved by the Lender. In no event shall any such financial transfer cause the Borrower to breach a covenant of this Indicative Term Sheet. 7.    No additional management remuneration/bonuses (on top of its normalized salary), dividends, and or any other employees’ loans via the balance sheet that will cause the Borrower to breach a covenant of this agreement. 8.    Restrictions on capital reorganizations and other changes in capital structure of the Borrower without consent of the Lender, except for the Amalgamation. 9.    Restrictions on issuance of any securities, warrants or convertible instruments which give rise to a right to receive any shares in the capital of the Borrower or their subsidiaries without consent of the Lender. 10.   No change of control or ownership of the Borrower and Guarantors without the prior written consent of the Lender. 11.   Restrictions on the sale of assets greater than CDN$500,000, unless reinvested within 180 days, without the prior written consent of the Lender. 12.    Limitation on sales and leaseback transactions.
Reporting Requirements:	Usual and customary for facilities of this type, including but not limited to:
	1.    Annual audited combined financial statements and related management discussion and analysis of the Borrower and Guarantor(s) within 120 days

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NORSAT INTERNATIONAL INC. CONFIDENTIAL

	of the end of each Fiscal Year accompanied by MD&A. A report showing calculations of financial covenants including the calculation of Excess Annual Cash Flows and a compliance certificate signed by an officer of the Borrower is to be included with the reporting package.
	2.    Financial forecast to be provided annually within 60 days of each fiscal year end.  Said projections to be completed on a monthly basis and include income statement, balance sheet, cash flow statement, capital expenditure budget, detailed list of assumptions and projected compliance ratios.
	3.    Quarterly unaudited, consolidated financial statements and related management discussion and analysis of the Borrower and Guarantor(s) within 45 days of the end of each Fiscal Quarter with comparison to budget and the previous year period. A report showing calculations of financial covenants and a compliance certificate signed by an officer of the Borrower is to be included with the reporting package.
	4.    Quarterly signed aged lists of accounts receivable on an invoice dated basis within 45 days of each Fiscal Quarter-end.
	5.    Quarterly signed aged lists of accounts payable within 45 days of each Fiscal Quarter-end.
	6.    Quarterly signed inventory listing within 45 days of each Fiscal Quarter-end.
	7.    Prompt notification of management letters; default notices; litigations, and any other material events.
	8.    Such other information as the Lender may reasonably request from time to time.
Expenses:	The Company and the Lead Investor shall be responsible for any and all reasonable costs, fees and expenses (including, without limitation, all reasonable professional fees) incurred by BMO in connection with its due diligence and the preparation, negotiation and registration of this Senior Debt Loan Commitment, all loan and security documents and the other documents and agreements contemplated herein, whether or not the Term Loan or other credit is advanced.
Confidentiality:	This Senior Debt Loan Commitment, its terms and the transactions referred to herein are private and confidential and (other than to the Company, the Lead Investor and its partners, and the Target and their respective officers, directors, senior management and professional advisors) may not be disclosed by the Lead Investor, the Company or any of the Subsidiaries to any person whatsoever without the prior written consent of BMO.
Legal Counsel:	Dentons Canada LLP
Expiry Date:	This Senior Debt Loan Commitment is available for acceptance by the Company and the Lead Investor until 5:00 p.m., Vancouver, British Columbia time, May 19, 2017, after which if unaccepted the Lender will be under no obligation to proceed

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NORSAT INTERNATIONAL INC. CONFIDENTIAL

	with the proposed Facilities or to negotiate definitive loan documentation.
Lapse Date:	The Lender shall have the right to terminate this Senior Debt Loan Commitment, by written notice thereof to the Company and the Lead Investor, if the Closing Date (as hereinafter defined) does not occur on or before September 30th, 2017.
Closing Date:	The date of consummation of the Acquisition and the funding under Facility 2 .
Governing Law:	Province of British Columbia and the laws of Canada applicable in such Province
Language:	It is the express wish of the parties that this agreement and any related documents be drawn up and executed in English. Les parties conviennent que la présente convention et tous les documents s'y rattachant soient rédigés et signés en anglais.

10

BANK OF MONTREAL
Per:	/s/ Keiju Yamasaki
	Name: Keiju Yamasaki
	Title: Managing Director, Corporate Finance Division
Per:
	Name:
	Title:

This Senior Debt Loan Commitment is accepted on behalf of IRIS Canada Acquisition Corp. and Privet Fund Management, LLC

This 13th day of May, 2017

Borrower:		Lead Investor:
IRIS Canada Acquisition Corp.		Privet Fund Management, LLC
Per:	/s/ Ryan Levenson	Per:	/s/ Ryan Levenson
	Name: Ryan Levenson		Name: Ryan Levenson
	Title: Director		Title: Managing Member
Per:		Per:
	Name:		Name:
	Title:		Title:

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NORSAT INTERNATIONAL INC. CONFIDENTIAL

Schedule A – Definitions

Certain Funds Provision:	has the meaning set forth on Schedule D
EBITDA:	Earnings (as defined in the Borrower’s consolidated financial statements prepared in accordance with GAAP) before interest expense, income taxes, depreciation amortization and extraordinary/unusual non-recurring items (such latter items to be agreed upon by the Lender for the respective period).
Excess Annual Cash Flow:	EBITDA less interest paid, unfunded capital expenditure, scheduled principal payments paid, and cash taxes.
Fixed Charge Coverage Ratio:	The ratio of (a) EBITDA minus (i) cash taxes (ii)  unfunded capital expenditures, and (iii) cash distributions to shareholders, divided by (b) debt service (defined as interest paid and principal payments on total debt over the last 12 month period).
Generally Accepted Accounting Principles (GAAP):	Except as otherwise expressly provided herein, all terms of accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time.  All calculations of the components of financial information for the purposes of determining compliance with the financial ratios and financial covenants contained herein shall be made on a basis consistent with GAAP in existence as at the date of the definitive loan agreement and used in preparation of the consolidated financial statements of the Borrower and Guarantors.  Upon adoption by the Borrower and Guarantors of International Financial Reporting Standards (IFRS), or in event of a change in GAAP, the Borrower and Guarantors and the Lender shall negotiate in good faith to revise (if appropriate) such ratios and covenants to give effect to the intention of the parties under this Senior Debt Loan Commitment at the Closing Date, and any new ratio or covenant shall be subject to the approval of the Lender.  In the event that such a negotiation is unsuccessful, all calculations thereafter made for the purpose of determining compliance with the financial ratios and financial covenants contained herein shall be made on a basis consistent with GAAP in existence at the Closing Date.
Governmental Entity:	means any (i) supranational, multinational, federal, territorial, provincial, state, regional, municipal, local or other governmental or public ministry, department, authority, body, armed forces, central bank, court, commission, tribunal, board, bureau or agency, domestic or foreign, (ii) subdivision, agent or authority of any of the above, (iii) quasi-governmental or private body, including any tribunal, commission, regulatory agency or self-regulatory organization, exercising any regulatory, expropriation or taxing authority under or for the account of any of the above, or (iv) stock exchange (including the Exchanges as defined in the Acquisition Agreement), and “Governmental Entities” means more than one Governmental Entity.
Norsat Material Adverse Change:	means any event, change, effect, development, state of facts, condition, circumstance or occurrence that, individually or in the aggregate with other events, effects, developments, state of facts, conditions, circumstances or occurrences would or would reasonably be expected to have a material adverse effect on the business, results of operations, assets, liabilities or financial condition of the Target and its Subsidiaries, taken as a whole; except to the extent that such material adverse effect results from any of the following:
	(i)        any changes in law or interpretations thereof by any Governmental Entity or Regulatory Authority, except to the extent that such changes have a materially disproportionate adverse effect on the Target and its Subsidiaries, taken as a whole, relative to the adverse effect that such changes have on other companies in the Target’s industry;
	(ii)       any changes in general Canadian, United States or global economic conditions or in national or global financial or capital markets, except to the extent such changes have a materially disproportionate adverse effect on the Target and its Subsidiaries, taken as a whole, relative to the adverse effect that such changes have on other companies in

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NORSAT INTERNATIONAL INC. CONFIDENTIAL

	the Target’s industry;
	(iii)      any changes in conditions generally affecting the Target’s industry, except to the extent such changes in conditions have a materially disproportionate adverse effect on the Target and its Subsidiaries, taken as a whole, relative to the adverse effect that such changes have on other companies in the Target’s industry;
	(iv)     changes or proposed changes in GAAP applicable to the Target or the enforcement or interpretation thereof;
	(v)       any natural disaster, act of terrorism or outbreak of war, except to the extent that such event has a materially disproportionate adverse effect on the Target and its Subsidiaries, taken as a whole, relative to the adverse effect that such changes have on other companies in the Target’s industry;
	(vi)      any change in the market price or trading volume of the securities of the Target, including after announcement of the entering into of the Acquisition Agreement (it being understood that the causes underlying such change may be taken into account in determining whether a Norsat Material Adverse Change has occurred);
	(vii)     the failure of the Target in and of itself to meet any internal or public projections, forecasts or estimates of revenues or earnings (it being understood that the causes underlying such change or failure may be taken into account in determining whether a Norsat Material Adverse Change has occurred); or
	(viii)    except for any requirement to operate in the ordinary course of business, any action taken (or refrained from being taken) specifically and expressly required by the Acquisition  Agreement or at the written request of the Parent (as defined in the Acquisition Agreement) or the Borrower;
Person:	means any individual, sole proprietorship, corporation, company, partnership, unincorporated association, association, institution, entity, party, trust, joint venture, estate or other judicial entity or any governmental body.
Regulatory Approvals:	means those sanctions, rulings, consents, orders, exemptions, permits and other approvals (including the lapse, without objection, of a prescribed time under a statute or regulation that states that a transaction may be implemented if a prescribed time lapses following the giving of notice without an objection being made) of Regulatory Authorities and includes all Regulatory Clearances as defined in the Arrangement Agreement.
Regulatory Authority:	means:
	(a)          any multinational or supranational body or organization, nation, government, state, province, country, territory, municipality, quasi-government, administrative, judicial or regulatory authority, agency, board, body, bureau, commission, instrumentality, court or tribunal or any political subdivision thereof, or any central bank (or similar monetary or regulatory authority) thereof, any taxing authority, any ministry or department or agency of any of the foregoing;
	(b)          any self-regulatory organization or stock exchange, including the  Toronto Stock Exchange and the NYSE;
	(c)          any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government; and
	(d)          any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of such entities or other bodies pursuant to the foregoing.
Security Documents:	means the collective reference to all present and future documents, agreements and instruments pursuant to which the Borrower or any Guarantor grants a Security Interest to or

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NORSAT INTERNATIONAL INC. CONFIDENTIAL

	for the benefit of the Lender, alone or together with any other person or persons, in any of its assets securing all or part of the obligations of the Borrower under or pursuant to the Facilities and this Term Sheet or any other Definitive Documents.
Security Interest:	means a hypothec, mortgage, pledge, fixed or floating charge, assignment by way of security or any other security interest securing payment or performance of an obligation.
Senior Funded Debt:	Senior indebtedness for borrowed money, inclusive of all financial contingent obligations (i.e. financial guarantees, capitalized interest, obligations pursuant to capital leases, etc) plus the negative hedging agreement risk of all outstanding hedging agreements.
Specified Acquisition Agreement Representations:	has the meaning set forth in Schedule D attached to this Senior Debt Loan Commitment.
Specified Event of Default:	has the meaning set forth in Schedule D attached to this Senior Debt Loan Commitment.
Specified Representations:	has the meaning set forth in Schedule D attached to this Senior Debt Loan Commitment.
Total Funded Debt:	Senior Funded Debt plus subordinated debt.
Unfunded Capital Expenditures	means for any period the amount of capital expenditures for the Borrower for such period less the amount of any capital expenditures funded by (a) capital leases that are Permitted Liens, (b) Permitted Indebtedness, and (c) additional capital contributions in the form of equity proceeds and/or additional funds injected as shareholder loans which are postponed and subordinated in favor of the Lender; provided however, Unfunded Capital Expenditures cannot be less than zero.

[EXPLANATORY NOTE: “***” indicates the portion of this exhibit that has been omitted and separately filed with the Securities and Exchange Commission pursuant to a request for confidential treatment.]

NORSAT INTERNATIONAL INC. CONFIDENTIAL

SCHEDULE B – GENERAL TERMS AND PROVISIONS

Events of Default:	Usual and customary for facilities of this type (including materiality qualifications, exceptions and baskets to be agreed), including but not limited to (a) failure to pay any interest, principal, fees or other amounts when due; (b) default under any covenant or agreement in any loan document; (c) any loan document is repudiated or is no longer in force and effect; (d) inaccurate or false representations or warranties; (e) cross default with other debt agreements; (f) insolvency; (g) bankruptcy; (h) change of control; (i) unsatisfied judgments and (k) occurrence of a material adverse effect.
Representations & Warranties:	Usual and customary representations and warranties for facilities of this type (including materiality and other qualifications and exceptions to be agreed) , including but not limited to organization and qualification, subsidiaries, authorization and validity of loan documents, use of proceeds and margin stock, financial reports, no material adverse change, full disclosure, intellectual property, governmental authority and licensing, title to properties and assets, no material litigation, payment of taxes, governmental approvals, transactions with affiliates, compliance with laws (including environmental), no violation of agreements, solvency, no broker’s fees, and absence of Default or Event of Default.
Positive Covenants:	Usual and customary for a transaction of this nature (including materiality qualifications, exceptions and baskets to be agreed) including, without limitation, (a) payment of all amounts due, (b) maintenance of corporate existence, right and privileges, (c) maintenance of insurance, (d) payment of taxes, (e) delivery of financial statements, (f) delivery of a business plan and undertaking business in accordance therewith, (g) maintenance of fixed assets, (h) notice of actions, (i) maintenance of records, (j) notice of material events including a material adverse effect, Default or Event of Default, (k) compliance with environmental and other laws, (l) maintenance of material authorizations and (m) delivery of guarantees and security from any additional subsidiaries.
Negative Covenants:	Usual and customary for a transaction of this nature (including materiality qualifications, exceptions and baskets to be agreed) including, without limitation, (a) limitation on amalgamations, consolidations, liquidations, the assumption of contingent liabilities, and other transactions involving transfer of material portion of assets, (b) limitation on Liens other than Permitted Liens (including, without limitation, a negative pledge in respect of the Borrower’s and its subsidiaries’ owned real/immoveable property), (c) limitation on Indebtedness (other than Permitted Indebtedness), (d) limitation on use of proceeds for any acquisition that is hostile, (e) limitation on hedging agreements (other than eligible hedging agreements), (f) limitation on asset dispositions, (g) limitation on change in distribution policy and special distributions, (h) limitations on capital expenditures, (i) limitations on financial assistance, acquisitions, investments, and (j) limitations on changes in business.
Expenses:	The Borrower shall pay all reasonable costs and expenses of the Lender associated with the preparation, due diligence (including third party expenses), and administration of the Facilities and loan documentation, including without limitation the legal fees of the Lender’s counsel, regardless of whether the Facilities close.  Costs and expenses of the Lender, including without limitation its legal fees, in connection with any default or event of default or the enforcement of the loan documents to be reimbursed by the Borrower.
Assignment:	The Borrower shall not assign any of its rights or obligations hereunder. After the Closing Date the Lender shall have the right to assign, sell or participate its rights and obligations in the Facilities or in any borrowing hereunder, in whole or in part, to one or more financial institutions, subject to a minimum assignment amount of CDN$5,000,000, subject to the assignor holding at least CDN$5,000,000 thereafter and the consent of the Borrower not to be unreasonably withheld. Notwithstanding the foregoing, the consent of the Borrower is not required if an event of default has occurred and is continuing.
Increased Costs, Taxes etc.:	The Borrower will reimburse any costs the Lender incurs in performing their obligations under the

[EXPLANATORY NOTE: “***” indicates the portion of this exhibit that has been omitted and separately filed with the Securities and Exchange Commission pursuant to a request for confidential treatment.]

NORSAT INTERNATIONAL INC. CONFIDENTIAL

	Facilities resulting from any change in law, including any reserve or special deposit requirement or any tax or capital requirement or any change in the compliance of the Lender therewith, that has the effect of increasing the cost of funding to the Lender or reducing the effective return on its capital.  All loan repayments shall be made free and clear of any present and future taxes, withholdings or any other deductions, other than customary excluded taxes.
Confidential Information Release:	The Borrower consents to the release of confidential information regarding the business by the Lender to BMO Financial Group business groups, affiliates and subsidiaries for the purpose of assisting the Lender in supporting the Borrower with its strategic plans.
Indemnification:	The Borrower and the Lead Investor agree to indemnify the Lender from and against any and all losses, claims, damages and liabilities arising from activities under or contemplated under this document other than as a result of the Lender’s gross negligence or wilful misconduct.
Consent:	The Borrower authorizes and consents to reproduction, disclosure and use by the Lender of information about the Borrower (including, without limitation, the Borrower’s name and any identifying logos) and the Facilities herein contemplated (all such information being called the “Information”) to enable the Lender to publish promotional “tombstones” and other forms of notices of the Facilities in any manner and in any media (including, without limitation, brochures). The Borrower acknowledges and agrees: that Lender shall be entitled to determine, in its discretion, whether to use the Information; that no compensation will be payable by the Lender resulting there from; and that the Lender shall not have any liability whatsoever to the Borrower or any of its employees, officers, directors, affiliates or shareholders in obtaining and using the Information in accordance with this paragraph.
Acknowledgement:	The Borrower acknowledges that the Facilities are for use by the Borrower and the Guarantors and will be used for the Borrower's and the Borrower’s subsidiaries’ business purposes only.
Evidence of Obligations (Noteless Advances)	The Lender may, but shall not be obliged to, request the Borrower to execute and deliver from time to time such promissory notes as may be required in order to evidence its Obligations in connection with the Facilities.  The Lender shall open and maintain, in accordance with its usual practice, an account or accounts evidencing such Obligations, and the information entered in such accounts shall be deemed to be prima facie correct.

[EXPLANATORY NOTE: “***” indicates the portion of this exhibit that has been omitted and separately filed with the Securities and Exchange Commission pursuant to a request for confidential treatment.]

NORSAT INTERNATIONAL INC. CONFIDENTIAL

SCHEDULE C – ADDITIONAL CONDITIONS PRECEDENT

(a) the requisite approvals of the shareholders and directors of Target and termination or waiver of any shareholder rights plan;

(b) the Interim Order and Final Order (as such terms are defined in the Acquisition Agreement), shall have been obtained or concluded in each case on terms not inconsistent with the Acquisition Agreement, and: (i) the Interim Order and the Final Order shall not have been set aside or modified in a manner unacceptable to BMO, acting reasonably, and, (ii) in the case of waiting, suspensory or investigatory periods, such waiting, suspensory or investigatory periods shall have expired, been terminated or been waived by the applicable Governmental Entity;

(c) all Regulatory Clearances (as defined in the Acquisition Agreement) shall have been obtained and each such Regulatory Clearance shall be in full force and effect and shall not have been modified in a way that will enjoin or prohibit the completion of the transactions contemplated in the Acquisition Agreement;

(d) all Third Party Consents (as defined in the Acquisition Agreement), if any, shall have been obtained in a manner and on terms that are acceptable to BMO acting reasonably;

(e) all other conditions precedent of the Acquisition Agreement in favour of the Borrower and the Parent not specifically described herein shall have been satisfied or waived provided that the waiver of any such other condition precedent shall require BMO approval (acting reasonably) if such waiver would have or would reasonably be expected to have an adverse effect on BMO;

(f) there shall have been no Change in Recommendation (as defined in the Acquisition Agreement) prior to requisite shareholder approval of the Arrangement Resolution (as defined in the Arrangement Agreement);

(g) the Target shall not have received and accepted a Superior Proposal (as defined in the Acquisition Agreement);

(h) the Acquisition Agreement shall not have been terminated, and no modification or amendment made thereto or to the Plan of Arrangement or the Disclosure Letter which has or would reasonably be expected to have an adverse effect on BMO (except any such modification or amendment consented to in writing by BMO, acting reasonably);

(i) the Specified Acquisition Agreement Representations and the Specified Representations shall be true and correct as provided in the Certain Funds Provision;

(j) all covenants of the Target under the Acquisition Agreement to be performed on or before completion of the transactions contemplated in the Acquisition Agreement shall have been duly performed by the Target in all material respects;

(k) no act, action, suit, demand or Proceeding (as defined in the Acquisition Agreement) shall have been commenced or threatened in writing by any Governmental Entity and no law shall have been enacted, promulgated or applied to cease trade, enjoin, prohibit or impose material limitations, damages or material additional conditions on, the completion of the transactions contemplated by the Acquisition Agreement; and

(l) no Specified Event of Default shall have occurred and be continuing.

[EXPLANATORY NOTE: “***” indicates the portion of this exhibit that has been omitted and separately filed with the Securities and Exchange Commission pursuant to a request for confidential treatment.]

NORSAT INTERNATIONAL INC. CONFIDENTIAL

SCHEDULE D

CERTAIN FUNDS PROVISION

Notwithstanding anything to the contrary contained in this Senior Debt Loan Commitment, the Fee Letter, the Definitive Documents or any other letter agreement or undertaking concerning the financing of the Acquisition, the Lender’s commitments hereunder to fund the Facilities on the Closing Date are subject to the satisfaction (or waiver by the Lender) of the following conditions precedent (the “Lender Conditions Precedent”):

(a)            since the date of the December 31, 2016 audited financial statements of the Target and its Subsidiaries there has not been a Norsat Material Adverse Change;

(b)            the execution and delivery by the Borrower and the Guarantors of their respective Definitive Documents in accordance with the terms and provisions of this Senior Debt Loan Commitment; and

(c)            the other conditions set forth under Conditions Precedent (at or prior to Closing) contained in this Senior Debt Loan Commitment and the other conditions set forth in Schedule C attached to this Senior Debt Loan Commitment.

It being understood and agreed that there are no other conditions (implied or otherwise) to the commitments under this Senior Debt Loan Commitment or the funding of the Facilities on the Closing Date.

Notwithstanding anything to the contrary contained in this Senior Debt Loan Commitment, the Fee Letter, the Definitive Documents or any other letter agreement or undertaking concerning the financing of the Acquisition:

(a) the only representations and warranties, the accuracy of which will be a condition to the availability of the Facilities on the Closing Date will be (i) the representations and warranties of the Target made by or with respect to the Target and its subsidiaries in the Acquisition Agreement shall be true and correct in all respects as of the Effective Time (as defined in the Arrangement Agreement) as though made at and as of the Effective Time (except for representations made as of a specified date, the accuracy of which shall be determined as of that specified date) without regard to any materiality or Norsat Material Adverse Change qualifications contained therein, except where the failure or failures of any such representations and warranties to be so true and correct in all respects would not have, individually or in the aggregate, a Norsat Material Adverse Change provided further that the representations and warranties of the Target in Sections 1 (Organization, Good Standing and Qualification), 2 (Capital Structure), 3 (Subsidiaries), 4 (Corporate Authority, Approval and Fairness), 7(b)(A) (No Norsat Material Adverse Change since the Date of the Audited Consolidated Balance Sheet of Target and its Subsidiaries as at December 31, 2016) and 21 (Brokers and Finders) of Schedule C to the Arrangement Agreement shall be true in all respects as of the Effective Time as though made at and as of the Effective Time (the "Specified Acquisition Agreement Representations") and (ii) the Specified Representations (as defined below); and

(b) the terms of the Definitive Documents will be such that they do not impair the availability of the Facilities on the Closing Date if the Lender Conditions Precedent are satisfied (or waived by the Lender) it being understood that to the extent any lien on any collateral (other than (x) any collateral the security interest in which may be perfected by the filing of a financing statement under personal property security legislation of any province or territory of Canada or under the Uniform Commercial Code of any state of the United States of America, or (y) stock certificates or other certificated securities of the Borrower and the Target) is not perfected on the Closing Date after your use of commercially reasonable efforts to do so, the perfection of such lien(s) will not constitute a condition precedent to the availability of the Facilities on the Closing Date, but such liens(s) will be required to be perfected within 10 business days after the Closing Date in the case of non-real estate collateral (or 20 business days, if such perfection requires action to be taken by any third party, such as the execution of documentation or the delivery of possessory collateral), and 20 business days in the case of real estate collateral.

As used herein, (x) "Specified Representations" means the representations and warranties of the Borrower and the Guarantors relating to their corporate existence; corporate power and authority to enter into the Definitive Documents; due authorization, execution, delivery and enforceability of the Definitive Documents; no conflicts of the Definitive Documents with charter documents of the Borrower; the creation and perfection of liens in the collateral (subject to the limitations on creation and perfection set forth above), and the absence of a Specified Event of Default, and (y) "Specified Event of Default"

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NORSAT INTERNATIONAL INC. CONFIDENTIAL

means an event of default under the Definitive Documents arising from the bankruptcy of the Borrower or a payment event of default. This Schedule D is referred to as the "Certain Funds Provision".

[EXPLANATORY NOTE: “***” indicates the portion of this exhibit that has been omitted and separately filed with the Securities and Exchange Commission pursuant to a request for confidential treatment.]

NORSAT INTERNATIONAL INC. CONFIDENTIAL

SCHEDULE E

COPIES OF ARRANGEMENT AGREEMENT AND DISCLOSURE LETTER

EX-99.5

Exhibit 99.5

[EXPLANATORY NOTE: “***” indicates the portion of this exhibit that has been omitted and separately filed with the Securities and Exchange Commission pursuant to a request for confidential treatment.]

Norsat International inc.

Loan Commitment

(the “Subordinated Debt Loan Commitment”)

may 12, 2017

Subject to acceptance and execution of this Subordinated Debt Loan Commitment by the Company and the Lead Investor by no later than 5:00 p.m., Vancouver, British Columbia time, on May 19, 2017, Bank of Montreal d.b.a. BMO Capital Partners, hereby confirms its commitment to provide the Company with financing on the basis of the terms and conditions and for the purposes set forth in this Subordinated Debt Loan Commitment. The undersigned has the authority to bind BMOCP.

Borrower	IRIS Canada Acquisition Corp., a British Columbia corporation (the “Company” or the “Borrower”).  Upon consummation of the amalgamation of the Company with Norsat (the “Amalgamation”), Norsat, as survivor of the Amalgamation, will become successor Borrower in connection with the Loan and will execute any and all joinders, assumption agreements and other documentation reasonably requested by the Lender for purposes of evidence such succession.
Lead Investor:	Privet Fund Management, LLC (“Privet” or the “Lead Investor”)
Guarantors:	Norsat International Inc., a British Columbia corporation (“Target” or “Norsat”) and all existing or hereafter acquired direct or indirect subsidiaries (the “Subsidiaries”) of the Borrower and Target, and IRIS Holdings, Inc., a Delaware corporation (the “Parent”) that will hold all the issued and outstanding shares of the Borrower (collectively, the “Guarantors” and each, a “Guarantor”).
Lender:	Bank of Montreal, d.b.a. BMO Capital Partners (the “Lender” or “BMOCP”).
Amount:	USD$7,903,000 secured subordinated term loan (the “Loan”), available by way of a single advance on a non-revolving basis.
Purpose:	To finance the buyout of all the issued and outstanding shares/assets of Norsat.

Sources and Uses of	Sources	$		Uses	$
Funds: (USD)	Excess Cash on BS	12,627		Purchase Price	66,787
	Senior Revolver ($4.000M)	0
	Senior Term Debt	18,968
	Subordinated Debt	7,903
	Rolled Equity	11,169
	New Investor Equity	18,620		Transaction Costs	2,500
	Total Sources	$	69,287	Total Uses	$	69,287

[EXPLANATORY NOTE: “***” indicates the portion of this exhibit that has been omitted and separately filed with the Securities and Exchange Commission pursuant to a request for confidential treatment.]

NORSAT INTERNATIONAL INC. CONFIDENTIAL

Term:	*** months from disbursement (“Maturity”).
Disbursement:	One single drawing on closing.
Interest Rate:	***% per annum; ***% of which shall be calculated and payable monthly in arrears on the last day of each month and ***% of which shall be calculated and compounded monthly and payable on the earliest of: (a) Maturity; (b) repayment of the Loan or any part thereof and (c) acceleration of the Loan upon the occurrence of an event of default under the Loan.
Default Interest Rate:	Upon the occurrence, and during the continuance, of a default under the Loan, interest on the Loan will be ***% per annum, payable on demand.
Repayment:	The Loan is repayable, in full, on the earlier of: (a) Maturity and (b) acceleration of the Loan upon the occurrence of an event of default under the Loan.
Mandatory Prepayments:	Subject to the terms of any applicable subordination and intercreditor agreement, the Borrower shall make mandatory prepayments in an amount equal to the net proceeds received from: (a) any sales or issuances of equity or debt securities by the Borrower or any Guarantor (other than certain permitted sales or issuances of equity or debt securities to be agreed in the Definitive Documents); and (b) any sale or disposition of any assets (other than sales of inventory in the ordinary course of business) above a basket amount to be determined by the Lender, and not otherwise reinvested within 180 days or required to be applied to Senior Funded Debt.
Voluntary Prepayments:	The Company shall not be entitled to make voluntary prepayments until the earlier of (i) the third anniversary of the Closing Date (as defined below) and (ii) the “Premium” provision below having been satisfied in full.
Premium:	If the Company prepays the Loan for any reason including, but not limited to a change in control or an initial public offering, or the obligations under the Loan are accelerated or otherwise terminated before Maturity, the Company will pay a premium to ensure that the BMOCP shall have earned a minimum interest compensation equal to *** months of interest on the Loan.
Reporting Requirements:	Standard for financings of this type including, without limitation:
	1.            within 120 days following the Company's fiscal year end, annual consolidated financial statements of the Company and the Guarantors (prepared on a consolidated basis), prepared in accordance with ASPE and accompanied by an unqualified audit opinion provided by an

2

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NORSAT INTERNATIONAL INC. CONFIDENTIAL

	auditing firm acceptable to BMOCP;
	2.            within 45 days following the end of each calendar month, monthly financial statements of the Company and the Guarantors (prepared on a consolidated and unconsolidated basis), prepared by the Company in accordance with ASPE;
	3.            within 45 days following the end of the Company’s fiscal quarter, a management discussion and analysis of results to date, including commentary on variances to amounts contained in the Company's operating and capital budget;
	4.            within 45 days following the end of the Company’s fiscal quarter ends, a signed compliance certificate accompanied by a report showing calculations of financial covenants;
	5.            within 60 days after the commencement of each fiscal year of the Company, an annual operating and capital budget (projections) including a consolidated balance sheet, consolidated income statement and statement of cash flows all prepared on a monthly basis and in accordance with ASPE;
	6.            any and all reports provided by the Company to its senior lender(s) from time to time; and
	7.            such other information as the BMOCP may reasonably request from time to time.
Financial Covenants:	Financial covenants will be tested quarterly and will be determined on a trailing 12 month basis (unless specified otherwise), in accordance with generally accepted accounting practices (‘GAAP’ or ‘IFRS’) and conditions normally applicable to transactions of this nature and will include, without limitation, the following:
	1.    Maximum  ratio of Total Funded Debt to EBITDA of:
	a.    ***:***    at closing;
	b.    ***:***    following closing until 2017 FYE;
	c.    ***:***    by 2018 FYE;
	d.    ***:***    by 2019 FYE;

3

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NORSAT INTERNATIONAL INC. CONFIDENTIAL

e.    ***:***   by 2020 FYE;

f.    ***:***    by 2021 FYE.

2.    Maximum  ratio of Senior Funded Debt to EBITDA of:

a.    ***:***    at closing;

b.    ***:***    following closing until 2017 FYE;

c.    ***:***    by 2018 FYE;

d.    ***:***    by 2019 FYE;

	e.    ***:***    by 2020 FYE;
	f.    ***:***    by 2021 FYE.
	3.    Minimum Fixed Charge Coverage ratio of ***:***.
	4.    Capital expenditures to be reviewed and approved annually by the Lender based on the Borrower’s business plan.
Non-Financial Covenants:	Usual and customary non-financial covenants, including positive and negative covenants outlined in Schedule B (that are not inconsistent with the terms and provisions of this Subordinated Debt Loan Commitment, and will not be more restrictive than the corresponding provisions of Senior Funded Debt provided to the Borrower by BMO), and not limited to:
	1.    For Permitted Acquisitions: (1) target’s business must be in similar type of business to Borrower; (2) target must be located in Canada or the U.S.A.; (3) must contribute positive EBITDA for the Borrower and not be hostile; (4) maximum amount to be paid is CDN$2,000,000 per acquisition and CDN$5,000,000 per annum; (5) if not assets, Borrower must acquire control; (6) if real property, satisfactory environmental due diligence required; and (7) in 60 days, previous security (if any) over such acquisition to be released and new security taken.
	2.    The Borrower shall maintain bank accounts at the Bank of Montreal during the life of the Loan, and all cash management will be held with the Bank of Montreal.
	3.    Restriction on payment of dividends, interest or principal on subrogated

4

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NORSAT INTERNATIONAL INC. CONFIDENTIAL

	debt without the prior written consent of the Lender, subject to provisions of applicable subordination and intercreditor agreement.
	4.    Limitations on additional indebtedness other than permitted indebtedness.
	5.    Negative pledge under which the Borrower will not encumber mortgage or permit liens to be taken on any of its assets without the prior written consent of the Lender with the exception of permitted liens approved by the Lender (“Permitted Liens”).
	6.    Prohibition on guarantees, financial assistance, investments, employee loans and affiliate transactions, except for those currently held and in amounts approved by the Lender. In no event shall any such financial transfer cause the Borrower to breach a covenant of this Indicative Term Sheet.
	7.    No additional management remuneration/bonuses (on top of its normalized salary), dividends, and or any other employees’ loans via the balance sheet that will cause the Borrower to breach a covenant of this agreement.
	8.    Restrictions on capital reorganizations and other changes in capital structure of the Borrower without consent of the Lender, except for the Amalgamation.
	9.    Restrictions on issuance of any securities, warrants or convertible instruments which give rise to a right to receive any shares in the capital of the Borrower or their subsidiaries without consent of the Lender.
	10.    No change of control or ownership of the Borrower and Guarantors without the prior written consent of the Lender.
	11.    Restrictions on the sale of assets greater than CDN$500,000, unless reinvested within 180 days, without the prior written consent of the Lender.
	12.    Limitation on sales and leaseback transactions.
Events of Default:	Standard for financings of this type including, without limitation:
	1.            default in the payment of any principal, interest, fees or other amounts payable by the Company to BMOCP and/or default in the performance of any other covenant (including materiality qualifications, exceptions and baskets to be agreed).

5

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NORSAT INTERNATIONAL INC. CONFIDENTIAL

	2.            cross default to other material debt.
	3.            customary bankruptcy and insolvency events relating to the Company and/or any of the Subsidiaries or Guarantors.
	4.            a material adverse change in the financial condition, assets, operations or prospects of the Company and/or the Subsidiaries.
	5.            change of control.
Observer:	For so long as the Loan is outstanding, BMOCP shall be entitled to have one observer present at all meetings of the board of directors of the Company and its Subsidiaries. The reasonable out of pocket travel and other incidental expenses of such observer shall be for the account of the Company.
Security:	The Borrower and the Guarantors shall provide the usual and customary credit and security documents for transactions of this type (together with such other security as Lender, acting reasonably, may consider to be necessary or advisable in the circumstances having regard to the transaction and the results of the Lender’s due diligence) not inconsistent with the terms and provisions set forth herein and otherwise in form and substance satisfactory to the Lender and their counsel (collectively, the “Definitive Documents”), including, without limitation, the following:
	1.    Credit Agreement, incorporating the Terms and Conditions outlined in this Subordinated Debt Loan Commitment and general terms and conditions usual and customary for facilities of this type which the Lender considers necessary or advisable in the circumstances (but not inconsistent with the terms and provisions set forth herein).
	2.    Registered General Security Agreement (“GSA”) and/or such other documentation as required, providing the Lender with a second ranking security interest (subject only to BMO’s first lien and other Permitted Liens) over all of the tangible and intangible assets of the Borrower and the Guarantors whether now owned or hereafter acquired.
	3.    Corporate Guarantees from each Guarantor.
	4.    Pledge of all outstanding shares of the Borrower and the Guarantors.
	5.    Assignment of other material contracts, permits, agreements, licenses, management agreements (to the extent assignable), at the discretion of the Lender.

6

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NORSAT INTERNATIONAL INC. CONFIDENTIAL

6.    Landlords’ waivers, or, at a minimum, access landlord agreement on a best efforts basis post-closing.

7.    Assignment of all perils Insurance from the Borrower and the Guarantors with the Lender to be named as loss payee on business and fire insurance. Insurance to include business interruption insurance. Certified copy of policy to be provided. Standard mortgage clause to be contained in the policy.

8.    Assignment of creditor insurance (if any), as approved by the Lender, in favour of the Lender (as required), with any required consents of insurance companies on a best efforts basis post-closing, and full insurance review within 60 days of closing and additional insurance as reasonably required by BMOCP.

9.    Assignment, Postponement and Subordination of all shareholders’ and related party loans.

10.   Executed intercreditor agreements with respect to any subordinated debt holders.

11.  If required by the Lender, title insurance in respect of each property owned by the Borrower or any Guarantor, at the time such property is mortgaged to Lender.

12.  A covenant and undertaking from the Lead Investor in favour of BMOCP agreeing, if called upon by BMOCP, to contribute or cause Privet Fund LP and/or Privet Capital Investments I, LP to contribute additional equity to the Borrower or Norsat (via the Parent) in an amount sufficient to satisfy any and all amounts paid or payable (whether by way of agreement, court order or judgment) for the shares of any shareholders of Norsat exercising their dissent rights in respect of the acquisition by the Borrower of all common shares of Norsat other than those common shares held by the Parent (the “Acquisition”).

13.   Environmental Indemnity with respect to all owned and leased real property.  

14.   Solicitor’s letter of opinion over loan and security documentation.

7

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NORSAT INTERNATIONAL INC. CONFIDENTIAL

Conditions Precedent (At or prior to Closing):	BMOCP’s commitment to fund the Loan shall be subject to the following conditions to be satisfied or waived by BMOCP on or prior to closing of the Acquisition:
	1.    Minimum cash equity contribution on closing of US $29,789,000 by the Parent, comprised of roll-over equity of US $11,169,000 by Privet Fund LP, and not less than US $18,620,000 by Privet Capital Investments I, LP, with the Lead Investor as the sole general partner of each of Privet Fund LP and Privet Capital Investments I, LP, and the Borrower being a wholly owned, indirect subsidiary of Privet Fund LP and Privet Capital Investments I, LP on closing, 38.5% and 61.5% respectively.
	2.    Execution, delivery and registration (where applicable, subject to the Certain Funds Provision) as a second ranking security interest subject only to BMO as senior lender and subject to Permitted Liens of all Definitive Documents or, in the case of security to be provided by Target and its subsidiaries, undertakings or arrangements satisfactory to BMO for such execution, delivery and registration of such security.
	3.    receipt of favourable customary legal opinions from counsel to the Company and the Guarantors all in form and substance reasonably satisfactory to BMOCP and its counsel including without limitation opinions with respect to corporate existence, due authorization, execution and delivery, enforceability, registration, perfection, non contravention with applicable laws and constating documents, and that all material Regulatory Approvals and other governmental approvals and consents have been obtained with respect to the Acquisition and the execution, delivery and performance of the Definitive Documents;
	4.    receipt by BMOCP and its legal counsel of fully executed copies of the arrangement agreement in the form attached hereto as Schedule E to this signed Subordinated Debt Loan Commitment Letter (the “Acquisition Agreement”) and a disclosure letter from the Target addressed to the Borrower and Parent in the form attached hereto as Schedule E to this signed Subordinated Debt Loan Commitment Letter (the “Disclosure Letter”) previously provided by the Target to Hytera Communications Co. Ltd. and Hytera Project Corp.;
	5.    arrangements satisfactory to BMOCP for the completion of the acquisition,

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NORSAT INTERNATIONAL INC. CONFIDENTIAL

	of the Target by the Borrower (the “Acquisition”) contemporaneously with the closing of the Loan, on the terms provided in the Acquisition Agreement and the plan of arrangement attached as Schedule B to the Acquisition Agreement (the “Plan of Arrangement”);
	6.    payment of all fees and expenses owing to BMOCP with respect to the Loan;
	7.    repayment and cancellation of the Target’s existing credit facilities upon Closing (excluding permitted indebtedness to be agreed);
	8.    receipt of releases, discharges and postponements (in registrable form where appropriate) covering all encumbrances affecting the collateral charged or to be charged by the Definitive Documents which are not permitted encumbrances, or undertakings satisfactory to BMOCP to provide such releases, discharges and postponements;
	9.    BMOCP shall be satisfied, acting reasonably, that the depositary agreement pursuant to which BMOCP net loan proceeds will be deposited with the Depositary (as defined in the Acquisition Agreement) pre-closing together with the additional cash funds required for closing,  provides for the unconditional and prompt return of such loan proceeds  to BMOCP  if the transaction does not complete for any reason whatsoever;
	10.   receipt of all information necessary in order for Lender  to comply with legal and internal requirements in respect of money laundering legislation, proceeds of crime legislation and “know your customer” requirements;
	11.   Delivery of compliance certificate at closing confirming pro forma compliance with the financial covenants described in items 1, 2 and 3 under “Financial Covenants” below; and
	12.   the additional conditions precedent set out in Schedule C hereto.
Assignment:	After the Closing Date, BMOCP will have the right (i) to assign all or a part of their debt investment or commitments in minimum amount of $500,000 and (ii) to sell participations in all or part of their investment or commitments to a Canadian or US resident, with consent of the Borrower not to be unreasonably withheld, provided that no Borrower consent is required if an event of default has occurred and is continuing.

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NORSAT INTERNATIONAL INC. CONFIDENTIAL

Upfront Fee:	See the Fee letter.
Break Fee:	See the Fee Letter
Expenses:	The Company and the Lead Investor shall be responsible for any and all reasonable costs, fees and expenses (including, without limitation, all reasonable professional fees) incurred by BMOCP in connection with its due diligence and the preparation, negotiation and registration of all loan and security documents and the other documents and agreements contemplated herein, whether or not the Loan is advanced.
Confidentiality:	This Subordinated Debt Loan Commitment, its terms and the transactions referred to herein are private and confidential and (other than to the Company's officers, directors, senior management and professional advisors) may not be disclosed by the Company or any of the Subsidiaries to any person whatsoever without the prior written consent of BMOCP.
Acquisition, Use and Release of Confidential Information:	The Company consents to BMOCP or certain BMOCP Financial Group business groups and/or subsidiaries making inquiries, including the collection of personal, corporate and business information (“the Confidential Information”) about the Company from such persons, financial institutions, credit bureaus, personal information Lenders or other entities as it deems necessary in order to evaluate and/or administer any relationship or potential relationship with the Company. The Company consents to the release of such confidential information regarding the Company by BMOCP to certain BMOCP Financial Group business groups and /or subsidiaries and vice-versa for the purpose of assisting BMOCP and/or BMOCP Financial Group in evaluating the opportunity and supporting the Company with its strategic plans. The Company further acknowledges that BMOCP is not an Agent of BMOCP Financial Group and the BMOCP Financial Group is not an Agent of BMOCP. Any discussions, representations or other communications by BMOCP with the Company are not in any manner binding on BMOCP Financial Group and vice-versa.
Authorization and Consent:	The Company authorizes and consents to reproduction, disclosure and use by BMOCP of information about the Company (including, without limitation, the Company's name and any identifying logos) and the transaction(s) herein contemplated (including, without limitation, the Financing) (all such information being called the “Information”) to enable BMOCP to publish promotional "tombstones" and other forms of notices of the Financing in any manner and in any media (including, without limitation, brochures). The Company

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NORSAT INTERNATIONAL INC. CONFIDENTIAL

	acknowledges and agrees that: (a) no compensation will be payable by BMOCP resulting therefrom; and (b) BMOCP shall have no liability whatsoever to the Company or any of its employees, officers, directors, shareholders or affiliates in obtaining and using the Information in accordance with this paragraph.
Indemnity:	The Company hereby indemnifies BMOCP and its officers, directors, employees, advisers and Lenders (each an “Indemnified Person”) and holds each of them harmless from and against all losses, costs, expenses (including, without limitation, all professional fees) and damages incurred by an Indemnified Person arising out of, relating to or resulting from this Subordinated Debt Loan Commitment and/or the Loan (whether or not the Loan is advanced), provided that no Indemnified Person will be indemnified for its own gross negligence or wilful misconduct.
Governing Law:	The laws of the Province of British Columbia and of Canada applicable therein.
Expiry:	This Subordinated Debt Loan Commitment is open for acceptance until 5:00 p.m. Vancouver, British Columbia time May 19, 2017.
Lapse Date:	BMOCP shall have the right to terminate this Subordinated Debt Loan Commitment, by written notice thereof to the Company and the Lead Investor, if the Closing Date  does not occur on or before September 30th, 2017.
Closing Date:	The date of consummation of the Acquisition and the funding of the Loan.

11

NORSAT INTERNATIONAL INC. CONFIDENTIAL

BANK OF MONTREAL d.b.a. BMO Capital Partners
Per:	/s/ Lee Grimshaw
	Name: Lee Grimshaw
	Title: Managing Director
Per:
	Name:
	Title:

This Subordinated Debt Loan Commitment is accepted on behalf of IRIS Canada Acquisition Corp. and Privet Fund Management, LLC

This 13 day of May, 2017

Borrower:		Lead Investor:
IRIS Canada Acquisition Corp.		Privet Fund Management, LLC
Per:	/s/ Ryan Levenson	Per:	/s/ Ryan Levenson
	Name: Ryan Levenson		Name: Ryan Levenson
	Title: Director		Title: Managing Member
Per:		Per:
	Name:		Name:
	Title:		Title:

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NORSAT INTERNATIONAL INC. CONFIDENTIAL

Schedule A – Definitions

Certain Funds Provision:	has the meaning set forth on Schedule D
EBITDA:	Earnings (as defined in the Borrower’s consolidated financial statements prepared in accordance with GAAP) before interest expense, income taxes, depreciation amortization and extraordinary/unusual non-recurring items (such latter items to be agreed upon by the Lender for the respective period).
Excess Annual Cash Flow:	EBITDA less interest paid, unfunded capital expenditure, scheduled principal payments paid, and cash taxes.
Fixed Charge Coverage Ratio:	The ratio of (a) EBITDA minus (i) cash taxes (ii)  unfunded capital expenditures, and (iii) cash distributions to shareholders, divided by (b) debt service (defined as interest paid and principal payments on total debt over the last 12 month period).
Generally Accepted Accounting Principles (GAAP):	Except as otherwise expressly provided herein, all terms of accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time.  All calculations of the components of financial information for the purposes of determining compliance with the financial ratios and financial covenants contained herein shall be made on a basis consistent with GAAP in existence as at the date of the definitive loan agreement and used in preparation of the consolidated financial statements of the Borrower and Guarantors.  Upon adoption by the Borrower and Guarantors of International Financial Reporting Standards (IFRS), or in event of a change in GAAP, the Borrower and Guarantors and the Lender shall negotiate in good faith to revise (if appropriate) such ratios and covenants to give effect to the intention of the parties under this Subordinated Debt Loan Commitment at the Closing Date, and any new ratio or covenant shall be subject to the approval of the Lender.  In the event that such a negotiation is unsuccessful, all calculations thereafter made for the purpose of determining compliance with the financial ratios and financial covenants contained herein shall be made on a basis consistent with GAAP in existence at the Closing Date.
Governmental Entity:	means any (i) supranational, multinational, federal, territorial, provincial, state, regional, municipal, local or other governmental or public ministry, department, authority, body, armed forces, central bank, court, commission, tribunal, board, bureau or agency, domestic or foreign, (ii) subdivision, agent or authority of any of the above, (iii) quasi-governmental or private body, including any tribunal, commission, regulatory agency or self-regulatory organization, exercising any regulatory, expropriation or taxing authority under or for the account of any of the above, or (iv) stock exchange (including the Exchanges as defined in the Acquisition Agreement), and “Governmental Entities” means more than one Governmental Entity.
Norsat Material Adverse Change:	means any event, change, effect, development, state of facts, condition, circumstance or occurrence that, individually or in the aggregate with other events, effects, developments, state of facts, conditions, circumstances or occurrences would or would reasonably be expected to have a material adverse effect on the business, results of operations, assets, liabilities or financial condition of the Target and its Subsidiaries, taken as a whole; except to the extent that such material adverse effect results from any of the following:
	(i)       any changes in law or interpretations thereof by any Governmental Entity or Regulatory Authority, except to the extent that such changes have a materially disproportionate adverse effect on the Target and its Subsidiaries, taken as a whole, relative to the adverse effect that such changes have on other companies in the Target’s industry;

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NORSAT INTERNATIONAL INC. CONFIDENTIAL

	(ii)       any changes in general Canadian, United States or global economic conditions or in national or global financial or capital markets, except to the extent such changes have a materially disproportionate adverse effect on the Target and its Subsidiaries, taken as a whole, relative to the adverse effect that such changes have on other companies in the Target’s industry;
	(iii)       any changes in conditions generally affecting the Target’s industry, except to the extent such changes in conditions have a materially disproportionate adverse effect on the Target and its Subsidiaries, taken as a whole, relative to the adverse effect that such changes have on other companies in the Target’s industry;
	(iv)      changes or proposed changes in GAAP applicable to the Target or the enforcement or interpretation thereof;
	(v)      any natural disaster, act of terrorism or outbreak of war, except to the extent that such event has a materially disproportionate adverse effect on the Target and its Subsidiaries, taken as a whole, relative to the adverse effect that such changes have on other companies in the Target’s industry;
	(vi)      any change in the market price or trading volume of the securities of the Target, including after announcement of the entering into of the Acquisition Agreement (it being understood that the causes underlying such change may be taken into account in determining whether a Norsat Material Adverse Change has occurred);
	(vii)     the failure of the Target in and of itself to meet any internal or public projections, forecasts or estimates of revenues or earnings (it being understood that the causes underlying such change or failure may be taken into account in determining whether a Norsat Material Adverse Change has occurred); or
	(viii)   except for any requirement to operate in the ordinary course of business, any action taken (or refrained from being taken) specifically and expressly required by the Acquisition  Agreement or at the written request of the Parent (as defined in the Acquisition Agreement) or the Borrower;
Person:	means any individual, sole proprietorship, corporation, company, partnership, unincorporated association, association, institution, entity, party, trust, joint venture, estate or other judicial entity or any governmental body.
Regulatory Approvals:	means those sanctions, rulings, consents, orders, exemptions, permits and other approvals (including the lapse, without objection, of a prescribed time under a statute or regulation that states that a transaction may be implemented if a prescribed time lapses following the giving of notice without an objection being made) of Regulatory Authorities and includes all Regulatory Clearances as defined in the Arrangement Agreement.
Regulatory Authority:	means:
	(a)          any multinational or supranational body or organization, nation, government, state, province, country, territory, municipality, quasi-government, administrative, judicial or regulatory authority, agency, board, body, bureau, commission, instrumentality, court or tribunal or any political subdivision thereof, or any central bank (or similar monetary or regulatory authority) thereof, any taxing authority, any ministry or department or agency of any of the foregoing;
	(b)          any self-regulatory organization or stock exchange, including the Toronto Stock

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NORSAT INTERNATIONAL INC. CONFIDENTIAL

	Exchange and the NYSE;
	(c)          any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government; and
	(d)          any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of such entities or other bodies pursuant to the foregoing.
Security Documents:	means the collective reference to all present and future documents, agreements and instruments pursuant to which the Borrower or any Guarantor grants a Security Interest to or for the benefit of the Lender, alone or together with any other person or persons, in any of its assets securing all or part of the obligations of the Borrower under or pursuant to the Loan and this Term Sheet or any other Definitive Documents.
Security Interest:	means a hypothec, mortgage, pledge, fixed or floating charge, assignment by way of security or any other security interest securing payment or performance of an obligation.
Senior Funded Debt:	Senior indebtedness for borrowed money, inclusive of all financial contingent obligations (i.e. financial guarantees, capitalized interest, obligations pursuant to capital leases, etc) plus the negative hedging agreement risk of all outstanding hedging agreements.
Specified Acquisition Agreement Representations:	has the meaning set forth in Schedule D attached to this Subordinated Debt Loan Commitment.
Specified Event of Default:	has the meaning set forth in Schedule D attached to this Subordinated Debt Loan Commitment.
Specified Representations:	has the meaning set forth in Schedule D attached to this Subordinated Debt Loan Commitment.
Total Funded Debt:	Senior Funded Debt plus subordinated debt.
Unfunded Capital Expenditures	means for any period the amount of capital expenditures for the Borrower for such period less the amount of any capital expenditures funded by (a) capital leases that are Permitted Liens, (b) Permitted Indebtedness, and (c) additional capital contributions in the form of equity proceeds and/or additional funds injected as shareholder loans which are postponed and subordinated in favor of the Lender; provided however, Unfunded Capital Expenditures cannot be less than zero.

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NORSAT INTERNATIONAL INC. CONFIDENTIAL

SCHEDULE B – GENERAL TERMS AND PROVISIONS

Events of Default:	Usual and customary for facilities of this type (including materiality qualifications, exceptions and baskets to be agreed) , including but not limited to (a) failure to pay any interest, principal, fees or other amounts when due; (b) default under any covenant or agreement in any loan document; (c) any loan document is repudiated or is no longer in force and effect; (d) inaccurate or false representations or warranties; (e) cross default with other debt agreements; (f) insolvency; (g) bankruptcy; (h) change of control; (i) unsatisfied judgments and (k) occurrence of a material adverse effect.
Representations & Warranties:	Usual and customary representations and warranties for facilities of this type (including materiality and other qualifications and exceptions to be agreed) , including but not limited to organization and qualification, subsidiaries, authorization and validity of loan documents, use of proceeds and margin stock, financial reports, no material adverse change, full disclosure, intellectual property, governmental authority and licensing, title to properties and assets, no material litigation, payment of taxes, governmental approvals, transactions with affiliates, compliance with laws (including environmental), no violation of agreements, solvency, no broker’s fees, and absence of Default or Event of Default.
Positive Covenants:	Usual and customary for a transaction of this nature (including materiality qualifications, exceptions and baskets to be agreed) including, without limitation, (a) payment of all amounts due, (b) maintenance of corporate existence, right and privileges, (c) maintenance of insurance, (d) payment of taxes, (e) delivery of financial statements, (f) delivery of a business plan and undertaking business in accordance therewith, (g) maintenance of fixed assets, (h) notice of actions, (i) maintenance of records, (j) notice of material events including a material adverse effect, Default or Event of Default, (k) compliance with environmental and other laws, (l) maintenance of material authorizations and (m) delivery of guarantees and security from any additional subsidiaries.
Negative Covenants:	Usual and customary for a transaction of this nature (including materiality qualifications, exceptions and baskets to be agreed) including, without limitation, (a) limitation on amalgamations, consolidations, liquidations, the assumption of contingent liabilities, and other transactions involving transfer of material portion of assets, (b) limitation on Liens other than Permitted Liens (including, without limitation, a negative pledge in respect of the Borrower’s and its subsidiaries’ owned real/immoveable property), (c) limitation on Indebtedness (other than Permitted Indebtedness), (d) limitation on use of proceeds for any acquisition that is hostile, (e) limitation on hedging agreements (other than eligible hedging agreements), (f) limitation on asset dispositions, (g) limitation on change in distribution policy and special distributions, (h) limitations on capital expenditures, (i) limitations on financial assistance, acquisitions, investments, and (j) limitations on changes in business.
Expenses:	The Borrower shall pay all reasonable costs and expenses of the Lender associated with the preparation, due diligence (including third party expenses), and administration of the Loan and loan documentation, including without limitation the legal fees of the Lender’s counsel, regardless of whether the Loan closes.  Costs and expenses of the Lender, including without limitation its legal fees, in connection with any default or event of default or the enforcement of the loan documents to be reimbursed by the Borrower.
Assignment:	The Borrower shall not assign any of its rights or obligations hereunder.
Increased Costs, Taxes etc.:	The Borrower will reimburse any costs the Lender incurs in performing their obligations under the

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NORSAT INTERNATIONAL INC. CONFIDENTIAL

	Loan resulting from any change in law, including any reserve or special deposit requirement or any tax or capital requirement or any change in the compliance of the Lender therewith, that has the effect of increasing the cost of funding to the Lender or reducing the effective return on its capital.  All loan repayments shall be made free and clear of any present and future taxes, withholdings or any other deductions, other than customary excluded taxes.
Confidential Information Release:	The Borrower consents to the release of confidential information regarding the business by the Lender to BMOCP Financial Group business groups, affiliates and subsidiaries for the purpose of assisting the Lender in supporting the Borrower with its strategic plans.
Indemnification:	The Borrower and the Lead Investor agree to indemnify the Lender from and against any and all losses, claims, damages and liabilities arising from activities under or contemplated under this document other than as a result of the Lender’s gross negligence or wilful misconduct.
Consent:	The Borrower authorizes and consents to reproduction, disclosure and use by the Lender of information about the Borrower (including, without limitation, the Borrower’s name and any identifying logos) and the Loan herein contemplated (all such information being called the “Information”) to enable the Lender to publish promotional “tombstones” and other forms of notices of the Loan in any manner and in any media (including, without limitation, brochures). The Borrower acknowledges and agrees: that Lender shall be entitled to determine, in its discretion, whether to use the Information; that no compensation will be payable by the Lender resulting there from; and that the Lender shall not have any liability whatsoever to the Borrower or any of its employees, officers, directors, affiliates or shareholders in obtaining and using the Information in accordance with this paragraph.
Acknowledgement:	The Borrower acknowledges that the Loan is for use by the Borrower and the Guarantors and will be used for the Borrower's and the Borrower’s subsidiaries’ business purposes only.
Evidence of Obligations (Noteless Advances)	The Lender may, but shall not be obliged to, request the Borrower to execute and deliver from time to time such promissory notes as may be required in order to evidence its Obligations in connection with the Loan.  The Lender shall open and maintain, in accordance with its usual practice, an account or accounts evidencing such Obligations, and the information entered in such accounts shall be deemed to be prima facie correct.

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NORSAT INTERNATIONAL INC. CONFIDENTIAL

SCHEDULE C – ADDITIONAL CONDITIONS PRECEDENT

(a) the requisite approvals of the shareholders and directors of Target and termination or waiver of any shareholder rights plan;

(b) the Interim Order and Final Order (as such terms are defined in the Acquisition Agreement), shall have been obtained or concluded in each case on terms not inconsistent with the Acquisition Agreement, and: (i) the Interim Order and the Final Order shall not have been set aside or modified in a manner unacceptable to BMOCP, acting reasonably, and, (ii) in the case of waiting, suspensory or investigatory periods, such waiting, suspensory or investigatory periods shall have expired, been terminated or been waived by the applicable Governmental Entity;

(c) all Regulatory Clearances (as defined in the Acquisition Agreement) shall have been obtained and each such Regulatory Clearance shall be in full force and effect and shall not have been modified in a way that will enjoin or prohibit the completion of the transactions contemplated in the Acquisition Agreement;

(d) all Third Party Consents (as defined in the Acquisition Agreement), if any, shall have been obtained in a manner and on terms that are acceptable to BMOCP acting reasonably;

(e) all other conditions precedent of the Acquisition Agreement in favour of the Borrower and the Parent not specifically described herein shall have been satisfied or waived provided that the waiver of any such other condition precedent shall require BMOCP approval (acting reasonably) if such waiver would have or would reasonably be expected to have an adverse effect on BMOCP;

(f) there shall have been no Change in Recommendation (as defined in the Acquisition Agreement) prior to requisite shareholder approval of the Arrangement Resolution (as defined in the Arrangement Agreement);

(g) the Target shall not have received and accepted a Superior Proposal (as defined in the Acquisition Agreement);

(h) the Acquisition Agreement shall not have been terminated, and no modification or amendment made thereto or to the Plan of Arrangement or the Disclosure Letter which has or would reasonably be expected to have an adverse effect on BMOCP (except any such modification or amendment consented to in writing by BMOCP, acting reasonably);

(i) the Specified Acquisition Agreement Representations and the Specified Representations shall be true and correct as provided in the Certain Funds Provision;

(j) all covenants of the Target under the Acquisition Agreement to be performed on or before completion of the transactions contemplated in the Acquisition Agreement shall have been duly performed by the Target in all material respects;

(k) no act, action, suit, demand or Proceeding (as defined in the Acquisition Agreement) shall have been commenced or threatened in writing by any Governmental Entity and no law shall have been enacted, promulgated or applied to cease trade, enjoin, prohibit or impose material limitations, damages or material additional conditions on, the completion of the transactions contemplated by the Acquisition Agreement; and

(l) no Specified Event of Default shall have occurred and be continuing.

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NORSAT INTERNATIONAL INC. CONFIDENTIAL

SCHEDULE D

CERTAIN FUNDS PROVISION

Notwithstanding anything to the contrary contained in this Senior Debt Loan Commitment, the Fee Letter, the Definitive Documents or any other letter agreement or undertaking concerning the financing of the Acquisition, the Lender’s commitments hereunder to fund the Loan on the Closing Date are subject to the satisfaction (or waiver by the Lender) of the following conditions precedent (the “Lender Conditions Precedent”):

(a)        since the date of the December 31, 2016 audited financial statements of the Target and its Subsidiaries there has not been a Norsat Material Adverse Change;

(b)        the execution and delivery by the Borrower and the Guarantors of their respective Definitive Documents in accordance with the terms and provisions of this Subordinated Debt Loan Commitment; and

(c)        the other conditions set forth under Conditions Precedent (at or prior to Closing) contained in this Subordinated Debt Loan Commitment and the other conditions set forth in Schedule C attached to this Subordinated Debt Loan Commitment.

It being understood and agreed that there are no other conditions (implied or otherwise) to the commitments under this Subordinated Debt Loan Commitment or the funding of the Loan on the Closing Date.

Notwithstanding anything to the contrary contained in this Subordinated Debt Loan Commitment, the Fee Letter, the Definitive Documents or any other letter agreement or undertaking concerning the financing of the Acquisition:

(a) the only representations and warranties, the accuracy of which will be a condition to the availability of the Loan on the Closing Date will be (i) the representations and warranties of the Target made by or with respect to the Target and its subsidiaries in the Acquisition Agreement shall be true and correct in all respects as of the Effective Time (as defined in the Arrangement Agreement) as though made at and as of the Effective Time (except for representations made as of a specified date, the accuracy of which shall be determined as of that specified date) without regard to any materiality or Norsat Material Adverse Change qualifications contained therein, except where the failure or failures of any such representations and warranties to be so true and correct in all respects would not have, individually or in the aggregate, a Norsat Material Adverse Change provided further that the representations and warranties of the Target in Sections 1 (Organization, Good Standing and Qualification), 2 (Capital Structure), 3 (Subsidiaries), 4 (Corporate Authority, Approval and Fairness), 7(b)(A) (No Norsat Material Adverse Change since the Date of the Audited Consolidated Balance Sheet of Target and its Subsidiaries as at December 31, 2016) and 21 (Brokers and Finders) of Schedule C to the Arrangement Agreement shall be true in all respects as of the Effective Time as though made at and as of the Effective Time (the "Specified Acquisition Agreement Representations") and (ii) the Specified Representations (as defined below); and

(b) the terms of the Definitive Documents will be such that they do not impair the availability of the Loan on the Closing Date if the Lender Conditions Precedent are satisfied (or waived by the Lender) it being understood that to the extent any lien on any collateral (other than (x) any collateral the security interest in which may be perfected by the filing of a financing statement under personal property security legislation of any province or territory of Canada or under the Uniform Commercial Code of any state of the United States of America, or (y) stock certificates or other certificated securities of the Borrower and the Target) is not perfected on the Closing Date after your use of commercially reasonable efforts to do so, the perfection of such lien(s) will not constitute a condition precedent to the availability of the Loan on the Closing Date, but such liens(s) will be required to be perfected within 10 business days after the Closing Date in the case of non-real estate collateral (or 20 business days, if such perfection requires action to be taken by any third party, such as the execution of documentation or the delivery of possessory collateral), and 20, business days in the case of real estate collateral.

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NORSAT INTERNATIONAL INC. CONFIDENTIAL

As used herein, (x) "Specified Representations" means the representations and warranties of the Borrower and the Guarantors relating to their corporate existence; corporate power and authority to enter into the Definitive Documents; due authorization, execution, delivery and enforceability of the Definitive Documents; no conflicts of the Definitive Documents with charter documents of the Borrower; the creation and perfection of liens in the collateral (subject to the limitations on creation and perfection set forth above), and the absence of a Specified Event of Default, and (y) "Specified Event of Default" means an event of default under the Definitive Documents arising from the bankruptcy of the Borrower or a payment event of default. This Schedule D is referred to as the "Certain Funds Provision".

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NORSAT INTERNATIONAL INC. CONFIDENTIAL

SCHEDULE E

COPIES OF ARRANGEMENT AGREEMENT AND DISCLOSURE LETTER

21

EX-99.6

Exhibit 99.6

REDACTED VERSIONConfidential

Bryan Cave Draft 5/17/17

ARRANGEMENT AGREEMENT

AMONG

 PRIVET FUND MANAGEMENT LLC

- AND -

HYTERA COMMUNICATIONS CO., LTD.IRIS HOLDINGS, INC.

- AND -

HYTERA PROJECTIRIS CANADA ACQUISITION CORP.

- AND –

NORSAT INTERNATIONAL INC.

March 24,May [  ], 2017

Table of Contents

		Page
ARTICLE I INTERPRETATION		12
1.1	Definitions	12
1.2	Interpretation Not Affected by Headings	14
1.3	Number and Gender	1415
1.4	Date for Any Action	15
1.5	Currency	15
1.6	Accounting Matters	15
1.7	Knowledge	15
1.8	Schedules	15
1.9	Other Definitional and Interpretive Provisions	15
ARTICLE II THE ARRANGEMENT		16
2.1	Arrangement	16
2.2	Interim Order	16
2.3	The Company Meeting	17
2.4	The Company Circular	18
2.5	Final Order	19
2.6	Court Proceedings	1920
2.7	Stock Options	20
2.8	Restricted Share Units	2021
2.9	Performance of the Purchaser	2021
2.10	Effective Date	21
2.11	Payment of Consideration by Purchaser	2122
2.12	Tax Withholdings and Other Source Deductions	2122
2.13	Elections Regarding Options	2122
2.14	Dividends, etc.	22
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY		22
3.1	Representations and Warranties of the Company	22
3.2	Company Disclosure Letter	2223
3.3	Survival of Representations and Warranties of the Company	2223
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PARENT AND THE PURCHASER		2223
4.1	Representations and Warranties of the Parent and the Purchaser	2223
4.2	Survival of Representations and Warranties of the Parent and the Purchaser	23
ARTICLE V COVENANTS OF COMPANY, THE PARENT AND THE PURCHASER		23
5.1	Interim Covenants of the Company	23

Table of Contents (continued)

5.2	Covenants of Company Regarding the Performance of Obligations	2627
5.3	Covenants of Parent and, the Purchaser and Privet Regarding the Performance of Obligations	2829
5.4	Mutual Covenants	2930
5.5	Securityholder Communications	3031
5.6	Privacy	3031
ARTICLE VI CONDITIONS		3132
6.1	Mutual Conditions Precedent	3132
6.2	Additional Conditions Precedent to the Obligations of the Parent and the Purchaser	3133
6.3	Additional Conditions Precedent to the Obligations of the Company	3334
6.4	Satisfaction of Conditions	3435
ARTICLE VII ADDITIONAL AGREEMENTS		3435
7.1	Notice and Cure Provisions	3435
7.2	Non-Solicitation, Superior Proposal, Right to Match	3536
7.3	Information Rights	4042
7.4	Shareholder Claims	4142
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER		4142
8.1	Termination	4142
8.2	Termination Payment by Company	4344
8.3	Termination Payment by Parent	4446
8.4	Effect of Termination	4546
8.5	Waiver	4547
ARTICLE IX GENERAL PROVISIONS		4547
9.1	Directors’ and Officers’ Insurance	4547
9.2	Notices	4648
9.3	Governing Law, Jurisdiction	4749
9.4	Injunctive Relief and Specific Performance	4749
9.5	Time of Essence	4850
9.6	Entire Agreement, Binding Effect	4850
9.7	Assignment	4850
9.8	Severability	4850
9.9	Contra Proferentum	4951
9.10	No Third Party Beneficiaries	4951
9.11	No Liability	4951
9.12	Expenses	4951
9.13	Counterparts, Execution	4951
9.14	Amendments	5052

Table of Contents (continued)

SCHEDULE A –	ARRANGEMENT RESOLUTION	A - 1
SCHEDULE B –	PLAN OF ARRANGEMENT	B - 1
SCHEDULE C –	REPRESENTATIONS AND WARRANTIES OF THE COMPANY	C - 1
SCHEDULE D –	REPRESENTATIONS AND WARRANTIES OF THE PARENT AND THE PURCHASERD - 1SCHEDULE E – PROCEDURES FOR REQUESTING CONSEN

ARRANGEMENT AGREEMENT

THIS ARRANGEMENT AGREEMENT (this “Agreement”) dated as of March 24,May [    ], 2017, AMONG:

PRIVET FUND MANAGEMENT LLC, a limited liability company existing under the laws of the State of Delaware (“Privet”), solely with respect to Section 5.3(2) hereof

HYTERA COMMUNICATIONS CO., LTDIRIS HOLDINGS, INC., a corporation existing under the laws of the RepublicState of ChinaDelaware (the “Parent”)

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HYTERA PROJECTIRIS CANADA ACQUISITION CORP., a company existing under the laws of the Province of British Columbia (the “Purchaser”)

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NORSAT INTERNATIONAL INC., a company existing under the laws of the Province of British Columbia (the “Company”)

WHEREAS Privet and Privet Fund LP (collectively, the “Parent Parties”) beneficially own, directly or indirectly, 1,027,170 Common Shares (the “Parent Shares”);

WHEREAS Privet is the sole manager of IRIS Holdings, LLC, a Delaware limited liability company (“IRIS LLC”), and has the power to manage the business and operations of IRIS LLC;

WHEREAS Parent is a wholly owned subsidiary of IRIS LLC;

WHEREAS Purchaser is a wholly owned subsidiary of Parent;

WHEREAS the Parent desires to acquire all of the Common Shares (as hereinafter defined) other than the Parent Shares through its wholly-owned subsidiary, the Purchaser;

AND WHEREAS the board of directors of the Company (the “Board of Directors”) has unanimously determined, after receiving financial and legal advice, that the consideration to be received by the Shareholders (as hereinafter defined) pursuant to the Arrangement (as hereinafter defined) is fair and that the Arrangement is in the best interests of the Company and that the Board of Directors has resolved to unanimously support the Arrangement and to recommend that the Shareholders vote in favour of the Arrangement, all subject to the terms and the conditions contained herein;

NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the covenants and agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto covenant and agree as follows:

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ARTICLE I
INTERPRETATION

1.1 Definitions

In this Agreement (including the Schedules and the Recitals hereto), the following terms shall have the following meanings, and grammatical variations shall have the respective corresponding meanings:

“1933 Act” means the United States Securities Act of 1933, as amended, including the rules and regulations promulgated thereunder;

“1934 Act” means the United States Securities Exchange Act of 1934, as amended, including the rules and regulations promulgated thereunder;

“Acquisition Proposal” means, excluding the Arrangement, any offer, proposal or inquiry, whether written or oral, made after the date of this Agreement, from any person or group of persons acting jointly or in concert relating to, in each case whether in a single transaction or a series of related transactions:

(i) any takeover bid, tender offer or exchange offer that, if consummated, would result in a person or group of persons beneficially owning 20% or more of any class of voting or equity securities of the Company and/or one or more Subsidiaries of the Company whose assets, revenues or earnings constitute, individually or in the aggregate, 20% or more of the consolidated assets, revenues or earnings of the Company;

(ii) any amalgamation, plan of arrangement, share exchange, business combination, merger, consolidation, recapitalization, reorganization or other similar transaction involving the Company and/or one or more Subsidiaries of the Company whose assets, revenues or earnings constitute, individually or in the aggregate, 20% or more of the consolidated assets, revenues or earnings of the Company, or any liquidation, dissolution or winding-up of the Company and/or one or more Subsidiaries of the Company whose assets, revenues or earnings constitute, individually or in the aggregate, 20% or more of the consolidated assets, revenues or earnings of the Company;

(iii) any direct or indirect acquisition or sale of assets (or any lease, long-term supply arrangement, license, technology partnering agreement or other arrangement having the same economic effect as a sale of assets) of the Company and/or one or more Subsidiaries of the Company which represents, individually or in the aggregate, 20% or more of the consolidated assets or contributed 20% or more of the consolidated revenues or earnings of the Company;

(iv) any direct or indirect sale, issuance or acquisition of Common Shares or any other voting or equity interests (or securities convertible into or exercisable for such Common Shares or other voting or equity interests) of the Company representing

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20% or more of the issued and outstanding voting or equity interests (or rights or interests therein or thereto) of the Company or any Subsidiary of the Company; or

(v) any proposal or offer to do, proposed amendment of, or public announcement of an intention to do, any of the foregoing,

excluding the Transactions and the Plan of Arrangement and any transaction to which the Parent, the Purchaser or a Subsidiary of the Parent is a party and any transaction involving only the Company and/or one or more of its Subsidiaries;

“affiliate” has the meaning ascribed thereto in the BCBCA;

“Agreement” means this arrangement agreement (including the Schedules hereto and the Company Disclosure Letter) as the same may be amended, supplemented or otherwise modified from time to time in accordance with the terms hereof;

“Applicable Securities Laws” means the Securities Act, the 1933 Act, the 1934 Act, and all other applicable Canadian and United States securities Laws, rules and regulations and published policies thereunder and the rules of the Exchanges applicable to companies listed thereon;

“Applications” has the meaning ascribed thereto in Section 10(f) of Schedule C;

“Arrangement” means an arrangement pursuant to Division 5 of Part 9 of the BCBCA on the terms and subject to the conditions set out in the Plan of Arrangement, subject to any amendments or variations thereto made in accordance with Section 9.14 or the Plan of Arrangement or made at the direction of the Court in the Final Order with the consent of the Company and the Purchaser, each acting reasonably;

“Arrangement Resolution” means the special resolution of the Shareholders approving the Plan of Arrangement to be considered at the Company Meeting, to be substantially in the form and content of Schedule A;

“Assets” has the meaning ascribed thereto in Section 14(c) of Schedule C;

“Audited Balance Sheet” means the audited consolidated balance sheet of the Company and its Subsidiaries as at December 31, 2016;

“Bankruptcy and Equity Exception” has the meaning ascribed thereto in Section 4(a) of Schedule C;

“BCBCA” means the Business Corporations Act (British Columbia), and the regulations promulgated thereunder, as amended;

“Benefit Plans” has the meaning ascribed thereto in Section 9(a) of Schedule C;

“Board of Directors” has the meaning ascribed thereto in the Recitals;

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“business day” means any day (other than a Saturday, a Sunday, a statutory or civic holiday or, for the purpose of the Final Order, a date the courts in Vancouver, British Columbia would not hear the application for the Final Order) on which commercial banks located in Vancouver, British Columbia and Toronto, Ontario are open for the conduct of business;

“Canadian Equivalent of the Consideration per Common Share” means the amount in Canadian dollars of the Consideration per Common Share on the basis of the United States to Canadian dollar daily exchange rate on the date that is three business days immediately preceding the Effective Date as reported by the Bank of Canada;

“CGP Approval” means a statement or other indication from the Controlled Goods Directorate of Public Works and Government Services Canada affirming that the Company’s registration under the Controlled Goods Program will not be revoked, suspended or otherwise jeopardized by Purchaser’s acquisition of the Company;

“Change in Recommendation” by the Board of Directors means:

(i) any withholding, amendment, withdrawal, modification or qualification in any manner adverse to the Parent and/or the consummation of the Arrangement of the Company Recommendation, including any failure to include the Company Recommendation in the Company Circular;

(ii) any approval, acceptance, recommendation or endorsement by the Board of Directors of, or public proposal by the Board of Directors to approve, accept, recommend or endorse, or publicly taking no position or a neutral position with respect to, any Acquisition Proposal (it being understood that publicly taking a neutral position or no position with respect to an Acquisition Proposal until the earlier to occur of ten business days following the earlier of the receipt, and the public announcement of such Acquisition Proposal and two business days prior to the Company Meeting shall not constitute a Change in Recommendation);

(iii) the Company enters into a written agreement in respect of an Acquisition Proposal (other than a confidentiality agreement permitted by Section 7.2(4)(i); or

(iv) the Company shall have publicly announced the intention to, or the Board of Directors shall have resolved to, do any of the foregoing;

except that a determination by the Company that it shall make or the making by the Company of a submission for SADI Approval of an Acquisition Proposal shall not be considered a Change in Recommendation without also the matter in (iii) above having occurred;

“Code” means the United States Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder;

“Common Shares” means common shares in the capital of the Company, including common shares issued on the conversion, exchange or exercise of Convertible Securities;

“Company” has the meaning ascribed thereto in the recitals;

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

“Company Customers” has the meaning ascribed thereto in Section 22 of Schedule C;

“Company Disclosure Letter” means the disclosure letter dated the date hereof regarding this Agreement that has been provided by the Company to the Parent and the Purchaser;

“Company Intellectual Property” means all Intellectual Property used in, or necessary to conduct, the Company’s or its Subsidiaries’ business as currently conducted and as planned to be conducted;

“Company Leases” means all leases, subleases, licenses, occupancy or other agreements pursuant to which the Company or any of its Subsidiaries holds a leasehold, subleasehold or other estate in real property;

“Company Material Adverse Change” means any event, change, effect, development, state of facts, condition, circumstance or occurrence that, individually or in the aggregate with other events, effects, developments, state of facts, conditions, circumstances or occurrences would or would reasonably be expected to have a material adverse effect on the business, results of operations, assets, liabilities or financial condition of the Company and its Subsidiaries, taken as a whole; except to the extent that such material adverse effect results from any of the following:

(i) any changes in Law or interpretations thereof by any Governmental Entity or Regulatory Authority, except to the extent that such changes have a materially disproportionate adverse effect on the Company and its Subsidiaries, taken as a whole, relative to the adverse effect that such changes have on other companies in the Company’s industry;

(ii) any changes in general Canadian, United States or global economic conditions or in national or global financial or capital markets, except to the extent such changes have a materially disproportionate adverse effect on the Company and its Subsidiaries, taken as a whole, relative to the adverse effect that such changes have on other companies in the Company’s industry;

(iii) any changes in conditions generally affecting the Company’s industry, except to the extent such changes in conditions have a materially disproportionate adverse effect on the Company and its Subsidiaries, taken as a whole, relative to the adverse effect that such changes have on other companies in the Company’s industry;

(iv) changes or proposed changes in GAAP applicable to the Company or the enforcement or interpretation thereof;

(v) any natural disaster, act of terrorism or outbreak of war, except to the extent that such event has a materially disproportionate adverse effect on the Company and

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its Subsidiaries, taken as a whole, relative to the adverse effect that such changes have on other companies in the Company’s industry;

(vi) any change in the market price or trading volume of the securities of the Company, including after announcement of the entering into of this Agreement (it being understood that the causes underlying such change may be taken into account in determining whether a Company Material Adverse Change has occurred);

(vii) the failure of the Company in and of itself to meet any internal or public projections, forecasts or estimates of revenues or earnings (it being understood that the causes underlying such change or failure may be taken into account in determining whether a Company Material Adverse Change has occurred); or

(viii) except for any requirement to operate in the ordinary course of business, any action taken (or refrained from being taken) specifically and expressly required by this Agreement or at the written request of the Parent or the Purchaser;

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

“Company Recommendation” has the meaning ascribed thereto in Section 4(b) of Schedule C;

“Company Registered IP” shall mean (i) Patents, (ii) Trademarks that are the subject of a registration or a pending application for registration and material unregistered Trademarks, (iii) copyrights that are the subject of a registration or pending application for registration, and (iv) domain name registrations, in each case, owned by the Company or its Subsidiaries;

“Company Reports” has the meaning ascribed thereto in Section 6(a) of Schedule C;

“Company Securities” has the meaning ascribed thereto in Section 2(d) of Schedule C;

“Company Suppliers” has the meaning ascribed thereto in Section 22 of Schedule C;

“Company Termination Payment” means U.S.$2.02.5 million;

“Competition Act” means the Competition Act, R.S.C. 1985, c. C-34, as amended, including the regulations promulgated thereunder;

“Confidentiality Agreement” means the confidentiality and personal information protection agreement dated June 7, 2016, as amended, between the Parent and the Company;

“Consideration” means U.S.$10.2511.00 in cash per Common Share, subject to adjustment pursuant to Section 2.14 and in accordance with Section 2.4 of the Plan of Arrangement;

“Constating Documents” means, in the case of a body corporate, the articles and certificate(s) of incorporation and the articles and certificate(s) of amendment, amalgamation, arrangement,

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reorganization, continuance or revival, as the case may be, of such body corporate or the memorandum of agreement, special act or statute and any other instrument or constating document by or pursuant to which the body corporate is incorporated or comes into existence, and its by-laws in effect from time to time; or as to any other legal person, its charter or agreement or similar document adopted or filed in connection with its creation, formation, or organization; and all amendments to or restatements of any of the foregoing;

“Contract” means any lease, sublease, license, sublicense, contract, subcontract, commitment, note, bond, mortgage, indenture, or other agreement, instrument, obligation or binding arrangement or understanding of any kind or character, whether oral or in writing;

“Convertible Securities” means, collectively, the Options, RSUs and any other securities of the

Company that are convertible into or exchangeable or exercisable for Common Shares;

“Court” means the Supreme Court of British Columbia;

“Data Requirements” has the meaning ascribed thereto in Section 11(a) of Schedule C;

“Data Room” means collectively, the website hosted and maintained by the Company under the project name [REDACTED FOR CONFIDENTIALITY] and the website maintained by the Company and accessible at [REDACTED FOR CONFIDENTIALITY], the contents of which websites on the date of this Agreement are set forth in the index of documents, which is appended to the Company Disclosure Letter;

“Depositary” means Computershare Investor Services Inc., as depositary;

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

“EDGAR” means the Electronic Data Gathering, Analysis, and Retrieval system;

“Effective Date” has the meaning ascribed thereto in the Plan of Arrangement;

“Effective Time” has the meaning ascribed thereto in the Plan of Arrangement;

“Environmental Law” means any Law concerning (i) pollution or the protection, investigation or restoration of the environment, health and safety as it relates to Hazardous Substance exposure, or natural resources, (ii) the assessment of any substance to determine toxicity and management or regulation of any such substances, (iii) the handling, import, manufacture, processing, distribution, treatment, generation, storage, containment, transportation, use, presence, disposal, emissions, discharges, release or threatened release of, or exposure to, any Hazardous Substance, (iv) noise, odor, air, employee exposure, surface water, groundwater, land, wetlands, pollution, contamination or any injury or threat of injury to persons or property relating to any Hazardous Substance, or (v) endangered or threatened species of fish, wildlife and plants, or the mitigation of adverse environmental effects on environment;

“ERISA” means the United States Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder;

“Exchanges” means the TSX and NYSE;

“Export Controls” has the meaning ascribed thereto in Section 23(a) of Schedule C;

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“Fairness Opinions” means the fairness opinions of Raymond James Ltd., the financial advisor to the Company, and KPMG LLP, rendered to the Board of Directors in respect of the Arrangement;

“Final Order” means the final order of the Court, after a hearing upon the fairness of the terms and conditions of the Arrangement, approving the Arrangement as such order may be amended by the Court (with the consent of both the Company and the Purchaser, each acting reasonably) at any time prior to the Effective Date or, if appealed, then, unless such appeal is withdrawn or denied, as affirmed or as amended (provided that any such amendment is acceptable to both the Company and the Purchaser, each acting reasonably) on appeal;

“GAAP” means Canadian generally accepted accounting principles as set out in the Handbook of the Canadian Institute of Chartered Accountants, as amended from time to time, consistently applied, which, for greater certainty, includes International Financial Reporting Standards consistently applied, as applicable;

“Governmental Entity” means any (i) supranational, multinational, federal, territorial, provincial, state, regional, municipal, local or other governmental or public ministry, department, authority, body, armed forces, central bank, court, commission, tribunal, board, bureau or agency, domestic or foreign, (ii) subdivision, agent or authority of any of the above, (iii) quasi-governmental or private body, including any tribunal, commission, regulatory agency or self-regulatory organization, exercising any regulatory, expropriation or taxing authority under or for the account of any of the above, or (iv) stock exchange (including the Exchanges), and “Governmental Entities” means more than one Governmental Entity;

“Hazardous Substance” means any chemical, pollutant, contaminant, waste, material or substance that is: (i) defined, listed, classified or regulated pursuant to any Environmental Law; or (ii) any other substance which is regulated due to a potential adverse effect on human health or the environment;

“ICA Approval” has the meaning ascribed to it in Section 6.2(viivi);

“ICA Notification” means a notification under Part III of the Investment Canada Act;

“Import Restrictions” has the meaning ascribed thereto in Section 23(a) of Schedule C;

“Intellectual Property” means all registered and unregistered intellectual property and industrial property rights of any kind or nature throughout the world, including all Trademarks, Patents, Trade Secrets, inventions, copyrights and copyrightable subject matter, including all published and unpublished works of authorship and the registrations and applications, and renewals, extensions, restorations and reversions thereof; rights in computer programs (whether in source code, object code, or other form), algorithms, databases, compilations and data, technology supporting the foregoing, and all documentation, including user manuals and training materials, related to any of the foregoing; and all rights in the foregoing and in other similar intangible assets;

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

“Investment Canada Act” means the Investment Canada Act (Canada), as amended, including the regulations promulgated thereunder;

“IP Contracts” means (i) all Contracts to which the Company or any of its Subsidiaries is a party as of the date hereof, the primary subject of which is the licensing of Intellectual Property, under which the Company or one of its Subsidiaries has obtained or granted any express license or other right to use, or which by their terms expressly restrict the Company’s or its Subsidiaries’ right to use any Company Intellectual Property, other than (a) Contracts involving Intellectual Property that is generally available on a commercial basis from third parties, and (b) Contracts providing for the license of software that is generally available on a commercial basis, and (ii) all Contracts to which the Company or any of its Subsidiaries is a party as of the date hereof, the primary subject of which is the assignment or other conveyance of Intellectual Property, under which the Company or one of its Subsidiaries has obtained or granted any ownership right in any Company Intellectual Property, other than Contracts entered into in the ordinary course of business;

“IRIS LLC” has the meaning ascribed thereto in the Recitals;

“IRS” has the meaning ascribed thereto in Section 9(b) of Schedule C;

“Law” or “Laws” means any applicable laws, including international, multinational, federal, national, provincial, state, municipal and local laws (statutory, common or otherwise), constitutions, treaties, conventions, statutes, principles of law and equity, rulings, ordinances, judgments, determinations, awards, decrees, injunctions, writs, certificates and orders, notices, bylaws, rules, regulations, ordinances, or other requirements, policies, guidelines, standards or instruments, whether domestic or foreign, and the terms and conditions of any grant of approval, permission, authority or licence or other similar requirement enacted, adopted, promulgated, or applied by any Governmental Entity (including the Exchanges) having the force of law, and the term “applicable” with respect to such Laws and in a context that refers to one or more persons, means such Laws as are binding upon or applicable to such person or its assets;

“Liabilities” means any liability, indebtedness, obligation or commitment of any kind or nature (whether accrued, absolute, contingent, matured, unmatured or otherwise and whether or not required to be recorded or reflected on a balance sheet under GAAP);

“Liens” means any mortgage, hypothec, pledge, assignment, charge, lien, prior claim, security interest, encroachment, option, right of first refusal or first offer, occupancy rights, covenants, restrictions adverse interest, adverse claim, other third person interest or encumbrance of any kind, whether contingent or absolute, and any agreement, option, right or privilege (whether by Law, contract or otherwise) capable of becoming any of the foregoing;

“Material Contract” has the meaning ascribed thereto in Section 13(a) of Schedule C;

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“material fact” has the meaning ascribed thereto in the Securities Act and, where the context requires, the meaning ascribed thereto under the 1933 Act and the 1934 Act;

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

Special Transactions of the securities regulatory authorities of Ontario and Quebec;

“Minister” means the Minister of Innovation, Science and Economic Development;

“Money Laundering Laws” has the meaning ascribed thereto in Section 12(b) of Schedule C;

“NYSE” means the NYSE MKT LLC;

“OFAC” has the meaning ascribed thereto in Section 23(a) of Schedule C;

“Option” means an option to purchase Common Shares granted by the Company under the Stock Option Plan or otherwise;

“Order” means, with respect to any person, any order, judgment, decision, decree, injunction, ruling, writ, assessment or other similar requirement issued, enacted, adopted, promulgated or applied by, or agreed to with, any Governmental Entity or arbitrator that is binding on or applicable to such person or its property;

“ordinary course of business”, when used in relation to the taking of any action by the Company or any of its Subsidiaries, means that the action is consistent in nature, scope and magnitude with the past practices of the Company and its Subsidiaries over the last 12 months prior to the date hereof and is taken in the ordinary course of normal day-to-day operations of the Company and its Subsidiaries;

“Outside Date” means September 30, 2017 or such later date as the Purchaser and the Company may agree in writing;

“Parent” has the meaning ascribed thereto in the Recitals;

“Parent Material Adverse Change” has the meaning ascribed thereto in Section 1 of Schedule

D;

“Parent Parties” has the meaning ascribed thereto in the Recitals;

“Parent Shares” has the meaning ascribed thereto in the Recitals;

“Parent Termination Payment” means U.S.$2.02.5 million;

“Parties” means, collectively, the Company, the Parentand, the Purchaser and, solely with respect to Section 5.3(2), Privet, and “Party” means any of them;

“Patents” means all patents (including utility and design patents and utility models), and patent applications, including any divisionals, revisions, supplementary protection certificates,

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continuations, continuations-in-part, reissues, re-examinations, substitutions, extensions and renewals thereof;

“Permits” means any permit, license, certifications, registrations, security clearances, variances, exemptions, Orders, authorization, consent, approval or from any Governmental Entity;

“Permitted Liens” means a Lien:

(i) for Taxes, assessments or governmental charges or levies which relate to obligations not yet due and delinquent or that are being contested in good faith by appropriate proceedings in respect to which adequate reserves have been established in accordance with GAAP in the consolidated balance sheet of the Company as at December 31, 2016;

(ii) that is a carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other similar lien arising in the ordinary course of business; or

(iii) that is a zoning, entitlement or other land use or environmental regulation by any Governmental Entity that does not, individually or in the aggregate, materially detract from the value of, or materially impair the use of such property in the ordinary course of business;

“person” includes an individual, general partnership, limited partnership, corporation, company, limited liability company, body corporate, joint venture, unincorporated organization, other form of business organization, trust, trustee, executor, administrator or other legal representative, government (including any Governmental Entity) or any other entity, whether or not having legal status;

“Plan of Arrangement” means the plan of arrangement, substantially in the form of Schedule B, and any amendments or variations thereto made in accordance with Section 9.14 or the Plan of Arrangement or made at the direction of the Court in the Final Order with the written consent of the Company and the Purchaser, each acting reasonably;

“PRC Approvals” means the approval of the National Development and Reform Commission of the People’s Republic of China, the Ministry of Commerce of the People’s Republic of China and the State Administration of Foreign Exchange of the People’s Republic of China to the payment of the Consideration;

“Privacy Laws” has the meaning ascribed thereto in Section 11(a) of Schedule C;

“Privet” has the meaning ascribed thereto in the Recitals hereto;

“Proceedings” has the meaning ascribed thereto in Section 8 of Schedule C;

“Products” means the products designed, manufactured, sold, leased or licensed by the Company and its Subsidiaries in connection with their respective businesses;

“Purchaser” has the meaning ascribed thereto in the Recitals hereto;

“Receiving Party” has the meaning set out in Section 5.4(2);

“Registrar” means the Registrar of Companies appointed under the BCBCA;

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“Regulatory Authorities” has the meaning ascribed thereto in Section 10(b) of Schedule C;

“Regulatory Clearances” means those sanctions, rulings, consents, orders, exemptions, permits and other approvals (including the lapse, without objection, of a prescribed time under a statute or regulation that states that a transaction may be implemented if a prescribed time lapses following the giving of notice without an objection being made) of Governmental Entities necessary to implement the Arrangement and includes the (i) ICA Approval; (ii) CGP Approval; and (iii) SADI Approval and (iv) PRC Approvals;

“Representative” means, in respect of a person, its Subsidiaries and each of its and their respective directors, officers, employees, agents and other representatives (including any financial, legal or other advisors);

“Requisite ShareholderSecurityholder Approval” has the meaning ascribed thereto in Section 2.2(iii);

“Right to Match Period” has the meaning ascribed thereto in Section 7.2(5);

“RSU Plan” means the Restricted Share Unit Plan of the Company dated May 9, 2012, as may be amended, restated and/or supplemented;

“RSUs” means the restricted share units granted by the Company under the RSU Plan or otherwise;

“SADI” means the Strategic Aerospace & Defence Initiative, designed by Industry Canada to encourage strategic research and development in aerospace, defence, space or security;

“SADI Agreements” means SADI Agreement No. 780-502886 and SADI Agreement No. 70-510309, each between the Company and Her Majesty the Queen in Right of Canada

“SADI Approval” means the prior written consent of the Industrial Technology Office of Innovation, Science and Economic Development Canada` to enter into an agreement resulting in a Change in Control as defined in Schedule 1 – SADI General Conditions attached to each SADI Agreement;

“SEC” means the United States Securities and Exchange Commission;

“Securities Act” means the Securities Act (British Columbia), and the rules and regulations promulgated thereunder, as amended;

“Securities Authorities” means the British Columbia Securities Commission, the SEC and the applicable securities commissions and other securities regulatory authorities in each of the other provinces of Canada and the states of the United States;

“Securityholders” means the Shareholders, holders of Options and holders of RSUs;

“SEDAR” means the System for Electronic Document Analysis and Retrieval described in National Instrument 13-101 – System for Electronic Document Analysis and Retrieval and available for public view at www.sedar.com;

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“Shareholders” means the registered or beneficial holders of the Common Shares;

“Special Committee” means the special committee of the Board of Directors;

“Stock Option Plan” means the Stock Option Plan of the Company dated May 9, 2012, as may be amended, restated or supplemented;

“Subsidiary” means a “subsidiary” as defined in the BCBCA;

“Subsidiary Securities” has the meaning ascribed thereto in Section 3(c) of Schedule C;

“Superior Proposal” means a bona fide Acquisition Proposal to purchase or otherwise acquire directly or indirectly, including by means of a merger, takeover bid, amalgamation, plan of arrangement, business combination or similar transaction, (i) not less than all of the Common Shares (other than Common Shares beneficially owned by the party making such Acquisition Proposal), or (ii) not less than all or substantially all of the assets of the Company and its Subsidiaries taken as a whole, that, in either case:

(i) did not result from a breach of Section 7.2;

(ii) complies with Applicable Securities Laws;

(iii) is made in writing after the date hereof, including any variation or other amendment of any Acquisition Proposal made prior to the date hereof;

(iv) is not subject to any due diligence or financing condition of any nature whatsoever; and

(v) the Board of Directors has determined in good faith (after consultation with its financial advisors and outside legal counsel) (A) is reasonably likely to be completed in accordance with its terms without undue delay taking into account, to the extent considered appropriate by the Board of Directors, all legal, financial, regulatory and other aspects of such Acquisition Proposal and the person or persons making such Acquisition Proposal, including that shareholder approval and SADI Approval may be required, and (B) would, if consummated in accordance with its terms (but expressly taking into account any and all risk of non-completion), result in a transaction more favourable to the Shareholders from a financial point of view to the Shareholders than the Arrangement (taking into consideration any adjustment to the terms and conditions of the Arrangement proposed by the Parent and the Purchaser pursuant to Section 7.2);

“Superior Proposal Notice” has the meaning ascribed thereto in Section 7.2(5);

“Supplying Party” has the meaning ascribed thereto in Section 5.4(2);

“Target Effective Date” has the meaning ascribed thereto in Section 2.10;

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“Tax Act” means the Income Tax Act (Canada) and the rules and regulations promulgated thereunder, as amended;

“Tax Returns” means all reports, forms, elections, declarations, designations, schedules, agreements, statements, estimates, declarations of estimated tax, information statements, returns and all other similar documents filed or required by Law to be filed with or provided to a Governmental Entity with respect to Taxes or Tax information reporting, including any claims for refunds of Taxes, and any amendments or supplements of the foregoing;

“Taxes” means, with respect to any person, all supranational, federal, state, local, provincial, branch or other taxes, including income taxes, gross receipts taxes, windfall profits taxes, value added taxes, severance taxes, ad valorem taxes, property taxes, capital taxes, net worth taxes, production taxes, sales taxes, use taxes, licence taxes, excise taxes, franchise taxes, environmental taxes, transfer taxes, withholding or similar taxes, payroll taxes, employment taxes, contributions, pension plan premiums, social security premiums, workers’ compensation premiums, employment insurance or compensation premiums, stamp taxes, occupation taxes, premium taxes, alternative or add-on minimum taxes, goods and services tax, harmonized sales taxes, customs duties or other taxes of any kind whatsoever imposed, required to be withheld or accounted for, or charged by any Governmental Entity, together with installments of any such taxes and any interest, penalties, or additions with respect thereto and any interest in respect of such additions or penalties;

“Termination Payment Event” has the meaning ascribed thereto in Section 8.2(1);

“Third Party Consents” means those consents and approvals described in Section 1.1 of the Company Disclosure Letter;

“Trade Secrets” means all trade secrets, know-how, and any other proprietary confidential information, including processes, formulae, models and methodologies;

“Trademarks” means all trademarks, service marks, corporate names, trade names, Internet domain names, logos, slogans, trade dress, and other indicia of source or origin, any applications and registrations for the foregoing and the renewals thereof, and all goodwill associated therewith and symbolized thereby;

“Transaction Personal Information” has the meaning ascribed thereto in Section 5.6;

“Transactions” has the meaning ascribed thereto in Section 4(a) of Schedule C;

“TSX” means the Toronto Stock Exchange;

“United States” means the United States of America, its territories and possessions, any state of the United States, and the District of Columbia; and

“Voting Support Agreements” means the voting support agreements prepared by the Purchaser and entered into contemporaneously, or as soon or practicable after the date herewith, between the Purchaser and (i) each member of the Board of Directors and (ii) each executive officer of the Company.

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1.2 Interpretation Not Affected by Headings

The division of this Agreement into Articles, Sections, subsections, paragraphs, clauses and Schedules and the insertion of headings are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. Unless the contrary intention appears, references in this Agreement to an Article, Section, subsection, paragraph, clause or Schedule by number or letter or both refer to the Article, Section, subsection, paragraph, clause or Schedule, respectively, bearing that designation in this Agreement.

1.3 Number and Gender

In this Agreement, unless the contrary intention appears, words importing the singular include the plural and vice versa, and words importing gender include all genders.

1.4 Date for Any Action

If the date on which any action is required to be taken hereunder by a Party is not a business day, such action shall be required to be taken on the next succeeding day which is a business day. In this Agreement, references from or through any date mean, unless otherwise specified, from and including that date and/or through and including that date, respectively.

1.5 Currency

Unless otherwise stated, all references in this Agreement to sums of money are expressed in, and all payments provided for herein shall be made in, U.S. currency and “U.S.$” or “$” refers to United States dollars. All references to “Cdn.$” refers to Canadian dollars.

1.6 Accounting Matters

Unless otherwise stated, all accounting terms used in this Agreement in respect of the Company shall have the meanings attributable thereto under GAAP and all determinations of an accounting nature in respect of the Company required to be made shall be made in a manner consistent with GAAP.

1.7 Knowledge

In this Agreement, unless otherwise stated, references to “the knowledge of the Company” means the actual knowledge, after reasonable internal inquiry in their capacity as officers of the Company and not in their personal capacity of, Amiee Chan, President and Chief Executive Officer, and Arthur Chin, Chief Financial Officer.

1.8 Schedules

The following Schedules are annexed to this Agreement and are incorporated by reference into this Agreement and form a part hereof:

Schedule A	-	Arrangement Resolution
Schedule B	-	Plan of Arrangement

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Schedule C	-	Representations and Warranties of the Company
Schedule D	-	Representations and Warranties of the Parent and the Purchaser
Schedule E	-	Procedures For Requesting Consent of the Parent Under Section 5.1(1)

1.9 Other Definitional and Interpretive Provisions

(i) References in this Agreement to the words “include”, “includes” or “including” shall be deemed to be followed by the words “without limitation” whether or not they are in fact followed by those words or words of like import.

(ii) The words “hereof”, “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.

(iii) Any terms defined in this Agreement and used in the Company Disclosure Letter, any exhibit or Schedule but not otherwise defined therein, shall have the meaning as defined in this Agreement.

(iv) References to any agreement, contract or plan are to that agreement, contract or plan as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. Any reference in this Agreement to any person includes its heirs, administrators, executors, legal personal representatives, predecessors, successors and permitted assigns of that person.

(v) References to a particular statute or Law shall be to such statute or Law and the rules, regulations and published policies made thereunder, as now in effect and as they may be promulgated thereunder or amended from time to time.

ARTICLE II
THE ARRANGEMENT

2.1 Arrangement

The Company, the Parent and the Purchaser agree that the Arrangement shall be implemented in accordance with and subject to the terms and conditions contained in this Agreement and the Plan of Arrangement.

2.2 Interim Order

The Company agrees that as soon as reasonably practicable after the date hereof, and in any event no later than [•], 2017, the Company shall apply, in a manner acceptable to the Purchaser, acting reasonably, pursuant to Division 5 of Part 9 of the BCBCA and, in cooperation with the Purchaser, prepare, file and diligently pursue an application for the Interim Order, the terms of which are acceptable to the Purchaser, acting reasonably, which shall provide, among other things:

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(i) for the class of persons to whom notice is to be provided in respect of the Arrangement and the Company Meeting and for the manner in which notice is to be provided;

(ii) for confirmation of the record date in respect of the Company Meeting referred to in Section 2.3(2);

(iii) that the requisiterequired level of approval for the Arrangement Resolution shall be(the “Requisite Securityholder Approval”) taken at the Company Meeting will be: (A)a) at least two-thirds of the votes cast on the Arrangement Resolution by the by Shareholders present in person or represented by proxy at the Company Meeting (the “Requisite Shareholder Approval”); and (B) such other approval, if any, as is required byand entitled to vote at the Company Meeting, voting together as a single class; (b) at least two-thirds of the votes cast by Securityholders present in person or represented by proxy and entitled to vote at the Company Meeting, voting together as a single class; and (c) a simple majority of the votes cast in person or by proxy on the Arrangement Resolution by Shareholders (excluding any votes cast by certain Shareholders that are required to be excluded pursuant to MI 61-101);

(iv) that, in all other respects, the terms, restrictions and conditions of the Company’s Constating Documents, including quorum requirements and all other matters, shall apply in respect of the Company Meeting;

(v) for the grant of the Dissent Rights;

(vi) for the notice requirements with respect to the presentation of the application to the Court for the Final Order;

(vii) that the Company Meeting may be adjourned or postponed in accordance with the terms of this Agreement from time to time by the Company without the need for additional approval of the Court; and

(viii) that the record date for Shareholders entitled to vote at the Company Meeting shall not change in respect of any adjournment(s) or postponement(s) of the Company Meeting, unless required by Law.

2.3 The Company Meeting

(1)        Subject to the terms of this Agreement and the Interim Order and provided that this Agreement has not been terminated, the Company agrees to convene and conduct the Company Meeting in accordance with the Interim Order, the Company’s Constating Documents and Laws as soon as reasonably practicable and in any event on or before May [•], 2017 and not to propose to adjourn or postpone the Company Meeting:

(i) except as required for quorum purposes or by Law or by a Governmental Entity;

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(ii) except as required or permitted under Section 7.2(8); or

(iii) except for an adjournment consented to by the Purchaser for the purpose of attempting to obtain the Requisite ShareholderSecurityholder Approval.

(2)        The Company shall fix a record date for the purposes of determining the Shareholders entitled to receive notice of and to vote at the Company Meeting, which record date shall be [•], 2017 or such other date as agreed by the Company and the Purchaser or as required by Law.

(3)        The Company shall use commercially reasonable efforts to solicit proxies in favour of the approval of the Arrangement Resolution, including, if so requested by the Purchaser, acting reasonably, using dealer and proxy solicitation services and cooperating with any persons engaged by the Purchaser (at its reasonable cost) to solicit proxies in favour of the approval of the Arrangement Resolution.

(4)        The Company shall give notice to the Purchaser of the Company Meeting and allow the Purchaser’s representatives and legal counsel to attend the Company Meeting.

(5)        The Company shall advise the Purchaser as the Purchaser may reasonably request, and at least on a daily basis on each of the last ten business days prior to the date of the Company Meeting, as to the aggregate tally of the proxies received by the Company in respect of the Arrangement Resolution and any further information respecting such proxies as the Purchaser may reasonably request.

(6)        The Company shall promptly advise the Purchaser of any written notice of dissent or purported exercise by any Shareholder of Dissent Rights received by the Company in relation to the Arrangement Resolution and any withdrawal of Dissent Rights received by the Company and, subject to Laws, any written communications sent by or on behalf of the Company to any Shareholder exercising or purporting to exercise Dissent Rights in relation to the Arrangement Resolution. The Company shall not make any payment or settlement offer, or agree to any such settlement, prior to the Effective Time with respect to any such notice of dissent or purported exercise of Dissent Rights unless the Purchaser shall have given its prior written consent to such payment, settlement offer or settlement as applicable.

(7)The Parent shall, and shall cause the Parent Parties to, vote the Parent Shares, or to submit a proxy in respect of the Parent Shares to vote, in favour of the Arrangement Resolution at the Company Meeting.

2.4 The Company Circular

(1)        Subject to compliance by the Purchaser and/or the Parent with this Section 2.4, promptly after the execution of this Agreement, the Company shall prepare and complete the Company Circular together with any other documents required by the BCBCA, Applicable Securities Laws and other Laws in connection with the

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Company Meeting and the Arrangement, and the Company shall, as promptly as reasonably practicable after obtaining the Interim Order, cause the Company Circular and other documentation required in connection with the Company Meeting to be filed and to be sent to each Shareholder, each holder of Options and RSUs, the directors of the Company, the auditors of the Company and any other persons as required by the Interim Order and Laws, in each case so as to permit the Company Meeting to be held within the time required by Section 2.3(1).

(2)        The Company shall ensure that the Company Circular complies in all material respects with all Laws, and, without limiting the generality of the foregoing, that the Company Circular shall 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 not misleading in light of the circumstances in which they are made (other than with respect to any information furnished by the Parent, the Purchaser or their affiliates) and shall provide the Shareholders with information in sufficient detail to permit them to form a reasoned judgment concerning the matters to be placed before them at the Company Meeting. The Company Circular shall include the Company Recommendation.

(3)        The Purchaser and its legal counsel shall be given a reasonable opportunity to review and comment on drafts of the Company Circular and other documents related thereto, and reasonable consideration shall be given to any comments made by the Purchaser and its counsel, provided that all information relating solely to the Purchaser, the Parent or their affiliates included in the Company Circular shall be in form and content satisfactory to the Purchaser, acting reasonably.

(4)        The Purchaser and the Parent shall on a timely basis furnish to the Company all such information concerning the Purchaser, the Parent and their respective affiliates and any financing sources, as applicable, as may be reasonably required by the Company in the preparation of the Company Circular and other documents related thereto, and the Purchaser and the Parent shall ensure that no such information shall contain any untrue statement of a material fact or omit to state a material fact required to be stated in the Company Circular in order to make any information so furnished not misleading in light of the circumstances in which it is disclosed.

(5)        The Company, the Purchaser and the Parent shall promptly notify each other if at any time before the Effective Date it becomes aware that the Company Circular contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements contained therein not misleading in light of the circumstances in which they are made, or that otherwise requires an amendment or supplement to the Company Circular, as required or appropriate, and the Company shall, subject to compliance by the Purchaser and/or the Parent with this Section 2.4, and, if required by the Court or Laws, promptly mail or otherwise publicly disseminate any amendment or supplement to the Company Circular to the Shareholders and file the same with

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the Securities Authorities and as otherwise required. The Purchaser and Parent will reimburse the Company for any reasonable expenses incurred if a change is required to the information in respect of the Parent or Purchaser included in the Company Circular.

2.5 Final Order

If the Interim Order is obtained, the Arrangement Resolution is passed at the Company Meeting as provided for in the Interim Order and as required by Law and the condition in Section 6.1(iii) has been satisfied or waived by each of the Parties then, subject to the terms of this Agreement, the Company shall as soon as reasonably practicable (but in any event within three business days) thereafter take all steps necessary or desirable to submit the Arrangement to the Court and diligently pursue an application for the Final Order pursuant to Division 5 of Part 9 of the BCBCA. The Company agrees that it will oppose any proposal from any other person that the Final Order contains any provision inconsistent with this Agreement and, if at any time after the issuance of the Final Order and prior to the Effective Date, the Company is required by the terms of the Final Order or by Law to return to Court with respect to the Final Order, it shall do so after notice to, and in consultation and cooperation with, the Parent.

2.6 Court Proceedings

Subject to the terms and conditions of this Agreement, the Purchaser and the Parent shall cooperate with, assist and consent to the Company seeking the Interim Order and the Final Order, including by providing to the Company on a timely basis any information required to be supplied by the Purchaser and the Parent concerning the Purchaser and the Parent or their respective affiliates in connection therewith. The Company shall provide legal counsel to the Purchaser with reasonable opportunity to review and comment upon drafts of all material to be filed with the Court in connection with the Arrangement and reasonable consideration shall be given to any comments made by the Purchaser and its legal counsel. The Company shall also provide legal counsel to the Purchaser on a timely basis with copies of any notice of appearance and evidence served on the Company or its legal counsel in respect of the application for the Final Order or any appeal therefrom. The Company will ensure that all materials filed with the Court in connection with the Arrangement are consistent in all material respects with the terms of this Agreement and the Plan of Arrangement. In addition, the Company will not object to legal counsel to the Parent making such submissions on the hearing of the motion for the Interim Order and the application for the Final Order as such counsel considers appropriate, provided that the Company is advised of the nature of any submissions prior to the hearing and such submissions are consistent with this Agreement and the Plan of Arrangement.

2.7 Stock Options

In accordance with the Plan of Arrangement, at the time specified in the Plan of Arrangement, each Option outstanding immediately prior to the Effective Time (whether vested or unvested) shall be transferred from the holder thereof to the Company in consideration for a cash payment by or on behalf of the Company equal to the amount, if any, by which the Canadian Equivalent of the Consideration per Common Share exceeds the exercise price per Common Share of such Option, subject to (for greater certainty) applicable Tax withholdings and other source deductions

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in accordance with Section 2.12. Each Option issued and outstanding immediately prior to the Effective Time shall thereafter be immediately cancelled, the holder thereof shall thereafter have only the right to receive the consideration to which such holder is entitled pursuant to this Section 2.7 and in the manner specified in the Plan of Arrangement, and all option agreements related thereto shall be terminated. The Company shall take, and shall cause its Subsidiaries to take, all steps necessary or desirable to give effect to the foregoing, including amending the Stock Option Plan. The Company also shall use, and shall cause its Subsidiaries to use, commercially reasonable efforts to obtain necessary consents (in form and substance reasonably satisfactory to the Purchaser) from holders of Options to the transfer and cancellation of the Options as described above.

2.8 Restricted Share Units

In accordance with the Plan of Arrangement, at the time specified in the Plan of Arrangement, each RSU outstanding immediately prior to the Effective Time (whether vested or unvested) shall be transferred from the holder thereof to the Company in consideration for a cash payment by or on behalf of the Company equal to the Consideration per Common Share, subject to (for greater certainty) applicable Tax withholdings and other source deductions in accordance with Section 2.12. Each RSU issued and outstanding immediately prior to the Effective Time shall thereafter be immediately cancelled, the holder thereof shall thereafter have only the right to receive the consideration to which such holder is entitled pursuant to this Section 2.8 and in the manner specified in the Plan of Arrangement, and all agreements related thereto shall be terminated. The Company shall take, and shall cause its Subsidiaries to take, all steps necessary or desirable to give effect to the foregoing, including obtaining any necessary consents from holders of RSUs.

2.9 Performance of the Purchaser

The Parent hereby unconditionally and irrevocably guarantees, and covenants and agrees to be jointly and severally liable with the Purchaser, as principal obligor, for the due and punctual performance of each and every obligation of the Purchaser under or relating to this Agreement and the Transactions, including ensuring it has (i) sufficient funds under Section 2.11 to pay the aggregate Consideration for all of the Common Shares to be acquired pursuant to the Arrangement, and (ii) any other amounts required to be paid by the Purchaser in connection with the Transactions and all related fees and expenses and any amount of any judgment or award made against the Purchaser for the benefit of the Company. The guarantee and obligations of the Parent pursuant to this Section 2.9 shall terminate at the Effective Time. The Parent shall cause the Purchaser to comply with all of the Purchaser’s obligations under or relating to the Arrangement and the transactions contemplated by this Agreement.

2.10 Effective Date

On the second business day (the “Target Effective Date”) after the issuance of the Final Order and satisfaction or, where not prohibited, the waiver by the applicable Party or Parties in whose favour the condition is, and subject to Law, of the conditions (excluding conditions that, by their terms, cannot be satisfied until the Effective Date, but subject to the satisfaction or, where not prohibited, the waiver by the applicable Party or Parties in whose favour the condition is, of those

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conditions as of the Effective Date) set forth in Article VI, unless another time or date is agreed to in writing by the Parties, Company shall take all steps and actions, including without limitation making all necessary filings with Governmental Entities, to give effect to the Arrangement and implement the Plan of Arrangement, provided that the Company has received written confirmation, in form satisfactory to it, from the Depositary that it has received the funds referred to in Section 2.11. Subject to the terms hereof, the Arrangement shall become effective on the Effective Date and the steps to be carried out pursuant to the Arrangement shall become effective on the Effective Date in the order as set out in Plan of Arrangement. From and after the Effective Time, the Plan of Arrangement shall have all of the effects provided by Law.

2.11 Payment of Consideration by Purchaser

As soon as practicable following the receipt of the Final Order, the Purchaser shall provide the Depositary with sufficient funds in escrow (the terms and conditions of such escrow to be satisfactory to the Parties) to pay the aggregate Consideration provided for in the Plan of Arrangement.

2.12 Tax Withholdings and Other Source Deductions

Each of the Company, Parent, Purchaser, and the Depositary shall be entitled to deduct and withhold from any amounts payable to any person pursuant to this Agreement and under the Plan of Arrangement such amounts as are required or permitted to be deducted or withheld with respect to such payment under the Tax Act or any provision of any other Law or under the administrative practice of the relevant Governmental Entity administering such Law. To the extent that amounts are so withheld or deducted and remitted to the applicable Governmental Entity, such withheld or deducted amounts shall be treated for all purposes of this Agreement and the Plan of Arrangement as having been paid to such person as the remainder of the payment in respect of which such deduction and withholding were made.

2.13 Elections Regarding Options

The Parent, the Purchaser and the Company each acknowledge and agree that the Company and all persons not dealing at arm’s length with the Company will forego any deduction under the Tax Act with respect to the cash payment to be made by the Company to holders of Options as described in Section 2.7 and pursuant to the Plan of Arrangement. To effect the foregoing, the Company shall timely comply with the requirements described in subsection 110(1.1) of the Tax Act, including making and filing appropriate elections and delivering written notice of such elections to such holders of Options in accordance with the requirements set out in the Tax Act.

2.14 Dividends, etc.

If, on or after the date hereof, the Company declares, sets aside or pays any dividend or other distribution payable in cash, securities, property or otherwise with respect to the Common Shares, or sets a record date therefor that is prior to the Effective Date, then the Consideration shall be adjusted to reflect each such dividend or other distribution by way of a reduction in the Consideration by an amount equal to the amount of such dividend or distribution per Common Share.

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ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

3.1 Representations and Warranties of the Company

Except as disclosed in the Company Disclosure Letter, the Company hereby represents and warrants to and in favour of the Parent and the Purchaser as set forth in Schedule C and acknowledges that the Parent and the Purchaser are relying upon such representations and warranties in connection with the entering into of this Agreement.

3.2 Company Disclosure Letter

Contemporaneously with the execution and delivery of this Agreement, the Company is delivering to the Purchaser the Company Disclosure Letter required to be delivered pursuant to this Agreement, which sets out the disclosures, exceptions and exclusions contemplated or permitted by this Agreement, including certain exceptions and exclusions to the representations and warranties and covenants of the Company contained in this Agreement. The disclosure of any item in the Company Disclosure Letter shall constitute disclosure or, as applicable, exclusion of that item for the Company Disclosure Letter where the relevance of that item as an exception to (or a disclosure for the purposes of) the applicable representations and warranties and covenants is clearly apparent on the face of such disclosure regardless of whether the applicable representations, warranties or covenants are qualified by the language “Except as disclosed in the Company Disclosure Letter” or an equivalent qualification.

3.3 Survival of Representations and Warranties of the Company

The representations and warranties of the Company contained in this Agreement shall not survive the completion of the Arrangement and shall expire and be terminated on the earlier of the Effective Time and the date this Agreement is terminated in accordance with its terms.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE PARENT AND THE PURCHASER

4.1 Representations and Warranties of the Parent and the Purchaser

Each of the Parent and the Purchaser hereby jointly and severally represents and warrants to and in favour of the Company as set forth in Schedule D and acknowledges that the Company is relying upon such representations and warranties in connection with the entering into of this Agreement.

4.2 Survival of Representations and Warranties of the Parent and the Purchaser

The representations and warranties of the Parent and the Purchaser contained in this Agreement shall not survive the completion of the Arrangement and shall expire and be terminated on the earlier of the Effective Date and the date on which this Agreement is terminated in accordance with its terms.

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ARTICLE V

COVENANTS OF COMPANY, THE PARENT AND THE PURCHASER

5.1 Interim Covenants of the Company

(1)        From the date hereof until the earlier of the Effective Time and the time that this Agreement is terminated in accordance with its terms, except (i) as required by Law or a Governmental Entity (including a Securities Authority and Regulatory Authority), (ii) with the prior written consent of Parent (it being agreed that the Parent shall respond within five business days to any request for consent under this Section 5.1(1) that is made in accordance with the procedures set forth in Schedule E), (iii) as expressly required by this Agreement, or (iv) as set forth in Section 5.1(1) of the Company Disclosure Letter, (x) the Company shall cause the business of the Company and its Subsidiaries to be conducted in the ordinary course of business and shall use commercially reasonable efforts to (a) preserve intact its and its Subsidiaries’ present business organization except as required, and only to the extent necessary, to obtain any Regulatory Clearances, pay and perform all material obligations when due and maintain its current relationships with Governmental Entities and other persons having business dealings with the Company or any of its Subsidiaries, (b) prepare and file any requisite regulatory filings with any Regulatory Authority on a timely basis and in accordance with the ordinary course of business, (c) obtain or maintain any Permits required by Governmental Entities in order to conduct its business as presently conducted or to preserve or perform its obligations under a Material Contract and (y) without limiting the generality of clause (x) above and notwithstanding anything to the contrary contained in clause (x) above, the Company shall not and shall not permit any of its Subsidiaries to:

(i) amend its Constating Documents;

(ii) merge or consolidate the Company or any of its Subsidiaries with any other person, except for such transactions between the Company and its Subsidiaries, or dissolve or completely or partially liquidate, except as required, any only to the extent necessary, to obtain any Regulatory Clearances;

(iii) form any Subsidiary or, except in the ordinary course of business, acquire assets from any other person with a value or purchase price in the aggregate in excess of $250,000 in any transaction or series of related transactions;

(iv) issue, sell, pledge, dispose of, grant, transfer or encumber (A) any Company Securities (B) any Subsidiary Securities or (C) any share appreciation rights, phantom shares, profit participation interests or other similar agreements, commitments or arrangements payable in cash that relate to the shares of, or other equity or voting interest in, the Company or any of its Subsidiaries, other than (x) issuance or sales of Common Shares

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upon exercise of the Options outstanding on the date hereof or (y) as permitted under Section 5.1(1)(xvii);

(v) other than in the ordinary course of business, create or incur any Lien on (A) any assets (other than Company Intellectual Property) of the Company or any of its Subsidiaries having a value in excess of $50,000, (B) any Intellectual Property of the Company or any of its Subsidiaries or (C) any Intellectual Property licensed to the Company or any of its Subsidiaries;

(vi) (A) make any loans, advances, guarantees or capital contributions to or investments in any person (other than the Company or any of its wholly-owned Subsidiaries) in excess of $50,000 in the aggregate, or (B) deposit, invest or otherwise manage its cash, cash equivalents or marketable securities other than in the ordinary course of business (including as to manner, amount and jurisdictions);

(vii) (A) declare, accrue, set aside, make or pay any dividend or other distribution payable in cash, shares, property or otherwise, with respect to any Company Securities or Subsidiary Securities (except for dividends paid by the Company’s wholly-owned Subsidiaries to the Company or another wholly-owned Subsidiary of the Company), (B) repurchase, redeem or otherwise reacquire any shares or other securities, or subdivide, reclassify, recapitalize, split, combine or exchange or enter into any similar transaction with respect to any Company Securities or Subsidiary Securities or issue any other securities in respect of, in lieu of or in substitution for Company Securities or Subsidiary Securities, except for any split, combination or reclassification of shares of a wholly-owned Subsidiary of the Company, or any issuance of any securities of a wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary of the Company, or (C) enter into any agreement with respect to the voting of its shares;

(viii) incur any indebtedness for borrowed money or assume, guarantee, endorse or otherwise become liable or responsible for (whether directly, contingently or otherwise) any other person’s indebtedness for borrowed money, or issue or sell any debt securities or warrants or other rights to acquire any debt security of the Company or any of its Subsidiaries;

(ix) make any capital expenditures in excess of $250,000 in the aggregate;

(x) make any changes with respect to accounting policies or procedures other than as required by changes in GAAP;

(xi) settle any pending or threatened Proceedings or other material claims or disputes, other than the settlement of Proceedings or other material claims or disputes (A) reflected or reserved against in full in the Audited Balance Sheet or (B) the settlement of which does not include any obligation (other

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than the payment of money) to be performed by the Company or its Subsidiaries following the Effective Time that is in excess of $250,000 in the aggregate;

(xii) enter into any Contract that would have been a Material Contract had it been entered into prior to the date hereof;

(xiii) amend, modify, assign any rights under or terminate any Material Contract;

(xiv) other than pursuant to Material Contracts in effect prior to the date hereof and furnished to the Parent prior to the date of this Agreement, transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel, abandon or allow to lapse or expire or otherwise dispose of any material assets, licenses, operations, rights or businesses of the Company or any of its Subsidiaries;

(xv) assign or grant an exclusive license of any material right in any Company Intellectual Property necessary or useful for the manufacture, use, sale, offer for sale or importation of any Company product or that otherwise enables a third party to compete with the Company with respect to the manufacture or sale of any product that competes with any Company product;

(xvi) (A) waive or terminate any inbound license in any IP Contract under any Patent or other Company Intellectual Property material to any Company product, (B) amend any inbound license in any IP Contract under any Patent or other Company Intellectual Property material to any Company product or (C) enter into any Contract that would constitute an IP Contract if entered into prior to the date of this Agreement;

(xvii) except as required by Law or otherwise required pursuant to existing Contracts or Benefit Plans in effect as of the date hereof and made available to the Parent prior to the date hereof, (A) increase the compensation or benefits of any current or former employee, director, or consultant of the Company or any of its Subsidiaries, (B) promote any employee, (C) pay any bonus to any person (including any employee), (D) amend, enter into or establish any new employment, change in control, severance, termination, indemnification or other agreement with any current or former employee, director, or consultant of the Company or any of its Subsidiaries, (E) make any severance or termination payments to any current or former employee, director, or consultant of the Company or any of its Subsidiaries, (F) make any new equity awards to any person or accelerate the vesting of any award under any Benefit Plan, (G) establish, adopt, terminate or amend any Benefit Plan, or (H) hire any person as an employee or consultant;

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(xviii) except as required by Law, make, change or rescind any material Tax election, file any amended material Tax Return, settle or compromise any material Tax liability, agree to an extension or waiver of the statute of limitations with respect to material Taxes, make a request for a Tax ruling or enter into any closing agreement with respect to a material Tax, surrender any right to claim a material Tax refund, or change any material method of Tax accounting;

(xix) enter into or consummate any tax planning or restructuring transaction which involves any transfer, assignment or other disposition of any Company Intellectual Property;

(xx) make any “investment”, as that term is defined for purposes of proposed section 212.3 of the Tax Act, in any corporation that is, or will be prior to the Effective Time, a “foreign affiliate” of the Company for purposes of the Tax Act;

(xxi) (A) waive or amend (except in the course of diligently prosecuting the Company Intellectual Property) the Company’s rights in or to any Company Intellectual Property owned by the Company or one of its Subsidiaries that is registered or the subject of an application for registration, (B) fail to diligently prosecute or maintain any material Company Intellectual Property owned by the Company or one of its Subsidiaries that is registered or the subject of an application for registration, in each case in the name of Company or one of its Subsidiaries or (C) fail to make any required payments in accordance with the terms of any IP Contract pursuant to which the Company licenses any material Intellectual Property; or

(xxii) authorize, commit or enter into any Contract to do any of the foregoing.

(2)        Nothing contained in this Agreement shall give Parent or the Purchaser, directly or indirectly, the right to control the Company or any of its Subsidiaries or direct the business or operations of the Company or any of its Subsidiaries prior to the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its operations and the operations of its Subsidiaries. Nothing in this Agreement, including any of the actions, rights or restrictions set forth herein, shall be interpreted in such a way as to place the Company, the Parent or the Purchaser in violation of any rule, regulation or policy of any Governmental Entity or Regulatory Authority, including any Law.

5.2 Covenants of Company Regarding the Performance of Obligations

Subject to the terms and conditions of this Agreement, the Company shall and shall cause its Subsidiaries, and to perform all obligations required or desirable to be performed by the Company or any of its Subsidiaries under this Agreement, and co-operate with the Parent and Purchaser in

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connection therewith, in order to consummate and make effective, as soon as reasonably practicable, the Arrangement. Without limiting the generality of the foregoing, the Company shall and, where appropriate, shall cause its Subsidiaries to:

(i) use commercially reasonable efforts to obtain a voting support agreement from all Shareholders who under Applicable Law have identified themselves as beneficially holding more than 5% of the Common Shares and each member of the Board and each executive officer of the company (it being understood that the Company’s obligations will be limited to communicating with the Shareholder and using such efforts and the Company will not be required to make any concessions to or provide any benefit to a Shareholder);

(ii) use commercially reasonable efforts to obtain the Requisite ShareholderSecurityholder Approval, including submitting the Arrangement Resolution for approval by the Shareholders at the Company Meeting in accordance with Section 2.3(1);

(iii) subject to applicable Law, cooperate and provide all commercially reasonable assistance, including providing all necessary information and documentation, to the Purchaser that the Purchaser may reasonably request in connection with making an ICA Notification and obtaining ICA Approval and any other Regulatory Clearances;

(iv) promptly advise the Purchaser orally and, if then requested, in writing of any event, change or development that may have resulted in, or that to the knowledge of the Company, might reasonably be expected to constitute, a Company Material Adverse Change, or resulted in any material adverse change in any fact set forth in the Company Disclosure Letter;

(v) promptly advise the Purchaser of any written notice or other communication received by it from any Governmental Entity;

(vi) promptly notify Parent of (a) any written notice or other communication received by it from any third party, subsequent to the date of this Agreement and prior to the Effective Time, alleging any material breach of or default under (x) any Material Contract to which the Company or any of its Subsidiaries is a party or (y) any other Contract to which the Company or any of its Subsidiaries is a party, the breach of or default under which would reasonably be expected to result in liability that is material to the Company and its Subsidiaries, taken as a whole, or (b) any written notice or other communication received by the Company or any of its Subsidiaries from any third party, subsequent to the date of this Agreement and prior to the Effective Time, alleging that the consent or waiver of such third party is or may be required in connection with the Transactions;

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(vii) use commercially reasonable efforts to assist in effecting the resignations of the Company directors and cause them to be replaced following the Effective Date by persons nominated by the Purchaser;

(viii) ensure that any Common Shares that are unallocated and held by the trustee under the RSU Plan are fully allocated to holders of RSUs;

(ix) at the request of the Purchaser, use commercially reasonable efforts to obtain all other third person consents, waivers, Permits, exemptions, orders, approvals, agreements, amendments and modifications to the Material Contracts that are necessary to permit consummation of the Transactions; and

(x) provide, subject to compliance with all Applicable Laws, lists of beneficial and registered holders of the Common Shares and any geographical reports prepared by its transfer agent in the possession of the Company and a list of holders of the Options and RSUs, as well as a security position listing from each depositary, including CDS Clearing and Depository Services Inc. and the Depository, and deliver any such lists to the Purchaser promptly following the date hereof and promptly deliver to the Purchaser upon demand thereafter supplemental lists setting out changes thereto.

5.3 Covenants of Parent and, the Purchaser and Privet Regarding the Performance of Obligations

(1)        Subject to the terms and conditions of this Agreement, the Parent and Purchaser shall and shall cause their Subsidiaries, to perform all obligations required or desirable to be performed by the Parent, Purchaser or any of their Subsidiaries under this Agreement, and co-operate with the Company in connection therewith, in order to obtain the Regulatory Clearances and consummate and make effective, as soon as reasonably practicable, the Arrangement. Without limiting the generality of the foregoing, the Parent and the Purchaser shall and, where appropriate, shall cause their Subsidiaries to:

(i) submit to the Minister, as promptly as practicable, but in any event no later than 30 days following the implementation of the Arrangement, an ICA Notification;

(ii) act diligently and use commercially reasonable efforts to obtain the ICA Approval;

(iii) provide or agree to the following terms and conditions:

(a) undertakings that, after completion of the Transactions, (I) the Company and will remain a separate legal entity, (II) all the assets, intellectual property and products developed formfrom those assets and intellectual property will reside with the Company or its Subsidiaries and (III) the Company will comply with the terms and conditions of, and its obligations under, the

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SADI Agreements as further described in the Company Disclosure Letter; and

(b) make necessary divestitures provided that they do not materially impair the ability of the Purchaser to operate and derive benefits from the business in a commercially reasonable manner; and

(iv) promptly advise the Company of any written notice or other communication received by it from any Governmental Entity in respect of the Transactions.

(2)       Subject to the terms and conditions of this Agreement, from the date of this Agreement and until the Effective Date, Privet shall be and remain the sole manager of IRIS LLC, and IRIS LLC shall be and remain the controlling shareholder of Parent.

5.4 Mutual Covenants

(1)        Subject to the terms and conditions of this Agreement, with respect to the Transactions, the Parent, the Purchaser and the Company shall use their commercially reasonable efforts to obtain the Regulatory Clearances as soon as practicable, without limiting the foregoing, each of the Parties shall, as applicable to a Party under a Law, as soon as practicable (but in any event, except as otherwise stated herein, within seven business days of the date hereof), submit to the appropriate Governmental Entities all filings necessary or advisable to obtain or satisfy all other Regulatory Clearances.

(2)        Notwithstanding anything to the contrary in this Section 5.4, no Party shall be required to provide to any other Party any confidential competitively-sensitive information, provided that any Party seeking to exclude any such confidential competitively-sensitive information (“Supplying Party”) from any other Party (“Receiving Party”) shall provide a redacted version of the information to the Receiving Party along with a non-redacted version containing the confidential competitively sensitive information to the Receiving Party’s external legal counsel on an “external counsel only” basis and the Receiving Party shall not request or otherwise receive the information from its external legal counsel without having received written permission from the Supplying Party. In particular, the Receiving Party will cause its external counsel to use such confidential competitively-sensitive information disclosed or made available to the Receiving Party’s external counsel solely for the purposes of Section 5.3 hereof and not for external counsel’s own or other purposes. The Receiving Party will promptly advise the Supplying Party in writing of any misappropriation or misuse by the Receiving Party’s external counsel of such confidential competitively-sensitive information disclosed or made available to external counsel which may come to its attention. The Receiving Party shall be liable for all breaches of the terms of this subsection by its external counsel.

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(3)        In the event the Transaction encounters insurmountable barriers due to Laws or operating reasons, the Parent shall take, or cause to be taken, all reasonable actions and do, or cause to be done, all things reasonably necessary to enable the Parties to close the Transactions, including the acquisition of the Company with appropriate carve outs restricting the business being acquired, provided that any such actions: (i) do not impair the ability of the Purchaser to operate and derive benefits from the business in a commercially reasonable manner; (ii) may be conditioned upon the consummation of the Transactions; and (iii) for greater certainty, any action taken shall be in addition to any action required to obtain ICA Approval pursuant to Section 6.2(viivi). The Company agrees to cooperate and provide all reasonable assistance to the Purchaser and Parent in taking such actions and doing such things, provided that the Company will not be obligated to take any steps which in the opinion of the Board would in any way be detrimental to the Company if the Transaction is not completed. However, notwithstanding the foregoing or anything to the contrary in this Agreement, it is expressly understood and agreed that, in connection with obtaining the Regulatory Clearances neither the Parent nor the Purchaser nor the Company shall have any obligation to litigate or contest any administrative or judicial action or Proceeding or any decree, judgment, injunction or other Order, whether temporary, preliminary or permanent.

5.5 Securityholder Communications

The Company and the Parent agree to co-operate in the preparation of presentations, if any, to securityholders of the Company regarding the Arrangement, provided that nothing shall restrict a Party from responding to investor relations inquiries. Neither the Parent nor the Purchaser will communicate with securityholders of the Company with respect to the Arrangement without the prior written consent of the Company. For greater certainty, the foregoing shall not prevent ordinary course communications with Representatives of the Company (including meeting or interviewing existing employees of the Company) otherwise in accordance with the provisions hereof. Subject to Section 2.4, except as required by Laws, neither the Parent, the Purchaser nor the Company shall, and each shall cause its respective Representatives not to, make any public announcement or statement with respect to the Arrangement, this Agreement, or the financial condition, properties, assets or liabilities of the Company without the approval of the other Parties, such approval not to be unreasonably withheld, conditioned or delayed. In any event, each Party agrees to give prior notice to the other of any such public announcement relating to the Arrangement or this Agreement and agrees to consult with the other prior to issuing each such public announcement. In particular, the Company shall not make any public announcement regarding the ICA Notification, the status of the application or the ICA Approval without the consent of the Parent and the Purchaser, such consent not to be unreasonably withheld, conditioned or delayed. Each of the Parent and the Company agrees that, promptly after the entering into of this Agreement, it shall issue a press release announcing the entering into of this Agreement, which press release shall, in each case, be satisfactory in form and substance to the other Party, acting reasonably. The Company will file such press release, together with a material change report in prescribed form, with applicable Securities Authorities in each province of Canada in which it is a reporting issuer (or equivalent) under Applicable Securities Laws. Without limiting the generality of the foregoing, the Parent and the Purchaser acknowledge  

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and agree that a copy of this Agreement will be filed on SEDAR and EDGAR by the Company and made available on the Company website promptly following the execution thereof.

5.6 Privacy

Each Party shall comply with applicable privacy Laws in the course of collecting, using and disclosing personal information about an identifiable individual (“Transaction Personal Information”). The Purchaser shall not disclose Transaction Personal Information to any person other than to its advisors who are evaluating and advising on the Transactions. If the Purchaser completes the Transactions, the Purchaser shall not, following the Effective Date, without the consent of the individuals to whom such Transaction Personal Information relates or as permitted or required by Law, use or disclose Transaction Personal Information:

(i) for purposes other than those for which such Transaction Personal Information was collected by the Company prior to the Effective Date; and

(ii) which does not relate directly to the carrying on of the Company’s business or to the carrying out of the purposes for which the Transactions were implemented.

The Company shall protect and safeguard Transaction Personal Information against unauthorized collection, use or disclosure. The Purchaser shall cause its advisors to observe the terms of this Section 5.6 and to protect and safeguard Transaction Personal Information in their possession.

ARTICLE VI
CONDITIONS

6.1 Mutual Conditions Precedent

The obligations of the Parties to complete the Arrangement are subject to the fulfillment, on or before the Effective Time, of each of the following conditions precedent, each of which may only be waived with the mutual consent of the Parties:

(i) the Arrangement Resolution shall have been approved by the Shareholders at the Company Meeting in accordance with the Interim Order;

(ii) the Interim Order and the Final Order shall each have been obtained on terms consistent with this Agreement, and shall not have been set aside or modified in a manner inconsistent with this Agreement;

(iii) the Regulatory Clearances shall have been obtained and each such Regulatory Clearance is in force and has not been modified in a way that would enjoin or prohibit the closing of the Arrangement;

(iv) no Governmental Entity shall have after the date of this Agreement enacted, issued, promulgated, made, enforced or entered, any Law (whether temporary, preliminary or permanent) that restrains, enjoins or otherwise prohibits consummation of, or dissolves, the Arrangement; and

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(v) this Agreement shall not have been terminated in accordance with its terms.

6.2 Additional Conditions Precedent to the Obligations of the Parent and the Purchaser

The obligations of the Purchaser to complete the Arrangement are subject to the fulfillment, on or before the Effective Time, of each of the following additional conditions precedent, all of which are included for the sole benefit of the Purchaser and any or all of which may be waived by the Purchaser in whole or in part in its sole discretion without prejudice to any other right the Purchaser may have under this Agreement:

(i) all representations and warranties of the Company set forth in this Agreement shall be true and correct in all respects as of the date hereof and as of the Effective Time as though made at and as of the Effective Time (except for representations and warranties made as of a specified date, the accuracy of which shall be determined as of that specified date), without regard to any materiality or Company Material Adverse Change qualifications contained in them, except where the failure or failures of any such representations and warranties to be so true and correct in all respects would not have, individually or in the aggregate, a Company Material Adverse Change; provided that the representations and warranties of the Company in Sections 1, 2, 3, 4, 7(b)(A) and 21 of Schedule C shall be true in all respects as of the date hereof and as of the Effective Time as though made at and as of the Effective Time, and the Parent and the Purchaser shall have received a certificate of the Company addressed to the Parent and the Purchaser and dated the Effective Date, signed on behalf of the Company by two senior executive officers of the Company (on the Company’s behalf and without personal liability), confirming the same as of the Effective Date;

(ii) all covenants of the Company under this Agreement to be performed on or before the Effective Time shall have been duly performed by the Company in all material respects, and the Parent and the Purchaser shall have received a certificate of the Company addressed to the Parent and the Purchaser and dated the Effective Date, signed on behalf of the Company by two senior executive officers of the Company (on the Company’s behalf and without personal liability), confirming the same as of the Effective Date;

(iii) all Third Party Consents shall have been obtained in a manner and on terms that are acceptable to the Purchaser, acting reasonably, and the Parent and the Purchaser shall have received a certificate of the Company addressed to the Parent and the Purchaser and dated as of the Effective Time, signed on behalf of the Company by two senior executive officers of the Company (on the Company’s behalf and without personal liability), confirming the same as of the Effective Date;

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(iv) since the date of this Agreement, there shall not have occurred, or have been disclosed to the public (if previously undisclosed to the public prior to the date hereof) any Company Material Adverse Change;

(v) no act, action, suit, demand or Proceeding shall have been commenced or threatened in writing by any Governmental Entity and no Law shall have been proposed, enacted, promulgated or applied to cease trade, enjoin, prohibit, or impose material limitations, damages or material additional conditions on, the completion of the Arrangement;

(vi) the aggregate number of Common Shares held, directly or indirectly, by those holders of such shares who have validly exercised Dissent Rights and not withdrawn such exercise in connection with the Arrangement (or instituted proceedings to exercise Dissent Rights) shall not exceed 20% of the aggregate number of Common Shares outstanding immediately prior to the Effective Time;

(vi) (vii) the Minister shall have not sent to the Purchaser a notice under subsection 25.2(1) of the Investment Canada Act and the Governor in Council shall have not made an order under subsection 25.3(1) of the Investment Canada Act in relation to the Transactions or, if such a notice has been sent or such an order has been made, the Purchaser shall have subsequently received (i) a notice under paragraph 25.2(4)(a) of the Investment Canada Act indicating that a review of the Transactions on grounds of national security will not be made, (ii) a notice under paragraph 25.3(6)(b) of the Investment Canada Act indicating that no further action will be taken in respect of the Transactions or (iii) a copy of an order under paragraph 25.4(1)(b) authorizing the Transactions, provided that such order is on terms and conditions satisfactory to the Purchaser acting reasonably and in compliance with Section 5.3(ii) (“ICA Approval”); and

(vii) (viii) the Purchaser shall have not received an order under Section 92 of the Competition Act precluding completion of the Arrangement or a notice that an application will be made under Section 92 or any other applicable section of Part VIII of the Competition Act in respect of the Transactions.

6.3 Additional Conditions Precedent to the Obligations of the Company

The obligations of the Company to complete the Arrangement are subject to the fulfillment, on or before the Effective Time, of each of the following additional conditions precedent, all of which are included for the sole benefit of the Company and any or all of which may be waived by the Company in whole or in part in its sole discretion without prejudice to any other right the Company may have under this Agreement:

(i) all representations and warranties of the Parent and the Purchaser set forth in this Agreement shall be true and correct in all respects, without regard to any materiality qualifications contained in them as at the date hereof and as of the Effective Time, as though made at and as of the Effective Time (except for representations and warranties made as of a specified date, the accuracy of which shall be determined as of that specified date), except where any failure or failures of any such representations and warranties to be so true and correct in all respects would not, individually or in the aggregate, reasonably be expected to materially delay or materially impede the completion of the Arrangement, and the Company shall have received

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a certificate of the Purchaser addressed to the Company and dated the Effective Date, signed on behalf of the Purchaser by two officers of the Purchaser (on the Purchaser’s behalf and without personal liability), confirming the same as of the Effective Date;

(ii) all covenants of the Parent and the Purchaser under this Agreement to be performed on or before the Effective Time shall have been duly performed by the Parent and the Purchaser in all material respects, and the Company shall have received a certificate of the Company addressed to the Company and dated the Effective Date, signed on behalf of the Purchaser by two officers of the Purchaser (on the Purchaser’s behalf and without personal liability), confirming the same as of the Effective Date; and

(iii) the Purchaser shall have deposited or caused to be deposited with the Depositary in escrow (the terms and conditions of such escrow to be satisfactory to the Company, acting reasonably) in accordance with Section 2.11 the funds required to effect payment in full of the aggregate Consideration to be paid for the Common Shares and the Depositary shall have confirmed in writing to the Company receipt of those funds.

6.4 Satisfaction of Conditions

The conditions precedent set out in Sections 6.1, 6.2, and 6.3 shall be conclusively deemed to have been satisfied, waived or released at the Effective Time. For greater certainty, and notwithstanding the terms of any escrow arrangement entered into between the Purchaser and the Depositary, all funds held in escrow by the Depositary pursuant to Section 2.11 shall be released from escrow at the Effective Time without any further act or formality required on the part of any person.

ARTICLE VII
ADDITIONAL AGREEMENTS

7.1 Notice and Cure Provisions

(1)         Each Party shall give prompt notice to the other Parties of the occurrence, or failure to occur, at any time from the date hereof until the earlier to occur of the termination of this Agreement and the Effective Time of any event or state of facts which occurrence or failure would, or would be likely to:

(i) cause any of the representations or warranties of any Party contained herein to be untrue or inaccurate in any material respect on the date hereof or at the Effective Time; or

(ii) result in the failure to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by any Party hereunder prior to the Effective Time.

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(2)         The Purchaser may not exercise its right to terminate this Agreement pursuant to Section 8.1(1)(iii)(b) [Breach of Representations or Covenants by Company] and the Company may not exercise its right to terminate this Agreement pursuant to Section 8.1(1)(iv)(b) [Breach of Representations or Covenants by Purchaser] unless the Party seeking to terminate this Agreement shall have delivered a written notice to the other Parties specifying in reasonable detail all breaches of covenants, representations and warranties or other matters which the Party delivering such notice is asserting as the basis for the termination right. If any such notice is delivered, provided that a Party is proceeding diligently to cure such matter and such matter is reasonably capable of being cured, no Party may exercise such termination right until the earlier of (i) the Outside Date and (ii) the date that is thirty days following receipt of such notice by the Party to whom the notice was delivered, if such matter has not been cured by such date. If such

notice has been delivered prior to the date of the Company Meeting, the notifying Party may elect to request that such meeting shall, unless the Parties agree otherwise, be postponed or adjourned in accordance with the terms of this Agreement until the expiry of such period (without causing any breach of any other provision contained herein).

(3)         No notification provided to the Parent or the Purchaser under this Section 7.1 or Section 5.2 shall affect or be deemed to modify any representation or warranty of the Company set forth herein or the conditions to the obligations of Parent and the Purchaser to consummate the Transactions or the remedies available to the partiesParties hereunder.

7.2 Non-Solicitation, Superior Proposal, Right to Match

(1)         Subject to Section 7.2(4) and Section 7.2(5), on and after the date hereof until the termination of this Agreement, the Company shall not, directly or indirectly, through any Representative or otherwise, and shall cause each of its Subsidiaries not to, directly or indirectly or through any Representative:

(i) make, solicit, assist, initiate, knowingly encourage, promote or otherwise facilitate (including by way of furnishing non-public information, permitting any visit to any facilities or properties of the Company or any Subsidiary or entering into any form of written or oral agreement, arrangement or understanding) any inquiries, proposals or offers regarding, constituting or that could reasonably be expected to lead to, an Acquisition Proposal;

(ii) participate in any discussions or negotiations with any person (other than the Parent or any of its Representatives) regarding any Acquisition Proposal;

(iii) make a Change in Recommendation;

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(iv) accept, approve, endorse or recommend, or propose publicly to accept, approve, endorse or recommend, or take no position or remain neutral with respect to, any Acquisition Proposal (it being understood that (a) publicly taking no position or a neutral position with respect to an Acquisition Proposal until the earlier to occur of ten business days following the earlier of the receipt and the public announcement of such Acquisition Proposal and two business days prior to the Company Meeting or (b) the submission of an Acquisition Proposal for SADI Approval, shall in each case not, in and of themselves, be considered to be in violation of this Section 7.2(1));

(v) release any person from, terminate, waive, amend or modify any provision of or otherwise forbear the enforcement of, any confidentiality or standstill agreement to which it or any of its Subsidiaries is a party, provided that, for avoidance of doubt, any clear and contractual release or deemed waiver from the standstill provisions of any such agreement in accordance with its terms without any further agreement or action by the Company or any of its Subsidiaries shall not constitute a breach of this Section 7.2(1); or

(vi) accept, approve, endorse, recommend or enter into, or publicly propose to accept, approve, endorse or enter into, any letter of intent, agreement in principle, agreement, arrangement or understanding related to an Acquisition Proposal.

(2)        The Company shall, and shall instruct each of its Representatives to, immediately cease and cause to be terminated any existing solicitation, assistance, discussion, encouragement, negotiation or process with or involving any person (other than the Parent or any of its Representatives) conducted heretofore by the Company or any of its Representatives with respect to or which could reasonably be expected to lead to an actual or potential Acquisition Proposal, whether or not initiated by the Company or any of its Representatives and, in connection therewith, the Company will discontinue access to any other third party to any data rooms (virtual or otherwise) made available by and under the control of the Company (and not establish or allow access to any other data rooms, virtual or otherwise or otherwise furnish information). The Company shall immediately request, to the extent permitted under the applicable confidentiality and standstill agreement (and exercise all rights it has to require) the return or destruction of all information provided to any third parties who have entered into a confidentiality and standstill agreement with the Company relating to any potential Acquisition Proposal and shall use commercially reasonable efforts to ensure that such requests are honoured in accordance with the terms of such confidentiality and standstill agreements. The Company shall enforce the provisions of any confidentiality and standstill agreement to which it or any of its Subsidiaries is a party, including by seeking injunctions to prevent any such breaches and to enforce specifically the terms and provisions thereof.

(3)        The Company shall promptly (and in any event within 24 hours after it has received any proposal, inquiry, offer or request) notify the Parent, at first orally

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and then in writing, of any proposal, inquiry, offer or request relating to or constituting an Acquisition Proposal or which could lead to an Acquisition Proposal or any request for non-public information relating to the Company or any of its Subsidiaries in connection with an actual or potential Acquisition Proposal, or for access to properties, books and records or a list of securityholders of the Company or any of its Subsidiaries in connection with an actual or potential Acquisition Proposal. Such notice shall include a description of the terms and conditions of, and the identity of the person making, any proposal, inquiry, offer or request. The Company shall promptly provide (and in any event within 24 hours thereafter) copies of all correspondence, proposals, inquiries, offers or requests if in writing or electronic form, and if not in writing or electronic form, a description of the terms of such correspondence, sent to the Company by or on behalf of the person making any such Acquisition Proposal or by or on behalf of the Company to the person making such Acquisition Proposal and such other details of the proposal, inquiry, offer or request as the Parent may reasonably request. The Company shall keep the Parent and the Purchaser informed on a prompt basis of the status, including any change to the price offered or any other material terms, of any such proposal (including amendments and proposed amendments), inquiry, offer, request, or any amendment to the foregoing and will promptly respond to all reasonable inquiries of the Parent with respect thereto.

(4)        If at any time following the date of this Agreement and prior to obtaining the approval of the Arrangement Resolution by the Shareholders at the Company Meeting, the Company or any of its Representatives receives any bona fide written Acquisition Proposal (including, for greater certainty, a variation or other amendment to an Acquisition Proposal made prior to the date hereof) that provides for consideration per Common Share that is greater than the Consideration and was not solicited after the date hereof in contravention of, and other than any Acquisition Proposal that resulted from a breach of, this Section 7.2 by the Company, its Subsidiaries or its Representatives, then the Company and its Representatives may:

(i) contact the person making the Acquisition Proposal and its Representatives solely for the purpose of clarifying the terms and conditions of such Acquisition Proposal and the likelihood of its consummation so as to determine whether such Acquisition Proposal is, or is reasonably likely to lead to, a Superior Proposal; and

(ii) if the Board of Directors determines in good faith, after consultation with its outside legal counsel and financial advisors, that such Acquisition Proposal is, or could reasonably be expected to lead to, a Superior Proposal, and that the failure to take the relevant action would constitute a breach of its fiduciary duties:

(a) furnish information with respect to the Company and its Subsidiaries to the person making such Acquisition Proposal and its Representatives, provided that (a) the Company promptly provides written notice to the

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Parent and the Purchaser of its decision to take such action, (b) the Company first enters into a confidentiality and standstill agreement with such person that is no less favourable in the aggregate to the Company than the Confidentiality Agreement, and (c) the Company sends a copy of such confidentiality agreement to the Parent promptly following its execution and before any non-public information is provided to such person and the Parent is promptly provided (to the extent not previously provided) with any such information provided to such person; provided that the Company will not be obligated to enter into a new confidentiality agreement and standstill agreement with a person who has already entered into a confidentiality agreement with the Company in the 12 month period preceding the date of receipt of the Acquisition Proposal and such agreement will remain in effect for all applicable periods and for the purposes of this section that existing confidentiality agreement will be the confidentiality agreement to be entered into and provided to the Purchaser under clause (a) and (b);

(b) engage in discussions and negotiations with respect to the Acquisition Proposal with the person making such Acquisition Proposal and its Representatives, provided that any non-public information about the Company and its Subsidiaries will only be provided if the Company has complied with Section 7.2(4)(ii); and

(c) make a submission for SADI Approval of such Acquisition Proposal and related agreement.

(5)        The Company may terminate this Agreement pursuant to Section 8.1(1)(iv)(a) [Definitive Agreement for Superior Proposal] and approve, accept and enter into any agreement, understanding or arrangement in respect of a Superior Proposal (other than a confidentiality and standstill agreement as described in Section 7.2(4)) if and only if:

(i) the Company has complied with its obligations under this Section 7.2;

(ii) the Board of Directors has determined, after consultation with its outside legal counsel and financial advisors, that such Acquisition Proposal is a Superior Proposal and that the failure to take the relevant action would constitute a breach of its fiduciary duties;

(iii) the Company has delivered written notice to the Parent and the Purchaser of the determination of the Board of Directors that the Acquisition Proposal is a Superior Proposal and of the intention of the Board of Directors to accept, approve or recommend such Superior Proposal and/or of the Company to enter into an agreement with respect to such Superior Proposal, together with a copy of the Acquisition Proposal and all documentation (including all agreements, arrangements and understandings) comprising the Acquisition Proposal to the extent not

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previously provided and a summary of the valuation analysis attributed by the Board of Directors to any non-cash consideration included in the Acquisition Proposal (collectively, the “Superior Proposal Notice”);

(iv) at least five business days have elapsed from the date the Superior Proposal Notice was received by the Parent and the Purchaser, which five business day period is referred to herein as the “Right to Match Period” (for greater certainty, the Right to Match Period shall expire at 5:00 p.m. (Toronto time) on the fifth business day following the day that the Superior Proposal Notice was sent to the Parent);

(v) if the Parent and the Purchaser have offered to amend the terms and conditions of this Agreement during the Right to Match Period pursuant to Section 7.2(6), the Board of Directors has determined in accordance with Section 7.2(6) that such Acquisition Proposal continues to be a Superior Proposal when assessed against the Arrangement as it is proposed to be amended as at the termination of the Right to Match Period; and

(vi) prior to or simultaneously with, and as a condition to the effectiveness of a termination of this Agreement pursuant to Section 8.1(1)(iv)(a) [Definitive Agreement for Superior Proposal], the Company pays the Company Termination Payment prescribed by Section 8.2(1) (which can be satisfied by paying the amount in trust to Canadian counsel for the Parent named in Section 9.2).

(6)        During the Right to Match Period, the Parent and the Purchaser will have the opportunity, but not the obligation, to offer to amend the terms of the Arrangement and this Agreement, and the Company shall cooperate with the Parent and the Purchaser with respect thereto, including negotiating in good faith with the Parent and the Purchaser to enable the Parent and the Purchaser to make such adjustments to the terms and conditions of this Agreement and the Arrangement as the Parent and the Purchaser deem appropriate and as would permit the Parent and the Purchaser to proceed with the Arrangement and any related transactions on such adjusted terms and applying for SADI Approval for any adjusted terms. The Board of Directors will review any such offer by the Parent and the Purchaser to amend the terms of the Arrangement and this Agreement in order to determine, in the exercise of its fiduciary duties, after consultation with its outside legal counsel and financial advisors, whether the Parent and the Purchaser’s offer to amend the Arrangement and this Agreement, upon its acceptance, would result in the applicable Acquisition Proposal ceasing to be a Superior Proposal when assessed against the Arrangement as it is proposed to be amended as at the termination of the Right to Match Period. If the Board of Directors so determines that the applicable Acquisition Proposal would cease to be a Superior Proposal when assessed against the Arrangement as it is proposed to be amended as at the termination of the Right to Match Period, the Parent and the Purchaser will apply for SADI Approval of the adjusted terms and, if granted, amend the terms of the Arrangement and the Company. The Parent and Purchaser

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may not withdraw their offer to make such amendment to the terms of the Arrangement while such SADI Approval is pending and on the grant of that SADI approval the Parent and the Purchaser shall enter into an amendment to this Agreement reflecting the offer by the Parent and the Purchaser to amend the terms of the Arrangement and this Agreement.

(7)        The Board of Directors will promptly reaffirm its Company Recommendation by press release after (i) any Acquisition Proposal is publicly announced or made and the Board of Directors determines it is not a Superior Proposal, (ii) the Board of Directors determines that a proposed amendment to the terms of the Arrangement pursuant to Section 7.2(6) would result in an Acquisition Proposal not being a Superior Proposal when assessed against the Arrangement as it is proposed to be amended as at the termination of the Right to Match Period, and the Parent and the Purchaser have so amended the terms of the Arrangement in accordance with Section 7.2(6), or (iii) the Purchaser, acting reasonably, requests in writing reaffirmation of such Company Recommendation by the Board of Directors (expectexcept that if the Company advises the Purchaser that it intends to make or has made a submission for SADI Approval of an Acquisition Proposal such reaffirmation is not required to be provided until such submission has been processed and a final determination made as to whether to provide the SADI Approval). The Parent and the Purchaser will be given a reasonable opportunity to review and comment on the form and content of any such press release.

(8)        Each additional amendment to any Acquisition Proposal that results in an increase in, or modification of, the consideration (or value of such consideration) to be received by the Shareholders or otherwise constitutes a material amendment to the Acquisition Proposal will constitute a new Acquisition Proposal for purposes of this Section 7.2, and the Parent and the Purchaser shall be afforded a new Right to Match Period in respect of each such new Acquisition Proposal from the date the Superior Proposal Notice was received by the Parent in respect of such new Acquisition Proposal. In the event the Company provides the notice contemplated by Section 7.2(3) on a date which is less than ten days prior to the Company Meeting, the Purchaser shall be entitled to require the Company to adjourn or postpone the Company Meeting in accordance with the terms of this Agreement to a date that is not more than ten days after the scheduled date of the Company Meeting, provided that in no event shall such adjourned or postponed meeting be held on a date less than five business days prior to the Outside Date. In the event the Company provides the notice contemplated by Section 7.2(5), the Purchaser shall be entitled to require the Company to adjourn or postpone the Company Meeting to a date that is not less than five business days after the Right to Match Period has expired, provided that in no event shall such adjourned or postponed meeting be held less than five business days prior to the Outside Date. In the event the Company receives any proposal, inquiry, offer or request which could relate to or constitute an Acquisition Proposal on a date which is less than 45 days prior to the Company Meeting, the Board of Directors shall be entitled, notwithstanding any rights of the Purchaser granted in this section, to adjourn or postpone the Company Meeting to a date that is not more than 45 days after the scheduled date

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of the Company Meeting, provided that in no event shall such adjourned or postponed meeting be held on a date less than five business days prior to the Outside Date.

(9)        Nothing in this Agreement shall prevent the Board of Directors from issuing a directors’ circular or otherwise responding as required by Laws to an Acquisition Proposal or from calling and holding a meeting of Shareholders requisitioned by Shareholders pursuant to the BCBCA or ordered to be held by a court pursuant to the BCBCA.

7.3 Information Rights

The Parent and the Purchaser acknowledge having completed their due diligence investigation of the Company, but, for informational purposes only the Company agrees, upon reasonable notice, to continue to provide the Purchaser and its Representatives with reasonable access without unreasonable disruption to the conduct of the Company’s business during normal business hours to the books, records, information and files in the Company’s possession and control, and access (upon reasonable advance notice during normal business hours and with, at the Company’s option, a Company representative present) to its personnel on an as requested basis, as well as reasonable access to the properties of the Company and each of its Subsidiaries, for strategic planning purposes; provided, however, that no such access shall affect the representations, warranties, covenants, agreements or obligations of the Parties (or remedies with respect thereto) or the conditions to the obligations of the Parties under this Agreement. The Company shall cooperate with the Parent and the Purchaser to promptly provide, without unreasonable disruption to the conduct of the Company’s business, any information that they reasonably request. The foregoing shall be subject to the Confidentiality Agreement and nothing in the foregoing shall require the Company to disclose information which it is prohibited from disclosing pursuant to Law.

7.4 Shareholder Claims

The Company shall promptly notify the Purchaser and the Parent of any claim brought by (or threatened to be brought by) any present, former or purported holder of any securities of the Company in connection with any of the Transactions. The Company shall consult with the Purchaser and the Parent prior to settling any such claim and shall not settle or compromise, or agree to settle or compromise, any such claim without the prior written consent of the Parent and the Purchaser.

ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER

8.1 Termination

(1)        This Agreement may be terminated and the Arrangement may be abandoned at any time prior to the Effective Time (notwithstanding any approval of this Agreement or the Arrangement Resolution or the Arrangement by the Shareholders and/or the Court):

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(i) by mutual written agreement of the Company, the Parent and the Purchaser;

(ii) by either the Company or the Purchaser, if:

(a) the Effective Time shall not have occurred on or before the Outside Date, except that the right to terminate this Agreement under this Section 8.1(1)(ii)(a) shall not be available to any such Party whose failure (or, in the case of the Purchaser, the failure of any of the Purchaser or the Parent) to fulfill any of its obligations has been the principal cause of, or resulted in, the failure of the Effective Time to occur by such date;

(b) after the date hereof, there shall be enacted, issued, promulgated, made, enforced or amended any Law (which Law shall have become final and non-appealable) that restrains, enjoins or otherwise prohibits the consummation of, or dissolves, the Arrangement;

(c) the Purchaser elects not to match a Superior Proposal in accordance with the terms of Section 7.2, provided the Company has paid to the Purchaser the applicable Termination Payment in accordance with Section 8.2 (provided that the Purchaser may not exercise this right of termination if the Company has advised the Purchaser that it intends to make or has made a submission for SADI Approval in respect of an Acquisition Proposal while such submission is outstanding or pending); or

(d) the Arrangement Resolution shall have failed to receive the Requisite ShareholderSecurityholder Approval at the Company Meeting (including any adjournment or postponement thereof) in accordance with the Interim Order;

(iii) by the Purchaser, if:

(a) prior to obtaining the approval of the Arrangement Resolution by the Shareholders, (A) the Board of Directors shall have effected a Change in Recommendation, (B) the Company shall have breached Section 7.2 in any material respect, or (C) the Purchaser requests in writing that the Board of Directors unconditionally reaffirm its Company Recommendation and the Board of Directors shall not have done so by the earlier to occur of (x) the tenth business day following receipt of such request and (y) two business days prior to the Company Meeting (expect that if the Company advises the Purchaser that it intends to make or has made a submission for SADI Approval of an Acquisition Proposal such reaffirmation is not required to be provided until such submission has been processed and a final determination made as to whether to provide the SADI Approval);

(b) subject to Section 7.1(2), a breach of any representation or warranty or failure to perform any covenant or agreement on the part of the Company set forth in this Agreement shall have occurred that would cause the

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conditions set forth in Section 6.1 or Section 6.2 not to be satisfied at such time; provided that the Purchaser or the Parent is not then in breach of this Agreement so as to cause any of the conditions set forth in Section 6.1 or Section 6.3 not to be satisfied; or

(c) after the date hereof and prior to the Effective Time, a Company Material Adverse Change has occurred and the Company Material Adverse Change is still in existence on the Effective Date; or.

(d) immediately before the proposed Effective Time, the condition in Section 6.2(vi) is not met or waived by the Purchaser;

(iv) by the Company, if:

(a) prior to obtaining the approval of the Arrangement Resolution by the Shareholders, the Board of Directors authorizes the Company, subject to complying with the terms of Section 7.2 and Section 8.2(1), to approve, accept and enter into a definitive agreement (other than a confidentiality agreement) with respect to a Superior Proposal;

(b) subject to Section 7.1(2), a breach of any representation or warranty or failure to perform any covenant or agreement on the part of any of the Purchaser or the Parent set forth in this Agreement shall have occurred that would cause the conditions set forth in Section 6.1 or Section 6.3 not to be satisfied at such time; provided that the Company is not then in breach of this Agreement so as to cause any of the conditions set forth in Section 6.1 or Section 6.2 not to be satisfied;

(c) the Purchaser does not provide or cause to be provided the Depositary with sufficient funds to complete the Arrangement as required pursuant to Section 2.11; or

(d) the Company has confirmed in writing to the Parent and Purchaser that it is entitled to and is ready to implement the Plan of Arrangement under Section 2.10 and the Purchaser fails to take all steps it is required to take in order for the Company to implement the Plan of Arrangement within two business days following the written notice provided by the Company.

(2)        The Party desiring to terminate this Agreement pursuant to this Section 8.1 (other than pursuant to Section 8.1(1)(i)) shall give written notice of such termination to the other Parties.

8.2 Termination Payment by Company

(1)        If a Termination Payment Event occurs, the Company shall pay as directed by the Parent in writing (by wire transfer of immediately available funds) the Company Termination Payment in accordance with this Section 8.2. For the purposes of this Agreement, “Termination Payment Event” means the termination of this Agreement pursuant to:

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(i) Section 8.1(1)(iii)(a) [Change in Recommendation] prior to the Company Meeting or Section 8.1(1)(iv)(a) [Definitive Agreement for Superior Proposal]; or

(ii) Section 8.1(1)(ii)(a) [Outside Date] or Section 8.1(1)(ii)(d) [Failure to Receive Requisite Shareholder Approval] either by the Company or the Purchaser, or Section 8.1(1)(iii)(b)[Breach of Representations or Covenants] by the Purchaser, but only if, in the case of this paragraph (ii): (a) following the date hereof and prior to the termination of this Agreement, an Acquisition Proposal shall have been communicated or otherwise made known to the Company by any person other than the Purchaser or the Parent or any affiliate thereof, and (b) a definitive agreement providing for an Acquisition Proposal is entered into within 12 months of termination of this Agreement, and such Acquisition Proposal is later consummated or effected (whether or not within such one-year period).

(2)        If a Termination Payment Event occurs due to a termination of this Agreement by the Company pursuant to Section 8.1(1)(iv)(a) [Definitive Agreement for Superior Proposal], the Company Termination Payment shall be paid on the first business day following receipt by the Purchaser of notice of termination of this Agreement by the Company. If a Termination Payment Event occurs due to a termination of this Agreement by the Purchaser pursuant to Section 8.1(1)(iii)(a) [Change in Recommendation] the Company Termination Payment shall be paid within five business days following receipt by the Company of notice of termination of this Agreement by the Purchaser. If a Termination Payment Event occurs in the circumstancescircumstance set out in Section 8.2(1)(ii), the Company Termination Payment shall be paid upon the consummation of the applicable Acquisition Proposal referred to therein. For the avoidance of doubt, in the event that the Company terminates this Agreement at a time when the Parent or the Purchaser would have had the right to terminate this Agreement and be entitled hereunder to receive the Company Termination Payment, the Parent shall be entitled to receipt of the Company Termination Payment that would have been (or would have subsequently become) payable had the Parent terminated this Agreement at such time.

(3)        Upon written notice to the Company, the Parent may assign its right to receive the Company Termination Payment to any of its Subsidiaries or affiliates.

(4)        The Company shall not be obligated to make more than one Company Termination Payment under this Section 8.2 if one or more of the events specified herein occur.

(5)        Each of the Parties acknowledges that the agreements contained in this Section 8.2 are an integral part of the Transactions and that, without these agreements, the Parties would not enter into this Agreement. Accordingly, if the Company shall fail to pay in a timely manner the Company Termination Payment due pursuant to this Section 8.2, and, in order to obtain such payment, the Parent makes a claim that results in a judgment against the Company, the Company shall pay to the Parent its reasonable costs and expenses (including its reasonable attorneys’ fees

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and expenses) incurred in connection with such suit, together with interest on the Company Termination Payment due pursuant to this Section 8.2 at the prime rate of the Royal Bank of Canada in effect on the date such payment was required to be made, plus three percentage points.

8.3 Termination Payment by Parent

(1)        If the Company terminates this Agreement under Sections 8.1(1)(iv)(b), 8.1(1)(iv)(c) or 8.1(1)(iv)(d), the Parent will, as directed by the Company in writing, pay the Parent Termination Payment (by wire transfer of immediately available funds). The Parent Termination Payment will be paid within two business days of the date of written demand of the Company. For the avoidance of doubt, in the event that the Parent or Purchaser terminates this Agreement at a time when the Company would have had the right to terminate this Agreement and be entitled hereunder to receive the Parent Termination Payment, the Company shall be entitled to receipt of the Parent Termination Payment that would have been (or would have subsequently become) payable had the Company terminated this Agreement at such time.

(2)        Upon written notice to the Parent, the Company may assign its right to receive the Parent Termination Payment to any of its Subsidiaries or affiliates.

(3)        The Parent shall not be obligated to make more than one Parent Termination Payment under this Section 8.3 if one or more of the events specified herein occur.

(4)        Each of the Parties acknowledges that the agreements contained in this Section 8.3 are an integral part of the Transactions and that, without these agreements, the Parties would not enter into this Agreement. Accordingly, if the Parent shall fail to pay in a timely manner the Parent Termination Payment due pursuant to this Section 8.3, and, in order to obtain such payment, the Company makes a claim that results in a judgment against the Parent, the Parent shall pay to the Company its reasonable costs and expenses (including its reasonable attorneys’ fees and expenses) incurred in connection with such suit, together with interest on the Parent Termination Payment due pursuant to this Section 8.3 at the prime rate of the Royal Bank of Canada in effect on the date such payment was required to be made, plus three percentage points.

8.4 Effect of Termination

If this Agreement is terminated pursuant to Section 8.1, this Agreement shall become void and of no effect without liability of any Party (or any shareholder, director, officer, employee, agent, consultant or representative of such Party) to any other Party hereto, except that (i) the provisions of this Section 8.4, Section 5.6, Section 8.2, Section 9.2, Section 9.3, Section 9.6, Section 9.9, Section 9.10, Section 9.11 and Section 9.12 (including all related definitions set forth herein) shall survive any termination hereof pursuant to Section 8.1(1), and (ii) the payment of the Company Termination Payment or the Parent Termination Payment is the sole remedy in

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compensation or damages of, as applicable, the Company and its Subsidiaries and the Parent and the Purchaser with respect to the event or events giving rise to the termination of this Agreement, provided that neither the termination of this Agreement nor anything contained in this Section 8.4 shall relieve or have the effect of relieving any Party in any way from liability for damages incurred or suffered by any other Party as a result of a knowing, intentional or wilful breach of this Agreement, including a knowing, intentional, wilful or fraudulent making of a representation or knowing, intentional or wilful non-compliance with a covenant of this Agreement.

8.5 Waiver

(1)        At any time prior to the termination of this Agreement pursuant to Section 8.1, any Party may (i) extend the time for the performance of any of the obligations or other acts of any other Party or (ii) waive compliance with any of the agreements of the other Party or with any conditions to its own obligations, in each case only to the extent such obligations, agreements and conditions are intended for its benefit.

(2)        No waiver of any of the provisions of this Agreement by any Party shall be effective unless in writing and any waiver shall affect only the matter, and the occurrence thereof, specifically identified and shall not extend to any other matter or occurrence. No failure or delay by any Party in exercising any right, power or privilege under this Agreement will operate as a waiver thereof, nor will any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any right, power or privilege under this Agreement.

ARTICLE IX
GENERAL PROVISIONS

9.1 Directors’ and Officers’ Insurance

(1)        Prior to the Effective Date, the Company shall purchase pre-paid, non-cancellable directors’ and officers’ liability insurance for the Company’s present and former directors and officers and those of its Subsidiaries, covering claims made prior to and within six years after the Effective Time, on a “trailing” or “run-off” basis and otherwise bearing such terms and conditions as the Company may, in its sole discretion, determine, provided that such insurance is available at a one-time cost that is not in excess of 250% of the annual cost to the Company of the Company’s current directors’ and officers’ insurance policy and that the Company shall have consulted with the Parent as to the pricing and scope of such insurance. From and after the Effective Time, the Company or the Parent, as applicable, agrees not to take any action to terminate such directors’ and officers’ liability insurance or adversely affect the rights of the Company’s present and former directors and officers thereunder.

(2)        Following the Effective Time, and subject to compliance with Laws, the Parent shall cause the Company and its Subsidiaries (or their successors) to comply with all of their obligations to the present and former employees, directors and officers

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of the Company and its Subsidiaries under the agreements and rights to indemnification or exculpation as are disclosed in the Company Disclosure Letter, including by paying to the individuals party to such agreements, in each case, such amounts as are required in accordance with such agreements. Subject to compliance with Laws, such rights to indemnification or exculpation shall not be amended, repealed or otherwise modified in a manner that would adversely affect the rights of present and former officers and directors of the Company and its Subsidiaries for a period of six years from the Effective Time.

9.2 Notices

Any notice, consent, waiver, direction or other communication required or permitted to be given under this Agreement by a party shall be in writing and may be given by delivering same or sending same by facsimile transmission or by delivery addressed to the party to which the notice is to be given at its address for service herein. Any notice, consent, waiver, direction or other communication aforesaid shall, if delivered, be deemed to have been given and received on the date on which it was delivered to the address provided herein (if a business day, if not, the next succeeding business day) and if sent by facsimile transmission be deemed to have been given and received at the time of receipt (if a business day, if not, the next succeeding business day) unless actually received after 4:30 p.m. (local time) at the point of delivery in which case it shall be deemed to have been given and received on the next business day.

(i) if to the Company:

Norsat International Inc.

110-4020 Viking Way

Richmond, British Columbia V6V 2L4 Canada

Attention:	Amiee Chan, Chief Executive Officer
Facsimile:	(604) 821-2801

Attention:	Arthur Chin, Chief Financial Officer
Facsimile:	(604) 821-2801

with a copy (which shall not itself constitute notice) to:

McMillan LLP

1055 West Georgia Street

Royal Centre, Suite 1500

Vancouver, British Columbia V6E 4N7

Attention:	Leo Raffin
Facsimile:	(604) 685-7084

(ii) if to Privet, the Parent or the Purchaser:

Hytera Communications Co., Ltd.

Hytera Tower, Shenzhen Hi-Tech Industrial Park North, Beihuan

RD. 9108# Nanshan District, Shenzhen, P.R.C.

IRIS Holdings, Inc.

c/o Privet Fund Management LLC

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79 West Paces Ferry Road, Suite 200B

Atlanta, Georgia 30305

Attention:	Nuo Xu, Chief Investment OfficerRyan Levenson, Managing
Member
Facsimile:	+86 (755) 8613-3699, Ext. 0027(404) 419-2681

with a copy (which shall not itself constitute notice) to:

Baker & McKenzieBryan Cave LLP

Brookfield Place

Bay/Wellington Tower

One Atlantic Center

1201 W. Peachtree St., NW, Fourteenth Floor

Atlanta, Georgia 30309

Attention:	Rick Miller
Facsimile:	(404) 420-0787

with a copy (which shall not itself constitute notice) to:

SkyLaw Professional Corporation

181 Bay Street3 Bridgman Avenue, Suite 2100204

Toronto, Ontario, M5R 3V4 Canada M5J 2T3

Attention:	Charlie MacCreadyKevin R. West
Facsimile:	(416866) 863-6275832-0623

9.3 Governing Law, Jurisdiction

This Agreement shall be governed in all respects, including validity, interpretation and effect, by the Laws of the Province of British Columbia and the federal Laws of Canada applicable therein, without giving effect to any principles of conflict of Laws thereof that would result in the application of the Laws of any other jurisdiction. The Parties irrevocably attorn to the exclusive jurisdiction of the courts of the Province of British Columbia with respect to any dispute, claim or other matter arising under this Agreement.

9.4 Injunctive Relief and Specific Performance

The Parties agree that irreparable damage would occur for which money damages would not be an adequate remedy at Law in the event that any provision of this Agreement were not performed in accordance with its specific terms or were otherwise breached, and that money damages or other legal remedies would not be an adequate remedy for any such damages. Accordingly, the Parties acknowledge and hereby agree that in the event of any breach or threatened breach by the Company, on the one hand, or the Parent or the Purchaser, on the other hand, of any of their respective covenants or obligations set forth in this Agreement, the Company, on the one hand, and the Parent and the Purchaser, on the other hand, shall be entitled, without the requirement to post a bond or other security, to an injunction or injunctions and other equitable relief to prevent or restrain breaches or threatened breaches of this Agreement by the other, to seek enforcement of the terms and provisions of this Agreement to prevent breaches or threatened breaches of, or to enforce compliance with, the covenants and obligations of the other under this Agreement. The

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Parties further agree that (i) by seeking the remedies provided for in this Section 9.4, a Party shall not in any respect waive its right to seek any other form of relief that may be available to a Party under this Agreement in the event that this Agreement has been terminated or in the event that the remedies provided for in this Section 9.4 are not available or otherwise are not granted, and (ii) nothing set forth in this Section 9.4 shall require any party to institute any proceeding for (or limit any Party’s right to institute any proceeding for) specific performance under this Section 9.4 prior or as a condition to exercising any termination right under Article VIII (and pursuing damages after such termination), nor shall the commencement of any legal proceeding restrict or limit any Party’s right to terminate this Agreement in accordance with the terms of Article VIII or pursue any other remedies under this Agreement that may be available then or thereafter.

9.5 Time of Essence

Time shall be of the essence in this Agreement.

9.6 Entire Agreement, Binding Effect

This Agreement, the Company Disclosure Letter and the Confidentiality Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and thereof and cancel and supersede all such prior agreements, understandings, negotiations and discussions, whether oral or written, between the parties. There are no conditions, covenants, agreements, representations, warranties or other provisions, whether oral or written, express or implied, collateral, statutory or otherwise, relating to the subject matter hereof other than those contained in this Agreement, the Company Disclosure Letter and the Confidentiality Agreement.

9.7 Assignment

This Agreement shall not be assigned by operation of Law or otherwise other than as expressly permitted by this Agreement. This Agreement may be assigned by the Company with the prior written consent of the Parent and the Purchaser and may be assigned by the Parent and the Purchaser with the prior written consent of the Company. Subject to the receipt of a SADI Approval, the Purchaser may assign, without the consent of the Company, all or any part of its rights under this Agreement to, and its obligations under this Agreement may be assumed by, a Subsidiary of the Parent, provided that if such assignment and/or assumption takes place, the Purchaser shall continue to be liable jointly and severally with such Subsidiary for all of its obligations hereunder.

9.8 Severability

If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule or Law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the Transactions are not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the Transactions are fulfilled to the fullest extent possible.

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9.9 Contra Proferentum

The Parties waive the application of any rule of Law which otherwise would be applicable in connection with the construction of this Agreement that ambiguous or conflicting terms or provisions should be construed against the party who (or whose counsel) prepared the executed agreement or any earlier draft of the same.

9.10 No Third Party Beneficiaries

This Agreement is not intended to confer on any person other than the Parties, any rights or remedies, except that the provisions of Section 9.1 are (i) intended for the benefit of the persons specified therein as and to the extent applicable in accordance with their terms, and will be enforceable by each of such persons and his or her heirs, executors, administrators and other legal representatives and the Company will hold the rights and benefits of Section 9.1 in trust for and on behalf of such persons and the Company hereby accepts such trust and agrees to hold the benefit of and enforce performance of such covenants on behalf of such persons as directed by such persons, and (ii) in addition to, and not in substitution for, any other rights that such persons may have by contract or otherwise.

9.11 No Liability

No director or officer of the Parent or the Purchaser shall have any personal liability whatsoever to the Company or any third party beneficiary under this Agreement and the Plan of Arrangement or any other document delivered in connection with the Transactions on behalf of the Parent and the Purchaser. No director or officer of the Company shall have any personal liability whatsoever to the Parent and the Purchaser under this Agreement and the Plan of Arrangement or any other document delivered in connection with the Transactions on behalf of the Company.

9.12 Expenses

The Parties agree that all costs and expenses of the Parties relating to the transactions contemplated under this Agreement, including legal fees, accounting fees, financial advisory fees, regulatory filing fees, stock exchange fees, all disbursements of advisors and printing and mailing costs, shall be paid by the party incurring such expense.

9.13 Counterparts, Execution

This Agreement may be executed in any number of counterparts, each of which shall be deemed to be original and all of which taken together shall be deemed to constitute one and the same instrument, and it shall not be necessary in making proof of this Agreement to produce more than one counterpart. The Parties shall be entitled to rely upon delivery of an executed facsimile, PDF email transmission or similar executed electronic copy of this Agreement, and such facsimile, PDF email transmission or similar executed electronic copy shall be legally effective to create a valid and binding agreement among the Parties.

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9.14 Amendments

This Agreement and the Plan of Arrangement may, at any time and from time to time before or after the holding of the Company Meeting but not later than the Effective Time, be amended by mutual written agreement of the Parties, and any such amendment may, subject to the Interim Order and Final Order and Laws, without limitation:

(i) change the time for performance of any of the obligations or acts of the Parties;

(ii) modify any representation or warranty contained herein or in any document delivered pursuant hereto;

(iii) modify any of the covenants herein contained and waive or modify performance of any of the obligations of the Parties; and/or

(iv) modify any mutual conditions precedent herein contained.

[Remainder of page intentionally left blank.]

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IN WITNESS WHEREOF, the Parent, the Purchaser and, the Company and, solely with respect to Section 5.3(2) thereof, Privet, have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

PRIVET FUND MANAGEMENT LLC
By:
	Name:
	Title:
IRIS HOLDINGS, INC.
By:	“Chen Qingzhou”
	Name: Chen Qingzhou
	Title:   Chairman and CEO
HYTERA PROJECTIRIS CANADA ACQUISITION CORP.
By:	“Zeng Hua”
	Name: Zeng Hua
	Title:   Director
NORSAT INTERNATIONAL INC.
By:	“Amiee Chan”
	Name: Amiee Chan
	Title:   President and CEO

SCHEDULE A

ARRANGEMENT RESOLUTION

BE IT RESOLVED THAT:

1.       The arrangement (the “Arrangement”) pursuant to Division 5 of Part 9 of the Business Corporations Act (British Columbia) (the “BCBCA”) of Norsat International Inc. (the “Company”), as more particularly described and set forth in the management information circular (the “Company Circular”) dated ●, 2017 of the Company accompanying the notice of this meeting (as the Arrangement may be amended, modified or supplemented), is hereby authorized, approved and adopted.

2.       The plan of arrangement of the Company (as it has been or may be amended, modified or supplemented) (the “Plan of Arrangement”) implementing the Arrangement, the full text of which is set out in Appendix “●” to the Company Circular, is hereby authorized, approved and adopted.

3.       The (i) the arrangement agreement (the “Arrangement Agreement”) made as of March 24,May [   ], 2017 between the Company, the Parent and the Purchaser,IRIS Holdings, Inc., IRIS Canada Acquisition Corp. and, solely with respect to Section 5.3(2) thereof, Privet, and related transactions, (ii) actions of the directors of the Company in approving the Arrangement Agreement, and (iii) actions of the directors and officers of the Company in executing and delivering the Arrangement Agreement, and any amendments, modifications or supplements thereto, are hereby ratified and approved.

4.       The Company be and is hereby authorized to apply for a final order from the Supreme Court of British Columbia (the “Court”) to approve the Arrangement on the terms set forth in the Arrangement Agreement and the Plan of Arrangement (as they may be amended, modified or supplemented and as described in the Company Circular).

5.       Notwithstanding that these resolutions have been passed (and the Arrangement adopted) by the shareholders of the Company or that the Arrangement has been approved by the Supreme Court of British Columbia, the directors of the Company are hereby authorized and empowered to, without notice to or approval of the shareholders of the Company, (i) amend, modify or supplement the Arrangement Agreement or the Plan of Arrangement to the extent permitted by the Arrangement Agreement, the Plan of Arrangement or the Court, and (ii) not to proceed with the Arrangement and related transactions.

6.       Any officer or director of the Company is hereby authorized and directed for and on behalf of the Company to execute or cause to be executed and to deliver or cause to be delivered all such other documents and instruments and to perform or cause to be performed all such other acts and things as such person determines may be necessary or desirable to give full effect to the foregoing resolution and the matters authorized thereby, such determination to be conclusively evidenced by the execution and delivery of such document or instrument or the doing of any such act or thing.

SCHEDULE B

PLAN OF ARRANGEMENT

PURSUANT TO DIVISION 5 OF PART 9

OF THE BUSINESS CORPORATIONS ACT (BRITISH COLUMBIA)

ARTICLE 1.

INTERPRETATION

1.1 Definitions

In this Plan of Arrangement, unless there is something in the subject matter or context inconsistent therewith, the following terms will have the respective meanings set out below and grammatical variations of those terms will have corresponding meanings:

(a)        “Arrangement Agreement” means the arrangement agreement made as of March 24,May [ ], 2017 between the Parent, the Purchaser, the Company and, solely with respect to Section 5.3(2) thereof, Privet, as the same may be supplemented or amended from time to time in accordance with its terms;

(b)        “Arrangement Resolution” means the special resolution of Shareholders approving the Arrangement to be considered at the Company Meeting;

(c)        “Arrangement” means the arrangement pursuant to Division 5 of Part 9 of the BCBCA as set out in this Plan of Arrangement, subject to any amendments or variations thereto made in accordance with the terms of the Arrangement Agreement, Article 3 of this Plan of Arrangement or made at the direction of the Court in the Final Order with the consent of the Company and the Purchaser, each acting reasonably;

(d)        “BCBCA” means the Business Corporations Act (British Columbia) and the regulations made thereunder, as now in effect and as they may be promulgated or amended from time to time;

(e)        “Board” means the board of directors of the Company;

(f)        “Business Day” means any day (other than a Saturday, a Sunday, a statutory or civic holiday) on which commercial banks located in Vancouver, British Columbia and Toronto, Ontario are open for the conduct of business;

(g)        “Canadian Equivalent of the Share Consideration” means the amount in Canadian dollars of the Share Consideration on the basis of the United States to Canadian dollar daily exchange rate on the date that is three business days immediately preceding the Effective Date as reported by the Bank of Canada;

(h)        “Company” means Norsat International Inc., a company existing under the laws of British Columbia;

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(i)        “Company Meeting” means the special meeting of Shareholders, including any adjournment or postponement thereof, to be called and held in accordance with the Interim Order for the purpose of considering and, if thought fit, approving the Arrangement Resolution;

(j)         “Court” means the Supreme Court of British Columbia;

(k)        “Depositary” means Computershare Investor Services Inc., as depositary;

(l)         “Dissent Rights” has the meaning ascribed thereto in Section 4.1;

(m)       “Dissenting Shareholder” means a registered holder of Shares who has duly and validly exercised the Dissent Rights in respect of the Arrangement Resolution in strict compliance with the Dissent Rights and who has not withdrawn or been deemed to have withdrawn such exercise of Dissent Rights;

(n)        “Dissenting Shares” means the Shares held by Dissenting Shareholders;

(o)       “Dividend Per Share” the amount per Share declared by the Board as the Permitted Dividend;

(p)        “Effective Date” means the date the Purchaser and the Company agree upon in writing as the Effective Date;

(q)        “Effective Time” means the time on the Effective Date the Company and the Purchaser agree upon in writing as the Effective Time;

(r)        “Final Order” means the final order of the Court approving the Arrangement as such order may be amended by the Court (with the consent of both the Company and the Purchaser, each acting reasonably) at any time before the Effective Date or, if appealed, then, unless such appeal is withdrawn or denied, as affirmed or as amended (provided that any such amendment is acceptable to both the Company and the Purchaser, each acting reasonably) on appeal;

(s)       “Governmental Authority” means any multinational, federal, provincial, territorial, state, regional, municipal, local or other government or governmental body and any division, agent, official, agency, commission, board or authority of any government, governmental body, quasi-governmental or private body (including any stock exchange) exercising any statutory, regulatory, expropriation or taxing authority under the authority of any of the foregoing and any domestic, foreign or international judicial, quasi-judicial or administrative court, tribunal, commission, board, panel or arbitrator acting under the authority of any of the foregoing;

(t)         “holder”, when used with reference to any securities of the Company, means the holder of such securities shown from time to time in the central securities register maintained by or on behalf of the Company in respect of such securities;

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(u)        “Interim Order” means the interim order of the Court in a form acceptable to the Company and the Purchaser, acting reasonably, providing for, among other things, the calling and holding of the Company Meeting, as the same may be amended by the Court with the consent of the Company and the Purchaser, each acting reasonably;

(v)         “Laws” means any applicable laws including international, multinational, federal, national, provincial, state, municipal and local laws (statutory, common or otherwise), constitutions, treaties, conventions, statutes, principles of law and equity, rulings, ordinances, judgments, determinations, awards, decrees, injunctions, writs, certificates and orders, notices, bylaws, rules, regulations, ordinances, or other requirements, policies, guidelines, standards or instruments, whether domestic, or foreign, and the terms and conditions of any grant of approval, permission, authority or licence of other similar requirement enacted, adopted, promulgated, or applied by any Governmental Authority having the force of law, and the term “applicable” with respect to such Laws and in a context that refers to one or more person, means such Laws as are binding upon or applicable to such person or its assets;

(w)       “Letter of Transmittal” means the letter of transmittal to be delivered by the Company to Shareholders providing for the delivery of Shares to the Depositary;

(x)        “Liens” means any mortgage, hypothec, pledge, assignment, charge, lien, prior claim, security interest, encroachment, option, right of first refusal or first offer, occupancy rights, covenants, restrictions adverse interest, adverse claim, other third person interest or encumbrance of any kind, whether contingent or absolute, and any agreement, option, right or privilege (whether by law, contract or otherwise) capable of becoming any of the foregoing;

(y)        “Option” means an option to purchase a Share granted by the Company under the Stock Option Plan;

(z)        “Optionholder” means a holder of one or more Options;

(aa)       “Parent” means Hytera Communications Co., LtdIRIS Holdings, Inc., a corporation existing under the laws of the People’s RepublicState of ChinaDelaware;

(bb)“Parent Parties” means Privet and Privet Fund LP;

(cc)(bb) “Plan of Arrangement” or “Plan” means this plan of arrangement, including any appendices hereto, and any amendments, modifications or supplements hereto made from time to time in accordance with the terms hereof or made at the direction of the Court in the Final Order, with the consent of the Company and the Purchaser, each acting reasonably;

(dd)     “Privet” means Privet Fund Management LLC, a limited liability company existing under the laws of the State of Delaware;

(ee)      (cc) “Purchaser” means Hytera ProjectIRIS Canada Acquisition Corp., a company incorporated under the laws of the Province of British Columbia;

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(ff) (dd) “RSU holder” means a holder of one or more RSUs;

(gg) (cc) “RSU Plan” means the Restricted Share Unit Plan of the Company dated May 9, 2012, as may be amended, restated or supplemented;

(hh) (ff) “RSUs” means the restricted share units granted by the Company under the RSU Plan;

(ii) (gg) “Share Consideration” means U.S.$10.2511.00 in cash per Share, subject to adjustment pursuant to the terms of the Arrangement Agreement and in accordance with the Plan of Arrangement;

(jj) (hh) “Shareholder” means a holder of one or more Shares;

(kk) (ii) “Shares” means the common shares in the capital of the Company;

(ll) (jj) “Stock Option Plan” means the Stock Option Plan of the Company dated May 9, 2012, as may be amended, restated or supplemented;

(mm) (kk) “Tax Act” means the Income Tax Act (Canada) including all regulations thereunder; and

(nn) (ll) “U.S. Tax Code” means the United States Internal Revenue Code of 1986, as amended.

Any capitalized term used but not defined in this Plan will have the meaning ascribed to such term in the Arrangement Agreement. In addition, words and phrases used in this Plan and defined in the BCBCA and not otherwise defined in this Plan or in the Arrangement Agreement will have the same meaning in this Plan as in the BCBCA unless the context otherwise requires.

1.2 Interpretation Not Affected by Headings, etc.

The division of this Plan of Arrangement into Articles, Sections, paragraphs and other portions and the insertion of headings are for convenience of reference only and will not affect the construction or interpretation hereof. Unless otherwise indicated, all references to an “Article”, “Section” or “paragraph” followed by a number and a letter refer to the specified Article, Section or paragraph of this Plan of Arrangement.

1.3 Number

In this Plan of Arrangement, unless the context otherwise requires, words used herein importing the singular include the plural and vice versa.

1.4 Date of Any Action

If a date on which an action is required to be taken hereunder by a Party is not a Business Day, such action will be required to be taken on the next day which is a Business Day.

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1.5 Time

Time will be of the essence in every matter or action contemplated hereunder. All times expressed in this Plan or in any letter of transmittal contemplated in this Plan are local time (British Columbia) unless otherwise stipulated.

1.6 Currency

Unless otherwise stated, all references in this Plan of Arrangement to sums of money are expressed in lawful money of the United States of America.

ARTICLE 2.

EFFECT OF THE ARRANGEMENT

2.1 Arrangement Agreement

This Plan of Arrangement is made pursuant to, is subject to the provisions of, and forms a part of the Arrangement Agreement, except in respect of the sequence of the steps comprising the Arrangement, which will occur in the order set forth in this Plan.

2.2 Binding Effect

This Plan of Arrangement will become effective at the Effective Time and will be binding upon the Purchaser, the Company, Shareholders, Optionholders, RSU holders and all beneficial owners of Shares, Options and RSUs in each case without any further act or formality required on the part of any person.

ARTICLE 3.

ARRANGEMENT

3.1 The Arrangement

Commencing at the Effective Time, each of the events set out below will occur and be deemed to occur in the following sequence, in each case without any further authorization, act or formality of or by the Company, the Purchaser or any other person:

(a)        notwithstanding the Stock Option Plan or any agreements or other arrangements relating to the Options, each Option outstanding immediately before the Effective Time (whether vested or unvested) will be transferred from the holder thereof to the Company (free and clear of all Liens) and, subject to Article 5, in consideration therefor the Company will pay the amount, if any, by which the Canadian Equivalent of the Share Consideration exceeds the exercise price per Common Share of such Option;

(b)        at the same time as the steps in Section 3.1(a) (i) each holder of Options will cease to be a holder of such Options, (ii) such holder’s name will be removed from the register of Optionholders, (iii) each Option will be cancelled and the Stock Option Plan and all agreements or commitments relating to the Options will be terminated and will be of no further force and effect, and (iv) such holder will thereafter have only the right to receive

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the consideration to which they are entitled pursuant to Section 3.1(a) at the time and in the manner specified in Section 3.1(a);

(c)        notwithstanding the RSU Plan or any agreements or other arrangements relating to the RSUs, each RSU outstanding immediately before the Effective Time (whether vested or unvested) will be transferred from the holder thereof to the Company and, subject to Article 5, in consideration therefor the Company will pay an amount equal to the Share Consideration;

(d)        at the same time as the steps in Section 3.1(c), (i) each holder of RSUs will cease to be a holder of such RSUs, (ii) such holder’s name will be removed from the register of RSU holders, (iii) each RSU will be cancelled and the RSU Plan and all agreements or commitments relating to the RSUs will be terminated and will be of no further force and effect, and (iv) such holder will thereafter have only the right to receive the consideration to which they are entitled pursuant to Section 3.1(c) at the time and in the manner specified in Section 3.1(c);

(e)        each issued Share held by a Shareholder (other than a Dissenting Shareholder or the Purchaser or any subsidiary of the PurchaserParent Parties) will be transferred to the Purchaser (free and clear of any Liens) and, subject to Article 5, in consideration therefor the Purchaser will pay the Share Consideration;

(f)         each Share held by a Dissenting Shareholder will be deemed to be transferred by the holder thereof, without any further act or formality on its part, free and clear of all liens, claims and encumbrances, to the Purchaser and the Purchaser will thereupon be obliged to pay the amount therefor determined and payable in accordance with Article 4 hereof, and the name of such holder will be removed from the central securities register of the Company as a holder of Shares and the Shares so transferred will be cancelled;

(g)        at the same time as the steps in Sections 3.1(e) and 3.1(f), with respect to each Share transferred to the Purchaser in accordance therewith,

(i)       the holder thereof will cease to be the holder thereof or to have any rights as a holder in respect of such Share and the name of the holder thereof will be removed from the central securities register of the Company with respect to such Share; and

(ii)       legal and beneficial title to such Share will vest in the Purchaser and the Purchaser will be and be deemed to be the transferee and legal and beneficial owner of such Share (free and clear of any Liens) and will be entered in the central securities register of the Company as the sole holder thereof; and

(h)        each holder of Shares, Options and RSUs, with respect to each step set out above applicable to such holder, will be deemed, at the time such step occurs, to have executed and delivered all consents, releases, assignments and waivers, statutory or otherwise, required to transfer such Share, Option or RSU, as the case may be, in accordance with such step.

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ARTICLE 4.

DISSENT RIGHTS

4.1 Rights of Dissent

Each registered Shareholder may exercise rights of dissent (“Dissent Rights”) pursuant to and in the manner set forth under Division 2 of Part 8 of the BCBCA, the Interim Order and this Article 4 in connection with the Arrangement, provided that the written objection to the Arrangement Resolution contemplated by Section 242 of the BCBCA must be sent to and received by the Company at least two days before the Company Meeting. Shareholders who duly exercise such Dissent Rights and who:

(a)        are ultimately determined to be entitled to be paid fair value by the Purchaser for the Dissenting Shares in respect of which they have exercised Dissent Rights, will be deemed to have irrevocably transferred such Dissenting Shares to the Purchaser pursuant to Section 3.1(f) in consideration of such fair value; or

(b)        are ultimately not entitled, for any reason, to be paid fair value for the Dissenting Shares in respect of which they have exercised Dissent Rights, will be deemed to have participated in the Arrangement on the same basis as a Shareholder who has not exercised Dissent Rights, as at and from the time specified in Section 3.1(f) and be entitled to receive only the consideration set forth in Section 3.1(e);

but in no case will the Company or the Purchaser or any other person be required to recognize such holders as holders of Shares after the completion of the steps set forth in Section 3.1, and each Dissenting Shareholder will cease to be entitled to the rights of a Shareholder in respect of the Shares in relation to which such Dissenting Shareholder has exercised Dissent Rights and the central securities register of the Company will be amended to reflect that such former holder is no longer the holder of such Shares as and from the completion of the steps in Section 3.1. For greater certainty, and in addition to any other restriction under Section 242 of the BCBCA, no Optionholder or RSU holder, or a Shareholder who has voted (or instructed a proxyholder to vote) in favour of the Arrangement Resolution, will be entitled to exercise Dissent Rights.

ARTICLE 5.

CERTIFICATES AND PAYMENTS

5.1 Payments

(a)        Following the receipt of the Final Order and before the Effective Date the Purchaser will deposit or arrange to be deposited cash with the Depositary in the aggregate amount equal to payments in respect of Shares required by this Plan of Arrangement to be paid by the Purchaser (calculated without reference to whether any Shareholder has exercised Dissent Rights), which cash will be held by the Depositary for distribution to the Shareholders in accordance with the provisions of the Plan;

(b)        At the Effective Time, the Company will pay the amounts, net of applicable withholdings, to be paid to holders of Options and RSUs under Sections 3.1(a) and 3.1(c) either (i) pursuant to the normal payroll practices and procedures of the Company, or (ii)

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in the event that payment pursuant to the normal payroll practices and procedures of the Company is not practicable for any such holder, by cheque (delivered to such holder of Options or RSUs as applicable, as reflected on the register maintained by or on behalf of the Company in respect of Options and RSUs).

(c)        As soon as practicable following the later of the Effective Date and the surrender to the Depositary by or on behalf of a former holder of Shares of a duly completed Letter of Transmittal and such additional documents and instruments as the Depositary may reasonably require (including a certificate which immediately before the Effective Time represented Shares that were transferred under Section 3.1) and as would have been required to effect such transfer under the BCBCA, the articles of the Company and the Securities Transfer Act (British Columbia) after giving effect to Section 3.1 the former holder of such Shares will be entitled to receive the Share Consideration, less any amounts withheld pursuant to Section 5.4.

(d)        Subject to Section 5.3, until surrendered as contemplated by this Section 5.1, each certificate which immediately before the Effective Time represented Shares will be deemed after the time described in Section 3.1 to represent only the right to receive from the Depositary upon such surrender the Share Consideration or in the case of a Dissenting Shareholder who is ultimately determined to be entitled to be paid the fair value of the Shares in respect of which they have validly exercised Dissent Rights, the fair value of their Shares, less in each case any amounts withheld pursuant to Section 5.4.

(e)        The Company and the Purchaser will cause the Depositary, as soon as a former holder of Shares becomes entitled to the Share Consideration in accordance with Section 5.1(c), to:

(i)        forward or cause to be forwarded to such former holder at the address specified in the Letter of Transmittal;

(ii)        if requested by such former holder in the Letter of Transmittal make available at the offices of the Depositary specified in the Letter of Transmittal; or

(iii)        if the Letter of Transmittal neither specifies an address as described in Section 5.1(e)(i) nor contains a request as described in Section 5.1(e)(ii), forward or cause to be forwarded to such former holder at the address of such former holder as shown on the applicable securities register maintained by or on behalf of the Company immediately before the Effective Time; a cheque(s) (or other form of immediately available funds) representing the Share Consideration payable to such former holder in accordance with the provisions hereof.

5.2 Loss of Certificates

If a certificate which immediately before the Effective Time represented an outstanding Share that was acquired by the Purchaser pursuant to Section 3.1 has been lost, stolen or destroyed, upon the making of an affidavit of that fact by the former holder of such Share, the Depositary will deliver to such person or make available for pick up at its offices in exchange for such lost, stolen or destroyed certificate, the Share Consideration the former holder of such Share is entitled

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to receive pursuant to Section 3.1 in accordance with the instructions in such holder’s Letter of Transmittal. When authorizing such payment in relation to any lost, stolen or destroyed certificate, the former holder of such Share will, as a condition precedent to the delivery of such Share Consideration give a bond satisfactory to the Company, the Purchaser and the Depositary in such sum as the Purchaser may direct or otherwise indemnify the Company and the Purchaser in a manner satisfactory to the Company and the Purchaser against any claim that may be made against the Company or the Purchaser with respect to the certificate alleged to have been lost, stolen or destroyed.

5.3 Extinction of Rights

If any former holder of Shares fails to deliver to the Depositary the certificates, documents or instruments required to be delivered to the Depositary under Section 5.1 or Section 5.2 in order for such former holder to receive the Share Consideration which such former holder is entitled to receive pursuant to Section 3.1, on or before the sixth anniversary of the Effective Date, on the sixth anniversary of the Effective Date (i) such former holder will be deemed to have donated and forfeited to the Purchaser or its successor any Share Consideration (including any interest accrued thereon) held by the Depositary in trust for such former holder to which such former holder is entitled and (ii) any certificate representing Shares formerly held by such former holder will cease to represent a claim of any nature whatsoever and will be deemed to have been surrendered to the Purchaser and will be cancelled. Neither the Company nor the Purchaser, or any of their respective successors, will be liable to any person in respect of any Share Consideration (including any consideration previously held by the Depositary in trust for any such former holder) which is forfeited to the Company or the Purchaser or delivered to any public official pursuant to any applicable abandoned property, escheat or similar Law.

5.4 Withholding Rights

Subject to the provisions of any applicable income tax treaty between Canada and the country where the recipient is resident, the Company, the Purchaser and the Depositary will be entitled to deduct and withhold from any consideration otherwise payable to any Shareholder, Optionholder or RSU holder under this Plan of Arrangement (including any payment to Dissenting Shareholders) such amounts as the Company, the Purchaser or the Depositary may be required or permitted to deduct and withhold with respect to such payment or deliverable under the Tax Act, the U.S. Tax Code and the rules and regulations promulgated thereunder, or any provision of any provincial, state, local or foreign tax Law. For the purposes hereof, all such withheld amounts will be treated as having been paid to the person in respect of which such deduction and withholding was made on account of the obligation to make payment to such person hereunder, provided that such deducted or withheld amounts are actually remitted to the appropriate Governmental Authority by or on behalf of the Company, the Purchaser or the Depositary, as the case may be.

5.5 No Liens

Any exchange or transfer of securities pursuant to this Plan of Arrangement will be free and clear of any Liens or other claims of third parties of any kind.

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5.6 Paramountcy

From and after the Effective Time: (a) this Plan of Arrangement will take precedence and priority over any and all Shares, Options and RSUs issued before the Effective Time, (b) the rights and obligations of Shareholders, the Company, the Purchaser, the Depositary and any transfer agent or other depositary therefor in relation thereto, will be solely as provided for in this Plan of Arrangement, and (c) all actions, causes of action, claims or proceedings (actual or contingent and whether or not previously asserted) based on or in any way relating to any Shares, Options and RSUs will be deemed to have been settled, compromised, released and determined without liability except as set forth in this Plan of Arrangement.

ARTICLE 6.

AMENDMENTS

6.1 Amendments to Plan of Arrangement

(a)        The Company reserves the right to amend, modify or supplement this Plan of Arrangement at any time and from time to time before the Effective Time, provided that each such amendment, modification or supplement must be (i) set out in writing, (ii) approved by the Purchaser, (iii) if made following the Company Meeting, approved by the Court and (iv) communicated to or approved by Shareholders if and as required by the Court.

(b)        Any amendment, modification or supplement to this Plan of Arrangement may be proposed by the Company at any time before the Company Meeting (provided that the Purchaser has consented thereto) with or without any other prior notice or communication and, if so proposed and accepted by the persons voting at the Company Meeting (other than as may be required under the Interim Order), will become part of this Plan of Arrangement for all purposes.

(c)        Any amendment, modification or supplement to this Plan of Arrangement that is approved or directed by the Court following the Company Meeting will be effective only if such amendment, modification or supplement (i) is consented to by each of the Company and the Purchaser and (ii) if required by the Court or applicable Law, is consented to by Shareholders voting in the manner directed by the Court.

(d)        Any amendment, modification or supplement to this Plan of Arrangement may be made following the Effective Date unilaterally by the Purchaser provided that it concerns a matter which, in the reasonable opinion of the Purchaser, is of an administrative nature required to better give effect to the implementation of this Plan of Arrangement and is not adverse to the financial or economic interests of any former holder of Shares.

ARTICLE 7.

FURTHER ASSURANCES

Notwithstanding that the transactions and events set out in this Plan of Arrangement will occur and be deemed to occur in the order set out in this Plan of Arrangement without any further act or formality, each of the Company and the Purchaser will make, do and execute, or cause to be

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made, done and executed, any such further acts, deeds, agreements, transfers, assurances, instruments or documents as may reasonably be required by any of them in order to further document or evidence any of the transactions or events set out in this Plan of Arrangement.

SCHEDULE C

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

1.         Organization, Good Standing and Qualification. The Company and each of its Subsidiaries is a legal entity duly organized, validly existing and in good standing under the Laws of its jurisdiction of organization (to the extent the “good standing” concept is applicable in such jurisdiction) and has all requisite corporate power and authority to own, lease and operate its properties and assets and to carry on its business as presently conducted. The Company and each of its Subsidiaries is qualified to do business and is in good standing in each jurisdiction where the ownership, leasing or operation of its assets or properties or conduct of its business requires such qualification (to the extent the “good standing” concept is applicable in such jurisdiction). The Company has made available to the Parent and the Purchaser complete and correct copies of the Company’s and its Subsidiaries’ Constating Documents, and each as so delivered is in full force and effect.

2. Capital Structure.

(a) The authorized capital of the Company consists of an unlimited number of Common Shares without par value of which 5,848,808 Common Shares are issued or outstanding on the date hereof. All of the issued and outstanding Common Shares have been duly authorized and are validly issued, fully paid and non-assessable.

(b) On the date hereof, there are 583,166 Common Shares reserved for issuance upon exercise of the outstanding Options. Section 2(b) of the Company Disclosure Letter sets forth a complete and accurate list of Options issued and outstanding on the date hereof, including, with respect to each such Option, the name of the holder, the date of grant, the exercise price per Common Share, the number of Common Shares originally granted subject to such Option (as adjusted to reflect all splits, combinations, share dividends and other adjustments), the number of Common Shares that remain subject to the Option, the vesting schedule (including a description of all applicable accelerated vesting provisions) and the expiration date. Each Option has been granted with an exercise price no less than the fair market value of the underlying Common Shares on the date of grant. All grants of Options were validly issued and properly approved by the Board of Directors or a duly authorized committee thereof no later than the date on which the grant of such Option was by its terms to be effective in accordance with all Laws and all required approvals by the Shareholders were timely obtained. Upon any issuance of any Common Shares in accordance with the terms of the Stock Option Plan, such Common Shares will be duly authorized, validly issued, fully paid and non-assessable.

(c) On the date hereof, there are 95,260 RSUs outstanding. Section 2(c) of the Company Disclosure Letter contains a complete and accurate list of the RSUs issued and outstanding as of the date hereof, including, with respect to each such RSU, the name of the holder, the date of grant, the vesting schedule (including a

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description of all applicable accelerated vesting provisions) and the expiration date. Each RSU has been granted with an exercise price no less than the fair market value of the underlying Common Shares on the date of grant. Upon any issuance of any Common Shares in accordance with the terms of the RSUs, such Common Shares will be duly authorized, validly issued, fully paid and non-assessable. All grants of RSUs were validly issued and properly approved by the Board of Directors.

(d) Except as set forth above, there are no outstanding (A) shares of, or other equity or voting interests in, the Company, (B) Convertible Securities or other securities of the Company or any of its Subsidiaries convertible into or exchangeable for shares of, or other equity or voting interest in, the Company, (C) options, share appreciation rights, warrants, restricted share units, rights or other commitments or agreements to acquire from the Company or any of its Subsidiaries, or that obligate the Company or any of its Subsidiaries to issue, any shares of, or other equity or voting interest in, or any securities convertible into or exchangeable for shares of, or other equity or voting interest in, the Company, (D) obligations of the Company to grant, extend or enter into any subscription, warrant, right, convertible or exchangeable security or other similar agreement or commitment (whether payable in equity, cash or otherwise) relating to any shares of, or other equity or voting interest (including any voting debt) in, the Company (the items in clauses (A), (B), (C) and (D), together with the shares of the Company, the options and the RSUs being referred to collectively as “Company Securities”) or (E) other obligations by the Company or any of its Subsidiaries to make any payments based on the price or value of any Company Securities. There are no Contracts which obligate the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any outstanding Company Securities.

(e) None of the Company or any of its Subsidiaries (A) is a party to any agreement with respect to the voting of, restricting the transfer of, or granting preemptive rights, anti-dilutive rights, rights of first refusal or similar rights with respect to, any securities of the Company (other than this Agreement and the Voting Support Agreements) or (B) has any contractual obligation to file a prospectus or registration statement under Applicable Securities Laws, in respect of any securities of the Company or any of its Subsidiaries. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the Shareholders on any matter.

(f) The aggregate book value of the assets of the Company and its Subsidiaries and the enterprise value of the Company and its Subsidiaries, calculated in the manner prescribed by the Investment Canada Act, is less than Cdn.$379 million and Cdn.$600 million, respectively, and neither the Company nor its Subsidiaries carry on, or control, directly or indirectly, another entity that carries on, a cultural business (as such term is defined in the Investment Canada Act).

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(g) The aggregate book value of the assets of the Company and its Subsidiaries and the gross revenues from sales in or from Canada generated from those assets, all as determined in accordance with Part IX of the Competition Act do not exceed Cdn.$88 million.

(h) Other than the RSUs listed in Section 2(d) of the Company Disclosure Letter, there are no outstanding or authorized share appreciation rights, restricted share units, phantom shares, profit participation interests or other similar agreements, commitments or arrangements payable in cash that relate to the shares of, or other equity or voting interest in, the Company.

3. Subsidiaries.

(a) Section 3(a) of the Company Disclosure Letter contains a complete and accurate list of the name, jurisdiction of organization and function of each Subsidiary of the Company. Other than as listed in Section 3(a) of the Company Disclosure Letter and except for the Company’s Subsidiaries, the Company does not own, directly or indirectly, any shares of, or other equity or voting interest in, any person.

(b) All of the outstanding shares of, or other equity or voting interest in, each Subsidiary of the Company (A) have been duly authorized, validly issued and are fully paid and non-assessable and (B) are owned, directly or indirectly, by the Company, free and clear of any Lien or other restriction (including any restriction on the right to vote, sell or otherwise dispose of such shares or other equity or voting interest) that would prevent the operation by the Parent of such Subsidiary’s business as presently conducted.

(c) There are no outstanding (A) Convertible Securities or other securities of the Company or any of its Subsidiaries convertible into or exchangeable for shares of, or other equity or voting interest in, any Subsidiary of the Company, (B) options, share appreciation rights, warrants, restricted share units, rights or other commitments or agreements to acquire from the Company or any of its Subsidiaries, or that obligate the Company or any of its Subsidiaries to issue, any shares of, or other equity or voting interest in, or any securities convertible into or exchangeable for shares of, or other equity or voting interest in, any Subsidiary of the Company, (C) obligations of the Company to grant, extend or enter into any subscription, warrant, right, convertible or exchangeable security or other similar agreement or commitment (whether payable in equity, cash or otherwise) relating to any shares of, or other equity or voting interest (including any voting debt) in, any Subsidiary of the Company (the items in clauses (A), (B) and (C), together with the shares of the Subsidiaries of the Company, being referred to collectively as “Subsidiary Securities”) or (D) other obligations by the Company or any of its Subsidiaries to make any payments based on the price or value of any Subsidiary Securities. There are no Contracts of any kind which obligate the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any outstanding Subsidiary Securities.

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(d) There are no outstanding or authorized share appreciation rights, phantom shares, profit participation interests or other similar agreements, commitments or arrangements payable in cash that relate to the shares of, or other equity or voting interest in, any of the Company’s Subsidiaries.

4. Corporate Authority; Approval and Fairness.

(a) The Company has all requisite corporate power, authority and capacity to execute and deliver this Agreement, to perform its obligations under this Agreement and to consummate the Arrangement and the other transactions contemplated under this Agreement (collectively, the “Transactions”), subject only to the approval by the Board of Directors of the Company Circular and the Requisite ShareholderSecurityholder Approval for the Arrangement in the manner required by the Interim Order and Laws and approval by the Court. The execution and delivery by the Company of this Agreement, the performance by the Company of its obligations under this Agreement and the consummation by the Company of the Transactions have been duly authorized by the Board of Directors and no other corporate proceedings on the part of the Company are necessary to authorize the execution and delivery by the Company of this Agreement, the performance by the Company of its obligations under this Agreement or the consummation by the Company of the Transactions, subject only to the approval by the Board of Directors of the Company Circular and receipt of the Requisite ShareholderSecurityholder Approval at the Company Meeting. This Agreement has been duly executed and delivered by the Company and constitutes a valid and binding agreement of the Company enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of general applicability relating to or affecting creditors’ rights and to general equity principles (the “Bankruptcy and Equity Exception”).

(b) At a meeting duly called and held prior to the execution and delivery of this Agreement, the Board of Directors adopted resolutions by the unanimous vote of all directors of the Company (A) authorizing and approving this Agreement, the Arrangement and the Transactions in accordance with the requirements of BCBCA, (B) determining that the terms of this Agreement, the Arrangement, the Transactions and the Consideration to be received by the Shareholders are fair to the holders of such Common Shares and that the Arrangement is in the best interests of the Company and (C) resolved to unanimously recommend that the Shareholders vote in favour of the Arrangement (“Company Recommendation”), and, as of the date hereof, none of the aforesaid actions by the Board of Directors have been amended, rescinded or modified.

(c) The Board of Directors has received the oral Fairness Opinions, and the Fairness Opinions have not been withdrawn or modified as of the date hereof.

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5. Governmental Filings; No Violations.

(a) Other than (A) the Interim Order and any approvals required by the Interim Order, (B) the Final Order, (C) the Regulatory Clearances; (D) compliance with all Applicable Securities Laws, including the rules and policies of the Exchanges and (E) except as, individually or in the aggregate, (x) would not reasonably be expected to be material to the Company and its Subsidiaries, taken as a whole, and (y) would not reasonably be expected to prevent, materially delay or materially impair the consummation of the Transactions, no notices, reports or other filings are required to be made by the Company or any of its Subsidiaries with, nor are any consents, registrations, approvals, Permits or authorizations required to be obtained by the Company or any of its Subsidiaries from, any Governmental Entity, in connection with the execution and delivery by the Company of this Agreement, the performance by the Company of its obligations under this Agreement or the consummation by the Company of the Transactions.

(b) The execution and delivery of this Agreement by the Company do not, and the performance by the Company of its obligations under this Agreement and the consummation by the Company of the Transactions will not, constitute or result in (A) a breach or violation of, or a default (or an event which with notice or lapse of time or both would become a default) under, the Constating Documents of the Company or any of its Subsidiaries, (B) a breach or violation of, a termination or cancelation (or right of termination or cancelation) or a default (or an event which with notice or lapse of time or both would become a default) under, the creation or acceleration of any Liabilities under, or any change in the rights, benefits or obligations of any party under, any Contract or Permit to which the Company or any of its Subsidiaries is a party or by which the Company, any of its Subsidiaries or any of their respective properties or assets may be bound, (C) assuming compliance with the matters referred to in Section 5(a) of Schedule C and receipt of the Requisite ShareholderSecurityholder Approval at the Company Meeting, a violation of any Law or Order to which the Company, any of its Subsidiaries or any of their respective properties or assets may be subject, (D) the loss or impairment of, payment of any additional amounts with respect to or the consent of any other person being required in respect of, the Company’s or any of its Subsidiaries’ right to own or use any Company Intellectual Property or (E) the creation of a Lien on any of the assets or properties of the Company or any of its Subsidiaries.

6. Company Reports; Financial Statements.

(a) The Company has filed or furnished, as applicable, on a timely basis all forms, statements, certifications, reports and documents required to be filed or furnished by it under Applicable Securities Laws (the forms, statements, certifications, reports and documents filed or furnished and those filed or furnished subsequent to the date hereof, including any amendments thereto, the “Company Reports”). Each of the Company Reports, at the time of its filing or being furnished complied or, if not yet filed or furnished, will comply, in all material respects with

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Applicable Securities Laws. As of their respective dates (or, if amended, as of the date of such amendment), the Company Reports did not, and any Company Reports filed with or furnished subsequent to the date hereof 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 made therein, in light of the circumstances in which they were made, not misleading. All of the Company Reports are publicly available on SEDAR or EDGAR. The Company has not filed any confidential material change report that at the date hereof remains confidential or any other confidential filings under any Applicable Securities Laws.

(b) The Company is in compliance in all material respects with the applicable listing and corporate governance rules and regulations of the Exchanges and Applicable Securities Laws.

(c) The Company is a “reporting issuer” under the Applicable Securities Laws of the provinces of British Columbia and Ontario, and is not in default of any Applicable Securities Laws of any such Canadian jurisdiction. None of the Company’s Subsidiaries is subject to any continuous or periodic, or other disclosure requirements under any Applicable Securities Laws in any jurisdiction. The Company has not taken any action to cease to be a reporting issuer in any province of Canada nor has the Company received notification from any Securities Authorities seeking to revoke the reporting issuer status of the Company. The Company is a “foreign private issuer” (as such term is defined in Rule 3b-4 under the 1934 Act).

(d) No delisting, suspension of trading in or cease trading order with respect to the Common Shares is pending or, to the knowledge of the Company, threatened.

(e) The Company’s system of internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the 1934 Act) is effective in providing reasonable assurance that (A) the Company maintains records that in reasonable detail accurately and fairly reflect its transactions and dispositions of assets, (B) transactions are executed in accordance with management’s general or specific authorization, (C) transactions are recorded as necessary (I) to permit preparation of financial statements in conformity with GAAP, and (II) to maintain accountability for assets, (D) access to assets is permitted only in accordance with management’s general or specific authorization, and (E) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company’s “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) under the 1934 Act) are reasonably designed to ensure that all information (both financial and non-financial) required to be disclosed by the Company in the reports that it files or furnishes under the 1934 Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that all such information is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure. The Company has disclosed, based on the most recent evaluation of its chief executive officer and its chief financial officer

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prior to the date hereof, to the Company’s auditors and the audit committee of the Board of Directors (A) any “significant deficiencies” or “material weaknesses” in the design or operation of its internal control over financial reporting that would reasonably be expected to adversely affect the Company’s ability to record, process, summarize and report financial information and has identified for the Company’s auditors and audit committee of the Board of Directors any material weaknesses in internal control over financial reporting and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting. The Company has made available to the Parent (x) a summary of any such disclosure made by management to the Company’s auditors and audit committee since January 1, 2011 and (y) any material communication since January 1, 2011 made by management or the Company’s auditors to the audit committee required or contemplated by listing standards of NYSE, the audit committee’s charter or professional standards of the Public Company Accounting Oversight Board. For purposes of this Section 6(e), the terms “significant deficiency” and “material weakness” shall have the meanings assigned to them by the Public Company Accounting Oversight Board Interim Standard AU 325 parts 2 and 3, as in effect on the date hereof. Since January 1, 2011, none of the Company, any director, officer, auditor, accountant or representative of the Company or any of its Subsidiaries has received or otherwise obtained knowledge of any complaint, allegation, assertion or claim, whether written or oral, regarding accounting, internal accounting controls or auditing matters, including any complaint, allegation, assertion, or claim that the Company or any of its Subsidiaries has engaged in questionable accounting or auditing practices, or any expression of concern from its employees regarding questionable accounting or auditing matters. The Company has made available to the Parent a summary of all complaints or concerns relating to other matters made since January 1, 2011 through the Company’s whistleblower hot line or equivalent system for receipt of employee concerns regarding possible violations of Law. No attorney representing the Company or any of its Subsidiaries, whether or not employed by the Company or any of its Subsidiaries, has reported evidence of a violation of Applicable Securities Laws, breach of fiduciary duty or similar violation by the Company or any of its officers, directors, employees or agents to the Company’s chief legal officer, audit committee of the Board of Directors (or other committee designated for the purpose) or the Board of Directors pursuant to the rules adopted pursuant to Section 307 of the Sarbanes-Oxley Act or any Company policy contemplating such reporting, including in instances not required by those rules.

(f) There is no material weakness (as such term is defined in National Instrument 52-109 – Certification of Disclosure in Issuers’ Annual and Interim Filings) relating to the design, implementation or maintenance of its internal control over financial reporting, or fraud, whether or not material, that involves management or other employees who have a significant role in the internal control over financial reporting of the Company.

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(g) The auditors of the Company are independent chartered accountants as required by Laws and there is not now, and there has never been, any reportable event (as defined in National Instrument 51-102 – Continuous Disclosure Obligations) with the present or any former auditors of the Company.

(h) Neither the Company nor any of its Subsidiaries is a party to, nor has any commitment to become a party to, any joint venture, partnership agreement or any similar Contract (including any Contract or arrangement relating to any transaction or relationship between or among the Company, on the one hand, and any unconsolidated affiliate, including any structured finance, special purpose or limited purpose entity or person, on the other hand), or any “off-balance sheet arrangements” (as defined in Item 303(a) of Regulation S-K promulgated by the SEC), where the result, purpose or effect of such Contract is to avoid disclosure of any material transaction involving, or material liabilities of, the Company in its published financial statements or other Company Reports.

(i) Each of the balance sheets included in or incorporated by reference into the Company Reports (including the related notes and schedules) fairly presents, or, in the case of Company Reports filed after the date hereof, will fairly present, the financial position of the Company and its Subsidiaries as of its date, and each of the statements of earnings and comprehensive income, changes in Shareholders’ equity and cash flows included in or incorporated by reference into the Company Reports (including any related notes and schedules) fairly presents or, in the case of Company Reports filed after the date hereof, will fairly present, the results of operations, retained earnings (loss) and changes in financial position, as the case may be, of the Company and its Subsidiaries for the periods set forth therein (subject, in the case of unaudited statements, to notes and normal year-end audit adjustments that will not be material in amount or effect), in each case, in accordance with GAAP consistently applied during the periods involved, except as may be noted therein.

(j) Neither the Company nor any of its Subsidiaries has incurred any liabilities of the type required to be set forth on a balance sheet prepared in accordance with GAAP other than (A) liabilities reflected or otherwise reserved against in the Audited Balance Sheet, (B) liabilities incurred pursuant to this Agreement, and (C) liabilities incurred in the ordinary course of business since the date of the Audited Balance Sheet in amounts and of the type consistent with the ordinary course of business.

(k) Each Option and RSU was properly accounted for in accordance with GAAP in the financial statements (including the related notes) of the Company.

7. Absence of Certain Changes.

(a) Since the date of the Audited Balance Sheet, other than in connection with the Transactions, the Company and its Subsidiaries have conducted their respective

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business only in, and have not engaged in any material transaction other than in accordance with, the ordinary course of business.

(b) Since the date of the Audited Balance Sheet, there has not occurred: (A) a Company Material Adverse Change; (B) any material damage, destruction or other casualty loss with respect to any material asset or property owned, leased or otherwise used by the Company or any of its Subsidiaries, whether or not covered by insurance; or (C) any action that, if taken after the date of this Agreement without the prior written consent of Parent, would constitute a breach of Section 5.1 of this Agreement.

8.          Legal Proceedings. There is no action, claim, suit, litigation, arbitration, investigation or proceeding (including any civil, criminal, administrative, investigative or appellate proceeding, public or private) by or before any Governmental Entity, arbitrator, mediator or other tribunal (collectively, “Proceedings”) pending or, to the knowledge of the Company, threatened, against the Company, any of its Subsidiaries or any of their respective properties or assets (other than disputes of a type as may arise from time to time in the Company’s ordinary course of business and which would not, individually or in the aggregate, be material to the Company or any of its Subsidiaries, taken as a whole). There is no material Order to which the Company, any of its Subsidiaries or any of their respective properties or assets is subject.

9. Employee Benefits.

(a) All benefit and compensation plans, Contracts, policies or arrangements covering current or former employees, current or former consultants or current or former directors of the Company and its Subsidiaries under which the Company or any of its Subsidiaries has (or may have) an obligation (contingent or otherwise), whether funded or unfunded, insured or self-insured, written or unwritten, including any such plan, Contract, policy or arrangement relating to retirement savings, pensions, superannuation, profit sharing, deferred compensation, bonuses, incentive compensation (whether cash-based or otherwise), share purchase, share appreciation rights, stock option or other equity compensation, life or accident insurance, workers compensation, hospitalization, health, medical or dental treatment or expenses, disability, employment insurance benefits, employee loans, vacation pay, personal/carer’s leave, severance or termination pay or benefits, retention, change in control, employment or other benefits (the “Benefit Plans”), are listed on Section 9(a) of the Company Disclosure Letter by jurisdiction.

(b) The Company has furnished to the Purchaser true, correct, up-to-date and complete copies of all the Benefit Plans (or, where oral, written summaries of the material terms thereof) as amended as of the date hereof together with all related documentation including current and past documents in effect at any time (or, with respect to past documents relating to any Benefit Plan that is not intended to be qualified under Section 401(a) of the Code, past documents in effect at any time during the last three years) and all amendments thereto, including annuity contracts, trust agreements or other funding vehicles, investment management

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agreements, funding agreements, actuarial reports, funding and financial information returns and statements, the most recent report on Form 5500 filed with the U.S. Internal Revenue Service (“IRS”) with respect to each Benefit Plan in effect on the date hereof (where required by Law), current asset valuations, collective agreements, participation agreements, current summary plan descriptions (where required by Law), all professional opinions (whether or not internally prepared) with respect to each Benefit Plan, all material internal memoranda concerning the Benefit Plans, copies of material correspondence, including correspondence with Governmental Entities, trustees and collective bargaining agents, with respect to each Benefit Plan and plan summaries, employee booklets and personnel manuals. The booklets, brochures, summaries, descriptions and manuals prepared for, and circulated to, the current and former participants and their beneficiaries concerning each Benefit Plan, together with all written communications of a general nature provided to such current and former participants and their beneficiaries, accurately summarize the benefits provided under each such Benefit Plan referred to therein.

(c) All Benefit Plans are, and have been, established, registered, qualified, administered, funded and invested in accordance with the terms of such Benefit Plans including the terms of the documents that support such Benefit Plans, any applicable collective agreement and all Laws and none of the Company, any of its Subsidiaries or agents or any fiduciary, has been in breach of any contractual or fiduciary obligation with respect to the administration of the Benefit Plans or the trusts or other funding media relating thereto. None of the Benefit Plans is intended to be qualified under Section 401(a) et seq. of the Code, nor have any advance tax rulings been sought or received in respect of any Benefit Plans (whether relating to Section 401(a) et seq. of the Code or any other Law).

(d) None of the Benefit Plans is a “registered pension plan” as that term is defined in subsection 248(1) of the Tax Act or is required to be registered under the Pension Benefits Act (Ontario) or similar legislation of any other jurisdiction.

(e) All contributions or premiums required to be made by the Company or a Subsidiary under the terms of each Benefit Plan, any collective bargaining agreement or by Law have been made in a timely fashion in accordance with Law and the terms of the Benefit Plans and any applicable collective bargaining agreement, no Taxes, penalties or fees are owing or exigible in respect of any of the Benefit Plans and neither the Company nor any Subsidiary has and as of the Effective Time will not have, any actual or potential unfunded Liabilities (other than Liabilities accruing after the Effective Time) with respect to any of the Benefit Plans. All liabilities of the Company and the Subsidiaries (whether accrued, absolute, contingent or otherwise) related to all Benefit Plans have been fully and accurately reflected in the Audited Balance Sheet.

(f) None of the Benefit Plans provides benefits beyond retirement or other termination of service (including any continuation coverage benefits pursuant to

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any Law) to current or former employees or current or former directors or to the beneficiaries or dependants of such employees or directors.

(g) Neither the Company nor any of its Subsidiaries has any plan or obligation to create any new Benefit Plan. No improvements to any Benefit Plan have been promised, and no amendments or improvements to any Benefit Plan will be made or promised by the Company prior to the Effective Time.

(h) All data used to administer each Benefit Plan is true and correct.

(i) No Benefit Plan, nor any related trust or other funding medium thereunder, is subject to any pending, threatened or anticipated Proceeding initiated by any Governmental Entity or by any other person (other than routine claims for benefits), and there exists no state of facts which after notice or lapse of time or both could reasonably be expected to give rise to any such Proceeding.

(j) None of the execution of this Agreement, the approval of the Plan of Arrangement by the Shareholders, or the consummation of the Transactions (either alone or in conjunction with any other additional or subsequent event, contingent or otherwise) will or may result in any payment (whether of severance pay or otherwise), acceleration of payment or vesting of benefits, forgiveness of indebtedness, vesting, distribution, restriction on funds, increase the amount payable or result in any other obligation pursuant to, any of the Benefit Plans or otherwise.

(k) Neither the Company nor any other person that, together with the Company, is treated as a single employer under Section 414(b), (c), (m) or (o) of the Code or any other Law, has sponsored, maintained, contributed to or been obligated to sponsor, maintain or contribute to, or has any actual or contingent liability or obligation under, (A) a “single-employer plan”, within the meaning of Section 4001(a)(15) of ERISA, (B) a “multiemployer plan”, within the meaning of Section 4001(a)(3) of ERISA, or (C) any benefit plan that is subject to Title IV of ERISA or Section 412 of the Code or is otherwise a defined benefit pension plan or is a plan described in Section 3(40) of ERISA or Section 413 of the Code.

(l) No employee has received or could reasonably be expected to receive any payment or benefit from the Company or any of its Subsidiaries that (A) could reasonably be expected to be non-deductible pursuant to Section 162(m) of the Code or any other Law or (B) could reasonably be expected to result in the payment or receipt of an “excess parachute payment” within the meaning of Section 280G(b)(1) of the Code. Neither the Company nor any of its Subsidiaries is obligated to provide a gross-up payment or other financial assistance to any “disqualified individual” (as such term is defined in Treasury Regulation Section 1.280G-1) for any excise tax liability pursuant to Section 4999 of the Code.

(m) Each Benefit Plan that is a non-qualified deferred compensation arrangement within the meaning of Section 409A of the Code (A) was, prior to January 1,

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2009, operated and administered in a good faith to comply in all respects with the applicable requirements of Section 409A of the Code and the applicable IRS guidance thereunder and (B) for all periods on or after January 1, 2009, has been documented, operated and administered in full compliance with Section 409A of the Code and the applicable Treasury Regulations thereunder. The Company does not have any obligation to indemnify, hold harmless or provide any tax gross-up payment to any individual with respect to any penalty tax, interest payments or other liability such individual may incur under Section 409A of the Code.

(n) Each Benefit Plan intended to be qualified under Section 401(a) of the Code has either obtained from the IRS a favorable opinion or determination letter as to its qualified status under the Code, including all currently effective amendments to the Code, and the corresponding related exemption of its trust from U.S. federal income taxation under Section 501(a) of the Code, or has applied to the IRS for such favorable determination letter within the remedial amendment period under Section 401(b) of the Code, and the Company is not aware of any circumstances likely to result in the loss of such qualifications of any such Benefit Plan. Neither the Company nor any of its Subsidiaries has engaged in a transaction that could subject the Company or any of its Subsidiaries to a tax or penalty imposed by either Section 4975 of the Code or Section 502(i) of ERISA. Each Benefit Plan is being, and has been, administered substantially in accordance with its terms and complies in all material respects with and is being, and has been, administered substantially in material compliance with the requirements prescribed by any and all Laws.

10. Legal and Regulatory Compliance.

(a) The Company and each of its Subsidiaries, and their respective properties and assets, are and have been in compliance in all material respects with all Laws and Orders. Neither the Company nor any of its Subsidiaries (A) has received any written notice from any Governmental Entity alleging any violation or potential violation by the Company or any of its Subsidiaries of any Law or Order nor (B) has provided any written notice to any Governmental Entity regarding any violation or potential violation by the Company or any of its Subsidiaries of any Law or Order, and no such notice referred to in clauses (A) or (B) remains outstanding or unresolved as of the date of this Agreement. No investigation by any Governmental Entity with respect to the Company or any of its Subsidiaries is pending or, to the knowledge of the Company, threatened.

(b) Each of the Company and its Subsidiaries has all Permits necessary to conduct its business as presently conducted, including all such Permits required by any applicable Governmental Entity (collectively, “Regulatory Authorities”) necessary to conduct its business as presently conducted or as conducted at the time of such activities, as applicable. All such Permits are valid and in full effect, and no suspension, revocation or termination of any such Permit is pending or, to the knowledge of the Company, threatened. Neither the Company nor any of its Subsidiaries has received any written notice from any Governmental Entity

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regarding (a) any violation or potential violation by the Company or any of its Subsidiaries of any Permits or the failure to have any required Permits, or (b) any suspension, revocation or termination of any Permits held by the Company or any of its Subsidiaries, and no such notice in either case remains outstanding or unresolved as of the date of this Agreement. The Company and each of its Subsidiaries has operated in compliance in all respects with Laws administered or enforced by any Regulatory Authority. There are no, and have not been any, inspection observations, notices, warning letters, untitled letters or similar documents that assert a lack of compliance by the Company or any of its Subsidiaries with any Laws or requirements of any Regulatory Authority.

(c) None of the Company, any of its Subsidiaries nor, to the knowledge of the Company, any of their respective officers or current or former employees, has been convicted of any crime, and there are currently no investigations regarding any crimes pending or to the knowledge of the Company, threatened.

(d) The Company has made available to the Parent complete and correct copies of each application or other filing including all related supplements, amendments, Permits, correspondence and annual reports made with any Regulatory Authority made on behalf of the Company or any of its Subsidiaries.

(e) To the knowledge of the Company, there is no information that would reasonably be expected to prevent the acceptance or the subsequent approval of any filing, application or request for approval of the Product by a Regulatory Authority.

(f) All applications, reports, documents, claims, Permits and notices required to be filed, maintained or furnished to any Regulatory Authority by the Company or any of its Subsidiaries, including, without limitation, with respect to Products, have been so filed, maintained or furnished (the “Applications”). All Applications: (A) have been made available to the Parent; and (B) were complete and accurate in all material respects on the date filed (or were corrected in or supplemented by a subsequent filing) or issued. Neither the Company nor any of its Subsidiaries, nor, to the knowledge of the Company, any officer, employee or agent or distributor of the Company or its Subsidiaries, has made an untrue statement of a material fact or a fraudulent statement to any Regulatory Authority, failed to disclose a material fact required to be disclosed to any Regulatory Authority, or committed an act, made a statement, or failed to make a statement that, at the time such disclosure or non-disclosure was made, would reasonably be expected to provide a basis for any Regulatory Authority to invoke its policy respecting “Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities”, set forth in 56 Fed. Reg. 46191 (September 10, 1991) or any similar policy or applicable non-US equivalent thereof.

(g) To the knowledge of the Company, no facts exist that would give rise to any of the Products being recalled or the suspension, revocation or termination of use of any such Products.

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11. Data Privacy and Security.

(a) The Company and its Subsidiaries (A) have operated their businesses in compliance with all Laws and Contracts relating to personal information, that regulate or limit the collection, maintenance, use, disclosure, processing or transmission of personal information made available to or collected by the Company or its Subsidiaries in connection with the operation of its business (the “Data Requirements”) and (B) have implemented all confidentiality, security and other protective measures required by the Data Requirements. Without limiting the foregoing, the Company and its Subsidiaries are and have at all times been in compliance with the privacy and security requirements of Personal Information Protection and Electronic Documents Act (Canada) and other applicable privacy Laws of any jurisdiction (collectively, “Privacy Laws”).

(b) Neither the Company nor any of its Subsidiaries has experienced any breach, misappropriation, or unauthorized collection, use or disclosure of any personal information.

(c) The Company has not been notified of and is not the subject of, any complaint, regulatory investigation or Proceeding related to data security or privacy.

12. Unlawful Payments.

(a) Neither the Company nor any of its Subsidiaries, nor, to the knowledge of the Company, any of their respective managers, directors, officers, agents, employees or other persons acting on behalf of or in the name of the Company or any of its Subsidiaries has: (A) offered or used any corporate funds for any unlawful contribution, gift, entertainment or other expense relating to any political campaign or activity; (B) if and to the extent applicable, violated or is violating any provision of the Corruption of Foreign Public Officials Act (Canada), the U.S. Foreign Corrupt Practices Act of 1977 or any other similar or equivalent Laws concerning bribing a foreign public official and the accuracy of books and records; or (C) with the corrupt intent to obtain or retain business, offered or given any bribe, rebate, payoff, influence payment, kickback or other payment or gift of money or anything of value to any person in violation of Law.

(b) The operations of the Company and each of its Subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements and money laundering Laws and the rules and regulations thereunder and any related or similar Laws, rules, regulations or guidelines, issued, administered or enforced by any Governmental Entity relating to money laundering (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or Governmental Entity involving the Company or any of its Subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.

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13. Material Contracts.

(a) For purposes of this Agreement, a “Material Contract” means any Contract (or group of related Contracts) to which the Company or any of its Subsidiaries is a party or by which any of their respective properties or assets are bound:

(i) that is filed or required to be filed by the Company as a “material contract” under Applicable Securities Laws in Canada;

(ii) that (A) purports to limit or otherwise restrict in any material respect the ability of the Company or any of its Subsidiaries to compete in any business or geographic area (or that, following the Arrangement, would by its terms apply such limits or other restrictions to the Parent or its Subsidiaries), (B) grants any exclusive rights, (C) contains a “most favored nation” or similar provision, (D) includes any “take or pay” or “requirements” obligation, (E) otherwise purports to prohibit or limit the right of the Company or any of its Subsidiaries to develop, license, sell or distribute any products or services or (F) that purports to limit or otherwise restrict the ability of the Company or its Subsidiaries to solicit for hire or to hire any person;

(iii) (A) containing any standstill, or similar agreement pursuant to which the Company or any of its Subsidiaries has agreed not to acquire assets or securities of another person, (B) containing a put, call, right of first refusal or similar right pursuant to which the Company or any of its Subsidiaries could be required to purchase or sell, or otherwise acquire or transfer, as applicable, any equity interests of any person or assets that have a fair market value or purchase price of more than $250,000 or (C) relating to the acquisition or disposition of any business or any material assets other than in the ordinary course of business (whether by merger, sale of shares or assets or otherwise);

(iv) that would prevent, materially delay or materially impede the Company’s ability to consummate the Transactions;

(v) that is between the Company or any of its Subsidiaries and any of their respective directors, officers, affiliates or any person beneficially owning 5% or more of the outstanding Common Shares;

(vi) that involves the payment or receipt by the Company or its Subsidiaries of royalties or other amounts in consideration for rights to practice any Intellectual Property of more than $250,000 in the aggregate;

(vii) (A) for the furnishing of services or the sale of products which involves, or would reasonably be expected in the future to involve, consideration in excess of $250,000 in any 12 month period, (B) for the receipt of services by a third party which involves payment by the Company or any of its

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Subsidiaries of consideration in excess of $250,000 in any 12 month period or which would reasonably be expected to involve payment by the Company or any of its Subsidiaries of consideration in excess of $250,000 in any future 12 month period during the term of such agreement or (C) that provides for future payment obligations by the Company or any of its Subsidiaries of $250,000 or more;

(viii) under which any of the Company or any of its Subsidiaries is a lessee of, or holds or uses, any equipment, machinery, vehicle or other tangible personal property owned by a third person which requires future annual payments in excess of $250,000;

(ix) pursuant to which the Company or any of its Subsidiaries has entered into a partnership, joint venture, collaboration or other similar arrangement with any person (other than intercompany agreements);

(x) for capital expenditures or the acquisition or construction of fixed assets which requires aggregate future payments in excess of $250,000;

(xi) pursuant to which the Company or any of its Subsidiaries agrees not to make use of any material right in any Intellectual Property owned by the Company or any of its Subsidiaries;

(xii) pursuant to which the Company or any of its Subsidiaries has outstanding indebtedness, or provides a guarantee in a principal amount in excess of $250,000;

(xiii) containing a settlement with respect to a Proceeding (whether commenced or threatened in writing) of any nature;

(xiv) which requires future payments by the Company or any of its Subsidiaries in excess of $50,000 per annum containing “change of control” or similar provisions (whether or not such payments or benefits are contingent upon the occurrence of any other event);

(xv) under which the Company or its Subsidiaries have received, or are entitled to receive, payment from any person for use in the research or development of any Product;

(xvi) under which the Company is obligated to make future payments of over $50,000 for the research or development of any Product;

(xvii) pursuant to which the Company, any of its Subsidiaries or any other party thereto has material continuing obligations, rights or interests relating to the research, development, distribution, supply, manufacture, marketing or co-promotion of, or collaboration with respect to any Product;

(xviii) any Company Lease;

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(xix) any employment, contractor or consulting Contract with any Company employee with annual compensation in excess of Cdn.$100,000;

(xx) any Contract that provides for any change of control, severance or termination pay or other compensation or benefits related to termination of employment or services to the Company or any of its Subsidiaries;

(xxi) any collective bargaining agreement or other similar Contract with a union, works council, trade union or other labor relations entity;

(xxii) any Contract with any current or former officer or director of the Company or any of its Subsidiaries that contains unfulfilled obligations; or

(xxiii) any Contract of which the Company has knowledge to which any employee, consultant or independent contractor of the Company or a Subsidiary is bound that in any manner purports to (A) restrict such employee’s, consultant’s or independent contractor’s freedom to engage in any line of business or activity or to compete with any other person, or (B) assign to any other person such employee’s, consultant’s or independent contractor’s rights to any Intellectual Property that relate to the business of the Company and its Subsidiaries.

(b) Section 13(b) of the Company Disclosure Letter contains a complete and accurate list of all Material Contracts to which the Company or any of its Subsidiaries is a party or by which any of their respective properties or assets are bound, and identifies each subsection of Section 13(a) that describes such Material Contract. The Company has delivered or made available to the Parent true, correct and complete copies of the Material Contracts, including all amendments, supplements and modifications thereto. Each of the Material Contracts is valid and binding on the Company or its applicable Subsidiary and, to the knowledge of the Company, each other party thereto and is in full force and effect. None of the Company, any of its Subsidiaries or, to the knowledge of the Company, any other party, is in breach of, or default under, in any material respect, any Material Contract, and no event has occurred that with notice or lapse of time or both would constitute such a breach or default thereunder in any material respect by the Company or any of its Subsidiaries, or, to the knowledge of the Company, any other party thereto. Neither the Company nor any of its Subsidiaries has received any written notice or other communication regarding any actual or possible violation or breach of or default under, or intention to cancel or modify, any Material Contract.

14. Properties and Assets.

(a) Neither the Company nor any of its Subsidiaries owns, or has ever owned, any real property.

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(b) None of the Company Leases has been assigned by the Company or a Subsidiary in favour of any person. The current uses of each property subject to a Company Lease comply with Law. Except as disclosed in Section 14(b) of the Company Disclosure Letter, no consent is required nor is any notice required to be given under any Company Lease by any party thereto or any other person in connection with the completion of the Transactions in order to maintain all rights of the Company or a Subsidiary, as the case may be, under such Company Lease. The completion of the Transactions will not afford any party to any of the Company Leases or any other person the right to terminate any Company Lease nor will the completion of such transactions result in any additional or more onerous obligation on the Company or a Subsidiary, as the case may be, under any Company Lease.

(c) The machinery, equipment, furniture, fixtures and other tangible personal property and assets owned, leased or used by the Company or any of its Subsidiaries (the “Assets”) are in good operating condition and repair, ordinary wear and tear excepted, in the aggregate, sufficient and adequate to carry on their respective businesses in all material respects as presently conducted or over the last twelve months prior to the date hereof, and the Company and its Subsidiaries are in possession of and have good title to, or valid leasehold interests in or valid rights under contract to use, such Assets that are material to the Company and its Subsidiaries, taken as a whole, free and clear of all Liens, except for Permitted Liens.

15. Environmental Matters.

(a) (A) To the knowledge of the Company, the Company and its Subsidiaries are in compliance with and have complied at all times with all applicable Environmental Laws, which compliance includes obtaining, maintaining and complying with the terms of any consents, registrations, approvals, Permits or authorizations required to be obtained from any Governmental Entity under any Environmental Laws; (B) no property (including soils, groundwater, surface water, buildings or other structures) currently owned, leased or operated by the Company or any of its Subsidiaries is contaminated with any Hazardous Substance in amounts or concentrations exceeding applicable governmental criteria or requiring reporting or remediation by, or as could reasonably be expected to result in Liability to, the Company or any of its Subsidiaries; (C) no property formerly owned, leased or operated by the Company or any of its Subsidiaries has been contaminated with any Hazardous Substance from the operations or activities of the Company or any of its Subsidiaries during or prior to such period of ownership, lease or operation requiring reporting or remediation by, or as could reasonably be expected to result in Liability to, the Company or any of its Subsidiaries; (D) neither the Company nor any of its Subsidiaries has incurred any Liability, nor been alleged to be Liable, for any Hazardous Substance disposal or contamination on any third-party property, including any sites to which the Company or any of its Subsidiaries have or may have sent Hazardous Substances, now or in the past; (E) neither the Company nor any of its Subsidiaries has released any Hazardous Substance other

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than in compliance with Environmental Laws; (F) neither the Company nor any of its Subsidiaries is subject to any Order or any indemnity or other agreement with any third party relating to liability under any Environmental Law or relating to Hazardous Substances; (G) there are no other circumstances or conditions involving the Company or any of its Subsidiaries that would reasonably be expected to result in any Proceeding, Liability or investigation pursuant to any Environmental Law; and (H) neither the Company nor any of its Subsidiaries has received any written or, to the knowledge of the Company, oral, notice, demand, letter, claim or request for information alleging that the Company or any of its Subsidiaries is or was in violation of, or has or had Liability under, any Environmental Law.

(b) The Company has delivered to the Parent copies of all environmental reports, studies, assessments, sampling data and other environmental reviews in its possession as of the date of this Agreement relating to the Company or any of its Subsidiaries or their respective current and former properties or operations.

16. Taxes.

(a) The Company and each of its Subsidiaries:

(i) has prepared in good faith and has duly and timely filed (taking into account any extension of time within which to file) all income Tax Returns and other Tax Returns required to be filed by, with respect to, or on behalf of any of them with any Governmental Entity, and all such Tax Returns are true, correct and complete;

(ii) has timely paid all Taxes, whether or not shown on any Tax Return, that are required to be paid by any of them at or prior to the date hereof;

(iii) has timely deducted, withheld and remitted (or accounted for) to the proper Governmental Entities all Taxes required to have been deducted, withheld and remitted (or accounted for) by any of them in connection with amounts paid or owing to any person, including to any employee, creditor, person that is or is deemed to be a non-resident of Canada (for purposes of the Tax Act) or a non-resident with respect to any paying Subsidiary’s jurisdiction of residence or other third party, in compliance with all Laws related to Taxes; and

(iv) has not waived any statute of limitations with respect to any material Taxes, agreed to any extension of time with respect to the assessment, reassessment or collection of a Tax.

(b) There are not pending or, to the knowledge of the Company, threatened, against the Company or any of its Subsidiaries any audits, examinations, investigations or other proceedings in respect of Taxes or Tax matters, and there are no other circumstances or conditions involving the Company or any of its Subsidiaries that

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would reasonably be expected to result in any such audits, examinations, investigations or other proceedings in respect of Taxes or Tax matters.

(c) In all material respects, the Company and its Subsidiaries have charged, collected and remitted on a timely basis all Taxes as required under Law on any sale, supply or delivery whatsoever, made by any of them.

(d) No deficiencies have been asserted by any Governmental Entity with respect to Taxes of the Company or any of its Subsidiaries.

(e) To the knowledge of the Company, the terms and conditions made or imposed in respect of every transaction (or series of transactions) between the Company or any Subsidiary and any person that is not dealing at arm’s length with the Company or such Subsidiary, as the case may be, do not differ from those that would have been made between persons dealing at arm’s length, and each of the Company and each Subsidiary has complied with the transfer pricing requirements of any Law.

(f) Adequate provision has been made on the consolidated financial statements of the Company for all Taxes assessed and all Taxes owing by the Company or any Subsidiary that are not yet due and payable and relate to periods ending prior to the date hereof.

(g) The Company has not, within the six months that precede the date of this Agreement, made any “investment”, as that term is defined for purposes of proposed section 212.3 of the Tax Act, in any corporation that is, or will be prior to the Effective Time, a “foreign affiliate” of the Company for purposes of the Tax Act.

17. Labor and Employee Matters.

(a) Neither the Company nor any of its Subsidiaries is a party to or otherwise bound by any collective bargaining agreement or other Contract with a labor union or similar labor organization. No employees of the Company or any of its Subsidiaries are represented by any labor union or similar labor organization with respect to their employment with the Company or any of its Subsidiaries. Neither the Company nor any of its Subsidiaries is the subject of any Proceeding that is pending, or, to the knowledge of the Company, threatened asserting that the Company or any of its Subsidiaries has committed an unfair or unlawful labor practice or seeking to compel it to bargain with any labor union or similar labor organization. There is no labor strike, dispute, slowdown, stoppage or lockout involving the Company or any of its Subsidiaries pending, or to the knowledge of the Company, threatened against the Company or any of its Subsidiaries.

(b) Section 17(b) of the Company Disclosure Letter contains a complete and accurate list of all of the employees of the Company and its Subsidiaries and other persons who are receiving remuneration for work or services provided to the Company or

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any of its Subsidiaries who are not employees as of the date of this Agreement, and the position, status, length of service, location of employment, compensation (wage or salary, bonus, deferred compensation, commission or individual severance arrangements) and benefits of each employee and the terms on which each other person who is providing work or services to the Company or any of its Subsidiaries is engaged. Except as set out on Section 17(b) of the Company Disclosure Letter, no employee of the Company or any of its Subsidiaries is on a long-term disability leave of absence, receiving benefits pursuant to applicable workers compensation legislation, or otherwise an inactive employee.

(c) Except as listed on Section 17(c) of the Company Disclosure Letter, neither the Company nor any of its Subsidiaries is a party to or bound by any written contract in respect of any employee (A) with annual compensation in excess of Cdn.$100,000 or (B) which provides such employee with termination or severance entitlements in excess of those required by Law.

(d) As of the date of this Agreement, to the knowledge of the Company, there is no current employee of the Company or any of its Subsidiaries above the level of Vice President, with an annual salary in excess of Cdn.$100,000, and/or who is a member of the clinical development team, who intends to terminate his or her employment.

(e) To the knowledge of the Company, no employee of the Company or any of its Subsidiaries is in violation of any term of any employment agreement, nondisclosure agreement, common law nondisclosure obligation, fiduciary duty, noncompetition agreement, assignment of invention covenant, restrictive covenant or other obligation to (A) the Company or any of its Subsidiaries or (B) a former employer of any such employee relating (i) to the right of any such employee to be employed by the Company or any of its Subsidiaries or (ii) to the knowledge or use of trade secrets, confidential or proprietary information.

(f) To the knowledge of the Company, all current and former officers and employees of the Company or any of its Subsidiaries who are or have been involved in the creation or development of Company Intellectual Property have executed and delivered to the Company an agreement providing for the protection of proprietary information and the assignment to the Company of such Intellectual Property. All current and former consultants and independent contractors to the Company or any of its Subsidiaries who are or have been involved in the creation or development of Company Intellectual Property have executed and delivered to the Company an agreement providing for the protection of proprietary information and the assignment to the Company of such Intellectual Property.

(g) Neither the Company nor any of its Subsidiaries is a party to any Proceeding under any Law relating to their employees or former employees, nor is the Company aware of any factual or legal basis on which any such Proceeding might be commenced.

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(h) Neither the Company nor any of its Subsidiaries is or has been required to maintain an affirmative action plan.

(i) To the knowledge of the Company, the Company and each of its Subsidiaries is and has been in compliance with all Laws respecting employment, employment practices, terms and conditions of employment, superannuation, worker classification, Tax withholding, prohibited discrimination, equal employment, fair employment practices, meal and rest periods, immigration status, employee safety and health, wages (including overtime wages), compensation, and hours of work, and, in each case, with respect to employees of the Company or any of its Subsidiaries: (A) is not liable for any arrears of wages, severance pay or any Taxes or any penalty for failure to comply with any of the foregoing, (B) is not liable for any payment to any trust or other fund governed by or maintained by or on behalf of any Governmental Entity, with respect to unemployment compensation benefits, social security or other benefits or obligations for employees of the Company or any of its Subsidiaries (other than routine payments to be made in the ordinary course of business) and (C) the Company and its Subsidiaries have not received notice of any complaint filed by any of the employees against the Company or its Subsidiaries claiming that the Company or any Subsidiary has violated employment or labour laws.

(j) There are no unsatisfied judgments or awards against the Company or any of its Subsidiaries by any current or former employee or pending or threatened audit by any Governmental Entity related to any of the employment practices of the Company or any of its Subsidiaries.

(k) To the knowledge of the Company, there is no pending or threatened or reasonably anticipated Proceeding against the Company or any of its Subsidiaries under any worker’s compensation policy or long-term disability policy or for claims of harassment or wrongful termination.

(l) Neither the Company nor any of its Subsidiaries is party to a conciliation agreement, consent decree or other agreement or Order with any Governmental Entity with respect to employment practices.

(m) The services provided by each employee of the Company or any of its Subsidiaries in any jurisdiction (other than Canada) is terminable at the will of the Company or any of its Subsidiaries and any such termination would result in no Liabilities to the Company.

(n) To the knowledge of the Company, neither the Company nor any of its Subsidiaries has any Liabilities with respect to any misclassification of: (A) any person as an independent contractor rather than as an employee, (B) any employee leased from another employer, or (C) any employee currently or formerly classified as exempt from overtime wages.

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(o) The Company and its Subsidiaries: (A) are in compliance with all Laws with respect to its independent contractors; and (B) have withheld, reported and paid all amounts required by Laws or by contract to be withheld, reported and paid with respect to any current or former independent contractors or directors.

18. Intellectual Property.

(a) Section 18(a) of the Company Disclosure Letter contains a complete and accurate list of all Company Registered IP. Section 18(a)(A) of the Company Disclosure Letter sets forth the jurisdictions in which such Company Registered IP has issued, or applications have been filed, the name of the owner, the application or registration number, the filing date, and as applicable the date of registration and the expiration date of such Intellectual Property. The Company is the sole and exclusive beneficial and, with respect to applications and registrations, record owner of all of the Company Registered IP, and all Company Registered IP is valid, subsisting and enforceable. No Company Registered IP is subject to any outstanding order, judgment or decree adversely affecting the Company’s or any of its Subsidiaries’ use thereof or rights thereto. The Company has provided to the Parent complete and accurate copies of all relevant applications, prosecution file histories for Patents within the Company Registered IP that are not publicly available.

(b) All necessary registration, maintenance and renewal fees for the Company Registered IP have been paid and all necessary documents and certificates have been filed with the relevant Governmental Entity for the purpose of maintaining such Company Registered IP. Section 18(b) of the Company Disclosure Letter accurately identifies and describes each action, filing, and payment that must be taken or made on or before the date that is 120 days after the date of this Agreement in order to maintain the Company Registered IP in full force and effect.

(c) The Company or one of its Subsidiaries owns or has a valid right to use all Company Intellectual Property. Without limiting the foregoing: (A) all documents and instruments necessary to establish, perfect and maintain the rights of the Company and its Subsidiaries in any Company Intellectual Property have been validly executed, delivered, filed and/or recorded in a timely manner with the appropriate Governmental Entity, (B) all officers, employees and contractors (as applicable) of Company and its Subsidiaries are obligated to assign to Company or its Subsidiary, as applicable, all inventions and other Intellectual Property made in the performance of their duties to the Company or its Subsidiaries, and (C) to the knowledge of the Company, no officer or employee of the Company or any of its Subsidiaries is subject to any Contract with any other person that requires such officer or employee to assign any interest in inventions or other Intellectual Property to such other person.

(d) To the knowledge of the Company, (A) neither the Company nor any of its Subsidiaries has infringed, misappropriated, or otherwise violated the Intellectual

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Property of any third party; and (B) no person is infringing, misappropriating, or otherwise violating the Intellectual Property owned by or exclusively licensed to the Company or any of its Subsidiaries. There has been no claim asserted or threatened in writing directed to the Company (including in the form of written offers or invitations to obtain a patent license) that the Company or any of its Subsidiaries is infringing, misappropriating, or otherwise violating the Intellectual Property of any third party, and to the knowledge of the Company, there is no basis for any such claim.

(e) None of the Company or any of its Subsidiaries is obligated to indemnify, defend, hold harmless any other person with respect to the infringement, misappropriation or other violation of any Intellectual Property.

(f) Section 18(f) of the Company Disclosure Letter contains a complete and accurate list of all IP Contracts. Each of the IP Contracts is valid and binding on the Company or its Subsidiary and, to the knowledge of the Company, each other party thereto, and is in full force and effect. None of the Company, any of its Subsidiaries or, to the knowledge of the Company, any other party, is in breach of, or default under, any such IP Contracts, and no event has occurred that with notice or lapse of time or both would constitute such a breach or default thereunder in any material respect by the Company or any of its Subsidiaries, or, to the knowledge of the Company, any other party thereto. Neither the Company nor any of its Subsidiaries has received any written notice or other communication regarding any actual or possible violation or breach of or default under, or intention to cancel or modify, any such IP Contract.

(g) No Company Intellectual Property owned or exclusively licensed by the Company or any of its Subsidiaries is subject to any outstanding injunction, judgment, order, decree, ruling, charge, settlement, or other disposition of a dispute.

(h) The Company and its Subsidiaries have taken commercially reasonable measures to protect the confidentiality of Trade Secrets that are owned by the Company or any of its Subsidiaries and such Trade Secrets have not been disclosed by the Company or any of its Subsidiaries to any person except pursuant to written nondisclosure agreements.

(i) The consummation of the Transactions will not result in the loss or impairment of or payment of any additional amounts with respect to, nor require the consent of any other person in respect of, the Company’s or any of its Subsidiaries’ right to own or use any of the Company Intellectual Property.

(j) Neither the Company nor any of its Subsidiaries has received any written notice from any third party challenging or threatening to challenge the right, title or interest of the Company or its Subsidiaries in, to or under the Company Intellectual Property, or the validity, enforceability or claim construction, as applicable, of any Company Intellectual Property.

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(k) There is no IP Contract under which the Company or any of its Subsidiaries has granted a license under Company Intellectual Property to any person.

19.       Product Liabilities. None of the Company or any of its Subsidiaries has received any claim, and, to the knowledge of the Company, there are no incidents that could reasonably be expected to give rise to a claim for or based upon breach of product warranty, strict liability in tort, negligent manufacture of product, negligent provision of services or any product complaint, adverse event report or any other similar allegation of liability, including or resulting in product recalls and including or resulting in bodily injury or property damage, arising from the materials, design, testing, manufacture, packaging, labeling (including instructions for use) or sale of the Products or from the provision of services, and to the knowledge of the Company, there is no basis for any such claim.

20.       Insurance. All insurance policies maintained by the Company and each of its Subsidiaries are in full force and effect, all premiums due and payable thereon have been paid, and the Company and each of its Subsidiaries are otherwise in compliance with the terms and conditions of such policies. Section 20 of the Company Disclosure Letter (A) contains a complete and accurate list of all material insurance policies maintained by or on behalf of the Company and each of its Subsidiaries as of the date hereof, and (B) a complete and accurate list of any and all claims submitted by the Company or any of its subsidiaries under any such policies. Neither the Company nor any of its Subsidiaries has received any notice of cancellation, termination or non-renewal of any such policy or arrangement or any notice of material adjustment in the amount of the premiums payable with respect to any such policy, and there is no material claim pending under any of such policies or arrangements as to which coverage has been questioned, denied or disputed by the underwriters of such policies or arrangements. There are no self-insurance arrangements in effect as of the date hereof with respect to the Company or any of its Subsidiaries.

21.       Brokers and Finders. Except for Raymond James Ltd. (a true and correct copy of whose engagement letter has been furnished to the Parent prior to the date hereof), there is no investment banker, broker, finder or other person that has been retained by or is authorized to act on behalf of the Company or any of its Subsidiaries who would be entitled to any fee or commission in connection with the Arrangement or the Transactions.

22.       Customers and Suppliers. Set forth in Section 22 of the Company Disclosure Letter is a complete and accurate list of the names of the top 20 customers (the “Company Customers”) and the top 20 suppliers (the “Company Suppliers”) of the Company and its Subsidiaries and the percentage of sales by which the Company and its Subsidiaries which each Company Customer represented, and the percentage of the purchases by the Company and its Subsidiaries which each Company Supplier represented, during the fiscal year ended December 31, 2016. Except as set forth in Section 22 of the Company Disclosure Letter, there exists no actual or threatened in writing, or to the knowledge of the Company otherwise threatened, termination, cancellation or

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limitation of, or any adverse change in, the business relationship of the Company or any of its Subsidiaries with any Company Customer or Company Supplier.

23. Export Control and Import Laws.

(a) The Company and each of its Subsidiaries have complied with all applicable United States Laws and regulations, as well as any applicable non-United States Laws and regulations regarding export and reexport controls or the examination or possession of controlled goods (“Export Controls”), including (A) the Export Administration Regulations maintained by the U.S. Department of Commerce, trade and economic sanctions maintained by the Treasury Department’s Office of Foreign Assets Control (“OFAC”) and the International Traffic in Arms Regulations maintained by the Department of State and any applicable anti-boycott compliance regulations, and (B) the Export and Import Permits Act, Special Economic Measures Act, United Nations Act, Criminal Code, Freezing Assets of Corrupt Foreign Officials Act, Defence Production Act (including regulations under these various statutes) and other export control measures and trade and economic sanctions maintained or administered by Global Affairs Canada, and/or the Canada Border Services Agency, as well as the Nuclear Safety and Control Act administered by the Canadian Nuclear Safety Commission. Neither the Company nor any of its Subsidiaries has directly or indirectly sold, exported, reexported, transferred, diverted, or otherwise disposed of any products, software, or technology (including products derived from or based on such technology) to any destination, entity, or person prohibited by the Export Controls without obtaining prior authorization from the competent Governmental Entities as required by those Export Controls. The Company and its Subsidiaries are in material compliance with all import Laws (“Import Restrictions”), including (A) Title 19 of the U.S. Code and Title 19 of the Code of Federal Regulations, and (B) the Customs Act, Customs Tariff and the Special Import Measures Act (including regulations under these various statutes).

(b) Section 23(b) of the Company Disclosure Letter accurately describes all of (A) the countries to which the goods, services, items, software, technology, or technical data of the Company or any of its Subsidiaries have been exported; and (B) the authority for the exports, including license number, license exception or no license required, for each good, service, item, software, technology, and technical data of the Company and its Subsidiaries. Any such exports were in compliance with the Laws and regulations of the country from which they were exported and all other Laws. No license is required under Export Controls to transfer any relevant goods, services, items, software, technology, or technical data from Company and its Subsidiaries to the Parent or its Subsidiaries.

(c) None of the Company, any of its Subsidiaries or, to the knowledge of the Company, any manager, director, officer, agent, distributor, employee or other person acting on behalf of or in the name of the Company or any of its Subsidiaries: (A) is, or is owned or controlled by, a person located in or subject to the sanctions administered by OFAC, including but not limited to the economic

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sanctions against Cuba, Iran, North Korea, Sudan or Syria; or (B) is included on any list of restricted entities, persons or organizations published by the government of the United States of America including the List of Specially Designated Nationals and Blocked Persons, Denied Persons List, Entities List, Debarred Parties List, Excluded Parties List and Terrorism Exclusion List, or any other Law.

(d) None of the Company, any of its Subsidiaries or, to the knowledge of the Company, any manager, director, officer, agent, distributor, employee or other person acting on behalf of or in the name of the Company or any of its Subsidiaries: (A) is, or is owned or controlled by, a person located in or subject to the sanctions or measures enacted pursuant to the Special Economic Measures Act, the United Nations Act, the Regulations Establishing a List of Entities (enacted pursuant to the Criminal Code), the Area Control List (enacted under the Export and Import Permits Act), and the Freezing Assets of Corrupt Foreign Officials Act; or (B) is included on any list of restricted entities, persons or organizations published by the government of Canada.

(e) No Proceeding, claim, request for information, or subpoena is pending, or to the knowledge of the Company, threatened, concerning or relating to any export or import activity of the Company or any of its Subsidiaries. No voluntary self-disclosures have been filed by or for the Company or any of its Subsidiaries with respect to known or possible violations of any Export Controls or Import Restrictions.

(f) Neither the Company nor any of its Subsidiaries has knowledge of any fact or circumstance that could result in any Liability for violation of any Export Controls or Import Restrictions.

(g) Neither the Company nor any of its Subsidiaries has knowledge of any fact or circumstance that could result in any Liability for violation of the Defence Production Act, including the requirements of the Canadian Controlled Goods Program, or the requirements of the Contract Security Program (formerly called the Industrial Security Program).

(h) The Company and its Subsidiaries, or where permitted by Law, its customs brokers and/or freight forwarders, have maintained all records required to be maintained in the Company’s and its Subsidiaries’ possession as required under the Export Controls and Import Restrictions.

24. Related Party Transactions.

(a) Except as set forth in the Company Reports, there are no transactions, agreements, arrangements or understandings between the Company or any of its Subsidiaries, on the one hand, and any affiliate (including any officer or director, but not including any wholly owned Subsidiary of the Company) thereof or any

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shareholder that beneficially owns 5% or more of the Common Shares, on the other hand.

(b) Neither the Company nor any of its Subsidiaries is indebted to any director, officer, employee or agent of, or independent contractor to, the Company or any of its Subsidiaries or any of their respective affiliates or associates (except for amounts due in the ordinary course of business as salaries, bonuses, director’s fees, amounts owing under any contracting agreement with any such independent contractor or the reimbursement of expenses in the ordinary course of business).

(c) NoOther than the Parent Parties, no related party of the Company (within the meaning of MI 61-101) together with its associated entities, beneficially owns or exercises control or direction over 1% or more of the outstanding Common Shares, except for related parties who will not receive a “collateral benefit” (within the meaning of such instrument) as a consequence of the transactions contemplated by this Agreement.

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SCHEDULE D

REPRESENTATIONS AND WARRANTIES OF THE PARENT AND THE PURCHASER

1. Organization, Good Standing and Qualification. Each of the Parent and the Purchaser is a legal entity duly organized, validly existing and in good standing under the Laws of its respective jurisdiction of organization and has all requisite corporate power and authority to own, lease and operate its properties and assets and to carry on its business as presently conducted and is qualified to do business and is in good standing in each jurisdiction where the ownership, leasing or operation of its assets or properties or conduct of its business requires such qualification, except where the failure to be so organized, qualified or in good standing, or to have such power or authority, would not individually or in the aggregate with other such failures, reasonably be expected to prevent, materially delay or materially impair the consummation of the Transactions (a “Parent Material Adverse Change”).

2. Corporate Authority. Each of the Parent and the Purchaser has all requisite corporate power, authority and capacity to execute and deliver this Agreement, to perform their obligations under this Agreement and to consummate the Transactions. The execution and delivery by the Parent and the Purchaser of this Agreement, the performance by the Parent and the Purchaser of their obligations under this Agreement and the consummation by the Parent and the Purchaser of the Transactions have been duly authorized by the boards of directors of the Parent and the Purchaser and no other corporate proceedings on the part of the Parent or the Purchaser are necessary to authorize the execution and delivery by the Parent and the Purchaser of this Agreement, the performance by the Parent and the Purchaser of their obligations under this Agreement or the consummation by the Parent and the Purchaser of the Transactions. This Agreement has been duly executed and delivered by each of the Parent and the Purchaser and, assuming this Agreement constitutes the valid and binding agreement of the Company, constitutes a valid and binding agreement of the Parent and the Purchaser enforceable against each of the Parent and the Purchaser in accordance with its terms, subject to the Bankruptcy and Equity Exception.

3. Governmental Filings; No Violations.

(a) Other than (A) the Interim Order and any approvals required by the Interim Order, (B) the Final Order, (C) the Regulatory Clearances, (D) compliance with any Applicable Securities Laws, including the rules and policies of the Exchanges and (E) except as, individually or in the aggregate, would not reasonably be expected to result in a Parent Material Adverse Change, no notices, reports or other filings are required to be made by the Company or any of its Subsidiaries with, nor are any consents, registrations, approvals, Permits or authorizations required to be obtained by the Company or any of its Subsidiaries from, any Governmental Entity, in connection with the execution and delivery by the Parent and the Purchaser of this Agreement, the performance by the Parent and the Purchaser of their obligations under this Agreement or the consummation by the Parent and the Purchaser of the Transactions.

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(b) The execution and delivery of this Agreement by the Parent and the Purchaser do not, and the performance by the Parent and the Purchaser of its respective obligations under this Agreement and the consummation by the Parent and the Purchaser of the Transactions will not, constitute or result in (A) a breach or violation of, or a default (or an event which with notice or lapse of time or both would become a default) under, the certificate of incorporation or bylaws of the Parent or the Purchaser (or the comparable governing documents), (B) a breach or violation of, a termination or cancelation (or right of termination or cancelation) or a default (or an event which with notice or lapse of time or both would become a default) under, the creation or acceleration of any Liabilities under, or any change in the rights, benefits or obligations of any party under, any Contract or Permit to which the Parent or any of its Subsidiaries is a party or by which the Parent, any of its Subsidiaries or any of their respective properties or assets may be bound, (C) assuming compliance with the matters referred to in Section 3(a) of Schedule D and receipt of the Requisite ShareholderSecurityholder Approval at the Company Meeting, a violation of any Law or Order to which the Parent, any of its Subsidiaries or any of their respective properties or assets may be subject or (D) the creation of a Lien on any of the assets or properties of the Parent or any of its Subsidiaries, except, in the case of clause (B) or (D) above, for any such breach, violation, termination, default, creation, acceleration, change, loss, impairment or payment that, individually or in the aggregate, would not reasonably be expected to, result in a Parent Material Adverse Change.

4. Legal Proceedings. As of the date of this Agreement, there are no Proceedings pending or, to the knowledge of the Parent, threatened against the Parent or the Purchaser that seek to enjoin, or would reasonably be expected to have the effect of preventing, making illegal, or otherwise interfering with, any of the Transactions, except for those that, individually or in the aggregate, have not had, and would not reasonably be expected to have, a Parent Material Adverse Change.

5. Funds Available. The Parent will have at the Effective Time sufficient funds or have made adequate arrangements to ensure that the required funds are available to effect payment in full of the Consideration for all the Common Shares acquired pursuant to the Transactions.

6. Investment Canada Act. The Parent is a WTO investor within the meaning of the Investment Canada Act.

7. Securityholdings. The Parent does not hold or haveExcept for the 1,027,170 Common Shares beneficially by the Parent Parties, none of the Parent Parties, the Parent or the Purchaser holds or has any interest, directly or indirectly, in any securities of the Company or any agreement to acquire, vote or have any interest in securities of the Company.

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SCHEDULE E

PROCEDURES FOR REQUESTING CONSENT OF THE PARENT UNDER SECTION

5.1(1)

If the Company desires to take an action which, without the prior written consent of the Parent, would be prohibited pursuant to Section 5.1, prior to taking such action the Company must request such written consent by sending an email addressed the below individual, and may not take such action until such consent has been received in writing from that individual; provided, however, that in the event the Company does not receive a response from that individual within five business days of such email request (or, in any event, does not receive a response from that individual either granting or denying such consent request within ten business days of such email request), the Company shall be permitted to take such action, the lack of response being deemed to be consent by the Parent for such action: The Parent may up-date the contact information in the manner set out in the Agreement for notices delivered.

Nuo Xu

Email address: nuo.xu@hytera.com

EX-99.7

EXHIBIT 99.7

AMENDED AND RESTATED JOINT FILING AGREEMENT

This Amended and Restated Joint Filing Agreement (this “Agreement”), dated as of May 15, 2017, is made by and among Privet Fund LP, a Delaware limited partnership, Privet Fund Management LLC, a Delaware limited liability company, Ryan Levenson, individually, Privet Capital Investments I, LP, a Delaware limited partnership, IRIS Holdings, LLC, a Delaware limited liability company, IRIS Holdings, Inc., a Delaware corporation, and IRIS Canada Acquisition Corp., a company incorporated under the laws of the Province of British Columbia.

WHEREAS, each of Privet Fund LP, Privet Fund Management LLC, and Ryan Levenson (together, the “Original Parties”) are parties to that certain Joint Filing Agreement dated as of February 11, 2015 (the “Original Agreement”), pursuant to the terms of which such parties agreed to provide for the filing of a joint Schedule 13D, and all amendments thereto, with respect to shares of common stock, no par value, of Norsat International Inc. (the “Shares”);

WHEREAS, the Original Parties desire by this Agreement to amend and restate the Original Agreement in its entirety to add Privet Capital Investments I, LP, IRIS Holdings, LLC, IRIS Holdings, Inc. and IRIS Canada Acquisition Corp. as parties thereto and to provide for the joint filing on behalf of each of the parties hereto of a statement on Schedule 13D (including any and all amendments thereto) with respect to the Shares.

NOW, THEREFORE, the parties hereto agree as follows:

In accordance with Rule 13d-1(k)(1) under the Securities and Exchange Act of 1934, as amended, the parties agree to the joint filing on behalf of each of them of a statement on Schedule 13D (including any and all amendments thereto) with respect to the Shares, and further agree that this Agreement shall be included as an exhibit to such joint filings.

The parties further agree that each party hereto is responsible for the timely filing of such statement on Schedule 13D and any amendments thereto, and for the accuracy and completeness of the information concerning such party contained therein; provided, however, that no party is responsible for the accuracy or completeness of the information concerning any other party, unless such party knows or has a reason to believe that such information is inaccurate.

This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument. Facsimiles and electronic pdf copies of original signatures are considered valid as original signatures.

[Signature Pages Follow]

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of the date first written above.

PRIVET FUND LP
By: Privet Fund Management LLC, its General Partner
By:	/s/ Ryan Levenson
Name:	Ryan Levenson
Title:	Managing Member

PRIVET FUND MANAGEMENT LLC
By:	/s/ Ryan Levenson
Name:	Ryan Levenson
Title:	Managing Member

/s/ Ryan Levenson

Ryan Levenson

PRIVET CAPITAL INVESTMENTS I, LP
By: Privet Fund Management LLC, its General Partner
By:	/s/ Ryan Levenson
Name:	Ryan Levenson
Title:	Managing Member

IRIS HOLDINGS, LLC

By: Privet Fund Management LLC, its Manager

By:	/s/ Ryan Levenson
Name:	Ryan Levenson
Title:	Managing Member

IRIS HOLDINGS, INC.
By:	/s/ Ryan Levenson
Name:	Ryan Levenson
Title:	President

[Signature Page to Joint Filing Agreement]

IRIS CANADA ACQUISITION CORP.
By:	/s/ Ryan Levenson
Name:	Ryan Levenson
Title:	Director

[Signature Page to Joint Filing Agreement]

EX-99.8

Exhibit 99.8

Privet Fund Management LLC Sends Revised Proposal to Acquire Norsat International Inc. for US$11.00 Per Share

ATLANTA, GA, May 15, 2017 /CNW/ - Privet Fund Management LLC ("Privet") announced today that Privet sent a letter to the board of directors of Norsat International Inc. ("Norsat") (TSX:NII , NYSE MKT:NSAT) containing a revised proposal to acquire 100% of the common shares of Norsat not already owned by Privet and its affiliates at a price of US$11.00 per share in cash pursuant to a plan of arrangement. This consideration continues to be greater than the US$10.25 per share in consideration offered by Hytera Communications Co., Ltd. ("Hytera") in Hytera's arrangement agreement (the "Hytera Agreement") with Norsat.

Privet's proposal is not subject to diligence or financing conditions and is not subject to certain conditions to closing to which the Hytera Agreement is subject. Privet is confident that this revised proposal constitutes a "Superior Proposal" as defined in the Hytera Agreement. Privet will provide all of the equity capital necessary for the proposal and has received a debt commitment to finance a portion of the consideration.  As Norsat's largest shareholder, Privet continues to view the Hytera arrangement as not being in the best interests of Norsat shareholders in light of Privet's higher offer and removal of conditions to closing.  Should Norsat continue to move forward with the Hytera arrangement (offering US$10.25 per share), Privet has substantial doubt that the Hytera arrangement will be approved by shareholders.

The proposal is non-binding and is subject to the negotiation and execution of a mutually acceptable definitive acquisition agreement between Privet and Norsat.

Privet and its affiliates continue to maintain ownership and control of 1,027,170 common shares of Norsat, representing approximately 17.6% of the outstanding common shares (based upon the 5,848,808 common shares stated to be issued and outstanding as of May 2, 2017 by Norsat in its management's discussion and analysis for the period ended March 31, 2017 filed on May 3, 2017).

Privet, a Delaware limited liability company and a registered investment advisor under the United States Investment Advisers Act of 1940, as amended, is the investment advisor and general partner to Privet Fund LP, a Delaware limited partnership. Ryan Levenson is the sole managing member of Privet. IRIS Holdings, Inc. and IRIS Canada Acquisition Corp. are direct or indirect subsidiaries of Privet. Each of Privet Fund LP, Ryan Levenson, IRIS Holdings, Inc. and IRIS Canada Acquisition Corp. may be considered joint actors with Privet in connection with the disclosure set out herein.

An early warning report on Form 62-103F1 will be filed by Privet in accordance with applicable Canadian securities laws and will be available on the SEDAR website at www.sedar.com. The early warning report will include a description of the material terms and conditions of the equity and debt commitments. Additional information is also being filed by Privet, Privet Fund LP and Ryan Levenson in accordance with applicable U.S. securities laws.

Depending on various factors, Privet may take such actions with respect to its investment in Norsat as it deems appropriate, including, without limitation, purchasing additional securities or other financial instruments relating to Norsat or selling some or all of the securities, engaging in hedging or similar transactions with respect to securities related to Norsat and/or otherwise changing its intentions with respect to the purposes of its investment in Norsat.

SOURCE Privet Fund Management LLC

For further information:

For a copy of the early warning report, go to www.sedar.com or contact Kevin R. West, SkyLaw Professional Corporation at 1.416.759.5299.