COURT FILE NO.

1901-04589 Clerk’s Stamp:

IcouRT
COURT COURT OF QUEEN’S BENCH OF ALBERTA I OC 3 2019

JUDICIAL CALGARY
CENTRE

PLAINTIFF ATB FINANCIAL, AS AGENT

DEFENDANTS INNOVA GLOBAL LTD., INNOVA GLOBAL OPERATING LTD., INNOVA GLOBAL
LIMITED PARTNERSHIP, 1938247 ALBERTA LTD., INNOVA GLOBAL
HOLDINGS LIMITED PARTNERSHIP, SHELF COMPANY NO. 79S DE R.L. DE
C.V., SHELF COMPANY NO. 82S DE R.L. DE CV., INNOVA GLOBAL INC.,
INNOVA GLOBAL LLC, BRADEN MANUFACTURING, L.LC, INNOVA GLOBAL
EUROPE B.V., GLOBAL POWER NETHERLANDS B.V., GLOBAL POWER
PROFESSIONAL SERVICES NETHERLANDS By., BRADEN-EUROPE B.V.,
INNOVA GLOBAL LIMITED, and INNOVA GLOBAL AUSTRALIA PTY LIMITED

DOCUMENT SECOND REPORT TO THE COURT SUBMITTED BY

PRICEWATERHOUSECOOPERS INC. LIT IN ITS CAPACITY AS RECEIVER
DATED DECEMBER 2, 2019

ADDRESS FOR Norton Rose Fuibright LLP Attention: Howard Gorman, Q.C.
SERVICE AND 400 3rd Avenue SW, Phone: 403.267.8144
CONTACT Suite 3700, Calgary Alberta Fax: 403.264.5973
INFORMATION T2P 4H2 Canada Email:
OF PARTY howard.gorman@nortonrosefulbright.com
FILING THIS
DOCUMENT

Page 1 of 10
Second Report to the Court submitted by PricewaterhouseCoopers Inc. LIT
In its capacity as Receiver for Innova Global et al.
December 2, 2019

Table of Contents
1. Introduction 3
2. Activities of the Receiver 4
3. Williams Settlement 5
4. Receiver’s Statement of Receipts and Disbursements 6
5. Recommendations 7
Appendix A – Debtors as defined in the Receivership Order subject to the Receivership Proceedings 8
Appendix B – Williams Settlement Agreement 9
Appendix C – U.S. Order 10

PwC Page 2 of 10
Second Report to the Court submitted by PricewaterhouseCoopers Inc. LIT
In its capacity as Receiver for Innova Global et al.
December 2, 2019

1. Introduction
1.1 By order (the “Receivership Order”) of the Honourable Justice B.E.C. Romaine of the
Court of Queen’s Bench of Alberta (the “Court”) dated April 1, 2019,
PricewaterhouseCoopers Inc., LIT (“PwC”) was appointed receiver and manager
(“Receiver”) pursuant to an application of ATB Financial (“ATB”) as agent (“Agent”) on
behalf of a syndicate of lenders (the “Lenders”) comprised of ATB, Export Development
Canada (“EDC”) and the Canadian Imperial Bank of Commerce (“CIBC”) under section
243(1) of the Bankruptcy and Insolvency Act, RSC 1985, c B-3 (the “BIA”) and section
13(2) of the Judicature Act, RSA 2000, c J-2, without security, of all of the current and
future assets, undertakings and properties of every nature and kind whatsoever, and
wherever situate, including all proceeds thereof (the “Property”) of the Persons listed in
Appendix “A” hereto (the “Debtors”, “Innova” or the “Company”). The appointment of
the Receiver and the receivership proceedings of Innova is referred to herein as the
“Receivership Proceedings”.

1.2 Because of the cross-border nature of the Company’s operations, the Receiver filed
petitions on behalf of the Debtors for relief under Chapter 15 of the United States
Bankruptcy Code. On April 5, 2019, the United States Bankruptcy Court for the Northern
District of Oklahoma (“US Court”), Case No. 19-10653, entered an Order Granting a
Temporary Restraining Order and Relief Pursuant to Sections 105(A) and 1519 of the
United States Bankruptcy Code (“US Bankruptcy Code”) and on April 18, 2019, the US
Court entered an Order Granting Petition for Recognition as Foreign Main Proceeding
Pursuant to Sections 1515 And 1517 Of The US Bankruptcy Code and Related Relief
(“Recognition Order”) recognizing the Receiver as foreign representative under Chapter
15 of the US Bankruptcy Code.

1.3 This is the Receiver’s second report to the Court (the “Second Report”), which has been
prepared in respect of the application to be heard on December 10, 2019. The purpose of
this report is to advise the Court with respect to the following:

1.3.1 The Receiver’s activities since the First Report;

1.3.2 A settlement agreement (the “Williams Settlement”) between certain of the

debtors and Williams Industrial Services Group Inc., formerly known as Global
Power Equipment Group Inc. (“Williams”); and

1.3.3 The Receiver’s statement of receipts and disbursements to November 15, 2019 (the
“Statement of Receipts & Disbursements”);

And to seek an Order of this Court:

1.3.4 Approving the Williams Settlement; and

1.3.5 Approving the actions, conduct, and activities of the Receiver and its counsel as set
out herein, including the Receiver’s Statement of Receipts & Disbursements.

1.4 Unless otherwise stated, all monetary amounts noted herein are expressed in Canadian
dollars. Capitalized terms not otherwise defined herein are as defined in the Receivership
Order.

1.5 Certain information contained in this First Report is based on information obtained from
the Company’s books and records. The Receiver has not independently verified the
accuracy or completeness of such information; accordingly, the Receiver does not express
an opinion thereon.

PwC Page 3 of 10
Second Report to the Court submitted by PricewaterhouseCoopers Inc. LIT
In its capacity as Receiver for Innova Global et al.
December 2, 2019

1.6 All materials filed with the Court and the US Court (collectively the “Courts”) and all
orders granted by the Courts in connection with the Receivership and Chapter 15
Proceedings will be made available to creditors and other interested parties in electronic
format on the Receiver’s website: www.pwc.com/ca/innova.

2. Activities of the Receiver

2.1 The Receiver has continued to focus on the collection of the Company’s accounts
receivable, transition of various projects to Innova’s customers to reduce liquidated
damages and understand the Company's intellectual property.

2.2 Canadian Operations:

2.2.1 As of the date of this Second Report, the Receiver has reduced the number of
contractors assisting with Innova’s former Canadian operations to 4. The
remaining staff continue to assist the Receiver with winding down the
international entities, facilitating the transition of projects to Innova’s customers
and certain bonding companies, backing up and collecting the books and records,
various accounting matters and the collection of Noise Management WIP and
receivables.

2.3 US Operations:

2.3.1 Subsequent to the closing of the Tulsa Sales Process and Auburn Sales Process,
the Receiver reduced the number of contractors assisting with former US
operations to 1. The remaining contractor continues to assist the Receiver with
the collection of accounts receivable, facilitating the wind down of international
entities, and understanding the Company’s intellectual property for potential
sale.

2.4 European Operations

2.4.1 The European entities are not controlled directly by the Receiver, as these entities
were named as defendants but not included in Schedule A to the Receivership
Order. The shares of the European entities, however, are wholly owned by the
Canadian entities that are subject to the Receivership Order.

2.4.2 As noted in the First Report, management of Braden Europe (“BE

Management”) worked to separate themselves from the Canadian and US
entities post receivership and develop a path to continue as a going concern. This
effort resulted in BE Management negotiating with the Lenders the sale of the
Lenders security over Braden Europe. Following the sale of the Lender’s security
over Braden Europe to BE Management, the Lenders will still face a significant
deficiency in the recovery of amounts owing to them by the Debtors under the
Credit Facilities. Concurrent with the sale of the Lender’s security over Braden
Europe, the Receiver also sold to Braden Europe for nominal consideration (1)
the shares of Braden Europe held by the Debtors and (2) the books and records of
Braden Europe that were located on Innova’s Canadian computer servers.

2.4.3 Based on the Receiver’s analysis, the negotiated purchase by Braden Europe of
the Lender's Security, Braden Europe’s shares and Braden Europe’s books and
records was the optimal resolution and achieved the greatest value in the
circumstances.

PwC Page 4 of 10
Second Report to the Court submitted by PricewaterhouseCoopers Inc. LIT
In its capacity as Receiver for Innova Global et al.
December 2, 2019

2.5 Mexico Operations

2.5.1 All operations within Innova’s Mexican entities, which are outside the
Receivership Proceedings, ceased post filing and only one employee remains to
assist with the collection of receivables and facilitate statutory compliance. The
Receiver is working with its contractors and the remaining employee in Mexico to
collect outstanding Value Added Tax (“VAT”) refunds for 2014 and 2015.
Subsequent to this collection, the Receiver will determine whether it’s practicable
and economic for the entities to apply for further VAT refunds and what steps
would be required to eventually repatriate funds from Mexico back into the
Receivership.

3. Williams Settlement
3.1 In October of 2017, Innova purchased Global Power Netherlands, BEBV, Global Power
Professional Services, Braden Manufacturing, GMex, GPEG Hong Kong, Braden China,
and GPTS (the “Braden Purchase”) from Williams Industrial Services Group Inc.
(“Williams”).

3.2 Following the execution of the Braden Purchase and the various agreements thereto,
certain disputes (the “Post Closing Disputes”) arose between Innova and Williams.
The Post Closing Disputes are fully described in the Williams Settlement Agreement,
attached as Appendix “B” (“Williams Settlement Agreement”). Prior to the
Receivership, Innova had primarily negotiated a settlement of the Post Closing Disputes
with Williams, however was unable to conclude prior to the Company’s insolvency.

3.3 The Receiver has worked with Williams to proceed and finalise a settlement of the Post
Closing Disputes. The primary terms of the Williams Settlement Agreement are:

3.3.1 Williams shall be entitled to retain the sum of $828,262.33, currently held by
Williams, at issue in the Cash Dispute (defined in the Williams Settlement
Agreement);

3.3.2 The Receiver, in its capacity as receiver of Innova, shall be entitled to the balance
of the Escrow Property as that term is defined in the Escrow Agreement, being
approximately $216,250, including any interest which may have accrued and
been deposited in the Escrow Account;

3.3.3 Williams will execute and deliver a notice to the escrow agent for release of the
Escrow Property to the Receiver; and

3.3.4 Each of Williams and the Receiver shall release each other, such that none of the
Settlement parties shall have any further obligations under the Braden Purchase
and the indemnification obligations of the Settlement Parties shall terminate and
be of no further force or effect.

3.3.5 The Williams Settlement Agreement requires approval of the U.S. Bankruptcy
Court for the Northern District of Oklahoma and the Alberta Court of Queen’s
Bench.

3.4 Based on the Receiver’s analysis, the Williams Settlement Agreement represented a fair
and reasonable compromise of the Post Closing Disputes.

PwC Page 5 of 10
Second Report to the Court submitted by PricewaterhouseCoopers Inc. LIT
In its capacity as Receiver for Innova Global et al.
December 2, 2019

3.5 The Receiver filed a motion with the US Bankruptcy Court for the Northern District of
Oklahoma on November 1, 2019 requesting authorization for the Receiver to enter into
the Williams Settlement and take any and all action necessary or appropriate to
consummate the Williams Settlement.

3.6 On November 27, 2019, the United States Bankruptcy Court for the Northern District of
Oklahoma granted an order (“U.S. Order”) approving the Williams Settlement
Agreement and permitting the parties to take all necessary steps to implement the
Williams Settlement Agreement. The U.S. Order is attached as Appendix “C”.

4. Receiver’s Statement of Receipts and

Disbursements
4.1 The Receiver’s statement of receipts and disbursements for the period April 1, 2019 to
November 15, 2019 is summarized as follows:

4.2 Collection of receivables are related to the Receiver’s efforts to recover amounts owing to
Innova from its customers while transitioning ongoing projects to the customers and
subcontractors. Other income includes various tax refunds, interest earned on deposits,
and the sale of finished goods.

4.3 Contract employees represent costs of labour to assist with the collection of receivables,
review of projects, various human resources matters, accounting, the sale of finished
goods and wind down of operations.

PwC Page 6 of 10
Second Report to the Court submitted by PricewaterhouseCoopers Inc. LIT
In its capacity as Receiver for Innova Global et al.
December 2, 2019

4.4 Project operational costs relate to the payment of finished goods to subcontractors and
subsequent shipping to Innova’s customers to recover material receivables in the ES
Business.

4.5 G&A includes general and administrative costs of the business, including, among other
items, facility rent, insurance, information technology and utilities.

4.6 Professional and Legal fees include the costs of the Receiver and its counsel, which have
been approved by the Lenders.

5. Recommendations
5.1 The Receiver respectively recommends that this Honourable Court approve:

5.1.1 The Williams Settlement; and

5.1.2 The Second Report and the activities of the Receiver as set out herein.

All of which is respectfully submitted on this 2nd day of December 2019.

PricewaterhouseCoopers Inc., LIT

In its Capacity as Court Appointed Receiver of Innova Global et al.

Paul Darby
Senior Vice President

PwC Page 7 of 10
Second Report to the Court submitted by PricewaterhouseCoopers Inc. LIT
In its capacity as Receiver for Innova Global et al.
December 2, 2019

Appendix A – Debtors as defined in the Receivership

Order subject to the Receivership Proceedings
Innova Global Ltd.

Innova Global Operating Ltd.

Innova Global Limited Partnership

1938247 Alberta Ltd.

Innova Global Holdings Limited Partnership

Innova Global Inc.

Innova Global LLC

Braden Manufacturing, L.L.C.

PwC Page 8 of 10
Second Report to the Court submitted by PricewaterhouseCoopers Inc. LIT
In its capacity as Receiver for Innova Global et al.
December 2, 2019

Appendix B – Williams Settlement Agreement

PwC Page 9 of 10
 Case 19-10653-R Document 261 Filed in USBC ND/OK on 11/01/19 Page 8 of 20

SETTLEMENT AGREEMENT

This Settlement Agreement (“Agreement”) is entered into as of the “Effective Date”

defined herein by and between: (i) Williams Industrial Services Group Inc., f/k/a Global Power
Equipment Group Inc., a Delaware corporation (“Williams”); (ii) Braden Holdings, LLC, a
Delaware limited liability company (“Braden Holdings”); (iii) GPEG C.V., a Netherlands
limited partnership (“GPEG C.V.,” and collectively with Williams and Braden Holdings,
“Sellers”); (iv) Innova Global Inc., a California Corporation (“Innova Global US”) by the
Receiver (as defined below); (v) Innova Global Operating Ltd., an Alberta corporation (“Innova
Global Operating”) by the Receiver (as defined below); and (vi) 1938247 Alberta Ltd., an
Alberta corporation by the Receiver (as defined below) (“247 AB”) (each, a “Party” and
collectively, the “Parties”).

WHEREAS, Innova Global Europe B.V., a Dutch besloten vennootschap met beperkte
aansprakelijkheid (collectively with Innova Global US, Innova Global Operating, and 247 AB,
“Buyers”) and the Parties entered into that certain Securities Purchase Agreement as of October
11, 2017 (the “Purchase Agreement”)1 through which Buyers acquired Global Power
Netherlands, BEBV, Global Power Professional Services, Braden Manufacturing, GMex, GPEG
Hong Kong, Braden China, and GPTS from Sellers (the “Transaction”); and

WHEREAS, in connection with the Purchase Agreement, the Parties entered into certain
other agreements, including that certain Transition Services Agreement, the form of which is
attached to the Purchase Agreement as Exhibit C, and Escrow Agreement, the form of which is
attached to the Purchase Agreement as Exhibit D, each of which became effective on or about
October 11, 2017; and

WHEREAS, following the execution of the Purchase Agreement, Transition Services

Agreement, and Escrow Agreement, and the subsequent closing of Transaction, certain disputes
(collectively, the “Post-Closing Disputes”)2 arose among the parties; and

WHEREAS, the Post-Closing Disputes include the following:

i. A dispute concerning the Working Capital Adjustment pursuant to Section

2.4(b) of the Purchase Agreement, whereby Sellers maintain that Buyers owe Sellers the
amount of approximately $2,122,909,3 and Buyers maintain that Sellers owe Buyers
approximately $254,000 (the “Net Working Capital Dispute”); and

ii. A dispute concerning certain past due amounts owed by Buyers to Sellers
in the amount of $135,300 relating to services provided by Sellers to Buyers pursuant to
the Transition Services Agreement (the “Transition Services Dispute”); and

1
Defined terms, unless specified otherwise herein, shall have the same meaning as set forth in the Purchase
Agreement.
2
For avoidance of doubt, the term Post-Closing Disputes includes the Net Working Capital Dispute, the Transition
Services Dispute, the Letters of Credit Dispute, the Escrow Funds Dispute, the Liquidated Damages Dispute, the
Braden Europe Bonuses Dispute, the Reverse Transition Services Dispute, the Cash Dispute, the Operating
Expenses Dispute, the A325 Warranty Dispute, the GMex Bonus Dispute, and the Requested Documents Dispute, as
those terms are subsequently defined herein.
3
All dollar amounts referenced herein refer to U.S. dollars, unless otherwise stated.

{KJS1336.DOC;7 }JEH v. 2
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[EXECUTION VERSION]

iii. A dispute concerning certain letters of credit which, Sellers contend,

pursuant to Section 6.19(b) of the Purchase Agreement, Buyers were obligated to
substitute with new letters of credit, but failed to do so, causing Sellers damages in the
amount of $162,990, namely: a) a letter of credit with the Bank of Tokyo in the amount
of $144,500.00; b) a letter of credit with the Bank of Tokyo in the amount of
$266,655.54; and c) a letter of credit with Mitsubishi in the amount of $402,134.40, the
last of which Buyers maintain has already been cancelled and replaced (the “Letters of
Credit Dispute”); and

iv. A dispute concerning approximately $216,250 currently being held in

escrow as originally provided for in the Escrow Agreement which, Sellers contend,
should have previously been released to Sellers, as Buyers made no claims against the
Escrow Property, as that term is defined in the Escrow Agreement, prior to the date upon
which they were to be released to Sellers (the “Escrow Funds Dispute”); and

v. A dispute concerning certain liquidated damages Buyers contend they are

owed by Sellers, namely: a) $67,000 relating to the Siemens Mankato Project; b)
$625,000 relating to the Mitsubishi Jawa Project; and c) $816,000 relating to the El
Carmen Project (collectively, the “Liquidated Damages Dispute”); and

vi. A dispute concerning certain bonuses in the amount of $197,230.17 which

Sellers maintain Buyers were to have paid to certain Braden Europe management in
connection with the closing of the Transaction (the “Braden Europe Bonuses Dispute”);
and

vii. A dispute concerning certain reverse transition services which Buyers

contend they provided to Sellers, totaling €33,176 (the “Reverse Transition Services
Dispute”); and

viii. A dispute concerning the sum of $828,262.33 inadvertently deposited by a

customer with the Sellers post-closing (the “Cash Dispute”); and

ix. A dispute concerning certain operating expenses in the amount of $13,796

relating to an invoice from US Properties, for which Buyers contend Sellers are
responsible (the “Operating Expenses Dispute”); and

x. A dispute concerning approximately $195,000 in connection with certain

environmental efforts undertaken in connection with the A325 bolt remediation, for
which Buyers contend Sellers are responsible (the “A325 Warranty Dispute”); and

xi. A dispute concerning a bonus in the amount of $125,000 that Buyers

indicated they paid to certain GMex employees, for which Buyers contend Sellers are
responsible (the “GMex Bonus Dispute”); and

xii. A request by Buyers for certain historic budget, financial, and tax
information which Buyers maintain is currently held by Sellers and which Buyers
contend they require; and

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xii. A request by Buyers for certain information from the Sellers regarding the
breakdown of historic bonus payments to the Sellers; and

WHEREAS, on April 1, 2019, the Court of Queen’s Bench of Alberta (the “Canadian
Court”), Honorable Justice B.E.C. Romaine, entered the Receivership Order (the “Receivership
Order”) pursuant to section 243(1) of the Bankruptcy and Insolvency Act (Canada), 13(2) of the
Judicature Act (Alberta), 99(a) of the Business Corporations Act (Alberta) and 65(7) of the
Personal Property Security Act (Alberta), in the Judicial Centre of Calgary, Canada, Court File
No. 1901-04589 (the “Canadian Proceedings”);

WHEREAS, the Receivership Order appointed PricewaterhouseCoopers Inc., LIT,

(“PWC”) court-appointed receiver (the “Receiver”) of the assets, undertakings and properties of
(1) Innova Global Ltd., (2) Innova Global Operating Ltd., (3) Innova Global Limited Partnership,
(4) 1938247 Alberta Ltd., (5) Innova Global Holdings Limited Partnership, (6) Innova Global
Inc. (formerly AEM Emissions Management Inc., formerly ATCO Emissions Management Inc.),
(7) Innova Global LLC (formerly AEM Noise Management LLC, formerly ATCO Noise
Management LLC), and (8) Braden Manufacturing, L.L.C. (collectively, “Debtors”);

WHEREAS, on April 4, 2019, the Receiver, as foreign representative, filed Form 401
chapter 15 petitions for recognition with respect to each of the Debtors in the United States
Bankruptcy Court for the Northern District of Oklahoma (the “US Court”) initiating that certain
jointly administered case designated Case No. 19-10653 (the “Chapter 15 Case”).

WHEREAS, on April 18, 2019, the United States Bankruptcy Court in the Chapter 15
Case entered Order Granting Petition For Recognition As Foreign Main Proceeding Pursuant
To Sections 1515 And 1517 Of The United States Bankruptcy Code And Related Relief
(“Recognition Order”) recognizing the Canadian Proceeding as foreign main proceedings under
11 U.S.C. §§ 1502 and 1517, and recognizing the Receiver as the duly appointed foreign
representative of the Debtors within the meaning of 11 U.S.C. § 101(24).

WHEREAS, the Parties desire to settle, resolve, and terminate all disputes between
them, relating to the Transaction, the Post-Closing Disputes, and any and all other claims that
any Party may have against any other Party, of any kind, whether asserted or unasserted, known
or unknown, foreseen or unforeseen, suspected or unsuspected, and to avoid the uncertainty,
inconvenience, and expense of litigation, arbitration, or mediation concerning same.

AND WHEREAS, pursuant to, inter alia, subparagraph 3(h) of the Receivership Order,
the Receiver is empowered and authorized to enter into this agreement and to carry out the terms
hereof.

NOW, THEREFORE, in consideration of the foregoing and the mutual promises,

undertakings, and other provisions and agreements set forth herein, the sufficiency of which is
acknowledged by the Parties, the Parties agree as follows:

1. Sellers to Retain the Funds at Issue in the Cash Dispute. The Parties Agree that,
upon the Effective Date, Sellers shall be entitled to retain the sum of $828,262.33, currently held
by Sellers, at issue in the Cash Dispute.

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2. Buyers to Retain the Funds at Issue in the Escrow Dispute. The Parties Agree
that, as of the Effective Date, Buyers shall be entitled to the balance of the Escrow Property as
that term is defined in the Escrow Agreement, being approximately $216,250, including any
interest which may have accrued and been deposited in the Escrow Account.

3. Instructions for Release of Indemnity Escrow Amount. Within three business days
of the Effective Date, the Seller, pursuant to Sections 3.4(d) and 7.3 of the Escrow Agreement,
shall provide a notice to the Escrow Agent that is identified in the Escrow Agreement, in the
form attached hereto as Exhibit A, which directs payment of the balance of the Escrow Property
to the Receiver. In the event that the Escrow Agent does not seasonably pay the balance of the
Escrow Property to the Receiver as directed by Seller, Seller shall take further actions that
Receiver reasonably requests to cause Escrow Agent to pay the balance of the Escrow Property
to Receiver.

4. Mutual Release by the Parties. Subject to satisfaction of the terms and conditions
set forth in Paragraphs 1 through 3 of this Agreement, each of the Parties, for itself and any of its
present, former and future parent corporations, predecessors, successors, subsidiary corporations,
related companies, divisions, general and limited partnerships and limited liability companies,
entities, representatives, assigns, transferees, principals, agents, and attorneys, and their
respective present, former, and future directors, officers, shareholders, managers, members,
partners, employees, and trustees, do hereby mutually and forever release and discharge the
other, including any of its present, former and future parent corporations, predecessors,
successors, subsidiary corporations, related companies, divisions, general and limited
partnerships and limited liability companies, entities, representatives, assigns, transferees,
principals, agents, and attorneys, and their respective present, former, and future directors,
officers, shareholders, managers, members, partners, employees, receivers (including the
Receiver) and trustees, from all claims, actions and causes of action, demands, controversies,
suits, charges, complaints, torts, violations of public policy, liabilities, damages, debts, expenses,
costs, interest, reimbursements, claims for attorneys’ fees, whether at law or in equity, asserted
or unasserted, known or unknown, foreseen or unforeseen, suspected or unsuspected, direct,
indirect, or contingent, that either Party had, now has, or may have in the future against the other
arising out of or relating in any way to the Transaction, the Purchase Agreement, the Transition
Services Agreement, the Escrow Agreement, the Post-Closing Disputes except for any and all
claims of the kind described in the Purchase Agreement at Sections 8.1(a)(i)(A) and 8.1(a)(ii),
which survive Closing and continue in full force and effect for the period of time after Closing as
indicated in the Purchase Agreement; provided, however, that such unreleased claims are
deemed to arise solely out of the Purchase Agreement and not this Agreement and the priority of
such unreleased claims in the Canadian Proceedings and the Chapter 15 Case shall not change as
a result of this Agreement.

5. No Further Obligations. For avoidance of doubt, the mutual releases set forth in
this Agreement are intended to and do in fact amount to a full and final walk away settlement
that fully and finally resolves all disputes of any kind among the Parties. Upon the satisfaction
of the terms and conditions set forth in Paragraphs 1-3 of this Agreement, Sellers on the one
hand, and Buyers on the other, shall have no continuing obligations to one another other than
compliance with the terms of this Agreement, and the indemnification obligations of the Parties
under the Purchase Agreement shall terminate and be of no further force or effect.

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6. No Admission of Liability. This Agreement does not constitute any admission of

liability by any Party.

7. Costs and Attorneys’ Fees. The Parties agree not to seek reimbursement or
indemnification from one another for their own costs, expenses, and attorneys’ fees relating in
any way to the Transaction, the Post-Closing Disputes, the preparation of this Agreement, or any
other matter.

8. Agreement Reviewed and Entered Into Voluntarily. The Parties have voluntarily
entered into this Agreement and have had the opportunity to consult with counsel. The Parties
and their counsel have read this Agreement, and this Agreement shall not be subject to any claim
of mistake of fact or duress. The Parties agree that this Agreement is clear and unambiguous and
agree that if any provision of this Agreement is deemed ambiguous, that provision shall be
construed without regard to which Party drafted that provision.

9. Amendment and Modification. Any amendment or modification of this

Agreement must be in writing and signed by all Parties.

10. Assignment. The Parties may not assign any rights, obligations, or interests under
this Agreement without the prior written consent of the other.

11. Choice of Law. This Agreement shall be construed under, enforced under, and
governed by the laws of the State of Delaware, without giving effect to the State of Delaware’s
or any other jurisdiction’s conflict of laws provisions.

12. Signing of Agreement and Approvals. By executing this Agreement, each

signatory represents that he or she has the capacity and authority to execute this Agreement and
to bind his or her principal in the capacity set forth below.

13. Counterparts. This Agreement may be executed in counterparts, each of which

shall be deemed an original, and all such counterparts shall be construed as one and the same
instrument. Electronically-scanned signatures shall constitute original signatures.

14. Section Headings. The section headings of this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

15. Effective Date. This Agreement is effective as of the date that the Agreement is
fully executed by each and all of the Parties.

16. Unknown Claims. Each of the Parties acknowledges that there is risk that
subsequent to the execution of this Agreement, it may discover facts or may discover, suffer, or
incur actions or causes of action which were unknown or unanticipated at the time of this
Agreement which may have materially affected their respective decisions to give the releases
contained in this Agreement (collectively, the “Unknown Claims”). Despite this knowledge and
understanding, each of the Parties understands and agrees: (1) that it is assuming the risk of each
and every category of every Unknown Claim, and (2) that subject to paragraph 4, it is releasing
all claims of every kind or nature whatsoever, known or unknown, foreseen or unforeseen,
suspected or unsuspected, and in connection herewith, expressly waives all rights under

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California Civil Code section 1542, or by any similar statute applicable in any jurisdiction in
which this Agreement may be implemented, to the extent that any such statutes may be
applicable. California Civil Code section 1542 provides as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE

CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT
TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING
THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD
HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR OR RELEASED PARTY.

17. Entire Agreement. This Agreement sets forth all of the terms and conditions
agreed to by the Parties regarding the subject matter hereof. The Parties agree that the execution
of this Agreement has not been induced by any representations or promises not expressly set
forth herein. Any prior agreements, promises, reservations, negotiations, or representations,
either oral or written, between the Parties or their attorneys relating to the Post-Closing Disputes
are of no force or effect.

18. Court Approval. This Agreement is subject to an order of the Canadian Court and
US Court being entered in the Canadian Proceedings and the Chapter 15 Case approving this
Agreement and authorizing the Receiver to carry out the terms hereof, which order shall be
acceptable in form and substance to the Receiver and the Sellers, each acting reasonably. For the
avoidance of doubt, the terms of the orders approving this Agreement shall provide that the
settlements and transactions contemplated herein shall be binding on the Receiver’s successors,
any trustee or successor trustee in bankruptcy, or similar official that may be appointed in respect
of any of the Debtors and shall not be void or voidable by creditors of any of the Debtors nor
constitute a fraudulent transfer, a preference, a fraudulent transfer, fraudulent conveyance,
transfer at undervalue or other reviewable transaction or oppressive conduct as those phrases are
used in United States and/or Canadian law. Any modification of this Agreement required to
secure court approval shall only be effective upon the unanimous consent of the Parties, which
consent may be indicated in a writing signed by the Parties and/or by counsel for the Parties on
the record at a hearing on any motion to secure court approval of this Agreement.

*** [SIGNATURE PAGES FOLLOW] ***

6 of 8
Case 19-10653-R Document 261 Filed in USBC ND/OK on 11/01/19 Page 14 of 20
Case 19-10653-R Document 261 Filed in USBC ND/OK on 11/01/19 Page 15 of 20
[EXECUTION VERSION]

SETTLING BUYERS:

PRICEWATERHOUSECOOPERS INC.,
LIT, solely in its capacity as court-
appointed receiver of INNOVA
GLOBAL INC.

By:
Name: Paul Darby
Title: Senior Vice President

PRICEWATERHOUSECOOPERS INC.,
LIT, solely in its capacity as court-
appointed receiver of INNOVA GLOBAL
OPERATING LTD.

By:
Name: Paul Darby
Title: Senior Vice President

PRICEWATERHOUSECOOPERS INC.,
LIT, solely in its capacity as court-
appointed receiver of 1938247 ALBERTA
LTD.

By: :
Name: Paul Darby
Title: Senior Vice President

8 of 8
Second Report to the Court submitted by PricewaterhouseCoopers Inc. LIT
In its capacity as Receiver for Innova Global et al.
December 2, 2019

Appendix C – U.S. Order

PwC Page 10 of 10
 Case 19-10653-R Document 271 Filed in USBC ND/OK on 11/27/19 Page 1 of 2

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