Section 85 Rollover Agreement

THIS AGREEMENT dated the 7th day of April, 2014.

BETWEEN:

Looney Inc.

(hereinafter referred to as the “Purchaser”)

- and -

Frank Looney

(hereinafter referred to as “the Vendor”)

ARTICLE I - DEFINITIONS

1.01 In this Agreement, including the recitals, the following terms shall have the following meanings:

(a)  “Closing” and “Closing Date” shall mean April 7, 2014, or such other date as the parties hereto may agree;

(b)  “Effective Date” shall mean April 7, 2014; and

(c)  “Purchased Assets” shall mean the assets of the Vendor described in Schedule “A” attached hereto.

ARTICLE II - AGREEMENT TO PURCHASE AND SELL

2.01 The Vendor hereby agrees to and with the Purchaser to sell, transfer and assign the Purchased Assets to the Purchaser for the Purchase Price hereinafter set out.

ARTICLE III - PURCHASE PRICE

3.01 The Purchase Price for the Purchased Assets shall be equal to the fair market value of the Purchased Assets, as determined by the valuators for the parties (the “FMV” and “Purchase Price”, respectively), payable as follows:

(a)  For the Purchased Assets listed in Schedule “A”, the Purchaser will deliver to the Vendor on Closing:

(i)  315,000 Class E special shares of the Purchaser with a cumulate amount equal to the FMV of the Purchased Assets.

3.02 The parties agree that a preliminary estimate of the ACB and FMV of the Purchased Assets is set out in Schedule “A”. The parties further agree that a final assessment of ACB and FMV of the Purchased Assets shall be made by their valuators as soon as possible following Closing, and that such final determination shall be final and binding upon the parties except as set out in Articles IV and V below.

ARTICLE IV - AGREEMENT TO FILE ELECTIONS

4.01 It is the intention of the parties that this transaction is taking place in contemplation that section 85 of the Income Tax Act (Canada) will apply. Therefore, the parties hereto covenant and agree that, notwithstanding the foregoing, for income and corporation tax purposes the acquisition cost to the Purchaser and the proceeds of disposition to the Vendor of the Purchased Assets referred to in paragraph 3.01(b) shall be deemed to be the UCC & Adjusted Cost Base (ACB) of those Purchased Assets to the Vendor, and the parties hereto agree jointly to make, execute and file with the appropriate bodies the elections required under the Income Tax Act (Canada) and the applicable provisions of the Corporations Tax Act (Ontario) in prescribed form and within the prescribed time frame.

4.02 The parties agree that in the event that any governmental taxing authority having jurisdiction issues or proposes to issue assessments or reassessments of additional liability for taxes or any other subject by reason of asserting that the value or UCC/ACB of the said Purchased Assets is greater or less than the value or UCC/ACB determined by the parties hereunder as set out above, then the value or UCC/ACB in question shall be increased or decreased by the difference so determined, but only to the extent that the said value or UCC/ACB so revised is accepted by the taxing authority, the Vendor and the Purchaser, or failing such acceptance, is established by courts having jurisdiction in the matter after all rights of appeal having been exhausted or expired without appeal by such taxing authority, the Vendor or the Purchaser. In the event there is an adjustment to the value or UCC/ACB as so provided for, such adjustment shall be deemed to be made nunc pro tunc with effect as of the Effective Date set out herein and revised or amended elections shall be filed accordingly.

ARTICLE V - PRICE ADJUSTMENT and ALLOCATION OF PURCHASE PRICE

5.01 It is the intention of the parties that the purchase and sale of the Purchased Assets take place at fair market value, and the parties agree that in the event any governmental taxing authority having jurisdiction issues or proposes to issue assessments or reassessments of additional liability for taxes or any other subject by reason of asserting that the fair market value of the Purchased Assets is greater than or less than the Purchase Price determined by the parties hereunder, then the Purchase Price shall be increased or decreased by the difference so determined, but only to the extent that the Purchase Price so revised is accepted by the taxing authority, the Vendor and the Purchaser, or failing such acceptance, is established by courts having jurisdiction in the matter after all rights of appeal having been exhausted or expired without appeal by such taxing authority, the Vendor or the Purchaser. In the event there is an adjustment to the Purchase Price as so provided for, such adjustment shall be deemed to be made nunc pro tunc with effect as of the Effective Date set out herein.

ARTICLE VI - VENDOR’S REPRESENTATIONS AND WARRANTIES

6.01 The Vendor represents, warrants, undertakes and agrees to and with the Purchaser as follows:

(a)  the Vendor is empowered and authorized to enter into this Agreement and to sell the Purchased Assets;

(b)  the Vendor is a resident of Canada within the meaning of the Income Tax Act (Canada);

(c)  the Vendor is the owner of the Purchased Assets;

(d)  the Vendor now has and will on Closing have good and marketable title to the Purchased Assets free and clear of all liens, encumbrances or security interests; and

(e)  the Vendor will execute such other and further assurances as may reasonably be required;

which representations, warranties, indemnities and undertakings shall survive Closing of this transaction for a period of one (1) year.

ARTICLE VII - PURCHASER’S REPRESENTATIONS AND WARRANTIES

7.01 The Purchaser represents and warrants to the Vendor that:

(a)  the Purchaser is not and will not be on Closing a non-eligible person for the purposes of the Investment Canada Act;

which representation and warranty shall survive Closing of this transaction for a period of one (1) year.

ARTICLE VIII - CLOSING

8.01 The transaction contemplated by this Agreement shall be completed on or before the Closing Date at a location to be selected by the vendor.

8.02 On Closing, the Vendor shall deliver:

(a)  such bills of sale, deeds, elections, assignments, consents, documents or instruments as may be required to complete the transfer and conveyance of the Purchased Assets to the Purchaser; and

(b)  such other documents as the solicitors for the parties may reasonably require.

ARTICLE IX - TITLE AND PERMITTED ENCUMBRANCES

9.1 The Vendor shall deliver the Purchased Assets and all other items or property to be conveyed hereunder to the Purchaser on Closing with a clear title free of all or any encumbrances.

ARTICLE X - ADDITIONAL TERMS AND CONDITIONS

10.01 Each of the parties hereto covenants to and with the other party hereto to execute or provide such other documents or assurances as may be necessary to give effect to the intentions of the parties as set out herein.

10.02 This Agreement constitutes the entire agreement between the parties, and there are no other terms, conditions, provisos, representations or warranties except as expressly contained herein.

10.03 The representations and warranties of the parties herein shall survive closing hereof as set out above.

10.04 This Agreement shall be deemed to be made in the Province of Ontario and shall be construed in accordance with and governed by the laws of such province.

10.05 This Agreement shall ensure to the benefit of and shall be binding upon the parties hereto and each of their respective personal representatives, heirs, administrators, successors and assigns.

10.06 Neither party hereto may assign or convey this Agreement or any rights or remedies hereunder without the consent of the other party, which consent shall not be unreasonably withheld.

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement effective as of the date first mentioned above.

Frank Looney Looney Inc.

Per:______Per:______

Schedule “A”Purchased Assets

Item(s) / Description / FMV / UCC/ACB
1 / GoodCharity / $315,000 / $1
Total / $315,000 / $1