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0001471727
Better Choice Co Inc.
0001471727
2024-09-03
2024-09-03
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xbrli:shares
iso4217:USD
xbrli:shares
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported): September 3, 2024
Better
Choice Company, Inc.
(Exact
name of Registrant as Specified in its Charter)
Delaware |
|
001-40477 |
|
83-4284557 |
(State
or other Jurisdiction of Incorporation) |
|
(Commission
File
Number)
|
|
(IRS Employer
Identification No.) |
12400 Race Track Road
Tampa, Florida 33626
(Address of Principal Executive Offices) (Zip Code)
(Registrant’s
Telephone Number, Including Area Code): (212) 896-1254
N/A
(Former
name or former address, if changed since last report.)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
☐ | Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| |
☒ | Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| |
☐ | Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| |
☐ | Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange on which registered |
Common
Stock, $0.001 par value share |
|
BTTR |
|
NYSE
American |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item
1.01 Entry into a Material Definitive Agreement
Arrangement
Agreement
On
September 3, 2024, Better Choice Company, Inc., a Delaware corporation (the “Company”), announced that it has entered
into an Arrangement Agreement (the “Arrangement Agreement”) with SRx Health Solutions, Inc., a corporation organized under
the laws of the Province of Ontario (“SRx”), 1000994476 Ontario Inc., an indirect wholly-owned subsidiary of the Company
and a corporation existing under the laws of the Province of Ontario (“AcquireCo”), and 1000994085 Ontario Inc., a
direct wholly-owned subsidiary of the Company and corporation existing under the laws of the Province of Ontario (“CallCo”).
Pursuant to the Arrangement Agreement, and the Plan of Arrangement adopted in connection therewith, the Company will acquire SRx in an
all-stock transaction pursuant to a statutory amalgamation of SRx and AcquireCo under Canadian law (the “Amalgamation”).
As a result of the Amalgamation, all of the property, rights, interests and obligations of SRx shall become the property, rights, interests
and obligations of the resulting entity (“Amalco”), and Amalco will be an indirectwholly-owned subsidiary of
the Company.
In
the Amalgamation, each issued and outstanding common share of SRx will be converted based on the Exchange Ratio (as defined below)
into shares of common stock of the Company (“BTTR Common Stock”) or, at the option of the holder thereof, exchangeable shares
of Amalco that will be exchangeable at the option of the holder (or under certain other circumstances) on a one-for-one basis
for shares of BTTR Common Stock. The Exchange Ratio will be determined five business days prior to the consummation of the Amalgamation
(the “Closing”) and will be based on the trailing 30-day volume weighed average price of the Better Choice
Common Stock on the NYSE America, subject to an aggregate share collar of 19,750,000 shares and 30,000,000 shares, with any resulting
fractional shares to be rounded to the nearest whole share (the “Exchange Ratio”). The Amalgamation assigns an equity
value of SRx of U.S. $80 million, assuming net debt at Closing of U.S. $43 million (which will be subject to a two-way
adjustment prior to the Closing). All outstanding warrants and restricted stock units of SRx will be converted into common shares
of SRx or terminated prior to the Closing.
The
transaction has been unanimously approved by the boards of directors of the Company and SRx. The
consummation of the Amalgamation is subject to customary closing conditions, including requisite approvals of the stockholders
of the Company and SRx and the Ontario Superior Court of Justice (Commercial List), among other required regulatory approvals, and
the absence of a material adverse effect with respect to the Company or SRx.
The
Arrangement Agreement has been included to provide investors and security holders with information regarding its terms. It is not intended
to provide any other factual information about the Company, SRx or their respective subsidiaries and affiliates. The Arrangement Agreement
contains representations and warranties by the Company and SRx made solely for the benefit of the parties. The assertions embodied in
those representations and warranties are subject to qualifications and limitations agreed to by the respective parties in negotiating
the terms of the Arrangement Agreement, including information in confidential disclosure letters delivered by each party in connection
with the signing of the Arrangement Agreement. Moreover, certain representations and warranties in the Arrangement Agreement were made
as of a specified date, may be subject to a contractual standard of materiality different from what might be viewed as material to investors,
or may have been used for the purpose of allocating risk between the Company and SRx, rather than establishing matters as facts. Accordingly,
the representations and warranties in the Arrangement Agreement should not be relied on by any persons as characterizations of the actual
state of facts about the Company or SRx at the time they were made or otherwise. In addition, information concerning the subject matter
of the representations and warranties may change after the date of the Arrangement Agreement, which subsequent information may or may
not be fully reflected in the Company’s or SRx’s public disclosures.
The
foregoing description of the Arrangement Agreement is not complete and is subject to and qualified in its entirety by reference to the
full text of the Arrangement Agreement which is filed as Exhibit 10.1 hereto, and the terms of which are incorporated herein by reference.
Voting Agreement
In
addition, on September 3, 2024, Mr. Adesh Vora, SRx’s Chief Executive Officer and majority stockholders have entered
to a Voting Agreement with the Company (the “Voting Agreement”). Pursuant to the Voting Agreement, Mr. Vora agreed, among
other things, to vote all of the capital stock of SRx that he owns and/or controls in favor of the Amalgamation.
The
foregoing description of the Voting Agreement is not complete and is subject to and qualified in its entirety by reference to the full
text of the Voting Agreement which is filed as Exhibit 10.2 hereto, and the terms of which are incorporated herein by reference. The
description of the Voting Agreement is qualified in its entirety by reference thereto.
Item 3.02 Unregistered
Sales of Equity Securities
The disclosure under
Item 1.01 of this Current Report relating to the Arrangement Agreement and the issuance of the shares of BTTR Common Stock and the exchangeable
shares is incorporated herein by reference. The securities to be issued under the Arrangement Agreement will be issued in reliance upon
Section 3(a)(10) of the Securities Act of 1933, as amended (the “Securities Act”), which exempts from the registration requirements
under the Securities Act any securities that are issued in exchange for one or more bona fide outstanding securities where the terms
and conditions of such issuance and exchange are approved, after a hearing upon the fairness of such terms and conditions at which all
persons to whom it is proposed to issue securities in such exchange shall have the right to appear, by any court expressly authorized
by law to grant such approval.
Item
7.01. Regulation FD Disclosure
On September 3,
2024, the Company issued a press release announcing the signing of the Arrangement Agreement. A copy of the press release is attached
as Exhibit 99.1 to this current report on Form 8-K and is incorporated herein by reference.
On
September 9, 2024, the Company posted an updated presentation (the “Presentation”) which is available in the Investors
– Events and Presentations section of the Company’s website at https://www.betterchoicecompany.com. A copy of the Presentation
is included as Exhibit 99.2 to this Current Report.
The
Company intends to use the Presentation in presentations to investors and analysts from time to time in the future. The furnishing of
the information in this Current Report is not intended to, and does not, constitute a determination by the Company that the information
in this Current Report is material or complete, or that investors should consider this information before making an investment decision
with respect to any security of the Company. The information in the materials is presented as of September 9, 2024, and the Company
does not assume any obligation to update such information in the future.
The
information in Item 7.01 of this Current Report shall not be deemed to be “filed” for the purposes of Section 18 of the Securities
and Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such section, nor shall
such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act,
except as shall be expressly set forth by specific reference in such a filing.
Forward-Looking
Statements
This current report
contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, which are intended to be covered by the “safe harbor” created by those sections.
All statements in this current report that are not based on historical fact are “forward looking statements.” These statements
may be identified by words such as “estimates,” “anticipates,” “projects,” “plans,” “strategy,”
“goal,” or “planned,” “seeks,” “may,” “might”, “will,” “expects,”
“intends,” “believes,” “should,” and similar expressions, or the negative versions thereof, and which
also may be identified by their context. All statements that address operating performance or events or developments the Company expects
or anticipates will occur in the future, such as stated objectives or goals, refinement of strategy, attempts to secure additional financing,
exploring possible business alternatives, or that are not otherwise historical facts, are forward-looking statements. While management
has based any forward-looking statements included in this current report on its current expectations, the information on which such expectations
were based may change. Forward-looking statements involve inherent risks and uncertainties which could cause actual results to differ
materially from those in the forward-looking statements as a result of various factors, including risks associated with the Company’s
ability to obtain additional capital in the future, the proposed transaction with SRx, general economic factors, competition in the industry
and other factors that could cause actual results to be materially different from those described herein as anticipated, believed, estimated
or expected. Additional risks and uncertainties are described in or implied by the Risk Factors and Management’s Discussion and
Analysis of Financial Condition and Results of Operations sections of the Company’s 2023 Annual Report on Form 10-K, filed on April
12, 2024 and other reports filed from time to time with the Securities and Exchange Commission (“SEC”). The Company urges
you to consider those risks and uncertainties in evaluating its forward-looking statements. Readers are cautioned to not place undue
reliance upon any such forward-looking statements, which speak only as of the date made. Except as otherwise required by the federal
securities laws, the Company disclaims any obligation or undertaking to publicly release any updates or revisions to any forward-looking
statement contained herein (or elsewhere) to reflect any change in its expectations with regard thereto, or any change in events, conditions,
or circumstances on which any such statement is based.
Additional
Information and Where to Find It
The Company will
prepare a proxy statement for the Company’s stockholders to be filed with the SEC. The proxy statement will be mailed to the Company’s
stockholders. The Company urges investors, stockholders and other interested persons to read, when available, the proxy statement, as
well as other documents filed with the SEC, because these documents will contain important information about the proposed transaction.
Such persons can also read the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, for a description
of the security holdings of its officers and directors and their respective interests as security holders in the consummation of the
transactions described herein. The Company’s definitive proxy statement will be mailed to stockholders of the Company as of a record
date to be established for voting on the transactions described in this report. The Company’s stockholders will also be able to
obtain a copy of such documents, without charge, by directing a request to: Carolina Martinez, Chief Financial Officer of Better Choice
Company, Inc., 12400 Race Track Road, Tampa, FL 33626; e-mail: nmartinez@bttrco.com. These documents, once available, can also be obtained,
without charge, at the SEC’s web site (http://www.sec.gov).
Participants
in Solicitation
The Company and
its respective directors, executive officers and other members of their management and employees, under SEC rules, may be deemed to be
participants in the solicitation of proxies of the Company’s stockholders in connection with the proposed transaction. Investors
and security holders may obtain more detailed information regarding the names, affiliations and interests of the Company’s directors
in its Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which was filed with the SEC on April 12, 2024. Information
regarding the persons who may, under SEC rules, be deemed participants in the solicitation of proxies to the Company’s stockholders
in connection with the proposed transaction will be set forth in the proxy statement for the proposed business combination when available.
Information concerning the interests of the Company’s participants in the solicitation, which may, in some cases, be different
than those of the Company’s equity holders generally, will be set forth in the proxy statement relating to the proposed business
combination when it becomes available.
Item
9.01 Financial Statements and Exhibits
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
|
Better Choice Company Inc. |
|
|
|
|
By: |
/s/
Carolina Martinez |
|
Name: |
Carolina
Martinez |
|
Title: |
Chief
Financial Officer |
|
|
|
September
9, 2024 |
|
|
Exhibit
10.1
Execution
Version
ARRANGEMENT
AGREEMENT
by
and among
BETTER
CHOICE COMPANY INC.
and
1000994476
ONTARIO INC.
and
1000994085
ONTARIO INC.
and
SRX
HEALTH SOLUTIONS INC.
September
3, 2024
SCHEDULES
Schedule
A |
|
Plan
of Arrangement |
Schedule
B |
|
SRx
Arrangement Resolution |
Schedule
C |
|
Representations
and Warranties of SRx |
Schedule
D |
|
Representations
and Warranties of Parent |
Schedule
E |
|
Key
Regulatory Approvals |
Schedule
F |
|
Form
of SRx Voting Agreement |
Schedule
G |
|
SRx
Supporting Shareholders |
ARRANGEMENT
AGREEMENT
THIS
ARRANGEMENT AGREEMENT, dated September 3, 2024, is entered into by and among BETTER CHOICE COMPANY INC., a corporation existing under
the laws of the State of Delaware (“Parent”), 1000994476 ONTARIO INC., a corporation existing under the laws of the
Province of Ontario (“AcquireCo”), 1000994085 ONTARIO INC., a corporation existing under the laws of the Province
of Ontario (“CallCo”), and SRX HEALTH SOLUTIONS INC., a corporation existing under the laws of the Province of Ontario
(“SRx”).
WHEREAS:
A. | Parent,
AcquireCo, CallCo and SRx wish to complete a transaction pursuant to which, among other things,
Parent will, indirectly through AcquireCo, acquire all of the SRx Shares in exchange for
the Consideration, by way of a statutory plan of arrangement, which is to be completed under
the provisions of the OBCA on and subject to the terms and conditions contained herein; |
| |
B. | the
SRx Board has determined, after having considered financial and legal advice, that it would
be advisable and in the best interests of SRx and the SRx Shareholders for the SRx Board
to unanimously recommend that SRx Securityholders vote in favor of the SRx Arrangement Resolution
at the SRx Meeting; |
| |
C. | within
ten (10) Business Days after the date hereof, Parent will enter into the SRx Voting Agreements
with the SRx Supporting Shareholders, pursuant to which, among other things, such SRx Supporting
Shareholders will agree to vote the SRx Shares and any securities convertible, exercisable
or exchangeable into SRx Shares held by them in favor of the SRx Arrangement Resolution (provided,
however, that the SRx Voting Agreement with Adesh Vora has been entered into prior to
or contemporaneously with the execution of this Agreement); |
| |
D. | the
Parent Financial Advisor has advised the Parent Board, and the Parent Board has determined,
that the Arrangement is fair, from a financial point of view, to the Parent Shareholders; |
| |
E. | the
Parent Board has determined, after having considered financial and legal advice, that it
would be advisable and in the best interests of Parent and the Parent Shareholders for the
Parent Board to unanimously recommend that Parent Shareholders vote in favor of the Parent
Shareholder Approval Matters at the Parent Meeting; |
| |
F. | within
ten (10) Business Days after the date hereof, SRx will enter into the Parent Voting Agreements
with the Parent Supporting Shareholders, pursuant to which, among other things, such Parent
Supporting Shareholders will agree to vote the Parent Shares and any securities convertible,
exercisable or exchangeable into Parent Shares held by them in favor of the Parent Shareholder
Approval Matters; |
| |
G. | prior
to the Effective Time, the Locked-Up Persons will enter into the Lock-Up Agreements pursuant
to which, among other things, the Locked-Up Persons will agree to lock-up and not sell, transfer
or otherwise dispose of their respective securities in the capital of Parent or AcquireCo,
as applicable, for a period of 180 days after the Effective Date, subject to customary exceptions; |
| |
H. | the
Parties intend that the plan of arrangement provide certain SRx Shareholders with the opportunity
to exchange SRx Shares for Exchangeable Shares on a tax-deferred basis for Canadian Tax purposes; |
| |
I. | the
Parties have entered into this Agreement to provide for the matters referred to in the foregoing
recitals and for other matters relating to the Arrangement; and |
| |
J. | Capitalized
terms used but not otherwise defined in these recitals have the meanings ascribed to such
terms in Section 1.1. |
NOW
THEREFORE in consideration of the covenants and agreements herein contained and other good and valuable consideration (the receipt
and sufficiency of which are hereby acknowledged), the Parties hereto covenant and agree as follows:
ARTICLE
I.
INTERPRETATION
1.1. | Definitions
In this Agreement, unless the context otherwise requires:”Acceptable Confidentiality Agreement” has the meaning
ascribed thereto in Section 7.3(a)(iv); |
“AcquireCo”
has the meaning ascribed thereto in the recitals above;
“Acquisition
Proposal” means, with respect to SRx, an SRx Acquisition Proposal, and, with respect to Parent, a Parent Acquisition Proposal;
“affiliate”
has the meaning ascribed thereto in the Securities Act;
“Agreement”
means this Arrangement Agreement, including all schedules annexed hereto, together with the SRx Disclosure Letter and the Parent Disclosure
Letter, as the same may be amended, supplemented or otherwise modified from time to time in accordance with the terms hereof;
“Alternative
Acquisition Agreement” has the meaning ascribed thereto in Section 7.2(a)(iv);
“Arrangement”
means the arrangement of SRx under Section 182 of the OBCA on the terms and subject to the conditions set out in the Plan of Arrangement,
subject to any amendments or variations to the Plan of Arrangement made in accordance with the terms of this Agreement or Article 5 of
the Plan of Arrangement or made at the direction of the Court in the Final Order with the consent of the Parties, each acting reasonably;
“Articles
of Arrangement” means the articles of arrangement of SRx in respect of the Arrangement required by the OBCA to be sent to the
Director after the Final Order is made, which shall be in a form and content satisfactory to the Parties, each acting reasonably;
“Authorization”
means any authorization, order, Permit, approval, grant, license, registration, consent, right, notification, condition, franchise, privilege,
certificate, judgment, writ, injunction, award, determination, direction, decision, decree, bylaw, rule or regulation, whether or not
having the force of Law, and includes any environmental Permit;
“Business
Day” means a day other than a Saturday, a Sunday or any other day on which commercial banking institutions in Toronto, Ontario
or Tampa, Florida are authorized or required by applicable Law to be closed;
“CallCo”
has the meaning ascribed thereto in the recitals above;
“Certificate
of Arrangement” means the certificate of arrangement to be issued by the Director pursuant to subsection 183(2) of the OBCA
in respect of the Articles of Arrangement;
“Change
in Recommendation” means, with respect to SRx, an SRx Change in Recommendation and, with respect to Parent, a Parent Change
in Recommendation;
“Claim”
means (a) any suit, action, proceeding, dispute, investigation, claim, arbitration, order, summons, citation, directive, ticket, charge,
demand or prosecution, whether legal or administrative; or (b) any appeal or application for review; whether at law or in equity or by
any Governmental Entity;
“Computer
Systems” means all computer hardware, Software, peripheral equipment, telecommunications systems and network systems that are
used by a Party to operate its business;
“Confidentiality
Agreement” means the confidentiality agreement between SRx and Parent, dated June 18, 2024, as amended from time to time;
“Consideration”
means the consideration to be received by SRx Shareholders pursuant to the Plan of Arrangement in respect of each SRx Share that is issued
and outstanding immediately prior to the Effective Time, being either the Parent Share Consideration or the Exchangeable Share Consideration,
as elected in accordance with the Plan of Arrangement by an SRx Shareholder in respect of each SRx Share held;
“Contract”
means any contract, agreement, license, franchise, lease, arrangement, commitment, joint venture, partnership or other right or obligation
(written or, to the extent enforceable, oral) to which a Party or any of its subsidiaries is a party or by which it or any of its subsidiaries
is bound or to which any of their respective properties or assets is subject;
“Court”
means the Ontario Superior Court of Justice (Commercial List);
“Depositary”
means Equity Stock Transfer LLC or such other Person appointed by SRx and Parent (each acting reasonably), for the purpose of, among
other things, exchanging certificates representing SRx Shares for the Consideration;
“DGCL”
means the Delaware General Corporation Law;
“Director”
means the Director appointed pursuant to Section 278 of the OBCA;
“Dissent
Rights” means the rights of dissent exercisable by the SRx Shareholders under Section 185 of the OBCA or as otherwise determined
by the Court in the Interim Order in respect of the SRx Arrangement Resolution;
“Dissenting
Shareholder” has the meaning ascribed thereto in the Plan of Arrangement;
“Effective
Date” means the date shown on the Certificate of Arrangement giving effect to the Arrangement, which shall be no later than
the Outside Date;
“Effective
Time” has the meaning ascribed thereto in the Plan of Arrangement;
“Employee
Plans” means all benefit or compensation plans, programs, policies, practices, contracts, agreements or other arrangements,
covering current or former employees, directors or consultants of a Party, including employment, consulting, deferred compensation, equity,
benefit, bonus, incentive, pension, retirement, savings, stock purchase, profit sharing, stock option, stock appreciation, phantom stock,
termination, change of control, life insurance, medical, health, welfare, hospital, dental, vision care, drug, sick leave, disability,
and similar plans, programs, arrangements or practices, whether or not in writing and whether or not funded, in each case, which is sponsored,
maintained or contributed to by a Party or any of its affiliates, or to which a Party or any of its affiliates is obligated to contribute,
or with respect to which a Party or any of its affiliates has any liability, direct or indirect, contingent or otherwise, other than
benefit plans established pursuant to statute;
“Encumbrance”
means any Claim, encumbrance, lien, charge, hypothec, pledge, mortgage, title retention agreement, security interest of any nature, adverse
claim, exception, reservation, easement, right of occupation, option, right of pre-emption, privilege or any matter capable of registration
against title or any Contract to create any of the foregoing;
“Environmental
Laws” means all Laws aimed at, or relating to, the reclamation or restoration of properties, occupational health and safety,
protection of the environment, abatement of pollution, protection of wildlife, ensuring public safety from environmental hazards and
all other Laws relating to (a) the management processing, use, treatment, storage, disposal, discharge, transport or handling of any
Hazardous Substances; (b) plant and animal life, (c) lands; or (d) other natural resources;
“Exchangeable
Share Consideration” has the meaning ascribed thereto in the Plan of Arrangement;
“Exchange
Ratio” has the meaning ascribed thereto in the Plan of Arrangement;
“Exchangeable
Shares” means the exchangeable shares in the capital of AcquireCo as set forth in the articles of incorporation of AcquireCo,
and which shall have rights, privileges, restrictions and conditions as agreed to by the Parties, acting reasonably;
“Exchange
Time” has the meaning set out in the Plan of Arrangement;
“Final
Order” means an order of the Court granted pursuant to Section 182(5) of the OBCA, in form and substance acceptable to each
of the Parties, each acting reasonably, approving the Arrangement after a hearing upon the procedural and substantive fairness of the
terms and conditions of the Arrangement, as such order may be affirmed, amended, modified, supplemented or varied by the Court (with
the consent of the Parties, each acting reasonably) at any time prior to the Effective Date or, if appealed, as affirmed or amended (provided,
however, that any such amendment is acceptable to the Parties, each acting reasonably) on appeal, unless such appeal is withdrawn,
abandoned or denied;
“Governmental
Entity” means (a) any multinational or supranational body or organization, nation, government, state, province, country, territory,
municipality, 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 securities exchange, including
the NYSE American, (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;
“Hazardous
Substance” means any waste or other substance that is prohibited, listed, defined, designated or classified as hazardous, radioactive,
corrosive, explosive, infectious, carcinogenic, or toxic or a pollutant or a contaminant under or pursuant to, or that could result in
any Liability under, any applicable Environmental Laws;
“IFRS”
means International Financial Reporting Standards;
“Intellectual
Property” means domestic and foreign intellectual property rights, whether or not registrable, patentable or otherwise formally
protectable, including: (a) inventions (whether patentable or unpatentable and whether or not reduced to practice), patents, applications
for patents and reissues, divisions, continuations, renewals, extensions and continuations-in-part of patents or patent applications;
(b) works, copyrights, copyright registrations and applications for copyright registration, including all moral rights or similar rights
of authorship or attribution; (c) designs, design registrations, design registration applications and integrated circuit topographies;
(d) trade names, business names, corporate names, domain names, website names and world wide web addresses, common law trade-marks, trade-mark
registrations, trade- mark applications, trade dress and logos, and all goodwill related thereto; (e) know-how, trade secrets, proprietary
information, algorithms, formulae, recipes, systems, compositions, manufacturing and production processes, methods and techniques and
related documentation, clinical and testing data, customer and supplier information, and market and survey information; and (f) telephone
numbers, domain names and social media identities, and the goodwill associated with any of the foregoing;
“Interim
Order” means an order of the Court in form and substance acceptable to each of the Parties, acting reasonably, providing for,
among other things, the calling and holding of the SRx Meeting, as the same may be amended by the Court with the consent of the Parties,
each acting reasonably;
“IT
Systems” means Computer Systems, hardware, servers, databases, Software, networks, telecommunications systems and related infrastructure;
“Key
Regulatory Approvals” means those rulings, consents, orders, exemptions, Permits, Authorizations and other approvals of Governmental
Entities, necessary to proceed with the transactions contemplated by this Agreement and the Plan of Arrangement, as listed in Schedule
E hereto;
“Law”
means, with respect to any Person, any and all applicable law (statutory, common, civil or otherwise), constitution, treaty, convention,
ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement, whether domestic or foreign,
enacted, adopted, promulgated or applied by a Governmental Entity that is binding upon or applicable to such Person or its business,
property or securities, and to the extent that they have the force of law, policies, guidelines, notices and protocols of any Governmental
Entity, as amended;
“Latest
Balance Sheet Date” means June 30, 2024.
“Liability”
means, in respect of any Person, any debt, liability or obligation of any kind or nature whatsoever, including (a) any right against
such Person to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured, (b) any right against such Person to an equitable remedy for breach of
performance, whether or not such right to any equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured or unsecured, and (c) any obligation of such Person for the performance of any covenant or agreement (whether for
the payment of money or otherwise);
“Lock-Up
Agreements” means lock-up agreements, to be effective as of the Effective Time, among Parent and each of the Locked-Up Persons,
pursuant to which, among other things, the Locked-Up Persons will agree to lock-up and not sell, transfer or otherwise dispose of their
respective securities in the capital of Parent or AcquireCo, as applicable, for a period of 180 days after the Effective Date, subject
to customary exceptions, in customary form and substance to be agreed upon by the Parties;
“Locked-Up
Persons” means, in each case as of the Effective Time after giving effect to the transactions hereunder, all of the executive
officers, directors and five percent (5%) shareholders of Parent (calculated on a fully-diluted basis, including issuance of Parent Shares
upon exchange of the Exchangeable Shares, but disregarding any awards reserved but not yet issued under equity incentive plans);
“material
change”, “material fact” and “misrepresentation” have the meanings ascribed thereto in
the Securities Act;
“Material
Contract” means any of the following for a Party:
| (a) | any
material management, employment, severance, retention, transaction bonus, change in control,
consulting, relocation, repatriation or expatriation agreement or other similar Contract; |
| | |
| (b) | any
Contract with any distributor, reseller or sales representative with an annual value in excess
of CAD$100,000; |
| | |
| (c) | any
Contract with any manufacturer, vendor, or other Person for the supply of materials or performance
of services by such third party to the Party in relation to the manufacture of the Party’s
products or product candidates with an annual value in excess of CAD$100,000; |
| | |
| (d) | any
agreement or plan, including any stock option plan, stock appreciation right plan or stock
purchase plan, any of the benefits of which will be increased, or the vesting of benefits
of which will be accelerated, by the occurrence of any of the transactions contemplated by
this Agreement; |
| | |
| (e) | any
Contract incorporating or relating to any guaranty, any sharing of liabilities or any indemnity
not entered into in the ordinary course of business, including any indemnification agreements
between a Party and any of its officers or directors; |
| (f) | any
Contract imposing any restriction on the right or ability of the Party or that would by the
terms of the Contract would impose any restriction on the right or ability of the Party:
(i) to compete with any other Person; (ii) to acquire any product or other asset or any services
from any other Person; (iii) to solicit, hire or retain any Person as a director, an officer
or other employee, a consultant or an independent contractor; (iv) to develop, sell, supply,
distribute, offer, support or service any product or any technology or other asset to or
for any other Person; (v) to perform services for any other Person; or (vi) to transact business
with any other Person; |
| | |
| (g) | any
Contract currently in force relating to the disposition or acquisition of assets not in the
ordinary course of business or any ownership interest in any corporation, partnership, joint
venture or other business enterprise; |
| | |
| (h) | any
mortgages, indentures, loans or credit agreements, security agreements or other agreements
or instruments relating to the borrowing of money or extension of credit; |
| | |
| (i) | any
joint marketing or development agreement; |
| | |
| (j) | any
Contract that provides for: (i) any right of first refusal, right of first negotiation, right
of first notification or similar right with respect to any securities or assets of the Party;
(ii) any “no shop” provision or similar exclusivity provision with respect to
any securities or assets of the Party; or (iii) contains most favored nation pricing provisions
with any third party or any requirements or minimum purchase obligations of the Party; |
| | |
| (k) | any
Contract that contemplates or involves the payment or delivery of cash or other consideration
in an amount or having a value in excess of CAD$100,000 or more in the aggregate, or contemplates
or involves the performance of services having a value in excess of CAD$100,000 in the aggregate
other than any arrangement or agreement expressly contemplated or provided for under this
Agreement; |
| | |
| (l) | any
Contract that does not allow the Party to terminate the Contract for convenience with no
more than sixty (60) days prior notice to the other party and without the payment of any
rebate, chargeback, penalty or other amount to such third party in connection with any such
termination in an amount or having a value in excess of CAD$100,000 in the aggregate; or |
| | |
| (m) | with
respect to Parent, any Contract that is a “material contract” as such term is
defined in Item 601(b)(10) of Regulation S-K of the SEC; |
“New
Employment Agreements” means new employment agreements, to be effective at the Effective Time, in form and substance reasonably
acceptable to the Parties, between Parent or SRx, on the one hand, and such current employees of SRx as mutually agreed by the Parties,
on the other hand.
“NYSE
American” means the NYSE American stock exchange; “OBCA” means the Business Corporations Act (Ontario);
“ordinary
course of business” or any similar reference, means, with respect to an action taken by a Person, that such action is consistent
with the past practices (in terms of nature, scope and magnitude) of such Person and is taken in the ordinary course of the normal day-to-day
business and operations of such Person;
“Outside
Date” means January 31, 2025 or such later date as may be agreed to in writing by the Parties; provided, however, that
such initial January 31, 2025 date may be extended (a) by either Parent or SRx upon written notice to the other Party for up to thirty
(30) days from such date or (b) upon mutual written agreement of Parent and SRx to such date as mutually agreed upon.
“Parent”
has the meaning ascribed thereto in the recitals above;
“Parent
Acquisition Proposal” means, other than the transactions contemplated by this Agreement and the Parent Regulation A Offering,
any offer, proposal or inquiry from any Person or group of Persons acting jointly or in concert, whether or not in writing and whether
or not delivered to Parent, after the date hereof relating to: (a) any acquisition or purchase, direct or indirect, of: (i) the assets
of Parent or one or more of its subsidiaries that, individually or in the aggregate, constitute twenty percent (20%) or more of the consolidated
assets of Parent and its subsidiaries, taken as a whole, or which contribute twenty percent (20%) or more of the consolidated revenue
of Parent and its subsidiaries, taken as a whole (or any lease, long-term supply, hedging arrangement, joint venture, strategic alliance,
partnership or other transaction having the same economic effect as a sale of such assets), or (ii) beneficial ownership of twenty percent
(20%) or more of the issued and outstanding voting or equity securities of Parent or any one or more of its subsidiaries that, individually
or in the aggregate, contribute twenty percent (20%) or more of the consolidated revenues or constitute twenty percent (20%) or more
of the consolidated assets of Parent and its subsidiaries, taken as a whole; (b) any take-over bid, tender offer or exchange offer that,
if consummated, would result in such Person or group of Persons beneficially owning twenty percent (20%) or more of the issued and outstanding
voting or equity securities of any class of voting or equity securities of Parent or any of its subsidiaries; (c) any plan of arrangement,
merger, amalgamation, consolidation, share exchange, business combination, reorganization, recapitalization, liquidation, dissolution
or other similar transaction involving Parent or any of its subsidiaries; in all cases, whether in a single transaction or in a series
of related transactions; (d) any direct or indirect sale of assets (or any alliance, joint venture, earn-in right, option to acquire,
lease, license or other arrangement having a similar economic effect as a sale) by Parent or one or more of its subsidiaries, which assets
represent twenty percent (20%) or more of the consolidated assets of Parent and its subsidiaries measured by fair market value, or contribute
twenty percent (20%) or more of the consolidated revenue or operating income of Parent; or (e) any other transaction, the consummation
of which prevents, or materially delays, impedes or interferes with, the transactions contemplated by this Agreement;
“Parent
Amended and Restated Bylaws” means the Amended and Restated Bylaws of Parent, in the form and substance to be determined by
SRx and reasonably acceptable to Parent;
“Parent
Amended and Restated Certificate” means the Amended and Restated Certificate of Incorporation of Parent, which shall be in
form and substance as determined by SRx and reasonably acceptable to Parent;
“Parent
Board” means the board of directors of Parent as the same is constituted from time to time; “Parent Board Matters”
has the meaning ascribed thereto in Section 2.13(a)(i);
“Parent
Board Recommendation” has the meaning ascribed thereto in Section 2.10(c)(iii);
“Parent
Business” means the business and affairs of the Parent Group as described in the Parent Disclosure Documents;
“Parent
Certificate of Designation” means the Certificate of Designation of Preferences, Rights and Limitations of the Special Voting
Share, in the form and substance to be determined by SRx and reasonably acceptable to Parent;
“Parent
Change in Recommendation” occurs or is made when, (a) the Parent Board or any committee of the Parent Board fails to unanimously
recommend or withdraws, amends, modifies or qualifies, publicly proposes or states its intention to do so, or fails to publicly reaffirm
(without qualification) within five (5) Business Days (and in any case prior to the Parent Meeting) after having been requested in writing
by SRx to do so, the Parent Board Recommendation, or (b) the Parent Board or any committee of the Parent Board takes no position or a
neutral position with respect to a Parent Acquisition Proposal for more than five (5) Business Days after a Parent Acquisition Proposal
is made or publicly announced, or (c) the Parent Board or any committee of the Parent Board resolves or publicly proposes to take any
of the foregoing actions;
“Parent
Disclosure Documents” means all information, disclosure, forms, reports, schedules, statements, certifications and other documents,
including all press releases, forms, reports, schedules, financial statements and notes and schedules to such financial statements, management’s
discussion and analysis of financial condition and results of operations, certifications, annual information forms, management information
circulars, material change reports, business acquisition reports and other documents publicly disclosed or filed by the Parent with the
Securities Authorities since January 1, 2024;
“Parent
Disclosure Letter” means the disclosure letter delivered by Parent, AcquireCo and CallCo to SRx prior to or concurrently with
the execution of this Agreement;
“Parent
Financial Advisor” means Strategic Capital Advisors Ltd;
“Parent
Financial Statements” means (a) the audited consolidated financial statements of Parent for the years ended December 31, 2023
and December 31, 2022, including the auditor’s report thereon and the notes thereto; and (b) the unaudited interim consolidated
financial statements of SRx for the six months ended June 30, 2024 and June 30, 2023;
“Parent
Group” means Parent and all of its direct and indirect subsidiaries, including AcquireCo and CallCo;
“Parent
Incentive Plan” means the Better Choice Company, Inc. Amended and Restated 2019 Incentive Award Plan;
“Parent
Material Adverse Effect” means any effect, fact, change, event, occurrence or circumstance that is, or would reasonably be
expected to be, material and adverse to the business, condition (financial or otherwise), properties, assets (tangible or intangible),
liabilities (whether absolute, accrued, conditional or otherwise), capital, operations or results of operations of Parent and its subsidiaries,
taken as a whole, other than any effect arising from, relating to or resulting from, as applicable: (a) the global economy, political
conditions (including the outbreak of war or any acts of terrorism), international trade or securities, financial or credit markets in
general, natural disasters or other acts of God; (b) the pet health industry in general, (c) any generally applicable change in applicable
Law (other than orders, judgments, claims or decrees against Parent or any of its subsidiaries), or accounting standards or the enforcement
or interpretation thereof; (d) a change in the market trading price or trading volume of Parent Shares (it being understood that the
underlying cause of any such change may be taken into consideration when determining whether a Parent Material Adverse Effect has occurred,
unless otherwise excepted under this definition); (e) the announcement of this Agreement, including the impact thereof on the relationships,
contractual or otherwise, on Parent or its subsidiaries with customers, suppliers, business partners, regulators, vendors, Governmental
Entities or other third Persons; (f) any action taken or refrained from being taken by Parent or its subsidiaries in connection with
this Agreement, to the extent SRx has expressly consented to, approved or requested such action in writing following the date of this
Agreement; and (g) any disease outbreaks, pandemics or epidemics or other related condition; provided, however, that (i) in the
event that Parent and its subsidiaries, taken as a whole, are materially and disproportionately affected by an effect described in clause
(a), (b), (c) or (g) above relative to other participants in the industries in which Parent and its subsidiaries operate, the extent
(and only the extent) of such effect, relative to such other participants, on Parent or any of its subsidiaries, taken as a whole, may
be taken into account in determining whether there has been a Parent Material Adverse Effect; and (ii) references in certain sections
of this Agreement to dollar amounts are not intended to be, and shall not be deemed to be, illustrative or interpretive for the purposes
of determining whether a “Parent Material Adverse Effect” has occurred;
“Parent
Meeting” means the special meeting of Parent Shareholders, including any adjournment or postponement thereof, to be called
and held in accordance with this Agreement, for the purpose of voting on the Parent Shareholder Approval Matters and for any other purpose
as may be set out in the Parent Proxy Statement if and as agreed to by SRx;
“Parent
Proxy Statement” shall mean the proxy statement to be sent to the Parent Shareholders in connection with the approval of the
Parent Shareholder Approval Matters.
“Parent
Record Date” has the meaning ascribed thereto in Section 2.10(b);
“Parent
Regulation A Offering” means the securities offering contemplated by the Offering Statement initially filed by Parent with
the SEC on August 30, 2024, as may be amended from time to time, being conducted pursuant to Regulation A promulgated under the Securities
Act.
“Parent
Share Consideration” has the meaning ascribed thereto to the term in the Plan of Arrangement;
“Parent
Shareholder Approval” means the approval of the Parent Shareholder Approval Matters in accordance with the requirements of
applicable Law;
“Parent
Shareholder Approval Matters” has the meaning ascribed thereto in Section 2.11(a);
“Parent
Shareholders” means the holders of Parent Shares; “Parent Shares” means the shares of common stock of Parent;
“Parent
Supporting Shareholders” means the executive officers and directors of Parent. “Parent Tail Policy” has
the meaning ascribed thereto in Section 5.5(a);
“Parent
Voting Agreements” means the voting agreements to be entered into between SRx and the Parent Supporting Shareholders setting
forth the terms and conditions upon which the Parent Supporting Shareholders will agree, among other things, to vote the Parent Shares
and any securities convertible, exercisable or exchangeable into Parent Shares held by them in favor of the Parent Shareholder Approval
Matters, in customary form and substance to be agreed upon by the Parties;
“Parties”
means, collectively, SRx, Parent, AcquireCo and CallCo and “Party” means any one of them;
“Permit”
means any license, permit, certificate, consent, order, grant, approval, agreement, classification, restriction, registration or other
authorization of, from or required by any Governmental Entity;
“Permitted
Encumbrance” means, with respect to a Party:
| (a) | assignments
of insurance provided to landlords (or their mortgagees) pursuant to the terms of any lease
to which the Party or any of its subsidiaries is the tenant; |
| | |
| (b) | statutory
liens for Taxes not yet due and payable and liens for Taxes, assessments and governmental
charges due and being contested in good faith and diligently by appropriate proceedings and
for the payment of which adequate provision has been made in the Party’s financial
statements; |
| | |
| (c) | registered
servitudes, easements, restrictions, rights of way and other similar rights in real property
or any interest therein, provided: (i) the same are not of such nature as to materially restrict,
limit, impair or impede the use of the property subject thereto in the Party’s business;
and (ii) each such encumbrance has been complied with and is in good standing; |
| | |
| (d) | security
given in the ordinary course of the Party’s business to any public utility, municipality
or government or to any statutory or public authority in connection with the operations of
the Party’s business, other than security for borrowed money, provided that such security
does not materially restrict, limit, impair of impede the ability of the Party or any of
its subsidiaries to carry on its business; and |
| | |
| (e) | undetermined
or inchoate liens, charges and privileges incidental to current construction or current operations
and statutory liens, charges, adverse Claims, security interests or Encumbrances to which
any Governmental Entity may be entitled that have not at the time been filed or registered
against the title to the asset or served upon the owner or lessee of the property subject
thereto pursuant to Law and that relate to obligations not due or delinquent, provided that
they do not materially restrict, limit, impair of impede the ability of the Party or any
of its subsidiaries to carry on its business; |
“Person”
includes any individual, firm, partnership, limited partnership, limited liability partnership, joint venture, venture capital fund,
limited liability company, unlimited liability company, association, trust, trustee, executor, administrator, legal personal representative,
estate, body corporate, corporation, company, unincorporated association or organization, Governmental Entity, syndicate or other entity,
whether or not having legal status;
“Personal
Information” means any information (regardless of form) that relates to an identified or identifiable individual; an identifiable
individual is one who can be identified, directly or indirectly, in particular by reference to an identifier, such as a name, an identification
number, location data, an online identifier or to one or more factors specific to the physical, physiological, genetic, mental, economic,
cultural or social identity of that natural person; or any other information about an individual that is defined as “personal data”
or “personal information” by applicable Law. Personal Information may include information such as name, street address, telephone
number, e-mail address, photograph, date of birth, social security / insurance number, driver’s license number or data collected
through an automated license plate recognition system, passport number, financial account information, username and password combinations
or customer or account number, geolocation information of an individual or device, biometric data, medical or health information, cookie
identifiers associated with registration information, or any other browser- or device- specific number or identifier, and web or mobile
browsing or usage information that is linked to the foregoing;
“Plan
of Arrangement” means the plan of arrangement of SRx, substantially in the form of Schedule A hereto, and any amendments
or variations thereto made from time to time in accordance with this Agreement, the plan of arrangement or upon the direction of the
Court in the Final Order with the consent of the Parties, each acting reasonably;
“Proceeding”
means any action, cause of action, claim, demand, litigation, suit, investigation, citation, summons, subpoena, audit, hearing, originating
application to a tribunal, arbitration or other similar proceeding of any nature, civil, criminal, regulatory, administrative or otherwise,
whether in equity or at law, in contract, in tort or otherwise;
“Processing”
means any operation or set of operations that is performed upon data or information, whether or not by automatic means, including collection,
access, acquisition, creation, derivation, recordation, organization, storage, adaptation, alteration, modification, correction, retrieval,
maintenance, consultation, use, disclosure, dissemination, transmission, transfer, sale, making available, alignment, combination, blocking,
storage, retention, deleting, disposal, erasure, destruction, or any other processing (as defined under any Law to which a Party is subject)
of such data or information;
“Reorganization”
has the meaning ascribed thereto in Section 2.19.
“Representative”
means, collectively, in respect of a Person, its subsidiaries and its affiliates and its and their officers, directors, employees, consultants,
advisors, agents or other representatives (including financial, legal or other advisors);
“Reverse
Split” has the meaning ascribed thereto in Section 2.14;
“SEC”
means the U.S. Securities and Exchange Commission;
“SEC
Clearance Date” has the meaning ascribed thereto in Section 2.10(b);
“Section
3(a)(10) Exemption” means the exemption from the registration requirements of the U.S. Securities Act provided by section 3(a)(10)
thereof;
“Securities
Act” means the Securities Act (Ontario) and the rules, regulations, instruments (including national and multilateral
instruments) and published policies made thereunder, as now in effect and as they may be promulgated or amended from time to time;
“Securities
Authorities” means all securities regulatory authorities (including the applicable securities commission or similar regulatory
authorities in the United States and each of the provinces and territories of Canada), the SEC and the NYSE American, that are applicable
to SRx or Parent, as the case may be;
“Securities
Laws” means the Securities Act, together with all other applicable Canadian provincial securities laws, the U.S. Securities
Act, the U.S. Exchange Act, the Sarbanes-Oxley Act of 2002, and applicable securities laws of the United States and the states thereof,
and the rules and regulations and published policies of the securities authorities thereunder, as now in effect and as they may be promulgated
or amended from time to time, and includes the rules and policies of the NYSE American, that are applicable to SRx or Parent, as the
case may be;
“Security
Breach” means any: (a) loss of Personal Information; (b) unauthorized or unlawful Processing, or corruption of Personal Information,
or unauthorized access to the IT Systems; (c) other incident that has compromised the privacy, confidentiality or security of Personal
Information or the security or operation of the IT Systems; or (d) any other incident that may require notification to any Person, any
Governmental Entity or any entity under any Law to which a Party is subject;
“Spin-Out”
“has the meaning ascribed thereto in Section 5.6(b);
“Spin-Out
SPV” “has the meaning ascribed thereto in Section 5.6(a);
“Software”
means computer software and programs (both source code and object code form), all proprietary rights in the computer software and programs
and all documentation and other materials related to the computer software and programs;
“Special
Voting Share” means the special voting share of Parent having substantially the rights, privileges, restrictions and conditions
described in the Voting Trust Agreement and the Parent Certificate of Designation which rights, privileges, restrictions and conditions
shall be agreed to by the Parties, acting reasonably;
“SRx”
has the meaning ascribed thereto in the recitals above;
“SRx
Acquisition Proposal” means, other than the transactions contemplated by this Agreement, any offer, proposal or inquiry from
any Person or group of Persons acting jointly or in concert, whether or not in writing and whether or not delivered to SRx, after the
date hereof relating to: (a) any acquisition or purchase, direct or indirect, of: (i) the assets of SRx or one or more of its subsidiaries
that, individually or in the aggregate, constitute twenty percent (20%) or more of the consolidated assets of SRx and its subsidiaries,
taken as a whole, or which contribute twenty percent (20%) or more of the consolidated revenue of SRx and its subsidiaries, taken as
a whole (or any lease, long-term supply, hedging arrangement, joint venture, strategic alliance, partnership or other transaction having
the same economic effect as a sale of such assets), or (ii) beneficial ownership of twenty percent (20%) or more of the issued and outstanding
voting or equity securities of SRx or any one or more of its subsidiaries that, individually or in the aggregate, contribute twenty percent
(20%) or more of the consolidated revenues or constitute twenty percent (20%) or more of the consolidated assets of SRx and its subsidiaries,
taken as a whole; (b) any take-over bid, tender offer or exchange offer that, if consummated, would result in such Person or group of
Persons beneficially owning twenty percent (20%) or more of the issued and outstanding voting or equity securities of any class of voting
or equity securities of SRx or any of its subsidiaries; (c) any plan of arrangement, merger, amalgamation, consolidation, share exchange,
business combination, reorganization, recapitalization, liquidation, dissolution or other similar transaction involving SRx or any of
its subsidiaries; in all cases, whether in a single transaction or in a series of related transactions; or (d) any direct or indirect
sale of assets (or any alliance, joint venture, earn-in right, option to acquire, lease, license or other arrangement having a similar
economic effect as a sale) by SRx or one or more of its subsidiaries, which assets represent twenty percent (20%) or more of the consolidated
assets of SRx and its subsidiaries measured by fair market value, or contribute twenty percent (20%) or more of the consolidated revenue
or operating income of SRx; or (e) any other transaction, the consummation of which prevents, or materially delays, impedes or interferes
with, the transactions contemplated by this Agreement;
“SRx
Arrangement Resolution” means the special resolution of the SRx Securityholders approving the Plan of Arrangement, which is
to be considered at the SRx Meeting in the form of Schedule B hereto (unless Parent agrees in writing to any changes to such form);
“SRx
Board” means the board of directors of SRx as the same is constituted from time to time; “SRx Board Recommendation”
has the meaning ascribed thereto in Section 2.5(b)(i);
“SRx
Business” means the business and affairs of the SRx Group, being a Canadian healthcare service provider specializing in the
specialty pharmacy of the pharmaceutical industry;
“SRx
Change in Recommendation” occurs or is made when, (a) the SRx Board or any committee of the SRx Board fails to unanimously
recommend or withdraws, amends, modifies or qualifies, publicly proposes or states its intention to do so, or fails to publicly reaffirm
(without qualification) within five (5) Business Days (and in any case prior to the SRx Meeting) after having been requested in writing
by the Parent to do so, the SRx Board Recommendation, or (b) the SRx Board or any committee of the SRx Board takes no position or a neutral
position with respect to an SRx Acquisition Proposal for more than five (5) Business Days after an SRx Acquisition Proposal is made or
publicly announced, or (iii) the SRx Board or any committee of the SRx Board resolves or publicly proposes to take any of the foregoing
actions;
“SRx
Circular” means the notice of the SRx Meeting and accompanying management information circular, including all schedules, appendices
and exhibits thereto and enclosures therewith, to be sent to the SRx Securityholders, as required by the Court in the Interim Order,
in connection with the SRx Meeting, as amended, supplemented or otherwise modified from time to time in accordance with the terms of
this Agreement;
“SRx
Disclosure Letter” means the disclosure letter delivered by SRx to Parent prior to or concurrently with the execution of this
Agreement;
“SRx
Financial Statements” means (a) the audited consolidated financial statements of SRx for the years ended September 30, 2023
and September 30, 2022, including the auditor’s report thereon and the notes thereto; and (b) the unaudited interim consolidated
financial statements of SRx for the nine (9) months ended June 30, 2024 and June 30, 2023;
“SRx
Group” means SRx and all of its direct and indirect subsidiaries;
“SRx
Material Adverse Effect” means any effect, fact, change, event, occurrence or circumstance that is, or would reasonably be
expected to be, material and adverse to the business, condition (financial or otherwise), properties, assets (tangible or intangible),
liabilities (whether absolute, accrued, conditional or otherwise), capital, operations or results of operations of SRx and its subsidiaries,
taken as a whole, other than any effect arising from, relating to or resulting from, as applicable: (a) the global economy, political
conditions (including the outbreak of war or any acts of terrorism), international trade or securities, financial or credit markets in
general, natural disasters or other acts of God; (b) the healthcare industry in general, (c) any generally applicable change in applicable
Law (other than orders, judgments, claims or decrees against SRx or any of its subsidiaries), or accounting standards or the enforcement
or interpretation thereof; (d) the announcement of this Agreement, including the impact thereof on the relationships, contractual or
otherwise, on SRx or its subsidiaries with customers, suppliers, business partners, regulators, vendors, Governmental Entities or other
third Persons; (e) any action taken or refrained from being taken by SRx or its subsidiaries in connection with this Agreement, to the
extent Parent has expressly consented to, approved or requested such action in writing following the date of this Agreement and (f) any
disease outbreaks, pandemics or epidemics or other related condition; provided, however, that (i) in the event that SRx and its
subsidiaries, taken as a whole, are materially and disproportionately affected by an effect described in clause (a), (b), (c) or (f)
above relative to other participants in the industries in which SRx and its subsidiaries operate, the extent (and only the extent) of
such effect, relative to such other participants, on SRx or any of its subsidiaries, taken as a whole, may be taken into account in determining
whether there has been an SRx Material Adverse Effect; and (ii) references in certain sections of this Agreement to dollar amounts are
not intended to be, and shall not be deemed to be, illustrative or interpretive for the purposes of determining whether a “SRx
Material Adverse Effect” has occurred;
“SRx
Meeting” means the special meeting of SRx Securityholders, including any adjournment or postponement thereof, to be called
and held in accordance with the Interim Order to consider the SRx Arrangement Resolution, and for any other purpose as may be set out
in the SRx Circular;
“SRx
Net Debt” means an amount equal to (a) the aggregate indebtedness for borrowed money of SRx (including accrued interest and
prepayment penalties, if applicable) as of 12:01 a.m. ET on the date that is five (5) Business Days before the closing of the Arrangement,
minus (b) all cash and cash equivalents of SRx (including money market accounts, money market funds, money market instruments),
including cash in transit and all such cash and cash equivalents held by third-party processors, as of 12:01 a.m. ET on the date that
is five (5) Business Days before the closing of the Arrangement. For greater clarity, and without limiting the generality of the foregoing,
the aggregate indebtedness for borrowed money of SRx shall include all amounts owed under (i) that certain Credit Agreement, dated September
14, 2023, by and among SRx, the guarantors and lenders named therein, and CWB Maximum Financial Inc., as administrative agent, and (ii)
certain unsecured convertible debentures issued by SRx between November 2022 and January 2023, in each case to the extent unpaid as of
12:01 a.m. ET on the date that is five (5) Business Days before the closing of the Arrangement.
“SRx
RSU” means a restricted stock unit of SRx; “SRx RSU Holders” means the holders of SRx RSUs;
“SRx
Securityholders” means SRx Shareholders, SRx RSU Holders and SRx Warrantholders; “SRx Securityholder Approval”
has the meaning ascribed thereto in Section 2.3(c);
“SRx
Shareholders” means the holders of SRx Shares;
“SRx
Shares” means the common shares in the capital of SRx;
“SRx
Supporting Shareholders” means those SRx shareholders set forth on Schedule G hereto.
“SRx
Tail Policy” has the meaning ascribed thereto in Section 5.5(b);
“SRx
Voting Agreements” means the voting agreements entered into, or to be entered into, between Parent and the SRx Supporting Shareholders
setting forth the terms and conditions upon which the SRx Supporting Shareholders have agreed, or will agree, among other things, to
vote the SRx Shares and any securities convertible, exercisable or exchangeable into SRx Shares held by them in favor of the SRx Arrangement
Resolution, substantially in the form and substance of Schedule F hereto;
“SRx
Warrantholders” means the holders of SRx Warrants;
“SRx
Warrants” means, as may be outstanding at any time, common share purchase warrants to acquire SRx Shares;
“subsidiary”
has the meaning ascribed thereto in the National Instrument 45-106 - Prospectus Exemptions;
“Superior
Proposal” means any unsolicited bona fide written Parent Acquisition Proposal from a Person who is an arm’s length third
party to acquire not less than all of the outstanding Parent Shares or all or substantially all of the assets of the Parent on a consolidated
basis that: (a) complies with Securities Laws and did not result from or involve a breach of Article VII; (b) is capable of being
completed without undue delay, taking into account, all financial, legal, regulatory and other aspects of such proposal and the Person
making such proposal; (c) if any consideration is cash, is not subject to any financing contingency or condition; (d) is not subject
to any due diligence or access condition; (e) does not provide for the payment of any break, termination or other fees or expenses to
the other party in the event that the Parent completes the Arrangement or any similar other transaction with SRx or any of its affiliates
agreed prior to any termination of this Agreement and (f) that the Parent Board determines, in its good faith judgment, after receiving
the advice of its outside legal and financial advisors and after taking into account all the terms and conditions of the Parent Acquisition
Proposal, including all legal, financial, regulatory and other aspects of such Parent Acquisition Proposal and the party making such
Parent Acquisition Proposal, (i) would, if consummated in accordance with its terms, but without assuming away the risk of non-completion,
result in a transaction which is more favorable, from a financial point of view, to the Parent Shareholders than the Arrangement (including
any amendments to the terms and conditions of the Arrangement proposed by SRx pursuant to Section 7.4(b)), and (ii) the failure
to recommend such Parent Acquisition Proposal to the Parent Shareholders would be contrary to the fiduciary duties of the Parent Board;
“Superior
Proposal Matching Period” has the meaning ascribed thereto in Section 7.4(a)(i)(D);
“Superior
Proposal Notice” has the meaning ascribed thereto in Section 7.4(a)(i)(C);
“Support
Agreement” means an agreement to be made among Parent, AcquireCo and CallCo in connection with the Plan of Arrangement in a
form as agreed between the Parties, acting reasonably;
“Tax
Act” means the Income Tax Act (Canada) and the regulations made thereunder, as now in effect and as they may be promulgated
or amended from time to time;
“Tax
Returns” means all domestic and foreign federal, state, provincial, territorial, municipal and local returns, reports, declarations,
disclosures, elections, notices, filings, forms, statements, information statements and other documents (whether in tangible, electronic
or other form) and including any amendments, schedules, attachments, supplements, appendices and exhibits thereto, made, prepared, filed
or required to be made, prepared or filed by Law in respect of Taxes;
“Taxes”
means any and all domestic and foreign federal, state, provincial, municipal, territorial and local taxes, assessments and other governmental
charges, duties, fees, levies, impositions and liabilities imposed by any Governmental Entity (whether payable directly or by withholding
and whether or not requiring the filing of a Tax Return), including pension plan contributions, tax instalment payments, unemployment
insurance contributions and employment insurance contributions, disability, severance, social security, workers’ compensation and
deductions at source, including taxes based on or measured by gross receipts, income, profits, sales, capital, use, and occupation, and
including goods and services, value added, ad valorem, sales, capital gains, capital stock, windfall profits, premium, transfer, franchise,
stamp, license, non- resident withholding, customs, payroll, recapture, employment, excise and property duties and taxes, together with
all estimated taxes, deficiency assessments, interest, penalties, fines and additions to tax imposed with respect to such amounts, and
shall include any liability for such amounts as a result of (i) being a transferee or successor or member of a combined, consolidated,
unitary or affiliated group, or (ii) a contractual obligation to indemnify any Person or other entity;
“Termination
Payment” means an amount equal to US$3,200,000;
“Transaction
Personal Information” has the meaning ascribed thereto in Section 9.1;
“U.S.
Exchange Act” means the United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder;
“U.S.
GAAP” means United States generally accepted accounting principles;
“U.S.
Securities Act” means the United States Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder;
“United
States” and “U.S.” means the United States of America, its territories and possessions, any state of the
United States and the District of Columbia; and
“Voting
Trust Agreement” means an agreement to be made among Parent, AcquireCo and such Person as may be appointed by SRx and Parent
(each acting reasonably), as trustee, in connection with the Plan of Arrangement, in a form as agreed between the Parties, acting reasonably.
1.2. |
Interpretation For the purposes of this
Agreement, except as otherwise expressly provided: |
| (a) | “this
Agreement” means this Arrangement Agreement, including the recitals and Schedules
hereto, and not any particular Article, Section, Section or other subdivision, recital or
Schedule hereof, and includes any agreement, document or instrument entered into, made or
delivered pursuant to the terms hereof, as the same may, from time to time, be supplemented
or amended and in effect; |
| | |
| (b) | the
words “hereof”, “herein”, “hereto”
and “hereunder” and other words of similar import refer to this Agreement
as a whole and not to any particular Article, Section, Section, or other subdivision, recital
or appendix hereof; |
| | |
| (c) | the
word “including” means including without limitation, and “include”
and “includes” have a corresponding meaning; |
| | |
| (d) | the
word “or” is inclusive and not exclusive; |
| | |
| (e) | all
references in this Agreement to a designated “Article”, “Section”
or other subdivision, recital or “Schedule” hereof are references to the designated
Article, Section or other subdivision, recital or Schedule to, this Agreement; |
| | |
| (f) | a
reference to a statute in this Agreement includes all regulations, rules, policies or instruments
made thereunder, all amendments to the statute, regulations, rules, policies or instruments
in force from time to time, and any statutes, regulations, rules, policies or instruments
that supplement or supersede such statute, regulations, rules, policies or instruments; |
| | |
| (g) | the
division of this Agreement into Articles, Sections and other subdivisions, recitals or Schedules,
the inclusion of a table of contents and the insertion of headings and captions are for convenience
of reference only and are not intended to interpret, define or limit the scope, extent or
intent of this Agreement or any provision hereof; and |
| | |
| (h) | Any
reference in a particular Section of the SRx Disclosure Letter or Parent Disclosure Letter
shall be deemed to be an exception to (or, as applicable, a disclosure for purposes of) (i)
the representations and warranties or covenants, as applicable, of SRx or Parent, AcquireCo
and CallCo, as applicable, that are contained in the corresponding Section of this Agreement
and (ii) all other representations, warranties and covenants of SRx or Parent, AcquireCo
and CallCo, as applicable, that are contained in this Agreement if the relevance of that
reference as an exception to (or a disclosure for purposes of) such representations, warranties
and covenants would be reasonably apparent based on the content and context of such disclosure
that such information, item or matter is relevant to such other section or subsection. The
listing of any matter on the SRx Disclosure Letter or Parent Disclosure Letter shall not
be deemed to constitute an admission by SRx or Parent, AcquireCo and CallCo, as applicable,
or to otherwise imply, that any such matter is material, is required to be disclosed by SRx
or Parent, AcquireCo and CallCo, as applicable, under this Agreement or falls within relevant
minimum thresholds or materiality standards set forth in this Agreement. No disclosure in
the SRx Disclosure Letter or Parent Disclosure Letter relating to any possible breach or
violation by SRx or Parent, AcquireCo and CallCo, as applicable, of any Contract or applicable
Law, the enforceability of any Contract, the existence or non-existence of third-party rights
or similar matters or statements shall be construed as an admission or indication with respect
to any of the foregoing. All disclosures in SRx Disclosure Letter or Parent Disclosure Letter
are intended only to allocate rights and risks between the Parties and are not intended to
be admissible against any Party by any Person who is not a party to this Agreement, or give
rise to any claim or benefit to any Person who is not a party to this Agreement. |
1.3. | Number,
Gender and PersonsIn this Agreement, unless the context otherwise requires, words importing
the singular shall include the plural and vice versa, words importing the use of either gender
shall include both genders and neuters. |
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1.4. | Date
for Any ActionIf 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. |
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1.5. | CurrencyUnless
otherwise stated, all references in this Agreement to sums of money are expressed in lawful
money of Canada, and “$” or “CAD$” refers to Canadian dollars. “US$”
refers to the lawful money of the United States. |
| |
1.6. | Accounting
MattersUnless otherwise stated, all accounting terms used in this Agreement in respect
of SRx shall have the meanings attributable thereto under IFRS, and all determinations of
an accounting nature in respect of SRx, required to be made shall be made in a manner consistent
with IFRS consistently applied. |
Unless
otherwise stated, all accounting terms used in this Agreement in respect of Parent, AcquireCo and CallCo shall have the meanings attributable
thereto under U.S. GAAP, and all determinations of an accounting nature in respect of Parent, AcquireCo and CallCo required to be made
shall be made in a manner consistent with U.S. GAAP consistently applied.
1.7. | KnowledgeWhere
any representation or warranty in this Agreement is expressly qualified by reference to the
knowledge of SRx, it shall be deemed to refer to the actual knowledge, after making reasonable
inquiries regarding the relevant subject matter, of any of the President & Chief Executive
Officer and the Chief Financial Officer, in each case as of the date hereof. |
Where
any representation or warranty in this Agreement is expressly qualified by reference to the knowledge of Parent, AcquireCo or CallCo,
it shall be deemed to refer to the actual knowledge, after making reasonable inquiries regarding the relevant subject matter, of any
of the Chief Executive Officer, the Chief Financial Officer and the Chair of the Parent Board, in each case as of the date hereof.
1.8. | SchedulesThe
Schedules annexed to this Agreement are incorporated by reference into this Agreement and
form a part hereof. |
ARTICLE
II.
THE ARRANGEMENT
2.1. | ArrangementThe
Parties agree that the Arrangement will be implemented in accordance with and subject to
the terms and conditions contained in this Agreement and the Plan of Arrangement, pursuant
to which (among other things) each SRx Shareholder (other than SRx Shareholders who have
validly exercised Dissent Rights) shall receive the Consideration for each SRx Share held. |
| |
2.2. | Obligations
of SRxSubject to the terms and conditions of this Agreement, SRx will take all actions
reasonably needed to facilitate the Arrangement in accordance with all applicable Law, including
Securities Laws, to: |
| (a) | apply
for and diligently prosecute a motion to the Court for the Interim Order in connection with
the application for the Final Order in respect of the Arrangement; |
| | |
| (b) | in
accordance with the terms of and the procedures contained in the Interim Order, duly call,
give notice of, convene and hold the SRx Meeting as soon as practicable after the date hereof; |
| | |
| (c) | solicit
proxies of the SRx Shareholders in favor of the SRx Arrangement Resolution and against any
resolution or proposal submitted by any Person that is inconsistent with the SRx Arrangement
Resolution or that would reasonably be expected to materially impair, delay or impede the
completion of any of the transactions contemplated by this Agreement; |
| | |
| (d) | fix
the date of the SRx Meeting, which date shall be no later than thirty-five (35) days following
the SEC Clearance Date, give notice to Parent of the SRx Meeting, and allow Parent and Parent’s
Representatives (including legal counsel) to attend the SRx Meeting; |
| | |
| (e) | subject
to obtaining the approvals as contemplated in the Interim Order and as may be directed by
the Court in the Interim Order, take all steps necessary to submit the Arrangement to the
Court and appear at Court to seek the Final Order as soon as reasonably practicable (and,
in any event, within five (5) Business Days following the approval of the SRx Arrangement
Resolution at the SRx Meeting); |
| | |
| (f) | deliver
the Articles of Arrangement to the Director in accordance with Section 2.8 upon satisfaction
or waiver of the conditions set out in Article VI; and |
| | |
| (g) | consult
with Parent in respect of the actions as set out in this Article II, including providing
Parent with a reasonable opportunity to comment on all draft documentation prepared by SRx
in connection with the foregoing, and to give due consideration to and act reasonably with
respect to adopting such comments. |
2.3. | Interim
OrderAs soon as reasonably practicable after the date of this Agreement, and in any event
no later than three (3) Business Days following the SEC Clearance Date, SRx shall apply to
the Court in a manner and on terms acceptable to Parent, acting reasonably, pursuant to Section
182 of the OBCA and, in cooperation with Parent, prepare, file and diligently pursue an application
for the Interim Order, which shall provide, among other things: |
| (a) | for
the class of Persons to whom notice is to be provided in respect of the Arrangement and the
SRx Meeting and for the manner in which such notice is to be provided; |
| | |
| (b) | for
a fixed record date for the purposes of determining the SRx Securityholders entitled to receive
notice of and vote at the SRx Meeting, which date shall be the close of business on the Business
Day immediately preceding the day on which the SRx Circular is mailed to the SRx Shareholders; |
| | |
| (c) | that
the requisite approval for the SRx Arrangement Resolution shall be two-thirds of the votes
cast by the SRx Shareholders and the SRx Warrantholders, voting together as a single class
(on an as- converted to SRx Share basis in the case of the SRx Warrants), present in person
or by proxy at the SRx Meeting (collectively, “SRx Securityholder Approval”); |
| | |
| (d) | that,
in all other respects, the terms, conditions and restrictions of the constating documents
of SRx relating to a meeting of SRx Shareholders, including quorum requirements, shall apply
in respect of the SRx Meeting; |
| | |
| (e) | for
the grant of Dissent Rights to the SRx Shareholders who are registered SRx Shareholders,
as set out in the Plan of Arrangement; |
| (f) | for
the notice requirements with respect to the presentation of the application to the Court
for the Final Order; |
| | |
| (g) | that
the SRx Meeting may be adjourned or postponed from time to time by SRx in accordance with
the terms of this Agreement without the need for additional approval of the Court; |
| | |
| (h) | that
the Parties intend to rely upon the Section 3(a)(10) Exemption, subject to and conditioned
on the Court’s determination that the Arrangement is substantively and procedurally
fair to the SRx Securityholders, with respect to the issuance of the Consideration to the
SRx Securityholders pursuant to the Arrangement (including pursuant to the exchange of Exchangeable
Shares), to implement the transactions contemplated hereby in respect of the SRx Securityholders; |
| | |
| (i) | that
each SRx Securityholder shall have the right to appear before the Court at the hearing of
the Court to approve the application for the Final Order so long as they enter a notice of
appearance within a reasonable time; and |
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| (j) | for
such other matters as Parent or SRx may reasonably require, subject to obtaining the prior
consent of SRx or Parent, respectively, such consent not to be unreasonably withheld or delayed
provided that such other matters would not reasonably be expected to materially impair, delay
or impede the completion of the transactions contemplated by this Agreement. |
2.4. | SRx
MeetingSubject to the terms of this Agreement: |
| (a) | SRx
agrees to convene and conduct the SRx Meeting in accordance with the Interim Order, the constating
documents of SRx and applicable Law as soon as practicable, and in any event no later than
thirty-five (35) days following the SEC Clearance Date; |
| | |
| (b) | SRx
will promptly advise Parent on a daily basis on each of the last ten (10) Business Days prior
to the date of the SRx Meeting as to the aggregate tally of the proxies received by SRx in
respect of the SRx Arrangement Resolution; |
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| (c) | SRx
will promptly advise Parent of any written communication from or written claims brought by
(or threatened in writing, to be brought by) any SRx Securityholder or any other Person in
opposition to the Arrangement, the SRx Arrangement Resolution or any exercise or purported
exercise by any SRx Shareholder of Dissent Rights received by SRx and any withdrawal of Dissent
Rights received by SRx and any written communications sent by or on behalf of SRx to any
SRx Shareholder exercising or purporting to exercise Dissent Rights; and |
| | |
| (d) | except
as required by applicable Law, SRx will not propose or submit for consideration at the SRx
Meeting any business other than the approval of the SRx Arrangement Resolution without Parent’s
prior written consent, which consent shall not be unreasonably withheld or delayed provided
that such business would not reasonably be expected to materially impair, delay or impede
the completion of the transactions contemplated by this Agreement. |
2.5. | SRx
CircularAs soon as reasonably practicable following execution of this Agreement, but
subject to Section 2.5(c), SRx shall (i) prepare, in consultation with Parent, the
SRx Circular, together with any other documents required by applicable Law and (ii) following
receipt of the Interim Order, cause the SRx Circular to be sent to SRx Securityholders and
any other Person as required by the Interim Order and applicable Law, and, in each case so
as to permit the SRx Meeting to be held by the date specified in Section 2.4(a). SRx
shall ensure that the SRx Circular complies in all material respects with all applicable
Law, does not include any misrepresentation (other than with respect to any information relating
solely to Parent, AcquireCo or CallCo and provided by Parent in writing specifically for
inclusion in the SRx Circular) and contains sufficient detail to permit the SRx Securityholders,
to form a reasoned judgment concerning the Arrangement and the SRx Arrangement Resolution
to be placed before them at the SRx Meeting. SRx shall be permitted to append to the SRx
Circular all of, or selected extracts from, the Parent Proxy Statement. |
| (b) | SRx
shall disclose in the SRx Circular: |
| (i) | that
the SRx Board has unanimously determined, after receiving financial and legal advice, that
(A) the Arrangement is fair and reasonable to the SRx Shareholders, (B) the Arrangement is
in the best interests of SRx, and (C) the SRx Board unanimously recommends that the SRx Securityholders
vote in favor of the SRx Arrangement Resolution (the “SRx Board Recommendation”); |
| | |
| (ii) | that
each SRx Supporting Shareholder has signed an SRx Voting Agreement and agreed to vote all
of such Person’s SRx Shares (including any SRx Shares issued upon the exercise of any
securities convertible, exercisable or exchangeable into or for SRx Shares) in favor of the
SRx Arrangement Resolution, and against any resolution submitted by any Person that is inconsistent
with the Arrangement, subject to the other terms of the SRx Voting Agreements; and |
| | |
| (iii) | such
information as may be required to allow Parent and AcquireCo to rely upon the Section 3(a)(10)
Exemption with respect to the issuance of the Consideration. |
| (c) | Parent
shall promptly provide to SRx all information regarding Parent or its subsidiaries and affiliates,
as required by the Interim Order and applicable Law for inclusion in the SRx Circular, or
in any amendments or supplements to such SRx Circular. Parent shall ensure that no such information
provided by Parent specifically for inclusion in the SRx Circular will contain any misrepresentation
concerning Parent. |
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| (d) | Parent
and its legal counsel shall be given a reasonable opportunity to review and comment on the
SRx Circular and all such other documents required to be filed or distributed to SRx Shareholders
under applicable Laws in connection with the Arrangement. SRx and its legal counsel will
incorporate all reasonable comments of Parent and its legal counsel into the SRx Circular
and all such other documents. The SRx Circular and all such other documents shall be satisfactory
to Parent, acting reasonably, before they are printed, or distributed to SRx Shareholders
or filed with any Governmental Entity. SRx agrees that all information relating solely to
Parent and its subsidiaries and affiliates included in the SRx Circular must be in a form
and content satisfactory to Parent. |
| | |
| (e) | Each
of SRx and Parent shall promptly notify the other Party if at any time before the Effective
Date either becomes aware that the SRx Circular contains a misrepresentation, or otherwise
requires an amendment or supplement. The Parties shall co-operate in the preparation of any
amendment or supplement to the SRx Circular as required or appropriate, and SRx shall promptly
mail or otherwise publicly disseminate any amendment or supplement to the SRx Circular to
SRx Securityholders and, if required by the Court or applicable Law, file the same with any
Governmental Entity and as otherwise required. |
2.6. | Final
OrderIf the Interim Order is obtained and the SRx Arrangement Resolution is passed at
the SRx Meeting in accordance with applicable Law and the Interim Order, then SRx shall take
all steps necessary or desirable to submit the Arrangement to the Court as soon as practicable
(and, in any event, within five (5) Business Days following the SRx Meeting) and apply to
the Court for the Final Order pursuant to Section 185 of the OBCA approving the Arrangement
on terms reasonably satisfactory to each of SRx and Parent. |
2.7. | Court
ProceedingsSubject to the terms of this Agreement, SRx shall diligently pursue, and SRx
and Parent shall cooperate with each other in pursuing, the Interim Order and the Final Order.
SRx will provide Parent and its legal counsel with a reasonable opportunity to review and
comment upon drafts of all material to be filed with the Court in connection with the Interim
Order and the Final Order and will incorporate all reasonable comments of Parent and its
counsel. SRx will ensure that all materials filed with the Court in connection with the Arrangement
are consistent with this Agreement and the Plan of Arrangement. Subject to applicable Law,
SRx will not file any material with the Court in connection with the Arrangement or serve
any such material, and will not agree to modify or amend materials so filed or served, except
with Parent’s prior written consent, such consent not to be unreasonably withheld,
conditioned or delayed; provided, however, that nothing herein shall require Parent
to agree or consent to any increase or change in the Consideration or any modification or
amendment to such filed or served materials that expands or increases Parent’s obligations
set forth in any such filed or served materials or under this Agreement or the Arrangement.
SRx shall also provide to Parent and to Parent’s legal counsel on a timely basis copies
of any notice of appearance or other Court documents served on SRx in respect of the application
for the Interim Order or the Final Order or any appeal therefrom and of any notice, whether
written or oral, received by SRx indicating any intention to oppose the granting of the Interim
Order or the Final Order or to appeal the Interim Order or the Final Order. In addition,
SRx will not object to legal counsel to 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, however, that SRx 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. SRx will also oppose any proposal from any party that the Interim
Order or the Final Order contain any provision inconsistent with this Agreement, and, if
at any time after the issuance of the Final Order and prior to the Effective Time, SRx 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 only after reasonable advance notice to, and in consultation
and cooperation with, Parent. If the Courts in Ontario are closed due to disease outbreaks,
pandemics or epidemics or other related conditions, then the time to make application to
the Court or convene and conduct the SRx Meeting in Section 2.2(d), Section 2.4
and Section 2.6, shall be tolled for such period as the Courts are closed plus
three (3) Business Days; provided that in no event shall such tolling and three (3) Business
Day period extend beyond the Outside Date. |
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2.8. | Articles
of Arrangement and Effective DateThe Articles of Arrangement shall implement the Plan
of Arrangement and will become effective as of the Effective Time. On the second (2nd) Business
Day after the satisfaction or, where permitted, the waiver 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 of those conditions as of the Effective Date) set forth
in Article VI, unless another time or date is agreed to in writing by the Parties,
the Articles of Arrangement shall be filed by SRx with the Director; provided, however,
that the Articles of Arrangement shall not be sent to the Director, for endorsement and
filing by the Director, except as contemplated hereby or with Parent’s prior written
consent. From and after the Effective Time, the Plan of Arrangement will have all of the
effects provided by applicable Law, including the OBCA. Each of SRx and Parent agrees to
amend the Plan of Arrangement at any time prior to the Effective Time in accordance with
Section 8.4 of this Agreement to include such other terms determined to be reasonably
necessary or desirable by Parent or SRx, as the case may be. |
|
(b) |
The
closing of the Arrangement will take place by electronic exchange of documents on the Effective Date, or at such other location as
may be agreed to by the Parties. |
2.9. | Payment
of ConsiderationAt least five (5) Business Days prior to the Effective Date, SRx shall
deliver to Parent the information required for variable ‘B’ (SRx U.S. Dollar
Net Debt) in the definition of Exchange Ratio, and Parent shall deliver to SRx the information
required for variable ‘C’ (30 Day VWAP) in the definition of Exchange Ratio.
Parent and AcquireCo will, following receipt by SRx of the Final Order and prior to the filing
by SRx of the Articles of Arrangement, issue in escrow with the Depositary (the terms and
conditions of such escrow to be satisfactory to the parties, acting reasonably) sufficient
Parent Shares and Exchangeable Shares to satisfy the aggregate Consideration for the SRx
Shares outstanding. |
| (b) | At
the Effective Time, the Depositary shall release all Consideration to the SRx Shareholders
in accordance with the direction of SRx. |
| | |
| (c) | Subject
to the provisions of the Plan of Arrangement, AmalCo shall execute joint elections under
subsection 85(1) or 85(2) of the Tax Act and any equivalent provincial or territorial legislation
with SRx Shareholders who are Eligible Holders (as defined in the Plan of Arrangement) and
who are entitled to receive Exchangeable Shares under the Arrangement, subject to and in
accordance with the Plan of Arrangement. Such election shall be filed on or before the due
date set out in subsection 85(6) of the Tax Act. |
2.10. | Parent
Proxy StatementAs promptly as practicable following execution of this Agreement, but
subject to Section 2.10(c), Parent shall (i) prepare, in consultation with SRx, the
preliminary Parent Proxy Statement (and the letter to shareholders, notice of meeting and
form of proxy included therewith), and (ii) cause the preliminary Parent Proxy Statement
to be filed with the SEC. |
| (b) | Parent
covenants and agrees that the definitive Parent Proxy Statement (including the letter to
shareholders, notice of meeting and form of proxy included therewith), will not, at the time
that the definitive Parent Proxy Statement or any amendment or supplement thereto is first
mailed to the Parent Shareholders and at the time of the Parent Meeting, contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading. Notwithstanding the foregoing, Parent makes no
covenant, representation or warranty with respect to statements made in the definitive Parent
Proxy Statement (and the letter to shareholders, notice of meeting and form of proxy included
therewith) (i) based on information furnished in writing by SRx specifically for inclusion
therein, or (ii) that otherwise reflect information about SRx or the planned business of
Parent or SRx following the Effective Time. Parent shall use commercially reasonable efforts
to cause the definitive Parent Proxy Statement to comply with the applicable rules and regulations
promulgated by the SEC and to respond promptly to any comments of the SEC or its staff. Parent
shall use commercially reasonable efforts to cause the definitive Parent Proxy Statement
to be filed with the SEC, and mailed to the Parent Shareholders as of the record date established
for the Parent Meeting (the “Parent Record Date”), as promptly as practicable
after (A) the 10th day after the preliminary Parent Proxy Statement therefor has been filed
with the SEC if by such date the SEC has not informed Parent that it intends to review the
preliminary Parent Proxy Statement or (B) if the SEC has, by the 10th day after the preliminary
Parent Proxy Statement therefor has been filed with the SEC, informed Parent that it intends
to review the preliminary Parent Proxy Statement, the date on which the SEC confirms that
it has no further comments on the preliminary Parent Proxy Statement (each such date, the
“SEC Clearance Date”). |
| | |
| (c) | Except
in the case of a Parent Change in Recommendation specifically permitted pursuant to Section
7.4, Parent shall disclose in the Parent Proxy Statement: |
| (i) | that
the Parent Board has received a fairness opinion from the Parent Financial Advisor stating
that, as at the date of such opinion, the Consideration to be paid by Parent and AcquireCo
pursuant to the Arrangement is fair, from a financial point of view, to the Parent Shareholders; |
| | |
| (ii) | the
general terms of the fairness opinion from the Parent Financial Advisor and a copy of such
fairness opinion shall be included in the Parent Proxy Statement; |
| | |
| (iii) | that
the Parent Board has unanimously determined, after receiving financial and legal advice,
that (A) the Arrangement is fair and reasonable to the Parent Shareholders, (B) the Arrangement
is in the best interests of the Parent and (C) the Parent Board unanimously recommends that
the Parent Shareholders vote in favor of the Parent Shareholder Approval Matters (the “Parent
Board Recommendation”); and |
| | |
| (iv) | that
each Parent Supporting Shareholder has signed a Parent Voting Agreement and agreed to vote
all of such Person’s Parent Shares (including any Parent Shares issued upon the exercise
of any securities convertible, exercisable or exchangeable into or for Parent Shares) in
favor of the Parent Shareholder Approval Matters, and against any matter submitted by any
Person that is inconsistent with the Arrangement, subject to the other terms of the Parent
Voting Agreements. |
| (d) | SRx
shall promptly provide to Parent all information regarding SRx or its subsidiaries and affiliates,
as required by applicable Law for inclusion in the Parent Proxy Statement, or in any amendments
or supplements to such Parent Proxy Statement. SRx covenants and agrees that no such information
provided by SRx specifically for inclusion in the Parent Proxy Statement will contain any
untrue statement of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading. Without limiting the generality of the foregoing,
SRx shall promptly provide to Parent all financial statements of SRx required to be included
in the Parent Proxy Statement, which financial statements shall comply in all material respects
with all applicable accounting requirements and with the rules and regulations of the SEC,
the U.S. Exchange Act and the U.S. Securities Act, including applicable “staleness”
requirements; |
| (e) | SRx
and its legal counsel shall be given a reasonable opportunity to review and comment on the
Parent Proxy Statement and all such other documents required to be filed or distributed to
Parent Shareholders in connection with the Arrangement. Parent and its legal counsel will
incorporate all reasonable comments of SRx and its legal counsel into the Parent Proxy Statement
and all such other documents. The Parent Proxy Statement and all such other documents shall
be satisfactory to SRx, acting reasonably, before they are printed, or distributed to Parent
Shareholders or filed with any Governmental Entity, subject to any disclosure obligations
imposed on Parent by any Securities Authorities. Parent agrees that all information relating
solely to SRx and its subsidiaries and affiliates included in the Parent Proxy Statement
must be in a form and content satisfactory to SRx. |
| | |
| (f) | Each
of SRx and Parent shall promptly notify the other Party if at any time before the Effective
Date either becomes aware that the Parent Proxy Statement contains any untrue statement of
a material fact or omits to state any material fact required to be stated therein or necessary
in order to make the statements made therein, in light of the circumstances under which they
were made, not misleading, or otherwise requires an amendment or supplement, and the Parties
shall co-operate in the preparation of any amendment or supplement to the Parent Proxy Statement
as required or appropriate. Parent shall promptly mail or otherwise publicly disseminate
any amendment or supplement to the Parent Proxy Statement to Parent Shareholders and, if
required by applicable Law, file the same with any Governmental Entity and as otherwise required. |
| | |
| (g) | Parent
shall keep SRx informed of any requests or comments made by any Securities Authorities in
connection with the Parent Proxy Statement and, as promptly as reasonably practicable, provide
SRx with copies of any correspondence received by Parent from, or sent by Parent to, any
Securities Authorities in connection with the Parent Proxy Statement. |
2.11. | Parent
MeetingParent shall take all action necessary under applicable Law to call, give notice
of and hold the Parent Meeting as soon as practicable, and in any event no later than sixty
(60) days following the SEC Clearance Date, to vote on the (i) transactions contemplated
by this Agreement, (ii) issuance of Parent Shares pursuant to this Agreement and the Plan
of Arrangement, (iii) Parent Amended and Restated Articles and Parent Amended and Restated
Bylaws, (iv) change of control of Parent resulting from the transaction contemplated by this
Agreement pursuant to rules of the NYSE American, (v) Reverse Split, if so determined by
the Parent Board in accordance with Section 2.14, (vi) increase in the number of authorized
shares of Parent to an amount to be determined by SRx and to create the Special Voting Share,
(vii) amendment to the Parent Incentive Plan to increase the number of Parent Shares reserved
for awards (taking into account the annual “evergreen” adjustment) to twenty
percent (20%) of the number of Parent Shares outstanding immediately after the Effective
Time (calculated on a fully-diluted basis, including issuance of Parent Shares upon exchange
of the Exchangeable Shares), and (viii) the Parent Board Matters, in each case to the extent
required by applicable Law (collectively, the “Parent Shareholder Approval Matters”).
The Parent Meeting shall be held as promptly as practicable, and in any event within sixty
(60) days, after the definitive Parent Proxy Statement is mailed to Parent Shareholders as
of the Parent Record Date. Parent shall take commercially reasonable measures to ensure that
all proxies solicited in connection with the Parent Meeting are solicited in compliance with
all applicable Law. Notwithstanding anything to the contrary contained herein, if on a date
preceding the date on which the Parent Meeting is scheduled, Parent reasonably believes that
(A) it will not receive proxies sufficient to obtain the Parent Shareholder Approval, whether
or not a quorum would be present or (B) it will not have sufficient Parent Shares represented
(either in person or by proxy) to constitute a quorum necessary to conduct the business of
the Parent Meeting, Parent may (or will, at SRx’s direction) postpone or adjourn, or
make one or more successive postponements or adjournments of, the Parent Meeting, provided
that (1) the date of the Parent Meeting is not postponed or adjourned more than an aggregate
of fifteen (15) days in connection with any postponements or adjournments in reliance on
the preceding sentence, (2) Parent shall not be required to postpone or adjourn the Parent
Meeting more than once at SRx’s direction and (III) the postponed or adjourned Parent
Meeting is held at least ten (10) Business Days in advance of the Outside Date. In addition,
Parent may postpone or adjourn the Parent Meeting to allow reasonable additional time for
the filing and mailing of any amendment or supplement to the Parent Proxy Statement that
the Parent Board determines in good faith to be required or advisable pursuant to Section
2.10(f), and for such amendment or supplement to be disseminated and reviewed by the
Parent Shareholders prior to the Parent Meeting, provided that the postponed or adjourned
Parent Meeting is held at least ten (10) Business Days in advance of the Outside Date. |
| (b) | Parent
will promptly advise SRx on a daily basis on each of the last ten (10) Business Days prior
to the date of the Parent Meeting as to the aggregate tally of the proxies received by Parent
in respect of the Parent Shareholder Approval Matters. |
| | |
| (c) | Except
in the case of a Parent Change in Recommendation specifically permitted pursuant to Section
7.4, Parent agrees that (i) the Parent Board shall unanimously issue the Parent Board
Recommendation that the Parent Shareholders vote in favor of the Parent Shareholder Approval
Matters and shall use commercially reasonable efforts to solicit such approval within the
timeframe set forth in Section 2.11(a) and (ii) the Parent Board Recommendation shall
not be withdrawn or modified in a manner adverse to SRx, and no resolution by the Parent
Board or any committee thereof to withdraw or modify the Parent Board Recommendation in a
manner adverse to SRx shall be adopted or proposed; and (iii) Parent shall use its reasonable
best efforts to solicit proxies from the Parent Shareholders to obtain the Parent Shareholder
Approval. |
2.12. | Obligations
Regarding Exchangeable SharesParent, AcquireCo and CallCo shall, on a joint and several
basis, use their commercially reasonable efforts: |
| (a) | to
cause the listing and admission to trading on the NYSE American of the Parent Shares to be
issued at the Exchange Time and from time to time upon exchange of the Exchangeable Shares; |
| | |
| (b) | to
ensure that AcquireCo is, at the Effective Time and for so long as there are Exchangeable
Shares outstanding (other than those Exchangeable Shares held by Parent, CallCo or any of
its affiliates), a “taxable Canadian corporation” and not a “mutual fund
corporation,” each within the meaning of the Tax Act (as of the Effective Time and
any modifications to such definitions which are consistent with the principles thereof); |
| | |
| (c) | to
file a registration statement on Form S-3 (or, if Parent is not eligible to use Form S-3,
such other form of registration statement as is appropriate) in order to register under the
U.S. Securities Act the Parent Shares to be issued upon exchange of the Exchangeable Shares
from time to time after the Effective Time, and use its commercially reasonable efforts to
cause such registration statement to become effective as promptly as reasonably practicable
following the Effective Time and to maintain the effectiveness of such registration for the
period that such Exchangeable Shares remain outstanding; |
| | |
| (d) | to
enter into the Support Agreement and the Voting Trust Agreement effective as of the Effective
Time; and |
| | |
| (e) | take
all actions required in order to create and issue the Special Voting Share as of the Effective
Time. |
2.13. | Parent
Post-Closing GovernanceUnless otherwise agreed by the Parties, at the Effective Time,
and subject to applicable Laws, including applicable NYSE American requirements relating
to director independence: |
| (i) | all
members of the Parent Board, other than Kent Cunningham, Michael Young and Lionel Conacher,
will resign, and the Parent Board shall be reconstituted such that it will consist of the
following five (5) members (collectively, the “Parent Board Matters”): |
| (A) | two
(2) director nominees selected by SRx in its sole discretion prior to the date on which the
Parent Proxy Statement is filed with the SEC, one (1) of whom shall be independent in accordance
with NYSE American requirements (presently intended to be Adesh Vora and David White, with
the former as Chairman and the latter as the independent director); and |
| | |
| (B) | two
(2) director nominees selected by Parent in its sole discretion prior to the date on which
the Parent Proxy Statement is filed with the SEC, one (1) of whom shall be independent in
accordance with NYSE American requirements (presently intended to be Kent Cunningham and
Michael Young, with the latter as the independent director); and |
| | |
| (C) | one
(1) director nominee mutually selected by the Parties prior to the date on which the Parent
Proxy Statement is filed with the SEC, who shall be independent in accordance with NYSE American
requirements (presently intended to be Lionel Conacher); |
| (ii) | all
executive officers of the Parent will resign from their offices currently held, except for
Nina Martinez in her capacity as Chief Financial Officer, and the executive officers of the
Parent shall consist of the following: |
| (A) | Adesh
Vora as Chief Executive Officer; |
| | |
| (B) | Dave
Sohi as President; and |
| | |
| (C) | Nina
Martinez as Chief Financial Officer. |
2.14. | Reverse
SplitParent may, but is not required to, submit to the Parent Shareholders at the Parent
Meeting a proposal to authorize the Parent Board to effect a reverse stock split of all outstanding
Parent Shares on the basis of a reverse stock split ratio within the range of one (1) new
Parent Share for up to three (3) “old” Parent Shares then outstanding, with such
ratio to be determined solely by the Parent Board (the “Reverse Split”);
provided, however, that the Parent Board shall have sole discretion as to (a) whether
to submit such proposal and (b) if such proposal is submitted and approved by the Parent
Shareholders, whether to implement the Reverse Split. Following any such approval by the
Parent Shareholders, the Parent Board may implement the Reverse Split on at least five (5)
Business Days’ prior written notice to SRx. For the avoidance of doubt, if the Reverse
Split is implemented, the Exchange Ratio shall be adjusted accordingly such that the Parties
obtain the same economic position following the Reverse Split as they were entitled to prior
to the Reverse Split. |
| |
2.15. | Announcements
and ConsultationsParent and SRx shall consult with each other in respect to issuing any
press release, preparing any presentations or otherwise making any public statement with
respect to this Agreement or the Arrangement and, except as otherwise set forth in this Agreement,
in making any filing with any Governmental Entity with respect to this Agreement or the Arrangement.
Each of Parent and SRx shall use all commercially reasonable efforts to enable the other
Party to review and comment on all such press releases, presentations, public statements
and, except as otherwise set forth in this Agreement, filings prior to the release or filing,
respectively, thereof, and neither Parent nor SRx shall release, make or file any press release,
presentation, public statements or, except as otherwise set forth in this Agreement, filing
without the prior written consent of the other Party (which consent shall not be unreasonably
withheld or delayed); provided, however, that the obligations herein shall not prevent
a Party from making such disclosure as is required by applicable Law or the rules and policies
of any applicable securities exchange, and the Party making such disclosure shall use all
commercially reasonable efforts to enable the other Party to review or comment on the disclosure
or filing, and if such prior notice is not possible, to give such notice immediately following
the making of such disclosure or filing. Reasonable consideration shall be given to any comments
made by the other Party and its counsel. |
2.16. | Withholding
TaxesSRx, Parent, AcquireCo, CallCo, the Depositary and their respective agents in connection
with the Arrangement shall be entitled to deduct and withhold from any dividend or consideration
payable to any Person (including, for greater certainty, any SRx Shareholder, any SRx RSU
Holder, any SRx Warrantholder and any Dissenting Shareholder), such amounts as SRx, Parent,
AcquireCo, CallCo, the Depositary, or their respective agents are required to deduct and
withhold with respect to such payment under the Tax Act, United States Tax Laws or any other
applicable Law. To the extent that amounts are so withheld, such withheld amounts shall be
treated for all purposes hereof as having been paid to the holder of the securities in respect
of which such deduction and withholding was made, provided that such withheld amounts are
actually remitted to the appropriate Governmental Entity. SRx, Parent, AcquireCo, CallCo,
the Depositary and their respective agents are hereby authorized to sell or otherwise dispose
of such portion of the non-cash consideration as is necessary to provide sufficient funds
to SRx, Parent, AcquireCo, CallCo, the Depositary or their respective agents, as the case
may be, to enable it to comply with such deduction or withholding requirement and SRx, Parent,
AcquireCo, CallCo the Depositary, or their respective agents, as applicable, shall notify
the holder thereof and remit any unapplied balance of the net proceeds of such sale. Any
such sale will be made in accordance with applicable Law and at prevailing market prices
and none of SRx, Parent, AcquireCo, CallCo, the Depositary, or any of their respective agents
shall be under any obligation to obtain a particular price, or indemnify any Person (including,
for greater certainty, any SRx Shareholder, any SRx RSU Holder, any SRx Warrantholder and
any Dissenting Shareholder) in respect of a particular price, for the portion of the non-cash
consideration so sold. |
| |
2.17. | Treatment
of SRx RSUs and SRx WarrantsAt the Effective Time, pursuant to the Plan of Arrangement,
each SRx RSU outstanding immediately prior to the Effective Time will vest and constitute
issued and outstanding SRx Shares for all purposes under this Agreement. |
|
(b) |
At
the Effective Time, pursuant to the Plan of Arrangement, each SRx Warrant outstanding and not already exercised in accordance with
the terms thereof, will be terminated. |
2.18. | U.S.
Securities Law MattersThe Parties intend that the Arrangement shall be carried out such
that the issuance of the Parent Shares and Exchangeable Shares to SRx Shareholders in exchange
for SRx Shares qualifies for the exemption from the registration requirements of the U.S.
Securities Act provided by the Section 3(a)(10) Exemption and applicable U.S. state securities
laws in reliance upon similar exemptions under applicable U.S. state securities laws. Each
Party agrees to act in good faith, consistent with the intent of the Parties and the intended
treatment of the Arrangement as set forth in this Section 2.18. In order to ensure
the availability of the Section 3(a)(10) Exemption, the Parties agree that the Arrangement
will be carried out on the following basis: |
| (a) | the
Arrangement will be subject to the approval of the Court; |
| | |
| (b) | the
Court will be advised as to the intention of the Parties to rely on the Section 3(a)(10)
Exemption prior to the Court hearing required to issue the Interim Order; |
| | |
| (c) | the
Court will be required to satisfy itself as to the substantive and procedural fairness of
the Arrangement to the SRx Shareholders; |
| | |
| (d) | the
Court will hold a hearing before approving the procedural and substantive fairness of the
terms and conditions of the Arrangement; |
| | |
| (e) | the
Final Order will expressly state that the Arrangement is approved by the Court as being substantively
and procedurally fair to the SRx Shareholders to whom Parent Shares and Exchangeable Shares
will be issued; |
| (f) | the
Parties will ensure that each SRx Shareholder entitled to receive Parent Shares or Exchangeable
Shares on completion of the Arrangement will (i) be given adequate notice advising them of
their right to attend the Court hearing and providing them with sufficient information necessary
for them to exercise that right; (ii) be advised that the Parent Shares and Exchangeable
Shares issuable pursuant to the Arrangement have not been and will not be registered under
the U.S. Securities Act and will be issued by Parent and AcquireCo in reliance on the Section
3(a)(10) Exemption, and that certain restrictions on resale under the securities laws of
the United States, including, as applicable, Rule 144 under the United States Securities
Act of 1933, as amended (the “U.S. Securities Act”), may be applicable
with respect to securities issued to “affiliates” (as defined in Rule 144 under
the U.S. Securities Act) of Parent or AcquireCo, as applicable; and (iii) each SRx Shareholder
entitled to receive Exchangeable Shares pursuant to the Arrangement will be advised that
the 3(a)(10) Exemption does not exempt the issuance of securities upon the exchange of such
Exchangeable Shares and that; therefore, the Parent Shares issuable upon exchange of the
Exchangeable Shares cannot be issued in reliance on the Section 3(a)(10) Exemption, and such
Parent Shares issuable upon exchange of the Exchangeable Shares may only be issued and subsequently
resold pursuant to one or more alternative exemptions from registration or an effective registration
statement under the U.S. Securities Act and compliance with applicable state securities laws; |
| | |
| (g) | the
Interim Order will specify that each SRx Shareholder entitled to receive Parent Shares or
Exchangeable Shares on completion of the Arrangement will have the right to appear before
the Court at the Court hearing on the Final Order so long as such SRx Shareholder enters
an appearance within a reasonable time and in accordance with the requirements of the Section
3(a)(10) Exemption; and |
| | |
| (h) | Parent
will request that the Final Order include a statement to substantially the following effect:
“This Order will serve as a basis of a claim to an exemption, pursuant to Section 3(a)(10)
of the U.S. Securities Act from the registration requirements otherwise imposed by the U.S.
Securities Act, regarding the distribution of Parent Shares or Exchangeable Shares, pursuant
to the Plan of Arrangement.” |
2.19. | U.S.
Tax MattersThe Arrangement is intended to qualify as a reorganization within the meaning
of Section 368(a) of the U.S. Tax Code and the Treasury Regulations promulgated thereunder
(a “Reorganization”), and this Agreement, together with the Plan of Arrangement,
is intended to be, and is hereby adopted as a “plan of reorganization” within
the meaning of the Treasury Regulations promulgated under Section 368 of the U.S. Tax Code.
The Parties will cooperate with each other to make any changes to the terms of the Arrangement,
reasonably requested by the other party upon advice of tax counsel, necessary for the Arrangement
to qualify as a Reorganization; provided that no Party hereto provides any assurances or
representations regarding the qualification of the Arrangement as a Reorganization. Provided
the Arrangement satisfies all of the applicable requirements of a Reorganization, each Party
agrees to treat the Arrangement as a Reorganization for all United States federal income
tax purposes, to treat this Agreement, together with the Plan of Arrangement, as a “plan
of reorganization” within the meaning of the Treasury Regulations promulgated under
Section 368 of the U.S. Tax Code, and to not take any position on any Tax return or otherwise
take any Tax reporting position inconsistent with such treatment, unless otherwise required
as a result of a “determination” within the meaning of Section 1313(a) of the
U.S. Tax Code. Following the Effective Date, Parent will prepare and file in accordance with
Treasury Regulations (including by posting a copy on the investor relations section of its
website) an IRS Form 8937 with respect to the Arrangement. Each Party agrees to act in good
faith, consistent with the intent of the Parties and the intended treatment of the Arrangement
as set forth herein and to use commercially reasonable efforts to not take any action, or
knowingly fail to take any action, if such action or failure to act would reasonably be expected
to prevent the Arrangement from qualifying as a Reorganization. Notwithstanding the foregoing,
no Party hereto makes any representation, warranty or provides any other assurances to any
SRx Shareholder, SRx RSU Holder, or SRx Warrantholder regarding the U.S. tax treatment of
the Arrangement. |
ARTICLE
III.
REPRESENTATIONS
AND WARRANTIES OF SRX
3.1. | Representations
and Warranties of SRxExcept as disclosed in the SRx Disclosure Letter, SRx represents
and warrants to Parent as set forth in Schedule C hereto and acknowledges and agrees
that Parent is relying upon such representations and warranties in connection with the entering
into of this Agreement. Any investigation by Parent or its Representatives shall not mitigate,
diminish or affect the representations and warranties of SRx pursuant to this Agreement. |
| |
3.2. | Survival
of Representations and WarrantiesThe representations and warranties of SRx contained
in this Agreement shall not survive the completion of the Arrangement and shall expire and
be terminated on the earlier of the Effective Time and the date on which this Agreement is
terminated in accordance with its terms. |
ARTICLE
IV.
REPRESENTATIONS
AND WARRANTIES OF PARENT, ACQUIRECO AND CALLCO
4.1. | Representations
and Warranties of ParentExcept as disclosed in the Parent Disclosure Letter, each of
Parent, AcquireCo and CallCo jointly and severally represents and warrants to SRx as set
forth in Schedule D hereto and acknowledges and agrees that SRx is relying upon such
representations and warranties in connection with the entering into of this Agreement. Any
investigation by SRx or its Representatives shall not mitigate, diminish or affect the representations
and warranties of Parent, AcquireCo and CallCo pursuant to this Agreement. |
| |
4.2. | Survival
of Representations and WarrantiesThe representations and warranties of Parent, AcquireCo
and CallCo contained in this Agreement shall not survive the completion of the Arrangement
and shall expire and be terminated on the earlier of the Effective Time and the date on which
this Agreement is terminated in accordance with its terms. |
ARTICLE
V.
COVENANTS
5.1. | Covenants
of Parent, AcquireCo and CallCo Relating to the ArrangementExcept such actions as are
expressly permitted pursuant to any other term of this Agreement, Parent, AcquireCo and CallCo
shall, on a joint and several basis, perform all obligations required to be performed by
Parent, AcquireCo and CallCo under this Agreement, co-operate with SRx in connection therewith,
and do all such other acts and things as may be necessary or desirable in order to consummate
and make effective, as soon as reasonably practicable, the Arrangement and the other transactions
contemplated in this Agreement and, without limiting the generality of the foregoing, Parent,
AcquireCo and CallCo shall: |
| (a) | apply
for and use all commercially reasonable efforts in co-operation with SRx to obtain all Key
Regulatory Approvals and, in doing so, keep SRx informed in a timely manner as to the status
of the proceedings or other actions related to obtaining the Key Regulatory Approvals, including
(i) providing SRx with copies of all related applications and notifications, in draft form,
in order for SRx to provide its comments thereon, and Parent, AcquireCo and CallCo shall
consult with the SRx on any comments provided in good faith; (ii) promptly furnishing to
SRx copies of notices or other formal communications received by Parent, AcquireCo or CallCo
from, or given by Parent, AcquireCo or CallCo to, any Governmental Entity (including any
Securities Authority) with respect to the transactions contemplated by this Agreement or
otherwise; (iii) not making any commitments, providing any undertakings or assuming any obligations,
in each case, that are outside the ordinary course of business, without the prior written
consent of SRx; and (iv) subject to applicable Law, each of Parent, AcquireCo and CallCo
shall, to the extent reasonably practicable, provide SRx and its counsel with the opportunity
to participate in any substantive meeting, teleconference or other material communication
with any Governmental Entity in respect of any filing, investigation or other inquiry in
connection with the Key Regulatory Approvals; |
| | |
| (b) | use
all commercially reasonable efforts to satisfy all conditions precedent in this Agreement
in its power to satisfy and comply promptly with all requirements which applicable Law may
impose on Parent, AcquireCo and CallCo with respect to the Arrangement or the other transactions
contemplated by this Agreement and including effecting all necessary registrations, filings
and submissions of information requested by Governmental Entities required to be effected
by Parent, AcquireCo, CallCo or any of their subsidiaries in connection with the Arrangement
and cooperating with SRx in connection with its performance of its obligations hereunder; |
| (c) | use
all commercially reasonable efforts to defend all lawsuits or other legal, regulatory or
other proceedings against Parent, AcquireCo or CallCo challenging or affecting this Agreement
or the consummation of the transactions contemplated hereby and use all commercially reasonable
efforts to have lifted or rescinded any injunction or restraining order or other order relating
to Parent, AcquireCo or CallCo which may materially impede the ability of the Parties to
consummate the Arrangement or the other transactions contemplated by this Agreement; |
| | |
| (d) | use
all commercially reasonable efforts to obtain, and to assist SRx with respect to obtaining,
as applicable, all consents, waivers or approvals required under all Material Contracts,
including waivers required in connection with any change of control provisions contained
in any Material Contracts; |
| | |
| (e) | use
all commercially reasonable efforts to take, or cause to be taken, all actions and do or
cause to be done all things reasonably necessary, proper or advisable on its part under applicable
Law and the policies of NYSE American to enable the listing on NYSE American by Parent of
the Parent Shares on the Effective Date; |
| | |
| (f) | use
its commercially reasonable efforts to ensure that the Section 3(a)(10) Exemption is available
for the issuance of Consideration to the SRx Shareholders in exchange for their SRx Shares
pursuant to the Plan of Arrangement; |
| | |
| (g) | until
the earlier of the Effective Time and termination of this Agreement in accordance with its
terms, subject to applicable Law, make available and cause to be made available to SRx, and
its Representatives, information reasonably requested by SRx for the purposes of preparing,
considering and implementing integration and strategic plans for the acquisition by Parent
of SRx following the Effective Date; and |
| | |
| (h) | until
the earlier of the Effective Time and termination of this Agreement in accordance with its
terms, Parent, AcquireCo and CallCo shall, to the extent not precluded by applicable Law,
promptly notify SRx, in writing, and promptly provide copies of any related documentation
received, when Parent has knowledge of: |
| (i) | any
notice or other communication from any Person alleging that the consent (or waiver, permit,
exemption, order, approval, agreement, amendment or confirmation) of such Person (or other
Person) is or may be required in connection with this Agreement or the Arrangement; |
| | |
| (ii) | any
notice or other communication from any Governmental Entity in connection with the Arrangement
or this Agreement; |
| | |
| (iii) | any
matter that has resulted in, or is reasonably likely to result in, a condition set forth
in Section 6.1 or 6.3 not being satisfied; |
| | |
| (iv) | the
failure of Parent, AcquireCo or CallCo to perform any obligations to be performed by it under
this Agreement such that any conditions set forth in Section 6.1 or 6.3 would
not be satisfied; or |
| | |
| (v) | any
filing, actions, suits, claims, investigations or proceedings commenced or, to the knowledge
of Parent, AcquireCo or CallCo, threatened orally or in writing against, or, in respect of
any filing, actions, suits, claims, investigations or proceedings existing as at the date
hereof, if any additional filing, actions, suits, claims, investigations or proceedings are
made or threatened orally or in writing, in each case relating to or involving or otherwise
affecting Parent, its subsidiaries or any of their respective assets that would reasonably
be expected to be material to Parent and its subsidiaries, taken as a whole; and |
| (i) | not
take any action, or refrain from taking any commercially reasonable action, or permit any
action to be taken or not taken, which is inconsistent with this Agreement or which would
reasonably be expected to, individually or in the aggregate, prevent, materially delay or
otherwise materially impede the consummation of the Arrangement. |
5.2. | Covenants
of SRx Relating to the ArrangementExcept such actions as are expressly permitted pursuant
to any other term of this Agreement, SRx shall perform all obligations required to be performed
by SRx under this Agreement, co-operate with Parent in connection therewith, and do all such
other acts and things as may be necessary or desirable in order to consummate and make effective,
as soon as reasonably practicable, the Arrangement and the other transactions contemplated
in this Agreement and, without limiting the generality of the foregoing, SRx shall: |
| (a) | apply
for and use all commercially reasonable efforts in co-operation with Parent to obtain all
Key Regulatory Approvals and, in doing so, keep Parent informed in a timely manner as to
the status of the proceedings or other actions related to obtaining the Key Regulatory Approvals,
including (i) providing Parent with copies of all related applications and notifications,
in draft form, in order for Parent to provide its comments thereon, and SRx shall consult
with the Parent on any comments provided in good faith; (ii) promptly furnishing to Parent
copies of notices or other formal communications received by SRx from, or given by SRx to,
any Governmental Entity (including any Securities Authority) with respect to the transactions
contemplated by this Agreement or otherwise; (iii) not making any commitments, providing
any undertakings or assuming any obligations, in each case, that are outside the ordinary
course of business, without the prior written consent of Parent; and (iv) subject to applicable
Law, SRx shall, to the extent reasonably practicable, provide Parent and its counsel with
the opportunity to participate in any substantive meeting, teleconference or other material
communication with any Governmental Entity in respect of any filing, investigation or other
inquiry in connection with the Key Regulatory Approvals; |
| | |
| (b) | use
all commercially reasonable efforts to satisfy all conditions precedent in this Agreement
in its power to satisfy and take all steps set forth in the Interim Order and Final Order
applicable to it and comply promptly with all requirements which applicable Law may impose
on SRx with respect to the Arrangement or the other transactions contemplated by this Agreement
and including effecting all necessary registrations, filings and submissions of information
requested by Governmental Entities required to be effected by SRx or its subsidiaries in
connection with the Arrangement and cooperating with Parent in connection with its performance
of its obligations hereunder; |
| | |
| (c) | use
all commercially reasonable efforts to defend all lawsuits or other legal, regulatory or
other proceedings against SRx challenging or affecting this Agreement or the consummation
of the transactions contemplated hereby and use all commercially reasonable efforts to have
lifted or rescinded any injunction or restraining order or other order relating to SRx which
may materially impede the ability of the Parties to consummate the Arrangement or the other
transactions contemplated by this Agreement; |
| | |
| (d) | use
all commercially reasonable efforts to obtain, and to assist Parent with respect to obtaining,
as applicable, all consents, waivers or approvals required under all Material Contracts,
including waivers required in connection with any change of control provisions contained
in any Material Contracts; |
| | |
| (e) | use
its commercially reasonable efforts to ensure that the Section 3(a)(10) Exemption is available
for the issuance of Consideration to the SRx Shareholders in exchange for their SRx Shares
pursuant to the Plan of Arrangement; |
| (f) | until
the earlier of the Effective Time and termination of this Agreement in accordance with its
terms, SRx shall, to the extent not precluded by applicable Law, promptly notify Parent,
in writing, and promptly provide copies of any related documentation received, when SRx has
knowledge of: |
| (i) | any
notice or other communication from any Person alleging that the consent (or waiver, permit,
exemption, order, approval, agreement, amendment or confirmation) of such Person (or other
Person) is or may be required in connection with this Agreement or the Arrangement; |
| | |
| (ii) | any
notice or other communication from any Governmental Entity in connection with the Arrangement
or this Agreement; |
| | |
| (iii) | any
matter that has resulted in, or is reasonably likely to result in, a condition set forth
in Section 6.1 or 6.2 not being satisfied; |
| | |
| (iv) | the
failure of SRx to perform any obligations to be performed by it under this Agreement such
that any conditions set forth in Section 6.1 or 6.2 would not be satisfied;
or |
| | |
| (v) | any
filings, actions, suits, claims, investigations or proceedings commenced or, to the knowledge
of SRx, threatened orally or in writing against, or, in respect of any filings, actions,
suits, claims, investigations or proceedings existing as at the date hereof, if any additional
filings, actions, suits, claims, investigations or proceedings are made or threatened orally
or in writing, in each case relating to or involving or otherwise affecting SRx, its subsidiaries
or any of their respective assets that would reasonably be expected to be material to SRx
and its subsidiaries, taken as a whole; and |
| (g) | not
take any action, or refrain from taking any commercially reasonable action, or permit any
action to be taken or not taken, which is inconsistent with this Agreement or which would
reasonably be expected to, individually or in the aggregate, prevent, materially delay or
otherwise materially impede the consummation of the Arrangement. |
5.3. | Covenants
of Parent, AcquireCo and CallCo Relating to the Conduct of Parent BusinessParent, AcquireCo
and CallCo jointly and severally covenant and agree, during the period from the date of this
Agreement until the earlier of the Effective Time and the time that this Agreement is terminated
in accordance with its terms, except (i) with the prior written consent of SRx (which consent
may not be unreasonably withheld, conditioned or delayed), (ii) as required or expressly
permitted by this Agreement, or (iii) as required by applicable Law or a Governmental Entity,
Parent shall, and shall cause the other members of the Parent Group to: |
| (i) | conduct
its business in the ordinary course in all material respects and in accordance with applicable
Laws and consistent with past practice, and use commercially reasonable efforts to maintain
and preserve in all material respects its and its subsidiaries’ business organization,
assets (including associated intellectual property), goodwill, employment relationships and
material business relationships with suppliers, distributors, employees, consultants, customers
and other Persons with which Parent or any of its subsidiaries have business relations: |
| | |
| (ii) | use
all commercially reasonable efforts to cause its current insurance (or re-insurance) policies
not to be cancelled or terminated or any of the coverage thereunder to lapse before the Outside
Date, unless simultaneously with such termination, cancellation or lapse, replacement policies
underwritten by insurance and re-insurance companies of nationally recognized standing providing
coverage equal to or greater than the coverage under the cancelled, terminated or lapsed
policies for substantially similar premiums are in full force and effect; and |
| (iii) | promptly
notify SRx orally and in writing upon becoming aware of any circumstance or development that,
to the knowledge of Parent, would, or would reasonably be expected to, constitute or result
in a Parent Material Adverse Effect. |
| (b) | Parent
covenants and agrees that, during the period from the date of this Agreement until the earlier
of the Effective Time and the time that this Agreement is terminated in accordance with its
terms, except (i) as set out in the corresponding subsection of Schedule 5.3(b) of
the Parent Disclosure Letter, (ii) with the prior written consent of SRx (which consent may
not be unreasonably withheld, conditioned or delayed), (iii) as required or expressly permitted
by this Agreement, or (iv) as required by applicable Law or a Governmental Entity, Parent
shall not, and shall cause the other members of the Parent Group not to: |
| (i) | Other
than in connection with the Parent Regulation A Offering and the Spin-Out, issue, deliver,
sell, pledge, lease, dispose of or encumber, or agree or offer to issue, deliver sell, pledge,
lease, dispose of or encumber, any Parent Shares or securities of its subsidiaries, or any
securities convertible, exchangeable or exercisable into or for Parent Shares or securities
of its subsidiaries, or any options, warrants, stock appreciation rights, phantom stock awards
or other rights or equity-based or convertible securities that are linked to the price or
value of the Parent Shares or securities of the Parent subsidiaries (other than pursuant
to the exercise, in accordance with their respective terms, of convertible or exercisable
securities of Parent outstanding on the date hereof) or amend, extend or terminate, or agree
to amend, extend or terminate, any of the terms of, or agreements governing, any of the outstanding
options, warrants or other convertible securities of Parent or its subsidiaries; |
| | |
| (ii) | amend
or propose to amend its certificate of incorporation or bylaws or other constating documents
or the terms of any of its securities; reduce its stated capital; or split, consolidate,
subdivide or reclassify, or propose to split, consolidate, subdivide or reclassify, any of
the Parent Shares or undertake or propose to undertake any other capital reorganization or
change in or exchange of Parent Shares, any other of its securities or its share capital; |
| | |
| (iii) | declare,
set aside or pay any dividend or other distribution or payment (whether in cash, securities
or property or any combination thereof) in respect of the Parent Shares or any other securities
of Parent, redeem, purchase or otherwise acquire, or offer to redeem, purchase or otherwise
acquire, any outstanding securities of Parent, adopt a plan of liquidation or resolution
providing for the complete or partial liquidation, winding-up, dissolution, merger, consolidation,
restructuring, recapitalization, or sale of all or substantially all of the assets of Parent
or any of its subsidiaries, or enter into any agreement with respect to any of the foregoing; |
| | |
| (iv) | except
with respect to inter-company transfers between Parent and its subsidiaries, sell, pledge,
lease, transfer, dispose of or encumber any assets, rights or properties of Parent or any
of its subsidiaries, other than in the ordinary course of business and in connection with
the Spin-Out; |
| | |
| (v) | acquire
or agree to acquire (by merger, amalgamation, arrangement, acquisition of shares or assets
or otherwise) any Person or division or business unit thereof, or incorporate or form, or
agree to incorporate or form, any Person or make or agree to make any investment either by
purchase of shares or securities, contributions of capital, property transfer or purchase
of, any property or assets of any other Person; |
| | |
| (vi) | make
any material change to the Parent Business or, other than in the ordinary course of business,
enter into enter into any Contract that, if entered into prior to the date hereof, would
be a Material Contract of Parent; |
| (vii) | enter
into or agree to the terms of any joint venture, strategic alliance, partnership, or similar
agreement, arrangement or relationship, other than in the ordinary course of business; |
| | |
| (viii) | other
than in respect of trade payables and a refinancing of the existing indebtedness of the Parent
and its subsidiaries, incur, create, assume or otherwise become liable for, any additional
indebtedness for borrowed money exceeding CAD$1,000,000 in the aggregate; |
| | |
| (ix) | make
any capital expenditures exceeding CAD$1,000,000 in the aggregate; |
| | |
| (x) | other
than in the ordinary course of business, enter into or modify (or make a promise regarding
entering into or modifying) any Employee Plan or any employment, consulting, severance or
similar agreements or arrangements with, or grant any bonuses, salary or fee increases, severance
or termination pay to, any officers, directors, employees or consultants; provided, however,
that it is acknowledged and agreed that Parent will abide by the terms and conditions
of any Employee Plan and any employment agreements and consulting agreements in effect on
the date of this Agreement, including with respect to the payments of any severance amounts
or change of control payments, if applicable; |
| | |
| (xi) | enter
into any collective bargaining or similar agreement; |
| | |
| (xii) | enter
into or adopt any shareholder rights plan or similar agreement or arrangement; |
| | |
| (xiii) | take
any action or fail to take any action which action or failure to act would result in the
material loss, expiration or surrender of, or the loss of any material benefit under, or
reasonably be expected to cause any Governmental Entities to institute proceedings for the
suspension, revocation or limitation of rights under, any Authorizations or Permits; |
| | |
| (xiv) | make,
revoke or change any Tax election; amend any previously filed Tax Return except as may be
required by applicable Law; file any Tax Return inconsistent with past practice; settle or
compromise any Liability for Taxes; agree to an extension or waiver of the limitation period
with respect to the assessment, reassessment, or determination of Taxes; enter into any closing
agreement with respect to any Tax; surrender any right to claim a material Tax refund; change
an annual accounting period; adopt or change any accounting method with respect to Taxes;
or consent to any extension or waiver of the limitation period applicable to any Tax claim
or assessment unless, in each case, such action is required by Law; |
| | |
| (xv) | other
than in connection with the Spin-Out, make any loan or advance to, or any capital contribution
or investment in, or assume, guarantee or otherwise become liable with respect to the liabilities
or obligations of, any Person (other than any advance payments or other investments made
by the SRx or any of its subsidiaries to a customer in the Ordinary Course based on sales
volume or purchase commitments (typically known as customer investments)) including, for
the avoidance of doubt, any “investment” (within the meaning of subsection 212.3(10)
of the Tax Act) in any corporation that is a non-resident for the purposes of the Tax Act; |
| | |
| (xvi) | amend
its accounting policies or adopt new accounting policies, except as may be required by applicable
Law or U.S. GAAP; |
| | |
| (xvii) | waive,
release, settle, agree to settle or compromise any material suit, action, claim, arbitration,
mediation, inquiry, proceeding or investigation pending or threatened against Parent or any
of its subsidiaries; |
| (xviii) | take
any action, or fail to take any action, which action or omission would jeopardize the validity
or enforceability of material Intellectual Property of Parent or its subsidiaries; |
| | |
| (xix) | engage
in any transaction with any related parties, other than transactions with subsidiaries or
in the ordinary course of business (including with respect to employment arrangements); |
| | |
| (xx) | take
any action that would cause a violation by any Person of economic sanctions or export controls; |
| | |
| (xxi) | take
any action or fail to take any action that prevents, or materially delays, impedes or interferes
with, or that would reasonably be expected to prevent or materially delay, impede or interfere
with, the ability of the Parties to consummate the transactions contemplated by this Agreement; |
| | |
| (xxii) | enter
into any transaction or perform any act that would render, or would reasonably be expected
to render any representations and warranties made by Parent, AcquireCo and CallCo set forth
in this Agreement untrue or inaccurate in any respect; or |
| | |
| (xxiii) | announce
an intention, authorize or propose, or enter into or modify any Contract, agreement, commitment
or arrangement, to do any of the matters prohibited by the foregoing provisions of this Section
5.2. |
5.4. | Covenants
of SRx Relating to the Conduct of SRx BusinessSRx covenants and agrees that, during the
period from the date of this Agreement until the earlier of the Effective Time and the time
that this Agreement is terminated in accordance with its terms, except (i) with the prior
written consent of Parent (which consent may not be unreasonably withheld, conditioned or
delayed), (ii) as required or expressly permitted by this Agreement, or (iii) as required
by applicable Law or a Governmental Entity, SRx shall, and shall cause the other members
of the SRx Group to: |
| (i) | conduct
its business in the ordinary course in all material respects and in accordance with applicable
Laws and consistent with past practice, and use commercially reasonable efforts to maintain
and preserve in all material respects its and its subsidiaries’ business organization,
assets (including associated intellectual property), goodwill, employment relationships and
material business relationships with suppliers, distributors, employees, consultants, customers
and other Persons with which SRx or any of its subsidiaries have business relations; |
| | |
| (ii) | use
all commercially reasonable efforts to cause its current insurance (or re-insurance) policies
not to be cancelled or terminated or any of the coverage thereunder to lapse before the Outside
Date, unless simultaneously with such termination, cancellation or lapse, replacement policies
underwritten by insurance and re-insurance companies of nationally recognized standing providing
coverage equal to or greater than the coverage under the cancelled, terminated or lapsed
policies for substantially similar premiums are in full force and effect; and |
| | |
| (iii) | promptly
notify Parent orally and in writing upon becoming aware of any circumstance or development
that, to the knowledge of SRx, would, or would reasonably be expected to, constitute or result
in an SRx Material Adverse Effect. |
| (b) | SRx
covenants and agrees that, during the period from the date of this Agreement until the earlier
of the Effective Time and the time that this Agreement is terminated in accordance with its
terms, except (i) as set out in the corresponding subsection of Schedule 5.4(b) of
the SRx Disclosure Letter, (ii) with the prior written consent of Parent (which consent may
not be unreasonably withheld, conditioned or delayed), (iii) as required or expressly permitted
by this Agreement, or (iv) as required by applicable Law or a Governmental Entity, SRx shall
not, and shall cause the other members of the SRx Group not to: |
| (i) | issue,
deliver, sell, pledge, lease, dispose of or encumber, or agree or offer to issue, deliver
sell, pledge, lease, dispose of or encumber, any SRx Shares or securities of its subsidiaries,
or any securities convertible, exchangeable or exercisable into or for SRx Shares or securities
of its subsidiaries, or any options, warrants, stock appreciation rights, phantom stock awards
or other rights or equity-based or convertible securities that are linked to the price or
value of the SRx Shares or securities of the SRx subsidiaries (other than pursuant to the
exercise, in accordance with their respective terms, of convertible or exercisable securities
of SRx outstanding on the date hereof) or amend, extend or terminate, or agree to amend,
extend or terminate, any of the terms of, or agreements governing, any of the outstanding
options, warrants or other convertible securities of SRx or its subsidiaries; |
| | |
| (ii) | amend
or propose to amend its articles of incorporation or bylaws or other constating documents
or the terms of any of its securities; reduce its stated capital; or split, consolidate,
subdivide or reclassify, or propose to split, consolidate, subdivide or reclassify, any of
the SRx Shares or undertake or propose to undertake any other capital reorganization or change
in or exchange of SRx Shares, any other of its securities or its share capital; |
| | |
| (iii) | declare,
set aside or pay any dividend or other distribution or payment (whether in cash, securities
or property or any combination thereof) in respect of the SRx Shares or any other securities
of SRx, redeem, purchase or otherwise acquire, or offer to redeem, purchase or otherwise
acquire, any outstanding securities of SRx, adopt a plan of liquidation or resolution providing
for the complete or partial liquidation, winding-up, dissolution, merger, consolidation,
restructuring, recapitalization, or sale of all or substantially all of the assets of SRx
or any of its subsidiaries, or enter into any agreement with respect to any of the foregoing; |
| | |
| (iv) | except
with respect to inter-company transfers between SRx and its subsidiaries, sell, pledge, lease,
transfer, dispose of or encumber any assets, rights or properties of SRx or any of its subsidiaries,
other than in the ordinary course of business; |
| | |
| (v) | acquire
or agree to acquire (by merger, amalgamation, arrangement, acquisition of shares or assets
or otherwise) any Person or division or business unit thereof, or agree to incorporate or
form, any Person or make or agree to make any investment either by purchase of shares or
securities, contributions of capital, property transfer or purchase of, any property or assets
of any other Person; |
| | |
| (vi) | make
any material change to the SRx Business or, other than in the ordinary course of business,
enter into enter into any Contract that, if entered into prior to the date hereof, would
be a Material Contract of SRx; |
| | |
| (vii) | enter
into or agree to the terms of any joint venture, strategic alliance, partnership, or similar
agreement, arrangement or relationship, other than in the ordinary course of business; |
| | |
| (viii) | other
than in respect of trade payables, incur, create, assume or otherwise become liable for,
any indebtedness for borrowed money exceeding CAD$1,000,000 in the aggregate; |
| | |
| (ix) | make
any capital expenditures exceeding CAD$1,000,000 in the aggregate; |
| (x) | other
than in the ordinary course of business, enter into or modify (or make a promise regarding
entering into or modifying) any Employee Plan or any employment, consulting, severance or
similar agreements or arrangements with, or grant any bonuses, salary or fee increases, severance
or termination pay to, any officers, directors, employees or consultants; provided, however,
that it is acknowledged and agreed that SRx will abide by the terms and conditions of
any Employee Plan and any employment agreements and consulting agreements in effect on the
date of this Agreement, including with respect to the payments of any severance amounts or
change of control payments, if applicable; |
| (xi) | enter
into any collective bargaining or similar agreement; |
| | |
| (xii) | enter
into or adopt any shareholder rights plan or similar agreement or arrangement; |
| | |
| (xiii) | take
any action or fail to take any action which action or failure to act would result in the
material loss, expiration or surrender of, or the loss of any material benefit under, or
reasonably be expected to cause any Governmental Entities to institute proceedings for the
suspension, revocation or limitation of rights under, any Authorizations or Permits; |
| | |
| (xiv) | make,
revoke or change any Tax election; amend any previously filed Tax Return except as may be
required by applicable Law; file any Tax Return inconsistent with past practice; settle or
compromise any Liability for Taxes; agree to an extension or waiver of the limitation period
with respect to the assessment, reassessment, or determination of Taxes; enter into any closing
agreement with respect to any Tax; surrender any right to claim a material Tax refund; change
an annual accounting period; adopt or change any accounting method with respect to Taxes;
or consent to any extension or waiver of the limitation period applicable to any Tax claim
or assessment unless, in each case, such action is required by Law; |
| | |
| (xv) | make
any loan or advance to, or any capital contribution or investment in, or assume, guarantee
or otherwise become liable with respect to the liabilities or obligations of, any Person
(other than any advance payments or other investments made by Parent or any of its subsidiaries
to a customer in the Ordinary Course based on sales volume or purchase commitments (typically
known as customer investments)); |
| | |
| (xvi) | amend
its accounting policies or adopt new accounting policies, except as may be required by applicable
Law or IFRS; |
| | |
| (xvii) | waive,
release, settle, agree to settle or compromise any material suit, action, claim, arbitration,
mediation, inquiry, proceeding or investigation pending or threatened against SRx or any
of its subsidiaries; |
| | |
| (xviii) | take
any action, or fail to take any action, which action or omission would jeopardize the validity
or enforceability of material Intellectual Property of SRx or its subsidiaries; |
| | |
| (xix) | engage
in any transaction with any related parties, other than transactions with subsidiaries or
in the ordinary course of business (including with respect to employment arrangements); |
| | |
| (xx) | take
any action that would cause a violation by any Person of economic sanctions or export controls; |
| | |
| (xxi) | take
any action or fail to take any action that prevents, or materially delays, impedes or interferes
with, or that would reasonably be expected to prevent or materially delay, impede or interfere
with, the ability of the Parties to consummate the transactions contemplated by this Agreement; |
| (xxii) | enter
into any transaction or perform any act that would render, or would reasonably be expected
to render any representations and warranties made by SRx set forth in this Agreement untrue
or inaccurate in any respect; or |
| | |
| (xxiii) | announce
an intention, authorize or propose, or enter into or modify any Contract, agreement, commitment
or arrangement, to do any of the matters prohibited by the foregoing provisions of this Section
5.4. |
5.5. | Covenant
of Parent and SRx Relating to D&O Tail PolicyPrior to the Effective Time, Parent
may purchase a prepaid “tail” policy (the “Parent Tail Policy”)
with respect to directors’ and officers’ liability insurance coverage for the
benefit of those Persons who are currently covered by any comparable insurance policies of
Parent as of the date hereof. If Parent or any of its successors or assigns (i) shall merge
or consolidate with or merge into any other corporation or entity and shall not be the surviving
or continuing corporation or entity of such consolidation or merger or (ii) shall transfer
all or substantially all of their respective properties and assets as an entity in one or
a series of related transactions to any Person, then in each such case, proper provisions
shall be made so that the successors or assigns of Parent shall assume all of the obligations
set forth in this Section 5.5(a). |
|
(b) |
Prior
to the Effective Time, SRx may purchase a prepaid “tail” policy (the “SRx Tail Policy”) with respect
to directors’ and officers’ liability insurance coverage for the benefit of those Persons who are currently covered by
any comparable insurance policies of SRx as of the date hereof. If SRx or any of its successors or assigns (i) shall merge or consolidate
with or merge into any other corporation or entity and shall not be the surviving or continuing corporation or entity of such consolidation
or merger or (ii) shall transfer all or substantially all of their respective properties and assets as an entity in one or a series
of related transactions to any Person, then in each such case, proper provisions shall be made so that the successors or assigns
of SRx shall assume all of the obligations set forth in this Section 5.5(b). |
5.6. | Spin-OutParent
shall take the following actions prior to the Effective Time: |
| (a) | cause
eight percent (8%) of the issued and outstanding capital stock of Parent’s wholly-owned
subsidiary, Halo, Purely For Pets, Inc., a Delaware corporation, to be contributed to a new
wholly- owned special purpose subsidiary of Parent (the “Spin-Out SPV”),
which Spin-Out SPV shall be established for the sole purpose of holding and transacting the
capital stock of Halo, taxed as a U.S. corporation, governed by Parent’s Board of Directors
prior to the Effective Time and by Michael Young following the Effective Time, and have such
other rights and restrictions mutually acceptable to the Parties, acting reasonably; and |
| | |
| (b) | immediately
prior to the Effective Time on the Effective Date (the “Spin-Out”):(i)
cause the equity interests in the Spin-Out SPV to be distributed as a dividend to the Parent
Shareholders of record on the Effective Date and immediately prior to the Effective Time;
and (ii) enter into a support agreement with the Spin-Out SPV on terms and conditions mutually
agreed to by the parties, acting reasonably, pursuant to which Parent shall pay, or reimburse
Spin-Out SPV for, all costs and expenses incurred by Spin-Out SPV or Michael Young, in connection
with the on-going existence, administration and maintenance of Spin-Out SPV, including, without,
limitation, all taxes payable by Spin-Out SPV and all expenses related to taxes, tax filings,
accounting and legal expenses. |
ARTICLE
VI.
CONDITIONS
6.1. | Mutual
Conditions PrecedentThe obligations of the Parties to complete the Arrangement are subject
to the fulfillment of each of the following conditions precedent on or before the Effective
Time or the waiver by each of SRx and Parent to the extent permitted by applicable Law and
without prejudice to their right to rely on the fulfilment of any other of such conditions: |
| (a) | the
Interim Order shall have been granted on terms consistent with this Agreement and the Interim
Order shall not have been set aside or modified in a manner unacceptable to either Party,
acting reasonably, on appeal or otherwise; |
| (b) | the
Final Order shall have been granted on terms consistent with this Agreement and the Final
Order shall not have been set aside or modified in a manner unacceptable to either Party,
acting reasonably, on appeal or otherwise; |
| | |
| (c) | the
SRx Arrangement Resolution shall have been passed by the SRx Shareholders in accordance with
the Interim Order and applicable Laws; |
| | |
| (d) | the
Parent Shareholder Approval Matters shall have been approved by the Parent Shareholders in
accordance with applicable Laws; |
| | |
| (e) | there
shall have been delivered letters of resignation and mutual releases from such directors
and officers of SRx and Parent as mutually agreed to, including as needed to implement the
Parent Board Matters; |
| | |
| (f) | the
New Employment Agreements shall have been duly executed by each of the parties thereto; |
| | |
| (g) | there
shall have been no action taken under any applicable Law or by any Governmental Entity of
competent jurisdiction which makes it illegal or otherwise directly or indirectly restrains,
enjoins or prohibits the completion of the Arrangement; |
| | |
| (h) | the
Key Regulatory Approvals shall have been obtained on terms acceptable to Parent and SRx,
each acting reasonably, and each such Key Regulatory Approval is in full force and effect
and has not been modified; |
| | |
| (i) | holders
of no more than five percent (5%) of the SRx Shares shall have exercised, and at the date
of the SRx Meeting, have not withdrawn, Dissent Rights; |
| | |
| (j) | the
Parent Certificate of Designation shall have been filed with the Secretary of State of the
State of Delaware, shall constitute a valid Parent Certificate of Designation under applicable
Laws and shall have not been rescinded or amended in any way; and |
| | |
| (k) | (i)
the existing Parent Shares shall have been continually listed on NYSE American as of and
from the date of this Agreement through the Effective Time and (ii) (a) the Parent Shares
issuable to SRx Shareholders pursuant to the Arrangement (including pursuant to the exchange
of the Exchangeable Shares) shall have been approved for listing on the NYSE American, subject
to official notice of issuance, (b) immediately following the Effective Time, Parent shall
satisfy any applicable continuing listing requirements of the NYSE American and (c) Parent
shall not have received any notice of non-compliance with such listing requirements that
has not been cured, or that would not be cured at or immediately following the Effective
Time. |
6.2. | Additional
Conditions Precedent in Favor of Parent, AcquireCo and CallCoThe obligation of Parent,
AcquireCo and CallCo to complete the Arrangement is subject to the fulfillment of each of
the following additional conditions precedent on or before the Effective Time (each of which
is for the exclusive benefit of Parent, AcquireCo and CallCo and may be waived by Parent): |
| (a) | all
covenants of SRx under this Agreement to be performed on or before the Effective Time shall
have been duly performed by SRx in all material respects and Parent shall have received a
certificate of SRx addressed to Parent and dated the Effective Date, signed on behalf of
SRx by two senior executive officers of SRx (on SRx’s behalf and without personal liability),
confirming the same as of the Effective Time; |
| (b) | the
representations and warranties of SRx set forth in this Agreement shall have been true and
correct in all respects as of the date of this Agreement, and shall be true and correct in
all respects as of the Effective Time as if made as of the Effective Time (except, in each
case, 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 such
representations and warranties to be so true and correct would not have, individually or
in the aggregate, an SRx Material Adverse Effect (it being understood that, for purposes
of determining the accuracy of such representations and warranties, all materiality, SRx
Material Adverse Effect and similar qualifiers set forth in such representations and warranties
shall be disregarded), and Parent shall have received a certificate of SRx addressed to Parent
and dated the Effective Date, signed on behalf of SRx by two senior executive officers of
SRx (on SRx’s behalf and without personal liability), confirming the same as at the
Effective Time; |
| | |
| (c) | there
shall not have occurred an SRx Material Adverse Effect on or prior to the date hereof which
is continuing, nor shall there have occurred an SRx Material Adverse Effect following the
date hereof, and Parent shall have received a certificate signed on behalf of SRx by two
senior executive officers of SRx (on SRx’s behalf and without personal liability) to
such effect; |
| | |
| (d) | all
covenants of the SRx Supporting Shareholders under the SRx Voting Agreement to be performed
on or before the Effective Time shall have been duly performed by the parties thereto (other
than Parent) in all respects; |
| | |
| (e) | the
Lock-Up Agreements shall have been duly executed by each of the directors, executive officers
and shareholders of SRx who will fall within the definition of “Locked-Up Persons”
at the Effective Time; and |
| | |
| (f) | Parent
shall have received a certificate of SRx, addressed to Parent and dated as of the Effective
Date, signed on behalf of SRx by two senior executive officers of SRx (on SRx’s behalf
and without personal liability), certifying as to (i) the SRx Net Debt, (ii) the SRx U.S.
Dollar Net Debt as defined in the Plan of Arrangement, and (iii) the number of issued and
outstanding securities of SRx immediately prior to the Effective Time. |
The
foregoing conditions will be for the sole benefit of Parent, AcquireCo and CallCo and may be waived by the Parent in whole or in part
at any time in its sole discretion.
6.3. | Additional
Conditions Precedent in Favor of SRxThe obligation of SRx to complete the Arrangement
is subject to the fulfillment of each of the following additional conditions precedent on
or before the Effective Time (each of which is for the exclusive benefit of SRx and may be
waived by SRx): |
| (a) | all
covenants of Parent, AcquireCo and CallCo under this Agreement to be performed on or before
the Effective Time shall have been duly performed by Parent, AcquireCo and CallCo in all
material respects and SRx shall have received a certificate of Parent, AcquireCo and CallCo
addressed to SRx and dated the Effective Date, signed on behalf of Parent, AcquireCo and
CallCo by two senior executive officers of such Parties (on Parent’s, AcquireCo’s
and CallCo’s behalf and without personal liability), confirming the same as of the
Effective Time; |
| | |
| (b) | the
representations and warranties of Parent, AcquireCo and CallCo set forth in this Agreement
shall have been true and correct in all respects as of the date of this Agreement, and shall
be true and correct in all respects as of the Effective Time as if made as of the Effective
Time (except, in each case, 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 such representations and warranties to be so true and correct would not have,
individually or in the aggregate, a Parent Material Adverse Effect (it being understood that
for purposes of determining the accuracy of such representations and warranties, all materiality,
Parent Material Adverse Effect and similar qualifiers set forth in such representations and
warranties shall be disregarded), and SRx shall have received a certificate of Parent, AcquireCo
and CallCo addressed to SRx and dated the Effective Date, signed on behalf of Parent, AcquireCo
and CallCo by two senior executive officers of Parent, AcquireCo and CallCo (on Parent’s,
AcquireCo’s and CallCo’s behalf and without personal liability), confirming the
same as at the Effective Time; |
| (c) | there
shall not have occurred a Parent Material Adverse Effect on or prior to the date hereof which
is continuing, nor shall there have occurred a Parent Material Adverse Effect following the
date hereof, and SRx shall have received a certificate signed on behalf of Parent by two
senior executive officers of Parent (on Parent’s behalf and without personal liability)
to such effect; |
| | |
| (d) | all
covenants of the Parent Supporting Shareholders under the Parent Voting Agreement to be performed
on or before the Effective Time shall have been duly performed by the parties thereto (other
than SRx) in all respects; |
| | |
| (e) | the
Lock-Up Agreements shall have been duly executed by each of the directors, executive officers
and shareholders of SRx who will fall within the definition of “Locked-Up Persons”
at the Effective Time; |
| | |
| (f) | SRx
shall have received a certificate of Parent, addressed to SRx and dated as the Effective
Date, signed on behalf of Parent by two senior executive officers of Parent (on Parent’s
behalf and without personal liability), certifying as to (i) 30-Day VWAP as defined in the
Plan of Arrangement and (ii) the number of issued and outstanding securities of Parent immediately
prior to the Effective Time; |
| | |
| (g) | the
Special Voting Share shall have been created and issued at or prior to the Effective Time; |
| | |
| (h) | the
Support Agreement and the Voting Trust Agreement shall have been duly executed by the parties
thereto at or prior to the Effective Time and shall remain in effect; |
| | |
| (i) | the
distribution of the Parent Shares and the Exchangeable Shares pursuant to the Arrangement
shall be exempt from the prospectus and registration requirements of applicable Law by virtue
of applicable exemptions under applicable law, and the first trade of the Parent Shares shall
be exempt from the prospectus and registration requirements of applicable Law by virtue of
applicable exemptions under applicable Law (provided that all conditions of the applicable
prospectus or registration exemption relied on by the holder are satisfied); and |
| | |
| (j) | Parent
and AcquireCo shall have complied with its obligations under Section 2.9 and the Depositary
shall have confirmed receipt of the aggregate Consideration contemplated thereby. |
The
foregoing conditions will be for the sole benefit of SRx and may be waived by SRx in whole or in part at any time in its sole discretion.
6.4. | Notice
and Cure ProvisionsEach Party will give prompt notice to the other 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. |
| (b) | Notice
provided under this Section 6.4 will not affect the representations, warranties, covenants,
agreements or obligations of the Parties (or remedies with respect thereto) or the conditions
to the obligations of the Parties under this Agreement. |
| (c) | Parent
may not exercise its rights to terminate this Agreement pursuant to Section 8.2(a)(iii)(C),
and SRx may not exercise its right to terminate this Agreement pursuant to Section 8.2(a)(iv)(C),
unless the Party intending to rely thereon has delivered a written notice to the other Party
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
non-fulfilment or the applicable condition or termination right, as the case may be. If any
such notice is delivered, provided that a Party is proceeding diligently to cure such matter
and such matter is capable of being cured prior to the Outside Date, no Party may terminate
this Agreement until the expiration of a period of ten (10) Business Days from such notice,
and then only if such matter has not been cured by such date. If such notice has been delivered
less than ten (10) Business Days prior to the making of the application for the Final Order,
such application and such filing shall be postponed until the expiry of such period, provided
that such extension does not result in a filing of the Final Order after the Outside Date.
For greater certainty, in the event that such matter is cured within the time period referred
to herein without having a Parent Material Adverse Effect or an SRx Material Adverse Effect,
as the case may be, this Agreement may not be terminated as a result of the cured breach. |
6.5. | Satisfaction
of ConditionsOther than as set forth in this Article VI, the conditions precedent
set out in Section 6.1, Section 6.2 and Section 6.3 shall be conclusively
deemed to have been satisfied, waived or released when the Certificate of Arrangement is
issued by the Director following filing of the Articles of Arrangement with the consent of
the Parties in accordance with the terms of this Agreement. |
ARTICLE
VII.
ADDITIONAL
COVENANTS
7.1. | Covenant
Regarding Non-SolicitationEach Party shall, and shall direct and cause its Representatives
to immediately, cease and cause to be terminated any solicitation, encouragement, activity,
discussion or negotiation with any parties that may be ongoing with respect to an Acquisition
Proposal involving such Party whether or not initiated by such Party, discontinue access
to any parties (other than a Party to this Agreement and its Representatives) to any dataroom
that contains information regarding the SRx Group or the Parent Group (as applicable), and
to the extent such Party entered into a confidentiality agreement with any such parties,
such Party shall request the return of information regarding the SRx Group or the Parent
Group (as applicable) previously provided to such parties and shall request the destruction
of all materials including or incorporating any confidential information regarding the SRx
Group or the Parent Group (as applicable) pursuant to any such confidentiality agreement.
Each Party represents and warrants that it has not, and agrees not to, release or permit
the release of any Person from, or waive or forbear in the enforcement of, any confidentiality
agreement or other similar agreement relating to a potential Acquisition Proposal involving
such Party to which such third party is a party. Each Party further represents and warrants
that it has not, and agrees not to, release or permit the release of any Person from, or
waive or forbear in the enforcement of, any standstill or similar agreement or obligation
to which such third party is a party or by which such third party is bound. |
| |
7.2. | Covenant
Regarding Acquisition ProposalsEach Party agrees that it shall not, and shall cause its
Representatives (including the SRx Board or the Parent Board, as applicable) not to, directly
or indirectly: |
| (i) | make,
solicit, initiate, entertain, knowingly encourage, promote or facilitate, (including by way
of furnishing non-public information, permitting any visit to its facilities or properties
or entering into any form of agreement, arrangement or understanding) any inquiries or offers
or the making of any proposals regarding or that would reasonably be expected to constitute
an Acquisition Proposal involving such Party or that would be reasonably be expected to lead
to an actual or potential Acquisition Proposal involving such Party; |
| | |
| (ii) | participate,
directly or indirectly, in any discussions or negotiations regarding, or furnish to any Person
any non-public information or otherwise co-operate with, respond to, assist or participate
in any Acquisition Proposal involving such Party or potential Acquisition Proposal involving
such Party or participate in any discussions or negotiations regarding an actual or potential
Acquisition Proposal involving such Party, or furnish any information or access to any Person
(other than a Party to this Agreement and its Representatives) with respect to any inquiries,
proposals or offers that constitute, or that would reasonably be expected to lead to, an
actual or potential Acquisition Proposal involving such Party; |
| (iii) | remain
neutral with respect to, or agree to, approve or recommend any, Acquisition Proposal involving
such Party or potential Acquisition Proposal involving such Party (it being understood that
publicly taking no position or a neutral position with respect to an Acquisition Proposal
involving such Party for a period of no more than five (5) Business Days following formal
announcement of such Acquisition Proposal shall not be considered to be a violation of this
Section 7.2(a)(iii)); |
| | |
| (iv) | enter
into any agreement, arrangement or understanding related to any Acquisition Proposal involving
such Party (other than, in the case of the Parent, an Acceptable Confidentiality Agreement)
or requiring it to abandon, terminate or fail to consummate the Arrangement or the transactions
contemplated by this Agreement or providing for the payment of any break, termination or
other fees or expenses to any Person in the event that the Arrangement or the transactions
contemplated by this Agreement are completed or in the event that it completes any other
transaction with the other Party or Parties or with an affiliate of the other Party or Parties
that is agreed to prior to any termination of this Agreement (any such agreement, arrangement
or understanding, an “Alternative Acquisition Agreement”); or |
| | |
| (v) | subject
to Article VII, make a Change in Recommendation. |
| (b) | SRx
shall promptly (and in any event within 24 hours) notify Parent, at first orally and then
in writing, of any proposals, offers or inquiries relating to or constituting or that would
reasonably be expected to lead to an SRx Acquisition Proposal or any request for non-public
information relating to SRx or any of its subsidiaries. Such notice shall include a description
of the terms and conditions of any proposal, inquiry or offer, the identity of the Person
making such proposal, inquiry or offer, a copy of the proposal, offer or inquiry (if written),
and provide such other details of the proposal, inquiry or offer as Parent may reasonably
request. SRx shall keep Parent fully informed on a prompt basis of the status, including
any change to the material terms, of any such proposal, inquiry or offer, provided that,
for greater certainty, SRx shall at all times comply with its obligations under Section
7.2(a) |
| | |
| (c) | Parent,
AcquireCo and CallCo shall promptly (and in any event within 24 hours) notify SRx, at first
orally and then in writing, of any proposals, offers or inquiries relating to or constituting
or that would reasonably be expected to lead to a Parent Acquisition Proposal or any request
for non-public information relating to Parent or any of its subsidiaries. Such notice shall
include a description of the terms and conditions of any proposal, inquiry or offer, the
identity of the Person making such proposal, inquiry or offer, a copy of the proposal, offer
or inquiry (if written), and provide such other details of the proposal, inquiry or offer
as SRx may reasonably request. Parent shall keep SRx fully informed on a prompt basis of
the status, including any change to the material terms, of any such proposal, inquiry or
offer. |
| | |
| (d) | SRx
shall ensure that its officers, directors and any financial advisors or other advisors or
Representatives retained by it are aware of the provisions of Section 7.1 and this
Section 7.2, and SRx shall be responsible for any breach of Section 7.1 or
this Section 7.2 by such officers, directors, financial advisors or other advisors
or Representatives. Each of Parent, AcquireCo and CallCo shall ensure that its officers,
directors and any financial advisors or other advisors or Representatives retained by it
are aware of the provisions of Section 7.1 and this Section 7.2, and each of
Parent and AcquireCo shall be responsible for any breach of Section 7.1 or this Section
7.2 by such officers, directors, financial advisors or other advisors or Representatives. |
| | |
| (e) | Nothing
contained in Section 7.1 or Section 7.2 shall prohibit Parent from taking and
disclosing a position contemplated by Rule 14e-2(a), Rule 14d-9 or Item 1012(a) of Regulation
M-A promulgated under the U.S. Exchange Act. |
7.3. | Responding
to a Parent Acquisition ProposalNotwithstanding Section 7.1 and Section 7.2,
if Parent receives a bona fide written Parent Acquisition Proposal from a third party prior
to obtaining the Parent Shareholder Approval, Parent may engage in or participate in discussions
or negotiations with such Person regarding such Parent Acquisition Proposal, and may provide
copies of, access to or disclosure of confidential information, properties, facilities, books
or records of itself and its subsidiaries, if and only if: |
| (i) | the
Parent Board first determines in good faith, based on the advice of its financial advisors
and its outside counsel, that such Parent Acquisition Proposal is bona fide and constitutes
or would reasonably be expected to constitute a Superior Proposal, and, based on the advice
of its outside counsel, that the failure to engage in such discussions or negotiations would
be inconsistent with its fiduciary duties; |
| | |
| (ii) | such
Person was not restricted from making such Parent Acquisition Proposal pursuant to an existing
standstill confidentiality, non-disclosure, business purpose, use or similar restriction
or agreement; |
| | |
| (iii) | it
has been, and continues to be, in compliance with its obligations under Section 7.1
through Section 7.4, and such Parent Acquisition Proposal was unsolicited and did
not otherwise result from a breach of Section 7.1 or Section 7.2; |
| | |
| (iv) | prior
to providing any such copies, access, or disclosure, it enters into a confidentiality and
standstill agreement with such Person having terms at least as favorable to Parent as the
Confidentiality Agreement (an “Acceptable Confidentiality Agreement”);
and |
| | |
| (v) | it
promptly provides SRx with: |
| (A) | prior
written notice stating its intention to participate in such discussions or negotiations and
to provide such copies, access or disclosure, together with a copy of written advice from
its outside counsel that the failure to engage in such discussions or negotiations would
be inconsistent with the fiduciary duties of the Parent Board; and |
| | |
| (B) | prior
to providing any such copies, access or disclosure, a true, complete and final executed copy
of the Acceptable Confidentiality Agreement referred to in Section 7.3(a)(iv), |
provided,
that Parent shall not, and shall not allow its Representatives to, disclose any non-public information with respect to it or any of its
subsidiaries to such Person if such non-public information has not been previously provided to, or is not concurrently provided to, SRx.
7.4. | Superior
Proposals; Right to MatchNotwithstanding Section 7.1 and Section 7.2, at
any time prior to obtaining the Parent Shareholder Approval, the Parent Board may, if the
Parent Board determines in good faith, based on the advice of its outside counsel and financial
advisors, that the Superior Proposal remains a Superior Proposal (after taking into account
all adjustments to the terms of this Agreement that may be offered by SRx pursuant to this
Section 7.4), (A) make a Parent Change in Recommendation in response to a Superior
Proposal and (B) cause Parent to terminate this Agreement in accordance with Section 8.2(a)(iii)(A),
and concurrently enter into a binding Alternative Acquisition Agreement with respect to any
such Superior Proposal, provided that: |
| (i) | the
Parent Board may not make a Parent Change in Recommendation or terminate this Agreement pursuant
to Section 8.2(a)(iii)(A), unless: |
| (A) | such
Person was not restricted from making such Parent Acquisition Proposal pursuant to an existing
standstill confidentiality, non-disclosure, business purpose, use or similar restriction
or agreement; |
| (B) | Parent
has been, and continues to be, in compliance with its obligations under Section 7.1
through Section 7.4, and such Parent Acquisition Proposal was unsolicited and did
not otherwise result from a breach of Section 7.1 or Section 7.2; |
| | |
| (C) | Parent
has delivered to SRx a written notice of the determination of Parent Board that such Parent
Acquisition Proposal constitutes a Superior Proposal and of the intention of the Parent Board
to make a Parent Change in Recommendation, terminate this Agreement pursuant to Section
8.2(a)(iii)(A), and enter into a definitive Alternative Acquisition Agreement with respect
to such Superior Proposal, together with (1) a written notice from the Parent Board regarding
the value and financial terms that the Parent Board, in consultation with its financial advisors,
has determined should be ascribed to any non-cash consideration offered under such Superior
Proposal and (2) a copy of the proposed definitive Alternative Acquisition Agreement and
any other relevant transaction documents (the “Superior Proposal Notice”); |
| | |
| (D) | at
least five (5) Business Days (the “Superior Proposal Matching Period”)
have elapsed from the date on which SRx received the Superior Proposal Notice; |
| | |
| (E) | during
any Superior Proposal Matching Period, SRx has had the opportunity (but not the obligation),
in accordance with Section 7.4(b), to offer to amend this Agreement and the Arrangement
in order for such Parent Acquisition Proposal to cease to be a Superior Proposal; and |
| | |
| (F) | if
SRx has offered to amend this Agreement and the Arrangement under Section 7.4(b),
the Parent Board has determined in good faith, based on the advice of its outside legal counsel
and financial advisers, that such Parent Acquisition Proposal continues to constitute a Superior
Proposal compared to the terms of the Arrangement as proposed to be amended under Section
7.4(b). |
| (b) | During
any Superior Proposal Matching Period, or such longer period as Parent may approve in writing
for such purpose: (i) the Parent Board shall review any offer made by SRx under Section
7.4(a)(i)(F) to amend the terms of this Agreement and the Arrangement in good faith in
order to determine whether such proposal would, upon acceptance, result in the Parent Acquisition
Proposal previously constituting a Superior Proposal ceasing to be a Superior Proposal; and
(ii) Parent shall negotiate in good faith with SRx to make such amendments to the terms of
this Agreement and the Arrangement as would enable SRx to proceed with the transactions contemplated
by this Agreement on such amended terms. If the Parent Board determines that such Parent
Acquisition Proposal would cease to be a Superior Proposal, Parent shall promptly so advise
SRx, and the Parties shall amend this Agreement to reflect such offer made by SRx, and shall
take and cause to be taken all such actions as are necessary to give effect to the foregoing. |
| | |
| (c) | Each
successive amendment to any Parent Acquisition Proposal that results in an increase in, or
modification of, the consideration (or value of such consideration) to be received by the
Parent Shareholders or other material terms or conditions thereof shall constitute a new
Parent Acquisition Proposal for the purposes of this Section 7.4, which shall require
a new Superior Proposal Notice to SRx. SRx shall be afforded a new five (5) Business Day
Superior Proposal Matching Period from the date on which SRx receives the Superior Proposal
Notice with respect to such amended Parent Acquisition Proposal from Parent. |
| | |
| (d) | The
Parent Board shall promptly reaffirm the Parent Board Recommendation by press release after
any Parent Acquisition Proposal which is not determined to be a Superior Proposal is publicly
announced or the Parent Board determines that a proposed amendment to the terms of this Agreement
as contemplated under Section 7.4(b) would result in a Parent Acquisition Proposal
no longer being a Superior Proposal. Parent shall provide SRx and its outside legal counsel
with a reasonable opportunity to review the form and content of any such press release and
shall make all reasonable amendments to such press release as requested by SRx and its outside
legal counsel. |
| (e) | If
Parent provides a Superior Proposal Notice to SRx after a date that is less than ten (10)
Business Days before the Parent Meeting, Parent shall either proceed with or shall postpone
such meeting, as directed by SRx acting reasonably, to a date that is not more than ten (10)
Business Days after the scheduled date of that meeting but before the Outside Date. |
7.5. | Access
to Information; Confidentiality; TransitionFrom the date hereof until the earlier of
the Effective Time and the termination of this Agreement pursuant to its terms, subject to
compliance with applicable Law and the terms of any existing Contracts, each Party shall,
and shall cause its Representatives to, afford to the other Party and its Representatives
reasonable access during normal business hours upon reasonable notice, to the properties,
information and records relating to, and the personnel of, such Party, including the related
facilities, books, contracts, financial statements, forecasts, financial projections (to
the extent permitted by confidentiality agreements in force on the date hereof), studies,
records, operating Permits, and any other documentation (whether in writing or stored in
computerized, electronic, disk, tape, microfilm or any other form); provided, however,
that each Party shall provide the other Party with at least one (1) Business Day prior
written notice of any requested on site access to any real property of the other Party. Each
of Parent and SRx shall, and shall cause their subsidiaries and their respective Representatives
to, as the case may be, work cooperatively and in good faith to ensure an orderly transition
following the Effective Time, including with respect to transitional planning, transitional
services, and the retention of personnel (and any related arrangements thereto). From the
date hereof until the earlier of the Effective Time and the termination of this Agreement
pursuant to its terms, each Party will maintain the access of the other Party and its Representatives
to the information contained as at the date of this Agreement in any dataroom that contains
information regarding the such Party to which the other Party and its Representatives have
access as at the date of this Agreement. |
| |
7.6. | Other
DeliveriesWithin ten (10) Business Days after the date hereof, (i) SRx shall deliver
to Parent all of the SRx Voting Agreements, and (ii) Parent shall deliver to SRx all of the
Parent Voting Agreements (provided, however, that the SRx Voting Agreement with Adesh Vora
has been entered into prior to or contemporaneously with the execution of this Agreement). |
|
(b) |
As
promptly as practicable after the execution and deliver of this Agreement, and in any event prior to the Effective Time, (i) SRx
shall deliver to Parent Lock-Up Agreements duly executed by each of the directors, executive officers and shareholders of SRx who
will fall within the definition of “Locked-Up Persons” at the Effective Time, and (ii) Parent shall deliver to SRx Lock-Up
Agreements duly executed by each of the directors, executive officers and shareholders of Parent who will fall within the definition
of “Locked-Up Persons” at the Effective Time. |
ARTICLE
VIII.
TERM,
TERMINATION, AMENDMENT AND WAIVER
8.1. | TermThis
Agreement shall be effective from the date hereof until the earlier of the Effective Time
and the termination of this Agreement in accordance with its terms. |
| |
8.2. | TerminationThis
Agreement may be terminated: |
| (i) | at
any time prior to the Effective Time by mutual written agreement of SRx and Parent; |
| (ii) | by
either SRx or Parent, 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 8.2(a)(ii)(A) shall not be available
to any Party whose failure to fulfill any of its obligations or breach any of its covenants,
representations and warranties under this Agreement has been the cause of, or resulted in,
the failure of the Effective Time to occur on or before the Outside Date; provided however,
that if completion of the Arrangement is delayed by (i) an injunction or order made by a
Governmental Entity of competent jurisdiction, or (ii) Parent or SRx not having obtained
any Key Regulatory Approval or the Interim Order or the Final Order which is necessary to
permit the completion of the Arrangement such that the conditions set forth in Section
6.1(a), 6.1(b) or 6.1(h) shall not have been satisfied or waived then,
provided that such injunction or order is being contested or appealed or such regulatory
waiver, consent or approval or the Interim Order or the Final Order is being actively sought,
as applicable, the Outside Date shall automatically be extended for an additional period
of thirty (30) days; |
| | |
| (B) | after
the date of this Agreement, any Governmental Entity of competent jurisdiction shall have
issued an order, decree or ruling or there shall be enacted or made any applicable Law that
makes consummation of the Arrangement illegal or otherwise prohibited or otherwise restrains,
enjoins or prohibits SRx or Parent, AcquireCo or CallCo from consummating the Arrangement
(unless such order, decree, ruling or applicable Law has been withdrawn, reversed or otherwise
made inapplicable) and such order, decree, ruling or applicable Law or enjoinment shall have
become final and non-appealable; |
| | |
| (C) | the
SRx Securityholder Approval shall not have been obtained at the SRx Meeting (at which a vote
was held) in accordance with applicable Law and the Interim Order; |
| | |
| (D) | the
Parent Shareholder Approval Matters shall not have been approved at the Parent Meeting (at
which a vote was held) in accordance with applicable Law; or |
| | |
| (E) | as
of the date of the SRx Meeting, the condition set forth in Section 6.1(i) has not
been satisfied or waived by all Parties. |
| (A) | prior
to obtaining the Parent Shareholder Approval, the Parent Board authorizes Parent to accept
a Superior Proposal, provided that Parent shall have (1) simultaneously with such termination,
entered into the Alternative Acquisition Agreement associated with such Superior Proposal,
(2) otherwise complied with its obligations set forth in Section 7.1 through Section
7.4 and (3) paid any amounts due pursuant to Section 8.3(b); |
| | |
| (B) | there
shall have occurred an SRx Material Adverse Effect which is incapable of being cured by the
Outside Date; |
| | |
| (C) | subject
to Section 6.4, SRx is in default of a covenant or obligation hereunder (other than
the covenants and obligations set forth in Section 7.1 and Section 7.2, as
to which Section 8.2(a)(iii)(D) shall apply) such that the condition contained in
Section 6.2(a) is not satisfied or is incapable of satisfaction, or any representation
or warranty of SRx or SRx under this Agreement is untrue or incorrect or shall have become
untrue or incorrect such that the condition contained in Section 6.2(b) would be incapable
of satisfaction; provided that Parent, AcquireCo and CallCo are not then in breach of this
Agreement so as to cause any of the conditions set forth in Section 6.2(a) or Section
6.2(b) not to be satisfied; or |
| | |
| (D) | SRx
shall have breached or failed to perform any of its obligations set forth in Section 7.1
through Section 7.4. |
| (A) | there
shall have occurred a Parent Change in Recommendation; |
| | |
| (B) | there
shall have occurred a Parent Material Adverse Effect which is incapable of being cured by
the Outside Date; |
| | |
| (C) | subject
to Section 6.4, Parent, AcquireCo or CallCo is in default of a covenant or obligation
hereunder (other than the covenants and obligations set forth in Section 7.1 and Section
7.2, as to which Section 8.2(a)(iv)(D) shall apply) such that the condition contained
in Section 6.3(a) is not satisfied or is incapable of satisfaction, or any representation
or warranty of Parent or AcquireCo under this Agreement is untrue or incorrect or shall have
become untrue or incorrect such that the condition contained in Section 6.3(b) would
be incapable of satisfaction; provided that SRx is not then in breach of this Agreement so
as to cause any of the conditions set forth in Section 6.3(a) or 6.3(b) not to be
satisfied; or |
| | |
| (D) | Parent
shall have breached or failed to perform any of its obligations set forth in Section 7.1
through Section 7.4. |
| (b) | Subject
to Section 6.4(b), the Party desiring to terminate this Agreement pursuant to this
Section 8.2 (other than pursuant to Section 8.2(a)(i)) shall give notice of
such termination to the other Party, specifying in reasonable detail the basis for such Party’s
exercise of its termination right. |
| | |
| (c) | If
this Agreement is terminated pursuant to this Section 8.2, this Agreement shall become
void and be of no further force or effect without liability of any Party (or any shareholder
or other Representative of such Party) to any other Party hereto, except that the provisions
of this Section 8.2(c) and Section 8.3, Section 9.1, Section 9.3. ,
Section 9.4 , Section 9.6, Section 9.7 and Section
9.8 and all related definitions set forth in Section 1.1 and the provisions of
the Confidentiality Agreement shall survive any termination of this Agreement pursuant to
this Section 8.2; provided further that neither the termination of this Agreement
pursuant to this Section 8.2 nor anything contained in this Section 8.2 shall
relieve a Party from any Liability arising prior to such termination arising from any willful
and material breach of this Agreement or fraud. |
8.3. | Expenses
and Termination PaymentExcept as otherwise provided herein, the Parties agree that all
costs and expenses of the Parties relating to the Arrangement and the transactions contemplated
in this Agreement, including legal fees, accounting fees, financial advisory fees, strategic
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 expenses. |
| (b) | The
Termination Payment shall be payable by Parent to SRx in the event that this Agreement is
terminated in the following circumstances: |
| (i) | pursuant
to Section 8.2(a)(iv)(A) (Parent Change in Recommendation), Section 8.2(a)(iv)(D)
(Breach of Parent Non-Solicitation Covenants) or Section 8.2(a)(iii)(A)
(Superior Proposal); or |
| (ii) | pursuant
to Section 8.2(a)(ii)(A) (Outside Date), Section 8.2(a)(ii)(D) (Failure
to Approve Parent Shareholder Approval Matters), Section 8.2(a)(iv)(B) (Parent
Material Adverse Effect) or Section 8.2(a)(iv)(C) (Parent Breach) if, in
any such case, prior to the earlier of the termination of this Agreement or the holding of
the Parent Meeting, (A) a Parent Acquisition Proposal, or the intention to make a Parent
Acquisition Proposal, shall have been publicly announced by any Person (other than SRx or
any of its affiliates) and not withdrawn prior to such termination or holding of the Parent
Meeting, and (B) within twelve (12) months after the later of the date of termination of
this Agreement or the holding of the Parent Meeting, (1) Parent has entered into a definitive
agreement with respect to or consummated a Parent Acquisition Proposal, (2) a Parent Acquisition
Proposal has been publicly accepted or recommended by the Parent Board, or (3) a Parent Acquisition
Proposal has been approved by or submitted for approval to the Parent Shareholders. For the
purpose of this Section 8.3(b)(ii), the term “Parent Acquisition Proposal”
shall have the meaning ascribed to such term in Section 1.1, except that references
to “20%” shall be deemed to be “50%”. For the avoidance of doubt,
the Parent Acquisition Proposal referred to in clauses (B)(1), (B)(2) and (B)(3) of this
Section 8.3(b)(ii) need not be the same Parent Acquisition Proposal that was made
to Parent or publicly announced prior to the termination of this Agreement or holding of
the Parent Meeting. |
The
Termination Payment shall be made by Parent by wire transfer of same-day funds, to an account designated by SRx, (x) in the event that
this Agreement is terminated pursuant to Section 8.2(a)(iii)(A), simultaneously with, and as a condition to the effectiveness
of, such termination, (y) in the event that this Agreement is terminated pursuant to Section 8.2(a)(iv)(A) or Section 8.2(a)(iv)(D),
as soon as practicable, and in any event within two (2) Business Days of the date on which this Agreement is terminated, and (z) in the
event that the Termination Payment is payable pursuant to Section 8.3(b)(ii), on the earliest occur of the events referred to
in clauses (B)(1), (B)(2) and (B)(3) thereof.
SRx
hereby acknowledges that the Termination Payment to which it may become entitled to is a payment of liquidated damages which is a genuine
pre-estimate of the damages which it will suffer or incur as a result of the event giving rise to such damages and the resultant non-completion
of the Arrangement and the transactions contemplated by this Agreement and is not a penalty. Parent hereby irrevocably waives any right
it may have to raise as a defense that any such liquidated damages are excessive or punitive. Upon receipt by SRx of the Termination
Payment, SRx shall have no further Claim against Parent at law or in equity or otherwise (including injunctive relief to restrain any
breach or threatened breach by Parent of any of its obligations hereunder or otherwise to obtain specific performance).
8.4. | AmendmentSubject
to the provisions of the Interim Order and Final Order, the Plan of Arrangement and applicable
Law, this Agreement and the Plan of Arrangement may, at any time and from time to time prior
to the Effective Time, be amended only by mutual written agreement of Parent and SRx, and
any such amendment may, without limitation: |
| (a) | change
the time for performance of any of the obligations or acts of the Parties; |
| | |
| (b) | waive
any inaccuracies or modify any representation or warranty contained herein or in any document
delivered pursuant hereto; |
| | |
| (c) | waive
compliance with or modify any of the covenants herein contained and waive or modify performance
of any of the obligations of the Parties; and |
| | |
| (d) | waive
compliance with or modify any mutual conditions precedent herein contained. |
Notwithstanding
the foregoing, after each of the SRx Securityholder Approval and the Parent Shareholder Approval has been obtained, no amendment shall
be made that pursuant to applicable Law requires further approval or adoption by the SRx Shareholders or the Parent Shareholders without
such further approval or adoption.
8.5. | WaiverAny
Party may (a) extend the time for the performance of any of the obligations or acts of the
other Party, (b) waive compliance, except as provided herein, with any of the other Party’s
agreements or the fulfilment of any conditions to its own obligations contained herein, or
(c) waive inaccuracies in any of the other Party’s representations or warranties contained
herein or in any document delivered by the other Party, in each case only to the extent such
obligations, agreements and conditions are intended for its benefit. Notwithstanding the
foregoing, after each of the SRx Securityholder Approval and the Parent Shareholder Approval
has been obtained, no waiver shall be made that pursuant to applicable Law requires further
approval or adoption by the SRx Shareholders or the Parent Shareholders without such further
approval or adoption. No extension or waiver shall be valid unless set forth in an instrument
in writing signed on behalf of the waiving Party and, unless otherwise provided in the written
waiver, will be limited to the specific breach or condition waived and shall not extend to
any other matter or occurrence. No failure or delay 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 AND MISCELLANEOUS
9.1. | PrivacyEach
Party shall comply with applicable privacy Laws in the course of collecting, using and disclosing
Personal Information in connection with the transactions contemplated hereby (the “Transaction
Personal Information”). No Party shall disclose Transaction Personal Information
originally collected by any other Party to any Person other than to its advisors who are
evaluating and advising on the transactions contemplated by this Agreement. If Parent completes
the transactions contemplated by this Agreement, Parent 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 applicable Law, use or disclose Transaction Personal
Information originally collected by SRx: |
| (a) | for
purposes other than those for which such Transaction Personal Information was collected by
SRx prior to the Effective Date; and |
| | |
| (b) | which
does not relate directly to the carrying on of the business of SRx (including carrying on
the SRx Business) or to the carrying out of the purposes for which the transactions contemplated
by this Agreement were implemented. |
The
Parties shall protect and safeguard the Transaction Personal Information against unauthorized collection, use or disclosure. Parent shall
cause its advisors to observe the terms of this Section 9.1 and to protect and safeguard all Transaction Personal Information
in their possession. If this Agreement shall be terminated, each Party shall promptly deliver to the other Party all Transaction Personal
Information originally collected by such other Party in its possession or in the possession of any of its advisors, including all copies,
reproductions, summaries or extracts thereof, except, unless prohibited by applicable Law, for electronic backup copies made automatically
in accordance with the usual backup procedures of the Party returning such Transaction Personal Information.
9.2. | NoticesAll
notices and other communications given or made pursuant to this Agreement shall be in writing
and shall be deemed to have been duly given and received on the day it is delivered, provided
that it is delivered on a Business Day prior to 4:30 p.m. Toronto time in the place of delivery
or receipt. However, if notice is delivered after 4:30 p.m. Toronto time or if such day is
not a Business Day then the notice shall be deemed to have been given and received on the
next Business Day. Notice shall be sufficiently given if delivered (either in person, by
courier service or other personal method of delivery), or if transmitted by e- mail to the
Parties at the following addresses (or at such other addresses as shall be specified by any
Party by notice to the other given in accordance with these provisions): |
| (a) | if
to Parent, AcquireCo or CallCo: |
12400
Race Track Road
Tampa,
FL 33626
Attention:
Mike Young and Carolina Martinez
Email:
myoung@cottcap.com / nmartinez@bttrco.com
Wildeboer
Dellelce LLP
Suite
800, Wildeboer Dellelce Place
365
Bay Street
Toronto,
ON M5H 2V1
Attention:
Perry Dellelce and James Brown
Email:
perry@wildlaw.ca; jbrown@wildlaw.ca
and
to:
Meister
Seelig & Fein PLLC
125
Park Avenue, 7th Floor
New
York, New York 10017
Attention
Louis Lombardo
Email:
LL@msf-law.com
SRX
Health Solutions Inc.
65
Queen street West
8th
floor Toronto, On
M5H
2M5
Attention:
Adesh Vora and Dave Sohi
Email:
adesh.vora@srxhealth.ca / dave.sohi@srxhealth.ca
and
to:
Borden
Ladner Gervais LLP
Bay
Adelaide Centre, East Tower,
22
Adelaide St. West
Toronto,
ON, Canada M5H 4E3
Attention:
Colin Cameron-Vendrig
Email:
ccameronvendrig@blg.com
Dorsey
& Whitney LLP
TD
Canada Trust Tower
Brookfield
Place 161 Bay Street, Suite 4310
Toronto,
ON M5J 2S1
Attention:
Richard Raymer
Email:
raymer.richard@dorsey.comGoverning Law
This
Agreement shall be governed, including as to validity, interpretation and effect, by the Laws of the Province of Ontario and the Laws
of Canada applicable therein, without giving effect to any principles of conflict of Laws thereof which would result in the application
of the Laws of any other jurisdiction. Each of the Parties hereby irrevocably attorns to the exclusive jurisdiction of the courts of
the Province of Ontario in respect of all matters arising under and in relation to this Agreement and the Arrangement. Notwithstanding
the foregoing, any provisions of this Agreement with respect to US Securities Laws shall be governed by applicable US Laws, and any provisions
with respect to the corporate governance, existence, good standing and authority of Parent shall be governed by the DGCL.
Subject
to Section 8.3(b), the Parties acknowledge and agree that irreparable harm would occur for which money damages would not be an
adequate remedy at law in the event that any of the provisions of this Agreement were not performed in accordance with their specific
terms or were otherwise breached. Accordingly, the Parties agree that, in the event of any breach or threatened breach of this Agreement
by a Party, the non-breaching Party will be entitled, without the requirement of posting a bond or other security, to seek equitable
relief, including injunctive relief and specific performance, and the Parties shall not object to the granting of injunctive or other
equitable relief on the basis that there exists an adequate remedy at law. Subject to Section 8.3(b), such remedies will not be
the exclusive remedies for any breach of this Agreement but will be in addition to all other remedies available at law or equity to each
of the Parties.
Time
shall be of the essence in this Agreement.
9.6. | Entire
Agreement, Binding Effect and Assignment |
This
Agreement (including the exhibits and schedules hereto and the SRx Disclosure Letter, the Parent Disclosure Letter and the other agreements,
documents and certificates delivered or to be delivered pursuant to this Agreement) and the Confidentiality Agreement constitute the
entire agreement, and supersede all other prior agreements and understandings, both written and oral, among the Parties, or any of them,
with respect to the subject matter hereof and thereof and, except as expressly provided herein, this Agreement is not intended to and
shall not confer upon any Person other than the Parties any rights or remedies hereunder. This Agreement shall inure to the benefit of
and be binding upon the Parties and their respective successors and permitted assigns. Neither this Agreement nor any of the rights,
interests or obligations hereunder may be assigned by any of the Parties without the prior written consent of the other Parties.
No
director or officer of Parent shall have any personal liability whatsoever to SRx under this Agreement, or any other document delivered
in connection with the transactions contemplated hereby on behalf of Parent. No director or officer of SRx shall have any personal liability
whatsoever to Parent, AcquireCo or CallCo under this Agreement, or any other document delivered in connection with the transactions contemplated
hereby on behalf of SRx.
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 contemplated hereby is not affected in any manner materially adverse to any Party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the fullest extent possible.
9.9. | Counterparts;
Execution |
This
Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together shall
constitute one and the same instrument. The Parties shall be entitled to rely upon delivery of an executed facsimile or similar executed
electronic copy of this Agreement, and such facsimile or similar executed electronic copy shall be legally effective to create a valid
and binding agreement among the Parties.
IN
WITNESS WHEREOF, the Parties have executed this Arrangement Agreement as of the date first written above by their respective officers
thereunto duly authorized.
|
BETTER
CHOICE COMPANY INC. |
|
|
|
|
By: |
/s/
Michael Young |
|
Name: |
Michael
Young |
|
Title: |
Chairman |
|
|
|
|
1000994476
ONTARIO INC. |
|
|
|
|
By: |
/s/
Michael Young |
|
Name: |
Michael
Young |
|
Title: |
President |
|
|
|
|
1000994085
ONTARIO INC. |
|
|
|
|
By: |
/s/
Michael Young |
|
Name: |
Michael
Young |
|
Title: |
President |
|
|
|
|
SRX
HEALTH SOLUTIONS INC. |
|
|
|
|
By: |
|
|
Name: |
Adesh
Vora |
|
Title: |
President
& Chief Executive Officer |
|
|
|
|
SRX
HEALTH SOLUTIONS INC. |
|
|
|
|
By: |
|
|
Name: |
Dave
Sohi |
|
Title: |
Chief
Financial Officer |
IN
WITNESS WHEREOF, the Parties have executed this Arrangement Agreement as of the date first written above by their respective officers
thereunto duly authorized.
|
BETTER
CHOICE COMPANY INC. |
|
|
|
|
By: |
|
|
Name: |
|
|
Title: |
|
|
|
|
|
[●] |
|
|
|
|
By: |
|
|
Name: |
|
|
Title: |
|
|
|
|
|
[●] |
|
|
|
|
By: |
|
|
Name: |
|
|
Title: |
|
|
|
|
|
SRX
HEALTH SOLUTIONS INC. |
|
|
|
|
By: |
/s/
Adesh Vora |
|
Name: |
Adesh
Vora |
|
Title: |
Chief
Executive Officer |
|
|
|
|
SRX
HEALTH SOLUTIONS INC. |
|
|
|
|
By: |
/s/
Dave Sohi |
|
Name: |
Dave
Sohi |
|
Title: |
Chief
Financial Officer |
SCHEDULE
A
PLAN
OF ARRANGEMENT
[See
Attached]
Execution
Version
PLAN
OF ARRANGEMENT
ARTICLE
1
INTERPRETATION
In
this Plan of Arrangement:
“Acquireco”
means 1000994476 Ontario Inc., an indirect subsidiary of Parent, incorporated under the laws of the Province of Ontario that issues the
Exchangeable Shares pursuant to the Arrangement.
“Amalgamation”
has the meaning set out in Section 2.2(h).
“Ancillary
Rights” means all rights relating to the Exchangeable Shares which are provided outside of the Exchangeable Share Provisions,
including, the interest of a holder of Exchangeable Shares as a beneficiary of the trust created under the Voting Trust Agreement and
all rights created under the Support Agreement.
“affiliate”
has the meaning ascribed thereto in the Securities Act (Ontario), as amended.
“Amalco”
means the indirect subsidiary of Parent, existing under the laws of the Province of Ontario formed upon the amalgamation of Acquireco
and SRx pursuant to Section 2.2(g).
“Arrangement”
means an arrangement under Section 182 of the OBCA on the terms and subject to the conditions set out in this Plan of Arrangement, subject
to any amendments or variations hereto made in accordance with this Plan of Arrangement and the Arrangement Agreement or made at the
direction of the Court.
“Arrangement
Agreement” means the arrangement agreement made as of September 3, 2024 between Parent, Acquireco, Callco and SRx, as amended,
supplemented and/or restated in accordance with its terms.
“Articles
of Arrangement” means the articles of arrangement of SRx in respect of the Arrangement required by the OBCA to be sent to the
Director after the Final Order is made, which shall be in a form and content satisfactory to Parent and SRx, each acting reasonably.
“Business
Day” means a day other than a Saturday, a Sunday or any other day on which commercial banking institutions in Toronto, Ontario
or Tampa, Florida are authorized or required by applicable Law to be closed.
“Callco”
means 1000994085 Ontario Inc, being a wholly-owned subsidiary of Parent incorporated under the laws of the Province of Ontario.
“Canadian
Resident” means (i) a person who is not a non-resident of Canada for the purposes of the Tax Act, or (ii) a partnership that
is a “Canadian partnership” for purposes of the Tax Act.
Execution
Version
“Certificate
of Arrangement” means the certificate of arrangement to be issued by the Director pursuant to subsection 183(2) of the OBCA
in respect of the Articles of Arrangement.
“Code”
means the United States Internal Revenue Code of 1986, as amended.
“Consideration”
means the consideration to be received by SRx Shareholders pursuant to the Plan of Arrangement in respect of each SRx Share that is issued
and outstanding immediately prior to the Effective Time, being either the Parent Share Consideration or the Exchangeable Share Consideration
as elected by a SRx Shareholder or as otherwise determined in accordance with Section 2.3 in respect of each SRx Share held.
“Court”
means the Ontario Superior Court of Justice (Commercial List).
“CRA” means the Canada Revenue Agency.
“Current
Market Price” has the meaning set out in the Exchangeable Share Provisions. “Depositary” means the person
acting as depositary under the Arrangement.
“Director”
means the Director appointed pursuant to Section 278 of the OBCA. “Dissent Rights” has the meaning set out in Section
3.1.
“Dissenting
Shareholder” means a registered holder of SRx Shares that has duly and validly exercised Dissent Rights and who is ultimately
entitled to be paid the fair value of such holder’s SRx Shares as determined in accordance with Section 3.1.
“Effective
Date” means the date shown on the Certificate of Arrangement giving effect to the Arrangement.
“Effective
Time” means 12:01 a.m. (Toronto time) on the Effective Date.
“Election
Deadline” means 4:00 p.m. (Toronto time) on the Business Day which is not less than five (5) Business Days preceding the Effective
Date, unless otherwise agreed in writing by Parent and SRx.
“Eligible
Holder” means an SRx Shareholder who is (i) a Canadian Resident, or (ii) a partnership, any member of which is a Canadian Resident.
“Exchange
Ratio” means the number of Parent Shares or Exchangeable Shares that an SRx Shareholder will receive at the Effective Time
in exchange for each one (1) SRx Share held, determined as follows:
A
= the number of Parent Shares or Exchangeable Shares to be received in exchange for each one (1) SRx Share, rounded to three decimal
places;
Execution
Version
B
= US$80,000,000 plus US$43,000,000 minus the SRx U.S. Dollar Net Debt;
C
= 30 Day VWAP; and
D
= the total number of SRx Shares outstanding immediately prior to the Effective Time,
provided
that if:
“Exchange
Time” means the time that the steps in Sections 2.2(c) and 2.2(e) occur.
“Exchangeable
Elected Shares” means SRx Shares (other than SRx Shares held by Parent or an affiliate) that the holder thereof shall have
elected, in accordance with Section 2.3(a) in a duly completed Letter of Transmittal and Election Form deposited with the Depositary
no later than the Election Deadline, to transfer to Acquireco under the Arrangement for the Exchangeable Share Consideration.
“Exchangeable
Share Consideration” means the consideration in the form of Exchangeable Shares, together with the Ancillary Rights, elected
for each SRx Share held by a SRx Shareholder (other than a Dissenting Shareholder) pursuant to Section 2.3(a), which shall be that number
of Exchangeable Shares equal to the Exchange Ratio for each SRx Share held immediately prior to the Effective Time.
“Exchangeable
Share Provisions” means the rights, privileges, restrictions and conditions attaching to the Exchangeable Shares shall be the
rights, privileges, restrictions and conditions as set forth in the articles of incorporation of Acquireco.
“Exchangeable
Shares” means the exchangeable shares in the capital of Acquireco having the rights, privileges, restrictions and conditions
set forth in the Exchangeable Share Provisions.
“Final
Order” means an Order of the Court granted pursuant to Section 185 of the OBCA, in a form acceptable to each of Parent and
SRx, each acting reasonably, approving the Arrangement after a hearing upon the procedural and substantive fairness of the terms and
conditions of the Arrangement, as such Order may be affirmed, amended, modified, supplemented or varied by the Court (with the consent
of Parent and SRx, each acting reasonably) at any time prior to the Effective Date or, if appealed, as affirmed or amended (provided,
however, that any such amendment is acceptable to Parent and SRx, each acting reasonably) on appeal, unless such appeal is withdrawn,
abandoned or denied.
Execution
Version
“Governmental
Entity” means (i) 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, (ii) any self-regulatory organization or stock exchange,
including the NYSE, (iii) any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining
to government; and (iv) 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.
“holder”
means the holder of SRx Shares, SRx RSUs or SRx Warrants shown from time to time in the central securities register maintained by or
on behalf of SRx in respect of such securities, as the context requires.
“including”
means “including without limitation” and “includes” means “includes without limitation”.
“Interim
Order” means an Order of the Court in a form acceptable to each of Parent and SRx, acting reasonably, providing for, among
other things, the calling and holding of the SRx Meeting, as the same may be amended by the Court with the consent of Parent and SRx,
each acting reasonably.
“Judgment”
means any judgment, Order, decree, award, ruling, decision, verdict, subpoena, injunction or settlement entered, issued, made or rendered
by any Governmental Entity (in each case whether temporary, preliminary or permanent).
“Law”
means, with respect to any person, any and all applicable law (statutory, common, civil or otherwise), constitution, treaty, convention,
ordinance, code, rule, regulation, Order, injunction, Judgment, decree, ruling or other similar requirement, whether domestic or foreign,
enacted, adopted, promulgated or applied by a Governmental Entity that is binding upon or applicable to such person or its business,
undertaking, property or securities, and to the extent that they have the force of law, policies, guidelines, notices and protocols of
any Governmental Entity, as amended.
“Letter
of Transmittal and Election Form” means the letter of transmittal and election form sent by SRx for use by holders of SRx Securityholders,
as applicable, in connection with the Arrangement, in the form accompanying the SRx Circular.
“NYSE”
means the New York Stock Exchange.
“OBCA”
means the Business Corporations Act (Ontario), as amended.
“Order”
means an order, injunction, Judgment, administrative complaint, decree, ruling, award, assessment, direction, instruction, penalty or
sanction issued, filed or imposed by any Governmental Entity.
Execution
Version
“person”
includes any individual, firm, partnership, limited partnership, limited liability partnership, joint venture, venture capital fund,
limited liability company, unlimited liability company, association, trust, trustee, executor, administrator, legal personal representative,
estate, body corporate, corporation, company, unincorporated association or organization, Governmental Entity, syndicate or other entity,
whether or not having legal status.
“Plan
of Arrangement” means this plan of arrangement.
“Preferred
Voting Share Provisions” means the rights, privileges, restrictions and conditions attaching to the special voting shares of
Acquireco, set forth in the articles of incorporation of Acquireco.
“Principal”
means Adesh Vora, the Founder, President and Chief Executive Officer of SRx.
“Parent”
means Better Choice Company Inc., a corporation existing under the laws of the State of Delaware.
“Parent
Share Consideration” means the Consideration in the form of Parent Shares elected or deemed to be elected for each SRx Share
held by an SRx Shareholder (other than a Dissenting Shareholder) pursuant to Section 2.3, which shall be that number of Parent Shares
equal to the Exchange Ratio for each SRx Share held immediately prior to the Effective Time.
“Parent
Shares” means the common stock, par value $0.001 per share, in the capital of Parent.
“SEC”
means the U.S. Securities and Exchange Commission.
“Securities
Authorities” means all securities regulatory authorities, including the applicable securities commission or similar regulatory
authorities in each of the provinces and territories of Canada, the SEC and the NYSE, that are applicable to SRx or Parent, as the case
may be.
“Special
Voting Share” means the special voting share in the capital of Parent having substantially the rights, privileges, restrictions
and conditions described in the Arrangement Agreement.
“SRx”
means SRx Health Solutions Inc., a corporation governed under the OBCA.
“SRx
Arrangement Resolution” means the special resolution of SRx Shareholders and the SRx Warrantholders (on an as-converted to
SRx Share basis) voting together as a single class, approving the Arrangement to be considered at the SRx Meeting.
“SRx
Circular” means the notice of the SRx Meeting and accompanying management information circular, including all schedules, appendices
and exhibits thereto and enclosures therewith, sent to the SRx Shareholders, as required by the Court in the Interim Order, in connection
with the SRx Meeting, as amended, supplemented or otherwise modified from time to time in accordance with the terms of this Agreement.
Execution
Version
“SRx
Meeting” means the special meeting of SRx Securityholders, including any adjournment or postponement thereof, to be called
and held in accordance with the Interim Order to consider the SRx Arrangement Resolution, and for any other purpose as may be set out
in the SRx Circular.
“SRx
Net Debt” means an amount equal to (a) the aggregate indebtedness for borrowed money of SRx (including accrued interest and
prepayment penalties, if applicable) as of 12:01 a.m. ET on the date that is five (5) Business Days before the Effective Date, minus
(b)
all cash and cash equivalents of SRx (including money market accounts, money market funds, money market instruments), including cash
in transit and all such cash and cash equivalents held by third-party processors, as of 12:01 a.m. ET on the date that is five (5) Business
Days before the Effective Date. For greater clarity, and without limiting the generality of the foregoing, the aggregate indebtedness
for borrowed money of SRx shall include all amounts owed under (i) that certain Credit Agreement, dated September 14, 2023, by and among
SRx, the guarantors and lenders named therein, and CWB Maximum Financial Inc., as administrative agent, and (ii) certain unsecured convertible
debentures issued by SRx between November 2022 and January 2023, in each case to the extent unpaid as of 12:01 a.m. ET on the date that
is five (5) Business Days before the Effective Date.
“SRx
RSU Holders” means the holders at the relevant time of SRx RSUs.
“SRx RSU Plan” means the Omnibus Long Term
Incentive Plan of SRx.
“SRx
RSUs” means, at any time, restricted share units of SRx granted under the SRx RSU Plan which are, at such time, outstanding,
whether or not vested.
“SRx
Securityholders” means SRx Shareholders, SRx RSU Holders and SRx Warrantholders;
“SRx
Securities” means SRx Shares, SRx RSUs and SRx Warrants;
“SRx Shareholders” means the holders of SRx Shares.
“SRx
Shares” means issued and outstanding common shares in the capital of SRx.
“SRx
U.S. Dollar Net Debt” the U.S. Dollar Equivalent of the SRx Net Debt based calculated as of the date that is five (5) Business
Days before the Effective Date.
“SRx
Warrantholders” means the holders at the relevant time of SRx Warrants.
“SRx
Warrants” means the common share purchase warrants to acquire SRx Shares which are at such time outstanding.
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“Support
Agreement” means an agreement to be made among Parent, Callco and Acquireco in connection with this Plan of Arrangement, which
shall be in a form and content satisfactory to Parent and SRx, each acting reasonably.
“Tax
Act” means the Income Tax Act (Canada) and the regulations made thereunder, as now in effect and as they may be promulgated
or amended from time to time.
“Tax
Election Package” a copy of CRA form T2057, or, if the SRx Shareholder is a partnership, a copy of CRA form T2058 and a copy
of any applicable equivalent provincial or territorial election form, each of which has been duly and properly completed and executed
by the SRx Shareholder in accordance with the rules contained in the Tax Act or the relevant provincial or territorial legislation.
“30
Day VWAP” means the volume weighted average trading price of the Parent Shares on the NYSE or such other principal stock exchange
on which the Parent Shares are trading, calculated by dividing the total value by the total volume of the Parent Shares trade for thirty
(30) trading days preceding the date that is five (5) Business Days prior to the Effective Time.
“Trading
Day” means any day on which Parent Shares are actually traded on the NYSE or such other stock exchange or automated quotation
system on which Parent Shares are actually traded if such shares do not trade on the NYSE.
“Transfer
Agent” means such person as may from time to time be appointed by Acquireco as the registrar and transfer agent for the Exchangeable
Shares.
“Trustee”
means the Principal or any other such person that the Principal determines.
“U.S.
Dollar Equivalent” means in respect of an amount expressed in a currency other than U.S. dollars (the “Foreign Currency
Amount”) the product obtained by multiplying:
| a) | the
Foreign Currency Amount by, |
| b) | the
single daily exchange rate on such date for such foreign currency expressed in U.S.
dollars as reported by the Bank of Canada or, in the event such exchange rate is not available, such exchange rate on such date for such
foreign currency expressed in U.S. dollars as may be deemed by the Board of Directors of SRx, acting reasonably, to be appropriate for
such purpose. |
“U.S.
Securities Act” means the United States Securities Act of 1933.
“Voting
Trust Agreement” means the trust agreement to be made among Parent, Acquireco and the Trustee in connection with this Plan
of Arrangement, which shall be in a form and content satisfactory to Parent and SRx, each acting reasonably, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with the terms thereof.
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1.2 | Headings
and References |
The
division of this Plan of Arrangement into Sections and the insertion of headings are for convenience of reference only and do not affect
the construction or interpretation of this Plan of Arrangement. Unless otherwise specified, references to Sections are to Sections of
this Plan of Arrangement.
Except
as expressly indicated otherwise, all sums of money referred to in this Plan of Arrangement are expressed and shall be payable in lawful
money of the United States and “$” refers to United States dollars. “CA$” refers to the lawful money of Canada.
Time
shall be of the essence in each and every matter or thing herein provided. Unless otherwise indicated, all times expressed herein are
local time at Toronto, Ontario.
ARTICLE
2
THE
ARRANGEMENT
Subject
to the terms of the Arrangement Agreement, the Arrangement will become effective at the Effective Time and shall be binding at and after
the Effective Time on SRx, Parent, Acquireco, Callco, the Depositary, the Trustee and all holders and beneficial holders of SRx Shares,
SRx RSUs and SRx Warrants, including Dissenting Shareholders.
Commencing
at the Effective Time on the Effective Date, subject to the terms and conditions of the Arrangement Agreement, the following shall occur
as part of the Arrangement and shall be deemed to occur sequentially in the following order (except that the steps in Sections 2.2(c)
to Section 2.2(f) shall be deemed to occur contemporaneously) without any further act or formality:
| (a) | each
SRx Share held by a Dissenting Shareholder shall be deemed to be transferred by the holder
thereof, without any further act or formality on its part, free and clear of all Encumbrances,
to SRx and SRx shall thereupon be obliged to pay the amount therefor determined and payable
in accordance with Article 3 hereof, and the name of such holder shall be removed from the
central securities register of SRx as a holder of SRx Shares and SRx shall be recorded as
the registered holder of the SRx Shares so transferred and shall be deemed to be the legal
owner of such SRx Shares, which SRx Shares shall thereupon be cancelled; |
| | |
| (b) | each
SRx Warrant outstanding immediately prior to the Effective Time that has not been exercised
in advance of the exercise deadline set out in the SRx Circular, shall be cancelled without
consideration; |
| | |
| (c) | notwithstanding
the terms of the SRx RSU Plan, each SRx RSU outstanding immediately prior to the Effective
Time shall be deemed to be vested, without any further action by or on behalf of an SRx RSU
Holder, and each SRx RSU Holder shall receive one SRx Share for each SRx RSU, and all of
SRx’ obligations under such SRx RSUs shall be deemed to be fully satisfied and the
SRx RSU Holders shall cease to have any rights as holders of the SRx RSUs, other than the
right to receive the compensation contemplated by this Plan of Arrangement and the SRx Shares
issued in connection with this Section 2.2(c) shall be treated as all other SRx Shares at
the Effective Time in accordance with Section 2.2(c) or Section 2.2(d), as applicable; |
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| (d) | contemporaneously
with the steps in Section 2.2(e) and Section 2.2(f), each issued and outstanding SRx Share
(other than Exchangeable Elected Shares and SRx Shares held by the Parent or Dissenting Shareholders)
held by a SRx Shareholder shall be transferred by the holder thereof, without any further
act or formality on its part, free and clear of all Encumbrances, to Acquireco in exchange
for Parent Share Consideration in accordance with the election or deemed election of such
SRx Shareholder pursuant to Section 2.3; |
| (e) | contemporaneously
with the step in Section 2.2(d) and Section 2.2(f), each Exchangeable Elected Share shall
be transferred by the holder thereof, without any further act or formality on its part, free
and clear of all Encumbrances, to Acquireco in exchange for Exchangeable Share Consideration
in accordance with the election of such SRx Shareholder pursuant to Section 2.3; |
| (f) | contemporaneously
with the step in Section 2.2(d) and Section 2.2(e): (i) Parent, Acquireco and Callco shall
execute the Support Agreement, and the Exchangeable Shareholders shall be deemed to be parties
thereto; (ii) Parent, Acquireco and the Trustee shall execute the Voting Trust Agreement
and Parent shall issue to and deposit with the Trustee the Special Voting Share in consideration
of the payment to Parent by SRx on behalf of the SRx Shareholders of ten dollars in Canadian
funds (CA$10.00), to be thereafter held of record by the Trustee for and on behalf of, and
for the use and benefit of, the holders of the Exchangeable Shares in accordance with the
Voting Trust Agreement, and the Exchangeable Shareholders shall be deemed to be parties thereto
to the extent necessary; |
| (g) | SRx
shall reduce the stated capital of the SRx Shares to CA$1.00; and |
| (h) | Acquireco
and SRx shall merge (the “Amalgamation”) to form one corporate entity,
Amalco, with the same effect as if they had amalgamated under Section 177(1) of the OBCA,
except that the legal existence of Acquireco shall not cease and AcquireCo shall survive
the merger as Amalco and the Amalgamation is intended to qualify as an amalgamation as defined
in subsection 87(1) of the Tax Act, and without limiting the generality of the foregoing,
upon and as a consequence of the Amalgamation; |
| (i) | the
separate legal existence of the SRx shall cease without SRx being liquidated or wound up
and Acquireco and SRx shall continue as one company and the property, rights, interests and
obligations of SRx shall become the property, rights, interests and obligations of Amalco; |
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| (ii) | the
properties, rights, interests and obligations of Acquireco shall continue to be the properties,
rights, interests and obligations of Amalco, and the Amalgamation shall not constitute an
assignment by operation of law, a transfer or any other disposition of the properties, rights
and interests of Acquireco to Amalco; |
| (iii) | Amalco
will own and hold the property of Acquireco and SRx and, without limiting the provisions
hereof, all rights of creditors or others of Acquireco and SRx will be unimpaired by the
Amalgamation, and all liabilities and obligations of Acquireco and SRx, whether arising by
contract or otherwise, may be enforced against Amalco to the same extent as if such obligations
had been incurred or contracted by Amalco; |
| (iv) | Amalco
will continue to be liable for all of the liabilities and obligations of Acquireco and SRx; |
| (v) | all
rights, contracts, permits and interests of Acquireco and SRx will continue as rights, contracts,
permits and interests of Amalco as if Acquireco and SRx continued and, for greater certainty,
the Amalgamation will not constitute a transfer or assignment of the rights or obligations
of either Acquireco or SRx under any such rights, contracts, permits and interests; |
| (vi) | any
existing cause of action, claim or liability to prosecution will be unaffected; |
| (vii) | a
civil, criminal or administrative action or proceeding pending by or against either Acquireco
or SRx may be continued by or against Amalco; |
| (viii) | a
conviction against, or ruling, order or judgment in favour of or against either Acquireco
or SRx may be enforced by or against Amalco; |
| (ix) | each
issued and outstanding share of each class of shares of Acquireco shall become a share of
the same class of shares of Amalco having the same terms and conditions as such Acquireco
shares had immediately prior to the Amalgamation and all of the issued and outstanding shares
of SRx will be cancelled without repayment of capital in respect thereof; |
| (x) | the
name of Amalco shall be SRX Health Solutions Inc.; |
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| (xi) | Amalco
shall be authorized to issue an unlimited number of Exchangeable Shares, Preferred Voting
Shares and common shares each without par value; |
| (xii) | the
articles and bylaws of Amalco shall be in the form of the articles and bylaws of Acquireco; |
| (xiii) | the
first annual general meeting of Amalco or resolutions in lieu thereof shall be held within
18 months from the Effective Date; |
| (xiv) | the
first directors of Amalco following the amalgamation shall be the then current Acquireco
directors; and |
| (xv) | the
stated capital of each class of shares of Amalco will be an amount equal to the stated capital
attributable to the corresponding class of Acquireco shares immediately prior to the Amalgamation. |
2.3 | Consideration
Elections |
With
respect to the exchange of securities effected pursuant to Section 2.2(e):
| (a) | SRx
Shareholders who are Eligible Holders may elect to (i) receive in respect of any or all of
their SRx Shares, the Exchangeable Share Consideration, and (ii)
receive in respect of the balance of their SRx Shares, if any, the Parent Share Consideration; |
| (b) | the
election provided for in Section 2.3(a) shall be made by an SRx Shareholder depositing with
the Depositary, prior to the Election Deadline, a duly completed Letter of Transmittal and
Election Form indicating such SRx Shareholder’s election, together with certificates
representing such holder’s SRx Shares, if any; |
| (c) | any
SRx Shareholder who does not deposit with the Depositary a duly completed Letter of Transmittal
and Election Form prior to the Election Deadline, or otherwise fails to comply with the requirements
of Section 2.3(b) and the Letter of Transmittal and Election Form in respect of any such
SRx Shareholder’s SRx Shares (including SRx Shareholders who duly exercise Dissent
Rights but are ultimately not entitled, for any reason, to be paid fair value for their SRx
Shares in respect of which they have exercised Dissent Rights), shall be deemed to have elected
to receive the Parent Share Consideration; |
| (d) | Letters
of Transmittal and Election Forms must be received by the Depositary on or before the Election
Deadline; and |
| (e) | any
Letter of Transmittal and Election Form, once deposited with the Depositary, shall be irrevocable
and may not be withdrawn by an SRx Shareholder. |
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| (a) | SRx
Shareholders who are Eligible Holders who are entitled to receive Exchangeable Share Consideration
under the Arrangement shall be entitled to make an income tax election pursuant to subsection
85(1) of the Tax Act or, if an SRx Shareholder is a partnership, subsection 85(2) of the
Tax Act (and in each case, where applicable, the analogous provisions of provincial or territorial
income tax Law) with respect to the transfer of their SRx Shares to Acquireco by providing
the Tax Election Package to the Depositary within 90 days following the Effective Date, duly
completed with the details of the number of Acquireco Shares transferred and the applicable
agreed amounts (which cannot be less than the fair market value of the Ancillary Rights at
the Exchange Time). Thereafter, subject to the Tax Election Package being duly completed,
the relevant forms will be signed by Acquireco and returned to such persons within 150 days
after the Effective Date for filing with the CRA (or the applicable provincial taxing agency).
Acquireco will not be responsible for the proper or accurate completion of the Tax Election
Package or to check or verify the content of any election form and, except for Acquireco’s
obligation to return duly completed Tax Election Packages which are received by the Depositary
within 90 days of the Effective Date, within 150 days after the Effective Date, Acquireco
will not be responsible for any taxes, interest or penalties or any other costs or damages
resulting from the failure by an SRx Shareholder to properly and accurately complete or file
the necessary election forms in the form and manner and within the time prescribed by the
Tax Act (or any applicable provincial or territorial legislation). In its sole discretion,
Acquireco may choose to sign and return Tax Election Packages received more than 90 days
following the Effective Date, but Acquireco will have no obligation to do so. |
| (b) | Upon
receipt of the Letter of Transmittal and Election Form in which an Eligible Holder has indicated
that the Eligible Holder intends to make an income tax election pursuant to subsection 85(1)
of the Tax Act or, if the person is a partnership, subsection 85(2) of the Tax Act (and in
each case, where applicable, the analogous provisions of provincial or territorial income
tax Law), Acquireco will promptly deliver a tax instruction letter (and a tax instruction
letter for the equivalent Quebec election, if applicable), together with the relevant tax
elections forms (including the Quebec election forms, if applicable) to the Eligible Holder. |
Every
SRx Shareholder from whom a SRx Share is transferred and acquired pursuant to the Arrangement shall be removed from the register of holders
of SRx Shares at the Effective Time and shall cease to have any rights in respect of such SRx Shares, and Acquireco shall become the
holder of such SRx Shares and shall be added to that register at the Effective Time and shall be entitled as of that time to all of the
rights and privileges attached to the SRx Shares. Every SRx Shareholder who acquires Exchangeable Shares and/or Parent Shares pursuant
to the Arrangement shall be added to the register of holders of Exchangeable Shares and/or Parent Shares, as applicable, and shall be
entitled as of the Effective Time to all of the rights and privileges attached to the Exchangeable Shares and/or Parent Shares, as the
case may be.
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2.6 | Convertible
Security Registers |
Every
SRx RSU Holder and SRx Warrantholder from whom an SRx RSU or SRx Warrant is terminated pursuant to the Arrangement shall be removed from
the registers of SRx RSU Holders and SRx Warrantholders, as applicable, at the Effective Time and shall cease to have any rights in respect
of such SRx RSUs or SRx Warrants, as applicable.
2.7 | Adjustments
to Consideration |
The
consideration to be paid pursuant to Sections 2.2(b), 2.2(c), 2.2(c), and 2.2(d) shall be adjusted to reflect fully the effect of any
stock split, reverse split, stock dividend (including any dividend or distribution of securities convertible into Parent Shares or SRx
Shares, other than stock dividends paid in lieu of ordinary course dividends), reorganization, recapitalization or other like change
with respect to Parent Shares or SRx Shares occurring after the date of the Arrangement Agreement and prior to the Effective Time.
Notwithstanding
any provision herein to the contrary, SRx, Parent and Acquireco agree that this Plan of Arrangement will be carried out with the intention
that all Consideration to be issued in connection with the Arrangement shall be exempt from registration requirements of the U.S. Securities
Act pursuant to the Section 3(a)(10) Exemption thereunder, and available exemptions from the registration or qualification requirements
of applicable U.S. state securities laws, and shall be without trading restrictions under the U.S. Securities Act (other than those that
would apply under the U.S. Securities Act to persons who are, have been within 90 days of the Effective Time, or, at the Effective Time,
become affiliates (as defined by Rule 144 of the U.S. Securities Act) of Acquireco or Parent as applicable).
ARTICLE
3
DISSENT RIGHTS
Registered
holders of SRx Shares may exercise rights of dissent with respect to those SRx Shares pursuant to, and (except as expressly indicated
to the contrary in this Section 3.1), in the manner set forth in, Section 185 of the OBCA and this Section 3.1 in connection with the
Arrangement (the “Dissent Rights”); provided that, notwithstanding Section 185(6) of the OBCA, the written objection
to the resolution approving the Arrangement referred to in Section 185(6) of the OBCA must be received by SRx not later than 5:00 p.m.
(Toronto time) on the second Business Day before the SRx Meeting; and provided further that, notwithstanding the provisions of Section
185 of the OBCA, SRx Shareholders who duly exercise Dissent Rights and who have not withdrawn or been deemed to have withdrawn such exercise
of Dissent Rights and who:
| (a) | ultimately
are determined to be entitled to be paid fair value for their SRx Shares, which fair value,
notwithstanding anything to the contrary contained in Section 185 of the OBCA, shall be determined
as of the Exchange Time, shall be deemed to have transferred those SRx Shares as of the Exchange
Time at the fair value of the SRx Shares determined as of the Exchange Time in accordance
with Section 2.2(a), without any further act or formality and free and clear of all Encumbrances,
to SRx and shall not be entitled to any other payment or consideration, including any payment
that would be payable under the Arrangement had such holder not exercised their Dissent Rights
in respect of such SRx Shares; or |
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| (b) | ultimately
are determined not to be entitled, for any reason, to be paid fair value for their SRx Shares,
shall be deemed to have participated in the Arrangement on the same basis as a holder of
SRx Shares who has not exercised Dissent Rights and shall be deemed to have elected to receive,
and shall receive, the consideration provided in Section 2.3(c), but in no case shall SRx,
Parent, Acquireco, the Depositary or any other person be required to recognize any such holder
as a holder of SRx Shares after the Exchange Time, and the names of each such holder shall
be deleted from the register of holders of SRx Shares at the Exchange Time. For greater certainty,
in addition to any other restrictions in the Interim Order, no SRx Shareholder shall be entitled
to exercise Dissent Rights with respect to SRx Shares in respect of which a SRx Shareholder
has voted or has instructed a proxyholder to vote in favour of the SRx Arrangement Resolution. |
ARTICLE
4
SHARE
DEPOSIT AND FRACTIONAL SHARES
At
least five (5) Business Days prior to the Effective Date, Parent shall deliver to SRx the information required for the 30 Day VWAP
and SRx shall deliver to Parent the information required for the SRx U.S. Dollar Net Debt. At least three (3) Business Days prior to
the Effective Time, Acquireco and Parent shall deposit or cause to be deposited with the Depositary, for the benefit of the holders
of SRx Shares, the aggregate number of whole Exchangeable Shares and the aggregate number of whole Parent Shares issuable to holders
of SRx Shares in accordance with Sections 2.2(c) and Section 2.2(e) under this Plan of Arrangement. Upon surrender to the Depositary
by a holder of SRx Shares of a duly completed Letter of Transmittal and Election Form and such other documents and instruments as
the Depositary may reasonably require along with the certificate or certificates, if any, representing such SRx Shares to be
exchanged under the Arrangement for cancellation, such holder of SRx Shares shall be entitled to receive, and promptly after the
Exchange Time the Depositary shall deliver to such person, written evidence of the book entry issuance in uncertificated form to, or
certificates registered in the name of, such person representing that number of Parent Shares and/or Exchangeable Shares which such
person is entitled to receive in accordance with Section 2.2(c) and Section 2.2(e) less any amounts withheld pursuant to Section
4.6, and any certificate so surrendered shall forthwith be cancelled. In the event of a transfer of ownership of such SRx Shares
which was not registered in the transfer records of SRx, written evidence of the book entry issuance of, or certificates
representing, the number of Parent Shares and/or Exchangeable Shares issuable to the registered holder may be registered in the name
of and issued to the transferee if the certificate representing such SRx Shares is presented to the Depositary, accompanied by a
duly completed Letter of Transmittal and Election Form and all documents required to evidence and effect such transfer. Without
limiting the provisions of Section 2.5, until surrendered as contemplated by this Section 4.1, each certificate which immediately
prior to the Exchange Time represented one or more outstanding SRx Shares that, under the Arrangement, were exchanged pursuant to
Section 2.2(c) or Section 2.2(e), shall be deemed at all times after the Exchange Time to represent only the right to receive upon
such surrender (i) the Consideration to which the holder thereof is entitled under the Arrangement, or as to a certificate held by a
Dissenting Shareholder (other than a shareholder who exercised Dissent Rights who is deemed to have participated in the Arrangement
pursuant to Section 3.1(b)), to receive the fair value of the SRx Shares represented by such certificate, and (ii) any dividends or
distributions with a record date after the Exchange Time theretofore paid or payable with respect to any Parent Shares or
Exchangeable Shares issued in exchange therefor as contemplated by Section 4.2, in each case less any amounts withheld pursuant to
Section 4.6.
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4.2 | Distributions
with Respect to Unsurrendered Certificates |
No
dividends or other distributions paid, declared or made with respect to Parent Shares or Exchangeable Shares, in each case with a
record date after the Exchange Time, shall be paid to the holder of any unsurrendered certificate which immediately prior to the
Exchange Time represented outstanding SRx Shares, unless and until such person shall have surrendered its certificates representing
SRx Shares in accordance with the provisions of Section 4.1. Subject to applicable Law, at the time such person shall have
surrendered its certificates representing SRx Shares in accordance with the provisions of Section 4.1, there shall be paid to such
person, without interest (i) the amount of dividends or other distributions with a record date after the Exchange Time theretofore
paid with respect to the Parent Share or the Exchangeable Share, as the case may be, to which such person is entitled pursuant
hereto, and (ii) on the appropriate payment date, the amount of dividends or other distributions with a record date after the
Exchange Time but prior to the date of surrender of certificates representing SRx Shares by such person in accordance with the
provisions of Section 4.1 and a payment date subsequent to the date of such compliance and payable with respect to such Parent
Shares or Exchangeable Shares, as the case may be.
No
fractional Parent Shares or fractional Exchangeable Shares shall be issued upon compliance with the provisions of Section 4.1 and no
dividend, stock split or other change in the capital structure of Parent or Acquireco shall relate to any such fractional security and
such fractional interests shall not entitle the owner thereof to exercise any rights as a security holder of Parent or Acquireco. Where
the aggregate number of Parent Shares or Exchangeable Shares to be issued to a SRx Shareholder as consideration under the Arrangement
would result in a fraction of an Parent Share or an Exchangeable Share being issuable, the number of Parent Shares or Exchangeable Shares,
as the case may be to be received by such SRx Shareholder shall be rounded down to the nearest whole Parent Share or Exchangeable Share,
as the case may be, and such person shall not be entitled to any compensation in respect of such fractional Parent Share or fractional
Exchangeable Share.
In
the event any certificate which immediately prior to the Exchange Time represented one or more outstanding SRx Shares that were exchanged
pursuant to Section 2.2 shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming
such certificate to be lost, stolen or destroyed, the Depositary will issue in exchange for such lost, stolen or destroyed certificate,
any Parent Shares or Exchangeable Shares (and any dividends or distributions with respect thereto) deliverable in accordance with Section
2.2 and such holder’s Letter of Transmittal and Election Form. When authorizing such payment in exchange for any lost, stolen or
destroyed certificate, the person to whom Parent Shares or Exchangeable Shares (and any dividends or distributions with respect thereto)
are to be issued shall, as a condition precedent to the issuance thereof, give a bond satisfactory to SRx, and Parent and its transfer
agent (each acting reasonably) in such amount as Parent may direct or otherwise indemnify SRx, Acquireco and Parent in a manner satisfactory
to SRx, Acquireco and Parent against any claim that may be made against SRx, Acquireco or Parent with respect to the certificate alleged
to have been lost, stolen or destroyed.
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Any
certificate which immediately prior to the Exchange Time represented outstanding SRx Shares that were exchanged pursuant to Section 2.2
that is not deposited with all other instruments required by Section 4.1 on the second anniversary of the Effective Date shall cease
to represent a claim or interest of any kind or nature as a securityholder of Parent or Acquireco. On such date, the Parent Shares and/or
Exchangeable Shares to which the former holder of the certificate referred to in the preceding sentence was ultimately entitled shall
be deemed to have been surrendered for no consideration to Acquireco. None of Parent, SRx, Acquireco, Callco or the Depositary shall
be liable to any person in respect of any cash or property delivered to a public official pursuant to any applicable abandoned property,
escheat or similar Law.
SRx,
Acquireco, Callco, Parent, the Depositary and their respective agents shall be entitled to deduct and withhold from any dividend, consideration
or amount otherwise payable to any holder of SRx Securities, Parent Shares or Exchangeable Shares such amounts as SRx, Acquireco, Callco,
Parent, the Depositary or their respective agents are required to deduct and withhold with respect to such payment under the Tax Act,
United States Tax Laws or any other applicable Law. To the extent that amounts are so withheld, such withheld amounts shall be treated
for all purposes hereof as having been paid to the holder of the securities in respect of which such deduction and withholding was made,
provided that such withheld amounts are actually remitted to the appropriate Governmental Entity. SRx, Acquireco, Callco, Parent, the
Depositary and their respective agents are hereby authorized to sell or otherwise dispose of such other portion of the consideration
as is necessary to provide sufficient funds to SRx, Acquireco, Callco, Parent, the Depositary or their respective agents, as the case
may be, to enable it to comply with such deduction or withholding requirement and SRx, Acquireco, Callco, Parent, the Depositary and
their respective agents, as applicable, shall notify the holder thereof and remit any unapplied balance of the net proceeds of such sale.
Any such sale will be made in accordance with applicable Law and at prevailing market prices and none of SRx, AcquireCo, Callco, Parent,
the Depositary, or any of their respective agents shall be under any obligation to obtain a particular price, or indemnify any Person
(including, for greater certainty, any SRx Shareholder, any SRx RSU Holder, any SRx Warrantholder and any Dissenting Shareholder) in
respect of a particular price, for the portion of the non-cash consideration so sold.
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From
and after the Effective Time: (i) this Plan of Arrangement shall take precedence and priority over any and all SRx Shares issued prior
to the Effective Time; (ii) the rights and obligations of the registered holders of SRx Shares (other than Parent, Acquireco or any of
their respective affiliates), and of SRx, Parent, Acquireco, the Depositary and any transfer agent or other depositary in relation thereto,
shall be solely as provided for in this Plan of Arrangement and the Arrangement Agreement; and (iii) 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 SRx Shares shall
be deemed to have been settled, compromised, released and determined without liability except as set forth herein.
ARTICLE
5
AMENDMENT
5.1 | Plan
of Arrangement Amendment |
| (a) | With
the prior written consent of Parent, not to be unreasonably withheld, SRx may amend, modify
and/or supplement this Plan of Arrangement at any time and from time to time, provided that
any such amendment, modification and/or supplement must be contained in a written document
that is filed with the Court and, if made after the SRx Meeting, approved by the Court and
communicated to the SRx Securityholders if and as required by the Court. |
| (b) | With
the prior written consent of Parent, not to be unreasonably withheld, any amendment, modification
or supplement to this Plan of Arrangement may be proposed by SRx at any time before or at
the SRx Meeting with or without any other prior notice or communication and, if so proposed
and accepted by the persons voting at the SRx Meeting in the manner required under the Interim
Order, shall become part of this Plan of Arrangement for all purposes. |
| (c) | Any
amendment, modification or supplement to this Plan of Arrangement that is approved or directed
by the Court following the SRx Meeting shall be effective only if it is consented to in writing
by SRx and Parent and, (ii) if required by the Court, it is consented to by SRx Shareholders,
SRx RSU Holders and/or SRx Warrantholders. |
| (d) | With
the prior written consent of Parent, not to be unreasonably withheld, any amendment, modification
or supplement to this Plan of Arrangement may be made prior to the Effective Date by SRx
and without the approval of the Court, SRx Shareholders, SRx RSU Holders or SRx Warrantholders,
provided that it concerns a matter which, in the reasonable opinion of SRx, is of an administrative
nature required to better give effect to the implementation of this Plan of Arrangement and
is not materially adverse to the financial or economic interests of any SRx Shareholder,
SRx RSU Holder or SRx Warrantholder. |
| (e) | This
Plan of Arrangement may be withdrawn prior to the Exchange Time in accordance with the Arrangement
Agreement. |
Execution
Version
ARTICLE
6
FURTHER ASSURANCES
Notwithstanding
that the transactions and events set out in this Plan of Arrangement shall occur and shall be deemed to occur in the order set out in
this Plan of Arrangement without any further act or formality, each of SRx, Parent, Callco and Acquireco shall make, do and execute,
or cause to be made, done and executed, all such further acts, deeds, agreements, transfers, assurances, instruments or documents as
may reasonably be required by any of them to document or evidence any of the transactions or events set out in this Plan of Arrangement.
ARTICLE
7
NOTICE
Any
notice to be given by Parent or Acquireco to SRx Shareholders, SRx RSU Holders or SRx Warrantholders pursuant to the Arrangement will
be deemed to have been properly given if it is mailed by first class mail, postage prepaid, to registered SRx Shareholders, SRx RSU Holders
and SRx Warrantholders, as the case may be, at their addresses as shown on the applicable register of such holders maintained by SRx
and will be deemed to have been received on the first day following the date of mailing which is a Business Day.
The
provisions of this Plan of Arrangement, the Arrangement Agreement and the Letter of Transmittal and Election Form apply notwithstanding
any accidental omission to give notice to any one or more SRx Shareholders, SRx Warrantholders or SRx RSU Holders and notwithstanding
any interruption of mail services in Canada, the United States or elsewhere following mailing. In the event of any interruption of mail
service following mailing, Parent intends to make commercially reasonable efforts to disseminate any notice by other means, such as dissemination
by press release. Notwithstanding the provisions of the Arrangement Agreement, this Plan of Arrangement and the Letter of Transmittal
and Election Form, certificates, if any, for Parent Shares and Exchangeable Shares issuable, pursuant to the Arrangement need not be
mailed if Parent determines that delivery thereof by mail may be delayed. Persons entitled to cheques and certificates which are not
mailed for the foregoing reason may take delivery thereof at the office of the Transfer Agent in respect of which the certificates being
issued were deposited, upon application to the Transfer Agent, until such time as Parent has determined that delivery by mail will no
longer be delayed. Notwithstanding the provisions of the Arrangement Agreement, this Plan of Arrangement and the Letter of Transmittal
and Election Form, the deposit of cheques and certificates with the Transfer Agent in such circumstances will constitute delivery to
the persons entitled thereto and the Parent Shares will be deemed to have been paid for immediately upon such deposit.
SCHEDULE
B
SRx
ARRANGEMENT RESOLUTION
| a) | the
arrangement (the “Arrangement”) under Section 182 of the Business Corporations
Act (Ontario) (the “OBCA”) involving BETTER CHOICE COMPANY INC., a
corporation existing under the laws of the State of Delaware (“Parent”),
1000994476 ONTARIO INC., a corporation existing under the laws of the Province of Ontario
(“AcquireCo”), 1000994085 ONTARIO INC., a corporation existing under the
laws of the Province of Ontario (“CallCo”), and SRX HEALTH SOLUTIONS INC.,
a corporation existing under the laws of the Province of Ontario (“SRx”),
as more particularly described and set forth in the management information circular of SRx
(the “Circular”) dated , 2024 accompanying the notice of this
meeting (as the Arrangement may be, or may have been, modified, amended or supplemented in
accordance with the definitive arrangement agreement (as it may be amended, the “Arrangement
Agreement”) made as of September 3, 2024 between Parent, AcquireCo, CallCo and
SRx) is hereby authorized, approved and adopted; |
| b) | the
plan of arrangement of SRx (as may be, or may have been, modified, amended or supplemented
in accordance with its terms and the terms of the Arrangement Agreement as the “Plan
of Arrangement”) implementing the Arrangement, the full text of which is set out
in Schedule to the Circular, is hereby authorized, approved and adopted; |
| c) | the
(i) Arrangement Agreement and related transactions, (ii) actions of the director of SRx in
approving the Arrangement Agreement, and (iii) actions of the director and officers of SRx
in executing and delivering the Arrangement Agreement, and any amendments, modifications
or supplements thereto, are hereby ratified and approved; |
| d) | SRx
be and is hereby authorized to apply for a final order from the Ontario Superior Court of
Justice (Commercial List) (the “Court”) to approve the Arrangement on
the terms set forth in the Arrangement Agreement and the Plan of Arrangement (as they may
be modified, amended or supplemented as described in the Circular); |
| e) | notwithstanding
that this resolution has been passed (and the Arrangement approved) by the shareholders of
SRx or that the Arrangement has been approved by the Court, the directors of SRx are hereby
authorized and empowered, without further notice to, or approval of, the shareholders of
SRx to (i) modify, amend or supplement the Arrangement Agreement or the Plan of Arrangement
to the extent permitted by the terms of the Arrangement Agreement or the Plan of Arrangement;
and (ii) subject to the terms of the Arrangement Agreement, not to proceed with the Arrangement
and related transactions; |
| f) | any
director or officer of SRx is hereby authorized and directed for and on behalf of SRx to
execute, whether under corporate seal of SRx or otherwise, and to deliver for filing with
the Director under the OBCA articles of arrangement and such other documents as are necessary
or desirable to give effect to the Arrangement in accordance with the Arrangement Agreement,
such determination to be conclusively evidenced by the execution and delivery of such articles
of arrangement and any such other documents; and |
| g) | any
one director or officer of SRx is hereby authorized and directed, for and on behalf and in
the name of SRx, to execute or cause to be executed and to deliver or cause to be delivered,
whether under corporate seal of SRx or otherwise, all such agreements, forms, waivers, notices,
certificate, confirmations and other documents and instruments, and to perform or cause to
be performed all such other acts and things, as in the opinion of such director or officer
may be necessary, desirable or useful for the purpose of giving effect to these resolutions
and the matters authorized thereby, the Arrangement Agreement and completion of the Plan
of Arrangement, including: |
| a. | a.
all actions required to be taken by or on behalf of SRx, and all necessary filings and obtaining
the necessary approvals, consents and acceptances of appropriate regulatory authorities;
and |
| b. | the
signing of the certificates, consents and other documents or declarations required under
the Arrangement Agreement or otherwise to be entered into by SRx; such determination to be
conclusively evidenced by the execution and delivery of such document, agreement or instrument
or the doing of any such act or thing. |
SCHEDULE
C
REPRESENTATIONS AND WARRANTIES OF SRx
SRx
represents and warrants to and in favor of Parent as follows, and acknowledges that Parent is relying upon such representations and warranties
in connection with the completion of the transactions contemplated herein:
| (a) | Schedule
C(a) of the SRx Disclosure Letter sets forth the name and jurisdiction of incorporation
of SRx and each of its subsidiaries (in this Schedule C, the “SRx Subsidiaries”).
Each of SRx and the SRx Subsidiaries (i) has been duly incorporated and is validly existing
and in good standing under the laws of its jurisdiction of incorporation and is up-to-date
in respect of all material corporate filings; (ii) has all requisite corporate or other organization,
as applicable power and authority to carry on its business as now conducted and to own or
lease and operate its assets and properties; and (iii)
in respect of SRx, has all requisite corporate power and authority to enter into and carry out its obligations under this Agreement. |
| (b) | SRx
does not beneficially own, or exercise control or direction over, directly or indirectly,
any interest in any other Person other than the SRx Subsidiaries or any agreement, option
or commitment to acquire any such investment. All of the issued and outstanding securities
of the SRx Subsidiaries are owned by SRx. |
| (c) | No
steps or proceedings have been taken, instituted or, to the knowledge of SRx, are pending
for the dissolution, liquidation or winding up of SRx or an SRx Subsidiary. Except as disclosed
in Schedule C(c) of the SRx Disclosure Letter, neither SRx nor any SRx Subsidiary:
(i) is insolvent or bankrupt under or pursuant to any corporate, insolvency, winding-up,
restructuring, reorganization, administration or other Laws applicable to it; (ii) has commenced,
approved, authorized or taken any action in furtherance of proceedings in respect of it under
any applicable bankruptcy, insolvency, restructuring, reorganization, administration, winding
up, liquidation, dissolution, or similar Law; (iii) has proposed a compromise or arrangement
with its creditors generally or is or has been subject to any actions taken, orders received
or proceedings commenced by creditors or other Persons for or in respect of the bankruptcy,
receivership, insolvency, restructuring, reorganization, administration, winding-up, liquidation
or dissolution of it, or any of its property or assets; (iv) had any encumbrancer take possession
of any of its property, or (v) had any execution or distress become enforceable or become
levied upon any of its property. SRx is not unable to pay its liabilities as they become
due and the realizable value of the assets of SRx are not less than the aggregate of its
liabilities and stated capital of all classes. |
| (d) | Each
of SRx and the SRx Subsidiaries is, in all material respects, conducting its business in
compliance with all applicable Laws (including all material applicable federal, provincial,
state, municipal and local laws, regulations and other lawful requirements of any Governmental
Entity) of each jurisdiction in which its business is carried on and is duly licensed, registered
or qualified in all jurisdictions in which it owns, leases or operates its property or carries
on business to enable its business to be carried on as now conducted and its property and
assets to be owned or leased and operated and all such licenses, registrations and qualifications
are valid, subsisting and in good standing and it has not received a notice of non-compliance,
nor knows of, nor has reasonable grounds to know of, any facts that could give rise to a
notice of non-compliance with any such Laws, licenses, permits, registrations or qualifications
which would reasonably be expected to result in an SRx Material Adverse Effect. |
| (e) | SRx
has the requisite corporate power and authority to enter into, deliver and perform its obligations
under this Agreement. The execution and delivery of this Agreement and performance by SRx
of its obligations under this Agreement and the consummation of the Arrangement and other
transactions contemplated hereby have been duly authorized by all necessary corporate action
of SRx and no other corporate proceedings on the part of SRx are necessary to authorize the
execution, delivery and performance of this Agreement or the consummation of the Arrangement
and the other transactions contemplated hereby other than the approval by the SRx Board of
the SRx Circular and the approval by the SRx Securityholders in the manner required by the
Interim Order, applicable Law and approval of the Arrangement by the Court. |
| (f) | This
Agreement has been duly and validly executed and delivered by SRx and, assuming due authorization,
execution and delivery by Parent, AcquireCo and CallCo, constitutes a legal, valid and binding
obligation of SRx, enforceable against SRx in accordance with its terms, subject however,
to limitations with respect to enforcement imposed by Law in connection with bankruptcy,
insolvency, reorganization or other Laws affecting creditors’ rights generally and
to the extent that equitable remedies such as specific performance and injunctions are only
available in the discretion of the court from which they are sought. |
| (g) | Other
than the Interim Order and any approvals required by the Interim Order, the Final Order,
filings with the Director under the OBCA and such filings and other actions required under
applicable Securities Laws and the Key Regulatory Approvals set out in in Schedule E,
no Authorization or consent of any Governmental Entity, and no notice, registration, declaration
or filing by SRx or any of the SRx Subsidiaries with any such Governmental Entity is required
in connection with the execution and delivery of, and performance by SRx of its obligations
under, this Agreement or the consummation of the Arrangement and the other transactions contemplated
in this Agreement. |
| (h) | Other
than as set out in Schedule C(h) of the SRx Disclosure Letter, there is no requirement
under any SRx Material Contract to make a filing with, give any notice to, or to obtain the
consent or approval of, any party to such SRx Material Contract relating to the transactions
contemplated by this Agreement. |
| (i) | The
execution and delivery of this Agreement by SRx, the performance by SRx of its obligations
hereunder and the consummation of the transactions contemplated hereby do not and will not
(whether after notice or lapse of time or both) (i) conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under (whether after
notice or lapse of time or both) or give rise to any right of termination or acceleration
of any obligations or indebtedness, and neither SRx nor an SRx Subsidiary is currently in
material breach or default of, (A) any Law applicable to SRx or an SRx Subsidiary; (B) the
constating documents or resolutions of SRx or any SRx Subsidiary, as applicable; (C) any
Contract or Debt Instrument to which SRx or any SRx Subsidiary is a party or by which it
is bound, except as disclosed in Schedule C(i) of the SRx Disclosure Letter, or (D)
any judgment, decree or order binding SRx or any SRx Subsidiary, as applicable, or the assets
or properties thereof; (ii) allow any Person to exercise any rights, require any consent
or other action by any Person or permit the termination, cancellation, acceleration or other
change of any right or other obligation or the loss of any benefit to which SRx or any SRx
Subsidiary is entitled (including by triggering any rights of first refusal or first offer,
change in control provision or other restriction or limitation) under any Material Contract;
or (iii) result in the creation or imposition of any Encumbrance up on any of SRx’s
assets or the assets of the SRx Subsidiaries. |
| (j) | Schedule
C(j) of the SRx Disclosure Letter sets forth the authorized, issued and outstanding share
capital of SRx and each of the SRx Subsidiaries. All of the issued and outstanding shares
of capital stock of, or other equity or voting interests in, each of SRx and the SRx Subsidiaries
has been duly authorized and validly issued in compliance with applicable Laws and, is fully
paid and non- assessable, were not issued in violation of any pre-emptive rights, purchase
options, call options, rights of first refusal, first offer, co-sale or participation or
subscription rights or other similar rights. Except as set out in Schedule C(j) of
the SRx Disclosure Letter, all of the issued and outstanding shares of capital stock of,
or other equity or voting interests in, each SRx Subsidiary is owned, directly or indirectly,
both as a matter of record and beneficially by SRx and is free and clear of all Encumbrances
(except for Permitted Encumbrances). Schedule C(k) of the SRx Disclosure Letter sets
forth a list of all other securities of SRx. |
| (k) | Except
for the securities set forth in Schedule C(k) of the SRx Disclosure Letter, no Person
now has any agreement or option or right or privilege (whether at law, pre-emptive or contractual)
capable of becoming an agreement for the purchase, subscription, redemption, repurchase or
issuance of, or conversion into, any shares, securities, warrants or convertible obligations
of any nature of SRx and a sufficient number of SRx Shares are reserved for issuance pursuant
to outstanding options, warrants, share incentive plans, convertible, exercisable and exchangeable
securities and other rights to acquire SRx Shares. Schedule C(k) of the SRx Disclosure
Letter sets forth all issued and outstanding securities of SRx convertible into SRx Shares. |
| (l) | SRx
is not aware of any legislation, or proposed legislation published by a legislative body,
which it anticipates will result in an SRx Material Adverse Effect. |
| (m) | The
SRx Financial Statements (i) have been prepared in accordance with IFRS applied on a consistent
basis throughout the periods involved (except as may be indicated in the notes thereto), (ii)
fairly present, in all material respects, the consolidated financial position of SRx and the SRx Subsidiaries as at the respective
dates thereof and the consolidated results of their operations and cash flows for the periods indicated (except that the unaudited
interim financial statements were or are subject to normal and recurring year-end adjustments) and (iii) when delivered by SRx for
inclusion in the Parent Proxy Statement for filing with the SEC following the date of this Agreement in accordance with Section
2.10, will comply in all material respects with the applicable accounting requirements and with the rules and regulations of the
SEC, the U.S. Exchange Act and the U.S. Securities Act applicable to a registrant, in effect as of the date thereof. Since September
30, 2023, there have been no formal investigations regarding financial reporting or accounting policies and practices discussed
with, reviewed by or initiated at the direction of the Chief Executive Officer or Chief Financial Officer of SRx, the SRx Board or
any committee thereof. Since September 30, 2023, neither SRx nor its independent auditors have identified (i) any significant
deficiency or material weakness in the system of internal accounting controls utilized by SRx, (ii) any fraud, whether or not
material, that involves SRx’s management or other employees who have a role in the preparation of financial statements or the
internal accounting controls utilized by SRx, or (iii) any claim or allegation regarding any of the foregoing. Except as disclosed
in the SRx Financial Statements, neither SRx nor any of the SRx Subsidiaries has any liabilities, indebtedness, obligation, expense,
claim, deficiency, guaranty, or endorsement, whether accrued, absolute, contingent, matured, or unmatured of the kind required to be
disclosed on a balance sheet or in the related notes to the consolidated financial statements prepared in accordance with IFRS which
are, individually or in the aggregate, material to the business, results of operations or financial condition of SRx and the SRx
Subsidiaries taken as a whole, except liabilities (i) identified in the balance sheet of SRx as of the Latest Balance Sheet Date or
the notes thereto, (ii) incurred in connection with the transactions contemplated by this Agreement, (iii) described on Schedule
C(m) of the SRx Disclosure Letter, (iv) executory obligations under any Contract or (v) incurred since the date of the
balance sheet of SRx as of the Latest Balance Sheet Date in the ordinary course of business. SRx does not intend to correct or
restate, nor is there any basis for any correction or restatement of, any aspect of the SRx Financial Statements. |
| (n) | Since
the Latest Balance Sheet Date through the date of this Agreement and other than with respect
to the negotiation, execution and performance of this Agreement, each of SRx and the SRx
Subsidiaries has conducted its business only in the ordinary course of business, and there
has not been: (i) any event that has had an SRx Material Adverse Effect, or (ii) any material
change by SRx or any SRx Subsidiary in its accounting methods, principles or practices, except
as required by concurrent changes in IFRS or as disclosed in the notes to the SRx Financial
Statements. |
| (o) | Neither
SRx nor any of the SRx Subsidiaries has any material liabilities or obligations of any nature,
whether or not accrued, contingent or otherwise, except for: (i) liabilities and obligations
that are adequately presented or reserved on the SRx Financial Statements or disclosed in
the notes thereto; or (ii) liabilities and obligations incurred in the ordinary course of
business that are not and would not, individually or in the aggregate with all other liabilities
and obligations of SRx and the SRx Subsidiaries (other than those disclosed on the SRx Financial
Statements), be material to SRx and the SRx Subsidiaries (taken as a whole). Without limiting
the foregoing, the SRx Financial Statements reflects reasonable reserves in accordance with
IFRS for contingent liabilities of SRx and the SRx Subsidiaries. |
| (p) | Each
of SRx and the SRx Subsidiaries maintains internal control over financial reporting. Such
internal control over financial reporting is effective in providing reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with IFRS and includes policies and procedures that:
(A) provide reasonable assurance that transactions are recorded as necessary to permit preparation
of financial statements in accordance with IFRS, and that receipts and expenditures of SRx
and the SRx Subsidiaries are being made only with appropriate authorizations of management
and directors of SRx and the SRx Subsidiaries, as applicable; and (B) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition
of the assets of SRx or the SRx Subsidiaries that could have a material effect on its financial
statements. As of the date of this Agreement, there neither is, nor has been, any fraud with
respect to SRx or the SRx Subsidiaries, whether or not material, relating to the financial
reporting or internal control over financial reporting of SRx or the SRx Subsidiaries, as
applicable. As of the date of this Agreement, to the knowledge of SRx, there is no fraud
that involves management or any other employees who have a role in the internal control over
financial reporting of SRx or the SRx Subsidiaries. |
| (q) | There
are no actions, proceedings or, to SRx’s knowledge, investigations (whether or not
purportedly by or on behalf of SRx) commenced or, to the knowledge of SRx, threatened or
pending against or relating to SRx or any SRx Subsidiary or the business thereof or affecting
any of their assets and properties or against any current officer or director relating to
such individual’s role with SRx or any SRx Subsidiary at law or in equity (whether
in any court, arbitration or similar tribunal) or before or by any Governmental Entity, that
would reasonably be expected to result in an SRx Material Adverse Effect or prevent or materially
delay the consummation of the Arrangement. |
| (r) | Except
as disclosed in Schedule C(r) of the SRx Disclosure Letter, none of SRx or any SRx
Subsidiary is a party to or bound or affected by any commitment, agreement or document containing
any covenant which expressly limits the freedom of SRx or the SRx Subsidiary to compete or
operate in any line of business, transfer or move any of its assets or operations or which
materially or adversely affects the business practices, operations or condition of SRx or
the SRx Subsidiary. |
| (s) | Except
as disclosed in Schedule C(s) of the SRx Disclosure Letter, neither SRx nor any of
the SRx Subsidiaries is party to, bound by or subject to any indenture, mortgage, lease,
agreement, license, permit, authorization, certification, instrument, statute, regulation,
order, judgment, decree or law that would be violated or breached by, or under which default
would occur or which could be terminated, cancelled or accelerated, in whole or in part,
or that would require consent or notice, as a result of the execution, delivery and performance
of this Agreement or the consummation of any of the transactions provided for in this Agreement
and the Plan of Arrangement (except (i) as would not, individually or in the aggregate, have
or reasonably be expected to have, individually or in the aggregate, an SRx Material Adverse
Effect or (ii) as set out in Schedule E of this Agreement (Key Regulatory Approvals)). |
| (t) | Except
as disclosed in Schedule C(t) of the SRx Disclosure Letter, SRx is not party to any
Contract or arrangement, nor to the knowledge of SRx, is there any shareholders agreement
or other Contract, which in any manner affects the voting control of any of the securities
of SRx. |
| (u) | Except
as disclosed in Schedule C(u) of the SRx Disclosure Letter, SRx and the SRx Subsidiaries
have duly and timely filed all income and other Tax Returns required to be filed by them
and all such Tax Returns are complete and correct in all material respects. |
| (v) | SRx
and the SRx Subsidiaries have paid on a timely basis all Taxes which are due and payable
or required to be paid by them, other than those which are being or have been contested in
good faith and in respect of which adequate reserves have been provided in the SRx Financial
Statements. SRx and
the SRx Subsidiaries have provided adequate accruals in accordance with IFRS in the SRx Financial Statements for any Taxes for the period
covered by such financial statements that have not been paid whether or not shown as being due on any Tax Returns. |
| (w) | neither
SRx nor the SRx Subsidiaries have declared nor paid (nor been deemed to have paid) any “taxable
dividend”, “eligible dividend” or “capital dividend”, all as
defined in the Tax Act. |
| (x) | Except
as disclosed in Schedule C(x) of the SRx Disclosure Letter, no deficiencies, litigation,
proposed adjustments or matters in controversy exist or have been asserted in writing with
respect to any Taxes or Tax Returns of SRx or the SRx Subsidiaries, and neither SRx nor the
SRx Subsidiaries are a party to any action or proceeding for assessment or collection of
Taxes, and no such event has been asserted in writing or, to the knowledge of SRx, threatened
against SRx or the SRx Subsidiaries. |
| (y) | No
written claim has been made by any Governmental Entity in a jurisdiction where SRx or any
of the SRx Subsidiaries does not file a Tax Return that SRx, or any of the SRx Subsidiaries,
is or may be liable to Tax by that jurisdiction or is or may be required to file a Tax Return
with a Governmental Entity of that jurisdiction. |
| (z) | For
the purposes of the Tax Act, and any applicable Tax treaty and any other relevant Tax purposes,
(i) SRx is resident in Canada and is a “table Canadian corporation” for purposes
of the Tax Act; and (ii) the SRx Subsidiaries are each resident in the jurisdiction in
which they were formed, and are not resident in any other country. |
| (aa) | There
are no Encumbrances (other than Permitted Encumbrances) with respect to Taxes upon any of
the assets of SRx or the SRx Subsidiaries. |
| (bb) | Each
of SRx and the SRx Subsidiaries has withheld, deducted, charged or collected all amounts
required to be withheld, deducted, charged or collected by it on account of Taxes and has
remitted all such amounts to the appropriate Governmental Entity when required by Law to
do so. SRx and the SRx Subsidiaries are in compliance with, and their respective records
contain all information and documents necessary to comply with, all applicable information
reporting and withholding requirements under all Law. |
| (cc) | Neither
SRx nor any of the SRx Subsidiaries is a party or is bound by any Tax sharing, allocation,
indemnification agreement or arrangement. Without limiting the generality of the foregoing,
neither SRx nor any of the SRx Subsidiaries has entered into an agreement contemplated in
section 80.04 or 191.3, or subsection 18(2.3), 125(3), 127(13) to (17) or 127(20) of the
ITA or any analogous provision of any comparable Law of any province or territory of Canada. |
| (dd) | There
are no outstanding agreements extending or waiving the statutory period of limitations applicable
to any claim for, or the period for the collection or assessment or reassessment of Taxes
due from SRx or any of the SRx Subsidiaries, for any taxable period and no request for any
such waiver or extension is currently pending. |
| (ee) | SRx
and the SRx Subsidiaries have complied with applicable transfer pricing Laws (including with
respect to the preparing, obtaining or retaining all required documentation), including for
greater certainty, with the provisions of section 247 of the Tax Act (and the corresponding
provisions of any other Law). |
| (ff) | Except
as disclosed in Schedule C(ff) of the SRx Disclosure Letter, SRx and the SRx Subsidiaries
have not, at any time, directly or indirectly transferred any property or supplied any services
to, or acquired any property or services from, a Person with whom SRx or the SRx Subsidiaries
was not dealing at arm’s length (within the meaning of the Tax Act) for consideration
other than consideration equal to the fair market value of such property or services at the
time of transfer, supply or acquisition, as the case may be, nor has SRx or the SRx Subsidiaries
been deemed to have done so for purposes of the Tax Act or any other Law. |
| (gg) | There
are no circumstances existing which could result in the application of sections 17, 78, 79,
79.1, sections 80 to 80.04 or subsection 90(6) of the Tax Act, or any equivalent provision
of any other Law, to SRx or the SRx Subsidiaries. Except as in accordance with past practices,
SRx and the SRx Subsidiaries have not claimed any reserve, credit, deduction or other amount
under any provision of the Tax Act or any other Law, if any amount could be included in the
income of SRx or the SRx Subsidiaries for any period ending after or including the Effective
Date. |
| (hh) | Neither
SRx nor any of the SRx Subsidiaries will be required to include an item of income or gain
in, or exclude any item of deduction or loss from, taxable income for or otherwise be liable
for Tax in any period (or any portion thereof) ending after the Effective Date as a result
of any (i) transaction, income or gain attributable to any period (or portion thereof) ending
on or prior to the Effective Date, (ii) installment sale, open transaction disposition or
other transaction occurring on or prior to the Effective Date, (iii) change in method of
accounting made or requested on or prior to the Effective Date, (iv) use of an improper method
of accounting on or prior to the Effective Date, (v) prepaid amount received, or deferred
revenue accrued, on or prior to the Effective Date, or (vi) closing agreement with any Tax
authority executed on or prior to the Effective Date. |
| (ii) | The
SRx Shares are not “taxable Canadian property” as such term is defined in the
Tax Act (or any analogous provision of any applicable comparable Law of any province or territory
of Canada.). |
| (jj) | Neither
SRx nor any of the SRx Subsidiaries has (i) undertaken, participated in, entered into or
been contractually obligated to enter into a “reportable transaction” or “notifiable
transaction” (each as defined in the Tax Act), or (ii) had any “reportable uncertain
tax treatment” (as defined in the Tax Act). |
| (kk) | All
research and development investment tax credits and other tax credits (“ITCs”)
claimed by the SRx or any of the SRx Subsidiaries were claimed in accordance with the Tax
Act or any other Law and SRx and or the SRx Subsidiaries, as applicable, has satisfied at
all times the relevant criteria and conditions entitling it to such ITCs. |
| (ll) | The
total fair market value of all shares of “foreign affiliates” (as defined in
subsection 95(1) of the Tax Act) that are held directly or indirectly by SRx does not exceed
75% of the total fair market value (determined without reference to debt obligations of any
corporation resident in Canada in which SRx has a direct or indirect interest) of all properties
owned by SRx. |
| | |
| (mm) | Except
as disclosed in Schedule C(mm) of the SRx Disclosure Letter, neither SRx nor any SRx
Subsidiary nor, to SRx’s knowledge, any other Person, is in default in any material
respect in the observance or performance of any term, covenant or obligation to be performed
by SRx or an SRx Subsidiary or such other Person under any Material Contract, and no event
has occurred which with notice or lapse of time or both would constitute such a default by
SRx or any SRx Subsidiary or, to SRx’s knowledge, any other party, except where such
default or event would not reasonably be expected to result in an SRx Material Adverse Effect. |
| | |
| (nn) | Since
the Latest Balance Sheet Date: |
| (i) | Except
as disclosed in Schedule C(nn)(i) of the SRx Disclosure Letter, there has not been
any material change in the assets, liabilities, obligations (absolute, accrued, contingent
or otherwise), business, condition (financial or otherwise) or results of operations of SRx
or any SRx Subsidiary; |
| (ii) | Except
as disclosed in Schedule C(nn)(ii) of the SRx Disclosure Letter, there has not been
any material change in the share capital or long-term debt of SRx; |
| (iii) | There
has not been any entering into, or an amendment of, any SRx Material Contract other than
(A) in the ordinary course of business, or (B) renewals of any such contract; |
| (iv) | There
has not been any satisfaction or settlement of any material claims or material liabilities,
other than the settlement of such claims or such liabilities incurred in the ordinary course
of business; |
| (v) | Except
for ordinary course adjustments to salary, bonus, or other remuneration payable to any officers
or senior or executive officers, there has not been any increase in the salary, bonus, severance,
termination pay, change of control entitlements or other remuneration payable to any senior
or executive officers of SRx or any SRx Subsidiary; and |
| (vi) | SRx
and the SRx Subsidiaries have carried on their business in the ordinary course consistent
with past practice. |
| (oo) | Except
as disclosed in Schedule C(oo) of the SRx Disclosure Letter, there has been no interruption
to or discontinuity in any material supplier or distributor arrangement or relationship of
SRx and the SRx Subsidiaries with each of their respective material suppliers and distributors
and the relationships of SRx and the SRx Subsidiaries with each of their respective material
suppliers and distributors are satisfactory, and there are no unresolved disputes with any
such supplier or distributor. Except as disclosed in Schedule C(oo) of the SRx Disclosure
Letter, no material supplier or distributor of SRx or any SRx Subsidiary has notified SRx
or the SRx Subsidiary that such material supplier or distributor will not continue dealing
with SRx or the SRx Subsidiary on substantially the same terms as presently conducted, and
to the knowledge of SRx, there is no reason to believe that, any such supplier or distributor
will not continue dealing with SRx or the SRx Subsidiary on substantially the same terms
as presently conducted, in each case subject to changes in pricing and volume in the ordinary
course. |
| (pp) | Each
of SRx and the SRx Subsidiaries possesses permits, licenses, approvals, consents and other
authorizations issued by a federal, provincial, state, local or foreign regulatory agencies
or bodies (in this Schedule C, collectively, “Governmental Licenses”)
required by Law to conduct the business now operated by them, except where the failure to
hold such Governmental Licenses would not, individually or in the aggregate, result in an
SRx Material Adverse Effect. Each Governmental License is valid and in full force and effect,
and is renewable by its terms or in the ordinary course without the need for SRx to comply
with any special rules of procedures, agree to any materially different terms or conditions
or pay any amounts other than routine filing fees. To the knowledge of SRx, each of SRx and
the SRx Subsidiaries is in compliance in all material respects with the terms and conditions
of all such Governmental Licenses. No consent, license, order, authorization, approval, permit,
registration or declaration of, or filing with, any Governmental Entity is required in connection
with: (i) the closing of the Arrangement; (ii) the execution and delivery by SRx of this
Agreement or any document delivered by SRx at the closing of the Arrangement to which it
is a party; (iii) the observance and performance by SRx of its obligations under this Agreement
or any document delivered by SRx at the closing of the Arrangement to which it is a party;
or (iv) avoiding the loss of any Governmental Licenses relating to SRx or the SRx Subsidiaries,
any of their properties and assets, or the business now operated by them. |
| (qq) | To
the knowledge of SRx, no event has occurred that, with or without notice or lapse of time
or both, would reasonably be expected to result in the revocation, suspension, lapse or limitation
of any Governmental License. |
| (rr) | There
are no actions, proceedings or, to SRx’s knowledge, investigations commenced or, to
the knowledge of SRx, pending in respect of or regarding any such Governmental License. None
of SRx and the SRx Subsidiaries has received any written notice of revocation or non-renewal
of any Governmental License, or of any intention of any Person to revoke or refuse to renew
any of such Governmental License. |
| (ss) | SRx
and the SRx Subsidiaries do not carry on any pharmacy activity outside of the provinces of
Alberta, British Columbia, Manitoba, Saskatchewan, Ontario, New Brunswick, Nova Scotia and
Newfoundland & Labrador. |
| (tt) | There
is no Person acting or purporting to act at the request of SRx who is entitled to any brokerage,
agency or other fiscal advisory or similar fee in connection with the transactions contemplated
by this Agreement and the Plan of Arrangement. |
| (uu) | Except
as disclosed in Schedule C(uu) of the SRx Disclosure Letter or in the SRx Financial
Statements, neither SRx nor any SRx Subsidiary has any loan or other indebtedness outstanding
which has been made to any of its securityholders, officers, directors or employees, past
or present, or any Person not dealing at arm’s length with it, other than for the reimbursement
of ordinary course business expenses. |
| (vv) | Except
for (i) employment, consulting or employment compensation agreements entered into in the
ordinary course of business, (ii) customary director and officer indemnification arrangements
on market terms, or (iii) financing agreements or shareholder agreements with the SRx Shareholders
entered into in connection with financings or other transactions to which SRx Shareholders
are generally parties and that will terminate at or prior to the Effective Time as a result
of the Arrangement, there are no current contracts or other transactions (including relating
to indebtedness by SRx or the SRx Subsidiaries) between SRx or any SRx Subsidiaries on the
one hand, and (A) any officer or director of SRx or the SRx Subsidiaries, (B) any holder
of record or beneficial owner of five percent (5%) or more of the voting securities of SRx,
or (C) any affiliate or associate of any officer, director or beneficial owner, on the other
hand except as disclosed in Schedule C(vv) of the SRx Disclosure Letter or in the
SRx Financial Statements. |
| (ww) | The
assets and properties of SRx and the SRx Subsidiaries and their business and operations are
insured against loss or damage with responsible insurers on a basis consistent with insurance
obtained by reasonably prudent participants in comparable businesses, and such coverage is
in full force and effect, and SRx and the SRx Subsidiaries have not failed to promptly give
any notice or present any material claim thereunder. |
| (xx) | The
vehicles, machinery, equipment and other tangible personal property of SRx and the SRx Subsidiaries
are, in all material respects, in good operating condition and repair having regard to their
use and age, and are not in need of maintenance or repairs other than preventative maintenance
and repairs in the ordinary course of business, and are adequate for the uses subject to
normal wear and tear to which they are being put to use, have been maintained in all material
respects in accordance with generally accepted industry practice and are free from any material
defects. All leased equipment and other leased personal property of SRx and the SRx Subsidiaries
is in all material respects in the condition required of such property by the terms of the
lease applicable thereto. |
| (yy) | To
the knowledge of SRx, none of SRx or any SRx Subsidiary is suspended or otherwise restricted
from participating in any drug insurance plan, nor, to the knowledge of SRx, are there any
facts or circumstances that are materially inconsistent with market practices and that provide
a reasonable basis for any material adverse regulatory communication or action against SRx
or any SRx Subsidiary, in respect of the SRx Business or relating to non-compliance with
any applicable Law. |
| (zz) | Neither
SRx nor the SRx Subsidiaries own any real property or hold an ownership interest in any real
property, or have owned or held such ownership interest in the past five years, save and
except as set out in Schedule C(zz) of the SRx Disclosure Letter. With respect to
each of the material leased premises of SRx and the SRx Subsidiaries, SRx and the SRx Subsidiaries
occupies the applicable leased premises and has the right to occupy and use the leased premises,
subject to the terms of the respective leases, and each of the leases pursuant to which SRx
and the SRx Subsidiaries occupies such leased premises is valid, legally binding and enforceable
against SRx or an SRx Subsidiary, as applicable, and to the knowledge of SRx, the other parties
in accordance with its terms is in good standing and in full force and effect, and none of
SRx or any of the SRx Subsidiaries is in breach of, or default under, such lease, sublease,
license or occupancy agreement, and no event has occurred which, with notice, lapse of time
or both, would constitute such a breach or default by SRx or any of the SRx Subsidiaries
or permit termination, modification or acceleration by any third party thereunder. No third
party has repudiated or has the right to terminate or repudiate any such lease (except for
the normal exercise of remedies in connection with a default thereunder or any termination
rights set forth in the lease) or any provision thereof. None of the aforementioned leases
has been assigned by SRx or any of the SRx Subsidiaries in favor of any Person or sublet
or sublicensed. There exists no claim of any kind or right of set-off against SRx or any
SRx Subsidiary, as the case may be, as tenant by the landlord or against the landlord by
SRx or any SRx Subsidiary, as the case may be, as tenant as of the date hereof. SRx and the
SRx Subsidiaries own, lease or license all personal or movable property as is necessary to
conduct their business as presently conducted, and SRx and the SRx Subsidiaries have good
and valid title to, or a valid and enforceable interest (whether a leasehold interest or
otherwise) in, all of such personal or movable property. |
| (aaa) | SRx
and the SRx Subsidiaries as tenants are in actual possession of all properties leased by
them. Except as disclosed in Schedule C(aaa) of the SRx Disclosure Letter, SRx and
the SRx Subsidiaries are not in arrears of rent required to be paid pursuant to any applicable
lease. |
| (bbb) | The
minute books and records of SRx and the SRx Subsidiaries made available to Parent and its
counsel in connection with their due diligence investigation in respect of the Arrangement
contain full, true and correct copies of all constating documents, including all amendments
thereto, and contain copies of all proceedings of securityholders and directors (and committees
thereof) and are complete in all material respects. |
| (ccc) | Schedule
C(ccc) of the SRx Disclosure Letter sets out separately all Intellectual Property owned
by SRx or the SRx Subsidiaries that has been registered or which applications for registration
have been filed and all other material Intellectual Property that is owned by SRx or the
SRx Subsidiaries (in this Schedule C, the “SRx Owned Intellectual Property”)
and the Intellectual Property that is duly licensed by SRx as part of its business as presently
conducted, except for commercially available, off-the-shelf software licensed to SRx or any
SRx Subsidiary on a royalty-free basis pursuant to standard, nondiscriminatory terms and
conditions (in this Schedule C, the “SRx Licensed Intellectual Property”,
and together with the SRx Owned Intellectual Property, the “SRx Intellectual Property”).
SRx or an SRx Subsidiary is the sole and exclusive owner of the SRx Owned Intellectual Property
and all other Intellectual Property that it owns or purports to own with good, valid and
marketable title thereto, free and clear of all Encumbrances (other than Permitted Encumbrances).
SRx or an SRx Subsidiary has valid and enforceable licenses to use all of the SRx Licensed
Intellectual Property used by it in connection with, and as required for, its business as
presently conducted. SRx has no knowledge to the effect that it will be unable to obtain
or maintain any rights or licenses to use all Intellectual Property necessary for the conduct
of its business. The SRx Owned Intellectual Property and the SRx Licensed Intellectual Property
constitute all of the Intellectual Property required by SRx and the SRx Subsidiaries to conduct
their respective businesses as currently conducted. To the knowledge of SRx, no third parties
have rights to any Intellectual Property, except for the ownership rights of the owners of
the SRx Licensed Intellectual Property which is licensed to SRx or an SRx Subsidiary. To
the knowledge of SRx, there is no infringement, misappropriation or misuse by third parties
of any SRx Owned Intellectual Property. There is no pending or, to the knowledge of SRx,
threatened action, suit, proceeding or claim by third parties challenging the rights in or
to any SRx Owned Intellectual Property, and SRx is not aware of any facts which form a reasonable
basis for any such claim. The SRx Owned Intellectual Property that is the subject of an application
or registration is valid, in full force and effect. There is no pending or, to the knowledge
of SRx, threatened action, suit, proceeding or claim by others challenging the validity or
enforceability of any SRx Owned Intellectual Property, and SRx is not aware of any allegations
or finding of unenforceability or invalidity of the SRx Owned Intellectual Property or any
facts which form a reasonable basis for any such claim. All applications, registrations,
filings, renewals and payments necessary to preserve the rights of SRx or any SRx Subsidiary
in and to SRx Owned Intellectual Property have been duly filed, made, prosecuted, maintained,
paid, are in good standing and are recorded in the name of SRx or an SRx Subsidiary. There
is no pending or, to the knowledge of SRx, threatened action, suit, proceeding or claim by
third parties that SRx or an SRx Subsidiary infringes, misappropriates or otherwise violates
any patent, trademark, copyright, trade secret or other proprietary rights of others. To
the knowledge of SRx, the business of SRx and the SRx Subsidiaries does not infringe, misappropriate
or otherwise violate any patent, trademark, copyright, trade secret or other proprietary
rights of third parties and, without limiting the foregoing, to the knowledge of SRx, there
is no patent or patent application by third parties that contains claims that interfere with
the issued or pending claims of any SRx Owned Intellectual Property. |
| (ddd) | Except
in respect of the Intellectual Property set forth in Schedule C(ddd) of the SRx Disclosure
Letter, no licenses or other rights have been granted to any third party in, to and in respect
of the SRx Owned Intellectual Property. |
| (eee) | Other
than in respect of those contracts disclosed in Schedule C(eee) of the SRx Disclosure
Letter, neither SRx nor any SRx Subsidiary is a party to or bound by any Contract or other
obligation that limits or impairs its ability to use, sell, transfer, assign or convey, or
that otherwise affects any SRx Intellectual Property. |
| (fff) | Except
as set forth in Schedule C(fff) of the SRx Disclosure Letter, neither SRx nor any
SRx Subsidiary is obligated to pay any royalties, fees or other compensation to any third
party in respect of its ownership, use, practice, exploitation or commercialization of any
Intellectual Property. |
| (ggg) | Except
as disclosed in Schedule C(ggg) of the SRx Disclosure Letter, no permits, licenses,
approvals, consents or other authorizations issued by any federal, provincial, state, local
or foreign regulatory agency or body are required to import or sell the products of SRx or
any SRx Subsidiary. |
| (hhh) | Except
in respect of the individuals listed in Schedule C(hhh) of the SRx Disclosure Letter,
all current and former employees of, and current and former consultants who have contributed
to the creation of any SRx Owned Intellectual Property to, SRx and the SRx Subsidiaries have
entered into proprietary rights or similar agreements with SRx or the applicable SRx Subsidiary,
whereby any Intellectual Property required by SRx to conduct its business as presently conducted
created by them in the course of the performance of their employment or engagement has been
fully and irrevocably assigned to SRx or the applicable SRx Subsidiary without additional
consideration, and, to the knowledge of SRx, no employee of, or consultant to, SRx or the
applicable SRx Subsidiary is in violation of such agreements. |
| (iii) | Each
of SRx and the SRx Subsidiaries have taken all reasonably necessary and appropriate steps
(including appropriately marking and labelling Intellectual Property) to protect the secrecy,
confidentiality and proprietary nature of all such Intellectual Property. To the knowledge
of SRx, the employment or engagement by SRx or the applicable SRx Subsidiary of such Persons
does not violate any non-disclosure or non-competition agreement between any such Person
and a third party. |
| (jjj) | The
conduct of SRx and the SRx Subsidiaries in carrying on the SRx Business and the operation
of the SRx Business by SRx and the SRx Subsidiaries have been and is in compliance with all
Environmental Laws, in all material respects, and there are no existing events, conditions,
or circumstances that would reasonably be expected to materially and adversely affect the
ability of SRx or the SRx Subsidiaries to comply with Environmental Laws. |
| (kkk) | Each
of SRx and the SRx Subsidiaries has obtained all licenses, permits, approvals, consents,
certificates, registrations and other authorizations under all applicable Environmental Laws
(in this Schedule C, the “Environmental Permits”) necessary as
at the date hereof for the operation of the business carried by SRx and the SRx Subsidiaries,
and each Environmental Permit is valid, subsisting and in good standing in all material respects
and none of SRx nor any of the SRx Subsidiaries is in default or breach of any Environmental
Permit in any respect and no proceeding is outstanding or, to the knowledge of SRx, has been
threatened or is pending to revoke or limit any Environmental Permit. |
| (lll) | To
the knowledge of SRx, each of SRx and the SRx Subsidiaries has not used, except in compliance
in all respects with all Environmental Laws and Environmental Permits, any property or facility
which it owns, controls manages, operates or leases or previously owned, controlled, operated,
managed or leased, to generate, manufacture, process, distribute, use, treat, store, dispose
of, transport or handle any Hazardous Substance and, to the knowledge of SRx, there have
been no releases of Hazardous Substances at any property or facility which it owns, controls,
manages, operates or leases or previously owned, controlled, operated, managed or leased. |
| (mmm) | Each
of SRx and the SRx Subsidiaries has not received any notice of, or been prosecuted for, an
offence alleging, non-compliance in any material respect with any Environmental Laws, and
none of SRx nor any of the SRx Subsidiaries has settled any allegation of non-compliance
short of prosecution. There are no orders or directions issued against each of SRx and the
SRx Subsidiaries under Environmental Laws including those requiring any material work, repairs,
construction or capital expenditures to be made with respect to any of the assets of SRx
or the SRx Subsidiaries, nor has SRx or any SRx Subsidiary received notice of any of the
same. |
| (nnn) | There
are no past unresolved or, to the knowledge of SRx, any threatened or pending claims, complaints,
notices or requests for information received by SRx or any SRx Subsidiary with respect to
any alleged violation of any Environmental Laws, and to the knowledge of SRx, no conditions
exist at, on or under any property now or previously owned, operated, optioned or leased
by SRx or an SRx Subsidiary which, with the passage of time, or the giving of notice or both,
would give rise to liability under Environmental Laws that, individually or in the aggregate,
would reasonably be expected to result in an SRx Material Adverse Effect. |
| (ooo) | None
of SRx nor any SRx Subsidiary has received any notice wherein it is alleged or stated that
it is potentially responsible for a federal, provincial, state, municipal or local clean-up
site or corrective action under Environmental Laws that would reasonably be expected to result
in an SRx Material Adverse Effect. |
| (ppp) | Except
as disclosed in Schedule C(ppp) of the SRx Disclosure Letter, there are no environmental
audits, evaluations, assessments, studies or tests relating to SRx or an SRx Subsidiary. |
| (qqq) | None
of SRx or the SRx Subsidiaries have agreed by contract or other agreement to indemnify or
be responsible for any liabilities or obligations under Environmental Laws. |
| (rrr) | To
the knowledge of SRx, SRx and the SRx Subsidiaries are and have been in compliance in all
material respects with all applicable Laws pertaining to employment and employment practices,
including all Laws relating to labor relations, equal employment opportunities, fair employment
practices, employment discrimination, harassment, retaliation, reasonable accommodation,
disability rights or benefits, immigration, wages, hours, overtime compensation, child labor,
hiring, promotion and termination of employees, working conditions, meal and break periods,
privacy, health and safety, workers’ compensation, leaves of absence and unemployment
insurance. All individuals characterized and treated by SRx or any SRx Subsidiary as independent
contractors or consultants are properly treated as independent contractors under all applicable
Laws. There are no actions against SRx or any SRx Subsidiary pending or, to the knowledge
of SRx, threatened to be brought or filed, by or with any Governmental Entity or arbitrator
in connection with the employment of any current or former applicant, employee, consultant
or independent contractor of SRx or any SRx Subsidiary, including any claim relating to unfair
labor practices, employment discrimination, harassment, retaliation, equal pay, wage and
hours or any other employment related matter arising under applicable Laws. |
| (sss) | Neither
SRx nor any SRx Subsidiary is subject to any claim for wrongful dismissal, constructive dismissal
or any other tort claim, actual or threatened, or any litigation actual or threatened, relating
to employment or termination of employment of employees or independent contractors. |
| (ttt) | Each
plan for retirement, bonus, stock purchase, profit sharing, stock option, deferred compensation,
severance or termination pay, insurance, medical, hospital, dental, vision care, drug, sick
leave, disability, salary continuation, legal benefits, unemployment benefits, vacation,
incentive or otherwise contributed to or required to be contributed to, by SRx or an SRx
Subsidiary for the benefit of any current or former director, officer, employee or consultant
of SRx or an SRx Subsidiary (in this Schedule C, the “SRx Employee Plans”)
has been maintained in compliance with its terms and with the requirements prescribed by
any and all Laws that are applicable to such SRx Employee Plans, in each case in all material
respects. |
| (uuu) | All
material accruals for unpaid vacation pay, premiums for unemployment insurance, health premiums,
federal or state pension plan premiums, accrued wages, salaries and commissions and employee
benefit plan payments have been reflected in the books and records of SRx and the SRx Subsidiaries. |
| (vvv) | There
is not currently any labor disruption, dispute, slowdown, stoppage, complaint or grievance
or, to the knowledge of SRx, threatened or pending which is adversely affecting or would
reasonably be expected to adversely affect, in a material manner, the carrying on of the
business of SRx and the SRx Subsidiaries, and, to the knowledge of SRx, there is no proposal
to unionize its employees and no collective bargaining agreements are in place or currently
being negotiated by SRx or any SRx Subsidiary. |
| (www) | Except
as set forth on Schedule C(www) of the SRx Disclosure Letter, neither the execution
and delivery of this Agreement, shareholder or other approval of this Agreement nor the consummation
of the transactions contemplated by this Agreement could, alone or in combination with another
event, (i) entitle any employee, director, officer or independent contractor of the SRx Group
to severance pay, termination pay, change of control payment or benefits, or any material
increase in severance pay, (ii) accelerate the time of payment or vesting, or materially
increase the amount of compensation due to any such employee, director, officer or independent
contractor, (iii) directly or indirectly cause the SRx Group to transfer or set aside any
assets to fund any material benefits under any Employee Plan, (iv) otherwise give rise to
any material liability under any Employee Plan, or (v)
limit or restrict the right to merge, materially amend, terminate or transfer the assets of any Employee Plan on or following the consummation
of the transactions contemplated by this Agreement. |
| (xxx) | Other
than this Agreement or as set forth on Schedule C(xxx) of the SRx Disclosure Letter,
neither SRx nor any SRx Subsidiary is currently party to any agreement in respect of: (i)
the purchase of any material property or assets or any interest therein or the sale, transfer
or other disposition of any material property or assets or any interest therein currently
owned, directly or indirectly, by SRx or an SRx Subsidiary whether by asset sale, transfer
of shares or otherwise; or (ii) the change of control of SRx or an SRx Subsidiary (whether
by sale or transfer of shares or otherwise). |
| (yyy) | None
of SRx nor any SRx Subsidiary is a party to any Material Contract, other than the SRx Material
Contracts. |
| (zzz) | The
operations of SRx and the SRx Subsidiaries are and have been conducted, at all times, in
material compliance with all applicable Anti-Money Laundering Laws, and no action by or before
any Governmental Entity against SRx or any SRx Subsidiary with respect to the Anti-Money
Laundering Laws is pending. None of SRx nor any SRx Subsidiary has, directly or indirectly:
(i) made or authorized any contribution, payment or gift of funds or property to any official,
employee or agent of any governmental agency, authority or instrumentality of any jurisdiction
in violation of applicable Laws; or (ii) made any contribution to any candidate for public
office, in either case where either the payment or the purpose of such contribution, payment
or gift was, is or would be prohibited under the Corruption of Foreign Public Officials
Act (Canada), the Proceeds of Crime (Money Laundering) and Terrorist Financing Act
(Canada) or the Uniting and Strengthening America by Providing Appropriate Tools Required
to Intercept and Obstruct Terrorism Act (United States) or the rules and regulations promulgated
thereunder or under any other Laws of any relevant jurisdiction covering a similar subject
matter applicable to SRx, the SRx Subsidiaries and their operations. None of SRx, the SRx
Subsidiaries, or, to the knowledge of SRx, any director, officer, agent, employee, affiliate
or Person acting on behalf of SRx or any SRx Subsidiary has been or is currently subject
to any United States sanctions administered by the Office of Foreign Assets Control of the
United States Treasury Department. |
| (aaaa) | None
of SRx, any SRx Subsidiary or, to the knowledge of SRx, any of their officers, directors
or employees acting on behalf of SRx has violated the United States’ Foreign Corrupt
Practices Act (and the regulations promulgated thereunder), the Corruption of Foreign
Public Officials Act (Canada) (and the regulations promulgated thereunder) or any other
applicable Law covering a similar subject matter applicable to SRx, the SRx Subsidiaries
and their operations, and to the knowledge of SRx, no such action has been taken by any of
its agents, representatives or other Persons acting on behalf of SRx. |
| (bbbb) | No
order, ruling or determination having the effect of suspending the sale or ceasing the trading
in any securities of SRx has been issued by any regulatory authority and is continuing in
effect and no proceedings for that purpose have been instituted or, to the knowledge of SRx,
are pending, contemplated or threatened by any regulatory authority. |
| (cccc) | Except
where non-compliance would not have a SRx Material Adverse Effect, SRx and the SRx Subsidiaries
have complied and is in compliance with all applicable Laws governing, and all applicable
contractual obligations to third parties relating to privacy, data protection, Processing,
or security of Personal Information, including with respect to obtaining consent or authorization
to collect, use, and disclose Personal Information, as well as all internal and external
privacy policies regarding Personal Information; and, no written notices, complaints or other
communications have been received by, and no claims are pending (whether by a Governmental
Entity or person), or, to the knowledge of SRx, threatened against SRx or an SRx Subsidiary
alleging a violation of any third party’s privacy rights or other rights relating to
Personal Information including any alleged violation of applicable Laws, contractual obligations
or internal or external privacy policies. |
| (dddd) | SRx
and the SRx Subsidiaries maintain commercially reasonable measures designed to protect the
privacy, confidentiality, integrity and security of Personal Information, including against
a Security Breach, consistent with industry standards and practices and applicable Law. |
| (eeee) | To
the knowledge of SRx, none of SRx or an SRx Subsidiary’s suppliers have experienced
a Security Breach, including any such incident or breach that may require notification to
any Person, any Governmental Authority or any entity under any Law to which the supplier
is subject. |
| (ffff) | Except
for the representations and warranties expressly made by SRx in this Schedule C or
in any certificate delivered pursuant to this Agreement, neither SRx nor any other Person
makes or has made any representation or warranty of any kind whatsoever, express or implied,
at law or in equity, with respect to SRx or any of the SRx Subsidiaries or their respective
business, operations, assets, liabilities, condition (financial or otherwise), notwithstanding
the delivery or disclosure to Parent or any of its affiliates or Representatives of any documentation,
forecasts or other information with respect to any one or more of the foregoing. Without
limiting the generality of the foregoing, neither SRx nor any other Person makes or has made
any express or implied representation or warranty to Parent or any of its Representatives
with respect to (A) any financial projection, forecast, estimate, or budget relating to SRx,
any of its subsidiaries or their respective businesses or, (B) except for the representations
and warranties made by SRx in this Schedule C, any oral or written information presented
to Parent or any of its Representatives in the course of their due diligence investigation
of SRx and the SRx Subsidiaries, the negotiation of this Agreement or the course of the Arrangement. |
SCHEDULE
D
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent
represents and warrants to and in favor of SRx as follows, and acknowledges that SRx is relying upon such representations and warranties
in connection with the completion of the transactions contemplated herein:
| (a) | The
name and jurisdiction of incorporation of Parent and each of its subsidiaries (in this Schedule
D, the “Parent Subsidiaries”) is set forth in the Parent Disclosure
Documents. Each of Parent and the Parent Subsidiaries (i) has been duly incorporated and
is validly existing and in good standing under the laws of its jurisdiction of incorporation
and is up-to-date in respect of all material corporate filings; (ii) has all requisite corporate
or other organization as applicable, power and authority to carry on its business as now
conducted and to own or lease and operate its assets and properties; and (iii)
in respect of Parent, AcquireCo and CallCo, has all requisite corporate power and authority to enter into and carry out its obligations
under this Agreement. |
| (b) | Parent
does not beneficially own, or exercise control or direction over, directly or indirectly,
any interest in any other Person other than the Parent Subsidiaries or any agreement, option
or commitment to acquire any such investment. All of the issued and outstanding securities
of the Parent Subsidiaries are owned by Parent. |
| (c) | No
steps or proceedings have been taken, instituted or, to the knowledge of Parent, are pending
for the dissolution, liquidation or winding up of Parent or a Parent Subsidiary. Except as
disclosed in Schedule D(c) of the Parent Disclosure Letter, neither Parent nor any
Parent Subsidiary: (i) is insolvent or bankrupt under or pursuant to any corporate, insolvency,
winding-up, restructuring, reorganization, administration or other Laws applicable to it;
(ii) has commenced, approved, authorized or taken any action in furtherance of proceedings
in respect of it under any applicable bankruptcy, insolvency, restructuring, reorganization,
administration, winding up, liquidation, dissolution, or similar Law; (iii) has proposed
a compromise or arrangement with its creditors generally or is or has been subject to any
actions taken, orders received or proceedings commenced by creditors or other Persons for
or in respect of the bankruptcy, receivership, insolvency, restructuring, reorganization,
administration, winding-up, liquidation or dissolution of it, or any of its property or assets;
(iv) had any encumbrancer take possession of any of its property, or (v) had any execution
or distress become enforceable or become levied upon any of its property. Parent is not unable
to pay its liabilities as they become due and the realizable value of the assets of Parent
are not less than the aggregate of its liabilities and stated capital of all classes. |
| (d) | Each
of Parent and the Parent Subsidiaries is, in all material respects, conducting its business
in compliance with all applicable Laws (including all material applicable federal, provincial,
state, municipal and local laws, regulations and other lawful requirements of any Governmental
Entity) of each jurisdiction in which its business is carried on and is duly licensed, registered
or qualified in all jurisdictions in which it owns, leases or operates its property or carries
on business to enable its business to be carried on as now conducted and its property and
assets to be owned or leased and operated and all such licenses, registrations and qualifications
are valid, subsisting and in good standing and it has not received a notice of non-compliance,
nor knows of, nor has reasonable grounds to know of, any facts that could give rise to a
notice of non-compliance with any such Laws, licenses, permits, registrations or qualifications
which would reasonably be expected to result in a Parent Material Adverse Effect. |
| (e) | Parent
has the requisite corporate power and authority to enter into, deliver and perform its obligations
under this Agreement. The execution and delivery of this Agreement and performance by Parent
of its obligations under this Agreement and the consummation of the Arrangement and other
transactions contemplated hereby have been duly authorized by all necessary corporate action
of Parent and no other corporate proceedings on the part of Parent are necessary to authorize
the execution, delivery and performance of this Agreement or the consummation of the Arrangement
and the other transactions contemplated hereby other than the approval by the Parent Board
of the Parent Proxy Statement and the approval of the Parent Shareholder Approval Matters
by the Parent Shareholders in the manner required by applicable Law. |
| (f) | This
Agreement has been duly and validly executed and delivered by each of Parent, AcquireCo and
CallCo and, assuming due authorization, execution and delivery by SRx, constitutes a legal,
valid and binding obligation of Parent, AcquireCo and CallCo, enforceable against Parent,
AcquireCo and CallCo in accordance with its terms, subject however, to limitations with respect
to enforcement imposed by Law in connection with bankruptcy, insolvency, reorganization or
other Laws affecting creditors’ rights generally and to the extent that equitable remedies
such as specific performance and injunctions are only available in the discretion of the
court from which they are sought. |
| (g) | Other
than the actions required under applicable Securities Laws and the Key Regulatory Approvals
set out in Schedule E of this Agreement (Key Regulatory Approvals), no Authorization
or consent of any Governmental Entity, and no notice, registration, declaration or filing
by Parent or any of the Parent Subsidiaries with any such Governmental Entity is required
in connection with the execution and delivery of, and performance by Parent, AcquireCo and
CallCo of their obligations under, this Agreement or the consummation of the Arrangement
and the other transactions contemplated in this Agreement. |
| (h) | Other
than as set out in Schedule D(h) of the Parent Disclosure Letter, there is no requirement
under any Parent Material Contract to make a filing with, give any notice to, or to obtain
the consent or approval of, any party to such Parent Material Contract relating to the transactions
contemplated by this Agreement. |
| (i) | The
execution and delivery of this Agreement by Parent, the performance by Parent of its obligations
hereunder and the consummation of the transactions contemplated hereby do not and will not
(whether after notice or lapse of time or both) (i) conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under (whether after
notice or lapse of time or both) or give rise to any right of termination or acceleration
of any obligations or indebtedness, and neither Parent nor a Parent Subsidiary is currently
in material breach or default of, (A) any Law applicable to Parent or a Parent Subsidiary;
(B) the constating documents or resolutions of Parent or any Parent Subsidiary, as applicable;
(C) any Contract or Debt Instrument to which Parent or any Parent Subsidiary is a party or
by which it is bound, except as disclosed in Schedule D(i) of the Parent Disclosure
Letter, or (D) any judgment, decree or order binding Parent or any Parent Subsidiary, as
applicable, or the assets or properties thereof; (ii) allow any Person to exercise any rights,
require any consent or other action by any Person or permit the termination, cancellation,
acceleration or other change of any right or other obligation or the loss of any benefit
to which Parent or any Parent Subsidiary is entitled (including by triggering any rights
of first refusal or first offer, change in control provision or other restriction or limitation)
under any Material Contract; or (iii)
result in the creation or imposition of any Encumbrance up on any of Parent’s assets or the assets of the Parent Subsidiaries. |
| (j) | The
authorized, issued and outstanding share capital of Parent and each of the Parent Subsidiaries
is set forth in the Parent Disclosure Documents. All of the issued and outstanding shares
of capital stock of, or other equity or voting interests in, each of Parent and the Parent
Subsidiaries has been duly authorized and validly issued in compliance with applicable Laws
and, is fully paid and non- assessable, were not issued in violation of any pre-emptive rights,
purchase options, call options, rights of first refusal, first offer, co-sale or participation
or subscription rights or other similar rights. Except as set out in Schedule D(j)
of the Parent Disclosure Letter, all of the issued and outstanding shares of capital stock
of, or other equity or voting interests in, each Parent Subsidiary is owned, directly or
indirectly, both as a matter of record and beneficially by Parent and is free and clear of
all Encumbrances (except for Permitted Encumbrances). Schedule D(k) of the Parent
Disclosure Letter sets forth a list of all other securities of Parent. |
| (k) | Except for the securities set forth in Schedule D(k) of the Parent Disclosure Letter, no Person now has any agreement or option or right or privilege (whether at law, pre-emptive or contractual) capable of becoming an agreement for the purchase, subscription, redemption, repurchase or issuance of, or conversion into, any shares, securities, warrants or convertible obligations of any nature of Parent and a sufficient number of Parent Shares are reserved for issuance pursuant to outstanding options, warrants, share incentive plans, convertible, exercisable and exchangeable securities and other rights to acquire Parent Shares. Schedule D(k) of the Parent Disclosure Letter sets forth all issued and outstanding securities of Parent convertible into Parent Shares.
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| (l) | Parent is not aware of any legislation, or proposed legislation published by a legislative body, which it anticipates will result in a Parent Material Adverse Effect.
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| (m) | The Parent Financial Statements (i) have been prepared in accordance with U.S. GAAP applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto) and (ii) fairly present, in all material respects, the consolidated financial position of Parent and the Parent Subsidiaries as at the respective dates thereof and the consolidated results of its operations and cash flows for the periods indicated (except that the unaudited interim financial statements were or are subject to normal and recurring year-end adjustments). Since December 31, 2023, there have been no formal investigations regarding financial reporting or accounting policies and practices discussed with, reviewed by or initiated at the direction of the Chief Executive Officer or Chief Financial Officer of Parent, the Parent Board or any committee thereof. Since December 31, 2023, neither Parent nor its independent auditors have identified (i) any significant deficiency or material weakness in the system of internal accounting controls utilized by Parent, (ii) any fraud, whether or not material, that involves Parent’s management or other employees who have a role in the preparation of financial statements or the internal accounting controls utilized by Parent, or (iii) any claim or allegation regarding any of the foregoing. Except as disclosed in the Parent Financial Statements, neither Parent nor any of the Parent Subsidiaries has any liabilities, indebtedness, obligation, expense, claim, deficiency, guaranty, or endorsement, whether accrued, absolute, contingent, matured, or unmatured of the kind required to be disclosed on a balance sheet or in the related notes to the consolidated financial statements prepared in accordance with U.S. GAAP which are, individually or in the aggregate, material to the business, results of operations or financial condition of Parent and the Parent Subsidiaries taken as a whole, except liabilities (i) identified in the balance sheet of Parent as of the Latest Balance Sheet Date or the notes thereto, (ii) incurred in connection with the transactions contemplated by this Agreement, (iii) described on Schedule D(m) of the Parent Disclosure Letter, (iv) executory obligations under any Contract or (v) incurred since the date of the balance sheet of Parent as of the Latest Balance Sheet Date in the ordinary course of business. Parent does not intend to correct or restate, nor is there any basis for any correction or restatement of, any aspect of the Parent Financial Statements.
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| (n) | Since the Latest Balance Sheet Date through the date of this Agreement and other than with respect to the negotiation, execution and performance of this Agreement, each of Parent and the Parent Subsidiaries has conducted its business only in the ordinary course of business, and there has not been: (A) any event that has had a Parent Material Adverse Effect, or (B) any material change by Parent or any Parent Subsidiary in its accounting methods, principles or practices, except as required by concurrent changes in U.S. GAAP or as disclosed in the notes to the Parent Financial Statements.
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| (o) | Neither
Parent nor any of the Parent Subsidiaries has any material liabilities or obligations of
any nature, whether or not accrued, contingent or otherwise, except for: (i) liabilities
and obligations that are adequately presented or reserved on the Parent Financial Statements
or disclosed in the notes thereto; or (ii) liabilities and obligations incurred in the ordinary
course of business that are not and would not, individually or in the aggregate with all
other liabilities and obligations of Parent and the Parent Subsidiaries (other than those
disclosed on the Parent Financial Statements), be material to Parent and the Parent Subsidiaries
(taken as a whole). Without limiting the foregoing, the Parent Financial Statements reflects
reasonable reserves in accordance with U.S. GAAP for contingent liabilities of Parent and
the Parent Subsidiaries. |
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(p) | Each of Parent and the Parent Subsidiaries maintains internal control over financial reporting. Such internal control over financial reporting is effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes policies and procedures that: (A) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures of Parent and the Parent Subsidiaries are being made only with appropriate authorizations of management and directors of Parent and the Parent Subsidiaries, as applicable; and (B) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the assets of Parent or the Parent Subsidiaries that could have a material effect on its financial statements. As of the date of this Agreement, there neither is, nor has been, any fraud with respect to Parent or the Parent Subsidiaries, whether or not material, relating to the financial reporting or internal control over financial reporting of Parent or the Parent Subsidiaries, as applicable. As of the date of this Agreement, to the knowledge of Parent, there is no fraud that involves management or any other employees who have a significant role in the internal control over financial reporting of Parent or the Parent Subsidiaries.
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| (q) | There are no actions, proceedings or, to Parent’s knowledge, investigations (whether or not purportedly by or on behalf of Parent) commenced or, to the knowledge of Parent, threatened or pending against or relating to Parent or any Parent Subsidiary or the business thereof or affecting any of their assets and properties or against any current officer or director relating to such individual’s role with Parent or any Parent Subsidiary at law or in equity (whether in any court, arbitration or similar tribunal) or before or by any Governmental Entity, that would reasonably be expected to result in a Parent Material Adverse Effect or prevent or materially delay the consummation of the Arrangement.
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| (r) | Except as disclosed in Schedule D(r) of the Parent Disclosure Letter or in the Parent Disclosure Documents, none of Parent or any Parent Subsidiary is a party to or bound or affected by any commitment, agreement or document containing any covenant which expressly limits the freedom of Parent or the Parent Subsidiary to compete or operate in any line of business, transfer or move any of its assets or operations or which materially or adversely affects the business practices, operations or condition of Parent or the Parent Subsidiary.
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| (s) | Except as disclosed in Schedule D(s) of the Parent Disclosure Letter or in the Parent Disclosure Documents, neither Parent nor any of the Parent Subsidiaries is party to, bound by or subject to any indenture, mortgage, lease, agreement, license, permit, authorization, certification, instrument, statute, regulation, order, judgment, decree or law that would be violated or breached by, or under which default would occur or which could be terminated, cancelled or accelerated, in whole or in part, or that would require consent or notice, as a result of the execution, delivery and performance of this Agreement or the consummation of any of the transactions provided for in this Agreement and the Plan of Arrangement (except (i) as would not, individually or in the aggregate, have or reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect or (ii) as set out in Schedule E of this Agreement (Key Regulatory Approvals)).
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| (t) | Except as disclosed in Schedule D(t) of the Parent Disclosure Letter or in the Parent Disclosure Documents, Parent is not party to any Contract or arrangement, nor to the knowledge of Parent, is there any shareholders agreement or other Contract, which in any manner affects the voting control of any of the securities of Parent.
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| (u) | Parent and the Parent Subsidiaries have duly and timely filed all income and other Tax Returns required to be filed by them and all such Tax Returns are complete and correct in all material respects.
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| (v) | Parent
and the Parent Subsidiaries have paid on a timely basis all Taxes which are due and payable
or required to be paid by them, other than those which are being or have been contested in
good faith and in respect of which adequate reserves have been provided in the Parent Financial
Statements. Parent and the Parent Subsidiaries have provided adequate accruals in accordance
with U.S. GAAP in the Parent Financial Statements for any Taxes for the period covered by
such financial statements that have not been paid whether or not shown as being due on any
Tax Returns. |
| (w) | Neither Parent nor the Parent Subsidiaries have declared nor paid (nor been deemed to have paid) any dividends.
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| (x) | No deficiencies, litigation, proposed adjustments or matters in controversy exist or have been asserted in writing with respect to any Taxes or Tax Returns of Parent or the Parent Subsidiaries, and neither Parent nor the Parent Subsidiaries are a party to any action or proceeding for assessment or collection of Taxes, and no such event has been asserted in writing or, to the knowledge of Parent, threatened against Parent or the Parent Subsidiaries.
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| (y) | No written claim has been made by any Governmental Entity in a jurisdiction where Parent or any of the Parent Subsidiaries does not file a Tax Return that Parent, or any of the Parent Subsidiaries, is or may be liable to Tax by that jurisdiction or is or may be required to file a Tax Return with a Governmental Entity of that jurisdiction.
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| (z) | For the purposes of any applicable Tax treaty and any other relevant Tax purposes, (i) Parent is a domestic corporation for U.S. federal income tax purposes and is classified for U.S. federal income tax purposes as a “C corporation”; and (ii) the Parent Subsidiaries are each resident in the jurisdiction in which they were formed, and are not resident in any other country.
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| (aa) | There are no Encumbrances (other than Permitted Encumbrances) with respect to Taxes upon any of the assets of Parent or the Parent Subsidiaries.
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| (bb) | Each of Parent and the Parent Subsidiaries has withheld, deducted, charged or collected all amounts required to be withheld, deducted, charged or collected by it on account of Taxes and has remitted all such amounts to the appropriate Governmental Entity when required by Law to do so. Parent and the Parent Subsidiaries are in compliance with, and their respective records contain all information and documents necessary to comply with, all applicable information reporting and withholding requirements under all Law.
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| (cc) | Neither Parent nor any of the Parent Subsidiaries is a party or is bound by any Tax sharing, allocation, indemnification agreement or arrangement.
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| (dd) | Except for any affiliated group of which Parent is the parent, each of Parent and each of the Parent Subsidiaries has never been a member of an affiliated group for U.S. federal or applicable state income Tax purposes or filed or been included in a combined, consolidated or unitary income Tax Return. None of Parent or any of the Parent Subsidiaries has any liability for Taxes of any other Person (i) as a result of being or ceasing to be a member of any affiliated group for U.S. federal or applicable state income Tax purposes (including any liability under Treasury Regulation Section 1.1502-6 or any comparable provision of other applicable Law) or (ii) arising under contract, by operation of law, by reason of being a successor or transferee, or otherwise, whether or not as a consequence of such third person failing to discharge such liability.
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| (ee) | None of Parent any of the Parent Subsidiaries has been either a “distributing corporation” or a “controlled corporation” within the respective meanings of such terms under Section 355(a)(1)(A) of the U.S. Tax Code in a distribution of stock qualifying under Section 355 of the U.S. Tax Code (i) in the six years before the date of this Agreement or (ii) in a distribution that could otherwise constitute part of a “plan” or “series of related transactions” within the meaning of Section 355(e) of the U.S. Tax Code in conjunction with the Arrangement.
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| (ff) | There
are no outstanding agreements extending or waiving the statutory period of limitations applicable
to any claim for, or the period for the collection or assessment or reassessment of Taxes
due from Parent or any of the Parent Subsidiaries, for any taxable period and no request
for any such waiver or extension is currently pending. |
| (gg) | Parent and the Parent Subsidiaries have complied with applicable transfer pricing Laws (including with respect to the preparing, obtaining or retaining all required documentation).
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| (hh) | Parent and the Parent Subsidiaries have not, at any time, directly or indirectly transferred any property or supplied any services to, or acquired any property or services from, a Person with whom Parent or the Parent Subsidiaries was not dealing at arm’s length for consideration other than consideration equal to the fair market value of such property or services at the time of transfer, supply or acquisition, as the case may be, nor has Parent or the Parent Subsidiaries been deemed to have done so for purposes of any Tax Law.
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| (ii) | Except as in accordance with past practices, Parent and the Parent Subsidiaries have not claimed any reserve, credit, deduction or other amount under any provision of any Tax Law, if any amount could be included in the income of Parent or the Parent Subsidiaries for any period ending after or including the Effective Date.
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| (jj) | Neither Parent nor any of the Parent Subsidiaries will be required to include an item of income or gain in, or exclude any item of deduction or loss from, taxable income for or otherwise be liable for Tax in any period (or any portion thereof) ending after the Effective Date as a result of any (i) transaction, income or gain attributable to any period (or portion thereof) ending on or prior to the Effective Date, (ii) installment sale, open transaction disposition or other transaction occurring on or prior to the Effective Date, (iii) change in method of accounting made or requested on or prior to the Effective Date, (iv) use of an improper method of accounting on or prior to the Effective Date, (v) prepaid amount received, or deferred revenue accrued, on or prior to the Effective Date, or (vi) closing agreement with any Tax authority executed on or prior to the Effective Date.
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| (kk) | Parent and each of the Parent Subsidiaries has never been a party to a “reportable transaction” or listed transaction within the meaning of Section 6707A(c) of the U.S. Tax Code or Treasury Regulation Section 1.6011-4(b) (or any comparable provision under state, local or foreign Laws). All transactions that could give rise to an understatement of Tax (within the meaning of Section 6662 of the U.S. Tax Code) were reported by Parent or the applicable Parent Subsidiary in a manner for which there is substantial authority or were adequately disclosed on the Tax Returns in accordance with Section 6662(d)(2)(B) of the U.S. Tax Code.
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| (ll) | Any and all tax credits claimed by the Parent or any of the Parent Subsidiaries were claimed in accordance with applicable Tax Law and Parent and each of the Parent Subsidiaries has satisfied at all times the relevant criteria and conditions entitling it to such tax credits.
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| (mm) | Neither Parent nor any Parent Subsidiary nor, to Parent’s knowledge, any other Person, is in default in any material respect in the observance or performance of any term, covenant or obligation to be performed by Parent or a Parent Subsidiary or such other Person under any Material Contract, and no event has occurred which with notice or lapse of time or both would constitute such a default by Parent or any Parent Subsidiary or, to Parent’s knowledge, any other party, except where such default or event would not reasonably be expected to result in a Parent Material Adverse Effect.
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|
(nn) |
Since the Latest Balance Sheet Date: |
| (i) | Except as disclosed in the Parent Disclosure Documents, there has not been any material change in the assets, liabilities, obligations (absolute, accrued, contingent or otherwise), business, condition (financial or otherwise) or results of operations of Parent or any Parent Subsidiary;
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| (ii) | Except
as disclosed in the Parent Disclosure Documents, there has not been any material change in
the share capital or long-term debt of Parent; |
| (iii) | There has not been any entering into, or an amendment of, any Parent Material Contract other than (A) in the ordinary course of business, or (B) renewals of any such contract;
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| (iv) | There has not been any satisfaction or settlement of any material claims or material liabilities, other than the settlement of such claims or such liabilities incurred in the ordinary course of business;
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| (v) | Except for ordinary course adjustments to salary, bonus, or other remuneration payable to any officers or senior or executive officers, there has not been any increase in the salary, bonus, severance, termination pay, change of control entitlements or other remuneration payable to any senior or executive officers of Parent or any Parent Subsidiary; and
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| (vi) | Parent
and the Parent Subsidiaries have carried on their business in the ordinary course consistent
with past practice. |
| (oo) | There has been no interruption to or discontinuity in any material supplier or distributor arrangement or relationship of Parent and the Parent Subsidiaries with each of their respective material suppliers and distributors and the relationships of Parent and the Parent Subsidiaries with each of their respective material suppliers and distributors are satisfactory, and there are no unresolved disputes with any such supplier or distributor. No material supplier or distributor of Parent or any Parent Subsidiary has notified Parent or the Parent Subsidiary that such material supplier or distributor will not continue dealing with Parent or the Parent Subsidiary on substantially the same terms as presently conducted, and to the knowledge of Parent, there is no reason to believe that, any such material supplier or distributor will not continue dealing with Parent or the Parent Subsidiary on substantially the same terms as presently conducted, in each case subject to changes in pricing and volume in the ordinary course.
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| (pp) | Each of Parent and the Parent Subsidiaries possesses permits, licenses, approvals, consents and other authorizations issued by a federal, provincial, state, local or foreign regulatory agencies or bodies (in this Schedule D, collectively, “Governmental Licenses”) required by Law to conduct the business now operated by them, except where the failure to hold such Governmental Licenses would not, individually or in the aggregate, result in a Parent Material Adverse Effect. Each Governmental License is valid and in full force and effect, and is renewable by its terms or in the ordinary course without the need for Parent to comply with any special rules of procedures, agree to any materially different terms or conditions or pay any amounts other than routine filing fees. To the knowledge of Parent, each of Parent and the Parent Subsidiaries is in compliance in all material respects with the terms and conditions of all such Governmental Licenses. No consent, license, order, authorization, approval, permit, registration or declaration of, or filing with, any Governmental Entity is required in connection with: (i) the closing of the Arrangement; (ii) the execution and delivery by Parent of this Agreement or any document delivered by Parent at the closing of the Arrangement to which it is a party; (iii) the observance and performance by Parent of its obligations under this Agreement or any document delivered by Parent at the closing of the Arrangement to which it is a party; or (iv) avoiding the loss of any Governmental Licenses relating to Parent or the Parent Subsidiaries, any of their properties and assets, or the business now operated by them.
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| (qq) | To the knowledge of Parent, no event has occurred that, with or without notice or lapse of time or both, would reasonably be expected to result in the revocation, suspension, lapse or limitation of any Governmental License.
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| (rr) | There
are no actions, proceedings or, to Parent’s knowledge, investigations commenced or,
to the knowledge of Parent, pending in respect of or regarding any such Governmental License.
None of Parent and the Parent Subsidiaries has received any written notice of revocation
or non-renewal of any Governmental License, or of any intention of any Person to revoke or
refuse to renew any of such Governmental License. |
| (ss) | Other than the Parent Financial Advisor, there is no Person acting or purporting to act at the request of Parent who is entitled to any brokerage, agency or other fiscal advisory or similar fee in connection with the transactions contemplated by this Agreement and the Plan of Arrangement.
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| (tt) | Except as disclosed in the Parent Disclosure Documents or in the Parent Financial Statements, neither Parent nor any Parent Subsidiary has any loan or other indebtedness outstanding which has been made to any of its securityholders, officers, directors or employees, past or present, or any Person not dealing at arm’s length with it, other than for the reimbursement of ordinary course business expenses.
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| (uu) | Except for (i) employment, consulting or employment compensation agreements entered into in the ordinary course of business, (ii) customary director and officer indemnification arrangements on market terms, or (iii) financing agreements or shareholder agreements with the Parent Shareholders entered into in connection with financings or other transactions to which Parent Shareholders are generally parties and that will terminate at or prior to the Effective Time as a result of the Arrangement, there are no current contracts or other transactions (including relating to indebtedness by Parent or the Parent Subsidiaries) between Parent or any Parent Subsidiaries on the one hand, and (A) any officer or director of Parent or the Parent Subsidiaries, (B) any holder of record or beneficial owner of five percent (5%) or more of the voting securities of Parent, or (C) any affiliate or associate of any officer, director or beneficial owner, on the other hand except as disclosed in the Parent Disclosure Documents or in the Parent Financial Statements.
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| (vv) | The assets and properties of Parent and the Parent Subsidiaries and their business and operations are insured against loss or damage with responsible insurers on a basis consistent with insurance obtained by reasonably prudent participants in comparable businesses, and such coverage is in full force and effect, and Parent and the Parent Subsidiaries have not failed to promptly give any notice or present any material claim thereunder.
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| (ww) | The vehicles, machinery, equipment and other tangible personal property of Parent and the Parent Subsidiaries are, in all material respects, in good operating condition and repair having regard to their use and age, and are not in need of maintenance or repairs other than preventative maintenance and repairs in the ordinary course of business, and are adequate for the uses subject to normal wear and tear to which they are being put to use, have been maintained in all material respects in accordance with generally accepted industry practice and are free from any material defects. All leased equipment and other leased personal property of Parent and the Parent Subsidiaries is in all material respects in the condition required of such property by the terms of the lease applicable thereto.
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| (xx) | To
the knowledge of Parent, none of Parent or any Parent Subsidiary is suspended or otherwise
restricted from participating in any drug insurance plan, nor, to the knowledge of Parent,
are there any facts or circumstances that are materially inconsistent with market practices
and that provide a reasonable basis for any material adverse regulatory communication or
action against Parent or any Parent Subsidiary, in respect of the Parent Business or relating
to non-compliance with any applicable Law. |
| (yy) | Neither Parent nor the Parent Subsidiaries own any real property or hold an ownership interest in any real property, or have owned or held such ownership interest in the past five years, save and except as set out in the Parent Disclosure Documents. With respect to each of the material leased premises of Parent and the Parent Subsidiaries, Parent and the Parent Subsidiaries occupies the applicable leased premises and has the right to occupy and use the leased premises, subject to the terms of the respective leases, and each of the leases pursuant to which Parent and the Parent Subsidiaries occupies such leased premises is valid, legally binding and enforceable against Parent or a Parent Subsidiary, as applicable, and to the knowledge of Parent, the other parties in accordance with its terms is in good standing and in full force and effect, and none of Parent or any of the Parent Subsidiaries is in breach of, or default under, such lease, sublease, license or occupancy agreement, and no event has occurred which, with notice, lapse of time or both, would constitute such a breach or default by Parent or any of the Parent Subsidiaries that would permit termination, modification or acceleration by any third party thereunder. No third party has repudiated or has the right to terminate or repudiate any such lease (except for the normal exercise of remedies in connection with a default thereunder or any termination rights set forth in the lease) or any provision thereof. None of the aforementioned leases has been assigned by Parent or any of the Parent Subsidiaries in favor of any Person or sublet or sublicensed. There exists no claim of any kind or right of set-off against Parent or any Parent Subsidiary, as the case may be, as tenant by the landlord or against the landlord by Parent or any Parent Subsidiary, as the case may be, as tenant as of the date hereof. Parent and the Parent Subsidiaries own, lease or license all personal or movable property as is necessary to conduct their business as presently conducted, and Parent and the Parent Subsidiaries have good and valid title to, or a valid and enforceable interest (whether a leasehold interest or otherwise) in, all of such personal or movable property.
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| | |
| (zz) | Parent
and the Parent Subsidiaries as tenants are in actual possession of all properties leased by them. Except as disclosed in Schedule
D(zz) of the Parent Disclosure Letter, Parent and the Parent Subsidiaries are not in arrears of rent required to be paid pursuant
to any applicable lease. |
| | |
| (aaa) | The minute books and records of Parent and the Parent Subsidiaries made available to SRx and its counsel in connection with their due diligence investigation in respect of the Arrangement contain full, true and correct copies of all constating documents, including all amendments thereto, and contain copies of all proceedings of securityholders and directors (and committees thereof) and are complete in all material respects.
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| | |
| (bbb) | The
Parent Disclosure Documents set out all Intellectual Property owned by Parent or a Parent
Subsidiary that has been registered or which applications for registration have been filed
and all other material Intellectual Property that is owned by Parent or the Parent Subsidiary
(in this Schedule D, the “Parent Owned Intellectual Property”)
and the Intellectual Property that is duly licensed by Parent as part of its business as
presently conducted, except for commercially available, off-the- shelf software licensed
to Parent or any Parent Subsidiary on a royalty-free basis pursuant to standard, nondiscriminatory
terms and conditions (in this Schedule D, the “Parent Licensed Intellectual
Property”, and together with the Parent Owned Intellectual Property, the “Parent
Intellectual Property”). Parent or a Parent Subsidiary is the sole and exclusive
owner of the Parent Owned Intellectual Property and all other Intellectual Property that
it owns or purports to own with good, valid and marketable title thereto, free and clear
of all Encumbrances (other than Permitted Encumbrances). Parent or a Parent Subsidiary has
valid and enforceable licenses to use all of the Parent Licensed Intellectual Property used
by it in connection with, and as required for, its business as presently conducted. Parent
has no knowledge to the effect that it will be unable to obtain or maintain any rights or
licenses to use all Intellectual Property necessary for the conduct of its business. The
Parent Owned Intellectual Property and the Parent Licensed Intellectual Property constitute
all of the Intellectual Property required by Parent or the Parent Subsidiaries to conduct
their respective businesses as currently conducted. To the knowledge of Parent, no third
parties have rights to any Intellectual Property, except for the ownership rights of the
owners of the Parent Licensed Intellectual Property which is licensed to Parent or a Parent
Subsidiary. To the knowledge of Parent, there is no infringement, misappropriation or misuse
by third parties of any Parent Owned Intellectual Property. There is no pending or, to the
knowledge of Parent, threatened action, suit, proceeding or claim by third parties challenging
the rights in or to any Parent Owned Intellectual Property, and Parent is not aware of any
facts which form a reasonable basis for any such claim. The Parent Owned Intellectual Property
that is the subject of an application or registration is valid, in full force and effect.
There is no pending or, to the knowledge of Parent, threatened action, suit, proceeding or
claim by others challenging the validity or enforceability of any Parent Owned Intellectual
Property, and Parent is not aware of any allegations or finding of unenforceability or invalidity
of the Parent Owned Intellectual Property or any facts which form a reasonable basis for
any such claim. All applications, registrations, filings, renewals and payments necessary
to preserve the rights of Parent or any Parent Subsidiary in and to Parent Owned Intellectual
Property have been duly filed, made, prosecuted, maintained, paid, are in good standing and
are recorded in the name of Parent or a Parent Subsidiary. There is no pending or, to the
knowledge of Parent, threatened action, suit, proceeding or claim by third parties that Parent
or a Parent Subsidiary infringes, misappropriates or otherwise violates any patent, trademark,
copyright, trade secret or other proprietary rights of others. To the knowledge of Parent,
the business of Parent and the Parent Subsidiaries does not infringe, misappropriate or otherwise
violate any patent, trademark, copyright, trade secret or other proprietary rights of third
parties and, without limiting the foregoing, to the knowledge of Parent, there is no patent
or patent application by third parties that contains claims that interfere with the issued
or pending claims of any Parent Intellectual Property. |
| (ccc) | Except in respect of the Intellectual Property set forth in Schedule D(ccc) of the Parent Disclosure Letter, no licenses or other rights have been granted to any third party in, to and in respect of the Parent Owned Intellectual Property.
|
| | |
| (ddd) | Other than in respect of those contracts disclosed in Schedule D(ddd) of the Parent Disclosure Letter, neither Parent nor any Parent Subsidiary is a party to or bound by any Contract or other obligation that limits or impairs its ability to use, sell, transfer, assign or convey, or that otherwise affects any Parent Intellectual Property.
|
| | |
| (eee) | Except as set forth in Schedule D(eee) the Parent Disclosure Letter, neither Parent nor any Parent Subsidiary is obligated to pay any royalties, fees or other compensation to any third party in respect of its ownership, use, practice, exploitation or commercialization of any Parent Intellectual Property.
|
| (fff) | Except as disclosed in Schedule D(fff) of the Parent Disclosure Letter, no permits, licenses, approvals, consents or other authorizations issued by any federal, provincial, state, local or foreign regulatory agency or body are required to import or sell the products of Parent or any Parent Subsidiary.
|
| (ggg) | Except in respect of the individuals listed in Schedule D(ggg)(i) of the Parent Disclosure Letter, all current and former employees of, and current and former consultants who have contributed to the creation of any Parent Owned Intellectual Property to, Parent and the Parent Subsidiaries have entered into proprietary rights or similar agreements with Parent or the applicable Parent Subsidiary, whereby any Intellectual Property required by Parent to conduct its business as presently conducted created by them in the course of the performance of their employment or engagement has been fully and irrevocably assigned to Parent or the applicable Parent Subsidiary without additional consideration, and, to the knowledge of Parent, no employee of, or consultant to, Parent or the applicable Parent Subsidiary is in violation of such agreements.
|
| (hhh) | Each of Parent and the Parent Subsidiaries have taken all reasonably necessary and appropriate steps (including appropriately marking and labelling Intellectual Property) to protect the secrecy, confidentiality and proprietary nature of all such Intellectual Property. To the knowledge of Parent, the employment or engagement by Parent or the applicable Parent Subsidiary of such Persons does not violate any non-disclosure or non-competition agreement between any such Person and a third party.
|
| (iii) | The conduct of Parent and the Parent Subsidiaries in carrying on the Parent Business and the operation of the Parent Business by Parent and the Parent Subsidiaries have been and is in compliance with all Environmental Laws, in all material respects, and there are no existing events, conditions, or circumstances that would reasonably be expected to materially and adversely affect the ability of Parent or the Parent Subsidiaries to comply with Environmental Laws.
|
| (jjj) | Each
of Parent and the Parent Subsidiaries has obtained all licenses, permits, approvals, consents,
certificates, registrations and other authorizations under all applicable Environmental Laws
(in this Schedule D, the “Environmental Permits”) necessary as
at the date hereof for the operation of the business carried by Parent and the Parent Subsidiaries,
and each Environmental Permit is valid, subsisting and in good standing in all material respects
and none of Parent nor any of the Parent Subsidiaries is in default or breach of any Environmental
Permit in any respect and no proceeding is outstanding or, to the knowledge of Parent, has
been threatened or is pending to revoke or limit any Environmental Permit. |
| (kkk) | To the knowledge of Parent, each of Parent and the Parent Subsidiaries has not used, except in compliance in all respects with all Environmental Laws and Environmental Permits, any property or facility which it owns, controls manages, operates or leases or previously owned, controlled, operated, managed or leased, to generate, manufacture, process, distribute, use, treat, store, dispose of, transport or handle any Hazardous Substance and, to the knowledge of Parent, there have been no releases of Hazardous Substances at any property or facility which it owns, controls, manages, operates or leases or previously owned, controlled, operated, managed or leased.
|
| (lll) | Each of Parent and the Parent Subsidiaries has not received any notice of, or been prosecuted for, an offence alleging, non-compliance in any material respect with any Environmental Laws, and none of Parent nor any of the Parent Subsidiaries has settled any allegation of non-compliance short of prosecution. There are no orders or directions issued against each of Parent and the Parent Subsidiaries under Environmental Laws including those requiring any material work, repairs, construction or capital expenditures to be made with respect to any of the assets of Parent or the Parent Subsidiaries, nor has Parent or any Parent Subsidiary received notice of any of the same.
|
| (mmm) | There are no past unresolved or, to the knowledge of Parent, any threatened or pending claims, complaints, notices or requests for information received by Parent or a Parent Subsidiary with respect to any alleged violation of any Environmental Laws; and, to the knowledge of Parent, no conditions exist at, on or under any property now or previously owned, operated, optioned or leased by Parent or a Parent Subsidiary which, with the passage of time, or the giving of notice or both, would give rise to liability under Environmental Laws that, individually or in the aggregate, would reasonably be expected to result in a Parent Material Adverse Effect.
|
| (nnn) | None of Parent nor any Parent Subsidiary has received any notice wherein it is alleged or stated that it is potentially responsible for a federal, provincial, state, municipal or local clean-up site or corrective action under Environmental Laws that would reasonably be expected to result in a Parent Material Adverse Effect.
|
| (ooo) | Except as disclosed in Schedule D(ooo) of the Parent Disclosure Letter, there are no environmental audits, evaluations, assessments, studies or tests relating to Parent or a Parent Subsidiary.
|
| (ppp) | None of Parent or the Parent Subsidiaries have agreed by contract or other agreement to indemnify or be responsible for any liabilities or obligations under Environmental Laws.
|
| (qqq) | To
the knowledge of Parent, Parent and the Parent Subsidiaries are and have been in compliance
in all material respects with all applicable Laws pertaining to employment and employment
practices, including all Laws relating to labor relations, equal employment opportunities,
fair employment practices, employment discrimination, harassment, retaliation, reasonable
accommodation, disability rights or benefits, immigration, wages, hours, overtime compensation,
child labor, hiring, promotion and termination of employees, working conditions, meal and
break periods, privacy, health and safety, workers’ compensation, leaves of absence
and unemployment insurance. All individuals characterized and treated by Parent or any Parent
Subsidiary as independent contractors or consultants are properly treated as independent
contractors under all applicable Laws. There are no actions against Parent or any Parent
Subsidiary pending or, to the knowledge of Parent, threatened to be brought or filed, by
or with any Governmental Entity or arbitrator in connection with the employment of any current
or former applicant, employee, consultant or independent contractor of Parent or any Parent
Subsidiary, including any claim relating to unfair labor practices, employment discrimination,
harassment, retaliation, equal pay, wage and hours or any other employment related matter
arising under applicable Laws. |
| (rrr) | Neither Parent nor any Parent Subsidiary is subject to any claim for wrongful dismissal, constructive dismissal or any other tort claim, actual or threatened, or any litigation actual or threatened, relating to employment or termination of employment of employees or independent contractors.
|
| (sss) | Each plan for retirement, bonus, stock purchase, profit sharing, stock option, deferred compensation, severance or termination pay, insurance, medical, hospital, dental, vision care, drug, sick leave, disability, salary continuation, legal benefits, unemployment benefits, vacation, incentive or otherwise contributed to or required to be contributed to, by Parent or a Parent Subsidiary for the benefit of any current or former director, officer, employee or consultant of Parent or a Parent Subsidiary (in this Schedule D, the “Parent Employee Plans”) has been maintained in compliance with its terms and with the requirements prescribed by any and all Laws that are applicable to such Parent Employee Plans, in each case in all material respects and has been publicly disclosed to the extent required by Securities Laws.
|
| (ttt) | All material accruals for unpaid vacation pay, premiums for unemployment insurance, health premiums, federal or state pension plan premiums, accrued wages, salaries and commissions and employee benefit plan payments have been reflected in the books and records of Parent and the Parent Subsidiaries.
|
| (uuu) | There is not currently any labor disruption, dispute, slowdown, stoppage, complaint or grievance or, to the knowledge of Parent, threatened or pending which is adversely affecting or would reasonably be expected to adversely affect, in a material manner, the carrying on of the business of Parent and the Parent Subsidiaries, and to the knowledge of Parent, there is no proposal to unionize its employees and no collective bargaining agreements are in place or currently being negotiated by Parent or any Parent Subsidiary.
|
| (vvv) | Except as set forth on Schedule D(vvv) of the Parent Disclosure Letter, neither the execution and delivery of this Agreement, shareholder or other approval of this Agreement nor the consummation of the transactions contemplated by this Agreement could, alone or in combination with another event, (i) entitle any employee, director, officer or independent contractor of the Parent Group to severance pay, termination pay, change of control payment or benefits, or any material increase in severance pay, (ii) accelerate the time of payment or vesting, or materially increase the amount of compensation due to any such employee, director, officer or independent contractor, (iii) directly or indirectly cause the Parent Group to transfer or set aside any assets to fund any material benefits under any Employee Plan, (iv) otherwise give rise to any material liability under any Employee Plan, or (v) limit or restrict the right to merge, materially amend, terminate or transfer the assets of any Employee Plan on or following the consummation of the transactions contemplated by this Agreement.
|
| (www) | Other than this Agreement, neither Parent nor any Parent Subsidiary is currently party to any agreement in respect of: (i) the purchase of any material property or assets or any interest therein or the sale, transfer or other disposition of any material property or assets or any interest therein currently owned, directly or indirectly, by Parent or a Parent Subsidiary whether by asset sale, transfer of shares or otherwise; or (ii) the change of control of Parent or a Parent Subsidiary (whether by sale or transfer of shares or otherwise).
|
| (xxx) | None of Parent nor any Parent Subsidiary is a party to any Material Contract, other than the Parent Material Contracts.
|
| (yyy) | The
operations of Parent and the Parent Subsidiaries are and have been conducted, at all times,
in material compliance with all applicable Anti-Money Laundering Laws, and no action by or
before any Governmental Entity against Parent or any Parent Subsidiary with respect to the
Anti-Money Laundering Laws is pending. None of Parent nor any Parent Subsidiary has, directly
or indirectly: (i) made or authorized any contribution, payment or gift of funds or property
to any official, employee or agent of any governmental agency, authority or instrumentality
of any jurisdiction in violation of applicable Laws; or (ii) made any contribution to any
candidate for public office, in either case where either the payment or the purpose of such
contribution, payment or gift was, is or would be prohibited under the Corruption of Foreign
Public Officials Act (Canada), the Proceeds of Crime (Money Laundering) and Terrorist Financing
Act (Canada) or the Uniting and Strengthening America by Providing Appropriate Tools Required
to Intercept and Obstruct Terrorism Act (United States) or the rules and regulations promulgated
thereunder or under any other Laws of any relevant jurisdiction covering a similar subject
matter applicable to Parent, the Parent Subsidiaries and their operations. None of Parent,
the Parent Subsidiaries, or, to the knowledge of Parent, any director, officer, agent, employee,
affiliate or Person acting on behalf of Parent or any Parent Subsidiary has been or is currently
subject to any United States sanctions administered by the Office of Foreign Assets Control
of the United States Treasury Department. |
| (zzz) | None of Parent, any Parent Subsidiary, or, to the knowledge of Parent, any of their officers, directors or employees acting on behalf of Parent has violated the United States’ Foreign Corrupt Practices Act (and the regulations promulgated thereunder), the Corruption of Foreign Public Officials Act (Canada) (and the regulations promulgated thereunder) or any other applicable Law covering a similar subject matter applicable to Parent, the Parent Subsidiaries and their operations, and to the knowledge of Parent, no such action has been taken by any of its agents, representatives or other Persons acting on behalf of Parent.
|
| (aaaa) | The Parent is a “reporting issuer” or equivalent thereof under applicable Securities Laws in the United States, and is not in default of any material requirements of any Securities Laws or the rules and regulations of the SEC or NYSE American. Parent has not taken any action to cease to be a reporting issuer nor has Parent received notification from any Securities Authority seeking to revoke the reporting issuer status of Parent. No delisting, suspension of trading in or cease trading order with respect to any of its securities and, to the knowledge of the Parent, no inquiry or investigation of any Securities Authority, is pending, in effect or ongoing or threatened, except as disclosed in the Parent Disclosure Documents and as would not, individually or in the aggregate, reasonably be expected to result in a Parent Material Adverse Effect. The Parent Shares are listed on NYSE American and trading of the Parent Shares is not currently halted or suspended. The Parent does not have any securities listed for trading on any securities exchange other than NYSE American. Parent is not subject to any cease trade or other order of NYSE American or any Securities Authority, and, to the knowledge of the Parent, no investigation or other proceedings involving the Parent that may operate to prevent or restrict trading of any securities of the Parent are currently in progress or pending before NYSE American or any Securities Authority. Parent has timely filed or furnished all Parent Disclosure Documents required to be filed or furnished by Parent under applicable Securities Laws. Each of the Parent Disclosure Documents complied in all material respects with applicable Securities Laws and did not, as of the date filed (or, if amended or superseded by a subsequent filing prior to the date of this Agreement, on the date of such filing), contain any misrepresentation (as defined under applicable Securities Laws). Parent has not filed any confidential filings (including redacted filings) filed to or furnished with, as applicable, any Securities Authority. There are no outstanding or unresolved comments in comment letters from any Securities Authority with respect to any of the Parent Disclosure Documents and, to the knowledge of Parent, neither Parent nor any of the Parent Disclosure Documents is the subject of an ongoing audit, review, comment or investigation by any Securities Authority or the SEC.
|
| (bbbb) | No order, ruling or determination having the effect of suspending the sale or ceasing the trading in any securities of Parent has been issued by any regulatory authority and is continuing in effect and no proceedings for that purpose have been instituted or, to the knowledge of Parent, are pending, contemplated or threatened by any regulatory authority.
|
| (cccc) | Parent is not a shell company (as defined in Rule 405 under the Securities Act) and has not been a shell company for at least twelve (12) calendar months prior to the date of this Agreement.
|
| (dddd) | The
Parent Certificate of Designation is in a form which complies with Delaware Law and, when
filed, will constitute the valid Parent Certificate of Designation under Delaware Law. |
| (eeee) | Except where non-compliance would not have a Parent Material Adverse Effect, Parent and the Parent Subsidiaries have complied and is in compliance with all applicable Laws governing, and all applicable contractual obligations to third parties relating to privacy, data protection, Processing, or security of Personal Information, including with respect to obtaining consent or authorization to collect, use, and disclose Personal Information, as well as all internal and external privacy policies regarding Personal Information; and, no written notices, complaints or other communications have been received by, and no claims are pending (whether by a Governmental Entity or person), or, to the knowledge of Parent, threatened against Parent or a Parent Subsidiary alleging a violation of any third party’s privacy rights or other rights relating to Personal Information including any alleged violation of applicable Laws, contractual obligations or internal or external privacy policies.
|
| (ffff) | Parent and the Parent Subsidiaries maintain commercially reasonable measures designed to protect the privacy, confidentiality, integrity and security of Personal Information, including against a Security Breach, consistent with industry standards and practices and applicable Law.
|
| (gggg) | To the knowledge of Parent, none of Parent or a Parent Subsidiary’s suppliers have experienced a Security Breach, including any such incident or breach that may require notification to any Person, any Governmental Authority or any entity under any Law to which the supplier is subject.
|
| (hhhh) | Except
for the representations and warranties expressly made by Parent in this Schedule D
or in any certificate delivered pursuant to this Agreement, neither Parent nor any other
Person makes or has made any representation or warranty of any kind whatsoever, express or
implied, at law or in equity, with respect to Parent or any of the Parent Subsidiaries or
their respective business, operations, assets, liabilities, condition (financial or otherwise),
notwithstanding the delivery or disclosure to SRx or any of its affiliates or Representatives
of any documentation, forecasts or other information with respect to any one or more of the
foregoing. Without limiting the generality of the foregoing, neither Parent nor any other
Person makes or has made any express or implied representation or warranty to SRx or any
of its Representatives with respect to (A) any financial projection, forecast, estimate,
or budget relating to Parent, any of its subsidiaries or their respective businesses or,
(B) except for the representations and warranties made by Parent in this Schedule D,
any oral or written information presented to SRx or any of its Representatives in the course
of their due diligence investigation of Parent and the Parent Subsidiaries, the negotiation
of this Agreement or the course of the Arrangement. |
SCHEDULE
E
KEY
REGULATORY APPROVALS
Filings
required under the U.S. Securities Act and U.S. Exchange Act, and other actions required by the SEC pursuant thereto
NYSE
American approval
SCHEDULE
F
FORM
OF SRX VOTING AGREEMENT
[See
Attached]
FORM
OF SRX VOTING AGREEMENT
THIS
AGREEMENT is made as of the __________ day of ___________________, 2024.
BETWEEN:
[●],
(the “Securityholder”)
-
and –
BETTER
CHOICE COMPANY INC., a corporation existing under the laws of the State of Delaware (“Better Choice”)
WHEREAS
the Securityholder is the registered and/or direct or indirect beneficial owner of the common shares (“SRx Shares”),
restricted stock units (“SRx RSUs”) and/or common share purchase warrants (“SRx Warrants”) in the
capital of SRx Health Solutions, a corporation existing under the laws of the Province of Ontario (“SRx”) set forth
opposite the Securityholder’s name in Appendix “A” hereto (collectively, the “Subject Securities”);
AND
WHEREAS the Securityholder understands that, concurrently with the execution and delivery of this Agreement, SRx and Better Choice
are entering into the Arrangement Agreement (as defined herein) providing for the Arrangement (as defined herein) whereby Better Choice
proposes to indirectly acquire all of the issued and outstanding voting and equity securities of SRx;
AND
WHEREAS in order for the Securityholder to realize the benefits that will accrue to the Securityholder in connection with the consummation
of the Arrangement, the Securityholder desires to enter into this Agreement to provide his or her support for completion of the Arrangement
on the terms and conditions set forth herein;
AND
WHEREAS the Securityholder acknowledges that Better Choice would not enter into the Arrangement Agreement but for the execution and
delivery of this Agreement by the Securityholder;
AND
WHEREAS this Agreement sets out the terms and conditions of the agreement of the Securityholder to abide by the covenants in respect
of the Subject Securities and the other restrictions and covenants set forth herein;
NOW
THEREFORE this Agreement witnesses that, in consideration of the premises and the covenants and agreements herein contained, the
parties hereto agree as follows:
ARTICLE
1
INTERPRETATION
In
this Agreement:
“Affiliate”
has the meaning ascribed thereto in the Securities Act (Ontario) and the rules, regulations, instruments (including national and
multilateral instruments) and published policies made thereunder, as now in effect and as they may be promulgated or amended from time
to time;
“Arrangement”
means the arrangement of SRx under Section 182 of the OBCA on the terms and subject to the conditions set out in the Plan of Arrangement,
subject to any amendments or variations to the Plan of Arrangement made in accordance with the terms of the Arrangement Agreement or
Article 6 of the Plan of Arrangement or made at the direction of the Court in the Final Order with the consent of the parties to the
Arrangement Agreement, each acting reasonably;
“Arrangement
Agreement” means the arrangement agreement, including the schedules thereto, of even date herewith, between Better Choice and
SRx, a copy of which is attached hereto as Appendix “B”, as it may be amended, supplemented or modified from time to time
in accordance with its terms;
“Plan
of Arrangement” means the plan of arrangement of SRx, substantially in the form of Schedule A to the Arrangement Agreement,
and any amendments or variations thereto made from time to time in accordance with the Arrangement Agreement, the plan of arrangement
or upon the direction of the Court in the Final Order with the consent of the parties to the Arrangement Agreement, each acting reasonably;
“SRx
Arrangement Resolution” means the special resolution of SRx securityholders approving the Plan of Arrangement, as contemplated
in the Arrangement Agreement;
“SRx
Meeting” means the special meeting of SRx securityholders, including any adjournment or postponement thereof, to be called
and held in accordance with the Interim Order to consider the SRx Arrangement Resolution, and for any other purpose as may be set out
in the SRx Circular; and
“SRx
Securityholder Approval” has the meaning ascribed thereto in Section 2.1.
1.2 | Definitions
in Arrangement Agreement |
All
terms used in this Agreement that are not defined in Section 1.1 or elsewhere in this Agreement and that are defined in the Arrangement
Agreement shall have the respective meanings ascribed to them in the Arrangement Agreement.
The
following Appendices attached hereto constitute an integral part of this Agreement:
Appendix “A” - Subject Securities
Appendix
“B” - Arrangement Agreement
ARTICLE
2
COVENANTS
OF THE SHAREHOLDERS
2.1 | Securityholder
Support |
In
connection with the Arrangement (and any transactions contemplated in connection with the Arrangement Agreement) and obtaining the requisite
approval for the SRx Arrangement Resolution (“SRx Securityholder Approval”), the Securityholder hereby covenants,
undertakes and agrees from time to time, until such time as this Agreement is terminated in accordance with Article 4, to cause to be
counted as present for purposes of establishing quorum and to vote (or cause to be voted) all of the Subject Securities (to the extent
they carry a right to vote): (i) at the SRx Meeting, or any other meeting of any of the securityholders of SRx at which the Securityholder
or any registered or beneficial owner of the Subject Securities are entitled to vote, to obtain the SRx Securityholder Approval; or (ii)
in any action by written consent of the securityholders of SRx, in favour of the approval, consent, ratification and adoption of any
resolution approving the Arrangement (and any transactions contemplated in connection with the Arrangement Agreement).
2.2 | Restrictions
with Respect to Subject Securities |
The
Securityholder hereby covenants and agrees that, from the date hereof until the earlier of (i) the Effective Time, (ii) the termination
of this Agreement in accordance with Article 4, or (iii) it being determined (by mutual agreement of Better Choice and SRx) that the
SRx Securityholder Approval is not required, except as permitted by this Agreement, the Securityholder will:
| (a) | not,
directly or indirectly, option, sell, assign, transfer, pledge, encumber, grant a participation
or security interest in or power of attorney over, hypothecate or otherwise convey or dispose
of any Subject Securities, or any right or interest therein (legal or equitable), to any
Person or group or Persons acting jointly or in concert or enter into any agreement, option
or other arrangement to do any of the foregoing (each of the foregoing, a “Transfer”),
other than to one or more of a parent, spouse, child or grandchild of, or a corporation,
partnership, limited liability company or other entity controlled solely by, the Securityholder
or a trust or account (including a Registered Retirement Savings Plan, Registered Education
Savings Plan, Registered Retirement Income Fund or similar account) existing for the benefit
of such Person or entity; provided, that a Transfer referred to in this sentence shall only
be permitted if, as a precondition to such Transfer, the transferee agrees in writing, in
form and substance reasonably acceptable to Better Choice, to be bound by all of the terms
of this Agreement with respect to the Subject Securities; and provided further, that in the
case of a Transfer to a corporation, partnership, limited liability company or other entity
solely controlled by, the Securityholder, such entity shall remain solely controlled by the
Securityholder until the earlier of: (i) the Effective Time; and (ii) the termination of
this Agreement in accordance with Article 4. Any purported transfer of any Subject Securities
or interest therein in violation of this Section 2.2(a) shall be null and void; |
| (b) | not, directly or indirectly, grant or agree to grant any proxy or other right to vote any Subject Securities, except for any proxies granted to vote in favour of any SRx Securityholder Approval in accordance with Section 2.1, or enter into any voting trust, vote pooling or other agreement with respect to the right to vote, call meetings of any of the shareholders of SRx or give consents or approval of any kind as to any Subject Securities;
|
| (c) | not vote or cause to be voted any Subject Securities in favor of, and vote or cause to be voted all Subject Securities against, any proposed action, transaction or agreement by or involving SRx or any of its Affiliates or the Securityholder or any other Person in a manner which could reasonably be expected to (i) prevent, hinder or delay the successful completion of the Arrangement or the transactions contemplated by the Arrangement Agreement; or (ii) change in any manner the voting rights of any class of shares of SRx;
|
| (d) | not, directly or indirectly, (i) solicit, assist, initiate, knowingly encourage or otherwise knowingly facilitate any inquiry, proposal or offer (whether public or otherwise) that constitutes or would reasonably be expected to constitute or lead to, an SRx Acquisition Proposal, (ii) enter into, engage in, continue or otherwise participate in any discussions or negotiations with any Person (other than Better Choice or its Affiliates) regarding any inquiry, proposal or offer that constitutes or would reasonably be expected to constitute or lead to, an SRx Acquisition Proposal, or (iii) accept or enter into, or publicly propose to accept or enter into, any agreement, understanding or arrangement with any Person in respect of an SRx Acquisition Proposal;
|
| (e) | take all such steps as are necessary or advisable to ensure that at all relevant times his, her or its Subject Securities will not be subject to any shareholders’ agreements, voting trust or similar agreements or any option, right or privilege (whether by law, pre-emptive or contractual) capable of becoming a shareholders’ agreement, voting trust or other agreement affecting or restricting the ability of him or her to exercise all voting rights attaching to such Subject Securities;
|
| (f) | not withdraw, amend, modify or qualify, or publicly propose or state an intention to withdraw, amend, modify or qualify, support for the transactions contemplated by the Arrangement Agreement; and
|
| (g) | irrevocably
waives to the fullest extent permitted by Law any and all rights of the Securityholder to
dissent with respect to the Arrangement, and will not exercise any such rights with respect
to the Arrangement or the transactions contemplated by the Arrangement Agreement. |
2.3 | Voting
of the Securityholder |
The
Securityholder hereby agrees with Better Choice that it will, on or before the 10th Business Day prior to any meeting of any
of the securityholders of SRx in respect of any SRx Securityholder Approval, duly complete forms of proxy in respect of all of his, her
or its Subject Securities, and any other required documents in connection therewith , and cause same to be validly delivered in support
of (and indicating that all Subject Securities are voted in favour of approving) the Arrangement (and any transactions contemplated in
connection with the Arrangement Agreement) and will not withdraw the forms of proxy except as expressly otherwise provided in this Agreement.
The Securityholder further agrees that it will, on or before the 10th Business Day prior to any meeting of any of the securityholders
of SRx in respect of any SRx Securityholder Approval to be called to approve the Arrangement (and any transactions contemplated in connection
with the Arrangement Agreement), deliver or cause to be delivered to Better Choice in accordance with Section 5.10 of this Agreement,
a copy or screenshot of the duly completed and signed forms of proxy described in the preceding sentence.
2.4 | Meaning
of Subject Securities. |
The
term “Subject Securities” means that number of SRx Shares, SRx RSUs and SRx Warrants set forth opposite the Securityholder’s
name in Appendix “A” hereto, being all of the securities of SRx owned legally or beneficially, either directly or
indirectly, by such Securityholder or over which the Securityholder exercises direct or indirect control or discretion, and will be deemed
to also include (a) any SRx Shares, SRx RSUs and SRx Warrants issued to the Securityholder pursuant to any stock dividend, stock split,
recapitalization, reclassification, combination or exchange of SRx Shares, SRx RSUs or SRx Warrants on, of, or affecting the Subject
Securities on or after the date of this Agreement and (b) any SRx Shares, SRx RSUs and SRx Warrants acquired by the Securityholder on
or after the date of this Agreement, or issued to the Securityholder, on or after the date of this Agreement (including pursuant to the
exercise, conversion or vesting of any securities of SRx that are exercisable for, convertible into or vest as SRx Shares (including
all Subject Securities)), and all such acquired SRx Shares, SRx RSUs and SRx Warrants shall be deemed Subject Securities and subject
to the terms of this Agreement as though owned by the Securityholder as of the date hereof.
ARTICLE
3
REPRESENTATIONS AND WARRANTIES
3.1 | Representations
and Warranties of the Securityholder |
The
Securityholder represents and warrants to and covenants with Better Choice as follows, and acknowledges that Better Choice is relying
upon such representations, warranties and covenants in entering into this Agreement:
| (a) | Incorporation; Authorization. If the Securityholder is a corporation or other legal entity, the Securityholder is a subsisting corporation or other entity under the laws of its incorporating or organizational jurisdiction. The Securityholder has all necessary power, authority, capacity and right to enter into this Agreement and to carry out each of its obligations under this Agreement. This Agreement has been duly executed and delivered by the Securityholder and, assuming due authorization, execution and delivery by Better Choice, constitutes a legal, valid and binding agreement enforceable by Better Choice against the Securityholder in accordance with its terms, subject, however, to limitations with respect to enforcement imposed by law in connection with bankruptcy, insolvency, reorganization or other laws affecting creditors’ rights generally and to the extent that equitable remedies such as specific performance and injunctions are only available in the discretion of the court from which they are sought.
|
| (b) | Ownership of Subject Securities. The Securityholder is, and, subject to any Transfer permitted pursuant to Section 2.2(a), will be continuously up until the Effective Time, the direct or indirect beneficial owner of the Subject Securities set out opposite the Securityholder’s name at Appendix “A”, with good and marketable title thereto, free and clear of any and all mortgages, liens, charges, restrictions, security interests, adverse claims, pledges, encumbrances and demands or rights of others of any nature or kind whatsoever. The Securityholder does not own or have any interest in any securities of SRx other than the Subject Securities. The Securityholder is not a party to, bound or affected by or subject to, any charter or by-law, contract, agreement provision, statute, regulation, judgment, order, decree or law which would be violated, contravened, breached by, or under which any default would occur as a result of, the execution and delivery of this Agreement or the consummation of any of the transactions provided for in this Agreement.
|
| (c) | No
Agreements. No Person has any agreement or option, or any right or privilege (whether
by law, pre-emptive or contractual) capable of becoming an agreement or option, for the purchase,
acquisition or transfer of any of the Subject Securities, or any interest therein or right
thereto, except pursuant to this Agreement. |
| (d) | Voting. None of such Subject Securities is subject to any proxy, power of attorney, voting trust, vote pooling or other agreement with respect to the right to vote, call meetings of any of the shareholders of SRx or give consents or approvals of any kind, except pursuant to this Agreement.
|
| (e) | Consents. No consent, waiver, approval, authorization, exemption, registration, licence or declaration of or by, or filing with, or notification to any Governmental Entity which has not been made or obtained is required to be made or obtained by the Securityholder in connection with (i) the execution and delivery by the Securityholder and enforcement against the Securityholder of this Agreement, or (ii) the consummation of any transactions by the Securityholder provided for herein.
|
| (f) | Legal Proceedings. There are no legal proceedings in progress or pending before any Governmental Entity or, to the knowledge of the Securityholder, threatened against the Securityholder or any of its Affiliates, or any of the Subject Securities or other property of the Securityholder or any of its Affiliates, and there is no judgment, decree or order against the Securityholder or its Affiliates, or any of the Subject Securities or other property of the Securityholder or any of its Affiliates, that would adversely affect in any manner the ability of the Securityholder to enter into this Agreement or adversely affect the Securityholder’s ability to perform its obligations hereunder or the title of the Securityholder to any of its Subject Securities.
|
| (g) | No
Commitment. None of the Subject Securities held by the Securityholder is the subject
of any commitment, undertaking or agreement, the terms of which would affect in any way the
ability of the Securityholder to perform the Securityholder’s obligations with respect
to such Subject Securities as set out in this Agreement. |
3.2 | Representations
and Warranties of Better Choice |
Better
Choice hereby represents and warrants to the Securityholder as follows, and acknowledges that the Securityholder is relying upon such
representations, warranties and covenants in entering into this Agreement:
| (a) | Better Choice is a corporation duly incorporated and validly existing under the laws of Delaware and it has the requisite corporate power, authority and capacity to enter into this Agreement and to perform its obligations hereunder;
|
| (b) | this Agreement has been duly executed and delivered by Better Choice and constitutes a legal, valid and binding agreement enforceable by the Securityholder against Better Choice in accordance with its terms, subject, however, to limitations with respect to enforcement imposed by law in connection with bankruptcy, insolvency, reorganization or other laws affecting creditors’ rights generally and to the extent that equitable remedies such as specific performance and injunctions are only available in the discretion of the court from which they are sought;
|
| (c) | none of the execution and delivery by Better Choice of this Agreement or the compliance by Better Choice with its obligations hereunder will violate, contravene, result in any breach of, or be in conflict with, or constitute a default under, or create a state of facts which after notice or lapse of time or both would constitute a default under, any term or provision of: (i) any organizational documents of Better Choice; (ii) any contract to which Better Choice is a party or by which Better Choice is bound; (iii) any judgment, decree, order or award of any Governmental Entity; or (iv) any applicable law, except in each case as would not reasonably be expected, either individually or in the aggregate, to materially impair the ability of Better Choice to perform its obligations hereunder or that would reasonably be expected to prevent or materially delay the completion of the Arrangement; and
|
| (d) | there
are no legal proceedings in progress or pending against or, to the knowledge of Better Choice,
threatened against Better Choice or any of its Affiliates that would adversely affect in
any manner the ability of Better Choice to enter into this Agreement and to perform its obligations
hereunder or that would reasonably be expected to prevent or materially delay the completion
of the Arrangement. |
ARTICLE
4
TERMINATION
This
Agreement shall terminate: (i) by a written instrument executed by each of the parties; (ii) in the event that the Arrangement Agreement
is terminated in accordance with its terms; (iii) on the Effective Time, or (iv) it being determined (by mutual agreement of Better Choice
and SRx) that the SRx Securityholder Approval is not required.
If
this Agreement is terminated in accordance with this Article 4, the provisions of this Agreement will become void in relation to such
Securityholder and Better Choice and no such party shall have liability to such other party in respect of whom this Agreement has been
terminated, except in respect of a wilful, intentional or material breach of the representations, warranties, obligations, terms or conditions
of this Agreement which occurred prior to such termination in which case the non-breaching party to this Agreement shall be entitled
to pursue any and all remedies at law or equity which may be available to it.
ARTICLE
5
GENERAL
Better
Choice agrees and acknowledges that the Securityholder is bound hereunder solely in his, her or its capacity as a securityholder of SRx
and that the provisions of this Agreement shall not be deemed or interpreted to bind the Securityholder or any of its directors, officers
or principal shareholders in his or her capacity as a director or officer of SRx or any of SRx’s subsidiaries. For the avoidance
of doubt, nothing in this Agreement shall limit or restrict any party from properly fulfilling his or her fiduciary duties as a director
or officer of SRx.
The
Securityholder will, from time to time, execute and deliver all such further documents and instruments and do all such acts and things
as Better Choice may reasonably require to effectively carry out or better evidence or perfect the full intent of the parties and meaning
of this Agreement.
5.3 | Survival
of Representations and Warranties |
No
investigations made by or on behalf any party or any of its authorized agents at any time shall have the effect of waiving, diminishing
the scope of or otherwise affecting any representation, warranty or covenant made by any other party herein or pursuant hereto.
No
press release or other disclosure (public or otherwise) with respect to the existence or details of this Agreement or the Arrangement
shall be made by a Securityholder without the prior written consent of Better Choice, except to the extent required by applicable law.
The Securityholder hereby consents to the disclosure of the substance of this Agreement in any press release by Better Choice and to
the filing of this Agreement as an exhibit to any filing by Better Choice with the United States Securities and Exchange Commission.
Subject
to prior written notice to the Securityholder, Better Choice may assign all or part of its rights under this Agreement to an Affiliate
of Better Choice. Other then as expressly contemplated by Section 2.2(a), this Agreement shall not be otherwise assignable by the Securityholder
without the prior written consent of Better Choice.
Time
shall be of the essence of this Agreement.
This
Agreement will be governed by, and interpreted and enforced in accordance with, the laws in force in the Province of Ontario (excluding
any rule or principle of the conflict of laws which might refer such interpretation to the laws of another jurisdiction) and the federal
laws of Canada applicable therein. Each party hereto irrevocably submits to the non-exclusive jurisdiction of the courts of Ontario with
respect to any matter arising hereunder or related hereto. The parties to this Agreement hereby irrevocably and unconditionally waive
any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the matters contemplated hereby
in the courts of the Province of Ontario and hereby further irrevocably and unconditionally waive and agree not to plead or claim in
any such court that any such action, suit or proceeding so brought has been brought in an inconvenient forum. This Section 5.7 shall
survive the termination of this Agreement.
This
Agreement, including the appendices hereto constitutes the entire agreement between the parties pertaining to the subject matter hereof.
There are no representations, warranties, conditions, undertakings, commitments, other agreements or acknowledgements, whether direct
or collateral, express or implied, that form part of or affect this Agreement, or which induced any party hereto to enter into this Agreement
or on which reliance is placed by any party hereto, except as specifically set forth in this Agreement.
This
Agreement may be amended, modified or supplemented only by a written agreement signed by all of the parties hereto.
If
any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy,
all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that
any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that
the terms of this Agreement remain as originally contemplated to the fullest extent possible.
All
notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed to have been duly given
and received on the day it is delivered, provided, however, that it is delivered on a Business Day prior to 4:30 p.m. Toronto time in
the place of delivery or receipt. However, if notice is delivered after 4:30 p.m. Toronto time or if such day is not a Business Day then
the notice shall be deemed to have been given and received on the next Business Day. Notice shall be sufficiently given if delivered
(either in person, by courier service or other personal method of delivery), or if transmitted by e- mail to the following addresses
(or at such other addresses as shall be specified by any party by notice to the other given in accordance with these provisions;
| a. | in
the case of a notice to the Securityholder, to the Securityholder at the email address indicated
opposite to the name of the Securityholder in Appendix “A”; and |
| b. | in
the case of a notice to Better Choice: |
Better
Choice Company Inc.
12400 Race Track Road
Tampa, FL 33626
|
Attention: |
Mike Young and Carolina Martinez |
|
E-mail: |
myoung@cottcap.com / nmartinez@bttrco.com |
with
a copy (which shall not constitute notice) to:
Wildeboer
Dellelce LLP
365 Bay Street, Suite 800
Toronto, Ontario M5H 2V1
|
Attention: |
Perry Dellelce and James Brown |
|
E-mail: |
perry@wildlaw.ca / jbrown@wildlaw.ca |
5.12 | Specific
Performance and other Equitable Rights |
It
is recognized and acknowledged that a breach by any party of any material obligations contained in this Agreement will cause the other
party to sustain injury for which it would not have an adequate remedy at law for money damages. Accordingly, in the event of any such
breach, any aggrieved party shall be entitled to the remedy of specific performance of such obligations and interlocutory, preliminary
and permanent injunctive and other equitable relief in addition to any other remedy to which it may be entitled, at law or in equity,
and the Securityholder will waive, in any action for specific performance, interlocutory, preliminary and permanent injunctive relief
and/or any other equitable relief, the defence of adequacy of a remedy at law and any requirement for the securing or posting of any
bond in connection with the obtaining of any such relief.
Each
of the parties shall pay its respective legal, financial advisory and accounting costs and expenses incurred in connection with the preparation,
execution and delivery of this Agreement and all documents and instruments executed or prepared pursuant hereto and any other related
costs and expenses whatsoever and howsoever incurred.
This
Agreement may be executed in any number of counterparts. Each executed counterpart will be deemed to be an original. All executed counterparts
taken together will constitute one agreement.
To
evidence the fact that a party hereto has executed this Agreement, such party may send a copy of its executed counterpart to the other
parties hereto by Electronic Transmission and if sent by email, in Portable Document File (PDF) format. That party will be deemed to
have executed this Agreement on the date it sent such Electronic Transmission.
5.15 | Independent
Legal Advice |
The
Securityholder acknowledges that:
| (a) | the Securityholder has read this Agreement in its entirety, understands this Agreement and agrees to be bound by its terms and conditions;
|
| (b) | the Securityholder has been advised to seek independent legal advice with respect to the Securityholder executing and delivering this Agreement and has received such advice or has, without undue influence, elected to waive the benefit of any such advice; and
|
| (c) | the
Securityholder is entering into this Agreement voluntarily. |
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK.
SIGNATURE PAGES FOLLOW.]
IN WITNESS WHEREOF the parties
have executed this Agreement as of the date first written above.
Signature
Page to SRx Voting Agreement
|
BETTER CHOICE COMPANY INC. |
|
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|
|
Per: |
|
|
Name: |
|
|
Title: |
|
Signature
Page to SRx Voting Agreement
APPENDIX
“A”
Subject
Securities
Securityholder
Name |
|
SRx
Shares |
|
SRx
RSUs |
|
SRx
Warrants |
|
Securityholder
Contact Email |
|
|
|
|
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|
|
|
|
APPENDIX
“B”
Arrangement
Agreement
See
attached.
SCHEDULE
G
SRx
SUPPORTING SHAREHOLDERS
All
Persons holding 5% or more of the SRx Shares (on a fully diluted basis) as of the date hereof.
Exhibit 10.2
FORM
OF SRX VOTING AGREEMENT
THIS
AGREEMENT is made as of the 3rd day of September, 2024.
BETWEEN:
ADESH
VORA, (the “Securityholder”)
-
and –
BETTER
CHOICE COMPANY INC., a corporation existing under the laws of the State of Delaware (“Better
Choice”)
WHEREAS
the Securityholder is the registered and/or direct or indirect beneficial owner of the common shares (“SRx Shares”),
restricted stock units (“SRx RSUs”) and/or common share purchase warrants (“SRx Warrants”) in the
capital of SRx Health Solutions, a corporation existing under the laws of the Province of Ontario (“SRx”) set forth
opposite the Securityholder’s name in Appendix “A” hereto (collectively, the “Subject Securities”);
AND
WHEREAS the Securityholder understands that, concurrently with the execution and delivery of this Agreement, SRx and Better Choice
are entering into the Arrangement Agreement (as defined herein) providing for the Arrangement (as defined herein) whereby Better Choice
proposes to indirectly acquire all of the issued and outstanding voting and equity securities of SRx;
AND
WHEREAS in order for the Securityholder to realize the benefits that will accrue to the Securityholder in connection with the consummation
of the Arrangement, the Securityholder desires to enter into this Agreement to provide his or her support for completion of the Arrangement
on the terms and conditions set forth herein;
AND
WHEREAS the Securityholder acknowledges that Better Choice would not enter into the Arrangement Agreement but for the execution and
delivery of this Agreement by the Securityholder;
AND
WHEREAS this Agreement sets out the terms and conditions of the agreement of the Securityholder to abide by the covenants in respect
of the Subject Securities and the other restrictions and covenants set forth herein;
NOW
THEREFORE this Agreement witnesses that, in consideration of the premises and the covenants and agreements herein contained, the
parties hereto agree as follows:
ARTICLE
1
INTERPRETATION
In
this Agreement:
“Affiliate”
has the meaning ascribed thereto in the Securities Act (Ontario) and the rules, regulations, instruments (including national and
multilateral instruments) and published policies made thereunder, as now in effect and as they may be promulgated or amended from time
to time;
“Arrangement”
means the arrangement of SRx under Section 182 of the OBCA on the terms and subject to the conditions set out in the Plan of Arrangement,
subject to any amendments or variations to the Plan of Arrangement made in accordance with the terms of the Arrangement Agreement or
Article 6 of the Plan of Arrangement or made at the direction of the Court in the Final Order with the consent of the parties to the
Arrangement Agreement, each acting reasonably;
“Arrangement
Agreement” means the arrangement agreement, including the schedules thereto, of even date herewith, between Better Choice and
SRx, a copy of which is attached hereto as Appendix “B”, as it may be amended, supplemented or modified from time to time
in accordance with its terms;
“Plan
of Arrangement” means the plan of arrangement of SRx, substantially in the form of Schedule A to the Arrangement Agreement,
and any amendments or variations thereto made from time to time in accordance with the Arrangement Agreement, the plan of arrangement
or upon the direction of the Court in the Final Order with the consent of the parties to the Arrangement Agreement, each acting reasonably;
“SRx
Arrangement Resolution” means the special resolution of SRx securityholders approving the Plan of Arrangement, as contemplated
in the Arrangement Agreement;
“SRx
Meeting” means the special meeting of SRx securityholders, including any adjournment or postponement thereof, to be called
and held in accordance with the Interim Order to consider the SRx Arrangement Resolution, and for any other purpose as may be set out
in the SRx Circular; and
“SRx
Securityholder Approval” has the meaning ascribed thereto in Section 2.1.
1.2 | Definitions
in Arrangement Agreement |
All
terms used in this Agreement that are not defined in Section 1.1 or elsewhere in this Agreement and that are defined in the Arrangement
Agreement shall have the respective meanings ascribed to them in the Arrangement Agreement.
The
following Appendices attached hereto constitute an integral part of this Agreement:
Appendix
“A” - Subject Securities
Appendix
“B” - Arrangement Agreement
ARTICLE
2
COVENANTS
OF THE SHAREHOLDERS
2.1 | Securityholder
Support |
In
connection with the Arrangement (and any transactions contemplated in connection with the Arrangement Agreement) and obtaining the requisite
approval for the SRx Arrangement Resolution (“SRx Securityholder Approval”), the Securityholder hereby covenants,
undertakes and agrees from time to time, until such time as this Agreement is terminated in accordance with Article 4, to cause to be
counted as present for purposes of establishing quorum and to vote (or cause to be voted) all of the Subject Securities (to the extent
they carry a right to vote): (i) at the SRx Meeting, or any other meeting of any of the securityholders of SRx at which the Securityholder
or any registered or beneficial owner of the Subject Securities are entitled to vote, to obtain the SRx Securityholder Approval; or (ii)
in any action by written consent of the securityholders of SRx, in favour of the approval, consent, ratification and adoption of any
resolution approving the Arrangement (and any transactions contemplated in connection with the Arrangement Agreement).
2.2 | Restrictions
with Respect to Subject Securities |
The
Securityholder hereby covenants and agrees that, from the date hereof until the earlier of (i) the Effective Time, (ii) the termination
of this Agreement in accordance with Article 4, or (iii) it being determined (by mutual agreement of Better Choice and SRx) that the
SRx Securityholder Approval is not required, except as permitted by this Agreement, the Securityholder will:
| (a) | not,
directly or indirectly, option, sell, assign, transfer, pledge, encumber, grant a participation
or security interest in or power of attorney over, hypothecate or otherwise convey or dispose
of any Subject Securities, or any right or interest therein (legal or equitable), to any
Person or group or Persons acting jointly or in concert or enter into any agreement, option
or other arrangement to do any of the foregoing (each of the foregoing, a “Transfer”),
other than to one or more of a parent, spouse, child or grandchild of, or a corporation,
partnership, limited liability company or other entity controlled solely by, the Securityholder
or a trust or account (including a Registered Retirement Savings Plan, Registered Education
Savings Plan, Registered Retirement Income Fund or similar account) existing for the benefit
of such Person or entity; provided, that a Transfer referred to in this sentence shall only
be permitted if, as a precondition to such Transfer, the transferee agrees in writing, in
form and substance reasonably acceptable to Better Choice, to be bound by all of the terms
of this Agreement with respect to the Subject Securities; and provided further, that in the
case of a Transfer to a corporation, partnership, limited liability company or other entity
solely controlled by, the Securityholder, such entity shall remain solely controlled by the
Securityholder until the earlier of: (i) the Effective Time; and (ii) the termination of
this Agreement in accordance with Article 4. Any purported transfer of any Subject Securities
or interest therein in violation of this Section 2.2(a) shall be null and void; |
| (b) | not,
directly or indirectly, grant or agree to grant any proxy or other right to vote any Subject
Securities, except for any proxies granted to vote in favour of any SRx Securityholder Approval
in accordance with Section 2.1, or enter into any voting trust, vote pooling or other agreement
with respect to the right to vote, call meetings of any of the shareholders of SRx or give
consents or approval of any kind as to any Subject Securities; |
| (c) | not
vote or cause to be voted any Subject Securities in favor of, and vote or cause to be voted
all Subject Securities against, any proposed action, transaction or agreement by or involving
SRx or any of its Affiliates or the Securityholder or any other Person in a manner which
could reasonably be expected to (i) prevent, hinder or delay the successful completion of
the Arrangement or the transactions contemplated by the Arrangement Agreement; or (ii) change
in any manner the voting rights of any class of shares of SRx; |
| (d) | not,
directly or indirectly, (i) solicit, assist, initiate, knowingly encourage or otherwise knowingly
facilitate any inquiry, proposal or offer (whether public or otherwise) that constitutes
or would reasonably be expected to constitute or lead to, an SRx Acquisition Proposal, (ii)
enter into, engage in, continue or otherwise participate in any discussions or negotiations
with any Person (other than Better Choice or its Affiliates) regarding any inquiry, proposal
or offer that constitutes or would reasonably be expected to constitute or lead to, an SRx
Acquisition Proposal, or (iii) accept or enter into, or publicly propose to accept or enter
into, any agreement, understanding or arrangement with any Person in respect of an SRx Acquisition
Proposal; |
| (e) | take
all such steps as are necessary or advisable to ensure that at all relevant times his, her
or its Subject Securities will not be subject to any shareholders’ agreements, voting
trust or similar agreements or any option, right or privilege (whether by law, pre-emptive
or contractual) capable of becoming a shareholders’ agreement, voting trust or other
agreement affecting or restricting the ability of him or her to exercise all voting rights
attaching to such Subject Securities; |
| (f) | not
withdraw, amend, modify or qualify, or publicly propose or state an intention to withdraw,
amend, modify or qualify, support for the transactions contemplated by the Arrangement Agreement;
and |
| (g) | irrevocably
waives to the fullest extent permitted by Law any and all rights of the Securityholder to
dissent with respect to the Arrangement, and will not exercise any such rights with respect
to the Arrangement or the transactions contemplated by the Arrangement Agreement. |
2.3 | Voting
of the Securityholder |
The
Securityholder hereby agrees with Better Choice that it will, on or before the 10th Business Day prior to any meeting of any
of the securityholders of SRx in respect of any SRx Securityholder Approval, duly complete forms of proxy in respect of all of his, her
or its Subject Securities, and any other required documents in connection therewith , and cause same to be validly delivered in support
of (and indicating that all Subject Securities are voted in favour of approving) the Arrangement (and any transactions contemplated in
connection with the Arrangement Agreement) and will not withdraw the forms of proxy except as expressly otherwise provided in this Agreement.
The Securityholder further agrees that it will, on or before the 10th Business Day prior to any meeting of any of the securityholders
of SRx in respect of any SRx Securityholder Approval to be called to approve the Arrangement (and any transactions contemplated in connection
with the Arrangement Agreement), deliver or cause to be delivered to Better Choice in accordance with Section 5.10 of this Agreement,
a copy or screenshot of the duly completed and signed forms of proxy described in the preceding sentence.
2.4 | Meaning
of Subject Securities. |
The
term “Subject Securities” means that number of SRx Shares, SRx RSUs and SRx Warrants set forth opposite the Securityholder’s
name in Appendix “A” hereto, being all of the securities of SRx owned legally or beneficially, either directly or
indirectly, by such Securityholder or over which the Securityholder exercises direct or indirect control or discretion, and will be deemed
to also include (a) any SRx Shares, SRx RSUs and SRx Warrants issued to the Securityholder pursuant to any stock dividend, stock split,
recapitalization, reclassification, combination or exchange of SRx Shares, SRx RSUs or SRx Warrants on, of, or affecting the Subject
Securities on or after the date of this Agreement and (b) any SRx Shares, SRx RSUs and SRx Warrants acquired by the Securityholder on
or after the date of this Agreement, or issued to the Securityholder, on or after the date of this Agreement (including pursuant to the
exercise, conversion or vesting of any securities of SRx that are exercisable for, convertible into or vest as SRx Shares (including
all Subject Securities)), and all such acquired SRx Shares, SRx RSUs and SRx Warrants shall be deemed Subject Securities and subject
to the terms of this Agreement as though owned by the Securityholder as of the date hereof.
ARTICLE
3
REPRESENTATIONS
AND WARRANTIES
3.1 | Representations
and Warranties of the Securityholder |
The
Securityholder represents and warrants to and covenants with Better Choice as follows, and acknowledges that Better Choice is relying
upon such representations, warranties and covenants in entering into this Agreement:
| (a) | Incorporation;
Authorization. If the Securityholder is a corporation or other legal entity, the Securityholder
is a subsisting corporation or other entity under the laws of its incorporating or organizational
jurisdiction. The Securityholder has all necessary power, authority, capacity and right to
enter into this Agreement and to carry out each of its obligations under this Agreement.
This Agreement has been duly executed and delivered by the Securityholder and, assuming due
authorization, execution and delivery by Better Choice, constitutes a legal, valid and binding
agreement enforceable by Better Choice against the Securityholder in accordance with its
terms, subject, however, to limitations with respect to enforcement imposed by law in connection
with bankruptcy, insolvency, reorganization or other laws affecting creditors’ rights
generally and to the extent that equitable remedies such as specific performance and injunctions
are only available in the discretion of the court from which they are sought. |
| (b) | Ownership
of Subject Securities. The Securityholder is, and, subject to any Transfer permitted
pursuant to Section 2.2(a), will be continuously up until the Effective Time, the direct
or indirect beneficial owner of the Subject Securities set out opposite the Securityholder’s
name at Appendix “A”, with good and marketable title thereto, free and
clear of any and all mortgages, liens, charges, restrictions, security interests, adverse
claims, pledges, encumbrances and demands or rights of others of any nature or kind whatsoever.
The Securityholder does not own or have any interest in any securities of SRx other than
the Subject Securities. The Securityholder is not a party to, bound or affected by or subject
to, any charter or by-law, contract, agreement provision, statute, regulation, judgment,
order, decree or law which would be violated, contravened, breached by, or under which any
default would occur as a result of, the execution and delivery of this Agreement or the consummation
of any of the transactions provided for in this Agreement. |
| (c) | No
Agreements. No Person has any agreement or option, or any right or privilege (whether
by law, pre-emptive or contractual) capable of becoming an agreement or option, for the purchase,
acquisition or transfer of any of the Subject Securities, or any interest therein or right
thereto, except pursuant to this Agreement. |
| (d) | Voting.
None of such Subject Securities is subject to any proxy, power of attorney, voting trust,
vote pooling or other agreement with respect to the right to vote, call meetings of any of
the shareholders of SRx or give consents or approvals of any kind, except pursuant to this
Agreement. |
| (e) | Consents.
No consent, waiver, approval, authorization, exemption, registration, licence or declaration
of or by, or filing with, or notification to any Governmental Entity which has not been made
or obtained is required to be made or obtained by the Securityholder in connection with (i)
the execution and delivery by the Securityholder and enforcement against the Securityholder
of this Agreement, or (ii) the consummation of any transactions by the Securityholder provided
for herein. |
| (f) | Legal
Proceedings. There are no legal proceedings in progress or pending before any Governmental
Entity or, to the knowledge of the Securityholder, threatened against the Securityholder
or any of its Affiliates, or any of the Subject Securities or other property of the Securityholder
or any of its Affiliates, and there is no judgment, decree or order against the Securityholder
or its Affiliates, or any of the Subject Securities or other property of the Securityholder
or any of its Affiliates, that would adversely affect in any manner the ability of the Securityholder
to enter into this Agreement or adversely affect the Securityholder’s ability to perform
its obligations hereunder or the title of the Securityholder to any of its Subject Securities. |
| (g) | No
Commitment. None of the Subject Securities held by the Securityholder is the subject
of any commitment, undertaking or agreement, the terms of which would affect in any way the
ability of the Securityholder to perform the Securityholder’s obligations with respect
to such Subject Securities as set out in this Agreement. |
3.2 | Representations
and Warranties of Better Choice |
Better
Choice hereby represents and warrants to the Securityholder as follows, and acknowledges that the Securityholder is relying upon such
representations, warranties and covenants in entering into this Agreement:
| (a) | Better
Choice is a corporation duly incorporated and validly existing under the laws of Delaware
and it has the requisite corporate power, authority and capacity to enter into this Agreement
and to perform its obligations hereunder; |
| (b) | this
Agreement has been duly executed and delivered by Better Choice and constitutes a legal,
valid and binding agreement enforceable by the Securityholder against Better Choice in accordance
with its terms, subject, however, to limitations with respect to enforcement imposed by law
in connection with bankruptcy, insolvency, reorganization or other laws affecting creditors’
rights generally and to the extent that equitable remedies such as specific performance and
injunctions are only available in the discretion of the court from which they are sought; |
| (c) | none
of the execution and delivery by Better Choice of this Agreement or the compliance by Better
Choice with its obligations hereunder will violate, contravene, result in any breach of,
or be in conflict with, or constitute a default under, or create a state of facts which after
notice or lapse of time or both would constitute a default under, any term or provision of:
(i) any organizational documents of Better Choice; (ii) any contract to which Better Choice
is a party or by which Better Choice is bound; (iii) any judgment, decree, order or award
of any Governmental Entity; or (iv) any applicable law, except in each case as would not
reasonably be expected, either individually or in the aggregate, to materially impair the
ability of Better Choice to perform its obligations hereunder or that would reasonably be
expected to prevent or materially delay the completion of the Arrangement; and |
| (d) | there
are no legal proceedings in progress or pending against or, to the knowledge of Better Choice,
threatened against Better Choice or any of its Affiliates that would adversely affect in
any manner the ability of Better Choice to enter into this Agreement and to perform its obligations
hereunder or that would reasonably be expected to prevent or materially delay the completion
of the Arrangement. |
ARTICLE
4
TERMINATION
This
Agreement shall terminate: (i) by a written instrument executed by each of the parties; (ii) in the event that the Arrangement
Agreement is terminated in accordance with its terms; (iii) on the Effective Time, or (iv) it being determined (by mutual agreement
of Better Choice and SRx) that the SRx Securityholder Approval is not required.
If
this Agreement is terminated in accordance with this Article 4, the provisions of this Agreement will become void in relation to such
Securityholder and Better Choice and no such party shall have liability to such other party in respect of whom this Agreement has been
terminated, except in respect of a wilful, intentional or material breach of the representations, warranties, obligations, terms or conditions
of this Agreement which occurred prior to such termination in which case the non-breaching party to this Agreement shall be entitled
to pursue any and all remedies at law or equity which may be available to it.
ARTICLE
5
GENERAL
Better
Choice agrees and acknowledges that the Securityholder is bound hereunder solely in his, her or its capacity as a securityholder of SRx
and that the provisions of this Agreement shall not be deemed or interpreted to bind the Securityholder or any of its directors, officers
or principal shareholders in his or her capacity as a director or officer of SRx or any of SRx’s subsidiaries. For the avoidance
of doubt, nothing in this Agreement shall limit or restrict any party from properly fulfilling his or her fiduciary duties as a director
or officer of SRx.
The
Securityholder will, from time to time, execute and deliver all such further documents and instruments and do all such acts and things
as Better Choice may reasonably require to effectively carry out or better evidence or perfect the full intent of the parties and meaning
of this Agreement.
5.3 | Survival
of Representations and Warranties |
No
investigations made by or on behalf any party or any of its authorized agents at any time shall have the effect of waiving, diminishing
the scope of or otherwise affecting any representation, warranty or covenant made by any other party herein or pursuant hereto.
No
press release or other disclosure (public or otherwise) with respect to the existence or details of this Agreement or the Arrangement
shall be made by a Securityholder without the prior written consent of Better Choice, except to the extent required by applicable law.
The Securityholder hereby consents to the disclosure of the substance of this Agreement in any press release by Better Choice and to
the filing of this Agreement as an exhibit to any filing by Better Choice with the United States Securities and Exchange Commission.
Subject
to prior written notice to the Securityholder, Better Choice may assign all or part of its rights under this Agreement to an Affiliate
of Better Choice. Other then as expressly contemplated by Section 2.2(a), this Agreement shall not be otherwise assignable by the Securityholder
without the prior written consent of Better Choice.
Time
shall be of the essence of this Agreement.
This
Agreement will be governed by, and interpreted and enforced in accordance with, the laws in force in the Province of Ontario (excluding
any rule or principle of the conflict of laws which might refer such interpretation to the laws of another jurisdiction) and the federal
laws of Canada applicable therein. Each party hereto irrevocably submits to the non-exclusive jurisdiction of the courts of Ontario with
respect to any matter arising hereunder or related hereto. The parties to this Agreement hereby irrevocably and unconditionally waive
any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the matters contemplated hereby
in the courts of the Province of Ontario and hereby further irrevocably and unconditionally waive and agree not to plead or claim in
any such court that any such action, suit or proceeding so brought has been brought in an inconvenient forum. This Section 5.7 shall
survive the termination of this Agreement.
This
Agreement, including the appendices hereto constitutes the entire agreement between the parties pertaining to the subject matter hereof.
There are no representations, warranties, conditions, undertakings, commitments, other agreements or acknowledgements, whether direct
or collateral, express or implied, that form part of or affect this Agreement, or which induced any party hereto to enter into this Agreement
or on which reliance is placed by any party hereto, except as specifically set forth in this Agreement.
This
Agreement may be amended, modified or supplemented only by a written agreement signed by all of the parties hereto.
If
any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy,
all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that
any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that
the terms of this Agreement remain as originally contemplated to the fullest extent possible.
All
notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed to have been duly given
and received on the day it is delivered, provided, however, that it is delivered on a Business Day prior to 4:30 p.m. Toronto time in
the place of delivery or receipt. However, if notice is delivered after 4:30 p.m. Toronto time or if such day is not a Business Day then
the notice shall be deemed to have been given and received on the next Business Day. Notice shall be sufficiently given if delivered
(either in person, by courier service or other personal method of delivery), or if transmitted by e- mail to the following addresses
(or at such other addresses as shall be specified by any party by notice to the other given in accordance with these provisions;
| a. | in
the case of a notice to the Securityholder, to the Securityholder at the email address indicated
opposite to the name of the Securityholder in Appendix “A”; and |
| b. | in
the case of a notice to Better Choice: |
Better
Choice Company Inc.
12400
Race Track Road
Tampa,
FL 33626
|
Attention: |
Mike Young and Carolina Martinez |
|
E-mail: |
myoung@cottcap.com / nmartinez@bttrco.com |
with
a copy (which shall not constitute notice) to:
Wildeboer
Dellelce LLP
365
Bay Street, Suite 800
Toronto,
Ontario M5H 2V1
|
Attention: |
Perry Dellelce and James Brown |
|
E-mail: |
perry@wildlaw.ca / jbrown@wildlaw.ca |
5.12 | Specific
Performance and other Equitable Rights |
It
is recognized and acknowledged that a breach by any party of any material obligations contained in this Agreement will cause the other
party to sustain injury for which it would not have an adequate remedy at law for money damages. Accordingly, in the event of any such
breach, any aggrieved party shall be entitled to the remedy of specific performance of such obligations and interlocutory, preliminary
and permanent injunctive and other equitable relief in addition to any other remedy to which it may be entitled, at law or in equity,
and the Securityholder will waive, in any action for specific performance, interlocutory, preliminary and permanent injunctive relief
and/or any other equitable relief, the defence of adequacy of a remedy at law and any requirement for the securing or posting of any
bond in connection with the obtaining of any such relief.
Each
of the parties shall pay its respective legal, financial advisory and accounting costs and expenses incurred in connection with the preparation,
execution and delivery of this Agreement and all documents and instruments executed or prepared pursuant hereto and any other related
costs and expenses whatsoever and howsoever incurred.
This
Agreement may be executed in any number of counterparts. Each executed counterpart will be deemed to be an original. All executed counterparts
taken together will constitute one agreement.
To
evidence the fact that a party hereto has executed this Agreement, such party may send a copy of its executed counterpart to the other
parties hereto by Electronic Transmission and if sent by email, in Portable Document File (PDF) format. That party will be deemed to
have executed this Agreement on the date it sent such Electronic Transmission.
5.15 | Independent
Legal Advice |
The
Securityholder acknowledges that:
| (a) | the
Securityholder has read this Agreement in its entirety, understands this Agreement and agrees
to be bound by its terms and conditions; |
| (b) | the
Securityholder has been advised to seek independent legal advice with respect to the Securityholder
executing and delivering this Agreement and has received such advice or has, without undue
influence, elected to waive the benefit of any such advice; and |
| (c) | the
Securityholder is entering into this Agreement voluntarily. |
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK. SIGNATURE PAGES FOLLOW.]
IN
WITNESS WHEREOF the parties have executed this Agreement as of the date first written above.
|
/s/
Adesh Vora |
|
ADESH
VORA |
Signature
Page to SRx Voting Agreement
|
BETTER
CHOICE COMPANY INC. |
|
|
|
|
Per: |
/s/
Michael Young |
|
Name:
|
Michael
Young |
|
Title:
|
Chairman |
Signature
Page to SRx Voting Agreement
APPENDIX
“A”
Subject
Securities
Securityholder
Name |
|
SRx
Shares |
|
SRx
RSUs |
|
SRx
Warrants |
|
Securityholder
Contact Email |
Adesh
Vora |
|
1,410,452 |
|
|
|
|
|
Adesh.vora@srxhealth.ca |
Adesh
Vora Pharmacy Professional Corporation |
|
996,413 |
|
|
|
|
|
Adesh.vora@srxhealth.ca |
Life
Beautiful Designs Inc. |
|
98,697 |
|
|
|
|
|
Adesh.vora@srxhealth.ca |
Niam
Pharmaceuticals Inc. |
|
5,024,525 |
|
|
|
|
|
Adesh.vora@srxhealth.ca |
TDDA
Therapeutics
Inc. |
|
617,260 |
|
|
|
|
|
Adesh.vora@srxhealth.ca |
Tricare
Consulting Inc. |
|
542,436 |
|
|
|
|
|
Adesh.vora@srxhealth.ca |
Vora
2018 Family Trust |
|
552,119 |
|
|
|
|
|
Adesh.vora@srxhealth.ca |
Naiya
Vora |
|
184,885 |
|
|
|
|
|
Adesh.vora@srxhealth.ca |
Niam
Vora |
|
184,885 |
|
|
|
|
|
Adesh.vora@srxhealth.ca |
Seva
Vora |
|
184,885 |
|
|
|
|
|
Adesh.vora@srxhealth.ca |
APPENDIX
“B”
Arrangement
Agreement
See
attached.
ARRANGEMENT
AGREEMENT
by
and among
BETTER
CHOICE COMPANY INC.
and
1000994476
ONTARIO INC.
and
1000994085
ONTARIO INC.
and
SRX
HEALTH SOLUTIONS INC.
September
3, 2024
SCHEDULES
Schedule A |
Plan of Arrangement |
Schedule B |
SRx Arrangement Resolution |
Schedule C |
Representations and Warranties of SRx |
Schedule D |
Representations and Warranties of Parent |
Schedule E |
Key Regulatory Approvals |
Schedule F |
Form of SRx Voting Agreement |
Schedule G |
SRx Supporting Shareholders |
ARRANGEMENT
AGREEMENT
THIS
ARRANGEMENT AGREEMENT, dated September 3, 2024, is entered into by and among BETTER CHOICE COMPANY INC., a corporation existing under
the laws of the State of Delaware (“Parent”), 1000994476 ONTARIO INC., a corporation existing under the laws of the
Province of Ontario (“AcquireCo”), 1000994085 ONTARIO INC., a corporation existing under the laws of the Province
of Ontario (“CallCo”), and SRX HEALTH SOLUTIONS INC., a corporation existing under the laws of the Province of Ontario
(“SRx”).
WHEREAS:
A. | Parent,
AcquireCo, CallCo and SRx wish to complete a transaction pursuant to which, among other things,
Parent will, indirectly through AcquireCo, acquire all of the SRx Shares in exchange for
the Consideration, by way of a statutory plan of arrangement, which is to be completed under
the provisions of the OBCA on and subject to the terms and conditions contained herein; |
B. | the
SRx Board has determined, after having considered financial and legal advice, that it would
be advisable and in the best interests of SRx and the SRx Shareholders for the SRx Board
to unanimously recommend that SRx Securityholders vote in favor of the SRx Arrangement Resolution
at the SRx Meeting; |
C. | within
ten (10) Business Days after the date hereof, Parent will enter into the SRx Voting Agreements
with the SRx Supporting Shareholders, pursuant to which, among other things, such SRx Supporting
Shareholders will agree to vote the SRx Shares and any securities convertible, exercisable
or exchangeable into SRx Shares held by them in favor of the SRx Arrangement Resolution (provided,
however, that the SRx Voting Agreement with Adesh Vora has been entered into prior to
or contemporaneously with the execution of this Agreement); |
D. | the
Parent Financial Advisor has advised the Parent Board, and the Parent Board has determined,
that the Arrangement is fair, from a financial point of view, to the Parent Shareholders; |
E. | the
Parent Board has determined, after having considered financial and legal advice, that it
would be advisable and in the best interests of Parent and the Parent Shareholders for the
Parent Board to unanimously recommend that Parent Shareholders vote in favor of the Parent
Shareholder Approval Matters at the Parent Meeting; |
F. | within
ten (10) Business Days after the date hereof, SRx will enter into the Parent Voting Agreements
with the Parent Supporting Shareholders, pursuant to which, among other things, such Parent
Supporting Shareholders will agree to vote the Parent Shares and any securities convertible,
exercisable or exchangeable into Parent Shares held by them in favor of the Parent Shareholder
Approval Matters; |
G. | prior
to the Effective Time, the Locked-Up Persons will enter into the Lock-Up Agreements pursuant
to which, among other things, the Locked-Up Persons will agree to lock-up and not sell, transfer
or otherwise dispose of their respective securities in the capital of Parent or AcquireCo,
as applicable, for a period of 180 days after the Effective Date, subject to customary exceptions; |
H. | the
Parties intend that the plan of arrangement provide certain SRx Shareholders with the opportunity
to exchange SRx Shares for Exchangeable Shares on a tax-deferred basis for Canadian Tax purposes; |
I. | the
Parties have entered into this Agreement to provide for the matters referred to in the foregoing
recitals and for other matters relating to the Arrangement; and |
J. | Capitalized
terms used but not otherwise defined in these recitals have the meanings ascribed to such
terms in Section 1.1. |
NOW
THEREFORE in consideration of the covenants and agreements herein contained and other good and valuable consideration (the receipt
and sufficiency of which are hereby acknowledged), the Parties hereto covenant and agree as follows:
ARTICLE
I.
INTERPRETATION
1.1. | DefinitionsIn
this Agreement, unless the context otherwise requires:”Acceptable Confidentiality
Agreement” has the meaning ascribed thereto in Section 7.3(a)(iv); |
“AcquireCo”
has the meaning ascribed thereto in the recitals above;
“Acquisition
Proposal” means, with respect to SRx, an SRx Acquisition Proposal, and, with respect to Parent, a Parent Acquisition Proposal;
“affiliate”
has the meaning ascribed thereto in the Securities Act;
“Agreement”
means this Arrangement Agreement, including all schedules annexed hereto, together with the SRx Disclosure Letter and the Parent Disclosure
Letter, as the same may be amended, supplemented or otherwise modified from time to time in accordance with the terms hereof;
“Alternative
Acquisition Agreement” has the meaning ascribed thereto in Section 7.2(a)(iv);
“Arrangement”
means the arrangement of SRx under Section 182 of the OBCA on the terms and subject to the conditions set out in the Plan of Arrangement,
subject to any amendments or variations to the Plan of Arrangement made in accordance with the terms of this Agreement or Article 5 of
the Plan of Arrangement or made at the direction of the Court in the Final Order with the consent of the Parties, each acting reasonably;
“Articles
of Arrangement” means the articles of arrangement of SRx in respect of the Arrangement required by the OBCA to be sent to the
Director after the Final Order is made, which shall be in a form and content satisfactory to the Parties, each acting reasonably;
“Authorization”
means any authorization, order, Permit, approval, grant, license, registration, consent, right, notification, condition, franchise, privilege,
certificate, judgment, writ, injunction, award, determination, direction, decision, decree, bylaw, rule or regulation, whether or not
having the force of Law, and includes any environmental Permit;
“Business
Day” means a day other than a Saturday, a Sunday or any other day on which commercial banking institutions in Toronto, Ontario
or Tampa, Florida are authorized or required by applicable Law to be closed;
“CallCo”
has the meaning ascribed thereto in the recitals above;
“Certificate
of Arrangement” means the certificate of arrangement to be issued by the Director pursuant to subsection 183(2) of the OBCA
in respect of the Articles of Arrangement;
“Change
in Recommendation” means, with respect to SRx, an SRx Change in Recommendation and, with respect to Parent, a Parent Change
in Recommendation;
“Claim”
means (a) any suit, action, proceeding, dispute, investigation, claim, arbitration, order, summons, citation, directive, ticket, charge,
demand or prosecution, whether legal or administrative; or (b) any appeal or application for review; whether at law or in equity or by
any Governmental Entity;
“Computer
Systems” means all computer hardware, Software, peripheral equipment, telecommunications systems and network systems that are
used by a Party to operate its business;
“Confidentiality
Agreement” means the confidentiality agreement between SRx and Parent, dated June 18, 2024, as amended from time to time;
“Consideration”
means the consideration to be received by SRx Shareholders pursuant to the Plan of Arrangement in respect of each SRx Share that is issued
and outstanding immediately prior to the Effective Time, being either the Parent Share Consideration or the Exchangeable Share Consideration,
as elected in accordance with the Plan of Arrangement by an SRx Shareholder in respect of each SRx Share held;
“Contract”
means any contract, agreement, license, franchise, lease, arrangement, commitment, joint venture, partnership or other right or obligation
(written or, to the extent enforceable, oral) to which a Party or any of its subsidiaries is a party or by which it or any of its subsidiaries
is bound or to which any of their respective properties or assets is subject;
“Court”
means the Ontario Superior Court of Justice (Commercial List);
“Depositary”
means Equity Stock Transfer LLC or such other Person appointed by SRx and Parent (each acting reasonably), for the purpose of, among
other things, exchanging certificates representing SRx Shares for the Consideration;
“DGCL”
means the Delaware General Corporation Law;
“Director”
means the Director appointed pursuant to Section 278 of the OBCA;
“Dissent
Rights” means the rights of dissent exercisable by the SRx Shareholders under Section 185 of the OBCA or as otherwise determined
by the Court in the Interim Order in respect of the SRx Arrangement Resolution;
“Dissenting
Shareholder” has the meaning ascribed thereto in the Plan of Arrangement;
“Effective
Date” means the date shown on the Certificate of Arrangement giving effect to the Arrangement, which shall be no later than
the Outside Date;
“Effective
Time” has the meaning ascribed thereto in the Plan of Arrangement;
“Employee
Plans” means all benefit or compensation plans, programs, policies, practices, contracts, agreements or other arrangements,
covering current or former employees, directors or consultants of a Party, including employment, consulting, deferred compensation, equity,
benefit, bonus, incentive, pension, retirement, savings, stock purchase, profit sharing, stock option, stock appreciation, phantom stock,
termination, change of control, life insurance, medical, health, welfare, hospital, dental, vision care, drug, sick leave, disability,
and similar plans, programs, arrangements or practices, whether or not in writing and whether or not funded, in each case, which is sponsored,
maintained or contributed to by a Party or any of its affiliates, or to which a Party or any of its affiliates is obligated to contribute,
or with respect to which a Party or any of its affiliates has any liability, direct or indirect, contingent or otherwise, other than
benefit plans established pursuant to statute;
“Encumbrance”
means any Claim, encumbrance, lien, charge, hypothec, pledge, mortgage, title retention agreement, security interest of any nature, adverse
claim, exception, reservation, easement, right of occupation, option, right of pre-emption, privilege or any matter capable of registration
against title or any Contract to create any of the foregoing;
“Environmental
Laws” means all Laws aimed at, or relating to, the reclamation or restoration of properties, occupational health and safety,
protection of the environment, abatement of pollution, protection of wildlife, ensuring public safety from environmental hazards and
all other Laws relating to (a) the management processing, use, treatment, storage, disposal, discharge, transport or handling of any
Hazardous Substances;
(b)
plant and animal life, (c) lands; or (d) other natural resources;
“Exchangeable
Share Consideration” has the meaning ascribed thereto in the Plan of Arrangement;
“Exchange
Ratio” has the meaning ascribed thereto in the Plan of Arrangement;
“Exchangeable
Shares” means the exchangeable shares in the capital of AcquireCo as set forth in the articles of incorporation of AcquireCo,
and which shall have rights, privileges, restrictions and conditions as agreed to by the Parties, acting reasonably;
“Exchange
Time” has the meaning set out in the Plan of Arrangement;
“Final
Order” means an order of the Court granted pursuant to Section 182(5) of the OBCA, in form and substance acceptable to each
of the Parties, each acting reasonably, approving the Arrangement after a hearing upon the procedural and substantive fairness of the
terms and conditions of the Arrangement, as such order may be affirmed, amended, modified, supplemented or varied by the Court (with
the consent of the Parties, each acting reasonably) at any time prior to the Effective Date or, if appealed, as affirmed or amended (provided,
however, that any such amendment is acceptable to the Parties, each acting reasonably) on appeal, unless such appeal is withdrawn,
abandoned or denied;
“Governmental
Entity” means (a) any multinational or supranational body or organization, nation, government, state, province, country, territory,
municipality, 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 securities exchange, including
the NYSE American, (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;
“Hazardous
Substance” means any waste or other substance that is prohibited, listed, defined, designated or classified as hazardous, radioactive,
corrosive, explosive, infectious, carcinogenic, or toxic or a pollutant or a contaminant under or pursuant to, or that could result in
any Liability under, any applicable Environmental Laws;
“IFRS”
means International Financial Reporting Standards;
“Intellectual
Property” means domestic and foreign intellectual property rights, whether or not registrable, patentable or otherwise formally
protectable, including: (a) inventions (whether patentable or unpatentable and whether or not reduced to practice), patents, applications
for patents and reissues, divisions, continuations, renewals, extensions and continuations-in-part of patents or patent applications;
(b) works, copyrights, copyright registrations and applications for copyright registration, including all moral rights or similar rights
of authorship or attribution; (c) designs, design registrations, design registration applications and integrated circuit topographies;
(d) trade names, business names, corporate names, domain names, website names and world wide web addresses, common law trade-marks, trade-mark
registrations, trade- mark applications, trade dress and logos, and all goodwill related thereto; (e) know-how, trade secrets, proprietary
information, algorithms, formulae, recipes, systems, compositions, manufacturing and production processes, methods and techniques and
related documentation, clinical and testing data, customer and supplier information, and market and survey information; and (f) telephone
numbers, domain names and social media identities, and the goodwill associated with any of the foregoing;
“Interim
Order” means an order of the Court in form and substance acceptable to each of the Parties, acting reasonably, providing for,
among other things, the calling and holding of the SRx Meeting, as the same may be amended by the Court with the consent of the Parties,
each acting reasonably;
“IT
Systems” means Computer Systems, hardware, servers, databases, Software, networks, telecommunications systems and related infrastructure;
“Key
Regulatory Approvals” means those rulings, consents, orders, exemptions, Permits, Authorizations and other approvals of Governmental
Entities, necessary to proceed with the transactions contemplated by this Agreement and the Plan of Arrangement, as listed in Schedule
E hereto;
“Law”
means, with respect to any Person, any and all applicable law (statutory, common, civil or otherwise), constitution, treaty, convention,
ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement, whether domestic or foreign,
enacted, adopted, promulgated or applied by a Governmental Entity that is binding upon or applicable to such Person or its business,
property or securities, and to the extent that they have the force of law, policies, guidelines, notices and protocols of any Governmental
Entity, as amended;
“Latest
Balance Sheet Date” means June 30, 2024.
“Liability”
means, in respect of any Person, any debt, liability or obligation of any kind or nature whatsoever, including (a) any right against
such Person to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured, (b) any right against such Person to an equitable remedy for breach of
performance, whether or not such right to any equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured or unsecured, and (c) any obligation of such Person for the performance of any covenant or agreement (whether for
the payment of money or otherwise);
“Lock-Up
Agreements” means lock-up agreements, to be effective as of the Effective Time, among Parent and each of the Locked-Up Persons,
pursuant to which, among other things, the Locked-Up Persons will agree to lock-up and not sell, transfer or otherwise dispose of their
respective securities in the capital of Parent or AcquireCo, as applicable, for a period of 180 days after the Effective Date, subject
to customary exceptions, in customary form and substance to be agreed upon by the Parties;
“Locked-Up
Persons” means, in each case as of the Effective Time after giving effect to the transactions hereunder, all of the executive
officers, directors and five percent (5%) shareholders of Parent (calculated on a fully-diluted basis, including issuance of Parent Shares
upon exchange of the Exchangeable Shares, but disregarding any awards reserved but not yet issued under equity incentive plans);
“material
change”, “material fact” and “misrepresentation” have the meanings ascribed thereto in
the Securities Act;
“Material
Contract” means any of the following for a Party:
| (a) | any
material management, employment, severance, retention, transaction bonus, change in control,
consulting, relocation, repatriation or expatriation agreement or other similar Contract; |
| (b) | any
Contract with any distributor, reseller or sales representative with an annual value in excess
of CAD$100,000; |
| (c) | any
Contract with any manufacturer, vendor, or other Person for the supply of materials or performance
of services by such third party to the Party in relation to the manufacture of the Party’s
products or product candidates with an annual value in excess of CAD$100,000; |
| (d) | any
agreement or plan, including any stock option plan, stock appreciation right plan or stock
purchase plan, any of the benefits of which will be increased, or the vesting of benefits
of which will be accelerated, by the occurrence of any of the transactions contemplated by
this Agreement; |
| (e) | any
Contract incorporating or relating to any guaranty, any sharing of liabilities or any indemnity
not entered into in the ordinary course of business, including any indemnification agreements
between a Party and any of its officers or directors; |
| (f) | any
Contract imposing any restriction on the right or ability of the Party or that would by the
terms of the Contract would impose any restriction on the right or ability of the Party:
(i) to compete with any other Person; (ii) to acquire any product or other asset or any services
from any other Person; (iii)
to solicit, hire or retain any Person as a director, an officer or other employee, a consultant or an independent contractor; (iv) to
develop, sell, supply, distribute, offer, support or service any product or any technology or other asset to or for any other Person;
(v) to perform services for any other Person; or (vi) to transact business with any other Person; |
| (g) | any
Contract currently in force relating to the disposition or acquisition of assets not in the
ordinary course of business or any ownership interest in any corporation, partnership, joint
venture or other business enterprise; |
| (h) | any
mortgages, indentures, loans or credit agreements, security agreements or other agreements
or instruments relating to the borrowing of money or extension of credit; |
| (i) | any
joint marketing or development agreement; |
| (j) | any
Contract that provides for: (i) any right of first refusal, right of first negotiation, right
of first notification or similar right with respect to any securities or assets of the Party;
(ii) any “no shop” provision or similar exclusivity provision with respect to
any securities or assets of the Party; or (iii) contains most favored nation pricing provisions
with any third party or any requirements or minimum purchase obligations of the Party; |
| (k) | any
Contract that contemplates or involves the payment or delivery of cash or other consideration
in an amount or having a value in excess of CAD$100,000 or more in the aggregate, or contemplates
or involves the performance of services having a value in excess of CAD$100,000 in the aggregate
other than any arrangement or agreement expressly contemplated or provided for under this
Agreement; |
| (l) | any
Contract that does not allow the Party to terminate the Contract for convenience with no
more than sixty (60) days prior notice to the other party and without the payment of any
rebate, chargeback, penalty or other amount to such third party in connection with any such
termination in an amount or having a value in excess of CAD$100,000 in the aggregate; or |
| (m) | with
respect to Parent, any Contract that is a “material contract” as such term is
defined in Item 601(b)(10) of Regulation S-K of the SEC; |
“New
Employment Agreements” means new employment agreements, to be effective at the Effective Time, in form and substance reasonably
acceptable to the Parties, between Parent or SRx, on the one hand, and such current employees of SRx as mutually agreed by the Parties,
on the other hand.
“NYSE
American” means the NYSE American stock exchange;
“OBCA” means the Business Corporations Act (Ontario);
“ordinary
course of business” or any similar reference, means, with respect to an action taken by a Person, that such action is consistent
with the past practices (in terms of nature, scope and magnitude) of such Person and is taken in the ordinary course of the normal day-to-day
business and operations of such Person;
“Outside
Date” means January 31, 2025 or such later date as may be agreed to in writing by the Parties; provided, however, that
such initial January 31, 2025 date may be extended (a) by either Parent or SRx upon written notice to the other Party for up to thirty
(30) days from such date or (b) upon mutual written agreement of Parent and SRx to such date as mutually agreed upon.
“Parent”
has the meaning ascribed thereto in the recitals above;
“Parent
Acquisition Proposal” means, other than the transactions contemplated by this Agreement and the Parent Regulation A Offering,
any offer, proposal or inquiry from any Person or group of Persons acting jointly or in concert, whether or not in writing and whether
or not delivered to Parent, after the date hereof relating to: (a) any acquisition or purchase, direct or indirect, of: (i) the assets
of Parent or one or more of its subsidiaries that, individually or in the aggregate, constitute twenty percent (20%) or more of the consolidated
assets of Parent and its subsidiaries, taken as a whole, or which contribute twenty percent (20%) or more of the consolidated revenue
of Parent and its subsidiaries, taken as a whole (or any lease, long-term supply, hedging arrangement, joint venture, strategic alliance,
partnership or other transaction having the same economic effect as a sale of such assets), or (ii) beneficial ownership of twenty percent
(20%) or more of the issued and outstanding voting or equity securities of Parent or any one or more of its subsidiaries that, individually
or in the aggregate, contribute twenty percent (20%) or more of the consolidated revenues or constitute twenty percent (20%) or more
of the consolidated assets of Parent and its subsidiaries, taken as a whole; (b) any take-over bid, tender offer or exchange offer that,
if consummated, would result in such Person or group of Persons beneficially owning twenty percent (20%) or more of the issued and outstanding
voting or equity securities of any class of voting or equity securities of Parent or any of its subsidiaries; (c) any plan of arrangement,
merger, amalgamation, consolidation, share exchange, business combination, reorganization, recapitalization, liquidation, dissolution
or other similar transaction involving Parent or any of its subsidiaries; in all cases, whether in a single transaction or in a series
of related transactions; (d) any direct or indirect sale of assets (or any alliance, joint venture, earn-in right, option to acquire,
lease, license or other arrangement having a similar economic effect as a sale) by Parent or one or more of its subsidiaries, which assets
represent twenty percent (20%) or more of the consolidated assets of Parent and its subsidiaries measured by fair market value, or contribute
twenty percent (20%) or more of the consolidated revenue or operating income of Parent; or (e) any other transaction, the consummation
of which prevents, or materially delays, impedes or interferes with, the transactions contemplated by this Agreement;
“Parent
Amended and Restated Bylaws” means the Amended and Restated Bylaws of Parent, in the form and substance to be determined by
SRx and reasonably acceptable to Parent;
“Parent
Amended and Restated Certificate” means the Amended and Restated Certificate of Incorporation of Parent, which shall be in
form and substance as determined by SRx and reasonably acceptable to Parent;
“Parent
Board” means the board of directors of Parent as the same is constituted from time to time;
“Parent Board Matters”
has the meaning ascribed thereto in Section 2.13(a)(i);
“Parent
Board Recommendation” has the meaning ascribed thereto in Section 2.10(c)(iii);
“Parent
Business” means the business and affairs of the Parent Group as described in the Parent Disclosure Documents;
“Parent
Certificate of Designation” means the Certificate of Designation of Preferences, Rights and Limitations of the Special Voting
Share, in the form and substance to be determined by SRx and reasonably acceptable to Parent;
“Parent
Change in Recommendation” occurs or is made when, (a) the Parent Board or any committee of the Parent Board fails to unanimously
recommend or withdraws, amends, modifies or qualifies, publicly proposes or states its intention to do so, or fails to publicly reaffirm
(without qualification) within five (5) Business Days (and in any case prior to the Parent Meeting) after having been requested in writing
by SRx to do so, the Parent Board Recommendation, or (b) the Parent Board or any committee of the Parent Board takes no position or a
neutral position with respect to a Parent Acquisition Proposal for more than five (5) Business Days after a Parent Acquisition Proposal
is made or publicly announced, or (c) the Parent Board or any committee of the Parent Board resolves or publicly proposes to take any
of the foregoing actions;
“Parent
Disclosure Documents” means all information, disclosure, forms, reports, schedules, statements, certifications and other documents,
including all press releases, forms, reports, schedules, financial statements and notes and schedules to such financial statements, management’s
discussion and analysis of financial condition and results of operations, certifications, annual information forms, management information
circulars, material change reports, business acquisition reports and other documents publicly disclosed or filed by the Parent with the
Securities Authorities since January 1, 2024;
“Parent
Disclosure Letter” means the disclosure letter delivered by Parent, AcquireCo and CallCo to SRx prior to or concurrently with
the execution of this Agreement;
“Parent
Financial Advisor” means Strategic Capital Advisors Ltd;
“Parent
Financial Statements” means (a) the audited consolidated financial statements of Parent for the years ended December 31, 2023
and December 31, 2022, including the auditor’s report thereon and the notes thereto; and (b) the unaudited interim consolidated
financial statements of SRx for the six months ended June 30, 2024 and June 30, 2023;
“Parent
Group” means Parent and all of its direct and indirect subsidiaries, including AcquireCo and CallCo;
“Parent
Incentive Plan” means the Better Choice Company, Inc. Amended and Restated 2019 Incentive Award Plan;
“Parent
Material Adverse Effect” means any effect, fact, change, event, occurrence or circumstance that is, or would reasonably be
expected to be, material and adverse to the business, condition (financial or otherwise), properties, assets (tangible or intangible),
liabilities (whether absolute, accrued, conditional or otherwise), capital, operations or results of operations of Parent and its subsidiaries,
taken as a whole, other than any effect arising from, relating to or resulting from, as applicable: (a) the global economy, political
conditions (including the outbreak of war or any acts of terrorism), international trade or securities, financial or credit markets in
general, natural disasters or other acts of God; (b) the pet health industry in general, (c) any generally applicable change in applicable
Law (other than orders, judgments, claims or decrees against Parent or any of its subsidiaries), or accounting standards or the enforcement
or interpretation thereof; (d) a change in the market trading price or trading volume of Parent Shares (it being understood that the
underlying cause of any such change may be taken into consideration when determining whether a Parent Material Adverse Effect has occurred,
unless otherwise excepted under this definition); (e) the announcement of this Agreement, including the impact thereof on the relationships,
contractual or otherwise, on Parent or its subsidiaries with customers, suppliers, business partners, regulators, vendors, Governmental
Entities or other third Persons; (f) any action taken or refrained from being taken by Parent or its subsidiaries in connection with
this Agreement, to the extent SRx has expressly consented to, approved or requested such action in writing following the date of this
Agreement; and (g) any disease outbreaks, pandemics or epidemics or other related condition; provided, however, that (i) in the
event that Parent and its subsidiaries, taken as a whole, are materially and disproportionately affected by an effect described in clause
(a), (b), (c) or (g) above relative to other participants in the industries in which Parent and its subsidiaries operate, the extent
(and only the extent) of such effect, relative to such other participants, on Parent or any of its subsidiaries, taken as a whole, may
be taken into account in determining whether there has been a Parent Material Adverse Effect; and (ii) references in certain sections
of this Agreement to dollar amounts are not intended to be, and shall not be deemed to be, illustrative or interpretive for the purposes
of determining whether a “Parent Material Adverse Effect” has occurred;
“Parent
Meeting” means the special meeting of Parent Shareholders, including any adjournment or postponement thereof, to be called
and held in accordance with this Agreement, for the purpose of voting on the Parent Shareholder Approval Matters and for any other purpose
as may be set out in the Parent Proxy Statement if and as agreed to by SRx;
“Parent
Proxy Statement” shall mean the proxy statement to be sent to the Parent Shareholders in connection with the approval of the
Parent Shareholder Approval Matters.
“Parent
Record Date” has the meaning ascribed thereto in Section 2.10(b);
“Parent
Regulation A Offering” means the securities offering contemplated by the Offering Statement initially filed by Parent with
the SEC on August 30, 2024, as may be amended from time to time, being conducted pursuant to Regulation A promulgated under the Securities
Act.
“Parent
Share Consideration” has the meaning ascribed thereto to the term in the Plan of Arrangement;
“Parent
Shareholder Approval” means the approval of the Parent Shareholder Approval Matters in accordance with the requirements of
applicable Law;
“Parent
Shareholder Approval Matters” has the meaning ascribed thereto in Section 2.11(a);
“Parent
Shareholders” means the holders of Parent Shares;
“Parent
Shares” means the shares of common stock of Parent;
“Parent
Supporting Shareholders” means the executive officers and directors of Parent.
“Parent
Tail Policy” has the meaning ascribed thereto in Section 5.5(a);
“Parent
Voting Agreements” means the voting agreements to be entered into between SRx and the Parent Supporting Shareholders setting
forth the terms and conditions upon which the Parent Supporting Shareholders will agree, among other things, to vote the Parent Shares
and any securities convertible, exercisable or exchangeable into Parent Shares held by them in favor of the Parent Shareholder Approval
Matters, in customary form and substance to be agreed upon by the Parties;
“Parties”
means, collectively, SRx, Parent, AcquireCo and CallCo and “Party” means any one of them;
“Permit”
means any license, permit, certificate, consent, order, grant, approval, agreement, classification, restriction, registration or other
authorization of, from or required by any Governmental Entity;
“Permitted
Encumbrance” means, with respect to a Party:
| (a) | assignments
of insurance provided to landlords (or their mortgagees) pursuant to the terms of any lease
to which the Party or any of its subsidiaries is the tenant; |
| (b) | statutory
liens for Taxes not yet due and payable and liens for Taxes, assessments and governmental
charges due and being contested in good faith and diligently by appropriate proceedings and
for the payment of which adequate provision has been made in the Party’s financial
statements; |
| (c) | registered
servitudes, easements, restrictions, rights of way and other similar rights in real property
or any interest therein, provided: (i) the same are not of such nature as to materially restrict,
limit, impair or impede the use of the property subject thereto in the Party’s business;
and (ii) each such encumbrance has been complied with and is in good standing; |
| (d) | security
given in the ordinary course of the Party’s business to any public utility, municipality
or government or to any statutory or public authority in connection with the operations of
the Party’s business, other than security for borrowed money, provided that such security
does not materially restrict, limit, impair of impede the ability of the Party or any of
its subsidiaries to carry on its business; and |
| (e) | undetermined
or inchoate liens, charges and privileges incidental to current construction or current operations
and statutory liens, charges, adverse Claims, security interests or Encumbrances to which
any Governmental Entity may be entitled that have not at the time been filed or registered
against the title to the asset or served upon the owner or lessee of the property subject
thereto pursuant to Law and that relate to obligations not due or delinquent, provided that
they do not materially restrict, limit, impair of impede the ability of the Party or any
of its subsidiaries to carry on its business; |
“Person”
includes any individual, firm, partnership, limited partnership, limited liability partnership, joint venture, venture capital fund,
limited liability company, unlimited liability company, association, trust, trustee, executor, administrator, legal personal representative,
estate, body corporate, corporation, company, unincorporated association or organization, Governmental Entity, syndicate or other entity,
whether or not having legal status;
“Personal
Information” means any information (regardless of form) that relates to an identified or identifiable individual; an identifiable
individual is one who can be identified, directly or indirectly, in particular by reference to an identifier, such as a name, an identification
number, location data, an online identifier or to one or more factors specific to the physical, physiological, genetic, mental, economic,
cultural or social identity of that natural person; or any other information about an individual that is defined as “personal data”
or “personal information” by applicable Law. Personal Information may include information such as name, street address, telephone
number, e-mail address, photograph, date of birth, social security / insurance number, driver’s license number or data collected
through an automated license plate recognition system, passport number, financial account information, username and password combinations
or customer or account number, geolocation information of an individual or device, biometric data, medical or health information, cookie
identifiers associated with registration information, or any other browser- or device- specific number or identifier, and web or mobile
browsing or usage information that is linked to the foregoing;
“Plan
of Arrangement” means the plan of arrangement of SRx, substantially in the form of Schedule A hereto, and any amendments
or variations thereto made from time to time in accordance with this Agreement, the plan of arrangement or upon the direction of the
Court in the Final Order with the consent of the Parties, each acting reasonably;
“Proceeding”
means any action, cause of action, claim, demand, litigation, suit, investigation, citation, summons, subpoena, audit, hearing, originating
application to a tribunal, arbitration or other similar proceeding of any nature, civil, criminal, regulatory, administrative or otherwise,
whether in equity or at law, in contract, in tort or otherwise;
“Processing”
means any operation or set of operations that is performed upon data or information, whether or not by automatic means, including collection,
access, acquisition, creation, derivation, recordation, organization, storage, adaptation, alteration, modification, correction, retrieval,
maintenance, consultation, use, disclosure, dissemination, transmission, transfer, sale, making available, alignment, combination, blocking,
storage, retention, deleting, disposal, erasure, destruction, or any other processing (as defined under any Law to which a Party is subject)
of such data or information;
“Reorganization”
has the meaning ascribed thereto in Section 2.19.
“Representative”
means, collectively, in respect of a Person, its subsidiaries and its affiliates and its and their officers, directors, employees, consultants,
advisors, agents or other representatives (including financial, legal or other advisors);
“Reverse
Split” has the meaning ascribed thereto in Section 2.14;
“SEC”
means the U.S. Securities and Exchange Commission;
“SEC
Clearance Date” has the meaning ascribed thereto in Section 2.10(b);
“Section
3(a)(10) Exemption” means the exemption from the registration requirements of the U.S. Securities Act provided by section 3(a)(10)
thereof;
“Securities
Act” means the Securities Act (Ontario) and the rules, regulations, instruments (including national and multilateral
instruments) and published policies made thereunder, as now in effect and as they may be promulgated or amended from time to time;
“Securities
Authorities” means all securities regulatory authorities (including the applicable securities commission or similar regulatory
authorities in the United States and each of the provinces and territories of Canada), the SEC and the NYSE American, that are applicable
to SRx or Parent, as the case may be;
“Securities
Laws” means the Securities Act, together with all other applicable Canadian provincial securities laws, the U.S. Securities
Act, the U.S. Exchange Act, the Sarbanes-Oxley Act of 2002, and applicable securities laws of the United States and the states thereof,
and the rules and regulations and published policies of the securities authorities thereunder, as now in effect and as they may be promulgated
or amended from time to time, and includes the rules and policies of the NYSE American, that are applicable to SRx or Parent, as the
case may be;
“Security
Breach” means any: (a) loss of Personal Information; (b) unauthorized or unlawful Processing, or corruption of Personal Information,
or unauthorized access to the IT Systems; (c) other incident that has compromised the privacy, confidentiality or security of Personal
Information or the security or operation of the IT Systems; or (d) any other incident that may require notification to any Person, any
Governmental Entity or any entity under any Law to which a Party is subject;
“Spin-Out”
“has the meaning ascribed thereto in Section 5.6(b);
“Spin-Out
SPV” “has the meaning ascribed thereto in Section 5.6(a);
“Software”
means computer software and programs (both source code and object code form), all proprietary rights in the computer software and programs
and all documentation and other materials related to the computer software and programs;
“Special
Voting Share” means the special voting share of Parent having substantially the rights, privileges, restrictions and conditions
described in the Voting Trust Agreement and the Parent Certificate of Designation which rights, privileges, restrictions and conditions
shall be agreed to by the Parties, acting reasonably;
“SRx”
has the meaning ascribed thereto in the recitals above;
“SRx
Acquisition Proposal” means, other than the transactions contemplated by this Agreement, any offer, proposal or inquiry from
any Person or group of Persons acting jointly or in concert, whether or not in writing and whether or not delivered to SRx, after the
date hereof relating to: (a) any acquisition or purchase, direct or indirect, of: (i) the assets of SRx or one or more of its subsidiaries
that, individually or in the aggregate, constitute twenty percent (20%) or more of the consolidated assets of SRx and its subsidiaries,
taken as a whole, or which contribute twenty percent (20%) or more of the consolidated revenue of SRx and its subsidiaries, taken as
a whole (or any lease, long-term supply, hedging arrangement, joint venture, strategic alliance, partnership or other transaction having
the same economic effect as a sale of such assets), or (ii) beneficial ownership of twenty percent (20%) or more of the issued and outstanding
voting or equity securities of SRx or any one or more of its subsidiaries that, individually or in the aggregate, contribute twenty percent
(20%) or more of the consolidated revenues or constitute twenty percent (20%) or more of the consolidated assets of SRx and its subsidiaries,
taken as a whole; (b) any take-over bid, tender offer or exchange offer that, if consummated, would result in such Person or group of
Persons beneficially owning twenty percent (20%) or more of the issued and outstanding voting or equity securities of any class of voting
or equity securities of SRx or any of its subsidiaries; (c) any plan of arrangement, merger, amalgamation, consolidation, share exchange,
business combination, reorganization, recapitalization, liquidation, dissolution or other similar transaction involving SRx or any of
its subsidiaries; in all cases, whether in a single transaction or in a series of related transactions; or (d) any direct or indirect
sale of assets (or any alliance, joint venture, earn-in right, option to acquire, lease, license or other arrangement having a similar
economic effect as a sale) by SRx or one or more of its subsidiaries, which assets represent twenty percent (20%) or more of the consolidated
assets of SRx and its subsidiaries measured by fair market value, or contribute twenty percent (20%) or more of the consolidated revenue
or operating income of SRx; or (e) any other transaction, the consummation of which prevents, or materially delays, impedes or interferes
with, the transactions contemplated by this Agreement;
“SRx
Arrangement Resolution” means the special resolution of the SRx Securityholders approving the Plan of Arrangement, which is
to be considered at the SRx Meeting in the form of Schedule B hereto (unless Parent agrees in writing to any changes to such form);
“SRx
Board” means the board of directors of SRx as the same is constituted from time to time;
“SRx
Board Recommendation” has the meaning ascribed thereto in Section 2.5(b)(i);
“SRx
Business” means the business and affairs of the SRx Group, being a Canadian healthcare service provider specializing in the
specialty pharmacy of the pharmaceutical industry;
“SRx
Change in Recommendation” occurs or is made when, (a) the SRx Board or any committee of the SRx Board fails to unanimously
recommend or withdraws, amends, modifies or qualifies, publicly proposes or states its intention to do so, or fails to publicly reaffirm
(without qualification) within five (5) Business Days (and in any case prior to the SRx Meeting) after having been requested in writing
by the Parent to do so, the SRx Board Recommendation, or (b) the SRx Board or any committee of the SRx Board takes no position or a neutral
position with respect to an SRx Acquisition Proposal for more than five (5) Business Days after an SRx Acquisition Proposal is made or
publicly announced, or (iii) the SRx Board or any committee of the SRx Board resolves or publicly proposes to take any of the foregoing
actions;
“SRx
Circular” means the notice of the SRx Meeting and accompanying management information circular, including all schedules, appendices
and exhibits thereto and enclosures therewith, to be sent to the SRx Securityholders, as required by the Court in the Interim Order,
in connection with the SRx Meeting, as amended, supplemented or otherwise modified from time to time in accordance with the terms of
this Agreement;
“SRx
Disclosure Letter” means the disclosure letter delivered by SRx to Parent prior to or concurrently with the execution of this
Agreement;
“SRx
Financial Statements” means (a) the audited consolidated financial statements of SRx for the years ended September 30, 2023
and September 30, 2022, including the auditor’s report thereon and the notes thereto; and (b) the unaudited interim consolidated
financial statements of SRx for the nine (9) months ended June 30, 2024 and June 30, 2023;
“SRx
Group” means SRx and all of its direct and indirect subsidiaries;
“SRx
Material Adverse Effect” means any effect, fact, change, event, occurrence or circumstance that is, or would reasonably be
expected to be, material and adverse to the business, condition (financial or otherwise), properties, assets (tangible or intangible),
liabilities (whether absolute, accrued, conditional or otherwise), capital, operations or results of operations of SRx and its subsidiaries,
taken as a whole, other than any effect arising from, relating to or resulting from, as applicable: (a) the global economy, political
conditions (including the outbreak of war or any acts of terrorism), international trade or securities, financial or credit markets in
general, natural disasters or other acts of God; (b) the healthcare industry in general, (c) any generally applicable change in applicable
Law (other than orders, judgments, claims or decrees against SRx or any of its subsidiaries), or accounting standards or the enforcement
or interpretation thereof; (d) the announcement of this Agreement, including the impact thereof on the relationships, contractual or
otherwise, on SRx or its subsidiaries with customers, suppliers, business partners, regulators, vendors, Governmental Entities or other
third Persons; (e) any action taken or refrained from being taken by SRx or its subsidiaries in connection with this Agreement, to the
extent Parent has expressly consented to, approved or requested such action in writing following the date of this Agreement and (f) any
disease outbreaks, pandemics or epidemics or other related condition; provided, however, that (i) in the event that SRx and its
subsidiaries, taken as a whole, are materially and disproportionately affected by an effect described in clause (a), (b), (c) or (f)
above relative to other participants in the industries in which SRx and its subsidiaries operate, the extent (and only the extent) of
such effect, relative to such other participants, on SRx or any of its subsidiaries, taken as a whole, may be taken into account in determining
whether there has been an SRx Material Adverse Effect; and (ii) references in certain sections of this Agreement to dollar amounts are
not intended to be, and shall not be deemed to be, illustrative or interpretive for the purposes of determining whether a “SRx
Material Adverse Effect” has occurred;
“SRx
Meeting” means the special meeting of SRx Securityholders, including any adjournment or postponement thereof, to be called
and held in accordance with the Interim Order to consider the SRx Arrangement Resolution, and for any other purpose as may be set out
in the SRx Circular;
“SRx
Net Debt” means an amount equal to (a) the aggregate indebtedness for borrowed money of SRx (including accrued interest and
prepayment penalties, if applicable) as of 12:01 a.m. ET on the date that is five (5) Business Days before the closing of the Arrangement,
minus (b) all cash and cash equivalents of SRx (including money market accounts, money market funds, money market instruments),
including cash in transit and all such cash and cash equivalents held by third-party processors, as of 12:01 a.m. ET on the date that
is five (5) Business Days before the closing of the Arrangement. For greater clarity, and without limiting the generality of the foregoing,
the aggregate indebtedness for borrowed money of SRx shall include all amounts owed under (i) that certain Credit Agreement, dated September
14, 2023, by and among SRx, the guarantors and lenders named therein, and CWB Maximum Financial Inc., as administrative agent, and (ii)
certain unsecured convertible debentures issued by SRx between November 2022 and January 2023, in each case to the extent unpaid as of
12:01 a.m. ET on the date that is five (5) Business Days before the closing of the Arrangement.
“SRx
RSU” means a restricted stock unit of SRx;
“SRx
RSU Holders” means the holders of SRx RSUs;
“SRx
Securityholders” means SRx Shareholders, SRx RSU Holders and SRx Warrantholders;
“SRx
Securityholder Approval” has the meaning ascribed thereto in Section 2.3(c);
“SRx
Shareholders” means the holders of SRx Shares;
“SRx
Shares” means the common shares in the capital of SRx;
“SRx
Supporting Shareholders” means those SRx shareholders set forth on Schedule G hereto.
“SRx
Tail Policy” has the meaning ascribed thereto in Section 5.5(b);
“SRx
Voting Agreements” means the voting agreements entered into, or to be entered into, between Parent and the SRx Supporting Shareholders
setting forth the terms and conditions upon which the SRx Supporting Shareholders have agreed, or will agree, among other things, to
vote the SRx Shares and any securities convertible, exercisable or exchangeable into SRx Shares held by them in favor of the SRx Arrangement
Resolution, substantially in the form and substance of Schedule F hereto;
“SRx
Warrantholders” means the holders of SRx Warrants;
“SRx
Warrants” means, as may be outstanding at any time, common share purchase warrants to acquire SRx Shares;
“subsidiary”
has the meaning ascribed thereto in the National Instrument 45-106 - Prospectus Exemptions;
“Superior
Proposal” means any unsolicited bona fide written Parent Acquisition Proposal from a Person who is an arm’s length third
party to acquire not less than all of the outstanding Parent Shares or all or substantially all of the assets of the Parent on a consolidated
basis that: (a) complies with Securities Laws and did not result from or involve a breach of Article VII; (b) is capable of being
completed without undue delay, taking into account, all financial, legal, regulatory and other aspects of such proposal and the Person
making such proposal; (c) if any consideration is cash, is not subject to any financing contingency or condition; (d) is not subject
to any due diligence or access condition; (e) does not provide for the payment of any break, termination or other fees or expenses to
the other party in the event that the Parent completes the Arrangement or any similar other transaction with SRx or any of its affiliates
agreed prior to any termination of this Agreement and (f) that the Parent Board determines, in its good faith judgment, after receiving
the advice of its outside legal and financial advisors and after taking into account all the terms and conditions of the Parent Acquisition
Proposal, including all legal, financial, regulatory and other aspects of such Parent Acquisition Proposal and the party making such
Parent Acquisition Proposal, (i) would, if consummated in accordance with its terms, but without assuming away the risk of non-completion,
result in a transaction which is more favorable, from a financial point of view, to the Parent Shareholders than the Arrangement (including
any amendments to the terms and conditions of the Arrangement proposed by SRx pursuant to Section 7.4(b)), and (ii) the failure
to recommend such Parent Acquisition Proposal to the Parent Shareholders would be contrary to the fiduciary duties of the Parent Board;
“Superior
Proposal Matching Period” has the meaning ascribed thereto in Section 7.4(a)(i)(D);
“Superior
Proposal Notice” has the meaning ascribed thereto in Section 7.4(a)(i)(C);
“Support
Agreement” means an agreement to be made among Parent, AcquireCo and CallCo in connection with the Plan of Arrangement in a
form as agreed between the Parties, acting reasonably;
“Tax
Act” means the Income Tax Act (Canada) and the regulations made thereunder, as now in effect and as they may be promulgated
or amended from time to time;
“Tax
Returns” means all domestic and foreign federal, state, provincial, territorial, municipal and local returns, reports, declarations,
disclosures, elections, notices, filings, forms, statements, information statements and other documents (whether in tangible, electronic
or other form) and including any amendments, schedules, attachments, supplements, appendices and exhibits thereto, made, prepared, filed
or required to be made, prepared or filed by Law in respect of Taxes;
“Taxes”
means any and all domestic and foreign federal, state, provincial, municipal, territorial and local taxes, assessments and other governmental
charges, duties, fees, levies, impositions and liabilities imposed by any Governmental Entity (whether payable directly or by withholding
and whether or not requiring the filing of a Tax Return), including pension plan contributions, tax instalment payments, unemployment
insurance contributions and employment insurance contributions, disability, severance, social security, workers’ compensation and
deductions at source, including taxes based on or measured by gross receipts, income, profits, sales, capital, use, and occupation, and
including goods and services, value added, ad valorem, sales, capital gains, capital stock, windfall profits, premium, transfer, franchise,
stamp, license, non- resident withholding, customs, payroll, recapture, employment, excise and property duties and taxes, together with
all estimated taxes, deficiency assessments, interest, penalties, fines and additions to tax imposed with respect to such amounts, and
shall include any liability for such amounts as a result of (i) being a transferee or successor or member of a combined, consolidated,
unitary or affiliated group, or (ii) a contractual obligation to indemnify any Person or other entity;
“Termination
Payment” means an amount equal to US$3,200,000;
“Transaction
Personal Information” has the meaning ascribed thereto in Section 9.1;
“U.S.
Exchange Act” means the United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder;
“U.S.
GAAP” means United States generally accepted accounting principles;
“U.S.
Securities Act” means the United States Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder;
“United
States” and “U.S.” means the United States of America, its territories and possessions, any state of the
United States and the District of Columbia; and
“Voting
Trust Agreement” means an agreement to be made among Parent, AcquireCo and such Person as may be appointed by SRx and Parent
(each acting reasonably), as trustee, in connection with the Plan of Arrangement, in a form as agreed between the Parties, acting reasonably.
1.2. | InterpretationFor
the purposes of this Agreement, except as otherwise expressly provided: |
| (a) | “this
Agreement” means this Arrangement Agreement, including the recitals and Schedules
hereto, and not any particular Article, Section, Section or other subdivision, recital or
Schedule hereof, and includes any agreement, document or instrument entered into, made or
delivered pursuant to the terms hereof, as the same may, from time to time, be supplemented
or amended and in effect; |
| (b) | the
words “hereof”, “herein”, “hereto”
and “hereunder” and other words of similar import refer to this Agreement
as a whole and not to any particular Article, Section, Section, or other subdivision, recital
or appendix hereof; |
| (c) | the
word “including” means including without limitation, and “include”
and “includes” have a corresponding meaning; |
| (d) | the
word “or” is inclusive and not exclusive; |
| (e) | all
references in this Agreement to a designated “Article”, “Section”
or other subdivision, recital or “Schedule” hereof are references to the designated
Article, Section or other subdivision, recital or Schedule to, this Agreement; |
| (f) | a
reference to a statute in this Agreement includes all regulations, rules, policies or instruments
made thereunder, all amendments to the statute, regulations, rules, policies or instruments
in force from time to time, and any statutes, regulations, rules, policies or instruments
that supplement or supersede such statute, regulations, rules, policies or instruments; |
| (g) | the
division of this Agreement into Articles, Sections and other subdivisions, recitals or Schedules,
the inclusion of a table of contents and the insertion of headings and captions are for convenience
of reference only and are not intended to interpret, define or limit the scope, extent or
intent of this Agreement or any provision hereof; and |
| (h) | Any
reference in a particular Section of the SRx Disclosure Letter or Parent Disclosure Letter
shall be deemed to be an exception to (or, as applicable, a disclosure for purposes of) (i)
the representations and warranties or covenants, as applicable, of SRx or Parent, AcquireCo
and CallCo, as applicable, that are contained in the corresponding Section of this Agreement
and (ii) all other representations, warranties and covenants of SRx or Parent, AcquireCo
and CallCo, as applicable, that are contained in this Agreement if the relevance of that
reference as an exception to (or a disclosure for purposes of) such representations, warranties
and covenants would be reasonably apparent based on the content and context of such disclosure
that such information, item or matter is relevant to such other section or subsection. The
listing of any matter on the SRx Disclosure Letter or Parent Disclosure Letter shall not
be deemed to constitute an admission by SRx or Parent, AcquireCo and CallCo, as applicable,
or to otherwise imply, that any such matter is material, is required to be disclosed by SRx
or Parent, AcquireCo and CallCo, as applicable, under this Agreement or falls within relevant
minimum thresholds or materiality standards set forth in this Agreement. No disclosure in
the SRx Disclosure Letter or Parent Disclosure Letter relating to any possible breach or
violation by SRx or Parent, AcquireCo and CallCo, as applicable, of any Contract or applicable
Law, the enforceability of any Contract, the existence or non-existence of third-party rights
or similar matters or statements shall be construed as an admission or indication with respect
to any of the foregoing. All disclosures in SRx Disclosure Letter or Parent Disclosure Letter
are intended only to allocate rights and risks between the Parties and are not intended to
be admissible against any Party by any Person who is not a party to this Agreement, or give
rise to any claim or benefit to any Person who is not a party to this Agreement. |
1.3. | Number,
Gender and PersonsIn this Agreement, unless the context otherwise requires, words importing
the singular shall include the plural and vice versa, words importing the use of either gender
shall include both genders and neuters. |
1.4. | Date
for Any ActionIf the date on which any action is required to be taken hereunder by a
Party is not a Business Day, such action shall be required to be taken on the next succeeding
day which is a Business Day. |
1.5. | CurrencyUnless
otherwise stated, all references in this Agreement to sums of money are expressed in lawful
money of Canada, and “$” or “CAD$” refers to Canadian dollars. “US$”
refers to the lawful money of the United States. |
1.6. | Accounting
MattersUnless otherwise stated, all accounting terms used in this Agreement in respect
of SRx shall have the meanings attributable thereto under IFRS, and all determinations of
an accounting nature in respect of SRx, required to be made shall be made in a manner consistent
with IFRS consistently applied. |
Unless
otherwise stated, all accounting terms used in this Agreement in respect of Parent, AcquireCo and CallCo shall have the meanings attributable
thereto under U.S. GAAP, and all determinations of an accounting nature in respect of Parent, AcquireCo and CallCo required to be made
shall be made in a manner consistent with U.S. GAAP consistently applied.
1.7. | KnowledgeWhere
any representation or warranty in this Agreement is expressly qualified by reference to the
knowledge of SRx, it shall be deemed to refer to the actual knowledge, after making reasonable
inquiries regarding the relevant subject matter, of any of the President & Chief Executive
Officer and the Chief Financial Officer, in each case as of the date hereof. |
Where
any representation or warranty in this Agreement is expressly qualified by reference to the knowledge of Parent, AcquireCo or CallCo,
it shall be deemed to refer to the actual knowledge, after making reasonable inquiries regarding the relevant subject matter, of any
of the Chief Executive Officer, the Chief Financial Officer and the Chair of the Parent Board, in each case as of the date hereof.
1.8. | SchedulesThe
Schedules annexed to this Agreement are incorporated by reference into this Agreement and
form a part hereof. |
ARTICLE
II.
THE
ARRANGEMENT
2.1. | ArrangementThe
Parties agree that the Arrangement will be implemented in accordance with and subject to
the terms and conditions contained in this Agreement and the Plan of Arrangement, pursuant
to which (among other things) each SRx Shareholder (other than SRx Shareholders who have
validly exercised Dissent Rights) shall receive the Consideration for each SRx Share held. |
2.2. | Obligations
of SRxSubject to the terms and conditions of this Agreement, SRx will take all actions
reasonably needed to facilitate the Arrangement in accordance with all applicable Law, including
Securities Laws, to: |
| (a) | apply
for and diligently prosecute a motion to the Court for the Interim Order in connection with
the application for the Final Order in respect of the Arrangement; |
| (b) | in
accordance with the terms of and the procedures contained in the Interim Order, duly call,
give notice of, convene and hold the SRx Meeting as soon as practicable after the date hereof; |
| (c) | solicit
proxies of the SRx Shareholders in favor of the SRx Arrangement Resolution and against any
resolution or proposal submitted by any Person that is inconsistent with the SRx Arrangement
Resolution or that would reasonably be expected to materially impair, delay or impede the
completion of any of the transactions contemplated by this Agreement; |
| (d) | fix
the date of the SRx Meeting, which date shall be no later than thirty-five (35) days following
the SEC Clearance Date, give notice to Parent of the SRx Meeting, and allow Parent and Parent’s
Representatives (including legal counsel) to attend the SRx Meeting; |
| (e) | subject
to obtaining the approvals as contemplated in the Interim Order and as may be directed by
the Court in the Interim Order, take all steps necessary to submit the Arrangement to the
Court and appear at Court to seek the Final Order as soon as reasonably practicable (and,
in any event, within five (5) Business Days following the approval of the SRx Arrangement
Resolution at the SRx Meeting); |
| (f) | deliver
the Articles of Arrangement to the Director in accordance with Section 2.8 upon satisfaction
or waiver of the conditions set out in Article VI; and |
| (g) | consult
with Parent in respect of the actions as set out in this Article II, including providing
Parent with a reasonable opportunity to comment on all draft documentation prepared by SRx
in connection with the foregoing, and to give due consideration to and act reasonably with
respect to adopting such comments. |
2.3. | Interim
OrderAs soon as reasonably practicable after the date of this Agreement, and in any event
no later than three (3) Business Days following the SEC Clearance Date, SRx shall apply to
the Court in a manner and on terms acceptable to Parent, acting reasonably, pursuant to Section
182 of the OBCA and, in cooperation with Parent, prepare, file and diligently pursue an application
for the Interim Order, which shall provide, among other things: |
| (a) | for
the class of Persons to whom notice is to be provided in respect of the Arrangement and the
SRx Meeting and for the manner in which such notice is to be provided; |
| (b) | for
a fixed record date for the purposes of determining the SRx Securityholders entitled to receive
notice of and vote at the SRx Meeting, which date shall be the close of business on the Business
Day immediately preceding the day on which the SRx Circular is mailed to the SRx Shareholders; |
| (c) | that
the requisite approval for the SRx Arrangement Resolution shall be two-thirds of the votes
cast by the SRx Shareholders and the SRx Warrantholders, voting together as a single class
(on an as- converted to SRx Share basis in the case of the SRx Warrants), present in person
or by proxy at the SRx Meeting (collectively, “SRx Securityholder Approval”); |
| (d) | that,
in all other respects, the terms, conditions and restrictions of the constating documents
of SRx relating to a meeting of SRx Shareholders, including quorum requirements, shall apply
in respect of the SRx Meeting; |
| (e) | for
the grant of Dissent Rights to the SRx Shareholders who are registered SRx Shareholders,
as set out in the Plan of Arrangement; |
| (f) | for
the notice requirements with respect to the presentation of the application to the Court
for the Final Order; |
| (g) | that
the SRx Meeting may be adjourned or postponed from time to time by SRx in accordance with
the terms of this Agreement without the need for additional approval of the Court; |
| (h) | that
the Parties intend to rely upon the Section 3(a)(10) Exemption, subject to and conditioned
on the Court’s determination that the Arrangement is substantively and procedurally
fair to the SRx Securityholders, with respect to the issuance of the Consideration to the
SRx Securityholders pursuant to the Arrangement (including pursuant to the exchange of Exchangeable
Shares), to implement the transactions contemplated hereby in respect of the SRx Securityholders; |
| (i) | that
each SRx Securityholder shall have the right to appear before the Court at the hearing of
the Court to approve the application for the Final Order so long as they enter a notice of
appearance within a reasonable time; and |
| (j) | for
such other matters as Parent or SRx may reasonably require, subject to obtaining the prior
consent of SRx or Parent, respectively, such consent not to be unreasonably withheld or delayed
provided that such other matters would not reasonably be expected to materially impair, delay
or impede the completion of the transactions contemplated by this Agreement. |
2.4. | SRx
MeetingSubject to the terms of this Agreement: |
| (a) | SRx
agrees to convene and conduct the SRx Meeting in accordance with the Interim Order, the constating
documents of SRx and applicable Law as soon as practicable, and in any event no later than
thirty-five (35) days following the SEC Clearance Date; |
| (b) | SRx
will promptly advise Parent on a daily basis on each of the last ten (10) Business Days prior
to the date of the SRx Meeting as to the aggregate tally of the proxies received by SRx in
respect of the SRx Arrangement Resolution; |
| (c) | SRx
will promptly advise Parent of any written communication from or written claims brought by
(or threatened in writing, to be brought by) any SRx Securityholder or any other Person in
opposition to the Arrangement, the SRx Arrangement Resolution or any exercise or purported
exercise by any SRx Shareholder of Dissent Rights received by SRx and any withdrawal of Dissent
Rights received by SRx and any written communications sent by or on behalf of SRx to any
SRx Shareholder exercising or purporting to exercise Dissent Rights; and |
| (d) | except
as required by applicable Law, SRx will not propose or submit for consideration at the SRx
Meeting any business other than the approval of the SRx Arrangement Resolution without Parent’s
prior written consent, which consent shall not be unreasonably withheld or delayed provided
that such business would not reasonably be expected to materially impair, delay or impede
the completion of the transactions contemplated by this Agreement. |
2.5. | SRx
CircularAs soon as reasonably practicable following execution of this Agreement, but
subject to Section 2.5(c), SRx shall (i) prepare, in consultation with Parent, the
SRx Circular, together with any other documents required by applicable Law and (ii) following
receipt of the Interim Order, cause the SRx Circular to be sent to SRx Securityholders and
any other Person as required by the Interim Order and applicable Law, and, in each case so
as to permit the SRx Meeting to be held by the date specified in Section 2.4(a). SRx
shall ensure that the SRx Circular complies in all material respects with all applicable
Law, does not include any misrepresentation (other than with respect to any information relating
solely to Parent, AcquireCo or CallCo and provided by Parent in writing specifically for
inclusion in the SRx Circular) and contains sufficient detail to permit the SRx Securityholders,
to form a reasoned judgment concerning the Arrangement and the SRx Arrangement Resolution
to be placed before them at the SRx Meeting. SRx shall be permitted to append to the SRx
Circular all of, or selected extracts from, the Parent Proxy Statement. |
| (b) | SRx
shall disclose in the SRx Circular: |
| (i) | that
the SRx Board has unanimously determined, after receiving financial and legal advice, that
(A) the Arrangement is fair and reasonable to the SRx Shareholders, (B) the Arrangement is
in the best interests of SRx, and (C) the SRx Board unanimously recommends that the SRx Securityholders
vote in favor of the SRx Arrangement Resolution (the “SRx Board Recommendation”); |
| (ii) | that
each SRx Supporting Shareholder has signed an SRx Voting Agreement and agreed to vote all
of such Person’s SRx Shares (including any SRx Shares issued upon the exercise of any
securities convertible, exercisable or exchangeable into or for SRx Shares) in favor of the
SRx Arrangement Resolution, and against any resolution submitted by any Person that is inconsistent
with the Arrangement, subject to the other terms of the SRx Voting Agreements; and |
| (iii) | such
information as may be required to allow Parent and AcquireCo to rely upon the Section 3(a)(10)
Exemption with respect to the issuance of the Consideration. |
| (c) | Parent
shall promptly provide to SRx all information regarding Parent or its subsidiaries and affiliates,
as required by the Interim Order and applicable Law for inclusion in the SRx Circular, or
in any amendments or supplements to such SRx Circular. Parent shall ensure that no such information
provided by Parent specifically for inclusion in the SRx Circular will contain any misrepresentation
concerning Parent. |
| (d) | Parent
and its legal counsel shall be given a reasonable opportunity to review and comment on the
SRx Circular and all such other documents required to be filed or distributed to SRx Shareholders
under applicable Laws in connection with the Arrangement. SRx and its legal counsel will
incorporate all reasonable comments of Parent and its legal counsel into the SRx Circular
and all such other documents. The SRx Circular and all such other documents shall be satisfactory
to Parent, acting reasonably, before they are printed, or distributed to SRx Shareholders
or filed with any Governmental Entity. SRx agrees that all information relating solely to
Parent and its subsidiaries and affiliates included in the SRx Circular must be in a form
and content satisfactory to Parent. |
| (e) | Each
of SRx and Parent shall promptly notify the other Party if at any time before the Effective
Date either becomes aware that the SRx Circular contains a misrepresentation, or otherwise
requires an amendment or supplement. The Parties shall co-operate in the preparation of any
amendment or supplement to the SRx Circular as required or appropriate, and SRx shall promptly
mail or otherwise publicly disseminate any amendment or supplement to the SRx Circular to
SRx Securityholders and, if required by the Court or applicable Law, file the same with any
Governmental Entity and as otherwise required. |
2.6. | Final
Order If the Interim Order is obtained and the SRx Arrangement Resolution is passed at
the SRx Meeting in accordance with applicable Law and the Interim Order, then SRx shall take
all steps necessary or desirable to submit the Arrangement to the Court as soon as practicable
(and, in any event, within five (5) Business Days following the SRx Meeting) and apply to
the Court for the Final Order pursuant to Section 185 of the OBCA approving the Arrangement
on terms reasonably satisfactory to each of SRx and Parent. |
2.7. | Court
Proceedings Subject to the terms of this Agreement, SRx shall diligently pursue, and SRx and Parent shall cooperate with each
other in pursuing, the Interim Order and the Final Order. SRx will provide Parent and its legal counsel with a reasonable
opportunity to review and comment upon drafts of all material to be filed with the Court in connection with the Interim Order and
the Final Order and will incorporate all reasonable comments of Parent and its counsel. SRx will ensure that all materials filed
with the Court in connection with the Arrangement are consistent with this Agreement and the Plan of Arrangement. Subject to
applicable Law, SRx will not file any material with the Court in connection with the Arrangement or serve any such material, and
will not agree to modify or amend materials so filed or served, except with Parent’s prior written consent, such consent not
to be unreasonably withheld, conditioned or delayed; provided, however, that nothing herein shall require Parent to agree or
consent to any increase or change in the Consideration or any modification or amendment to such filed or served materials that
expands or increases Parent’s obligations set forth in any such filed or served materials or under this Agreement or the
Arrangement. SRx shall also provide to Parent and to Parent’s legal counsel on a timely basis copies of any notice of
appearance or other Court documents served on SRx in respect of the application for the Interim Order or the Final Order or any
appeal therefrom and of any notice, whether written or oral, received by SRx indicating any intention to oppose the granting of the
Interim Order or the Final Order or to appeal the Interim Order or the Final Order. In addition, SRx will not object to legal
counsel to 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, however, that SRx 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. SRx will also oppose any proposal from
any party that the Interim Order or the Final Order contain any provision inconsistent with this Agreement, and, if at any time
after the issuance of the Final Order and prior to the Effective Time, SRx 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 only after reasonable advance notice to, and in consultation and
cooperation with, Parent. If the Courts in Ontario are closed due to disease outbreaks, pandemics or epidemics or other related
conditions, then the time to make application to the Court or convene and conduct the SRx Meeting in Section 2.2(d), Section
2.4 and Section 2.6, shall be tolled for such period as the Courts are closed plus three (3) Business Days; provided that
in no event shall such tolling and three (3) Business Day period extend beyond the Outside Date. |
2.8. | Articles
of Arrangement and Effective Date The Articles of Arrangement shall implement the Plan
of Arrangement and will become effective as of the Effective Time. On the second (2nd) Business
Day after the satisfaction or, where permitted, the waiver 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 of those conditions as of the Effective Date) set forth
in Article VI, unless another time or date is agreed to in writing by the Parties,
the Articles of Arrangement shall be filed by SRx with the Director; provided, however,
that the Articles of Arrangement shall not be sent to the Director, for endorsement and
filing by the Director, except as contemplated hereby or with Parent’s prior written
consent. From and after the Effective Time, the Plan of Arrangement will have all of the
effects provided by applicable Law, including the OBCA. Each of SRx and Parent agrees to
amend the Plan of Arrangement at any time prior to the Effective Time in accordance with
Section 8.4 of this Agreement to include such other terms determined to be reasonably
necessary or desirable by Parent or SRx, as the case may be. |
|
(b) |
The closing of the Arrangement will take place by electronic
exchange of documents on the Effective Date, or at such other location as may be agreed to by the Parties. |
2.9. | Payment
of Consideration At least five (5) Business Days prior to the Effective Date, SRx shall
deliver to Parent the information required for variable ‘B’ (SRx U.S. Dollar
Net Debt) in the definition of Exchange Ratio, and Parent shall deliver to SRx the information
required for variable ‘C’ (30 Day VWAP) in the definition of Exchange Ratio.
Parent and AcquireCo will, following receipt by SRx of the Final Order and prior to the filing
by SRx of the Articles of Arrangement, issue in escrow with the Depositary (the terms and
conditions of such escrow to be satisfactory to the parties, acting reasonably) sufficient
Parent Shares and Exchangeable Shares to satisfy the aggregate Consideration for the SRx
Shares outstanding. |
| (b) | At
the Effective Time, the Depositary shall release all Consideration to the SRx Shareholders
in accordance with the direction of SRx. |
| (c) | Subject
to the provisions of the Plan of Arrangement, AmalCo shall execute joint elections under
subsection 85(1) or 85(2) of the Tax Act and any equivalent provincial or territorial legislation
with SRx Shareholders who are Eligible Holders (as defined in the Plan of Arrangement) and
who are entitled to receive Exchangeable Shares under the Arrangement, subject to and in
accordance with the Plan of Arrangement. Such election shall be filed on or before the due
date set out in subsection 85(6) of the Tax Act. |
2.10. | Parent
Proxy Statement As promptly as practicable following execution of this Agreement, but
subject to Section 2.10(c), Parent shall (i) prepare, in consultation with SRx, the
preliminary Parent Proxy Statement (and the letter to shareholders, notice of meeting and
form of proxy included therewith), and (ii) cause the preliminary Parent Proxy Statement
to be filed with the SEC. |
| (b) | Parent
covenants and agrees that the definitive Parent Proxy Statement (including the letter to
shareholders, notice of meeting and form of proxy included therewith), will not, at the time
that the definitive Parent Proxy Statement or any amendment or supplement thereto is first
mailed to the Parent Shareholders and at the time of the Parent Meeting, contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading. Notwithstanding the foregoing, Parent makes no
covenant, representation or warranty with respect to statements made in the definitive Parent
Proxy Statement (and the letter to shareholders, notice of meeting and form of proxy included
therewith) (i) based on information furnished in writing by SRx specifically for inclusion
therein, or (ii) that otherwise reflect information about SRx or the planned business of
Parent or SRx following the Effective Time. Parent shall use commercially reasonable efforts
to cause the definitive Parent Proxy Statement to comply with the applicable rules and regulations
promulgated by the SEC and to respond promptly to any comments of the SEC or its staff. Parent
shall use commercially reasonable efforts to cause the definitive Parent Proxy Statement
to be filed with the SEC, and mailed to the Parent Shareholders as of the record date established
for the Parent Meeting (the “Parent Record Date”), as promptly as practicable
after (A) the 10th day after the preliminary Parent Proxy Statement therefor has been filed
with the SEC if by such date the SEC has not informed Parent that it intends to review the
preliminary Parent Proxy Statement or (B) if the SEC has, by the 10th day after the preliminary
Parent Proxy Statement therefor has been filed with the SEC, informed Parent that it intends
to review the preliminary Parent Proxy Statement, the date on which the SEC confirms that
it has no further comments on the preliminary Parent Proxy Statement (each such date, the
“SEC Clearance Date”). |
| (c) | Except
in the case of a Parent Change in Recommendation specifically permitted pursuant to Section
7.4, Parent shall disclose in the Parent Proxy Statement: |
| (i) | that
the Parent Board has received a fairness opinion from the Parent Financial Advisor stating
that, as at the date of such opinion, the Consideration to be paid by Parent and AcquireCo
pursuant to the Arrangement is fair, from a financial point of view, to the Parent Shareholders; |
| (ii) | the
general terms of the fairness opinion from the Parent Financial Advisor and a copy of such
fairness opinion shall be included in the Parent Proxy Statement; |
| | |
| (iii) | that
the Parent Board has unanimously determined, after receiving financial and legal advice,
that (A) the Arrangement is fair and reasonable to the Parent Shareholders, (B) the Arrangement
is in the best interests of the Parent and (C) the Parent Board unanimously recommends that
the Parent Shareholders vote in favor of the Parent Shareholder Approval Matters (the “Parent
Board Recommendation”); and |
| | |
| (iv) | that
each Parent Supporting Shareholder has signed a Parent Voting Agreement and agreed to vote
all of such Person’s Parent Shares (including any Parent Shares issued upon the exercise
of any securities convertible, exercisable or exchangeable into or for Parent Shares) in
favor of the Parent Shareholder Approval Matters, and against any matter submitted by any
Person that is inconsistent with the Arrangement, subject to the other terms of the Parent
Voting Agreements. |
| (d) | SRx
shall promptly provide to Parent all information regarding SRx or its subsidiaries and affiliates,
as required by applicable Law for inclusion in the Parent Proxy Statement, or in any amendments
or supplements to such Parent Proxy Statement. SRx covenants and agrees that no such information
provided by SRx specifically for inclusion in the Parent Proxy Statement will contain any
untrue statement of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading. Without limiting the generality of the foregoing,
SRx shall promptly provide to Parent all financial statements of SRx required to be included
in the Parent Proxy Statement, which financial statements shall comply in all material respects
with all applicable accounting requirements and with the rules and regulations of the SEC,
the U.S. Exchange Act and the U.S. Securities Act, including applicable “staleness”
requirements; |
| (e) | SRx
and its legal counsel shall be given a reasonable opportunity to review and comment on the
Parent Proxy Statement and all such other documents required to be filed or distributed to
Parent Shareholders in connection with the Arrangement. Parent and its legal counsel will
incorporate all reasonable comments of SRx and its legal counsel into the Parent Proxy Statement
and all such other documents. The Parent Proxy Statement and all such other documents shall
be satisfactory to SRx, acting reasonably, before they are printed, or distributed to Parent
Shareholders or filed with any Governmental Entity, subject to any disclosure obligations
imposed on Parent by any Securities Authorities. Parent agrees that all information relating
solely to SRx and its subsidiaries and affiliates included in the Parent Proxy Statement
must be in a form and content satisfactory to SRx. |
| (f) | Each
of SRx and Parent shall promptly notify the other Party if at any time before the Effective
Date either becomes aware that the Parent Proxy Statement contains any untrue statement of
a material fact or omits to state any material fact required to be stated therein or necessary
in order to make the statements made therein, in light of the circumstances under which they
were made, not misleading, or otherwise requires an amendment or supplement, and the Parties
shall co-operate in the preparation of any amendment or supplement to the Parent Proxy Statement
as required or appropriate. Parent shall promptly mail or otherwise publicly disseminate
any amendment or supplement to the Parent Proxy Statement to Parent Shareholders and, if
required by applicable Law, file the same with any Governmental Entity and as otherwise required. |
| (g) | Parent
shall keep SRx informed of any requests or comments made by any Securities Authorities in
connection with the Parent Proxy Statement and, as promptly as reasonably practicable, provide
SRx with copies of any correspondence received by Parent from, or sent by Parent to, any
Securities Authorities in connection with the Parent Proxy Statement. |
2.11. | Parent
Meeting Parent shall take all action necessary under applicable Law to call, give notice
of and hold the Parent Meeting as soon as practicable, and in any event no later than sixty
(60) days following the SEC Clearance Date, to vote on the (i) transactions contemplated
by this Agreement, (ii) issuance of Parent Shares pursuant to this Agreement and the Plan
of Arrangement, (iii) Parent Amended and Restated Articles and Parent Amended and Restated
Bylaws, (iv) change of control of Parent resulting from the transaction contemplated by this
Agreement pursuant to rules of the NYSE American, (v) Reverse Split, if so determined by
the Parent Board in accordance with Section 2.14, (vi) increase in the number of authorized
shares of Parent to an amount to be determined by SRx and to create the Special Voting Share,
(vii) amendment to the Parent Incentive Plan to increase the number of Parent Shares reserved
for awards (taking into account the annual “evergreen” adjustment) to twenty
percent (20%) of the number of Parent Shares outstanding immediately after the Effective
Time (calculated on a fully-diluted basis, including issuance of Parent Shares upon exchange
of the Exchangeable Shares), and (viii) the Parent Board Matters, in each case to the extent
required by applicable Law (collectively, the “Parent Shareholder Approval Matters”).
The Parent Meeting shall be held as promptly as practicable, and in any event within sixty
(60) days, after the definitive Parent Proxy Statement is mailed to Parent Shareholders as
of the Parent Record Date. Parent shall take commercially reasonable measures to ensure that
all proxies solicited in connection with the Parent Meeting are solicited in compliance with
all applicable Law. Notwithstanding anything to the contrary contained herein, if on a date
preceding the date on which the Parent Meeting is scheduled, Parent reasonably believes that
(A) it will not receive proxies sufficient to obtain the Parent Shareholder Approval, whether
or not a quorum would be present or (B) it will not have sufficient Parent Shares represented
(either in person or by proxy) to constitute a quorum necessary to conduct the business of
the Parent Meeting, Parent may (or will, at SRx’s direction) postpone or adjourn, or
make one or more successive postponements or adjournments of, the Parent Meeting, provided
that (1) the date of the Parent Meeting is not postponed or adjourned more than an aggregate
of fifteen (15) days in connection with any postponements or adjournments in reliance on
the preceding sentence, (2) Parent shall not be required to postpone or adjourn the Parent
Meeting more than once at SRx’s direction and (III) the postponed or adjourned Parent
Meeting is held at least ten (10) Business Days in advance of the Outside Date. In addition,
Parent may postpone or adjourn the Parent Meeting to allow reasonable additional time for
the filing and mailing of any amendment or supplement to the Parent Proxy Statement that
the Parent Board determines in good faith to be required or advisable pursuant to Section
2.10(f), and for such amendment or supplement to be disseminated and reviewed by the
Parent Shareholders prior to the Parent Meeting, provided that the postponed or adjourned
Parent Meeting is held at least ten (10) Business Days in advance of the Outside Date. |
| (b) | Parent
will promptly advise SRx on a daily basis on each of the last ten (10) Business Days prior
to the date of the Parent Meeting as to the aggregate tally of the proxies received by Parent
in respect of the Parent Shareholder Approval Matters. |
| (c) | Except
in the case of a Parent Change in Recommendation specifically permitted pursuant to Section
7.4, Parent agrees that (i) the Parent Board shall unanimously issue the Parent Board
Recommendation that the Parent Shareholders vote in favor of the Parent Shareholder Approval
Matters and shall use commercially reasonable efforts to solicit such approval within the
timeframe set forth in Section 2.11(a) and (ii) the Parent Board Recommendation shall
not be withdrawn or modified in a manner adverse to SRx, and no resolution by the Parent
Board or any committee thereof to withdraw or modify the Parent Board Recommendation in a
manner adverse to SRx shall be adopted or proposed; and (iii) Parent shall use its reasonable
best efforts to solicit proxies from the Parent Shareholders to obtain the Parent Shareholder
Approval. |
2.12. | Obligations
Regarding Exchangeable Shares Parent, AcquireCo and CallCo shall, on a joint and several
basis, use their commercially reasonable efforts: |
| (a) | to
cause the listing and admission to trading on the NYSE American of the Parent Shares to be
issued at the Exchange Time and from time to time upon exchange of the Exchangeable Shares; |
| (b) | to
ensure that AcquireCo is, at the Effective Time and for so long as there are Exchangeable
Shares outstanding (other than those Exchangeable Shares held by Parent, CallCo or any of
its affiliates), a “taxable Canadian corporation” and not a “mutual fund
corporation,” each within the meaning of the Tax Act (as of the Effective Time and
any modifications to such definitions which are consistent with the principles thereof); |
| (c) | to
file a registration statement on Form S-3 (or, if Parent is not eligible to use Form S-3,
such other form of registration statement as is appropriate) in order to register under the
U.S. Securities Act the Parent Shares to be issued upon exchange of the Exchangeable Shares
from time to time after the Effective Time, and use its commercially reasonable efforts to
cause such registration statement to become effective as promptly as reasonably practicable
following the Effective Time and to maintain the effectiveness of such registration for the
period that such Exchangeable Shares remain outstanding; |
| (d) | to
enter into the Support Agreement and the Voting Trust Agreement effective as of the Effective
Time; and |
| (e) | take
all actions required in order to create and issue the Special Voting Share as of the Effective
Time. |
2.13. | Parent
Post-Closing Governance Unless otherwise agreed by the Parties, at the Effective Time,
and subject to applicable Laws, including applicable NYSE American requirements relating
to director independence: |
| (i) | all
members of the Parent Board, other than Kent Cunningham, Michael Young and Lionel Conacher,
will resign, and the Parent Board shall be reconstituted such that it will consist of the
following five (5) members (collectively, the “Parent Board Matters”): |
| (A) | two
(2) director nominees selected by SRx in its sole discretion prior to the date on which the
Parent Proxy Statement is filed with the SEC, one (1) of whom shall be independent in accordance
with NYSE American requirements (presently intended to be Adesh Vora and David White, with
the former as Chairman and the latter as the independent director); and |
| (B) | two
(2) director nominees selected by Parent in its sole discretion prior to the date on which
the Parent Proxy Statement is filed with the SEC, one (1) of whom shall be independent in
accordance with NYSE American requirements (presently intended to be Kent Cunningham and
Michael Young, with the latter as the independent director); and |
| (C) | one
(1) director nominee mutually selected by the Parties prior to the date on which the Parent
Proxy Statement is filed with the SEC, who shall be independent in accordance with NYSE American
requirements (presently intended to be Lionel Conacher); |
| (ii) | all
executive officers of the Parent will resign from their offices currently held, except for
Nina Martinez in her capacity as Chief Financial Officer, and the executive officers of the
Parent shall consist of the following: |
| (A) | Adesh
Vora as Chief Executive Officer; |
| (B) | Dave
Sohi as President; and |
| (C) | Nina
Martinez as Chief Financial Officer. |
2.14. | Reverse
Split Parent may, but is not required to, submit to the Parent Shareholders at the Parent
Meeting a proposal to authorize the Parent Board to effect a reverse stock split of all outstanding
Parent Shares on the basis of a reverse stock split ratio within the range of one (1) new
Parent Share for up to three (3) “old” Parent Shares then outstanding, with such
ratio to be determined solely by the Parent Board (the “Reverse Split”);
provided, however, that the Parent Board shall have sole discretion as to (a) whether
to submit such proposal and (b) if such proposal is submitted and approved by the Parent
Shareholders, whether to implement the Reverse Split. Following any such approval by the
Parent Shareholders, the Parent Board may implement the Reverse Split on at least five (5)
Business Days’ prior written notice to SRx. For the avoidance of doubt, if the Reverse
Split is implemented, the Exchange Ratio shall be adjusted accordingly such that the Parties
obtain the same economic position following the Reverse Split as they were entitled to prior
to the Reverse Split. |
2.15. | Announcements
and Consultations Parent and SRx shall consult with each other in respect to issuing any
press release, preparing any presentations or otherwise making any public statement with
respect to this Agreement or the Arrangement and, except as otherwise set forth in this Agreement,
in making any filing with any Governmental Entity with respect to this Agreement or the Arrangement.
Each of Parent and SRx shall use all commercially reasonable efforts to enable the other
Party to review and comment on all such press releases, presentations, public statements
and, except as otherwise set forth in this Agreement, filings prior to the release or filing,
respectively, thereof, and neither Parent nor SRx shall release, make or file any press release,
presentation, public statements or, except as otherwise set forth in this Agreement, filing
without the prior written consent of the other Party (which consent shall not be unreasonably
withheld or delayed); provided, however, that the obligations herein shall not prevent
a Party from making such disclosure as is required by applicable Law or the rules and policies
of any applicable securities exchange, and the Party making such disclosure shall use all
commercially reasonable efforts to enable the other Party to review or comment on the disclosure
or filing, and if such prior notice is not possible, to give such notice immediately following
the making of such disclosure or filing. Reasonable consideration shall be given to any comments
made by the other Party and its counsel. |
2.16. | Withholding
Taxes SRx, Parent, AcquireCo, CallCo, the Depositary and their respective agents in connection
with the Arrangement shall be entitled to deduct and withhold from any dividend or consideration
payable to any Person (including, for greater certainty, any SRx Shareholder, any SRx RSU
Holder, any SRx Warrantholder and any Dissenting Shareholder), such amounts as SRx, Parent,
AcquireCo, CallCo, the Depositary, or their respective agents are required to deduct and
withhold with respect to such payment under the Tax Act, United States Tax Laws or any other
applicable Law. To the extent that amounts are so withheld, such withheld amounts shall be
treated for all purposes hereof as having been paid to the holder of the securities in respect
of which such deduction and withholding was made, provided that such withheld amounts are
actually remitted to the appropriate Governmental Entity. SRx, Parent, AcquireCo, CallCo,
the Depositary and their respective agents are hereby authorized to sell or otherwise dispose
of such portion of the non-cash consideration as is necessary to provide sufficient funds
to SRx, Parent, AcquireCo, CallCo, the Depositary or their respective agents, as the case
may be, to enable it to comply with such deduction or withholding requirement and SRx, Parent,
AcquireCo, CallCo the Depositary, or their respective agents, as applicable, shall notify
the holder thereof and remit any unapplied balance of the net proceeds of such sale. Any
such sale will be made in accordance with applicable Law and at prevailing market prices
and none of SRx, Parent, AcquireCo, CallCo, the Depositary, or any of their respective agents
shall be under any obligation to obtain a particular price, or indemnify any Person (including,
for greater certainty, any SRx Shareholder, any SRx RSU Holder, any SRx Warrantholder and
any Dissenting Shareholder) in respect of a particular price, for the portion of the non-cash
consideration so sold. |
2.17. | Treatment
of SRx RSUs and SRx Warrants At the Effective Time, pursuant to the Plan of Arrangement,
each SRx RSU outstanding immediately prior to the Effective Time will vest and constitute
issued and outstanding SRx Shares for all purposes under this Agreement. |
| (b) | At
the Effective Time, pursuant to the Plan of Arrangement, each SRx Warrant outstanding and
not already exercised in accordance with the terms thereof, will be terminated. |
2.18. | U.S.
Securities Law Matters The Parties intend that the Arrangement shall be carried out such
that the issuance of the Parent Shares and Exchangeable Shares to SRx Shareholders in exchange
for SRx Shares qualifies for the exemption from the registration requirements of the U.S.
Securities Act provided by the Section 3(a)(10) Exemption and applicable U.S. state securities
laws in reliance upon similar exemptions under applicable U.S. state securities laws. Each
Party agrees to act in good faith, consistent with the intent of the Parties and the intended
treatment of the Arrangement as set forth in this Section 2.18. In order to ensure
the availability of the Section 3(a)(10) Exemption, the Parties agree that the Arrangement
will be carried out on the following basis: |
| (a) | the
Arrangement will be subject to the approval of the Court; |
| (b) | the
Court will be advised as to the intention of the Parties to rely on the Section 3(a)(10)
Exemption prior to the Court hearing required to issue the Interim Order; |
| (c) | the
Court will be required to satisfy itself as to the substantive and procedural fairness of
the Arrangement to the SRx Shareholders; |
| (d) | the
Court will hold a hearing before approving the procedural and substantive fairness of the
terms and conditions of the Arrangement; |
| (e) | the
Final Order will expressly state that the Arrangement is approved by the Court as being substantively
and procedurally fair to the SRx Shareholders to whom Parent Shares and Exchangeable Shares
will be issued; |
| (f) | the
Parties will ensure that each SRx Shareholder entitled to receive Parent Shares or Exchangeable
Shares on completion of the Arrangement will (i) be given adequate notice advising them of
their right to attend the Court hearing and providing them with sufficient information necessary
for them to exercise that right; (ii) be advised that the Parent Shares and Exchangeable
Shares issuable pursuant to the Arrangement have not been and will not be registered under
the U.S. Securities Act and will be issued by Parent and AcquireCo in reliance on the Section
3(a)(10) Exemption, and that certain restrictions on resale under the securities laws of
the United States, including, as applicable, Rule 144 under the United States Securities
Act of 1933, as amended (the “U.S. Securities Act”), may be applicable
with respect to securities issued to “affiliates” (as defined in Rule 144 under
the U.S. Securities Act) of Parent or AcquireCo, as applicable; and (iii) each SRx Shareholder
entitled to receive Exchangeable Shares pursuant to the Arrangement will be advised that
the 3(a)(10) Exemption does not exempt the issuance of securities upon the exchange of such
Exchangeable Shares and that; therefore, the Parent Shares issuable upon exchange of the
Exchangeable Shares cannot be issued in reliance on the Section 3(a)(10) Exemption, and such
Parent Shares issuable upon exchange of the Exchangeable Shares may only be issued and subsequently
resold pursuant to one or more alternative exemptions from registration or an effective registration
statement under the U.S.
Securities Act and compliance with applicable state securities laws; |
| (g) | the
Interim Order will specify that each SRx Shareholder entitled to receive Parent Shares or
Exchangeable Shares on completion of the Arrangement will have the right to appear before
the Court at the Court hearing on the Final Order so long as such SRx Shareholder enters
an appearance within a reasonable time and in accordance with the requirements of the Section
3(a)(10) Exemption;
and
|
| (h) | Parent
will request that the Final Order include a statement to substantially the following effect:
“This Order will serve as a basis of a claim to an exemption, pursuant to Section 3(a)(10)
of the U.S. Securities Act from the registration requirements otherwise imposed by the U.S.
Securities Act, regarding the distribution of Parent Shares or Exchangeable Shares, pursuant
to the Plan of Arrangement.” |
2.19. | U.S.
Tax Matters The Arrangement is intended to qualify as a reorganization within the meaning
of Section 368(a) of the U.S. Tax Code and the Treasury Regulations promulgated thereunder
(a “Reorganization”), and this Agreement, together with the Plan of Arrangement,
is intended to be, and is hereby adopted as a “plan of reorganization” within
the meaning of the Treasury Regulations promulgated under Section 368 of the U.S. Tax Code.
The Parties will cooperate with each other to make any changes to the terms of the Arrangement,
reasonably requested by the other party upon advice of tax counsel, necessary for the Arrangement
to qualify as a Reorganization; provided that no Party hereto provides any assurances or
representations regarding the qualification of the Arrangement as a Reorganization. Provided
the Arrangement satisfies all of the applicable requirements of a Reorganization, each Party
agrees to treat the Arrangement as a Reorganization for all United States federal income
tax purposes, to treat this Agreement, together with the Plan of Arrangement, as a “plan
of reorganization” within the meaning of the Treasury Regulations promulgated under
Section 368 of the U.S. Tax Code, and to not take any position on any Tax return or otherwise
take any Tax reporting position inconsistent with such treatment, unless otherwise required
as a result of a “determination” within the meaning of Section 1313(a) of the
U.S. Tax Code. Following the Effective Date, Parent will prepare and file in accordance with
Treasury Regulations (including by posting a copy on the investor relations section of its
website) an IRS Form 8937 with respect to the Arrangement. Each Party agrees to act in good
faith, consistent with the intent of the Parties and the intended treatment of the Arrangement
as set forth herein and to use commercially reasonable efforts to not take any action, or
knowingly fail to take any action, if such action or failure to act would reasonably be expected
to prevent the Arrangement from qualifying as a Reorganization. Notwithstanding the foregoing,
no Party hereto makes any representation, warranty or provides any other assurances to any
SRx Shareholder, SRx RSU Holder, or SRx Warrantholder regarding the U.S. tax treatment of
the Arrangement. |
ARTICLE
III.
REPRESENTATIONS
AND WARRANTIES OF SRX
3.1. | Representations
and Warranties of SRx Except as disclosed in the SRx Disclosure Letter, SRx represents
and warrants to Parent as set forth in Schedule C hereto and acknowledges and agrees
that Parent is relying upon such representations and warranties in connection with the entering
into of this Agreement. Any investigation by Parent or its Representatives shall not mitigate,
diminish or affect the representations and warranties of SRx pursuant to this Agreement. |
3.2. | Survival
of Representations and Warranties The representations and warranties of SRx contained
in this Agreement shall not survive the completion of the Arrangement and shall expire and
be terminated on the earlier of the Effective Time and the date on which this Agreement is
terminated in accordance with its terms. |
ARTICLE
IV.
REPRESENTATIONS
AND WARRANTIES OF PARENT, ACQUIRECO AND CALLCO
4.1. | Representations
and Warranties of Parent Except as disclosed in the Parent Disclosure Letter, each of
Parent, AcquireCo and CallCo jointly and severally represents and warrants to SRx as set
forth in Schedule D hereto and acknowledges and agrees that SRx is relying upon such
representations and warranties in connection with the entering into of this Agreement. Any
investigation by SRx or its Representatives shall not mitigate, diminish or affect the representations
and warranties of Parent, AcquireCo and CallCo pursuant to this Agreement. |
4.2. | Survival
of Representations and Warranties The representations and warranties of Parent, AcquireCo
and CallCo contained in this Agreement shall not survive the completion of the Arrangement
and shall expire and be terminated on the earlier of the Effective Time and the date on which
this Agreement is terminated in accordance with its terms. |
ARTICLE
V.
COVENANTS
5.1. | Covenants
of Parent, AcquireCo and CallCo Relating to the Arrangement Except such actions as are
expressly permitted pursuant to any other term of this Agreement, Parent, AcquireCo and CallCo
shall, on a joint and several basis, perform all obligations required to be performed by
Parent, AcquireCo and CallCo under this Agreement, co-operate with SRx in connection therewith,
and do all such other acts and things as may be necessary or desirable in order to consummate
and make effective, as soon as reasonably practicable, the Arrangement and the other transactions
contemplated in this Agreement and, without limiting the generality of the foregoing, Parent,
AcquireCo and CallCo shall: |
| (a) | apply
for and use all commercially reasonable efforts in co-operation with SRx to obtain all Key
Regulatory Approvals and, in doing so, keep SRx informed in a timely manner as to the status
of the proceedings or other actions related to obtaining the Key Regulatory Approvals, including
(i) providing SRx with copies of all related applications and notifications, in draft form,
in order for SRx to provide its comments thereon, and Parent, AcquireCo and CallCo shall
consult with the SRx on any comments provided in good faith; (ii) promptly furnishing to
SRx copies of notices or other formal communications received by Parent, AcquireCo or CallCo
from, or given by Parent, AcquireCo or CallCo to, any Governmental Entity (including any
Securities Authority) with respect to the transactions contemplated by this Agreement or
otherwise; (iii) not making any commitments, providing any undertakings or assuming any obligations,
in each case, that are outside the ordinary course of business, without the prior written
consent of SRx; and (iv) subject to applicable Law, each of Parent, AcquireCo and CallCo
shall, to the extent reasonably practicable, provide SRx and its counsel with the opportunity
to participate in any substantive meeting, teleconference or other material communication
with any Governmental Entity in respect of any filing, investigation or other inquiry in
connection with the Key Regulatory Approvals; |
| (b) | use
all commercially reasonable efforts to satisfy all conditions precedent in this Agreement
in its power to satisfy and comply promptly with all requirements which applicable Law may
impose on Parent, AcquireCo and CallCo with respect to the Arrangement or the other transactions
contemplated by this Agreement and including effecting all necessary registrations, filings
and submissions of information requested by Governmental Entities required to be effected
by Parent, AcquireCo, CallCo or any of their subsidiaries in connection with the Arrangement
and cooperating with SRx in connection with its performance of its obligations hereunder; |
| (c) | use
all commercially reasonable efforts to defend all lawsuits or other legal, regulatory or
other proceedings against Parent, AcquireCo or CallCo challenging or affecting this Agreement
or the consummation of the transactions contemplated hereby and use all commercially reasonable
efforts to have lifted or rescinded any injunction or restraining order or other order relating
to Parent, AcquireCo or CallCo which may materially impede the ability of the Parties to
consummate the Arrangement or the other transactions contemplated by this Agreement; |
| (d) | use
all commercially reasonable efforts to obtain, and to assist SRx with respect to obtaining,
as applicable, all consents, waivers or approvals required under all Material Contracts,
including waivers required in connection with any change of control provisions contained
in any Material Contracts; |
| (e) | use
all commercially reasonable efforts to take, or cause to be taken, all actions and do or
cause to be done all things reasonably necessary, proper or advisable on its part under applicable
Law and the policies of NYSE American to enable the listing on NYSE American by Parent of
the Parent Shares on the Effective Date; |
| (f) | use
its commercially reasonable efforts to ensure that the Section 3(a)(10) Exemption is available
for the issuance of Consideration to the SRx Shareholders in exchange for their SRx Shares
pursuant to the Plan of Arrangement; |
| (g) | until
the earlier of the Effective Time and termination of this Agreement in accordance with its
terms, subject to applicable Law, make available and cause to be made available to SRx, and
its Representatives, information reasonably requested by SRx for the purposes of preparing,
considering and implementing integration and strategic plans for the acquisition by Parent
of SRx following the Effective Date; and |
| (h) | until
the earlier of the Effective Time and termination of this Agreement in accordance with its
terms, Parent, AcquireCo and CallCo shall, to the extent not precluded by applicable Law,
promptly notify SRx, in writing, and promptly provide copies of any related documentation
received, when Parent has knowledge of: |
| (i) | any
notice or other communication from any Person alleging that the consent (or waiver, permit,
exemption, order, approval, agreement, amendment or confirmation) of such Person (or other
Person) is or may be required in connection with this Agreement or the Arrangement; |
| | |
| (ii) | any
notice or other communication from any Governmental Entity in connection with the Arrangement
or this Agreement; |
| | |
| (iii) | any
matter that has resulted in, or is reasonably likely to result in, a condition set forth
in Section 6.1 or 6.3 not being satisfied; |
| | |
| (iv) | the
failure of Parent, AcquireCo or CallCo to perform any obligations to be performed by it under
this Agreement such that any conditions set forth in Section 6.1 or 6.3 would
not be satisfied; or |
| | |
| (v) | any
filing, actions, suits, claims, investigations or proceedings commenced or, to the knowledge
of Parent, AcquireCo or CallCo, threatened orally or in writing against, or, in respect of
any filing, actions, suits, claims, investigations or proceedings existing as at the date
hereof, if any additional filing, actions, suits, claims, investigations or proceedings are
made or threatened orally or in writing, in each case relating to or involving or otherwise
affecting Parent, its subsidiaries or any of their respective assets that would reasonably
be expected to be material to Parent and its subsidiaries, taken as a whole; and |
| (i) | not
take any action, or refrain from taking any commercially reasonable action, or permit any
action to be taken or not taken, which is inconsistent with this Agreement or which would
reasonably be expected to, individually or in the aggregate, prevent, materially delay or
otherwise materially impede the consummation of the Arrangement. |
5.2. | Covenants
of SRx Relating to the Arrangement Except such actions as are expressly permitted pursuant
to any other term of this Agreement, SRx shall perform all obligations required to be performed
by SRx under this Agreement, co-operate with Parent in connection therewith, and do all such
other acts and things as may be necessary or desirable in order to consummate and make effective,
as soon as reasonably practicable, the Arrangement and the other transactions contemplated
in this Agreement and, without limiting the generality of the foregoing, SRx shall: |
| (a) | apply
for and use all commercially reasonable efforts in co-operation with Parent to obtain all
Key Regulatory Approvals and, in doing so, keep Parent informed in a timely manner as to
the status of the proceedings or other actions related to obtaining the Key Regulatory Approvals,
including (i) providing Parent with copies of all related applications and notifications,
in draft form, in order for Parent to provide its comments thereon, and SRx shall consult
with the Parent on any comments provided in good faith; (ii) promptly furnishing to Parent
copies of notices or other formal communications received by SRx from, or given by SRx to,
any Governmental Entity (including any Securities Authority) with respect to the transactions
contemplated by this Agreement or otherwise; (iii) not making any commitments, providing
any undertakings or assuming any obligations, in each case, that are outside the ordinary
course of business, without the prior written consent of Parent; and (iv) subject to applicable
Law, SRx shall, to the extent reasonably practicable, provide Parent and its counsel with
the opportunity to participate in any substantive meeting, teleconference or other material
communication with any Governmental Entity in respect of any filing, investigation or other
inquiry in connection with the Key Regulatory Approvals; |
| (b) | use
all commercially reasonable efforts to satisfy all conditions precedent in this Agreement
in its power to satisfy and take all steps set forth in the Interim Order and Final Order
applicable to it and comply promptly with all requirements which applicable Law may impose
on SRx with respect to the Arrangement or the other transactions contemplated by this Agreement
and including effecting all necessary registrations, filings and submissions of information
requested by Governmental Entities required to be effected by SRx or its subsidiaries in
connection with the Arrangement and cooperating with Parent in connection with its performance
of its obligations hereunder; |
| (c) | use
all commercially reasonable efforts to defend all lawsuits or other legal, regulatory or
other proceedings against SRx challenging or affecting this Agreement or the consummation
of the transactions contemplated hereby and use all commercially reasonable efforts to have
lifted or rescinded any injunction or restraining order or other order relating to SRx which
may materially impede the ability of the Parties to consummate the Arrangement or the other
transactions contemplated by this Agreement; |
| (d) | use
all commercially reasonable efforts to obtain, and to assist Parent with respect to obtaining,
as applicable, all consents, waivers or approvals required under all Material Contracts,
including waivers required in connection with any change of control provisions contained
in any Material Contracts; |
| (e) | use
its commercially reasonable efforts to ensure that the Section 3(a)(10) Exemption is available
for the issuance of Consideration to the SRx Shareholders in exchange for their SRx Shares
pursuant to the Plan of Arrangement; |
| (f) | until
the earlier of the Effective Time and termination of this Agreement in accordance with its
terms, SRx shall, to the extent not precluded by applicable Law, promptly notify Parent,
in writing, and promptly provide copies of any related documentation received, when SRx has
knowledge of: |
| (i) | any
notice or other communication from any Person alleging that the consent (or waiver, permit,
exemption, order, approval, agreement, amendment or confirmation) of such Person (or other
Person) is or may be required in connection with this Agreement or the Arrangement; |
| | |
| (ii) | any
notice or other communication from any Governmental Entity in connection with the Arrangement
or this Agreement; |
| | |
| (iii) | any
matter that has resulted in, or is reasonably likely to result in, a condition set forth
in Section 6.1 or 6.2 not being satisfied; |
| (iv) | the
failure of SRx to perform any obligations to be performed by it under this Agreement such
that any conditions set forth in Section 6.1 or 6.2 would not be satisfied;
or |
| | |
| (v) | any
filings, actions, suits, claims, investigations or proceedings commenced or, to the knowledge
of SRx, threatened orally or in writing against, or, in respect of any filings, actions,
suits, claims, investigations or proceedings existing as at the date hereof, if any additional
filings, actions, suits, claims, investigations or proceedings are made or threatened orally
or in writing, in each case relating to or involving or otherwise affecting SRx, its subsidiaries
or any of their respective assets that would reasonably be expected to be material to SRx
and its subsidiaries, taken as a whole; and |
| (g) | not
take any action, or refrain from taking any commercially reasonable action, or permit any
action to be taken or not taken, which is inconsistent with this Agreement or which would
reasonably be expected to, individually or in the aggregate, prevent, materially delay or
otherwise materially impede the consummation of the Arrangement. |
5.3. | Covenants
of Parent, AcquireCo and CallCo Relating to the Conduct of Parent Business Parent, AcquireCo
and CallCo jointly and severally covenant and agree, during the period from the date of this
Agreement until the earlier of the Effective Time and the time that this Agreement is terminated
in accordance with its terms, except (i) with the prior written consent of SRx (which consent
may not be unreasonably withheld, conditioned or delayed), (ii) as required or expressly
permitted by this Agreement, or (iii) as required by applicable Law or a Governmental Entity,
Parent shall, and shall cause the other members of the Parent Group to: |
| (i) | conduct
its business in the ordinary course in all material respects and in accordance with applicable
Laws and consistent with past practice, and use commercially reasonable efforts to maintain
and preserve in all material respects its and its subsidiaries’ business organization,
assets (including associated intellectual property), goodwill, employment relationships and
material business relationships with suppliers, distributors, employees, consultants, customers
and other Persons with which Parent or any of its subsidiaries have business relations: |
| (ii) | use
all commercially reasonable efforts to cause its current insurance (or re-insurance) policies
not to be cancelled or terminated or any of the coverage thereunder to lapse before the Outside
Date, unless simultaneously with such termination, cancellation or lapse, replacement policies
underwritten by insurance and re-insurance companies of nationally recognized standing providing
coverage equal to or greater than the coverage under the cancelled, terminated or lapsed
policies for substantially similar premiums are in full force and effect; and |
| | |
| (iii) | promptly
notify SRx orally and in writing upon becoming aware of any circumstance or development that,
to the knowledge of Parent, would, or would reasonably be expected to, constitute or result
in a Parent Material Adverse Effect. |
| (b) | Parent
covenants and agrees that, during the period from the date of this Agreement until the earlier
of the Effective Time and the time that this Agreement is terminated in accordance with its
terms, except (i) as set out in the corresponding subsection of Schedule 5.3(b) of
the Parent Disclosure Letter, (ii) with the prior written consent of SRx (which consent may
not be unreasonably withheld, conditioned or delayed), (iii) as required or expressly permitted
by this Agreement, or (iv) as required by applicable Law or a Governmental Entity, Parent
shall not, and shall cause the other members of the Parent Group not to: |
| (i) | Other
than in connection with the Parent Regulation A Offering and the Spin-Out, issue, deliver,
sell, pledge, lease, dispose of or encumber, or agree or offer to issue, deliver sell, pledge,
lease, dispose of or encumber, any Parent Shares or securities of its subsidiaries, or any
securities convertible, exchangeable or exercisable into or for Parent Shares or securities
of its subsidiaries, or any options, warrants, stock appreciation rights, phantom stock awards
or other rights or equity-based or convertible securities that are linked to the price or
value of the Parent Shares or securities of the Parent subsidiaries (other than pursuant
to the exercise, in accordance with their respective terms, of convertible or exercisable
securities of Parent outstanding on the date hereof) or amend, extend or terminate, or agree
to amend, extend or terminate, any of the terms of, or agreements governing, any of the outstanding
options, warrants or other convertible securities of Parent or its subsidiaries; |
| (ii) | amend
or propose to amend its certificate of incorporation or bylaws or other constating documents
or the terms of any of its securities; reduce its stated capital; or split, consolidate,
subdivide or reclassify, or propose to split, consolidate, subdivide or reclassify, any of
the Parent Shares or undertake or propose to undertake any other capital reorganization or
change in or exchange of Parent Shares, any other of its securities or its share capital; |
| (iii) | declare,
set aside or pay any dividend or other distribution or payment (whether in cash, securities
or property or any combination thereof) in respect of the Parent Shares or any other securities
of Parent, redeem, purchase or otherwise acquire, or offer to redeem, purchase or otherwise
acquire, any outstanding securities of Parent, adopt a plan of liquidation or resolution
providing for the complete or partial liquidation, winding-up, dissolution, merger, consolidation,
restructuring, recapitalization, or sale of all or substantially all of the assets of Parent
or any of its subsidiaries, or enter into any agreement with respect to any of the foregoing; |
| (iv) | except
with respect to inter-company transfers between Parent and its subsidiaries, sell, pledge,
lease, transfer, dispose of or encumber any assets, rights or properties of Parent or any
of its subsidiaries, other than in the ordinary course of business and in connection with
the Spin-Out; |
| (v) | acquire
or agree to acquire (by merger, amalgamation, arrangement, acquisition of shares or assets
or otherwise) any Person or division or business unit thereof, or incorporate or form, or
agree to incorporate or form, any Person or make or agree to make any investment either by
purchase of shares or securities, contributions of capital, property transfer or purchase
of, any property or assets of any other Person; |
| (vi) | make
any material change to the Parent Business or, other than in the ordinary course of business,
enter into enter into any Contract that, if entered into prior to the date hereof, would
be a Material Contract of Parent; |
| (vii) | enter
into or agree to the terms of any joint venture, strategic alliance, partnership, or similar
agreement, arrangement or relationship, other than in the ordinary course of business; |
| (viii) | other
than in respect of trade payables and a refinancing of the existing indebtedness of the Parent
and its subsidiaries, incur, create, assume or otherwise become liable for, any additional
indebtedness for borrowed money exceeding CAD$1,000,000 in the aggregate; |
| (ix) | make
any capital expenditures exceeding CAD$1,000,000 in the aggregate; |
| (x) | other
than in the ordinary course of business, enter into or modify (or make a promise regarding
entering into or modifying) any Employee Plan or any employment, consulting, severance or
similar agreements or arrangements with, or grant any bonuses, salary or fee increases, severance
or termination pay to, any officers, directors, employees or consultants; provided, however,
that it is acknowledged and agreed that Parent will abide by the terms and conditions
of any Employee Plan and any employment agreements and consulting agreements in effect on
the date of this Agreement, including with respect to the payments of any severance amounts
or change of control payments, if applicable; |
| (xi) | enter
into any collective bargaining or similar agreement; |
| (xii) | enter
into or adopt any shareholder rights plan or similar agreement or arrangement; |
| (xiii) | take
any action or fail to take any action which action or failure to act would result in the
material loss, expiration or surrender of, or the loss of any material benefit under, or
reasonably be expected to cause any Governmental Entities to institute proceedings for the
suspension, revocation or limitation of rights under, any Authorizations or Permits; |
| (xiv) | make,
revoke or change any Tax election; amend any previously filed Tax Return except as may be
required by applicable Law; file any Tax Return inconsistent with past practice; settle or
compromise any Liability for Taxes; agree to an extension or waiver of the limitation period
with respect to the assessment, reassessment, or determination of Taxes; enter into any closing
agreement with respect to any Tax; surrender any right to claim a material Tax refund; change
an annual accounting period; adopt or change any accounting method with respect to Taxes;
or consent to any extension or waiver of the limitation period applicable to any Tax claim
or assessment unless, in each case, such action is required by Law; |
| (xv) | other
than in connection with the Spin-Out, make any loan or advance to, or any capital contribution
or investment in, or assume, guarantee or otherwise become liable with respect to the liabilities
or obligations of, any Person (other than any advance payments or other investments made
by the SRx or any of its subsidiaries to a customer in the Ordinary Course based on sales
volume or purchase commitments (typically known as customer investments)) including, for
the avoidance of doubt, any “investment” (within the meaning of subsection 212.3(10)
of the Tax Act) in any corporation that is a non-resident for the purposes of the Tax Act; |
| (xvi) | amend
its accounting policies or adopt new accounting policies, except as may be required by applicable
Law or U.S. GAAP; |
| (xvii) | waive,
release, settle, agree to settle or compromise any material suit, action, claim, arbitration,
mediation, inquiry, proceeding or investigation pending or threatened against Parent or any
of its subsidiaries; |
| (xviii) | take
any action, or fail to take any action, which action or omission would jeopardize the validity
or enforceability of material Intellectual Property of Parent or its subsidiaries; |
| (xix) | engage
in any transaction with any related parties, other than transactions with subsidiaries or
in the ordinary course of business (including with respect to employment arrangements); |
| (xx) | take
any action that would cause a violation by any Person of economic sanctions or export controls; |
| (xxi) | take
any action or fail to take any action that prevents, or materially delays, impedes or interferes
with, or that would reasonably be expected to prevent or materially delay, impede or interfere
with, the ability of the Parties to consummate the transactions contemplated by this Agreement; |
| (xxii) | enter
into any transaction or perform any act that would render, or would reasonably be expected
to render any representations and warranties made by Parent, AcquireCo and CallCo set forth
in this Agreement untrue or inaccurate in any respect; or |
| (xxiii) | announce
an intention, authorize or propose, or enter into or modify any Contract, agreement, commitment
or arrangement, to do any of the matters prohibited by the foregoing provisions of this Section
5.2. |
5.4. | Covenants
of SRx Relating to the Conduct of SRx Business SRx covenants and agrees that, during the
period from the date of this Agreement until the earlier of the Effective Time and the time
that this Agreement is terminated in accordance with its terms, except (i) with the prior
written consent of Parent (which consent may not be unreasonably withheld, conditioned or
delayed), (ii) as required or expressly permitted by this Agreement, or (iii) as required
by applicable Law or a Governmental Entity, SRx shall, and shall cause the other members
of the SRx Group to: |
| (i) | conduct
its business in the ordinary course in all material respects and in accordance with applicable
Laws and consistent with past practice, and use commercially reasonable efforts to maintain
and preserve in all material respects its and its subsidiaries’ business organization,
assets (including associated intellectual property), goodwill, employment relationships and
material business relationships with suppliers, distributors, employees, consultants, customers
and other Persons with which SRx or any of its subsidiaries have business relations; |
| (ii) | use
all commercially reasonable efforts to cause its current insurance (or re-insurance) policies
not to be cancelled or terminated or any of the coverage thereunder to lapse before the Outside
Date, unless simultaneously with such termination, cancellation or lapse, replacement policies
underwritten by insurance and re-insurance companies of nationally recognized standing providing
coverage equal to or greater than the coverage under the cancelled, terminated or lapsed
policies for substantially similar premiums are in full force and effect; and |
| (iii) | promptly
notify Parent orally and in writing upon becoming aware of any circumstance or development
that, to the knowledge of SRx, would, or would reasonably be expected to, constitute or result
in an SRx Material Adverse Effect. |
| (b) | SRx
covenants and agrees that, during the period from the date of this Agreement until the earlier
of the Effective Time and the time that this Agreement is terminated in accordance with its
terms, except (i) as set out in the corresponding subsection of Schedule 5.4(b) of
the SRx Disclosure Letter, (ii)
with the prior written consent of Parent (which consent may not be unreasonably withheld, conditioned or delayed), (iii) as required
or expressly permitted by this Agreement, or (iv) as required by applicable Law or a Governmental Entity, SRx shall not, and shall cause
the other members of the SRx Group not to: |
| (i) | issue,
deliver, sell, pledge, lease, dispose of or encumber, or agree or offer to issue, deliver
sell, pledge, lease, dispose of or encumber, any SRx Shares or securities of its subsidiaries,
or any securities convertible, exchangeable or exercisable into or for SRx Shares or securities
of its subsidiaries, or any options, warrants, stock appreciation rights, phantom stock awards
or other rights or equity-based or convertible securities that are linked to the price or
value of the SRx Shares or securities of the SRx subsidiaries (other than pursuant to the
exercise, in accordance with their respective terms, of convertible or exercisable securities
of SRx outstanding on the date hereof) or amend, extend or terminate, or agree to amend,
extend or terminate, any of the terms of, or agreements governing, any of the outstanding
options, warrants or other convertible securities of SRx or its subsidiaries; |
| (ii) | amend
or propose to amend its articles of incorporation or bylaws or other constating documents
or the terms of any of its securities; reduce its stated capital; or split, consolidate,
subdivide or reclassify, or propose to split, consolidate, subdivide or reclassify, any of
the SRx Shares or undertake or propose to undertake any other capital reorganization or change
in or exchange of SRx Shares, any other of its securities or its share capital; |
| (iii) | declare,
set aside or pay any dividend or other distribution or payment (whether in cash, securities
or property or any combination thereof) in respect of the SRx Shares or any other securities
of SRx, redeem, purchase or otherwise acquire, or offer to redeem, purchase or otherwise
acquire, any outstanding securities of SRx, adopt a plan of liquidation or resolution providing
for the complete or partial liquidation, winding-up, dissolution, merger, consolidation,
restructuring, recapitalization, or sale of all or substantially all of the assets of SRx
or any of its subsidiaries, or enter into any agreement with respect to any of the foregoing; |
| (iv) | except
with respect to inter-company transfers between SRx and its subsidiaries, sell, pledge, lease,
transfer, dispose of or encumber any assets, rights or properties of SRx or any of its subsidiaries,
other than in the ordinary course of business; |
| (v) | acquire
or agree to acquire (by merger, amalgamation, arrangement, acquisition of shares or assets
or otherwise) any Person or division or business unit thereof, or agree to incorporate or
form, any Person or make or agree to make any investment either by purchase of shares or
securities, contributions of capital, property transfer or purchase of, any property or assets
of any other Person; |
| (vi) | make
any material change to the SRx Business or, other than in the ordinary course of business,
enter into enter into any Contract that, if entered into prior to the date hereof, would
be a Material Contract of SRx; |
| (vii) | enter
into or agree to the terms of any joint venture, strategic alliance, partnership, or similar
agreement, arrangement or relationship, other than in the ordinary course of business; |
| (viii) | other
than in respect of trade payables, incur, create, assume or otherwise become liable for,
any indebtedness for borrowed money exceeding CAD$1,000,000 in the aggregate; |
| (ix) | make
any capital expenditures exceeding CAD$1,000,000 in the aggregate; |
| (x) | other
than in the ordinary course of business, enter into or modify (or make a promise regarding
entering into or modifying) any Employee Plan or any employment, consulting, severance or
similar agreements or arrangements with, or grant any bonuses, salary or fee increases, severance
or termination pay to, any officers, directors, employees or consultants; provided, however,
that it is acknowledged and agreed that SRx will abide by the terms and conditions of
any Employee Plan and any employment agreements and consulting agreements in effect on the
date of this Agreement, including with respect to the payments of any severance amounts or
change of control payments, if applicable; |
| (xi) | enter
into any collective bargaining or similar agreement; |
| (xii) | enter
into or adopt any shareholder rights plan or similar agreement or arrangement; |
| (xiii) | take
any action or fail to take any action which action or failure to act would result in the
material loss, expiration or surrender of, or the loss of any material benefit under, or
reasonably be expected to cause any Governmental Entities to institute proceedings for the
suspension, revocation or limitation of rights under, any Authorizations or Permits; |
| (xiv) | make,
revoke or change any Tax election; amend any previously filed Tax Return except as may be
required by applicable Law; file any Tax Return inconsistent with past practice; settle or
compromise any Liability for Taxes; agree to an extension or waiver of the limitation period
with respect to the assessment, reassessment, or determination of Taxes; enter into any closing
agreement with respect to any Tax; surrender any right to claim a material Tax refund; change
an annual accounting period; adopt or change any accounting method with respect to Taxes;
or consent to any extension or waiver of the limitation period applicable to any Tax claim
or assessment unless, in each case, such action is required by Law; |
| (xv) | make
any loan or advance to, or any capital contribution or investment in, or assume, guarantee
or otherwise become liable with respect to the liabilities or obligations of, any Person
(other than any advance payments or other investments made by Parent or any of its subsidiaries
to a customer in the Ordinary Course based on sales volume or purchase commitments (typically
known as customer investments)); |
| (xvi) | amend
its accounting policies or adopt new accounting policies, except as may be required by applicable
Law or IFRS; |
| (xvii) | waive,
release, settle, agree to settle or compromise any material suit, action, claim, arbitration,
mediation, inquiry, proceeding or investigation pending or threatened against SRx or any
of its subsidiaries; |
| (xviii) | take
any action, or fail to take any action, which action or omission would jeopardize the validity
or enforceability of material Intellectual Property of SRx or its subsidiaries; |
| (xix) | engage
in any transaction with any related parties, other than transactions with subsidiaries or
in the ordinary course of business (including with respect to employment arrangements); |
| (xx) | take
any action that would cause a violation by any Person of economic sanctions or export controls; |
| (xxi) | take
any action or fail to take any action that prevents, or materially delays, impedes or interferes
with, or that would reasonably be expected to prevent or materially delay, impede or interfere
with, the ability of the Parties to consummate the transactions contemplated by this Agreement; |
| (xxii) | enter
into any transaction or perform any act that would render, or would reasonably be expected
to render any representations and warranties made by SRx set forth in this Agreement untrue
or inaccurate in any respect; or |
| (xxiii) | announce
an intention, authorize or propose, or enter into or modify any Contract, agreement, commitment
or arrangement, to do any of the matters prohibited by the foregoing provisions of this Section
5.4. |
5.5. | Covenant
of Parent and SRx Relating to D&O Tail Policy Prior to the Effective Time, Parent
may purchase a prepaid “tail” policy (the “Parent Tail Policy”)
with respect to directors’ and officers’ liability insurance coverage for the
benefit of those Persons who are currently covered by any comparable insurance policies of
Parent as of the date hereof. If Parent or any of its successors or assigns (i) shall merge
or consolidate with or merge into any other corporation or entity and shall not be the surviving
or continuing corporation or entity of such consolidation or merger or (ii) shall transfer
all or substantially all of their respective properties and assets as an entity in one or
a series of related transactions to any Person, then in each such case, proper provisions
shall be made so that the successors or assigns of Parent shall assume all of the obligations
set forth in this Section 5.5(a). |
| (b) | Prior
to the Effective Time, SRx may purchase a prepaid “tail” policy (the “SRx
Tail Policy”) with respect to directors’ and officers’ liability insurance
coverage for the benefit of those Persons who are currently covered by any comparable insurance
policies of SRx as of the date hereof. If SRx or any of its successors or assigns (i) shall
merge or consolidate with or merge into any other corporation or entity and shall not be
the surviving or continuing corporation or entity of such consolidation or merger or (ii)
shall transfer all or substantially all of their respective properties and assets as an entity
in one or a series of related transactions to any Person, then in each such case, proper
provisions shall be made so that the successors or assigns of SRx shall assume all of the
obligations set forth in this Section 5.5(b). |
5.6. | Spin-Out
Parent shall take the following actions prior to the Effective Time: |
| (a) | cause
eight percent (8%) of the issued and outstanding capital stock of Parent’s wholly-owned
subsidiary, Halo, Purely For Pets, Inc., a Delaware corporation, to be contributed to a new
wholly- owned special purpose subsidiary of Parent (the “Spin-Out SPV”),
which Spin-Out SPV shall be established for the sole purpose of holding and transacting the
capital stock of Halo, taxed as a U.S. corporation, governed by Parent’s Board of Directors
prior to the Effective Time and by Michael Young following the Effective Time, and have such
other rights and restrictions mutually acceptable to the Parties, acting reasonably; and |
| (b) | immediately
prior to the Effective Time on the Effective Date (the “Spin-Out”):(i)
cause the equity interests in the Spin-Out SPV to be distributed as a dividend to the Parent
Shareholders of record on the Effective Date and immediately prior to the Effective Time;
and (ii) enter into a support agreement with the Spin-Out SPV on terms and conditions mutually
agreed to by the parties, acting reasonably, pursuant to which Parent shall pay, or reimburse
Spin-Out SPV for, all costs and expenses incurred by Spin-Out SPV or Michael Young, in connection
with the on-going existence, administration and maintenance of Spin-Out SPV, including, without,
limitation, all taxes payable by Spin-Out SPV and all expenses related to taxes, tax filings,
accounting and legal expenses. |
ARTICLE
VI.
CONDITIONS
6.1. | Mutual
Conditions Precedent The obligations of the Parties to complete the Arrangement are subject
to the fulfillment of each of the following conditions precedent on or before the Effective
Time or the waiver by each of SRx and Parent to the extent permitted by applicable Law and
without prejudice to their right to rely on the fulfilment of any other of such conditions: |
| (a) | the
Interim Order shall have been granted on terms consistent with this Agreement and the Interim
Order shall not have been set aside or modified in a manner unacceptable to either Party,
acting reasonably, on appeal or otherwise; |
| (b) | the
Final Order shall have been granted on terms consistent with this Agreement and the Final
Order shall not have been set aside or modified in a manner unacceptable to either Party,
acting reasonably, on appeal or otherwise; |
| (c) | the
SRx Arrangement Resolution shall have been passed by the SRx Shareholders in accordance with
the Interim Order and applicable Laws; |
| (d) | the
Parent Shareholder Approval Matters shall have been approved by the Parent Shareholders in
accordance with applicable Laws; |
| (e) | there
shall have been delivered letters of resignation and mutual releases from such directors
and officers of SRx and Parent as mutually agreed to, including as needed to implement the
Parent Board Matters; |
| (f) | the
New Employment Agreements shall have been duly executed by each of the parties thereto; |
| (g) | there
shall have been no action taken under any applicable Law or by any Governmental Entity of
competent jurisdiction which makes it illegal or otherwise directly or indirectly restrains,
enjoins or prohibits the completion of the Arrangement; |
| (h) | the
Key Regulatory Approvals shall have been obtained on terms acceptable to Parent and SRx,
each acting reasonably, and each such Key Regulatory Approval is in full force and effect
and has not been modified; |
| (i) | holders
of no more than five percent (5%) of the SRx Shares shall have exercised, and at the date
of the SRx Meeting, have not withdrawn, Dissent Rights; |
| (j) | the
Parent Certificate of Designation shall have been filed with the Secretary of State of the
State of Delaware, shall constitute a valid Parent Certificate of Designation under applicable
Laws and shall have not been rescinded or amended in any way; and |
| (k) | (i)
the existing Parent Shares shall have been continually listed on NYSE American as of and
from the date of this Agreement through the Effective Time and (ii) (a) the Parent Shares
issuable to SRx Shareholders pursuant to the Arrangement (including pursuant to the exchange
of the Exchangeable Shares) shall have been approved for listing on the NYSE American, subject
to official notice of issuance, (b) immediately following the Effective Time, Parent shall
satisfy any applicable continuing listing requirements of the NYSE American and (c) Parent
shall not have received any notice of non-compliance with such listing requirements that
has not been cured, or that would not be cured at or immediately following the Effective
Time. |
6.2. | Additional
Conditions Precedent in Favor of Parent, AcquireCo and CallCo The obligation of Parent,
AcquireCo and CallCo to complete the Arrangement is subject to the fulfillment of each of
the following additional conditions precedent on or before the Effective Time (each of which
is for the exclusive benefit of Parent, AcquireCo and CallCo and may be waived by Parent): |
| (a) | all
covenants of SRx under this Agreement to be performed on or before the Effective Time shall
have been duly performed by SRx in all material respects and Parent shall have received a
certificate of SRx addressed to Parent and dated the Effective Date, signed on behalf of
SRx by two senior executive officers of SRx (on SRx’s behalf and without personal liability),
confirming the same as of the Effective Time; |
| (b) | the
representations and warranties of SRx set forth in this Agreement shall have been true and
correct in all respects as of the date of this Agreement, and shall be true and correct in
all respects as of the Effective Time as if made as of the Effective Time (except, in each
case, 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 such
representations and warranties to be so true and correct would not have, individually or
in the aggregate, an SRx Material Adverse Effect (it being understood that, for purposes
of determining the accuracy of such representations and warranties, all materiality, SRx
Material Adverse Effect and similar qualifiers set forth in such representations and warranties
shall be disregarded), and Parent shall have received a certificate of SRx addressed to Parent
and dated the Effective Date, signed on behalf of SRx by two senior executive officers of
SRx (on SRx’s behalf and without personal liability), confirming the same as at the
Effective Time; |
| (c) | there
shall not have occurred an SRx Material Adverse Effect on or prior to the date hereof which
is continuing, nor shall there have occurred an SRx Material Adverse Effect following the
date hereof, and Parent shall have received a certificate signed on behalf of SRx by two
senior executive officers of SRx (on SRx’s behalf and without personal liability) to
such effect; |
| (d) | all
covenants of the SRx Supporting Shareholders under the SRx Voting Agreement to be performed
on or before the Effective Time shall have been duly performed by the parties thereto (other
than Parent) in all respects; |
| (e) | the
Lock-Up Agreements shall have been duly executed by each of the directors, executive officers
and shareholders of SRx who will fall within the definition of “Locked-Up Persons”
at the Effective Time; and |
| (f) | Parent
shall have received a certificate of SRx, addressed to Parent and dated as of the Effective
Date, signed on behalf of SRx by two senior executive officers of SRx (on SRx’s behalf
and without personal liability), certifying as to (i) the SRx Net Debt, (ii) the SRx U.S.
Dollar Net Debt as defined in the Plan of Arrangement, and (iii) the number of issued and
outstanding securities of SRx immediately prior to the Effective Time. |
The
foregoing conditions will be for the sole benefit of Parent, AcquireCo and CallCo and may be waived by the Parent in whole or in part
at any time in its sole discretion.
6.3. | Additional
Conditions Precedent in Favor of SRx The obligation of SRx to complete the Arrangement
is subject to the fulfillment of each of the following additional conditions precedent on
or before the Effective Time (each of which is for the exclusive benefit of SRx and may be
waived by SRx): |
| (a) | all
covenants of Parent, AcquireCo and CallCo under this Agreement to be performed on or before
the Effective Time shall have been duly performed by Parent, AcquireCo and CallCo in all
material respects and SRx shall have received a certificate of Parent, AcquireCo and CallCo
addressed to SRx and dated the Effective Date, signed on behalf of Parent, AcquireCo and
CallCo by two senior executive officers of such Parties (on Parent’s, AcquireCo’s
and CallCo’s behalf and without personal liability), confirming the same as of the
Effective Time; |
| (b) | the
representations and warranties of Parent, AcquireCo and CallCo set forth in this Agreement
shall have been true and correct in all respects as of the date of this Agreement, and shall
be true and correct in all respects as of the Effective Time as if made as of the Effective
Time (except, in each case, 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 such representations and warranties to be so true and correct would not have,
individually or in the aggregate, a Parent Material Adverse Effect (it being understood that
for purposes of determining the accuracy of such representations and warranties, all materiality,
Parent Material Adverse Effect and similar qualifiers set forth in such representations and
warranties shall be disregarded), and SRx shall have received a certificate of Parent, AcquireCo
and CallCo addressed to SRx and dated the Effective Date, signed on behalf of Parent, AcquireCo
and CallCo by two senior executive officers of Parent, AcquireCo and CallCo (on Parent’s,
AcquireCo’s and CallCo’s behalf and without personal liability), confirming the
same as at the Effective Time; |
| (c) | there
shall not have occurred a Parent Material Adverse Effect on or prior to the date hereof which
is continuing, nor shall there have occurred a Parent Material Adverse Effect following the
date hereof, and SRx shall have received a certificate signed on behalf of Parent by two
senior executive officers of Parent (on Parent’s behalf and without personal liability)
to such effect; |
| (d) | all
covenants of the Parent Supporting Shareholders under the Parent Voting Agreement to be performed
on or before the Effective Time shall have been duly performed by the parties thereto (other
than SRx) in all respects; |
| (e) | the
Lock-Up Agreements shall have been duly executed by each of the directors, executive officers
and shareholders of SRx who will fall within the definition of “Locked-Up Persons”
at the Effective Time; |
| (f) | SRx
shall have received a certificate of Parent, addressed to SRx and dated as the Effective
Date, signed on behalf of Parent by two senior executive officers of Parent (on Parent’s
behalf and without personal liability), certifying as to (i) 30-Day VWAP as defined in the
Plan of Arrangement and (ii) the number of issued and outstanding securities of Parent immediately
prior to the Effective Time; |
| (g) | the
Special Voting Share shall have been created and issued at or prior to the Effective Time; |
| (h) | the
Support Agreement and the Voting Trust Agreement shall have been duly executed by the parties
thereto at or prior to the Effective Time and shall remain in effect; |
| (i) | the
distribution of the Parent Shares and the Exchangeable Shares pursuant to the Arrangement
shall be exempt from the prospectus and registration requirements of applicable Law by virtue
of applicable exemptions under applicable law, and the first trade of the Parent Shares shall
be exempt from the prospectus and registration requirements of applicable Law by virtue of
applicable exemptions under applicable Law (provided that all conditions of the applicable
prospectus or registration exemption relied on by the holder are satisfied); and |
| (j) | Parent
and AcquireCo shall have complied with its obligations under Section 2.9 and the Depositary
shall have confirmed receipt of the aggregate Consideration contemplated thereby. |
The
foregoing conditions will be for the sole benefit of SRx and may be waived by SRx in whole or in part at any time in its sole discretion.
6.4. | Notice
and Cure Provisions Each Party will give prompt notice to the other 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. |
| (b) | Notice
provided under this Section 6.4 will not affect the representations, warranties, covenants,
agreements or obligations of the Parties (or remedies with respect thereto) or the conditions
to the obligations of the Parties under this Agreement. |
| (c) | Parent
may not exercise its rights to terminate this Agreement pursuant to Section 8.2(a)(iii)(C),
and SRx may not exercise its right to terminate this Agreement pursuant to Section 8.2(a)(iv)(C),
unless the Party intending to rely thereon has delivered a written notice to the other Party
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
non-fulfilment or the applicable condition or termination right, as the case may be. If any
such notice is delivered, provided that a Party is proceeding diligently to cure such matter
and such matter is capable of being cured prior to the Outside Date, no Party may terminate
this Agreement until the expiration of a period of ten (10) Business Days from such notice,
and then only if such matter has not been cured by such date. If such notice has been delivered
less than ten (10) Business Days prior to the making of the application for the Final Order,
such application and such filing shall be postponed until the expiry of such period, provided
that such extension does not result in a filing of the Final Order after the Outside Date.
For greater certainty, in the event that such matter is cured within the time period referred
to herein without having a Parent Material Adverse Effect or an SRx Material Adverse Effect,
as the case may be, this Agreement may not be terminated as a result of the cured breach. |
6.5. | Satisfaction
of Conditions Other than as set forth in this Article VI, the conditions precedent
set out in Section 6.1, Section 6.2 and Section 6.3 shall be conclusively
deemed to have been satisfied, waived or released when the Certificate of Arrangement is
issued by the Director following filing of the Articles of Arrangement with the consent of
the Parties in accordance with the terms of this Agreement. |
ARTICLE
VII.
ADDITIONAL
COVENANTS
7.1. | Covenant
Regarding Non-Solicitation Each Party shall, and shall direct and cause its Representatives
to immediately, cease and cause to be terminated any solicitation, encouragement, activity,
discussion or negotiation with any parties that may be ongoing with respect to an Acquisition
Proposal involving such Party whether or not initiated by such Party, discontinue access
to any parties (other than a Party to this Agreement and its Representatives) to any dataroom
that contains information regarding the SRx Group or the Parent Group (as applicable), and
to the extent such Party entered into a confidentiality agreement with any such parties,
such Party shall request the return of information regarding the SRx Group or the Parent
Group (as applicable) previously provided to such parties and shall request the destruction
of all materials including or incorporating any confidential information regarding the SRx
Group or the Parent Group (as applicable) pursuant to any such confidentiality agreement.
Each Party represents and warrants that it has not, and agrees not to, release or permit
the release of any Person from, or waive or forbear in the enforcement of, any confidentiality
agreement or other similar agreement relating to a potential Acquisition Proposal involving
such Party to which such third party is a party. Each Party further represents and warrants
that it has not, and agrees not to, release or permit the release of any Person from, or
waive or forbear in the enforcement of, any standstill or similar agreement or obligation
to which such third party is a party or by which such third party is bound. |
7.2. | Covenant
Regarding Acquisition Proposals Each Party agrees that it shall not, and shall cause its
Representatives (including the SRx Board or the Parent Board, as applicable) not to, directly
or indirectly: |
| (i) | make,
solicit, initiate, entertain, knowingly encourage, promote or facilitate, (including by way
of furnishing non-public information, permitting any visit to its facilities or properties
or entering into any form of agreement, arrangement or understanding) any inquiries or offers
or the making of any proposals regarding or that would reasonably be expected to constitute
an Acquisition Proposal involving such Party or that would be reasonably be expected to lead
to an actual or potential Acquisition Proposal involving such Party; |
| (ii) | participate,
directly or indirectly, in any discussions or negotiations regarding, or furnish to any Person
any non-public information or otherwise co-operate with, respond to, assist or participate
in any Acquisition Proposal involving such Party or potential Acquisition Proposal involving
such Party or participate in any discussions or negotiations regarding an actual or potential
Acquisition Proposal involving such Party, or furnish any information or access to any Person
(other than a Party to this Agreement and its Representatives) with respect to any inquiries,
proposals or offers that constitute, or that would reasonably be expected to lead to, an
actual or potential Acquisition Proposal involving such Party; |
| (iii) | remain
neutral with respect to, or agree to, approve or recommend any, Acquisition Proposal involving
such Party or potential Acquisition Proposal involving such Party (it being understood that
publicly taking no position or a neutral position with respect to an Acquisition Proposal
involving such Party for a period of no more than five (5) Business Days following formal
announcement of such Acquisition Proposal shall not be considered to be a violation of this
Section 7.2(a)(iii)); |
| (iv) | enter
into any agreement, arrangement or understanding related to any Acquisition Proposal involving
such Party (other than, in the case of the Parent, an Acceptable Confidentiality Agreement)
or requiring it to abandon, terminate or fail to consummate the Arrangement or the transactions
contemplated by this Agreement or providing for the payment of any break, termination or
other fees or expenses to any Person in the event that the Arrangement or the transactions
contemplated by this Agreement are completed or in the event that it completes any other
transaction with the other Party or Parties or with an affiliate of the other Party or Parties
that is agreed to prior to any termination of this Agreement (any such agreement, arrangement
or understanding, an “Alternative Acquisition Agreement”); or |
| (v) | subject
to Article VII, make a Change in Recommendation. |
| (b) | SRx
shall promptly (and in any event within 24 hours) notify Parent, at first orally and then
in writing, of any proposals, offers or inquiries relating to or constituting or that would
reasonably be expected to lead to an SRx Acquisition Proposal or any request for non-public
information relating to SRx or any of its subsidiaries. Such notice shall include a description
of the terms and conditions of any proposal, inquiry or offer, the identity of the Person
making such proposal, inquiry or offer, a copy of the proposal, offer or inquiry (if written),
and provide such other details of the proposal, inquiry or offer as Parent may reasonably
request. SRx shall keep Parent fully informed on a prompt basis of the status, including
any change to the material terms, of any such proposal, inquiry or offer, provided that,
for greater certainty, SRx shall at all times comply with its obligations under Section
7.2(a) |
| (c) | Parent,
AcquireCo and CallCo shall promptly (and in any event within 24 hours) notify SRx, at first
orally and then in writing, of any proposals, offers or inquiries relating to or constituting
or that would reasonably be expected to lead to a Parent Acquisition Proposal or any request
for non-public information relating to Parent or any of its subsidiaries. Such notice shall
include a description of the terms and conditions of any proposal, inquiry or offer, the
identity of the Person making such proposal, inquiry or offer, a copy of the proposal, offer
or inquiry (if written), and provide such other details of the proposal, inquiry or offer
as SRx may reasonably request. Parent shall keep SRx fully informed on a prompt basis of
the status, including any change to the material terms, of any such proposal, inquiry or
offer. |
| (d) | SRx
shall ensure that its officers, directors and any financial advisors or other advisors or
Representatives retained by it are aware of the provisions of Section 7.1 and this
Section 7.2, and SRx shall be responsible for any breach of Section 7.1 or
this Section 7.2 by such officers, directors, financial advisors or other advisors
or Representatives. Each of Parent, AcquireCo and CallCo shall ensure that its officers,
directors and any financial advisors or other advisors or Representatives retained by it
are aware of the provisions of Section 7.1 and this Section 7.2, and each of
Parent and AcquireCo shall be responsible for any breach of Section 7.1 or this Section
7.2 by such officers, directors, financial advisors or other advisors or Representatives. |
| (e) | Nothing
contained in Section 7.1 or Section 7.2 shall prohibit Parent from taking and
disclosing a position contemplated by Rule 14e-2(a), Rule 14d-9 or Item 1012(a) of Regulation
M-A promulgated under the U.S. Exchange Act. |
7.3. | Responding
to a Parent Acquisition Proposal Notwithstanding Section 7.1 and Section 7.2,
if Parent receives a bona fide written Parent Acquisition Proposal from a third party prior
to obtaining the Parent Shareholder Approval, Parent may engage in or participate in discussions
or negotiations with such Person regarding such Parent Acquisition Proposal, and may provide
copies of, access to or disclosure of confidential information, properties, facilities, books
or records of itself and its subsidiaries, if and only if: |
| (i) | the
Parent Board first determines in good faith, based on the advice of its financial advisors
and its outside counsel, that such Parent Acquisition Proposal is bona fide and constitutes
or would reasonably be expected to constitute a Superior Proposal, and, based on the advice
of its outside counsel, that the failure to engage in such discussions or negotiations would
be inconsistent with its fiduciary duties; |
| (ii) | such
Person was not restricted from making such Parent Acquisition Proposal pursuant to an existing
standstill confidentiality, non-disclosure, business purpose, use or similar restriction
or agreement; |
| (iii) | it
has been, and continues to be, in compliance with its obligations under Section 7.1
through Section 7.4, and such Parent Acquisition Proposal was unsolicited and did
not otherwise result from a breach of Section 7.1 or Section 7.2; |
| (iv) | prior
to providing any such copies, access, or disclosure, it enters into a confidentiality and
standstill agreement with such Person having terms at least as favorable to Parent as the
Confidentiality Agreement (an “Acceptable Confidentiality Agreement”);
and |
| (v) | it
promptly provides SRx with: |
| (A) | prior
written notice stating its intention to participate in such discussions or negotiations and
to provide such copies, access or disclosure, together with a copy of written advice from
its outside counsel that the failure to engage in such discussions or negotiations would
be inconsistent with the fiduciary duties of the Parent Board; and |
| (B) | prior
to providing any such copies, access or disclosure, a true, complete and final executed copy
of the Acceptable Confidentiality Agreement referred to in Section 7.3(a)(iv), |
provided,
that Parent shall not, and shall not allow its Representatives to, disclose any non-public information with respect to it or any of its
subsidiaries to such Person if such non-public information has not been previously provided to, or is not concurrently provided to, SRx.
7.4. | Superior
Proposals; Right to Match Notwithstanding Section 7.1 and Section 7.2, at
any time prior to obtaining the Parent Shareholder Approval, the Parent Board may, if the
Parent Board determines in good faith, based on the advice of its outside counsel and financial
advisors, that the Superior Proposal remains a Superior Proposal (after taking into account
all adjustments to the terms of this Agreement that may be offered by SRx pursuant to this
Section 7.4), (A) make a Parent Change in Recommendation in response to a Superior
Proposal and (B) cause Parent to terminate this Agreement in accordance with Section 8.2(a)(iii)(A),
and concurrently enter into a binding Alternative Acquisition Agreement with respect to any
such Superior Proposal, provided that: |
| (i) | the
Parent Board may not make a Parent Change in Recommendation or terminate this Agreement pursuant
to Section 8.2(a)(iii)(A), unless: |
| (A) | such
Person was not restricted from making such Parent Acquisition Proposal pursuant to an existing
standstill confidentiality, non-disclosure, business purpose, use or similar restriction
or agreement; |
| (B) | Parent
has been, and continues to be, in compliance with its obligations under Section 7.1
through Section 7.4, and such Parent Acquisition Proposal was unsolicited and did
not otherwise result from a breach of Section 7.1 or Section 7.2; |
| (C) | Parent
has delivered to SRx a written notice of the determination of Parent Board that such Parent
Acquisition Proposal constitutes a Superior Proposal and of the intention of the Parent Board
to make a Parent Change in Recommendation, terminate this Agreement pursuant to Section
8.2(a)(iii)(A), and enter into a definitive Alternative Acquisition Agreement with respect
to such Superior Proposal, together with (1) a written notice from the Parent Board regarding
the value and financial terms that the Parent Board, in consultation with its financial advisors,
has determined should be ascribed to any non-cash consideration offered under such Superior
Proposal and (2) a copy of the proposed definitive Alternative Acquisition Agreement and
any other relevant transaction documents (the “Superior Proposal Notice”); |
| (D) | at
least five (5) Business Days (the “Superior Proposal Matching Period”)
have elapsed from the date on which SRx received the Superior Proposal Notice; |
| (E) | during
any Superior Proposal Matching Period, SRx has had the opportunity (but not the obligation),
in accordance with Section 7.4(b), to offer to amend this Agreement and the Arrangement
in order for such Parent Acquisition Proposal to cease to be a Superior Proposal; and |
| (F) | if
SRx has offered to amend this Agreement and the Arrangement under Section 7.4(b),
the Parent Board has determined in good faith, based on the advice of its outside legal counsel
and financial advisers, that such Parent Acquisition Proposal continues to constitute a Superior
Proposal compared to the terms of the Arrangement as proposed to be amended under Section
7.4(b). |
| (b) | During
any Superior Proposal Matching Period, or such longer period as Parent may approve in writing
for such purpose: (i) the Parent Board shall review any offer made by SRx under Section
7.4(a)(i)(F) to amend the terms of this Agreement and the Arrangement in good faith in
order to determine whether such proposal would, upon acceptance, result in the Parent Acquisition
Proposal previously constituting a Superior Proposal ceasing to be a Superior Proposal; and
(ii) Parent shall negotiate in good faith with SRx to make such amendments to the terms of
this Agreement and the Arrangement as would enable SRx to proceed with the transactions contemplated
by this Agreement on such amended terms. If the Parent Board determines that such Parent
Acquisition Proposal would cease to be a Superior Proposal, Parent shall promptly so advise
SRx, and the Parties shall amend this Agreement to reflect such offer made by SRx, and shall
take and cause to be taken all such actions as are necessary to give effect to the foregoing. |
| (c) | Each
successive amendment to any Parent Acquisition Proposal that results in an increase in, or
modification of, the consideration (or value of such consideration) to be received by the
Parent Shareholders or other material terms or conditions thereof shall constitute a new
Parent Acquisition Proposal for the purposes of this Section 7.4, which shall require
a new Superior Proposal Notice to SRx. SRx shall be afforded a new five (5) Business Day
Superior Proposal Matching Period from the date on which SRx receives the Superior Proposal
Notice with respect to such amended Parent Acquisition Proposal from Parent. |
| (d) | The
Parent Board shall promptly reaffirm the Parent Board Recommendation by press release after
any Parent Acquisition Proposal which is not determined to be a Superior Proposal is publicly
announced or the Parent Board determines that a proposed amendment to the terms of this Agreement
as contemplated under Section 7.4(b) would result in a Parent Acquisition Proposal
no longer being a Superior Proposal. Parent shall provide SRx and its outside legal counsel
with a reasonable opportunity to review the form and content of any such press release and
shall make all reasonable amendments to such press release as requested by SRx and its outside
legal counsel. |
| (e) | If
Parent provides a Superior Proposal Notice to SRx after a date that is less than ten (10)
Business Days before the Parent Meeting, Parent shall either proceed with or shall postpone
such meeting, as directed by SRx acting reasonably, to a date that is not more than ten (10)
Business Days after the scheduled date of that meeting but before the Outside Date. |
7.5. | Access
to Information; Confidentiality; Transition From the date hereof until the earlier of
the Effective Time and the termination of this Agreement pursuant to its terms, subject to
compliance with applicable Law and the terms of any existing Contracts, each Party shall,
and shall cause its Representatives to, afford to the other Party and its Representatives
reasonable access during normal business hours upon reasonable notice, to the properties,
information and records relating to, and the personnel of, such Party, including the related
facilities, books, contracts, financial statements, forecasts, financial projections (to
the extent permitted by confidentiality agreements in force on the date hereof), studies,
records, operating Permits, and any other documentation (whether in writing or stored in
computerized, electronic, disk, tape, microfilm or any other form); provided, however,
that each Party shall provide the other Party with at least one (1) Business Day prior
written notice of any requested on site access to any real property of the other Party. Each
of Parent and SRx shall, and shall cause their subsidiaries and their respective Representatives
to, as the case may be, work cooperatively and in good faith to ensure an orderly transition
following the Effective Time, including with respect to transitional planning, transitional
services, and the retention of personnel (and any related arrangements thereto). From the
date hereof until the earlier of the Effective Time and the termination of this Agreement
pursuant to its terms, each Party will maintain the access of the other Party and its Representatives
to the information contained as at the date of this Agreement in any dataroom that contains
information regarding the such Party to which the other Party and its Representatives have
access as at the date of this Agreement. |
7.6. | Other
Deliveries Within ten (10) Business Days after the date hereof, (i) SRx shall deliver
to Parent all of the SRx Voting Agreements, and (ii) Parent shall deliver to SRx all of the
Parent Voting Agreements (provided, however, that the SRx Voting Agreement with Adesh Vora
has been entered into prior to or contemporaneously with the execution of this Agreement). |
|
(b) |
As promptly as practicable after the execution and deliver
of this Agreement, and in any event prior to the Effective Time, (i) SRx shall deliver to Parent Lock-Up Agreements duly executed by
each of the directors, executive officers and shareholders of SRx who will fall within the definition of “Locked-Up Persons”
at the Effective Time, and (ii) Parent shall deliver to SRx Lock-Up Agreements duly executed by each of the directors, executive officers
and shareholders of Parent who will fall within the definition of “Locked-Up Persons” at the Effective Time. |
ARTICLE
VIII.
TERM,
TERMINATION, AMENDMENT AND WAIVER
8.1. | Term
This Agreement shall be effective from the date hereof until the earlier of the Effective Time and the termination of this Agreement
in accordance with its terms. |
8.2. | Termination
This Agreement may be terminated: |
| (i) | at
any time prior to the Effective Time by mutual written agreement of SRx and Parent; |
| (ii) | by
either SRx or Parent, 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 8.2(a)(ii)(A) shall not be available
to any Party whose failure to fulfill any of its obligations or breach any of its covenants,
representations and warranties under this Agreement has been the cause of, or resulted in,
the failure of the Effective Time to occur on or before the Outside Date; provided however,
that if completion of the Arrangement is delayed by (i) an injunction or order made by a
Governmental Entity of competent jurisdiction, or (ii) Parent or SRx not having obtained
any Key Regulatory Approval or the Interim Order or the Final Order which is necessary to
permit the completion of the Arrangement such that the conditions set forth in Section
6.1(a), 6.1(b) or 6.1(h) shall not have been satisfied or waived then,
provided that such injunction or order is being contested or appealed or such regulatory
waiver, consent or approval or the Interim Order or the Final Order is being actively sought,
as applicable, the Outside Date shall automatically be extended for an additional period
of thirty (30) days; |
| (B) | after
the date of this Agreement, any Governmental Entity of competent jurisdiction shall have
issued an order, decree or ruling or there shall be enacted or made any applicable Law that
makes consummation of the Arrangement illegal or otherwise prohibited or otherwise restrains,
enjoins or prohibits SRx or Parent, AcquireCo or CallCo from consummating the Arrangement
(unless such order, decree, ruling or applicable Law has been withdrawn, reversed or otherwise
made inapplicable) and such order, decree, ruling or applicable Law or enjoinment shall have
become final and non-appealable; |
| (C) | the
SRx Securityholder Approval shall not have been obtained at the SRx Meeting (at which a vote
was held) in accordance with applicable Law and the Interim Order; |
| (D) | the
Parent Shareholder Approval Matters shall not have been approved at the Parent Meeting (at
which a vote was held) in accordance with applicable Law; or |
| (E) | as
of the date of the SRx Meeting, the condition set forth in Section 6.1(i) has not
been satisfied or waived by all Parties. |
| (A) | prior
to obtaining the Parent Shareholder Approval, the Parent Board authorizes Parent to accept
a Superior Proposal, provided that Parent shall have (1) simultaneously with such termination,
entered into the Alternative Acquisition Agreement associated with such Superior Proposal,
(2) otherwise complied with its obligations set forth in Section 7.1 through Section
7.4 and (3) paid any amounts due pursuant to Section 8.3(b); |
| (B) | there
shall have occurred an SRx Material Adverse Effect which is incapable of being cured by the
Outside Date; |
| (C) | subject
to Section 6.4, SRx is in default of a covenant or obligation hereunder (other than
the covenants and obligations set forth in Section 7.1 and Section 7.2, as
to which Section 8.2(a)(iii)(D) shall apply) such that the condition contained in
Section 6.2(a) is not satisfied or is incapable of satisfaction, or any representation
or warranty of SRx or SRx under this Agreement is untrue or incorrect or shall have become
untrue or incorrect such that the condition contained in Section 6.2(b) would be incapable
of satisfaction; provided that Parent, AcquireCo and CallCo are not then in breach of this
Agreement so as to cause any of the conditions set forth in Section 6.2(a) or Section
6.2(b) not to be satisfied; or |
| (D) | SRx
shall have breached or failed to perform any of its obligations set forth in Section 7.1
through Section 7.4. |
| (A) | there
shall have occurred a Parent Change in Recommendation; |
| (B) | there
shall have occurred a Parent Material Adverse Effect which is incapable of being cured by
the Outside Date; |
| (C) | subject
to Section 6.4, Parent, AcquireCo or CallCo is in default of a covenant or obligation
hereunder (other than the covenants and obligations set forth in Section 7.1 and Section
7.2, as to which Section 8.2(a)(iv)(D) shall apply) such that the condition contained
in Section 6.3(a) is not satisfied or is incapable of satisfaction, or any representation
or warranty of Parent or AcquireCo under this Agreement is untrue or incorrect or shall have
become untrue or incorrect such that the condition contained in Section 6.3(b) would
be incapable of satisfaction; provided that SRx is not then in breach of this Agreement so
as to cause any of the conditions set forth in Section 6.3(a) or 6.3(b) not to be
satisfied; or |
| (D) | Parent
shall have breached or failed to perform any of its obligations set forth in Section 7.1
through Section 7.4. |
| (b) | Subject
to Section 6.4(b), the Party desiring to terminate this Agreement pursuant to this
Section 8.2 (other than pursuant to Section 8.2(a)(i)) shall give notice of
such termination to the other Party, specifying in reasonable detail the basis for such Party’s
exercise of its termination right. |
| (c) | If
this Agreement is terminated pursuant to this Section 8.2, this Agreement shall become
void and be of no further force or effect without liability of any Party (or any shareholder
or other Representative of such Party) to any other Party hereto, except that the provisions
of this Section 8.2(c) and Section 8.3, Section 9.1, Section 9.3 ,
Section 9.4 , Section 9.6, Section 9.7 and Section
9.8 and all related definitions set forth in Section 1.1 and the provisions of
the Confidentiality Agreement shall survive any termination of this Agreement pursuant to
this Section 8.2; provided further that neither the termination of this Agreement
pursuant to this Section 8.2 nor anything contained in this Section 8.2 shall
relieve a Party from any Liability arising prior to such termination arising from any willful
and material breach of this Agreement or fraud. |
8.3. | Expenses
and Termination PaymentExcept as otherwise provided herein, the Parties agree that all
costs and expenses of the Parties relating to the Arrangement and the transactions contemplated
in this Agreement, including legal fees, accounting fees, financial advisory fees, strategic
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 expenses. |
| (b) | The
Termination Payment shall be payable by Parent to SRx in the event that this Agreement is
terminated in the following circumstances: |
| (i) | pursuant
to Section 8.2(a)(iv)(A) (Parent Change in Recommendation), Section 8.2(a)(iv)(D)
(Breach of Parent Non-Solicitation Covenants) or Section 8.2(a)(iii)(A)
(Superior Proposal); or |
| (ii) | pursuant
to Section 8.2(a)(ii)(A) (Outside Date), Section 8.2(a)(ii)(D) (Failure
to Approve Parent Shareholder Approval Matters), Section 8.2(a)(iv)(B) (Parent
Material Adverse Effect) or Section 8.2(a)(iv)(C) (Parent Breach) if, in
any such case, prior to the earlier of the termination of this Agreement or the holding of
the Parent Meeting, (A) a Parent Acquisition Proposal, or the intention to make a Parent
Acquisition Proposal, shall have been publicly announced by any Person (other than SRx or
any of its affiliates) and not withdrawn prior to such termination or holding of the Parent
Meeting, and (B) within twelve (12) months after the later of the date of termination of
this Agreement or the holding of the Parent Meeting, (1) Parent has entered into a definitive
agreement with respect to or consummated a Parent Acquisition Proposal, (2) a Parent Acquisition
Proposal has been publicly accepted or recommended by the Parent Board, or (3) a Parent Acquisition
Proposal has been approved by or submitted for approval to the Parent Shareholders. For the
purpose of this Section 8.3(b)(ii), the term “Parent Acquisition Proposal”
shall have the meaning ascribed to such term in Section 1.1, except that references
to “20%” shall be deemed to be “50%”. For the avoidance of doubt,
the Parent Acquisition Proposal referred to in clauses (B)(1), (B)(2) and (B)(3) of this
Section 8.3(b)(ii) need not be the same Parent Acquisition Proposal that was made
to Parent or publicly announced prior to the termination of this Agreement or holding of
the Parent Meeting. |
The
Termination Payment shall be made by Parent by wire transfer of same-day funds, to an account designated by SRx, (x) in the event that
this Agreement is terminated pursuant to Section 8.2(a)(iii)(A), simultaneously with, and as a condition to the effectiveness
of, such termination, (y) in the event that this Agreement is terminated pursuant to Section 8.2(a)(iv)(A) or Section 8.2(a)(iv)(D),
as soon as practicable, and in any event within two (2) Business Days of the date on which this Agreement is terminated, and (z) in the
event that the Termination Payment is payable pursuant to Section 8.3(b)(ii), on the earliest occur of the events referred to
in clauses (B)(1), (B)(2) and (B)(3) thereof.
SRx
hereby acknowledges that the Termination Payment to which it may become entitled to is a payment of liquidated damages which is a genuine
pre-estimate of the damages which it will suffer or incur as a result of the event giving rise to such damages and the resultant non-completion
of the Arrangement and the transactions contemplated by this Agreement and is not a penalty. Parent hereby irrevocably waives any right
it may have to raise as a defense that any such liquidated damages are excessive or punitive. Upon receipt by SRx of the Termination
Payment, SRx shall have no further Claim against Parent at law or in equity or otherwise (including injunctive relief to restrain any
breach or threatened breach by Parent of any of its obligations hereunder or otherwise to obtain specific performance).
8.4. | AmendmentSubject
to the provisions of the Interim Order and Final Order, the Plan of Arrangement and applicable
Law, this Agreement and the Plan of Arrangement may, at any time and from time to time prior
to the Effective Time, be amended only by mutual written agreement of Parent and SRx, and
any such amendment may, without limitation: |
| (a) | change
the time for performance of any of the obligations or acts of the Parties; |
| (b) | waive
any inaccuracies or modify any representation or warranty contained herein or in any document
delivered pursuant hereto; |
| (c) | waive
compliance with or modify any of the covenants herein contained and waive or modify performance
of any of the obligations of the Parties; and |
| (d) | waive
compliance with or modify any mutual conditions precedent herein contained. |
Notwithstanding
the foregoing, after each of the SRx Securityholder Approval and the Parent Shareholder Approval has been obtained, no amendment shall
be made that pursuant to applicable Law requires further approval or adoption by the SRx Shareholders or the Parent Shareholders without
such further approval or adoption.
8.5. | WaiverAny
Party may (a) extend the time for the performance of any of the obligations or acts of the
other Party, (b) waive compliance, except as provided herein, with any of the other Party’s
agreements or the fulfilment of any conditions to its own obligations contained herein, or
(c) waive inaccuracies in any of the other Party’s representations or warranties contained
herein or in any document delivered by the other Party, in each case only to the extent such
obligations, agreements and conditions are intended for its benefit. Notwithstanding the
foregoing, after each of the SRx Securityholder Approval and the Parent Shareholder Approval
has been obtained, no waiver shall be made that pursuant to applicable Law requires further
approval or adoption by the SRx Shareholders or the Parent Shareholders without such further
approval or adoption. No extension or waiver shall be valid unless set forth in an instrument
in writing signed on behalf of the waiving Party and, unless otherwise provided in the written
waiver, will be limited to the specific breach or condition waived and shall not extend to
any other matter or occurrence. No failure or delay 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 AND MISCELLANEOUS
9.1. | PrivacyEach
Party shall comply with applicable privacy Laws in the course of collecting, using and disclosing
Personal Information in connection with the transactions contemplated hereby (the “Transaction
Personal Information”). No Party shall disclose Transaction Personal Information
originally collected by any other Party to any Person other than to its advisors who are
evaluating and advising on the transactions contemplated by this Agreement. If Parent completes
the transactions contemplated by this Agreement, Parent 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 applicable Law, use or disclose Transaction Personal
Information originally collected by SRx: |
| (a) | for
purposes other than those for which such Transaction Personal Information was collected by
SRx prior to the Effective Date; and |
| (b) | which
does not relate directly to the carrying on of the business of SRx (including carrying on
the SRx Business) or to the carrying out of the purposes for which the transactions contemplated
by this Agreement were implemented. |
The
Parties shall protect and safeguard the Transaction Personal Information against unauthorized collection, use or disclosure. Parent shall
cause its advisors to observe the terms of this Section 9.1 and to protect and safeguard all Transaction Personal Information
in their possession. If this Agreement shall be terminated, each Party shall promptly deliver to the other Party all Transaction Personal
Information originally collected by such other Party in its possession or in the possession of any of its advisors, including all copies,
reproductions, summaries or extracts thereof, except, unless prohibited by applicable Law, for electronic backup copies made automatically
in accordance with the usual backup procedures of the Party returning such Transaction Personal Information.
9.2. | NoticesAll
notices and other communications given or made pursuant to this Agreement shall be in writing
and shall be deemed to have been duly given and received on the day it is delivered, provided
that it is delivered on a Business Day prior to 4:30 p.m. Toronto time in the place of delivery
or receipt. However, if notice is delivered after 4:30 p.m. Toronto time or if such day is
not a Business Day then the notice shall be deemed to have been given and received on the
next Business Day. Notice shall be sufficiently given if delivered (either in person, by
courier service or other personal method of delivery), or if transmitted by e- mail to the
Parties at the following addresses (or at such other addresses as shall be specified by any
Party by notice to the other given in accordance with these provisions): |
| (a) | if
to Parent, AcquireCo or CallCo: |
12400
Race Track Road
Tampa,
FL 33626
Attention:
Mike Young and Carolina Martinez
Email:
myoung@cottcap.com / nmartinez@bttrco.com
Wildeboer
Dellelce LLP
Suite
800, Wildeboer Dellelce Place
365
Bay Street
Toronto,
ON M5H 2V1
Attention:
Perry Dellelce and James Brown
Email:
perry@wildlaw.ca; jbrown@wildlaw.ca
and
to:
Meister
Seelig & Fein PLLC
125
Park Avenue, 7th Floor
New
York, New York 10017
Attention
Louis Lombardo
Email:
LL@msf-law.com
SRX
Health Solutions Inc.
65
Queen street West
8th
floor Toronto, On
M5H
2M5
Attention:
Adesh Vora and Dave Sohi
Email:
adesh.vora@srxhealth.ca / dave.sohi@srxhealth.ca
and
to:
Borden
Ladner Gervais LLP
Bay
Adelaide Centre, East Tower,
22
Adelaide St. West
Toronto,
ON, Canada M5H 4E3
Attention:
Colin Cameron-Vendrig
Email:
ccameronvendrig@blg.com
Dorsey
& Whitney LLP
TD
Canada Trust Tower
Brookfield
Place 161 Bay Street, Suite 4310
Toronto,
ON M5J 2S1
Attention:
Richard Raymer
Email:
raymer.richard@dorsey.comGoverning Law
This
Agreement shall be governed, including as to validity, interpretation and effect, by the Laws of the Province of Ontario and the Laws
of Canada applicable therein, without giving effect to any principles of conflict of Laws thereof which would result in the application
of the Laws of any other jurisdiction. Each of the Parties hereby irrevocably attorns to the exclusive jurisdiction of the courts of
the Province of Ontario in respect of all matters arising under and in relation to this Agreement and the Arrangement. Notwithstanding
the foregoing, any provisions of this Agreement with respect to US Securities Laws shall be governed by applicable US Laws, and any provisions
with respect to the corporate governance, existence, good standing and authority of Parent shall be governed by the DGCL.
Subject
to Section 8.3(b), the Parties acknowledge and agree that irreparable harm would occur for which money damages would not be an
adequate remedy at law in the event that any of the provisions of this Agreement were not performed in accordance with their specific
terms or were otherwise breached. Accordingly, the Parties agree that, in the event of any breach or threatened breach of this Agreement
by a Party, the non-breaching Party will be entitled, without the requirement of posting a bond or other security, to seek equitable
relief, including injunctive relief and specific performance, and the Parties shall not object to the granting of injunctive or other
equitable relief on the basis that there exists an adequate remedy at law. Subject to Section 8.3(b), such remedies will not be
the exclusive remedies for any breach of this Agreement but will be in addition to all other remedies available at law or equity to each
of the Parties.
Time
shall be of the essence in this Agreement.
9.6. | Entire
Agreement, Binding Effect and Assignment |
This
Agreement (including the exhibits and schedules hereto and the SRx Disclosure Letter, the Parent Disclosure Letter and the other agreements,
documents and certificates delivered or to be delivered pursuant to this Agreement) and the Confidentiality Agreement constitute the
entire agreement, and supersede all other prior agreements and understandings, both written and oral, among the Parties, or any of them,
with respect to the subject matter hereof and thereof and, except as expressly provided herein, this Agreement is not intended to and
shall not confer upon any Person other than the Parties any rights or remedies hereunder. This Agreement shall inure to the benefit of
and be binding upon the Parties and their respective successors and permitted assigns. Neither this Agreement nor any of the rights,
interests or obligations hereunder may be assigned by any of the Parties without the prior written consent of the other Parties.
No
director or officer of Parent shall have any personal liability whatsoever to SRx under this Agreement, or any other document delivered
in connection with the transactions contemplated hereby on behalf of Parent. No director or officer of SRx shall have any personal liability
whatsoever to Parent, AcquireCo or CallCo under this Agreement, or any other document delivered in connection with the transactions contemplated
hereby on behalf of SRx.
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 contemplated hereby is not affected in any manner materially adverse to any Party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the fullest extent possible.
9.9. | Counterparts;
Execution |
This
Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together shall
constitute one and the same instrument. The Parties shall be entitled to rely upon delivery of an executed facsimile or similar executed
electronic copy of this Agreement, and such facsimile or similar executed electronic copy shall be legally effective to create a valid
and binding agreement among the Parties.
IN
WITNESS WHEREOF, the Parties have executed this Arrangement Agreement as of the date first written above by their respective officers
thereunto duly authorized.
|
BETTER
CHOICE COMPANY INC. |
|
|
|
|
By: |
/s/
Michael Young |
|
Name:
|
Michael
Young |
|
Title: |
Chairman |
|
|
|
|
1000994476
ONTARIO INC. |
|
|
|
|
By: |
/s/
Michael Young |
|
Name:
|
Michael
Young |
|
Title: |
President |
|
|
|
|
1000994085
ONTARIO INC. |
|
|
|
|
By: |
/s/
Michael Young |
|
Name:
|
Michael
Young |
|
Title: |
President |
|
|
|
|
SRX
HEALTH SOLUTIONS INC. |
|
|
|
|
By: |
|
|
Name:
|
Adesh
Vora |
|
Title: |
President
& Chief Executive Officer |
|
|
|
|
SRX
HEALTH SOLUTIONS INC. |
|
|
|
|
By: |
|
|
Name:
|
Dave
Sohi |
|
Title: |
Chief
Financial Officer |
IN
WITNESS WHEREOF, the Parties have executed this Arrangement Agreement as of the date first written above by their respective officers
thereunto duly authorized.
|
BETTER
CHOICE COMPANY INC. |
|
|
|
|
By: |
|
|
Name: |
|
|
Title: |
|
|
|
|
|
[●] |
|
|
|
|
By: |
|
|
Name: |
|
|
Title: |
|
|
|
|
|
[●] |
|
|
|
|
By: |
|
|
Name: |
|
|
Title: |
|
|
|
|
|
SRX
HEALTH SOLUTIONS INC. |
|
|
|
|
By: |
/s/ Adesh
Vora |
|
Name: |
Adesh
Vora |
|
Title: |
Chief
Executive Officer |
|
|
|
|
SRX
HEALTH SOLUTIONS INC. |
|
|
|
|
By: |
/s/
Dave Sohi |
|
Name:
|
Dave
Sohi |
|
Title: |
Chief
Financial Officer |
SCHEDULE
A
PLAN
OF ARRANGEMENT
[See
Attached]
PLAN
OF ARRANGEMENT
ARTICLE
1
INTERPRETATION
In
this Plan of Arrangement:
“Acquireco”
means 1000994476 Ontario Inc., an indirect subsidiary of Parent, incorporated under the laws of the Province of Ontario that issues the
Exchangeable Shares pursuant to the Arrangement.
“Amalgamation”
has the meaning set out in Section 2.2(h).
“Ancillary
Rights” means all rights relating to the Exchangeable Shares which are provided outside of the Exchangeable Share Provisions,
including, the interest of a holder of Exchangeable Shares as a beneficiary of the trust created under the Voting Trust Agreement and
all rights created under the Support Agreement.
“affiliate”
has the meaning ascribed thereto in the Securities Act (Ontario), as amended.
“Amalco”
means the indirect subsidiary of Parent, existing under the laws of the Province of Ontario formed upon the amalgamation of Acquireco
and SRx pursuant to Section 2.2(g).
“Arrangement”
means an arrangement under Section 182 of the OBCA on the terms and subject to the conditions set out in this Plan of Arrangement, subject
to any amendments or variations hereto made in accordance with this Plan of Arrangement and the Arrangement Agreement or made at the
direction of the Court.
“Arrangement
Agreement” means the arrangement agreement made as of September 3, 2024 between Parent, Acquireco, Callco and SRx, as amended,
supplemented and/or restated in accordance with its terms.
“Articles
of Arrangement” means the articles of arrangement of SRx in respect of the Arrangement required by the OBCA to be sent to the
Director after the Final Order is made, which shall be in a form and content satisfactory to Parent and SRx, each acting reasonably.
“Business
Day” means a day other than a Saturday, a Sunday or any other day on which commercial banking institutions in Toronto, Ontario
or Tampa, Florida are authorized or required by applicable Law to be closed.
“Callco”
means 1000994085 Ontario Inc, being a wholly-owned subsidiary of Parent incorporated under the laws of the Province of Ontario.
“Canadian
Resident” means (i) a person who is not a non-resident of Canada for the purposes of the Tax Act, or (ii) a partnership that
is a “Canadian partnership” for purposes of the Tax Act.
“Certificate
of Arrangement” means the certificate of arrangement to be issued by the Director pursuant to subsection 183(2) of the OBCA
in respect of the Articles of Arrangement.
“Code”
means the United States Internal Revenue Code of 1986, as amended.
“Consideration”
means the consideration to be received by SRx Shareholders pursuant to the Plan of Arrangement in respect of each SRx Share that is issued
and outstanding immediately prior to the Effective Time, being either the Parent Share Consideration or the Exchangeable Share Consideration
as elected by a SRx Shareholder or as otherwise determined in accordance with Section 2.3 in respect of each SRx Share held.
“Court”
means the Ontario Superior Court of Justice (Commercial List). “CRA” means the Canada Revenue Agency.
“Current
Market Price” has the meaning set out in the Exchangeable Share Provisions. “Depositary” means the person
acting as depositary under the Arrangement.
“Director”
means the Director appointed pursuant to Section 278 of the OBCA. “Dissent Rights” has the meaning set out in Section
3.1.
“Dissenting
Shareholder” means a registered holder of SRx Shares that has duly and validly exercised Dissent Rights and who is ultimately
entitled to be paid the fair value of such holder’s SRx Shares as determined in accordance with Section 3.1.
“Effective
Date” means the date shown on the Certificate of Arrangement giving effect to the Arrangement.
“Effective
Time” means 12:01 a.m. (Toronto time) on the Effective Date.
“Election
Deadline” means 4:00 p.m. (Toronto time) on the Business Day which is not less than five (5) Business Days preceding the Effective
Date, unless otherwise agreed in writing by Parent and SRx.
“Eligible
Holder” means an SRx Shareholder who is (i) a Canadian Resident, or (ii) a partnership, any member of which is a Canadian Resident.
“Exchange
Ratio” means the number of Parent Shares or Exchangeable Shares that an SRx Shareholder will receive at the Effective Time
in exchange for each one (1) SRx Share held, determined as follows:
A
= the number of Parent Shares or Exchangeable Shares to be received in exchange for each one (1) SRx Share, rounded to three decimal
places;
B
= US$80,000,000 plus US$43,000,000 minus the SRx U.S. Dollar Net Debt;
C
= 30 Day VWAP; and
D
= the total number of SRx Shares outstanding immediately prior to the Effective Time,
provided
that if:
“Exchange
Time” means the time that the steps in Sections 2.2(c) and 2.2(e) occur.
“Exchangeable
Elected Shares” means SRx Shares (other than SRx Shares held by Parent or an affiliate) that the holder thereof shall have
elected, in accordance with Section 2.3(a) in a duly completed Letter of Transmittal and Election Form deposited with the Depositary
no later than the Election Deadline, to transfer to Acquireco under the Arrangement for the Exchangeable Share Consideration.
“Exchangeable
Share Consideration” means the consideration in the form of Exchangeable Shares, together with the Ancillary Rights, elected
for each SRx Share held by a SRx Shareholder (other than a Dissenting Shareholder) pursuant to Section 2.3(a), which shall be that number
of Exchangeable Shares equal to the Exchange Ratio for each SRx Share held immediately prior to the Effective Time.
“Exchangeable
Share Provisions” means the rights, privileges, restrictions and conditions attaching to the Exchangeable Shares shall be the
rights, privileges, restrictions and conditions as set forth in the articles of incorporation of Acquireco.
“Exchangeable
Shares” means the exchangeable shares in the capital of Acquireco having the rights, privileges, restrictions and conditions
set forth in the Exchangeable Share Provisions.
“Final
Order” means an Order of the Court granted pursuant to Section 185 of the OBCA, in a form acceptable to each of Parent and
SRx, each acting reasonably, approving the Arrangement after a hearing upon the procedural and substantive fairness of the terms and
conditions of the Arrangement, as such Order may be affirmed, amended, modified, supplemented or varied by the Court (with the consent
of Parent and SRx, each acting reasonably) at any time prior to the Effective Date or, if appealed, as affirmed or amended (provided,
however, that any such amendment is acceptable to Parent and SRx, each acting reasonably) on appeal, unless such appeal is withdrawn,
abandoned or denied.
“Governmental
Entity” means (i) 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, (ii) any self-regulatory organization or stock exchange,
including the NYSE, (iii) any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining
to government; and (iv) 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.
“holder”
means the holder of SRx Shares, SRx RSUs or SRx Warrants shown from time to time in the central securities register maintained by or
on behalf of SRx in respect of such securities, as the context requires.
“including”
means “including without limitation” and “includes” means “includes without limitation”.
“Interim
Order” means an Order of the Court in a form acceptable to each of Parent and SRx, acting reasonably, providing for, among
other things, the calling and holding of the SRx Meeting, as the same may be amended by the Court with the consent of Parent and SRx,
each acting reasonably.
“Judgment”
means any judgment, Order, decree, award, ruling, decision, verdict, subpoena, injunction or settlement entered, issued, made or rendered
by any Governmental Entity (in each case whether temporary, preliminary or permanent).
“Law”
means, with respect to any person, any and all applicable law (statutory, common, civil or otherwise), constitution, treaty, convention,
ordinance, code, rule, regulation, Order, injunction, Judgment, decree, ruling or other similar requirement, whether domestic or foreign,
enacted, adopted, promulgated or applied by a Governmental Entity that is binding upon or applicable to such person or its business,
undertaking, property or securities, and to the extent that they have the force of law, policies, guidelines, notices and protocols of
any Governmental Entity, as amended.
“Letter
of Transmittal and Election Form” means the letter of transmittal and election form sent by SRx for use by holders of SRx Securityholders,
as applicable, in connection with the Arrangement, in the form accompanying the SRx Circular.
“NYSE”
means the New York Stock Exchange.
“OBCA”
means the Business Corporations Act (Ontario), as amended.
“Order”
means an order, injunction, Judgment, administrative complaint, decree, ruling, award, assessment, direction, instruction, penalty or
sanction issued, filed or imposed by any Governmental Entity.
“person”
includes any individual, firm, partnership, limited partnership, limited liability partnership, joint venture, venture capital fund,
limited liability company, unlimited liability company, association, trust, trustee, executor, administrator, legal personal representative,
estate, body corporate, corporation, company, unincorporated association or organization, Governmental Entity, syndicate or other entity,
whether or not having legal status.
“Plan
of Arrangement” means this plan of arrangement.
“Preferred
Voting Share Provisions” means the rights, privileges, restrictions and conditions attaching to the special voting shares of
Acquireco, set forth in the articles of incorporation of Acquireco.
“Principal”
means Adesh Vora, the Founder, President and Chief Executive Officer of SRx.
“Parent”
means Better Choice Company Inc., a corporation existing under the laws of the State of Delaware.
“Parent
Share Consideration” means the Consideration in the form of Parent Shares elected or deemed to be elected for each SRx Share
held by an SRx Shareholder (other than a Dissenting Shareholder) pursuant to Section 2.3, which shall be that number of Parent Shares
equal to the Exchange Ratio for each SRx Share held immediately prior to the Effective Time.
“Parent
Shares” means the common stock, par value $0.001 per share, in the capital of Parent.
“SEC”
means the U.S. Securities and Exchange Commission.
“Securities
Authorities” means all securities regulatory authorities, including the applicable securities commission or similar regulatory
authorities in each of the provinces and territories of Canada, the SEC and the NYSE, that are applicable to SRx or Parent, as the case
may be.
“Special
Voting Share” means the special voting share in the capital of Parent having substantially the rights, privileges, restrictions
and conditions described in the Arrangement Agreement.
“SRx”
means SRx Health Solutions Inc., a corporation governed under the OBCA.
“SRx
Arrangement Resolution” means the special resolution of SRx Shareholders and the SRx Warrantholders (on an as-converted to
SRx Share basis) voting together as a single class, approving the Arrangement to be considered at the SRx Meeting.
“SRx
Circular” means the notice of the SRx Meeting and accompanying management information circular, including all schedules, appendices
and exhibits thereto and enclosures therewith, sent to the SRx Shareholders, as required by the Court in the Interim Order,
in connection with the SRx Meeting, as amended, supplemented or otherwise modified from time to time in accordance with the terms of
this Agreement.
“SRx
Meeting” means the special meeting of SRx Securityholders, including any adjournment or postponement thereof, to be called
and held in accordance with the Interim Order to consider the SRx Arrangement Resolution, and for any other purpose as may be set out
in the SRx Circular.
“SRx
Net Debt” means an amount equal to (a) the aggregate indebtedness for borrowed money of SRx (including accrued interest
and prepayment penalties, if applicable) as of 12:01 a.m. ET on the date that is five (5) Business Days before the Effective Date,
minus (b) all cash and cash equivalents of SRx (including money market accounts, money market funds, money market
instruments), including cash in transit and all such cash and cash equivalents held by third-party processors, as of 12:01 a.m. ET
on the date that is five (5) Business Days before the Effective Date. For greater clarity, and without limiting the generality of
the foregoing, the aggregate indebtedness for borrowed money of SRx shall include all amounts owed under (i) that certain Credit
Agreement, dated September 14, 2023, by and among SRx, the guarantors and lenders named therein, and CWB Maximum Financial Inc., as
administrative agent, and (ii) certain unsecured convertible debentures issued by SRx between November 2022 and January 2023, in
each case to the extent unpaid as of 12:01 a.m. ET on the date that is five (5) Business Days before the Effective Date.
“SRx
RSU Holders” means the holders at the relevant time of SRx RSUs. “SRx RSU Plan” means the Omnibus Long Term
Incentive Plan of SRx.
“SRx
RSUs” means, at any time, restricted share units of SRx granted under the SRx RSU Plan which are, at such time, outstanding,
whether or not vested.
“SRx
Securityholders” means SRx Shareholders, SRx RSU Holders and SRx Warrantholders;
“SRx
Securities” means SRx Shares, SRx RSUs and SRx Warrants; “SRx Shareholders” means the holders of SRx Shares.
“SRx
Shares” means issued and outstanding common shares in the capital of SRx.
“SRx
U.S. Dollar Net Debt” the U.S. Dollar Equivalent of the SRx Net Debt based calculated as of the date that is five (5) Business
Days before the Effective Date.
“SRx
Warrantholders” means the holders at the relevant time of SRx Warrants.
“SRx
Warrants” means the common share purchase warrants to acquire SRx Shares which are at such time outstanding.
“Support
Agreement” means an agreement to be made among Parent, Callco and Acquireco in connection with this Plan of Arrangement, which
shall be in a form and content satisfactory to Parent and SRx, each acting reasonably.
“Tax
Act” means the Income Tax Act (Canada) and the regulations made thereunder, as now in effect and as they may be promulgated
or amended from time to time.
“Tax
Election Package” a copy of CRA form T2057, or, if the SRx Shareholder is a partnership, a copy of CRA form T2058 and a copy
of any applicable equivalent provincial or territorial election form, each of which has been duly and properly completed and executed
by the SRx Shareholder in accordance with the rules contained in the Tax Act or the relevant provincial or territorial legislation.
“30
Day VWAP” means the volume weighted average trading price of the Parent Shares on the NYSE or such other principal stock exchange
on which the Parent Shares are trading, calculated by dividing the total value by the total volume of the Parent Shares trade for thirty
(30) trading days preceding the date that is five (5) Business Days prior to the Effective Time.
“Trading
Day” means any day on which Parent Shares are actually traded on the NYSE or such other stock exchange or automated quotation
system on which Parent Shares are actually traded if such shares do not trade on the NYSE.
“Transfer
Agent” means such person as may from time to time be appointed by Acquireco as the registrar and transfer agent for the Exchangeable
Shares.
“Trustee”
means the Principal or any other such person that the Principal determines.
“U.S.
Dollar Equivalent” means in respect of an amount expressed in a currency other than U.S. dollars (the “Foreign Currency
Amount”) the product obtained by multiplying:
|
a) |
the
Foreign Currency Amount by, |
|
b) |
the
single daily exchange rate on such date for such foreign currency expressed in U.S.
dollars as reported by the Bank of Canada or, in the event such exchange rate is not available, such exchange rate on such date for such
foreign currency expressed in U.S. dollars as may be deemed by the Board of Directors of SRx, acting reasonably, to be appropriate for
such purpose. |
“U.S.
Securities Act” means the United States Securities Act of 1933.
“Voting
Trust Agreement” means the trust agreement to be made among Parent, Acquireco and the Trustee in connection with this Plan
of Arrangement, which shall be in a form and content satisfactory to Parent and SRx, each acting reasonably, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with the terms thereof.
1.2 |
Headings
and References |
The
division of this Plan of Arrangement into Sections and the insertion of headings are for convenience of reference only and do not affect
the construction or interpretation of this Plan of Arrangement. Unless otherwise specified, references to Sections are to Sections of
this Plan of Arrangement.
Except
as expressly indicated otherwise, all sums of money referred to in this Plan of Arrangement are expressed and shall be payable in lawful
money of the United States and “$” refers to United States dollars. “CA$” refers to the lawful money of Canada.
Time
shall be of the essence in each and every matter or thing herein provided. Unless otherwise indicated, all times expressed herein are
local time at Toronto, Ontario.
ARTICLE
2
THE
ARRANGEMENT
Subject
to the terms of the Arrangement Agreement, the Arrangement will become effective at the Effective Time and shall be binding at and after
the Effective Time on SRx, Parent, Acquireco, Callco, the Depositary, the Trustee and all holders and beneficial holders of SRx Shares,
SRx RSUs and SRx Warrants, including Dissenting Shareholders.
Commencing
at the Effective Time on the Effective Date, subject to the terms and conditions of the Arrangement Agreement, the following shall occur
as part of the Arrangement and shall be deemed to occur sequentially in the following order (except that the steps in Sections 2.2(c)
to Section 2.2(f) shall be deemed to occur contemporaneously) without any further act or formality:
|
(a) |
each
SRx Share held by a Dissenting Shareholder shall be deemed to be transferred by the holder thereof, without any further act or formality
on its part, free and clear of all Encumbrances, to SRx and SRx shall thereupon be obliged to pay the amount therefor determined
and payable in accordance with Article 3 hereof, and the name of such holder shall be removed from the central securities register
of SRx as a holder of SRx Shares and SRx shall be recorded as the registered holder of the SRx Shares so transferred and shall be
deemed to be the legal owner of such SRx Shares, which SRx Shares shall thereupon be cancelled; |
|
|
|
|
(b) |
each
SRx Warrant outstanding immediately prior to the Effective Time that has not been exercised in advance of the exercise deadline set
out in the SRx Circular, shall be cancelled without consideration; |
|
|
|
|
(c) |
notwithstanding
the terms of the SRx RSU Plan, each SRx RSU outstanding immediately prior to the Effective Time shall be deemed to be vested, without
any further
action by or on behalf of an SRx RSU Holder, and each SRx RSU Holder shall receive one SRx Share for each SRx RSU, and all of SRx’
obligations under such SRx RSUs shall be deemed to be fully satisfied and the SRx RSU Holders shall cease to have any rights as holders
of the SRx RSUs, other than the right to receive the compensation contemplated by this Plan of Arrangement and the SRx Shares issued
in connection with this Section 2.2(c) shall be treated as all other SRx Shares at the Effective Time in accordance with Section 2.2(c)
or Section 2.2(d), as applicable; |
|
(d) |
contemporaneously
with the steps in Section 2.2(e) and Section 2.2(f), each issued and outstanding SRx Share (other than Exchangeable Elected Shares
and SRx Shares held by the Parent or Dissenting Shareholders) held by a SRx Shareholder shall be transferred by the holder thereof,
without any further act or formality on its part, free and clear of all Encumbrances, to Acquireco in exchange for Parent Share Consideration
in accordance with the election or deemed election of such SRx Shareholder pursuant to Section 2.3; |
|
(e) |
contemporaneously
with the step in Section 2.2(d) and Section 2.2(f), each Exchangeable Elected Share shall be transferred by the holder thereof, without
any further act or formality on its part, free and clear of all Encumbrances, to Acquireco in exchange for Exchangeable Share Consideration
in accordance with the election of such SRx Shareholder pursuant to Section 2.3; |
|
(f) |
contemporaneously
with the step in Section 2.2(d) and Section 2.2(e): (i) Parent, Acquireco and Callco shall execute the Support Agreement, and the
Exchangeable Shareholders shall be deemed to be parties thereto; (ii) Parent, Acquireco and the Trustee shall execute the Voting
Trust Agreement and Parent shall issue to and deposit with the Trustee the Special Voting Share in consideration of the payment to
Parent by SRx on behalf of the SRx Shareholders of ten dollars in Canadian funds (CA$10.00), to be thereafter held of record by the
Trustee for and on behalf of, and for the use and benefit of, the holders of the Exchangeable Shares in accordance with the Voting
Trust Agreement, and the Exchangeable Shareholders shall be deemed to be parties thereto to the extent necessary; |
|
(g) |
SRx
shall reduce the stated capital of the SRx Shares to CA$1.00; and |
|
(h) |
Acquireco
and SRx shall merge (the “Amalgamation”) to form one corporate entity, Amalco, with the same effect as if they
had amalgamated under Section 177(1) of the OBCA, except that the legal existence of Acquireco shall not cease and AcquireCo shall
survive the merger as Amalco and the Amalgamation is intended to qualify as an amalgamation as defined in subsection 87(1) of the
Tax Act, and without limiting the generality of the foregoing, upon and as a consequence of the Amalgamation; |
|
(i) |
the
separate legal existence of the SRx shall cease without SRx being liquidated or wound up and Acquireco and SRx shall continue as
one company and the property, rights, interests and obligations of SRx
shall become the property, rights, interests and obligations of Amalco; |
|
(ii) |
the
properties, rights, interests and obligations of Acquireco shall continue to be the properties, rights, interests and obligations
of Amalco, and the Amalgamation shall not constitute an assignment by operation of law, a transfer or any other disposition of the
properties, rights and interests of Acquireco to Amalco; |
|
(iii) |
Amalco
will own and hold the property of Acquireco and SRx and, without limiting the provisions hereof, all rights of creditors or others
of Acquireco and SRx will be unimpaired by the Amalgamation, and all liabilities and obligations of Acquireco and SRx, whether arising
by contract or otherwise, may be enforced against Amalco to the same extent as if such obligations had been incurred or contracted
by Amalco; |
|
(iv) |
Amalco
will continue to be liable for all of the liabilities and obligations of Acquireco and SRx; |
|
(v) |
all
rights, contracts, permits and interests of Acquireco and SRx will continue as rights, contracts, permits and interests of Amalco
as if Acquireco and SRx continued and, for greater certainty, the Amalgamation will not constitute a transfer or assignment of the
rights or obligations of either Acquireco or SRx under any such rights, contracts, permits and interests; |
|
(vi) |
any
existing cause of action, claim or liability to prosecution will be unaffected; |
|
(vii) |
a
civil, criminal or administrative action or proceeding pending by or against either Acquireco or SRx may be continued by or against
Amalco; |
|
(viii) |
a
conviction against, or ruling, order or judgment in favour of or against either Acquireco or SRx may be enforced by or against Amalco; |
|
(ix) |
each
issued and outstanding share of each class of shares of Acquireco shall become a share of the same class of shares of Amalco having
the same terms and conditions as such Acquireco shares had immediately prior to the Amalgamation and all of the issued and outstanding
shares of SRx will be cancelled without repayment of capital in respect thereof; |
|
(x) |
the
name of Amalco shall be SRX Health Solutions Inc.; |
|
(xi) |
Amalco
shall be authorized to issue an unlimited number of Exchangeable Shares, Preferred Voting Shares and common shares each without par
value; |
|
(xii) |
the
articles and bylaws of Amalco shall be in the form of the articles and bylaws of Acquireco; |
|
(xiii) |
the
first annual general meeting of Amalco or resolutions in lieu thereof shall be held within 18 months from the Effective Date; |
|
(xiv) |
the
first directors of Amalco following the amalgamation shall be the then current Acquireco directors; and |
|
(xv) |
the
stated capital of each class of shares of Amalco will be an amount equal to the stated capital attributable to the corresponding
class of Acquireco shares immediately prior to the Amalgamation. |
2.3 |
Consideration
Elections |
With
respect to the exchange of securities effected pursuant to Section 2.2(e):
|
(a) |
SRx
Shareholders who are Eligible Holders may elect to (i) receive in respect of any or all of their SRx Shares, the Exchangeable Share
Consideration, and (ii)
receive in respect of the balance of their SRx Shares, if any, the Parent Share Consideration; |
|
(b) |
the
election provided for in Section 2.3(a) shall be made by an SRx Shareholder depositing with the Depositary, prior to the Election
Deadline, a duly completed Letter of Transmittal and Election Form indicating such SRx Shareholder’s election, together with
certificates representing such holder’s SRx Shares, if any; |
|
(c) |
any
SRx Shareholder who does not deposit with the Depositary a duly completed Letter of Transmittal and Election Form prior to the Election
Deadline, or otherwise fails to comply with the requirements of Section 2.3(b) and the Letter of Transmittal and Election Form in
respect of any such SRx Shareholder’s SRx Shares (including SRx Shareholders who duly exercise Dissent Rights but are ultimately
not entitled, for any reason, to be paid fair value for their SRx Shares in respect of which they have exercised Dissent Rights),
shall be deemed to have elected to receive the Parent Share Consideration; |
|
(d) |
Letters
of Transmittal and Election Forms must be received by the Depositary on or before the Election Deadline; and |
|
(e) |
any
Letter of Transmittal and Election Form, once deposited with the Depositary, shall be irrevocable and may not be withdrawn by an
SRx Shareholder. |
|
(a) |
SRx
Shareholders who are Eligible Holders who are entitled to receive Exchangeable Share Consideration under the Arrangement shall be
entitled to make an income tax election pursuant to subsection 85(1) of the Tax Act or, if an SRx Shareholder is a partnership, subsection
85(2) of the Tax Act (and in each case, where applicable, the analogous provisions of provincial or territorial income tax Law) with
respect to the transfer of their SRx Shares to Acquireco by providing the Tax Election Package to the Depositary within 90 days following
the Effective Date, duly completed with the details of the number of Acquireco Shares transferred and the applicable agreed amounts
(which cannot be less than the fair market value of the Ancillary Rights at the Exchange Time). Thereafter, subject to the Tax Election
Package being duly completed, the relevant forms will be signed by Acquireco and returned to such persons within 150 days after the
Effective Date for filing with the CRA (or the applicable provincial taxing agency). Acquireco will not be responsible for the proper
or accurate completion of the Tax Election Package or to check or verify the content of any election form and, except for Acquireco’s
obligation to return duly completed Tax Election Packages which are received by the Depositary within 90 days of the Effective Date,
within 150 days after the Effective Date, Acquireco will not be responsible for any taxes, interest or penalties or any other costs
or damages resulting from the failure by an SRx Shareholder to properly and accurately complete or file the necessary election forms
in the form and manner and within the time prescribed by the Tax Act (or any applicable provincial or territorial legislation). In
its sole discretion, Acquireco may choose to sign and return Tax Election Packages received more than 90 days following the Effective
Date, but Acquireco will have no obligation to do so. |
|
(b) |
Upon
receipt of the Letter of Transmittal and Election Form in which an Eligible Holder has indicated that the Eligible Holder intends
to make an income tax election pursuant to subsection 85(1) of the Tax Act or, if the person is a partnership, subsection 85(2) of
the Tax Act (and in each case, where applicable, the analogous provisions of provincial or territorial income tax Law), Acquireco
will promptly deliver a tax instruction letter (and a tax instruction letter for the equivalent Quebec election, if applicable),
together with the relevant tax elections forms (including the Quebec election forms, if applicable) to the Eligible Holder. |
Every
SRx Shareholder from whom a SRx Share is transferred and acquired pursuant to the Arrangement shall be removed from the register of holders
of SRx Shares at the Effective Time and shall cease to have any rights in respect of such SRx Shares, and Acquireco shall become the
holder of such SRx Shares and shall be added to that register at the Effective Time and shall be entitled as of that time to all of the
rights and privileges attached to the SRx Shares. Every SRx Shareholder who acquires Exchangeable Shares and/or Parent Shares pursuant
to the Arrangement shall be added to the register of holders of Exchangeable Shares and/or Parent Shares, as applicable, and shall be
entitled as of the Effective Time to all of the rights and privileges attached to the Exchangeable Shares and/or Parent Shares, as the
case may be.
2.6 |
Convertible
Security Registers |
Every
SRx RSU Holder and SRx Warrantholder from whom an SRx RSU or SRx Warrant is terminated pursuant to the Arrangement shall be removed from
the registers of SRx RSU Holders and SRx Warrantholders, as applicable, at the Effective Time and shall cease to have any rights in respect
of such SRx RSUs or SRx Warrants, as applicable.
2.7 |
Adjustments
to Consideration |
The
consideration to be paid pursuant to Sections 2.2(b), 2.2(c), 2.2(c), and 2.2(d) shall be adjusted to reflect fully the effect of any
stock split, reverse split, stock dividend (including any dividend or distribution of securities convertible into Parent Shares or SRx
Shares, other than stock dividends paid in lieu of ordinary course dividends), reorganization, recapitalization or other like change
with respect to Parent Shares or SRx Shares occurring after the date of the Arrangement Agreement and prior to the Effective Time.
Notwithstanding
any provision herein to the contrary, SRx, Parent and Acquireco agree that this Plan of Arrangement will be carried out with the intention
that all Consideration to be issued in connection with the Arrangement shall be exempt from registration requirements of the U.S. Securities
Act pursuant to the Section 3(a)(10) Exemption thereunder, and available exemptions from the registration or qualification requirements
of applicable U.S. state securities laws, and shall be without trading restrictions under the U.S. Securities Act (other than those that
would apply under the U.S. Securities Act to persons who are, have been within 90 days of the Effective Time, or, at the Effective Time,
become affiliates (as defined by Rule 144 of the U.S. Securities Act) of Acquireco or Parent as applicable).
ARTICLE
3
DISSENT RIGHTS
Registered
holders of SRx Shares may exercise rights of dissent with respect to those SRx Shares pursuant to, and (except as expressly indicated
to the contrary in this Section 3.1), in the manner set forth in, Section 185 of the OBCA and this Section 3.1 in connection with the
Arrangement (the “Dissent Rights”); provided that, notwithstanding Section 185(6) of the OBCA, the written objection
to the resolution approving the Arrangement referred to in Section 185(6) of the OBCA must be received by SRx not later than 5:00 p.m.
(Toronto time) on the second Business Day before the SRx Meeting; and provided further that, notwithstanding the provisions of Section
185 of the OBCA, SRx Shareholders who duly exercise Dissent Rights and who have not withdrawn or been deemed to have withdrawn such exercise
of Dissent Rights and who:
|
(a) |
ultimately
are determined to be entitled to be paid fair value for their SRx Shares, which fair value, notwithstanding anything to the contrary
contained in Section 185 of the OBCA, shall be determined as of the Exchange Time, shall be deemed to have transferred those SRx
Shares as of the Exchange Time at the fair value of the SRx Shares determined as of the Exchange Time in accordance with Section
2.2(a), without
any further act or formality and free and clear of all Encumbrances, to SRx and shall not be entitled to any other payment or consideration,
including any payment that would be payable under the Arrangement had such holder not exercised their Dissent Rights in respect of such
SRx Shares; or |
|
(b) |
ultimately
are determined not to be entitled, for any reason, to be paid fair value for their SRx Shares, shall be deemed to have participated
in the Arrangement on the same basis as a holder of SRx Shares who has not exercised Dissent Rights and shall be deemed to have elected
to receive, and shall receive, the consideration provided in Section 2.3(c), but in no case shall SRx, Parent, Acquireco, the Depositary
or any other person be required to recognize any such holder as a holder of SRx Shares after the Exchange Time, and the names of
each such holder shall be deleted from the register of holders of SRx Shares at the Exchange Time. For greater certainty, in addition
to any other restrictions in the Interim Order, no SRx Shareholder shall be entitled to exercise Dissent Rights with respect to SRx
Shares in respect of which a SRx Shareholder has voted or has instructed a proxyholder to vote in favour of the SRx Arrangement Resolution. |
ARTICLE
4
SHARE
DEPOSIT AND FRACTIONAL SHARES
At
least five (5) Business Days prior to the Effective Date, Parent shall deliver to SRx the information required for the 30 Day VWAP and
SRx shall deliver to Parent the information required for the SRx U.S. Dollar Net Debt. At least three (3) Business Days prior to the
Effective Time, Acquireco and Parent shall deposit or cause to be deposited with the Depositary, for the benefit of the holders of SRx
Shares, the aggregate number of whole Exchangeable Shares and the aggregate number of whole Parent Shares issuable to holders of SRx
Shares in accordance with Sections 2.2(c) and Section 2.2(e) under this Plan of Arrangement. Upon surrender to the Depositary by a holder
of SRx Shares of a duly completed Letter of Transmittal and Election Form and such other documents and instruments as the Depositary
may reasonably require along with the certificate or certificates, if any, representing such SRx Shares to be exchanged under the Arrangement
for cancellation, such holder of SRx Shares shall be entitled to receive, and promptly after the Exchange Time the Depositary shall deliver
to such person, written evidence of the book entry issuance in uncertificated form to, or certificates registered in the name of, such
person representing that number of Parent Shares and/or Exchangeable Shares which such person is entitled to receive in accordance with
Section 2.2(c) and Section 2.2(e) less any amounts withheld pursuant to Section 4.6, and any certificate so surrendered shall forthwith
be cancelled. In the event of a transfer of ownership of such SRx Shares which was not registered in the transfer records of SRx, written
evidence of the book entry issuance of, or certificates representing, the number of Parent Shares and/or Exchangeable Shares issuable
to the registered holder may be registered in the name of and issued to the transferee if the certificate representing such SRx Shares
is presented to the Depositary, accompanied by a duly completed Letter of Transmittal and Election Form and all documents required to
evidence and effect such transfer. Without limiting the provisions of Section 2.5, until surrendered as contemplated by this Section
4.1, each certificate which immediately prior to the Exchange Time represented one or more outstanding SRx Shares that, under
the Arrangement, were exchanged pursuant to Section 2.2(c) or Section 2.2(e), shall be deemed at all times after the Exchange Time to
represent only the right to receive upon such surrender (i) the Consideration to which the holder thereof is entitled under the Arrangement,
or as to a certificate held by a Dissenting Shareholder (other than a shareholder who exercised Dissent Rights who is deemed to have
participated in the Arrangement pursuant to Section 3.1(b)), to receive the fair value of the SRx Shares represented by such certificate,
and (ii) any dividends or distributions with a record date after the Exchange Time theretofore paid or payable with respect to any Parent
Shares or Exchangeable Shares issued in exchange therefor as contemplated by Section 4.2, in each case less any amounts withheld pursuant
to Section 4.6.
4.2 |
Distributions
with Respect to Unsurrendered Certificates |
No
dividends or other distributions paid, declared or made with respect to Parent Shares or Exchangeable Shares, in each case with a record
date after the Exchange Time, shall be paid to the holder of any unsurrendered certificate which immediately prior to the Exchange Time
represented outstanding SRx Shares, unless and until such person shall have surrendered its certificates representing SRx Shares in accordance
with the provisions of Section 4.1. Subject to applicable Law, at the time such person shall have surrendered its certificates representing
SRx Shares in accordance with the provisions of Section 4.1, there shall be paid to such person, without interest
(i)
the amount of dividends or other distributions with a record date after the Exchange Time theretofore paid with respect to the Parent
Share or the Exchangeable Share, as the case may be, to which such person is entitled pursuant hereto, and (ii) on the appropriate payment
date, the amount of dividends or other distributions with a record date after the Exchange Time but prior to the date of surrender of
certificates representing SRx Shares by such person in accordance with the provisions of Section 4.1 and a payment date subsequent to
the date of such compliance and payable with respect to such Parent Shares or Exchangeable Shares, as the case may be.
No
fractional Parent Shares or fractional Exchangeable Shares shall be issued upon compliance with the provisions of Section 4.1 and no
dividend, stock split or other change in the capital structure of Parent or Acquireco shall relate to any such fractional security and
such fractional interests shall not entitle the owner thereof to exercise any rights as a security holder of Parent or Acquireco. Where
the aggregate number of Parent Shares or Exchangeable Shares to be issued to a SRx Shareholder as consideration under the Arrangement
would result in a fraction of an Parent Share or an Exchangeable Share being issuable, the number of Parent Shares or Exchangeable Shares,
as the case may be to be received by such SRx Shareholder shall be rounded down to the nearest whole Parent Share or Exchangeable Share,
as the case may be, and such person shall not be entitled to any compensation in respect of such fractional Parent Share or fractional
Exchangeable Share.
In
the event any certificate which immediately prior to the Exchange Time represented one or more outstanding SRx Shares that were exchanged
pursuant to Section 2.2 shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming
such certificate to be lost, stolen or destroyed, the Depositary will issue in exchange for such lost, stolen or destroyed
certificate, any Parent Shares or Exchangeable Shares (and any dividends or distributions with respect thereto) deliverable in accordance
with Section 2.2 and such holder’s Letter of Transmittal and Election Form. When authorizing such payment in exchange for any lost,
stolen or destroyed certificate, the person to whom Parent Shares or Exchangeable Shares (and any dividends or distributions with respect
thereto) are to be issued shall, as a condition precedent to the issuance thereof, give a bond satisfactory to SRx, and Parent and its
transfer agent (each acting reasonably) in such amount as Parent may direct or otherwise indemnify SRx, Acquireco and Parent in a manner
satisfactory to SRx, Acquireco and Parent against any claim that may be made against SRx, Acquireco or Parent with respect to the certificate
alleged to have been lost, stolen or destroyed.
Any
certificate which immediately prior to the Exchange Time represented outstanding SRx Shares that were exchanged pursuant to Section 2.2
that is not deposited with all other instruments required by Section 4.1 on the second anniversary of the Effective Date shall cease
to represent a claim or interest of any kind or nature as a securityholder of Parent or Acquireco. On such date, the Parent Shares and/or
Exchangeable Shares to which the former holder of the certificate referred to in the preceding sentence was ultimately entitled shall
be deemed to have been surrendered for no consideration to Acquireco. None of Parent, SRx, Acquireco, Callco or the Depositary shall
be liable to any person in respect of any cash or property delivered to a public official pursuant to any applicable abandoned property,
escheat or similar Law.
SRx,
Acquireco, Callco, Parent, the Depositary and their respective agents shall be entitled to deduct and withhold from any dividend, consideration
or amount otherwise payable to any holder of SRx Securities, Parent Shares or Exchangeable Shares such amounts as SRx, Acquireco, Callco,
Parent, the Depositary or their respective agents are required to deduct and withhold with respect to such payment under the Tax Act,
United States Tax Laws or any other applicable Law. To the extent that amounts are so withheld, such withheld amounts shall be treated
for all purposes hereof as having been paid to the holder of the securities in respect of which such deduction and withholding was made,
provided that such withheld amounts are actually remitted to the appropriate Governmental Entity. SRx, Acquireco, Callco, Parent, the
Depositary and their respective agents are hereby authorized to sell or otherwise dispose of such other portion of the consideration
as is necessary to provide sufficient funds to SRx, Acquireco, Callco, Parent, the Depositary or their respective agents, as the case
may be, to enable it to comply with such deduction or withholding requirement and SRx, Acquireco, Callco, Parent, the Depositary and
their respective agents, as applicable, shall notify the holder thereof and remit any unapplied balance of the net proceeds of such sale.
Any such sale will be made in accordance with applicable Law and at prevailing market prices and none of SRx, AcquireCo, Callco, Parent,
the Depositary, or any of their respective agents shall be under any obligation to obtain a particular price, or indemnify any Person
(including, for greater certainty, any SRx Shareholder, any SRx RSU Holder, any SRx Warrantholder and any Dissenting Shareholder) in
respect of a particular price, for the portion of the non-cash consideration so sold.
From
and after the Effective Time: (i) this Plan of Arrangement shall take precedence and priority over any and all SRx Shares issued prior
to the Effective Time; (ii) the rights and obligations of the registered holders of SRx Shares (other than Parent, Acquireco or any of
their respective affiliates), and of SRx, Parent, Acquireco, the Depositary and any transfer agent or other depositary in relation thereto,
shall be solely as provided for in this Plan of Arrangement and the Arrangement Agreement; and (iii) 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 SRx Shares shall
be deemed to have been settled, compromised, released and determined without liability except as set forth herein.
ARTICLE
5
AMENDMENT
5.1 |
Plan
of Arrangement Amendment |
|
(a) |
With
the prior written consent of Parent, not to be unreasonably withheld, SRx may amend, modify and/or supplement this Plan of Arrangement
at any time and from time to time, provided that any such amendment, modification and/or supplement must be contained in a written
document that is filed with the Court and, if made after the SRx Meeting, approved by the Court and communicated to the SRx Securityholders
if and as required by the Court. |
|
(b) |
With
the prior written consent of Parent, not to be unreasonably withheld, any amendment, modification or supplement to this Plan of Arrangement
may be proposed by SRx at any time before or at the SRx Meeting with or without any other prior notice or communication and, if so
proposed and accepted by the persons voting at the SRx Meeting in the manner required under the Interim Order, shall become part
of this Plan of Arrangement for all purposes. |
|
(c) |
Any
amendment, modification or supplement to this Plan of Arrangement that is approved or directed by the Court following the SRx Meeting
shall be effective only if it is consented to in writing by SRx and Parent and, (ii) if required by the Court, it is consented to
by SRx Shareholders, SRx RSU Holders and/or SRx Warrantholders. |
|
(d) |
With
the prior written consent of Parent, not to be unreasonably withheld, any amendment, modification or supplement to this Plan of Arrangement
may be made prior to the Effective Date by SRx and without the approval of the Court, SRx Shareholders, SRx RSU Holders or SRx Warrantholders,
provided that it concerns a matter which, in the reasonable opinion of SRx, is of an administrative nature required to better give
effect to the implementation of this Plan of Arrangement and is not materially adverse to the financial or economic interests of
any SRx Shareholder, SRx RSU Holder or SRx Warrantholder. |
|
(e) |
This
Plan of Arrangement may be withdrawn prior to the Exchange Time in accordance with the Arrangement Agreement. |
ARTICLE
6
FURTHER ASSURANCES
Notwithstanding
that the transactions and events set out in this Plan of Arrangement shall occur and shall be deemed to occur in the order set out in
this Plan of Arrangement without any further act or formality, each of SRx, Parent, Callco and Acquireco shall make, do and execute,
or cause to be made, done and executed, all such further acts, deeds, agreements, transfers, assurances, instruments or documents as
may reasonably be required by any of them to document or evidence any of the transactions or events set out in this Plan of Arrangement.
ARTICLE
7
NOTICE
Any
notice to be given by Parent or Acquireco to SRx Shareholders, SRx RSU Holders or SRx Warrantholders pursuant to the Arrangement will
be deemed to have been properly given if it is mailed by first class mail, postage prepaid, to registered SRx Shareholders, SRx RSU Holders
and SRx Warrantholders, as the case may be, at their addresses as shown on the applicable register of such holders maintained by SRx
and will be deemed to have been received on the first day following the date of mailing which is a Business Day.
The
provisions of this Plan of Arrangement, the Arrangement Agreement and the Letter of Transmittal and Election Form apply notwithstanding
any accidental omission to give notice to any one or more SRx Shareholders, SRx Warrantholders or SRx RSU Holders and notwithstanding
any interruption of mail services in Canada, the United States or elsewhere following mailing. In the event of any interruption of mail
service following mailing, Parent intends to make commercially reasonable efforts to disseminate any notice by other means, such as dissemination
by press release. Notwithstanding the provisions of the Arrangement Agreement, this Plan of Arrangement and the Letter of Transmittal
and Election Form, certificates, if any, for Parent Shares and Exchangeable Shares issuable, pursuant to the Arrangement need not be
mailed if Parent determines that delivery thereof by mail may be delayed. Persons entitled to cheques and certificates which are not
mailed for the foregoing reason may take delivery thereof at the office of the Transfer Agent in respect of which the certificates being
issued were deposited, upon application to the Transfer Agent, until such time as Parent has determined that delivery by mail will no
longer be delayed. Notwithstanding the provisions of the Arrangement Agreement, this Plan of Arrangement and the Letter of Transmittal
and Election Form, the deposit of cheques and certificates with the Transfer Agent in such circumstances will constitute delivery to
the persons entitled thereto and the Parent Shares will be deemed to have been paid for immediately upon such deposit.
SCHEDULE
B
SRx
ARRANGEMENT RESOLUTION
|
a) |
the
arrangement (the “Arrangement”) under Section 182 of the Business Corporations Act (Ontario) (the “OBCA”)
involving BETTER CHOICE COMPANY INC., a corporation existing under the laws of the State of Delaware (“Parent”),
1000994476 ONTARIO INC., a corporation existing under the laws of the Province of Ontario (“AcquireCo”), 1000994085
ONTARIO INC., a corporation existing under the laws of the Province of Ontario (“CallCo”), and SRX HEALTH SOLUTIONS
INC., a corporation existing under the laws of the Province of Ontario (“SRx”), as more particularly described
and set forth in the management information circular of SRx (the “Circular”) dated , 2024 accompanying
the notice of this meeting (as the Arrangement may be, or may have been, modified, amended or supplemented in accordance with the
definitive arrangement agreement (as it may be amended, the “Arrangement Agreement”) made as of September 3, 2024
between Parent, AcquireCo, CallCo and SRx) is hereby authorized, approved and adopted; |
|
b) |
the
plan of arrangement of SRx (as may be, or may have been, modified, amended or supplemented in accordance with its terms and the terms
of the Arrangement Agreement as the “Plan of Arrangement”) implementing the Arrangement, the full text of which
is set out in Schedule to the Circular, is hereby authorized, approved and adopted; |
|
c) |
the
(i) Arrangement Agreement and related transactions, (ii) actions of the director of SRx in approving the Arrangement Agreement, and
(iii) actions of the director and officers of SRx in executing and delivering the Arrangement Agreement, and any amendments, modifications
or supplements thereto, are hereby ratified and approved; |
|
d) |
SRx
be and is hereby authorized to apply for a final order from the Ontario Superior Court of Justice (Commercial List) (the “Court”)
to approve the Arrangement on the terms set forth in the Arrangement Agreement and the Plan of Arrangement (as they may be modified,
amended or supplemented as described in the Circular); |
|
e) |
notwithstanding
that this resolution has been passed (and the Arrangement approved) by the shareholders of SRx or that the Arrangement has been approved
by the Court, the directors of SRx are hereby authorized and empowered, without further notice to, or approval of, the shareholders
of SRx to (i) modify, amend or supplement the Arrangement Agreement or the Plan of Arrangement to the extent permitted by the terms
of the Arrangement Agreement or the Plan of Arrangement; and (ii) subject to the terms of the Arrangement Agreement, not to proceed
with the Arrangement and related transactions; |
|
f) |
any
director or officer of SRx is hereby authorized and directed for and on behalf of SRx to execute, whether under corporate seal of
SRx or otherwise, and to deliver for filing with the Director under the OBCA articles of arrangement and such other documents as
are necessary or desirable to give effect to the Arrangement in accordance with the Arrangement Agreement, such determination to
be conclusively evidenced by the execution and delivery of such articles of arrangement and any such other documents; and |
|
g) |
any
one director or officer of SRx is hereby authorized and directed, for and on behalf and in the name of SRx, to execute or cause to
be executed and to deliver or cause to be delivered, whether under corporate seal of SRx or otherwise, all such agreements, forms,
waivers, notices, certificate, confirmations and other documents and instruments, and to perform or cause to be performed all such
other acts and things, as in the opinion of such director or officer may be necessary, desirable or useful for the purpose of giving
effect to these resolutions and the matters authorized thereby, the Arrangement Agreement and completion of the Plan of Arrangement,
including: |
|
a. |
a.
all actions required to be taken by or on behalf of SRx, and all necessary filings and obtaining the necessary approvals, consents
and acceptances of appropriate regulatory authorities; and |
|
b. |
the
signing of the certificates, consents and other documents or declarations required under the Arrangement Agreement or otherwise to
be entered into by SRx; such determination to be conclusively
evidenced by the execution and delivery of such document, agreement or instrument or the doing of any such act or thing. |
SCHEDULE
C
REPRESENTATIONS AND WARRANTIES OF SRx
SRx
represents and warrants to and in favor of Parent as follows, and acknowledges that Parent is relying upon such representations and warranties
in connection with the completion of the transactions contemplated herein:
|
(a) |
Schedule
C(a) of the SRx Disclosure Letter sets forth the name and jurisdiction of incorporation of SRx and each of its subsidiaries (in
this Schedule C, the “SRx Subsidiaries”). Each of SRx and the SRx Subsidiaries (i) has been duly incorporated
and is validly existing and in good standing under the laws of its jurisdiction of incorporation and is up-to-date in respect of
all material corporate filings; (ii) has all requisite corporate or other organization, as applicable power and authority to carry
on its business as now conducted and to own or lease and operate its assets and properties; and (iii)
in respect of SRx, has all requisite corporate power and authority to enter into and carry out its obligations under this Agreement. |
|
(b) |
SRx
does not beneficially own, or exercise control or direction over, directly or indirectly, any interest in any other Person other
than the SRx Subsidiaries or any agreement, option or commitment to acquire any such investment. All of the issued and outstanding
securities of the SRx Subsidiaries are owned by SRx. |
|
(c) |
No
steps or proceedings have been taken, instituted or, to the knowledge of SRx, are pending for the dissolution, liquidation or winding
up of SRx or an SRx Subsidiary. Except as disclosed in Schedule C(c) of the SRx Disclosure Letter, neither SRx nor any SRx
Subsidiary: (i) is insolvent or bankrupt under or pursuant to any corporate, insolvency, winding-up, restructuring, reorganization,
administration or other Laws applicable to it; (ii) has commenced, approved, authorized or taken any action in furtherance of proceedings
in respect of it under any applicable bankruptcy, insolvency, restructuring, reorganization, administration, winding up, liquidation,
dissolution, or similar Law; (iii) has proposed a compromise or arrangement with its creditors generally or is or has been subject
to any actions taken, orders received or proceedings commenced by creditors or other Persons for or in respect of the bankruptcy,
receivership, insolvency, restructuring, reorganization, administration, winding-up, liquidation or dissolution of it, or any of
its property or assets; (iv) had any encumbrancer take possession of any of its property, or (v) had any execution or distress become
enforceable or become levied upon any of its property. SRx is not unable to pay its liabilities as they become due and the realizable
value of the assets of SRx are not less than the aggregate of its liabilities and stated capital of all classes. |
|
(d) |
Each
of SRx and the SRx Subsidiaries is, in all material respects, conducting its business in compliance with all applicable Laws (including
all material applicable federal, provincial, state, municipal and local laws, regulations and other lawful requirements of any Governmental
Entity) of each jurisdiction in which its business is carried on and is duly licensed, registered or qualified in all jurisdictions
in which it owns, leases or operates its property or carries on business to enable its business to be carried on as now conducted
and its property and assets to be owned or leased and operated and all such licenses, registrations and qualifications are valid,
subsisting and in good standing and it has not received a notice of non-compliance, nor knows of, nor has reasonable grounds to know
of, any facts that could give rise to a notice of non-compliance with any such Laws, licenses, permits, registrations or qualifications
which would reasonably be expected to result in an SRx Material Adverse Effect. |
|
(e) |
SRx
has the requisite corporate power and authority to enter into, deliver and perform its obligations under this Agreement. The
execution and delivery of this Agreement and performance by SRx of its obligations under this Agreement and the consummation of the
Arrangement and other transactions contemplated hereby have been duly authorized by all necessary corporate action of SRx and no
other corporate proceedings on the part of SRx are necessary to authorize the execution, delivery and performance of this Agreement
or the consummation of the Arrangement and the other transactions contemplated hereby other than the approval by the SRx Board of
the SRx Circular and the
approval by the SRx Securityholders in the manner required by the Interim Order, applicable Law and approval of the Arrangement by the
Court. |
|
(f) |
This
Agreement has been duly and validly executed and delivered by SRx and, assuming due authorization, execution and delivery by Parent,
AcquireCo and CallCo, constitutes a legal, valid and binding obligation of SRx, enforceable against SRx in accordance with its terms,
subject however, to limitations with respect to enforcement imposed by Law in connection with bankruptcy, insolvency, reorganization
or other Laws affecting creditors’ rights generally and to the extent that equitable remedies such as specific performance
and injunctions are only available in the discretion of the court from which they are sought. |
|
(g) |
Other
than the Interim Order and any approvals required by the Interim Order, the Final Order, filings with the Director under the OBCA
and such filings and other actions required under applicable Securities Laws and the Key Regulatory Approvals set out in in Schedule
E, no Authorization or consent of any Governmental Entity, and no notice, registration, declaration or filing by SRx or any of
the SRx Subsidiaries with any such Governmental Entity is required in connection with the execution and delivery of, and performance
by SRx of its obligations under, this Agreement or the consummation of the Arrangement and the other transactions contemplated in
this Agreement. |
|
(h) |
Other
than as set out in Schedule C(h) of the SRx Disclosure Letter, there is no requirement under any SRx Material Contract to
make a filing with, give any notice to, or to obtain the consent or approval of, any party to such SRx Material Contract relating
to the transactions contemplated by this Agreement. |
|
(i) |
The
execution and delivery of this Agreement by SRx, the performance by SRx of its obligations hereunder and the consummation of the
transactions contemplated hereby do not and will not (whether after notice or lapse of time or both) (i) conflict with or result
in a breach or violation of any of the terms or provisions of, or constitute a default under (whether after notice or lapse of time
or both) or give rise to any right of termination or acceleration of any obligations or indebtedness, and neither SRx nor an SRx
Subsidiary is currently in material breach or default of, (A) any Law applicable to SRx or an SRx Subsidiary; (B) the constating
documents or resolutions of SRx or any SRx Subsidiary, as applicable; (C) any Contract or Debt Instrument to which SRx or any SRx
Subsidiary is a party or by which it is bound, except as disclosed in Schedule C(i) of the SRx Disclosure Letter, or (D) any
judgment, decree or order binding SRx or any SRx Subsidiary, as applicable, or the assets or properties thereof; (ii) allow any Person
to exercise any rights, require any consent or other action by any Person or permit the termination, cancellation, acceleration or
other change of any right or other obligation or the loss of any benefit to which SRx or any SRx Subsidiary is entitled (including
by triggering any rights of first refusal or first offer, change in control provision or other restriction or limitation) under any
Material Contract; or (iii) result in the creation or imposition of any Encumbrance up on any of SRx’s assets or the assets
of the SRx Subsidiaries. |
|
(j) |
Schedule
C(j) of the SRx Disclosure Letter sets forth the authorized, issued and outstanding share capital of SRx and each of the SRx
Subsidiaries. All of the issued and outstanding shares of capital stock of, or other equity or voting interests in, each of SRx and
the SRx Subsidiaries has been duly authorized and validly issued in compliance with applicable Laws and, is fully paid and non- assessable,
were not issued in violation of any pre-emptive rights, purchase options, call options, rights of first refusal, first offer, co-sale
or participation or subscription rights or other similar rights. Except as set out in Schedule C(j) of the SRx Disclosure
Letter, all of the issued and outstanding shares of capital stock of, or other equity or voting interests in, each SRx Subsidiary
is owned, directly or indirectly, both as a matter of record and beneficially by SRx and is free and clear of all Encumbrances (except
for Permitted Encumbrances). Schedule C(k) of the SRx Disclosure Letter sets forth a list of all other securities of SRx. |
|
(k) |
Except
for the securities set forth in Schedule C(k) of the SRx Disclosure Letter, no Person now has any agreement or option or right
or privilege (whether at law, pre-emptive or contractual) capable of becoming an agreement for the purchase, subscription, redemption,
repurchase or issuance of, or conversion into, any shares, securities, warrants or convertible obligations of any nature of SRx and
a sufficient number of SRx Shares are reserved for issuance pursuant to outstanding options, warrants, share incentive plans, convertible,
exercisable and exchangeable securities and other rights to acquire SRx Shares. Schedule C(k) of the SRx Disclosure Letter
sets forth all issued and outstanding securities of SRx convertible into SRx Shares. |
|
(l) |
SRx
is not aware of any legislation, or proposed legislation published by a legislative body, which it anticipates will result in an
SRx Material Adverse Effect. |
|
(m) |
The
SRx Financial Statements (i) have been prepared in accordance with IFRS applied on a consistent basis throughout the periods involved
(except as may be indicated in the notes thereto), (ii)
fairly present, in all material respects, the consolidated financial position of SRx and the SRx Subsidiaries as at the respective
dates thereof and the consolidated results of their operations and cash flows for the periods indicated (except that the unaudited
interim financial statements were or are subject to normal and recurring year-end adjustments) and (iii) when delivered by SRx for
inclusion in the Parent Proxy Statement for filing with the SEC following the date of this Agreement in accordance with Section
2.10, will comply in all material respects with the applicable accounting requirements and with the rules and regulations of the
SEC, the U.S. Exchange Act and the U.S. Securities Act applicable to a registrant, in effect as of the date thereof. Since September
30, 2023, there have been no formal investigations regarding financial reporting or accounting policies and practices discussed
with, reviewed by or initiated at the direction of the Chief Executive Officer or Chief Financial Officer of SRx, the SRx Board or
any committee thereof. Since September 30, 2023, neither SRx nor its independent auditors have identified (i) any significant
deficiency or material weakness in the system of internal accounting controls utilized by SRx, (ii) any fraud, whether or not
material, that involves SRx’s management or other employees who have a role in the preparation of financial statements or the
internal accounting controls utilized by SRx, or (iii) any claim or allegation regarding any of the foregoing. Except as disclosed
in the SRx Financial Statements, neither SRx nor any of the SRx Subsidiaries has any liabilities, indebtedness, obligation, expense,
claim, deficiency, guaranty, or endorsement, whether accrued, absolute, contingent, matured, or unmatured of the kind required to be
disclosed on a balance sheet or in the related notes to the consolidated financial statements prepared in accordance with IFRS which
are, individually or in the aggregate, material to the business, results of operations or financial condition of SRx and the SRx
Subsidiaries taken as a whole, except liabilities (i) identified in the balance sheet of SRx as of the Latest Balance Sheet Date or
the notes thereto, (ii) incurred in connection with the transactions contemplated by this Agreement, (iii) described on Schedule
C(m) of the SRx Disclosure Letter, (iv) executory obligations under any Contract or (v) incurred since the date of the balance
sheet of SRx as of the Latest Balance Sheet Date in the ordinary course of business. SRx does not intend to correct or restate, nor
is there any basis for any correction or restatement of, any aspect of the SRx Financial Statements. |
|
(n) |
Since
the Latest Balance Sheet Date through the date of this Agreement and other than with respect to the negotiation, execution and performance
of this Agreement, each of SRx and the SRx Subsidiaries has conducted its business only in the ordinary course of business, and there
has not been: (i) any event that has had an SRx Material Adverse Effect, or (ii) any material change by SRx or any SRx Subsidiary
in its accounting methods, principles or practices, except as required by concurrent changes in IFRS or as disclosed in the notes
to the SRx Financial Statements. |
|
(o) |
Neither
SRx nor any of the SRx Subsidiaries has any material liabilities or obligations of any nature, whether or not accrued, contingent
or otherwise, except for: (i) liabilities and obligations that are adequately presented or reserved on the SRx Financial Statements
or disclosed in the notes thereto; or (ii) liabilities and obligations incurred in the ordinary course of business that are not and
would not, individually or in the aggregate with all other liabilities and obligations of SRx and the SRx Subsidiaries (other than
those disclosed on the SRx Financial Statements), be material to SRx and the
SRx Subsidiaries (taken as a whole). Without limiting the foregoing, the SRx Financial Statements reflects reasonable reserves in accordance
with IFRS for contingent liabilities of SRx and the SRx Subsidiaries. |
|
(p) |
Each
of SRx and the SRx Subsidiaries maintains internal control over financial reporting. Such internal control over financial reporting
is effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with IFRS and includes policies and procedures that: (A) provide reasonable assurance
that transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS, and that receipts
and expenditures of SRx and the SRx Subsidiaries are being made only with appropriate authorizations of management and directors
of SRx and the SRx Subsidiaries, as applicable; and (B) provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the assets of SRx or the SRx Subsidiaries that could have a material effect on its
financial statements. As of the date of this Agreement, there neither is, nor has been, any fraud with respect to SRx or the SRx
Subsidiaries, whether or not material, relating to the financial reporting or internal control over financial reporting of SRx or
the SRx Subsidiaries, as applicable. As of the date of this Agreement, to the knowledge of SRx, there is no fraud that involves management
or any other employees who have a role in the internal control over financial reporting of SRx or the SRx Subsidiaries. |
|
(q) |
There
are no actions, proceedings or, to SRx’s knowledge, investigations (whether or not purportedly by or on behalf of SRx) commenced
or, to the knowledge of SRx, threatened or pending against or relating to SRx or any SRx Subsidiary or the business thereof or affecting
any of their assets and properties or against any current officer or director relating to such individual’s role with SRx or
any SRx Subsidiary at law or in equity (whether in any court, arbitration or similar tribunal) or before or by any Governmental Entity,
that would reasonably be expected to result in an SRx Material Adverse Effect or prevent or materially delay the consummation of
the Arrangement. |
|
(r) |
Except
as disclosed in Schedule C(r) of the SRx Disclosure Letter, none of SRx or any SRx Subsidiary is a party to or bound or affected
by any commitment, agreement or document containing any covenant which expressly limits the freedom of SRx or the SRx Subsidiary
to compete or operate in any line of business, transfer or move any of its assets or operations or which materially or adversely
affects the business practices, operations or condition of SRx or the SRx Subsidiary. |
|
(s) |
Except
as disclosed in Schedule C(s) of the SRx Disclosure Letter, neither SRx nor any of the SRx Subsidiaries is party to, bound
by or subject to any indenture, mortgage, lease, agreement, license, permit, authorization, certification, instrument, statute, regulation,
order, judgment, decree or law that would be violated or breached by, or under which default would occur or which could be terminated,
cancelled or accelerated, in whole or in part, or that would require consent or notice, as a result of the execution, delivery and
performance of this Agreement or the consummation of any of the transactions provided for in this Agreement and the Plan of Arrangement
(except (i) as would not, individually or in the aggregate, have or reasonably be expected to have, individually or in the aggregate,
an SRx Material Adverse Effect or (ii) as set out in Schedule E of this Agreement (Key Regulatory Approvals)). |
|
(t) |
Except
as disclosed in Schedule C(t) of the SRx Disclosure Letter, SRx is not party to any Contract or arrangement, nor to the knowledge
of SRx, is there any shareholders agreement or other Contract, which in any manner affects the voting control of any of the securities
of SRx. |
|
(u) |
Except
as disclosed in Schedule C(u) of the SRx Disclosure Letter, SRx and the SRx Subsidiaries have duly and timely filed all income
and other Tax Returns required to be filed by them and all such Tax Returns are complete and correct in all material respects. |
|
(v) |
SRx
and the SRx Subsidiaries have paid on a timely basis all Taxes which are due and payable or required to be paid by them, other than
those which are being or have been contested in good faith and in respect of which adequate reserves have been provided in the SRx
Financial Statements. SRx and
the SRx Subsidiaries have provided adequate accruals in accordance with IFRS in the SRx Financial Statements for any Taxes for the period
covered by such financial statements that have not been paid whether or not shown as being due on any Tax Returns. |
|
(w) |
neither
SRx nor the SRx Subsidiaries have declared nor paid (nor been deemed to have paid) any “taxable dividend”, “eligible
dividend” or “capital dividend”, all as defined in the Tax Act. |
|
(x) |
Except
as disclosed in Schedule C(x) of the SRx Disclosure Letter, no deficiencies, litigation, proposed adjustments or matters in
controversy exist or have been asserted in writing with respect to any Taxes or Tax Returns of SRx or the SRx Subsidiaries, and neither
SRx nor the SRx Subsidiaries are a party to any action or proceeding for assessment or collection of Taxes, and no such event has
been asserted in writing or, to the knowledge of SRx, threatened against SRx or the SRx Subsidiaries. |
|
(y) |
No
written claim has been made by any Governmental Entity in a jurisdiction where SRx or any of the SRx Subsidiaries does not file a
Tax Return that SRx, or any of the SRx Subsidiaries, is or may be liable to Tax by that jurisdiction or is or may be required to
file a Tax Return with a Governmental Entity of that jurisdiction. |
|
(z) |
For
the purposes of the Tax Act, and any applicable Tax treaty and any other relevant Tax purposes, (i)
SRx is resident in Canada and is a “table Canadian corporation” for purposes of the Tax Act; and (ii)
the SRx Subsidiaries are each resident in the jurisdiction in which they were formed, and are not resident in any other country. |
|
(aa) |
There are no Encumbrances (other than Permitted Encumbrances) with respect to Taxes upon any of the assets of SRx or the SRx Subsidiaries. |
|
(bb) |
Each of SRx and the SRx Subsidiaries has withheld, deducted, charged or collected all amounts required to be withheld, deducted, charged
or collected by it on account of Taxes and has remitted all such amounts to the appropriate Governmental Entity when required by Law
to do so. SRx and the SRx Subsidiaries are in compliance with, and their respective records contain all information and documents necessary
to comply with, all applicable information reporting and withholding requirements under all Law. |
|
(cc) |
Neither SRx nor any of the SRx Subsidiaries is a party or is bound by any Tax sharing, allocation, indemnification agreement or arrangement.
Without limiting the generality of the foregoing, neither SRx nor any of the SRx Subsidiaries has entered into an agreement contemplated
in section 80.04 or 191.3, or subsection 18(2.3), 125(3), 127(13) to (17) or 127(20) of the ITA or any analogous provision of any comparable
Law of any province or territory of Canada. |
|
(dd) |
There are no outstanding agreements extending or waiving the statutory period of limitations applicable to any claim for, or the period
for the collection or assessment or reassessment of Taxes due from SRx or any of the SRx Subsidiaries, for any taxable period and no
request for any such waiver or extension is currently pending. |
|
(ee) |
SRx and the SRx Subsidiaries have complied with applicable transfer pricing Laws (including with respect to the preparing, obtaining
or retaining all required documentation), including for greater certainty, with the provisions of section 247 of the Tax Act (and the
corresponding provisions of any other Law). |
|
(ff) |
Except as disclosed in Schedule C(ff) of the SRx Disclosure Letter, SRx and the SRx Subsidiaries have not, at any time, directly
or indirectly transferred any property or supplied any services to, or acquired any property or services from, a Person with whom SRx
or the SRx Subsidiaries was not dealing at arm’s length (within the meaning of the Tax Act) for consideration other than consideration
equal to the fair market value of such property or services at the time of transfer, supply
or acquisition, as the case may be, nor has SRx or the SRx Subsidiaries been deemed to have done so for purposes of the Tax Act or any
other Law. |
|
(gg)
|
There are no circumstances existing which could result in the application of sections 17, 78, 79, 79.1, sections 80 to 80.04 or subsection
90(6) of the Tax Act, or any equivalent provision of any other Law, to SRx or the SRx Subsidiaries. Except as in accordance with past
practices, SRx and the SRx Subsidiaries have not claimed any reserve, credit, deduction or other amount under any provision of the Tax
Act or any other Law, if any amount could be included in the income of SRx or the SRx Subsidiaries for any period ending after or including
the Effective Date. |
|
(hh) |
Neither SRx nor any of the SRx Subsidiaries will be required to include an item of income or gain in, or exclude any item of deduction
or loss from, taxable income for or otherwise be liable for Tax in any period (or any portion thereof) ending after the Effective Date
as a result of any (i) transaction, income or gain attributable to any period (or portion thereof) ending on or prior to the Effective
Date, (ii) installment sale, open transaction disposition or other transaction occurring on or prior to the Effective Date, (iii) change
in method of accounting made or requested on or prior to the Effective Date, (iv) use of an improper method of accounting on or prior
to the Effective Date, (v) prepaid amount received, or deferred revenue accrued, on or prior to the Effective Date, or (vi) closing agreement
with any Tax authority executed on or prior to the Effective Date. |
|
(ii) |
The
SRx Shares are not “taxable Canadian property” as such term is defined in the Tax Act (or any analogous provision of
any applicable comparable Law of any province or territory of Canada.). |
|
(jj) |
Neither SRx nor any of the SRx Subsidiaries has (i) undertaken,
participated in, entered into or been contractually obligated to enter into a “reportable transaction” or “notifiable
transaction” (each as defined in the Tax Act), or (ii) had any “reportable uncertain tax treatment” (as defined in
the Tax Act). |
|
(kk) |
All research and development investment tax credits and other
tax credits (“ITCs”) claimed by the SRx or any of the SRx Subsidiaries were claimed in accordance with the Tax Act
or any other Law and SRx and or the SRx Subsidiaries, as applicable, has satisfied at all times the relevant criteria and conditions
entitling it to such ITCs. |
|
(ll) |
The total fair market value of all shares of “foreign
affiliates” (as defined in subsection 95(1) of the Tax Act) that are held directly or indirectly by SRx does not exceed 75% of
the total fair market value (determined without reference to debt obligations of any corporation resident in Canada in which SRx has
a direct or indirect interest) of all properties owned by SRx. |
|
(mm) |
Except as disclosed in Schedule C(mm) of the SRx Disclosure
Letter, neither SRx nor any SRx Subsidiary nor, to SRx’s knowledge, any other Person, is in default in any material respect in
the observance or performance of any term, covenant or obligation to be performed by SRx or an SRx Subsidiary or such other Person under
any Material Contract, and no event has occurred which with notice or lapse of time or both would constitute such a default by SRx or
any SRx Subsidiary or, to SRx’s knowledge, any other party, except where such default or event would not reasonably be expected
to result in an SRx Material Adverse Effect. |
|
(nn) |
Since the Latest Balance Sheet Date: |
|
(i) |
Except
as disclosed in Schedule C(nn)(i) of the SRx Disclosure Letter, there has not been any material change in the assets, liabilities,
obligations (absolute, accrued, contingent or otherwise), business, condition (financial or otherwise) or results of operations of
SRx or any SRx Subsidiary; |
|
(ii) |
Except
as disclosed in Schedule C(nn)(ii) of the SRx Disclosure Letter, there has not been any material change in the share capital
or long-term debt of SRx; |
|
(iii) |
There
has not been any entering into, or an amendment of, any SRx Material Contract other than (A) in the ordinary course of business,
or (B) renewals of any such contract; |
|
(iv) |
There
has not been any satisfaction or settlement of any material claims or material liabilities, other than the settlement of such claims
or such liabilities incurred in the ordinary course of business; |
|
(v) |
Except
for ordinary course adjustments to salary, bonus, or other remuneration payable to any officers or senior or executive officers,
there has not been any increase in the salary, bonus, severance, termination pay, change of control entitlements or other remuneration
payable to any senior or executive officers of SRx or any SRx Subsidiary; and |
|
(vi) |
SRx
and the SRx Subsidiaries have carried on their business in the ordinary course consistent with past practice. |
|
(oo) |
Except as disclosed in Schedule C(oo) of the SRx Disclosure
Letter, there has been no interruption to or discontinuity in any material supplier or distributor arrangement or relationship of SRx
and the SRx Subsidiaries with each of their respective material suppliers and distributors and the relationships of SRx and the SRx Subsidiaries
with each of their respective material suppliers and distributors are satisfactory, and there are no unresolved disputes with any such
supplier or distributor. Except as disclosed in Schedule C(oo) of the SRx Disclosure Letter, no material supplier or distributor
of SRx or any SRx Subsidiary has notified SRx or the SRx Subsidiary that such material supplier or distributor will not continue dealing
with SRx or the SRx Subsidiary on substantially the same terms as presently conducted, and to the knowledge of SRx, there is no reason
to believe that, any such supplier or distributor will not continue dealing with SRx or the SRx Subsidiary on substantially the same
terms as presently conducted, in each case subject to changes in pricing and volume in the ordinary course. |
|
(pp) |
Each of SRx and the SRx Subsidiaries possesses permits, licenses,
approvals, consents and other authorizations issued by a federal, provincial, state, local or foreign regulatory agencies or bodies (in
this Schedule C, collectively, “Governmental Licenses”) required by Law to conduct the business now operated
by them, except where the failure to hold such Governmental Licenses would not, individually or in the aggregate, result in an SRx Material
Adverse Effect. Each Governmental License is valid and in full force and effect, and is renewable by its terms or in the ordinary course
without the need for SRx to comply with any special rules of procedures, agree to any materially different terms or conditions or pay
any amounts other than routine filing fees. To the knowledge of SRx, each of SRx and the SRx Subsidiaries is in compliance in all material
respects with the terms and conditions of all such Governmental Licenses. No consent, license, order, authorization, approval, permit,
registration or declaration of, or filing with, any Governmental Entity is required in connection with: (i) the closing of the Arrangement;
(ii) the execution and delivery by SRx of this Agreement or any document delivered by SRx at the closing of the Arrangement to which
it is a party; (iii) the observance and performance by SRx of its obligations under this Agreement or any document delivered by SRx at
the closing of the Arrangement to which it is a party; or (iv) avoiding the loss of any Governmental Licenses relating to SRx or the
SRx Subsidiaries, any of their properties and assets, or the business now operated by them. |
|
(qq) |
To the knowledge of SRx, no event has occurred that, with or
without notice or lapse of time or both, would reasonably be expected to result in the revocation, suspension, lapse or limitation of
any Governmental License. |
|
(rr) |
There are no actions, proceedings or, to SRx’s knowledge,
investigations commenced or, to the knowledge of SRx, pending in respect of or regarding any such Governmental License. None of SRx and
the SRx Subsidiaries has received any written notice of revocation or non-renewal of any Governmental License, or of any intention of
any Person to revoke or refuse to renew any of such Governmental License. |
|
(ss) |
SRx and the SRx Subsidiaries do not carry on any pharmacy activity
outside of the provinces of Alberta, British Columbia, Manitoba, Saskatchewan, Ontario, New Brunswick, Nova Scotia and Newfoundland &
Labrador. |
|
(tt) |
There is no Person acting or purporting to act at the request
of SRx who is entitled to any brokerage, agency or other fiscal advisory or similar fee in connection with the transactions contemplated
by this Agreement and the Plan of Arrangement. |
|
(uu) |
Except as disclosed in Schedule C(uu) of the SRx Disclosure
Letter or in the SRx Financial Statements, neither SRx nor any SRx Subsidiary has any loan or other indebtedness outstanding which has
been made to any of its securityholders, officers, directors or employees, past or present, or any Person not dealing at arm’s
length with it, other than for the reimbursement of ordinary course business expenses. |
|
(vv) |
Except for (i) employment, consulting or employment compensation
agreements entered into in the ordinary course of business, (ii) customary director and officer indemnification arrangements on market
terms, or (iii) financing agreements or shareholder agreements with the SRx Shareholders entered into in connection with financings or
other transactions to which SRx Shareholders are generally parties and that will terminate at or prior to the Effective Time as a result
of the Arrangement, there are no current contracts or other transactions (including relating to indebtedness by SRx or the SRx Subsidiaries)
between SRx or any SRx Subsidiaries on the one hand, and (A) any officer or director of SRx or the SRx Subsidiaries, (B) any holder of
record or beneficial owner of five percent (5%) or more of the voting securities of SRx, or (C) any affiliate or associate of any officer,
director or beneficial owner, on the other hand except as disclosed in Schedule C(vv) of the SRx Disclosure Letter or in the SRx
Financial Statements. |
|
(ww) |
The assets and properties of SRx and the SRx Subsidiaries and
their business and operations are insured against loss or damage with responsible insurers on a basis consistent with insurance obtained
by reasonably prudent participants in comparable businesses, and such coverage is in full force and effect, and SRx and the SRx Subsidiaries
have not failed to promptly give any notice or present any material claim thereunder. |
|
(xx) |
The vehicles, machinery, equipment and other tangible personal
property of SRx and the SRx Subsidiaries are, in all material respects, in good operating condition and repair having regard to their
use and age, and are not in need of maintenance or repairs other than preventative maintenance and repairs in the ordinary course of
business, and are adequate for the uses subject to normal wear and tear to which they are being put to use, have been maintained in all
material respects in accordance with generally accepted industry practice and are free from any material defects. All leased equipment
and other leased personal property of SRx and the SRx Subsidiaries is in all material respects in the condition required of such property
by the terms of the lease applicable thereto. |
|
(yy) |
To the knowledge of SRx, none of SRx or any SRx Subsidiary
is suspended or otherwise restricted from participating in any drug insurance plan, nor, to the knowledge of SRx, are there any facts
or circumstances that are materially inconsistent with market practices and that provide a reasonable basis for any material adverse
regulatory communication or action against SRx or any SRx Subsidiary, in respect of the SRx Business or relating to non-compliance with
any applicable Law. |
|
(zz) |
Neither SRx nor the SRx Subsidiaries own any real property
or hold an ownership interest in any real property, or have owned or held such ownership interest in the past five years, save and except
as set out in Schedule C(zz) of the SRx Disclosure Letter. With respect to each of the material leased premises of SRx and the
SRx Subsidiaries, SRx and the SRx Subsidiaries occupies the applicable leased premises and has the right to occupy and use the leased
premises, subject to the terms of the respective leases, and each of the leases pursuant to which SRx and the SRx Subsidiaries occupies
such leased premises is valid, legally binding and enforceable against SRx or an SRx Subsidiary, as applicable, and to the knowledge
of SRx, the other parties in accordance with its terms is in good standing
and in full force and effect, and none of SRx or any of the SRx Subsidiaries is in breach of, or default under, such lease, sublease,
license or occupancy agreement, and no event has occurred which, with notice, lapse of time or both, would constitute such a breach or
default by SRx or any of the SRx Subsidiaries or permit termination, modification or acceleration by any third party thereunder. No third
party has repudiated or has the right to terminate or repudiate any such lease (except for the normal exercise of remedies in connection
with a default thereunder or any termination rights set forth in the lease) or any provision thereof. None of the aforementioned leases
has been assigned by SRx or any of the SRx Subsidiaries in favor of any Person or sublet or sublicensed. There exists no claim of any
kind or right of set-off against SRx or any SRx Subsidiary, as the case may be, as tenant by the landlord or against the landlord by
SRx or any SRx Subsidiary, as the case may be, as tenant as of the date hereof. SRx and the SRx Subsidiaries own, lease or license all
personal or movable property as is necessary to conduct their business as presently conducted, and SRx and the SRx Subsidiaries have
good and valid title to, or a valid and enforceable interest (whether a leasehold interest or otherwise) in, all of such personal or
movable property. |
|
(aaa) |
SRx and the SRx Subsidiaries as tenants are in actual possession
of all properties leased by them. Except as disclosed in Schedule C(aaa) of the SRx Disclosure Letter, SRx and the SRx Subsidiaries
are not in arrears of rent required to be paid pursuant to any applicable lease. |
|
(bbb) |
The minute books and records of SRx and the SRx Subsidiaries
made available to Parent and its counsel in connection with their due diligence investigation in respect of the Arrangement contain full,
true and correct copies of all constating documents, including all amendments thereto, and contain copies of all proceedings of securityholders
and directors (and committees thereof) and are complete in all material respects. |
|
(ccc) |
Schedule C(ccc) of the SRx Disclosure Letter sets out
separately all Intellectual Property owned by SRx or the SRx Subsidiaries that has been registered or which applications for registration
have been filed and all other material Intellectual Property that is owned by SRx or the SRx Subsidiaries (in this Schedule C,
the “SRx Owned Intellectual Property”) and the Intellectual Property that is duly licensed by SRx as part of its business
as presently conducted, except for commercially available, off-the-shelf software licensed to SRx or any SRx Subsidiary on a royalty-free
basis pursuant to standard, nondiscriminatory terms and conditions (in this Schedule C, the “SRx Licensed Intellectual
Property”, and together with the SRx Owned Intellectual Property, the “SRx Intellectual Property”). SRx
or an SRx Subsidiary is the sole and exclusive owner of the SRx Owned Intellectual Property and all other Intellectual Property that
it owns or purports to own with good, valid and marketable title thereto, free and clear of all Encumbrances (other than Permitted Encumbrances).
SRx or an SRx Subsidiary has valid and enforceable licenses to use all of the SRx Licensed Intellectual Property used by it in connection
with, and as required for, its business as presently conducted. SRx has no knowledge to the effect that it will be unable to obtain or
maintain any rights or licenses to use all Intellectual Property necessary for the conduct of its business. The SRx Owned Intellectual
Property and the SRx Licensed Intellectual Property constitute all of the Intellectual Property required by SRx and the SRx Subsidiaries
to conduct their respective businesses as currently conducted. To the knowledge of SRx, no third parties have rights to any Intellectual
Property, except for the ownership rights of the owners of the SRx Licensed Intellectual Property which is licensed to SRx or an SRx
Subsidiary. To the knowledge of SRx, there is no infringement, misappropriation or misuse by third parties of any SRx Owned Intellectual
Property. There is no pending or, to the knowledge of SRx, threatened action, suit, proceeding or claim by third parties challenging
the rights in or to any SRx Owned Intellectual Property, and SRx is not aware of any facts which form a reasonable basis for any such
claim. The SRx Owned Intellectual Property that is the subject of an application or registration is valid, in full force and effect.
There is no pending or, to the knowledge of SRx, threatened action, suit, proceeding or claim by others challenging the validity or enforceability
of any SRx Owned Intellectual Property, and SRx is not aware of any allegations or finding of unenforceability or invalidity of the SRx
Owned Intellectual Property or any facts which form a reasonable basis for any such claim. All applications, registrations, filings,
renewals and payments necessary to preserve the rights of SRx or any SRx Subsidiary in and to SRx Owned Intellectual Property have been
duly filed, made, prosecuted, maintained,
paid, are in good standing and are recorded in the name of SRx or an SRx Subsidiary. There is no pending or, to the knowledge of SRx,
threatened action, suit, proceeding or claim by third parties that SRx or an SRx Subsidiary infringes, misappropriates or otherwise violates
any patent, trademark, copyright, trade secret or other proprietary rights of others. To the knowledge of SRx, the business of SRx and
the SRx Subsidiaries does not infringe, misappropriate or otherwise violate any patent, trademark, copyright, trade secret or other proprietary
rights of third parties and, without limiting the foregoing, to the knowledge of SRx, there is no patent or patent application by third
parties that contains claims that interfere with the issued or pending claims of any SRx Owned Intellectual Property. |
|
(ddd) |
Except in respect of the Intellectual Property set forth in
Schedule C(ddd) of the SRx Disclosure Letter, no licenses or other rights have been granted to any third party in, to and in respect
of the SRx Owned Intellectual Property. |
|
(eee) |
Other than in respect of those contracts disclosed in Schedule
C(eee) of the SRx Disclosure Letter, neither SRx nor any SRx Subsidiary is a party to or bound by any Contract or other obligation
that limits or impairs its ability to use, sell, transfer, assign or convey, or that otherwise affects any SRx Intellectual Property. |
|
(fff) |
Except as set forth in Schedule C(fff) of the SRx Disclosure
Letter, neither SRx nor any SRx Subsidiary is obligated to pay any royalties, fees or other compensation to any third party in respect
of its ownership, use, practice, exploitation or commercialization of any Intellectual Property. |
|
(ggg) |
Except as disclosed in Schedule C(ggg) of the SRx Disclosure
Letter, no permits, licenses, approvals, consents or other authorizations issued by any federal, provincial, state, local or foreign
regulatory agency or body are required to import or sell the products of SRx or any SRx Subsidiary. |
|
(hhh) |
Except in respect of the individuals listed in Schedule
C(hhh) of the SRx Disclosure Letter, all current and former employees of, and current and former consultants who have contributed
to the creation of any SRx Owned Intellectual Property to, SRx and the SRx Subsidiaries have entered into proprietary rights or similar
agreements with SRx or the applicable SRx Subsidiary, whereby any Intellectual Property required by SRx to conduct its business as presently
conducted created by them in the course of the performance of their employment or engagement has been fully and irrevocably assigned
to SRx or the applicable SRx Subsidiary without additional consideration, and, to the knowledge of SRx, no employee of, or consultant
to, SRx or the applicable SRx Subsidiary is in violation of such agreements. |
|
(iii) |
Each
of SRx and the SRx Subsidiaries have taken all reasonably necessary and appropriate steps (including appropriately marking and labelling
Intellectual Property) to protect the secrecy, confidentiality and proprietary nature of all such Intellectual Property. To the knowledge
of SRx, the employment or engagement by SRx or the applicable SRx Subsidiary of such Persons does not violate any non-disclosure
or non-competition agreement between any such Person and a third party. |
|
(jjj) |
The conduct of SRx and the SRx Subsidiaries in carrying on
the SRx Business and the operation of the SRx Business by SRx and the SRx Subsidiaries have been and is in compliance with all Environmental
Laws, in all material respects, and there are no existing events, conditions, or circumstances that would reasonably be expected to materially
and adversely affect the ability of SRx or the SRx Subsidiaries to comply with Environmental Laws. |
|
(kkk) |
Each of SRx and the SRx
Subsidiaries has obtained all licenses, permits, approvals, consents, certificates, registrations and other authorizations under all
applicable Environmental Laws (in this Schedule C, the “Environmental Permits”) necessary as at the date
hereof for the operation of the business carried by SRx and the SRx Subsidiaries, and each Environmental Permit is valid, subsisting
and in good standing in all material respects and none of SRx nor any of the SRx Subsidiaries is in default or breach of any
Environmental Permit in any respect and no proceeding is
outstanding or, to the knowledge of SRx, has been threatened or is pending to revoke or limit any Environmental Permit. |
|
(lll) |
To the knowledge of SRx, each of SRx and the SRx Subsidiaries
has not used, except in compliance in all respects with all Environmental Laws and Environmental Permits, any property or facility which
it owns, controls manages, operates or leases or previously owned, controlled, operated, managed or leased, to generate, manufacture,
process, distribute, use, treat, store, dispose of, transport or handle any Hazardous Substance and, to the knowledge of SRx, there have
been no releases of Hazardous Substances at any property or facility which it owns, controls, manages, operates or leases or previously
owned, controlled, operated, managed or leased. |
|
(mmm) |
Each of SRx and the SRx Subsidiaries has not received any notice
of, or been prosecuted for, an offence alleging, non-compliance in any material respect with any Environmental Laws, and none of SRx
nor any of the SRx Subsidiaries has settled any allegation of non-compliance short of prosecution. There are no orders or directions
issued against each of SRx and the SRx Subsidiaries under Environmental Laws including those requiring any material work, repairs, construction
or capital expenditures to be made with respect to any of the assets of SRx or the SRx Subsidiaries, nor has SRx or any SRx Subsidiary
received notice of any of the same. |
|
(nnn) |
There are no past unresolved or, to the knowledge of SRx, any
threatened or pending claims, complaints, notices or requests for information received by SRx or any SRx Subsidiary with respect to any
alleged violation of any Environmental Laws, and to the knowledge of SRx, no conditions exist at, on or under any property now or previously
owned, operated, optioned or leased by SRx or an SRx Subsidiary which, with the passage of time, or the giving of notice or both, would
give rise to liability under Environmental Laws that, individually or in the aggregate, would reasonably be expected to result in an
SRx Material Adverse Effect. |
|
(ooo) |
None of SRx nor any SRx Subsidiary has received any notice
wherein it is alleged or stated that it is potentially responsible for a federal, provincial, state, municipal or local clean-up site
or corrective action under Environmental Laws that would reasonably be expected to result in an SRx Material Adverse Effect. |
|
(ppp) |
Except as disclosed in Schedule C(ppp) of the SRx Disclosure
Letter, there are no environmental audits, evaluations, assessments, studies or tests relating to SRx or an SRx Subsidiary. |
|
(qqq) |
None of SRx or the SRx Subsidiaries have agreed by contract
or other agreement to indemnify or be responsible for any liabilities or obligations under Environmental Laws. |
|
(rrr) |
To the knowledge of SRx, SRx and the SRx Subsidiaries are and
have been in compliance in all material respects with all applicable Laws pertaining to employment and employment practices, including
all Laws relating to labor relations, equal employment opportunities, fair employment practices, employment discrimination, harassment,
retaliation, reasonable accommodation, disability rights or benefits, immigration, wages, hours, overtime compensation, child labor,
hiring, promotion and termination of employees, working conditions, meal and break periods, privacy, health and safety, workers’
compensation, leaves of absence and unemployment insurance. All individuals characterized and treated by SRx or any SRx Subsidiary as
independent contractors or consultants are properly treated as independent contractors under all applicable Laws. There are no actions
against SRx or any SRx Subsidiary pending or, to the knowledge of SRx, threatened to be brought or filed, by or with any Governmental
Entity or arbitrator in connection with the employment of any current or former applicant, employee, consultant or independent contractor
of SRx or any SRx Subsidiary, including any claim relating to unfair labor practices, employment discrimination, harassment, retaliation,
equal pay, wage and hours or any other employment related matter arising under applicable Laws. |
|
(sss) |
Neither SRx nor any SRx Subsidiary is subject to any claim
for wrongful dismissal, constructive dismissal or any other tort claim, actual or threatened, or any litigation actual or threatened,
relating to employment or termination of employment of employees or independent contractors. |
|
(ttt) |
Each plan for retirement, bonus, stock purchase, profit sharing,
stock option, deferred compensation, severance or termination pay, insurance, medical, hospital, dental, vision care, drug, sick leave,
disability, salary continuation, legal benefits, unemployment benefits, vacation, incentive or otherwise contributed to or required to
be contributed to, by SRx or an SRx Subsidiary for the benefit of any current or former director, officer, employee or consultant of
SRx or an SRx Subsidiary (in this Schedule C, the “SRx Employee Plans”) has been maintained in compliance with
its terms and with the requirements prescribed by any and all Laws that are applicable to such SRx Employee Plans, in each case in all
material respects. |
|
(uuu) |
All material accruals for unpaid vacation pay, premiums for
unemployment insurance, health premiums, federal or state pension plan premiums, accrued wages, salaries and commissions and employee
benefit plan payments have been reflected in the books and records of SRx and the SRx Subsidiaries. |
|
(vvv) |
There is not currently any labor disruption, dispute, slowdown,
stoppage, complaint or grievance or, to the knowledge of SRx, threatened or pending which is adversely affecting or would reasonably
be expected to adversely affect, in a material manner, the carrying on of the business of SRx and the SRx Subsidiaries, and, to the knowledge
of SRx, there is no proposal to unionize its employees and no collective bargaining agreements are in place or currently being negotiated
by SRx or any SRx Subsidiary. |
|
(www) |
Except as set forth on Schedule C(www) of the SRx Disclosure
Letter, neither the execution and delivery of this Agreement, shareholder or other approval of this Agreement nor the consummation of
the transactions contemplated by this Agreement could, alone or in combination with another event, (i) entitle any employee, director,
officer or independent contractor of the SRx Group to severance pay, termination pay, change of control payment or benefits, or any material
increase in severance pay, (ii) accelerate the time of payment or vesting, or materially increase the amount of compensation due to any
such employee, director, officer or independent contractor, (iii) directly or indirectly cause the SRx Group to transfer or set aside
any assets to fund any material benefits under any Employee Plan, (iv) otherwise give rise to any material liability under any Employee
Plan, or (v) limit or restrict the right to merge, materially amend, terminate
or transfer the assets of any Employee Plan on or following the consummation of the transactions contemplated by this Agreement. |
|
(xxx) |
Other
than this Agreement or as set forth on Schedule C(xxx) of the SRx Disclosure Letter, neither SRx nor any SRx Subsidiary is
currently party to any agreement in respect of: (i) the purchase of any material property or assets or any interest therein or the
sale, transfer or other disposition of any material property or assets or any interest therein currently owned, directly or indirectly,
by SRx or an SRx Subsidiary whether by asset sale, transfer of shares or otherwise; or (ii) the change of control of SRx or an SRx
Subsidiary (whether by sale or transfer of shares or otherwise). |
|
(yyy) |
None of SRx nor any SRx Subsidiary is a party to any Material
Contract, other than the SRx Material Contracts. |
|
(zzz) |
The operations of SRx and the SRx Subsidiaries are and have
been conducted, at all times, in material compliance with all applicable Anti-Money Laundering Laws, and no action by or before any Governmental
Entity against SRx or any SRx Subsidiary with respect to the Anti-Money Laundering Laws is pending. None of SRx nor any SRx Subsidiary
has, directly or indirectly: (i) made or authorized any contribution, payment or gift of funds or property to any official, employee
or agent of any governmental agency, authority or instrumentality of any jurisdiction in violation of applicable Laws; or (ii) made any
contribution to any candidate for public office, in either case where either the payment or the purpose of such contribution, payment
or gift was, is or would be prohibited
under the Corruption of Foreign Public Officials Act (Canada), the Proceeds of Crime (Money Laundering) and Terrorist Financing
Act (Canada) or the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism
Act (United States) or the rules and regulations promulgated thereunder or under any other Laws of any relevant jurisdiction covering
a similar subject matter applicable to SRx, the SRx Subsidiaries and their operations. None of SRx, the SRx Subsidiaries, or, to the
knowledge of SRx, any director, officer, agent, employee, affiliate or Person acting on behalf of SRx or any SRx Subsidiary has been
or is currently subject to any United States sanctions administered by the Office of Foreign Assets Control of the United States Treasury
Department. |
|
(aaaa) |
None of SRx, any SRx Subsidiary or, to the knowledge of SRx,
any of their officers, directors or employees acting on behalf of SRx has violated the United States’ Foreign Corrupt Practices
Act (and the regulations promulgated thereunder), the Corruption of Foreign Public Officials Act (Canada) (and the regulations
promulgated thereunder) or any other applicable Law covering a similar subject matter applicable to SRx, the SRx Subsidiaries and their
operations, and to the knowledge of SRx, no such action has been taken by any of its agents, representatives or other Persons acting
on behalf of SRx. |
|
(bbbb) |
No order, ruling or determination having the effect of suspending
the sale or ceasing the trading in any securities of SRx has been issued by any regulatory authority and is continuing in effect and
no proceedings for that purpose have been instituted or, to the knowledge of SRx, are pending, contemplated or threatened by any regulatory
authority. |
|
(cccc) |
Except where non-compliance would not have a SRx Material Adverse
Effect, SRx and the SRx Subsidiaries have complied and is in compliance with all applicable Laws governing, and all applicable contractual
obligations to third parties relating to privacy, data protection, Processing, or security of Personal Information, including with respect
to obtaining consent or authorization to collect, use, and disclose Personal Information, as well as all internal and external privacy
policies regarding Personal Information; and, no written notices, complaints or other communications have been received by, and no claims
are pending (whether by a Governmental Entity or person), or, to the knowledge of SRx, threatened against SRx or an SRx Subsidiary alleging
a violation of any third party’s privacy rights or other rights relating to Personal Information including any alleged violation
of applicable Laws, contractual obligations or internal or external privacy policies. |
|
(dddd) |
SRx and the SRx Subsidiaries maintain commercially reasonable
measures designed to protect the privacy, confidentiality, integrity and security of Personal Information, including against a Security
Breach, consistent with industry standards and practices and applicable Law. |
|
(eeee) |
To the knowledge of SRx, none of SRx or an SRx Subsidiary’s
suppliers have experienced a Security Breach, including any such incident or breach that may require notification to any Person, any
Governmental Authority or any entity under any Law to which the supplier is subject. |
|
(ffff) |
Except for the representations and warranties expressly made
by SRx in this Schedule C or in any certificate delivered pursuant to this Agreement, neither SRx nor any other Person makes or
has made any representation or warranty of any kind whatsoever, express or implied, at law or in equity, with respect to SRx or any of
the SRx Subsidiaries or their respective business, operations, assets, liabilities, condition (financial or otherwise), notwithstanding
the delivery or disclosure to Parent or any of its affiliates or Representatives of any documentation, forecasts or other information
with respect to any one or more of the foregoing. Without limiting the generality of the foregoing, neither SRx nor any other Person
makes or has made any express or implied representation or warranty to Parent or any of its Representatives with respect to (A) any financial
projection, forecast, estimate, or budget relating to SRx, any of its subsidiaries or their respective businesses or, (B) except for
the representations and warranties made by SRx in this Schedule C, any oral or written information presented to Parent or any
of its Representatives in the course of their due diligence investigation of SRx and the SRx Subsidiaries, the negotiation of this Agreement
or the course of the Arrangement. |
SCHEDULE
D
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent
represents and warrants to and in favor of SRx as follows, and acknowledges that SRx is relying upon such representations and warranties
in connection with the completion of the transactions contemplated herein:
|
(a) |
The
name and jurisdiction of incorporation of Parent and each of its subsidiaries (in this Schedule D, the “Parent Subsidiaries”)
is set forth in the Parent Disclosure Documents. Each of Parent and the Parent Subsidiaries (i) has been duly incorporated and is
validly existing and in good standing under the laws of its jurisdiction of incorporation and is up-to-date in respect of all material
corporate filings; (ii) has all requisite corporate or other organization as applicable, power and authority to carry on its business
as now conducted and to own or lease and operate its assets and properties; and (iii)
in respect of Parent, AcquireCo and CallCo, has all requisite corporate power and authority to enter into and carry out its obligations
under this Agreement. |
|
(b) |
Parent
does not beneficially own, or exercise control or direction over, directly or indirectly, any interest in any other Person other
than the Parent Subsidiaries or any agreement, option or commitment to acquire any such investment. All of the issued and outstanding
securities of the Parent Subsidiaries are owned by Parent. |
|
(c) |
No
steps or proceedings have been taken, instituted or, to the knowledge of Parent, are pending for the dissolution, liquidation or
winding up of Parent or a Parent Subsidiary. Except as disclosed in Schedule D(c) of the Parent Disclosure Letter, neither
Parent nor any Parent Subsidiary: (i) is insolvent or bankrupt under or pursuant to any corporate, insolvency, winding-up, restructuring,
reorganization, administration or other Laws applicable to it; (ii) has commenced, approved, authorized or taken any action in furtherance
of proceedings in respect of it under any applicable bankruptcy, insolvency, restructuring, reorganization, administration, winding
up, liquidation, dissolution, or similar Law; (iii) has proposed a compromise or arrangement with its creditors generally or is or
has been subject to any actions taken, orders received or proceedings commenced by creditors or other Persons for or in respect of
the bankruptcy, receivership, insolvency, restructuring, reorganization, administration, winding-up, liquidation or dissolution of
it, or any of its property or assets; (iv) had any encumbrancer take possession of any of its property, or (v) had any execution
or distress become enforceable or become levied upon any of its property. Parent is not unable to pay its liabilities as they become
due and the realizable value of the assets of Parent are not less than the aggregate of its liabilities and stated capital of all
classes. |
|
(d) |
Each
of Parent and the Parent Subsidiaries is, in all material respects, conducting its business in compliance with all applicable Laws
(including all material applicable federal, provincial, state, municipal and local laws, regulations and other lawful requirements
of any Governmental Entity) of each jurisdiction in which its business is carried on and is duly licensed, registered or qualified
in all jurisdictions in which it owns, leases or operates its property or carries on business to enable its business to be carried
on as now conducted and its property and assets to be owned or leased and operated and all such licenses, registrations and qualifications
are valid, subsisting and in good standing and it has not received a notice of non-compliance, nor knows of, nor has reasonable grounds
to know of, any facts that could give rise to a notice of non-compliance with any such Laws, licenses, permits, registrations or
qualifications which would reasonably be expected to result in a Parent Material Adverse Effect. |
|
(e) |
Parent
has the requisite corporate power and authority to enter into, deliver and perform its obligations under this Agreement. The
execution and delivery of this Agreement and performance by Parent of its obligations under this Agreement and the consummation of
the Arrangement and other transactions contemplated hereby have been duly authorized by all necessary corporate action of Parent and
no other corporate proceedings on the part of Parent are necessary to authorize the execution, delivery and performance of this
Agreement or the consummation of the Arrangement and the other transactions contemplated hereby other than the approval by the
Parent Board of the Parent
Proxy Statement and the approval of the Parent Shareholder Approval Matters by the Parent Shareholders in the manner required by applicable
Law. |
|
(f) |
This
Agreement has been duly and validly executed and delivered by each of Parent, AcquireCo and CallCo and, assuming due authorization,
execution and delivery by SRx, constitutes a legal, valid and binding obligation of Parent, AcquireCo and CallCo, enforceable against
Parent, AcquireCo and CallCo in accordance with its terms, subject however, to limitations with respect to enforcement imposed by
Law in connection with bankruptcy, insolvency, reorganization or other Laws affecting creditors’ rights generally and to the
extent that equitable remedies such as specific performance and injunctions are only available in the discretion of the court from
which they are sought. |
|
(g) |
Other
than the actions required under applicable Securities Laws and the Key Regulatory Approvals set out in Schedule E of this
Agreement (Key Regulatory Approvals), no Authorization or consent of any Governmental Entity, and no notice, registration,
declaration or filing by Parent or any of the Parent Subsidiaries with any such Governmental Entity is required in connection with
the execution and delivery of, and performance by Parent, AcquireCo and CallCo of their obligations under, this Agreement or the
consummation of the Arrangement and the other transactions contemplated in this Agreement. |
|
(h) |
Other
than as set out in Schedule D(h) of the Parent Disclosure Letter, there is no requirement under any Parent Material Contract
to make a filing with, give any notice to, or to obtain the consent or approval of, any party to such Parent Material Contract relating
to the transactions contemplated by this Agreement. |
|
(i) |
The
execution and delivery of this Agreement by Parent, the performance by Parent of its obligations hereunder and the consummation of
the transactions contemplated hereby do not and will not (whether after notice or lapse of time or both) (i) conflict with or result
in a breach or violation of any of the terms or provisions of, or constitute a default under (whether after notice or lapse of time
or both) or give rise to any right of termination or acceleration of any obligations or indebtedness, and neither Parent nor a Parent
Subsidiary is currently in material breach or default of, (A) any Law applicable to Parent or a Parent Subsidiary; (B) the constating
documents or resolutions of Parent or any Parent Subsidiary, as applicable; (C) any Contract or Debt Instrument to which Parent or
any Parent Subsidiary is a party or by which it is bound, except as disclosed in Schedule D(i) of the Parent Disclosure Letter,
or (D) any judgment, decree or order binding Parent or any Parent Subsidiary, as applicable, or the assets or properties thereof;
(ii) allow any Person to exercise any rights, require any consent or other action by any Person or permit the termination, cancellation,
acceleration or other change of any right or other obligation or the loss of any benefit to which Parent or any Parent Subsidiary
is entitled (including by triggering any rights of first refusal or first offer, change in control provision or other restriction
or limitation) under any Material Contract; or (iii)
result in the creation or imposition of any Encumbrance up on any of Parent’s assets or the assets of the Parent Subsidiaries. |
|
(j) |
The
authorized, issued and outstanding share capital of Parent and each of the Parent Subsidiaries is set forth in the Parent Disclosure
Documents. All of the issued and outstanding shares of capital stock of, or other equity or voting interests in, each of Parent and
the Parent Subsidiaries has been duly authorized and validly issued in compliance with applicable Laws and, is fully paid and non-
assessable, were not issued in violation of any pre-emptive rights, purchase options, call options, rights of first refusal, first
offer, co-sale or participation or subscription rights or other similar rights. Except as set out in Schedule D(j) of the
Parent Disclosure Letter, all of the issued and outstanding shares of capital stock of, or other equity or voting interests in, each
Parent Subsidiary is owned, directly or indirectly, both as a matter of record and beneficially by Parent and is free and clear of
all Encumbrances (except for Permitted Encumbrances). Schedule D(k) of the Parent Disclosure Letter sets forth a list of all
other securities of Parent. |
|
(k) |
Except
for the securities set forth in Schedule D(k) of the Parent Disclosure Letter, no Person now has any agreement or option or
right or privilege (whether at law, pre-emptive or contractual) capable of becoming an agreement for the purchase, subscription,
redemption, repurchase or issuance of, or conversion into, any shares, securities, warrants or convertible obligations of any nature
of Parent and a sufficient number of Parent Shares are reserved for issuance pursuant to outstanding options, warrants, share incentive
plans, convertible, exercisable and exchangeable securities and other rights to acquire Parent Shares. Schedule D(k) of the
Parent Disclosure Letter sets forth all issued and outstanding securities of Parent convertible into Parent Shares. |
|
(l) |
Parent
is not aware of any legislation, or proposed legislation published by a legislative body, which it anticipates will result in a Parent
Material Adverse Effect. |
|
(m) |
The
Parent Financial Statements (i) have been prepared in accordance with U.S. GAAP applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes thereto) and (ii) fairly present, in all material respects, the consolidated financial
position of Parent and the Parent Subsidiaries as at the respective dates thereof and the consolidated results of its operations
and cash flows for the periods indicated (except that the unaudited interim financial statements were or are subject to normal and
recurring year-end adjustments). Since December 31, 2023, there have been no formal investigations regarding financial reporting
or accounting policies and practices discussed with, reviewed by or initiated at the direction of the Chief Executive Officer or
Chief Financial Officer of Parent, the Parent Board or any committee thereof. Since December 31, 2023, neither Parent nor its independent
auditors have identified (i) any significant deficiency or material weakness in the system of internal accounting controls utilized
by Parent, (ii) any fraud, whether or not material, that involves Parent’s management or other employees who have a role in
the preparation of financial statements or the internal accounting controls utilized by Parent, or (iii) any claim or allegation
regarding any of the foregoing. Except as disclosed in the Parent Financial Statements, neither Parent nor any of the Parent Subsidiaries
has any liabilities, indebtedness, obligation, expense, claim, deficiency, guaranty, or endorsement, whether accrued, absolute, contingent,
matured, or unmatured of the kind required to be disclosed on a balance sheet or in the related notes to the consolidated financial
statements prepared in accordance with U.S. GAAP which are, individually or in the aggregate, material to the business, results of
operations or financial condition of Parent and the Parent Subsidiaries taken as a whole, except liabilities (i) identified in the
balance sheet of Parent as of the Latest Balance Sheet Date or the notes thereto, (ii) incurred in connection with the transactions
contemplated by this Agreement, (iii) described on Schedule D(m) of the Parent Disclosure Letter, (iv) executory obligations
under any Contract or (v) incurred since the date of the balance sheet of Parent as of the Latest Balance Sheet Date in the ordinary
course of business. Parent does not intend to correct or restate, nor is there any basis for any correction or restatement of, any
aspect of the Parent Financial Statements. |
|
(n) |
Since
the Latest Balance Sheet Date through the date of this Agreement and other than with respect to the negotiation, execution and performance
of this Agreement, each of Parent and the Parent Subsidiaries has conducted its business only in the ordinary course of business,
and there has not been: (A) any event that has had a Parent Material Adverse Effect, or (B) any material change by Parent or any
Parent Subsidiary in its accounting methods, principles or practices, except as required by concurrent changes in U.S. GAAP or as
disclosed in the notes to the Parent Financial Statements. |
|
(o) |
Neither
Parent nor any of the Parent Subsidiaries has any material liabilities or obligations of any nature, whether or not accrued, contingent
or otherwise, except for: (i) liabilities and obligations that are adequately presented or reserved on the Parent Financial Statements
or disclosed in the notes thereto; or (ii) liabilities and obligations incurred in the ordinary course of business that are not and
would not, individually or in the aggregate with all other liabilities and obligations of Parent and the Parent Subsidiaries (other
than those disclosed on the Parent Financial Statements), be material to Parent and the Parent Subsidiaries (taken as a whole). Without
limiting the foregoing, the Parent Financial Statements reflects reasonable reserves in accordance with U.S. GAAP for contingent
liabilities of Parent and the Parent Subsidiaries. |
|
(p) |
Each
of Parent and the Parent Subsidiaries maintains internal control over financial reporting. Such internal control over financial reporting
is effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with U.S. GAAP and includes policies and procedures that: (A) provide reasonable assurance
that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that
receipts and expenditures of Parent and the Parent Subsidiaries are being made only with appropriate authorizations of management
and directors of Parent and the Parent Subsidiaries, as applicable; and (B) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use, or disposition of the assets of Parent or the Parent Subsidiaries that could have
a material effect on its financial statements. As of the date of this Agreement, there neither is, nor has been, any fraud with respect
to Parent or the Parent Subsidiaries, whether or not material, relating to the financial reporting or internal control over financial
reporting of Parent or the Parent Subsidiaries, as applicable. As of the date of this Agreement, to the knowledge of Parent, there
is no fraud that involves management or any other employees who have a significant role in the internal control over financial reporting
of Parent or the Parent Subsidiaries. |
|
(q) |
There
are no actions, proceedings or, to Parent’s knowledge, investigations (whether or not purportedly by or on behalf of Parent)
commenced or, to the knowledge of Parent, threatened or pending against or relating to Parent or any Parent Subsidiary or the business
thereof or affecting any of their assets and properties or against any current officer or director relating to such individual’s
role with Parent or any Parent Subsidiary at law or in equity (whether in any court, arbitration or similar tribunal) or before or
by any Governmental Entity, that would reasonably be expected to result in a Parent Material Adverse Effect or prevent or materially
delay the consummation of the Arrangement. |
|
(r) |
Except
as disclosed in Schedule D(r) of the Parent Disclosure Letter or in the Parent Disclosure Documents, none of Parent or any
Parent Subsidiary is a party to or bound or affected by any commitment, agreement or document containing any covenant which expressly
limits the freedom of Parent or the Parent Subsidiary to compete or operate in any line of business, transfer or move any of its
assets or operations or which materially or adversely affects the business practices, operations or condition of Parent or the Parent
Subsidiary. |
|
(s) |
Except
as disclosed in Schedule D(s) of the Parent Disclosure Letter or in the Parent Disclosure Documents, neither Parent nor any
of the Parent Subsidiaries is party to, bound by or subject to any indenture, mortgage, lease, agreement, license, permit, authorization,
certification, instrument, statute, regulation, order, judgment, decree or law that would be violated or breached by, or under which
default would occur or which could be terminated, cancelled or accelerated, in whole or in part, or that would require consent or
notice, as a result of the execution, delivery and performance of this Agreement or the consummation of any of the transactions provided
for in this Agreement and the Plan of Arrangement (except (i) as would not, individually or in the aggregate, have or reasonably
be expected to have, individually or in the aggregate, a Parent Material Adverse Effect or (ii) as set out in Schedule E of
this Agreement (Key Regulatory Approvals)). |
|
(t) |
Except
as disclosed in Schedule D(t) of the Parent Disclosure Letter or in the Parent Disclosure Documents, Parent is not party to
any Contract or arrangement, nor to the knowledge of Parent, is there any shareholders agreement or other Contract, which in any
manner affects the voting control of any of the securities of Parent. |
|
(u) |
Parent
and the Parent Subsidiaries have duly and timely filed all income and other Tax Returns required to be filed by them and all such
Tax Returns are complete and correct in all material respects. |
|
(v) |
Parent
and the Parent Subsidiaries have paid on a timely basis all Taxes which are due and payable or required to be paid by them, other
than those which are being or have been contested in good faith and in respect of which adequate reserves have been provided in the
Parent Financial Statements.
Parent and the Parent Subsidiaries have provided adequate accruals in accordance with U.S.
GAAP in the Parent Financial Statements for any Taxes for the period covered by such financial statements that have not been paid whether
or not shown as being due on any Tax Returns. |
|
(w) |
Neither
Parent nor the Parent Subsidiaries have declared nor paid (nor been deemed to have paid) any dividends. |
|
(x) |
No
deficiencies, litigation, proposed adjustments or matters in controversy exist or have been asserted in writing with respect to any
Taxes or Tax Returns of Parent or the Parent Subsidiaries, and neither Parent nor the Parent Subsidiaries are a party to any action
or proceeding for assessment or collection of Taxes, and no such event has been asserted in writing or, to the knowledge of Parent,
threatened against Parent or the Parent Subsidiaries. |
|
(y) |
No
written claim has been made by any Governmental Entity in a jurisdiction where Parent or any of the Parent Subsidiaries does not
file a Tax Return that Parent, or any of the Parent Subsidiaries, is or may be liable to Tax by that jurisdiction or is or may be
required to file a Tax Return with a Governmental Entity of that jurisdiction. |
|
(z) |
For
the purposes of any applicable Tax treaty and any other relevant Tax purposes, (i) Parent is a domestic corporation for U.S. federal
income tax purposes and is classified for U.S. federal income tax purposes as a “C corporation”; and (ii) the Parent
Subsidiaries are each resident in the jurisdiction in which they were formed, and are not resident in any other country. |
|
(aa) |
There are no Encumbrances (other than Permitted Encumbrances)
with respect to Taxes upon any of the assets of Parent or the Parent Subsidiaries. |
|
(bb) |
Each of Parent and the Parent Subsidiaries has withheld, deducted,
charged or collected all amounts required to be withheld, deducted, charged or collected by it on account of Taxes and has remitted all
such amounts to the appropriate Governmental Entity when required by Law to do so. Parent and the Parent Subsidiaries are in compliance
with, and their respective records contain all information and documents necessary to comply with, all applicable information reporting
and withholding requirements under all Law. |
|
(cc) |
Neither Parent nor any of the Parent Subsidiaries is a party
or is bound by any Tax sharing, allocation, indemnification agreement or arrangement. |
|
(dd) |
Except for any affiliated group of which Parent is the parent,
each of Parent and each of the Parent Subsidiaries has never been a member of an affiliated group for U.S. federal or applicable state
income Tax purposes or filed or been included in a combined, consolidated or unitary income Tax Return. None of Parent or any of the
Parent Subsidiaries has any liability for Taxes of any other Person (i) as a result of being or ceasing to be a member of any affiliated
group for U.S. federal or applicable state income Tax purposes (including any liability under Treasury Regulation Section 1.1502-6 or
any comparable provision of other applicable Law) or (ii) arising under contract, by operation of law, by reason of being a successor
or transferee, or otherwise, whether or not as a consequence of such third person failing to discharge such liability. |
|
(ee) |
None of Parent any of the
Parent Subsidiaries has been either a “distributing corporation” or a “controlled corporation” within the
respective meanings of such terms under Section 355(a)(1)(A) of the U.S. Tax Code in a distribution of stock qualifying under
Section 355 of the U.S. Tax Code (i)
in the six years before the date of this Agreement or (ii) in a distribution that could otherwise constitute part of a “plan”
or “series of related transactions” within the meaning of Section 355(e) of the U.S. Tax Code in conjunction with the Arrangement. |
|
(ff) |
There are no outstanding
agreements extending or waiving the statutory period of limitations applicable to any claim for, or the period for the collection or
assessment or reassessment of Taxes due
from Parent or any of the Parent Subsidiaries, for any taxable period and no request for any such waiver or extension is currently pending. |
|
(gg) |
Parent and the Parent Subsidiaries have complied with applicable
transfer pricing Laws (including with respect to the preparing, obtaining or retaining all required documentation). |
|
(hh) |
Parent and the Parent Subsidiaries have not, at any time, directly
or indirectly transferred any property or supplied any services to, or acquired any property or services from, a Person with whom Parent
or the Parent Subsidiaries was not dealing at arm’s length for consideration other than consideration equal to the fair market
value of such property or services at the time of transfer, supply or acquisition, as the case may be, nor has Parent or the Parent Subsidiaries
been deemed to have done so for purposes of any Tax Law. |
|
(ii) |
Except
as in accordance with past practices, Parent and the Parent Subsidiaries have not claimed any reserve, credit, deduction or other
amount under any provision of any Tax Law, if any amount could be included in the income of Parent or the Parent Subsidiaries for
any period ending after or including the Effective Date. |
|
(jj) |
Neither Parent nor any of the Parent Subsidiaries will be required
to include an item of income or gain in, or exclude any item of deduction or loss from, taxable income for or otherwise be liable for
Tax in any period (or any portion thereof) ending after the Effective Date as a result of any (i) transaction, income or gain attributable
to any period (or portion thereof) ending on or prior to the Effective Date, (ii) installment sale, open transaction disposition or other
transaction occurring on or prior to the Effective Date, (iii) change in method of accounting made or requested on or prior to the Effective
Date, (iv) use of an improper method of accounting on or prior to the Effective Date, |
|
(v) |
prepaid amount received, or deferred revenue accrued, on or
prior to the Effective Date, or (vi) closing agreement with any Tax authority executed on or prior to the Effective Date. |
|
(kk) |
Parent and each of the Parent Subsidiaries has never been a
party to a “reportable transaction” or listed transaction within the meaning of Section 6707A(c) of the U.S. Tax Code or
Treasury Regulation Section 1.6011-4(b) (or any comparable provision under state, local or foreign Laws). All transactions that could
give rise to an understatement of Tax (within the meaning of Section 6662 of the U.S. Tax Code) were reported by Parent or the applicable
Parent Subsidiary in a manner for which there is substantial authority or were adequately disclosed on the Tax Returns in accordance
with Section 6662(d)(2)(B) of the U.S. Tax Code. |
|
(ll) |
Any and all tax credits claimed by the Parent or any of the
Parent Subsidiaries were claimed in accordance with applicable Tax Law and Parent and each of the Parent Subsidiaries has satisfied at
all times the relevant criteria and conditions entitling it to such tax credits. |
|
(mm) |
Neither Parent nor any Parent Subsidiary nor, to Parent’s
knowledge, any other Person, is in default in any material respect in the observance or performance of any term, covenant or obligation
to be performed by Parent or a Parent Subsidiary or such other Person under any Material Contract, and no event has occurred which with
notice or lapse of time or both would constitute such a default by Parent or any Parent Subsidiary or, to Parent’s knowledge, any
other party, except where such default or event would not reasonably be expected to result in a Parent Material Adverse Effect. |
|
(nn) |
Since the Latest Balance Sheet Date: |
|
(i) |
Except
as disclosed in the Parent Disclosure Documents, there has not been any material change in the assets, liabilities, obligations (absolute,
accrued, contingent or otherwise), business, condition (financial or otherwise) or results of operations of Parent or any Parent
Subsidiary; |
|
(ii) |
Except
as disclosed in the Parent Disclosure Documents, there has not been any material change in the share capital or long-term debt of
Parent; |
|
(iii) |
There
has not been any entering into, or an amendment of, any Parent Material Contract other than (A) in the ordinary course of business,
or (B) renewals of any such contract; |
|
(iv) |
There
has not been any satisfaction or settlement of any material claims or material liabilities, other than the settlement of such claims
or such liabilities incurred in the ordinary course of business; |
|
(v) |
Except
for ordinary course adjustments to salary, bonus, or other remuneration payable to any officers or senior or executive officers,
there has not been any increase in the salary, bonus, severance, termination pay, change of control entitlements or other remuneration
payable to any senior or executive officers of Parent or any Parent Subsidiary; and |
|
(vi) |
Parent
and the Parent Subsidiaries have carried on their business in the ordinary course consistent with past practice. |
|
(oo) |
There has been no interruption to or discontinuity in any material
supplier or distributor arrangement or relationship of Parent and the Parent Subsidiaries with each of their respective material suppliers
and distributors and the relationships of Parent and the Parent Subsidiaries with each of their respective material suppliers and distributors
are satisfactory, and there are no unresolved disputes with any such supplier or distributor. No material supplier or distributor of
Parent or any Parent Subsidiary has notified Parent or the Parent Subsidiary that such material supplier or distributor will not continue
dealing with Parent or the Parent Subsidiary on substantially the same terms as presently conducted, and to the knowledge of Parent,
there is no reason to believe that, any such material supplier or distributor will not continue dealing with Parent or the Parent Subsidiary
on substantially the same terms as presently conducted, in each case subject to changes in pricing and volume in the ordinary course. |
|
(pp) |
Each of Parent and the Parent Subsidiaries possesses permits,
licenses, approvals, consents and other authorizations issued by a federal, provincial, state, local or foreign regulatory agencies or
bodies (in this Schedule D, collectively, “Governmental Licenses”) required by Law to conduct the business
now operated by them, except where the failure to hold such Governmental Licenses would not, individually or in the aggregate, result
in a Parent Material Adverse Effect. Each Governmental License is valid and in full force and effect, and is renewable by its terms or
in the ordinary course without the need for Parent to comply with any special rules of procedures, agree to any materially different
terms or conditions or pay any amounts other than routine filing fees. To the knowledge of Parent, each of Parent and the Parent Subsidiaries
is in compliance in all material respects with the terms and conditions of all such Governmental Licenses. No consent, license, order,
authorization, approval, permit, registration or declaration of, or filing with, any Governmental Entity is required in connection with:
(i) the closing of the Arrangement; (ii) the execution and delivery by Parent of this Agreement or any document delivered by Parent at
the closing of the Arrangement to which it is a party; (iii) the observance and performance by Parent of its obligations under this Agreement
or any document delivered by Parent at the closing of the Arrangement to which it is a party; or (iv) avoiding the loss of any Governmental
Licenses relating to Parent or the Parent Subsidiaries, any of their properties and assets, or the business now operated by them. |
|
(qq) |
To the knowledge of Parent, no event has occurred that, with
or without notice or lapse of time or both, would reasonably be expected to result in the revocation, suspension, lapse or limitation
of any Governmental License. |
|
(rr) |
There are no actions, proceedings or, to Parent’s knowledge,
investigations commenced or, to the knowledge of Parent, pending in respect of or regarding any such Governmental License. None of Parent
and the Parent Subsidiaries has received any written notice of revocation or non-renewal of any
Governmental License, or of any intention of any Person to revoke or refuse to renew any of such Governmental License. |
|
(ss) |
Other than the Parent Financial Advisor, there is no Person
acting or purporting to act at the request of Parent who is entitled to any brokerage, agency or other fiscal advisory or similar fee
in connection with the transactions contemplated by this Agreement and the Plan of Arrangement. |
|
(tt) |
Except as disclosed in the Parent Disclosure Documents or in
the Parent Financial Statements, neither Parent nor any Parent Subsidiary has any loan or other indebtedness outstanding which has been
made to any of its securityholders, officers, directors or employees, past or present, or any Person not dealing at arm’s length
with it, other than for the reimbursement of ordinary course business expenses. |
|
(uu) |
Except for (i) employment, consulting or employment compensation
agreements entered into in the ordinary course of business, (ii) customary director and officer indemnification arrangements on market
terms, or (iii) financing agreements or shareholder agreements with the Parent Shareholders entered into in connection with financings
or other transactions to which Parent Shareholders are generally parties and that will terminate at or prior to the Effective Time as
a result of the Arrangement, there are no current contracts or other transactions (including relating to indebtedness by Parent or the
Parent Subsidiaries) between Parent or any Parent Subsidiaries on the one hand, and (A) any officer or director of Parent or the Parent
Subsidiaries, (B) any holder of record or beneficial owner of five percent (5%) or more of the voting securities of Parent, or (C) any
affiliate or associate of any officer, director or beneficial owner, on the other hand except as disclosed in the Parent Disclosure Documents
or in the Parent Financial Statements. |
|
(vv) |
The assets and properties of Parent and the Parent Subsidiaries
and their business and operations are insured against loss or damage with responsible insurers on a basis consistent with insurance obtained
by reasonably prudent participants in comparable businesses, and such coverage is in full force and effect, and Parent and the Parent
Subsidiaries have not failed to promptly give any notice or present any material claim thereunder. |
|
(ww) |
The vehicles, machinery, equipment and other tangible personal
property of Parent and the Parent Subsidiaries are, in all material respects, in good operating condition and repair having regard to
their use and age, and are not in need of maintenance or repairs other than preventative maintenance and repairs in the ordinary course
of business, and are adequate for the uses subject to normal wear and tear to which they are being put to use, have been maintained in
all material respects in accordance with generally accepted industry practice and are free from any material defects. All leased equipment
and other leased personal property of Parent and the Parent Subsidiaries is in all material respects in the condition required of such
property by the terms of the lease applicable thereto. |
|
(xx) |
To the knowledge of Parent, none of Parent or any Parent Subsidiary
is suspended or otherwise restricted from participating in any drug insurance plan, nor, to the knowledge of Parent, are there any facts
or circumstances that are materially inconsistent with market practices and that provide a reasonable basis for any material adverse
regulatory communication or action against Parent or any Parent Subsidiary, in respect of the Parent Business or relating to non-compliance
with any applicable Law. |
|
(yy) |
Neither Parent nor the Parent Subsidiaries own any real property
or hold an ownership interest in any real property, or have owned or held such ownership interest in the past five years, save and except
as set out in the Parent Disclosure Documents. With respect to each of the material leased premises of Parent and the Parent Subsidiaries,
Parent and the Parent Subsidiaries occupies the applicable leased premises and has the right to occupy and use the leased premises, subject
to the terms of the respective leases, and each of the leases pursuant to which Parent and the Parent Subsidiaries occupies such leased
premises is valid, legally binding and enforceable against Parent or a Parent Subsidiary, as applicable, and to the knowledge of Parent,
the other parties in accordance with
its terms is in good standing and in full force and effect, and none of Parent or any of the Parent Subsidiaries is in breach of, or
default under, such lease, sublease, license or occupancy agreement, and no event has occurred which, with notice, lapse of time or both,
would constitute such a breach or default by Parent or any of the Parent Subsidiaries that would permit termination, modification or
acceleration by any third party thereunder. No third party has repudiated or has the right to terminate or repudiate any such lease (except
for the normal exercise of remedies in connection with a default thereunder or any termination rights set forth in the lease) or any
provision thereof. None of the aforementioned leases has been assigned by Parent or any of the Parent Subsidiaries in favor of any Person
or sublet or sublicensed. There exists no claim of any kind or right of set-off against Parent or any Parent Subsidiary, as the case
may be, as tenant by the landlord or against the landlord by Parent or any Parent Subsidiary, as the case may be, as tenant as of the
date hereof. Parent and the Parent Subsidiaries own, lease or license all personal or movable property as is necessary to conduct their
business as presently conducted, and Parent and the Parent Subsidiaries have good and valid title to, or a valid and enforceable interest
(whether a leasehold interest or otherwise) in, all of such personal or movable property. |
|
(zz) |
Parent and the Parent Subsidiaries as tenants are in actual
possession of all properties leased by them. Except as disclosed in Schedule D(zz) of the Parent Disclosure Letter, Parent and
the Parent Subsidiaries are not in arrears of rent required to be paid pursuant to any applicable lease. |
|
(aaa) |
The minute books and records of Parent and the Parent Subsidiaries
made available to SRx and its counsel in connection with their due diligence investigation in respect of the Arrangement contain full,
true and correct copies of all constating documents, including all amendments thereto, and contain copies of all proceedings of securityholders
and directors (and committees thereof) and are complete in all material respects. |
|
(bbb) |
The Parent Disclosure Documents set out all Intellectual Property
owned by Parent or a Parent Subsidiary that has been registered or which applications for registration have been filed and all other
material Intellectual Property that is owned by Parent or the Parent Subsidiary (in this Schedule D, the “Parent Owned
Intellectual Property”) and the Intellectual Property that is duly licensed by Parent as part of its business as presently
conducted, except for commercially available, off-the- shelf software licensed to Parent or any Parent Subsidiary on a royalty-free basis
pursuant to standard, nondiscriminatory terms and conditions (in this Schedule D, the “Parent Licensed Intellectual Property”,
and together with the Parent Owned Intellectual Property, the “Parent Intellectual Property”). Parent or a Parent
Subsidiary is the sole and exclusive owner of the Parent Owned Intellectual Property and all other Intellectual Property that it owns
or purports to own with good, valid and marketable title thereto, free and clear of all Encumbrances (other than Permitted Encumbrances).
Parent or a Parent Subsidiary has valid and enforceable licenses to use all of the Parent Licensed Intellectual Property used by it in
connection with, and as required for, its business as presently conducted. Parent has no knowledge to the effect that it will be unable
to obtain or maintain any rights or licenses to use all Intellectual Property necessary for the conduct of its business. The Parent Owned
Intellectual Property and the Parent Licensed Intellectual Property constitute all of the Intellectual Property required by Parent or
the Parent Subsidiaries to conduct their respective businesses as currently conducted. To the knowledge of Parent, no third parties have
rights to any Intellectual Property, except for the ownership rights of the owners of the Parent Licensed Intellectual Property which
is licensed to Parent or a Parent Subsidiary. To the knowledge of Parent, there is no infringement, misappropriation or misuse by third
parties of any Parent Owned Intellectual Property. There is no pending or, to the knowledge of Parent, threatened action, suit, proceeding
or claim by third parties challenging the rights in or to any Parent Owned Intellectual Property, and Parent is not aware of any facts
which form a reasonable basis for any such claim. The Parent Owned Intellectual Property that is the subject of an application or registration
is valid, in full force and effect. There is no pending or, to the knowledge of Parent, threatened action, suit, proceeding or claim
by others challenging the validity or enforceability of any Parent Owned Intellectual Property, and Parent is not aware of any allegations
or finding of unenforceability or invalidity of the Parent Owned Intellectual Property or any facts which form a reasonable basis for
any such claim. All applications, registrations, filings, renewals and payments necessary to preserve the
rights of Parent or any Parent Subsidiary in and to Parent Owned Intellectual Property have been duly filed, made, prosecuted, maintained,
paid, are in good standing and are recorded in the name of Parent or a Parent Subsidiary. There is no pending or, to the knowledge of
Parent, threatened action, suit, proceeding or claim by third parties that Parent or a Parent Subsidiary infringes, misappropriates or
otherwise violates any patent, trademark, copyright, trade secret or other proprietary rights of others. To the knowledge of Parent,
the business of Parent and the Parent Subsidiaries does not infringe, misappropriate or otherwise violate any patent, trademark, copyright,
trade secret or other proprietary rights of third parties and, without limiting the foregoing, to the knowledge of Parent, there is no
patent or patent application by third parties that contains claims that interfere with the issued or pending claims of any Parent Intellectual
Property. |
|
(ccc) |
Except in respect of the Intellectual Property set forth in
Schedule D(ccc) of the Parent Disclosure Letter, no licenses or other rights have been granted to any third party in, to and in
respect of the Parent Owned Intellectual Property. |
|
(ddd) |
Other than in respect of those contracts disclosed in Schedule
D(ddd) of the Parent Disclosure Letter, neither Parent nor any Parent Subsidiary is a party to or bound by any Contract or other
obligation that limits or impairs its ability to use, sell, transfer, assign or convey, or that otherwise affects any Parent Intellectual
Property. |
|
(eee) |
Except as set forth in Schedule D(eee) the Parent Disclosure
Letter, neither Parent nor any Parent Subsidiary is obligated to pay any royalties, fees or other compensation to any third party in
respect of its ownership, use, practice, exploitation or commercialization of any Parent Intellectual Property. |
|
(fff) |
Except as disclosed in Schedule D(fff) of the Parent
Disclosure Letter, no permits, licenses, approvals, consents or other authorizations issued by any federal, provincial, state, local
or foreign regulatory agency or body are required to import or sell the products of Parent or any Parent Subsidiary. |
|
(ggg) |
Except in respect of the individuals listed in Schedule
D(ggg)(i) of the Parent Disclosure Letter, all current and former employees of, and current and former consultants who have contributed
to the creation of any Parent Owned Intellectual Property to, Parent and the Parent Subsidiaries have entered into proprietary rights
or similar agreements with Parent or the applicable Parent Subsidiary, whereby any Intellectual Property required by Parent to conduct
its business as presently conducted created by them in the course of the performance of their employment or engagement has been fully
and irrevocably assigned to Parent or the applicable Parent Subsidiary without additional consideration, and, to the knowledge of Parent,
no employee of, or consultant to, Parent or the applicable Parent Subsidiary is in violation of such agreements. |
|
(hhh) |
Each of Parent and the Parent Subsidiaries have taken all reasonably
necessary and appropriate steps (including appropriately marking and labelling Intellectual Property) to protect the secrecy, confidentiality
and proprietary nature of all such Intellectual Property. To the knowledge of Parent, the employment or engagement by Parent or the applicable
Parent Subsidiary of such Persons does not violate any non-disclosure or non-competition agreement between any such Person and a third
party. |
|
(iii) |
The
conduct of Parent and the Parent Subsidiaries in carrying on the Parent Business and the operation of the Parent Business by Parent
and the Parent Subsidiaries have been and is in compliance with all Environmental Laws, in all material respects, and there are no
existing events, conditions, or circumstances that would reasonably be expected to materially and adversely affect the ability of
Parent or the Parent Subsidiaries to comply with Environmental Laws. |
|
(jjj) |
Each of Parent and the Parent Subsidiaries has obtained all
licenses, permits, approvals, consents, certificates, registrations and other authorizations under all applicable Environmental Laws
(in this Schedule D, the “Environmental Permits”) necessary as at the date hereof for the operation of the
business carried by Parent and the Parent Subsidiaries, and each Environmental Permit is valid, subsisting
and in good standing in all material respects and none of Parent nor any of the Parent Subsidiaries is in default or breach of any Environmental
Permit in any respect and no proceeding is outstanding or, to the knowledge of Parent, has been threatened or is pending to revoke or
limit any Environmental Permit. |
|
(kkk) |
To the knowledge of Parent, each of Parent and the Parent Subsidiaries
has not used, except in compliance in all respects with all Environmental Laws and Environmental Permits, any property or facility which
it owns, controls manages, operates or leases or previously owned, controlled, operated, managed or leased, to generate, manufacture,
process, distribute, use, treat, store, dispose of, transport or handle any Hazardous Substance and, to the knowledge of Parent, there
have been no releases of Hazardous Substances at any property or facility which it owns, controls, manages, operates or leases or previously
owned, controlled, operated, managed or leased. |
|
(lll) |
Each of Parent and the Parent Subsidiaries has not received
any notice of, or been prosecuted for, an offence alleging, non-compliance in any material respect with any Environmental Laws, and none
of Parent nor any of the Parent Subsidiaries has settled any allegation of non-compliance short of prosecution. There are no orders or
directions issued against each of Parent and the Parent Subsidiaries under Environmental Laws including those requiring any material
work, repairs, construction or capital expenditures to be made with respect to any of the assets of Parent or the Parent Subsidiaries,
nor has Parent or any Parent Subsidiary received notice of any of the same. |
|
(mmm) |
There are no past unresolved or, to the knowledge of Parent,
any threatened or pending claims, complaints, notices or requests for information received by Parent or a Parent Subsidiary with respect
to any alleged violation of any Environmental Laws; and, to the knowledge of Parent, no conditions exist at, on or under any property
now or previously owned, operated, optioned or leased by Parent or a Parent Subsidiary which, with the passage of time, or the giving
of notice or both, would give rise to liability under Environmental Laws that, individually or in the aggregate, would reasonably be
expected to result in a Parent Material Adverse Effect. |
|
(nnn) |
None of Parent nor any Parent Subsidiary has received any notice
wherein it is alleged or stated that it is potentially responsible for a federal, provincial, state, municipal or local clean-up site
or corrective action under Environmental Laws that would reasonably be expected to result in a Parent Material Adverse Effect. |
|
(ooo) |
Except as disclosed in Schedule D(ooo) of the Parent
Disclosure Letter, there are no environmental audits, evaluations, assessments, studies or tests relating to Parent or a Parent Subsidiary. |
|
(ppp) |
None of Parent or the Parent Subsidiaries have agreed by contract
or other agreement to indemnify or be responsible for any liabilities or obligations under Environmental Laws. |
|
(qqq) |
To the knowledge of Parent, Parent and the Parent Subsidiaries
are and have been in compliance in all material respects with all applicable Laws pertaining to employment and employment practices,
including all Laws relating to labor relations, equal employment opportunities, fair employment practices, employment discrimination,
harassment, retaliation, reasonable accommodation, disability rights or benefits, immigration, wages, hours, overtime compensation, child
labor, hiring, promotion and termination of employees, working conditions, meal and break periods, privacy, health and safety, workers’
compensation, leaves of absence and unemployment insurance. All individuals characterized and treated by Parent or any Parent Subsidiary
as independent contractors or consultants are properly treated as independent contractors under all applicable Laws. There are no actions
against Parent or any Parent Subsidiary pending or, to the knowledge of Parent, threatened to be brought or filed, by or with any Governmental
Entity or arbitrator in connection with the employment of any current or former applicant, employee, consultant or independent contractor
of Parent or any Parent Subsidiary, including any claim relating to unfair labor practices, employment discrimination, harassment, retaliation,
equal pay, wage and hours or any other employment related matter arising under applicable Laws. |
|
(rrr) |
Neither Parent nor any Parent Subsidiary is subject to any
claim for wrongful dismissal, constructive dismissal or any other tort claim, actual or threatened, or any litigation actual or threatened,
relating to employment or termination of employment of employees or independent contractors. |
|
(sss) |
Each plan for retirement, bonus, stock purchase, profit sharing,
stock option, deferred compensation, severance or termination pay, insurance, medical, hospital, dental, vision care, drug, sick leave,
disability, salary continuation, legal benefits, unemployment benefits, vacation, incentive or otherwise contributed to or required to
be contributed to, by Parent or a Parent Subsidiary for the benefit of any current or former director, officer, employee or consultant
of Parent or a Parent Subsidiary (in this Schedule D, the “Parent Employee Plans”) has been maintained in compliance
with its terms and with the requirements prescribed by any and all Laws that are applicable to such Parent Employee Plans, in each case
in all material respects and has been publicly disclosed to the extent required by Securities Laws. |
|
(ttt) |
All material accruals for unpaid vacation pay, premiums for
unemployment insurance, health premiums, federal or state pension plan premiums, accrued wages, salaries and commissions and employee
benefit plan payments have been reflected in the books and records of Parent and the Parent Subsidiaries. |
|
(uuu) |
There is not currently any labor disruption, dispute, slowdown,
stoppage, complaint or grievance or, to the knowledge of Parent, threatened or pending which is adversely affecting or would reasonably
be expected to adversely affect, in a material manner, the carrying on of the business of Parent and the Parent Subsidiaries, and to
the knowledge of Parent, there is no proposal to unionize its employees and no collective bargaining agreements are in place or currently
being negotiated by Parent or any Parent Subsidiary. |
|
(vvv) |
Except as set forth on Schedule D(vvv) of the Parent
Disclosure Letter, neither the execution and delivery of this Agreement, shareholder or other approval of this Agreement nor the consummation
of the transactions contemplated by this Agreement could, alone or in combination with another event, (i) entitle any employee, director,
officer or independent contractor of the Parent Group to severance pay, termination pay, change of control payment or benefits, or any
material increase in severance pay, (ii) accelerate the time of payment or vesting, or materially increase the amount of compensation
due to any such employee, director, officer or independent contractor, (iii) directly or indirectly cause the Parent Group to transfer
or set aside any assets to fund any material benefits under any Employee Plan, (iv) otherwise give rise to any material liability under
any Employee Plan, or (v) limit or restrict the right to merge, materially amend, terminate or transfer the assets of any Employee Plan
on or following the consummation of the transactions contemplated by this Agreement. |
|
(www) |
Other than this Agreement, neither Parent nor any Parent Subsidiary
is currently party to any agreement in respect of: (i) the purchase of any material property or assets or any interest therein or the
sale, transfer or other disposition of any material property or assets or any interest therein currently owned, directly or indirectly,
by Parent or a Parent Subsidiary whether by asset sale, transfer of shares or otherwise; or (ii) the change of control of Parent or a
Parent Subsidiary (whether by sale or transfer of shares or otherwise). |
|
(xxx) |
None of Parent nor any Parent Subsidiary is a party to any
Material Contract, other than the Parent Material Contracts. |
|
(yyy) |
The operations of Parent and the Parent Subsidiaries are and
have been conducted, at all times, in material compliance with all applicable Anti-Money Laundering Laws, and no action by or before
any Governmental Entity against Parent or any Parent Subsidiary with respect to the Anti-Money Laundering Laws is pending. None of Parent
nor any Parent Subsidiary has, directly or indirectly: (i)
made or authorized any contribution, payment or gift of funds or property to any official, employee or agent of any governmental agency,
authority or instrumentality of any jurisdiction in violation of applicable Laws; or (ii) made any contribution to any candidate for
public office, in either
case where either the payment or the purpose of such contribution, payment or gift was, is or would be prohibited under the Corruption
of Foreign Public Officials Act (Canada), the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) or the Uniting
and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (United States) or the rules
and regulations promulgated thereunder or under any other Laws of any relevant jurisdiction covering a similar subject matter applicable
to Parent, the Parent Subsidiaries and their operations. None of Parent, the Parent Subsidiaries, or, to the knowledge of Parent, any
director, officer, agent, employee, affiliate or Person acting on behalf of Parent or any Parent Subsidiary has been or is currently
subject to any United States sanctions administered by the Office of Foreign Assets Control of the United States Treasury Department. |
|
(zzz) |
None of Parent, any Parent Subsidiary, or, to the knowledge
of Parent, any of their officers, directors or employees acting on behalf of Parent has violated the United States’ Foreign Corrupt
Practices Act (and the regulations promulgated thereunder), the Corruption of Foreign Public Officials Act (Canada) (and the regulations
promulgated thereunder) or any other applicable Law covering a similar subject matter applicable to Parent, the Parent Subsidiaries and
their operations, and to the knowledge of Parent, no such action has been taken by any of its agents, representatives or other Persons
acting on behalf of Parent. |
|
(aaaa) |
The Parent is a “reporting issuer” or equivalent
thereof under applicable Securities Laws in the United States, and is not in default of any material requirements of any Securities Laws
or the rules and regulations of the SEC or NYSE American. Parent has not taken any action to cease to be a reporting issuer nor has Parent
received notification from any Securities Authority seeking to revoke the reporting issuer status of Parent. No delisting, suspension
of trading in or cease trading order with respect to any of its securities and, to the knowledge of the Parent, no inquiry or investigation
of any Securities Authority, is pending, in effect or ongoing or threatened, except as disclosed in the Parent Disclosure Documents and
as would not, individually or in the aggregate, reasonably be expected to result in a Parent Material Adverse Effect. The Parent Shares
are listed on NYSE American and trading of the Parent Shares is not currently halted or suspended. The Parent does not have any securities
listed for trading on any securities exchange other than NYSE American. Parent is not subject to any cease trade or other order of NYSE
American or any Securities Authority, and, to the knowledge of the Parent, no investigation or other proceedings involving the Parent
that may operate to prevent or restrict trading of any securities of the Parent are currently in progress or pending before NYSE American
or any Securities Authority. Parent has timely filed or furnished all Parent Disclosure Documents required to be filed or furnished by
Parent under applicable Securities Laws. Each of the Parent Disclosure Documents complied in all material respects with applicable Securities
Laws and did not, as of the date filed (or, if amended or superseded by a subsequent filing prior to the date of this Agreement, on the
date of such filing), contain any misrepresentation (as defined under applicable Securities Laws). Parent has not filed any confidential
filings (including redacted filings) filed to or furnished with, as applicable, any Securities Authority. There are no outstanding or
unresolved comments in comment letters from any Securities Authority with respect to any of the Parent Disclosure Documents and, to the
knowledge of Parent, neither Parent nor any of the Parent Disclosure Documents is the subject of an ongoing audit, review, comment or
investigation by any Securities Authority or the SEC. |
|
(bbbb) |
No order, ruling or determination having the effect of suspending
the sale or ceasing the trading in any securities of Parent has been issued by any regulatory authority and is continuing in effect and
no proceedings for that purpose have been instituted or, to the knowledge of Parent, are pending, contemplated or threatened by any regulatory
authority. |
|
(cccc) |
Parent is not a shell company (as defined in Rule 405 under
the Securities Act) and has not been a shell company for at least twelve (12) calendar months prior to the date of this Agreement. |
|
(dddd) |
The Parent Certificate of Designation is in a form which complies
with Delaware Law and, when filed, will constitute the valid Parent Certificate of Designation under Delaware Law. |
|
(eeee) |
Except where non-compliance would not have a Parent Material
Adverse Effect, Parent and the Parent Subsidiaries have complied and is in compliance with all applicable Laws governing, and all applicable
contractual obligations to third parties relating to privacy, data protection, Processing, or security of Personal Information, including
with respect to obtaining consent or authorization to collect, use, and disclose Personal Information, as well as all internal and external
privacy policies regarding Personal Information; and, no written notices, complaints or other communications have been received by, and
no claims are pending (whether by a Governmental Entity or person), or, to the knowledge of Parent, threatened against Parent or a Parent
Subsidiary alleging a violation of any third party’s privacy rights or other rights relating to Personal Information including
any alleged violation of applicable Laws, contractual obligations or internal or external privacy policies. |
|
(ffff) |
Parent and the Parent Subsidiaries maintain commercially reasonable
measures designed to protect the privacy, confidentiality, integrity and security of Personal Information, including against a Security
Breach, consistent with industry standards and practices and applicable Law. |
|
(gggg) |
To the knowledge of Parent, none of Parent or a Parent Subsidiary’s
suppliers have experienced a Security Breach, including any such incident or breach that may require notification to any Person, any
Governmental Authority or any entity under any Law to which the supplier is subject. |
|
(hhhh) |
Except for the representations and warranties expressly made
by Parent in this Schedule D or in any certificate delivered pursuant to this Agreement, neither Parent nor any other Person makes
or has made any representation or warranty of any kind whatsoever, express or implied, at law or in equity, with respect to Parent or
any of the Parent Subsidiaries or their respective business, operations, assets, liabilities, condition (financial or otherwise), notwithstanding
the delivery or disclosure to SRx or any of its affiliates or Representatives of any documentation, forecasts or other information with
respect to any one or more of the foregoing. Without limiting the generality of the foregoing, neither Parent nor any other Person makes
or has made any express or implied representation or warranty to SRx or any of its Representatives with respect to (A) any financial
projection, forecast, estimate, or budget relating to Parent, any of its subsidiaries or their respective businesses or, (B) except for
the representations and warranties made by Parent in this Schedule D, any oral or written information presented to SRx or any
of its Representatives in the course of their due diligence investigation of Parent and the Parent Subsidiaries, the negotiation of this
Agreement or the course of the Arrangement. |
SCHEDULE
E
KEY
REGULATORY APPROVALS
Filings
required under the U.S. Securities Act and U.S. Exchange Act, and other actions required by the SEC pursuant thereto NYSE
American approval
SCHEDULE
F
FORM
OF SRX VOTING AGREEMENT
[See
Attached]
FORM
OF SRX VOTING AGREEMENT
THIS
AGREEMENT is made as of the _____ day of __________, 2024.
BETWEEN:
[●],
(the “Securityholder”)
-
and –
BETTER
CHOICE COMPANY INC., a corporation existing under the laws of the State of Delaware (“Better Choice”)
WHEREAS
the Securityholder is the registered and/or direct or indirect beneficial owner of the common shares (“SRx Shares”),
restricted stock units (“SRx RSUs”) and/or common share purchase warrants (“SRx Warrants”) in the
capital of SRx Health Solutions, a corporation existing under the laws of the Province of Ontario (“SRx”) set forth
opposite the Securityholder’s name in Appendix “A” hereto (collectively, the “Subject Securities”);
AND
WHEREAS the Securityholder understands that, concurrently with the execution and delivery of this Agreement, SRx and Better Choice
are entering into the Arrangement Agreement (as defined herein) providing for the Arrangement (as defined herein) whereby Better Choice
proposes to indirectly acquire all of the issued and outstanding voting and equity securities of SRx;
AND
WHEREAS in order for the Securityholder to realize the benefits that will accrue to the Securityholder in connection with the consummation
of the Arrangement, the Securityholder desires to enter into this Agreement to provide his or her support for completion of the Arrangement
on the terms and conditions set forth herein;
AND
WHEREAS the Securityholder acknowledges that Better Choice would not enter into the Arrangement Agreement but for the execution and
delivery of this Agreement by the Securityholder;
AND
WHEREAS this Agreement sets out the terms and conditions of the agreement of the Securityholder to abide by the covenants in respect
of the Subject Securities and the other restrictions and covenants set forth herein;
NOW
THEREFORE this Agreement witnesses that, in consideration of the premises and the covenants and agreements herein contained, the
parties hereto agree as follows:
ARTICLE
1
INTERPRETATION
In
this Agreement:
“Affiliate”
has the meaning ascribed thereto in the Securities Act (Ontario) and the rules, regulations, instruments (including national and
multilateral instruments) and published policies made thereunder, as now in effect and as they may be promulgated or amended from time
to time;
“Arrangement”
means the arrangement of SRx under Section 182 of the OBCA on the terms and subject to the conditions set out in the Plan of Arrangement,
subject to any amendments or variations to the Plan of Arrangement made in accordance with the terms of the Arrangement Agreement or
Article 6 of the Plan of Arrangement or made at the direction of the Court in the Final Order with the consent of the parties to the
Arrangement Agreement, each acting reasonably;
“Arrangement
Agreement” means the arrangement agreement, including the schedules thereto, of even date herewith, between Better Choice and
SRx, a copy of which is attached hereto as Appendix “B”, as it may be amended, supplemented or modified from time to time
in accordance with its terms;
“Plan
of Arrangement” means the plan of arrangement of SRx, substantially in the form of Schedule A to the Arrangement Agreement,
and any amendments or variations thereto made from time to time in accordance with the Arrangement Agreement, the plan of arrangement
or upon the direction of the Court in the Final Order with the consent of the parties to the Arrangement Agreement, each acting reasonably;
“SRx
Arrangement Resolution” means the special resolution of SRx securityholders approving the Plan of Arrangement, as contemplated
in the Arrangement Agreement;
“SRx
Meeting” means the special meeting of SRx securityholders, including any adjournment or postponement thereof, to be called
and held in accordance with the Interim Order to consider the SRx Arrangement Resolution, and for any other purpose as may be set out
in the SRx Circular; and
“SRx
Securityholder Approval” has the meaning ascribed thereto in Section 2.1.
1.2 |
Definitions
in Arrangement Agreement |
All
terms used in this Agreement that are not defined in Section 1.1 or elsewhere in this Agreement and that are defined in the Arrangement
Agreement shall have the respective meanings ascribed to them in the Arrangement Agreement.
The
following Appendices attached hereto constitute an integral part of this Agreement:
Appendix “A” - Subject Securities
Appendix
“B” - Arrangement Agreement
ARTICLE
2
COVENANTS
OF THE SHAREHOLDERS
2.1 |
Securityholder
Support |
In
connection with the Arrangement (and any transactions contemplated in connection with the Arrangement Agreement) and obtaining the requisite
approval for the SRx Arrangement Resolution (“SRx Securityholder Approval”), the Securityholder hereby covenants,
undertakes and agrees from time to time, until such time as this Agreement is terminated in accordance with Article 4, to cause to be
counted as present for purposes of establishing quorum and to vote (or cause to be voted) all of the Subject Securities (to the extent
they carry a right to vote): (i) at the SRx Meeting, or any other meeting of any of the securityholders of SRx at which the Securityholder
or any registered or beneficial owner of the Subject Securities are entitled to vote, to obtain the SRx Securityholder Approval; or (ii)
in any action by written consent of the securityholders of SRx, in favour of the approval, consent, ratification and adoption of any
resolution approving the Arrangement (and any transactions contemplated in connection with the Arrangement Agreement).
2.2 |
Restrictions
with Respect to Subject Securities |
The
Securityholder hereby covenants and agrees that, from the date hereof until the earlier of (i) the Effective Time, (ii) the termination
of this Agreement in accordance with Article 4, or (iii) it being determined (by mutual agreement of Better Choice and SRx) that the
SRx Securityholder Approval is not required, except as permitted by this Agreement, the Securityholder will:
|
(a) |
not,
directly or indirectly, option, sell, assign, transfer, pledge, encumber, grant a participation or security interest in or power
of attorney over, hypothecate or otherwise convey or dispose of any Subject Securities, or any right or interest therein (legal or
equitable), to any Person or group or Persons acting jointly or in concert or enter into any agreement, option or other arrangement
to do any of the foregoing (each of the foregoing, a “Transfer”), other than to one or more of a parent, spouse,
child or grandchild of, or a corporation, partnership, limited liability company or other entity controlled
solely by, the Securityholder or a trust or account (including a Registered Retirement Savings Plan, Registered Education Savings Plan,
Registered Retirement Income Fund or similar account) existing for the benefit of such Person or entity; provided, that a Transfer referred
to in this sentence shall only be permitted if, as a precondition to such Transfer, the transferee agrees in writing, in form and substance
reasonably acceptable to Better Choice, to be bound by all of the terms of this Agreement with respect to the Subject Securities; and
provided further, that in the case of a Transfer to a corporation, partnership, limited liability company or other entity solely controlled
by, the Securityholder, such entity shall remain solely controlled by the Securityholder until the earlier of: (i) the Effective Time;
and (ii) the termination of this Agreement in accordance with Article 4. Any purported transfer of any Subject Securities or interest
therein in violation of this Section 2.2(a) shall be null and void; |
|
(b) |
not,
directly or indirectly, grant or agree to grant any proxy or other right to vote any Subject Securities, except for any proxies granted
to vote in favour of any SRx Securityholder Approval in accordance with Section 2.1, or enter into any voting trust, vote pooling
or other agreement with respect to the right to vote, call meetings of any of the shareholders of SRx or give consents or approval
of any kind as to any Subject Securities; |
|
(c) |
not
vote or cause to be voted any Subject Securities in favor of, and vote or cause to be voted all Subject Securities against, any proposed
action, transaction or agreement by or involving SRx or any of its Affiliates or the Securityholder or any other Person in a manner
which could reasonably be expected to (i) prevent, hinder or delay the successful completion of the Arrangement or the transactions
contemplated by the Arrangement Agreement; or (ii) change in any manner the voting rights of any class of shares of SRx; |
|
(d) |
not,
directly or indirectly, (i) solicit, assist, initiate, knowingly encourage or otherwise knowingly facilitate any inquiry, proposal
or offer (whether public or otherwise) that constitutes or would reasonably be expected to constitute or lead to, an SRx Acquisition
Proposal, (ii) enter into, engage in, continue or otherwise participate in any discussions or negotiations with any Person (other
than Better Choice or its Affiliates) regarding any inquiry, proposal or offer that constitutes or would reasonably be expected to
constitute or lead to, an SRx Acquisition Proposal, or (iii) accept or enter into, or publicly propose to accept or enter into, any
agreement, understanding or arrangement with any Person in respect of an SRx Acquisition Proposal; |
|
(e) |
take
all such steps as are necessary or advisable to ensure that at all relevant times his, her or its Subject Securities will not be
subject to any shareholders’ agreements, voting trust or similar agreements or any option, right or privilege (whether by law,
pre-emptive or contractual) capable of becoming a shareholders’ agreement, voting trust or other agreement affecting or restricting
the ability of him or her to exercise all voting rights attaching to such Subject Securities; |
|
(f) |
not
withdraw, amend, modify or qualify, or publicly propose or state an intention to withdraw, amend, modify or qualify, support for
the transactions contemplated by the Arrangement Agreement; and |
|
(g) |
irrevocably
waives to the fullest extent permitted by Law any and all rights of the Securityholder to dissent with respect to the Arrangement,
and will not exercise any such rights with respect to the Arrangement or the transactions contemplated by the Arrangement Agreement. |
2.3 |
Voting
of the Securityholder |
The
Securityholder hereby agrees with Better Choice that it will, on or before the 10th Business Day prior to any meeting of any
of the securityholders of SRx in respect of any SRx Securityholder Approval, duly complete forms of proxy in respect of all of his, her
or its Subject Securities, and any other required documents in connection therewith , and cause same to be validly delivered in support
of (and indicating that all Subject Securities are voted in favour of approving) the Arrangement (and any transactions contemplated in
connection with the Arrangement Agreement) and will not withdraw the forms of proxy except as expressly otherwise provided in this Agreement.
The Securityholder further agrees that it will, on or before the
10th Business Day prior to any meeting of any of the securityholders of SRx in respect of any SRx Securityholder Approval
to be called to approve the Arrangement (and any transactions contemplated in connection with the Arrangement Agreement), deliver or
cause to be delivered to Better Choice in accordance with Section 5.10 of this Agreement, a copy or screenshot of the duly completed
and signed forms of proxy described in the preceding sentence.
2.4 |
Meaning
of Subject Securities. |
The
term “Subject Securities” means that number of SRx Shares, SRx RSUs and SRx Warrants set forth opposite the Securityholder’s
name in Appendix “A” hereto, being all of the securities of SRx owned legally or beneficially, either directly or
indirectly, by such Securityholder or over which the Securityholder exercises direct or indirect control or discretion, and will be deemed
to also include (a) any SRx Shares, SRx RSUs and SRx Warrants issued to the Securityholder pursuant to any stock dividend, stock split,
recapitalization, reclassification, combination or exchange of SRx Shares, SRx RSUs or SRx Warrants on, of, or affecting the Subject
Securities on or after the date of this Agreement and (b) any SRx Shares, SRx RSUs and SRx Warrants acquired by the Securityholder on
or after the date of this Agreement, or issued to the Securityholder, on or after the date of this Agreement (including pursuant to the
exercise, conversion or vesting of any securities of SRx that are exercisable for, convertible into or vest as SRx Shares (including
all Subject Securities)), and all such acquired SRx Shares, SRx RSUs and SRx Warrants shall be deemed Subject Securities and subject
to the terms of this Agreement as though owned by the Securityholder as of the date hereof.
ARTICLE
3
REPRESENTATIONS AND WARRANTIES
3.1 |
Representations
and Warranties of the Securityholder |
The
Securityholder represents and warrants to and covenants with Better Choice as follows, and acknowledges that Better Choice is relying
upon such representations, warranties and covenants in entering into this Agreement:
|
(a) |
Incorporation;
Authorization. If the Securityholder is a corporation or other legal entity, the Securityholder is a subsisting corporation or
other entity under the laws of its incorporating or organizational jurisdiction. The Securityholder has all necessary power, authority,
capacity and right to enter into this Agreement and to carry out each of its obligations under this Agreement. This Agreement has
been duly executed and delivered by the Securityholder and, assuming due authorization, execution and delivery by Better Choice,
constitutes a legal, valid and binding agreement enforceable by Better Choice against the Securityholder in accordance with its terms,
subject, however, to limitations with respect to enforcement imposed by law in connection with bankruptcy, insolvency, reorganization
or other laws affecting creditors’ rights generally and to the extent that equitable remedies such as specific performance
and injunctions are only available in the discretion of the court from which they are sought. |
|
(b) |
Ownership
of Subject Securities. The Securityholder is, and, subject to any Transfer permitted pursuant to Section 2.2(a), will be continuously
up until the Effective Time, the direct or indirect beneficial owner of the Subject Securities set out opposite the Securityholder’s
name at Appendix “A”, with good and marketable title thereto, free and clear of any and all mortgages, liens,
charges, restrictions, security interests, adverse claims, pledges, encumbrances and demands or rights of others of any nature or
kind whatsoever. The Securityholder does not own or have any interest in any securities of SRx other than the Subject Securities.
The Securityholder is not a party to, bound or affected by or subject to, any charter or by-law, contract, agreement provision, statute,
regulation, judgment, order, decree or law which would be violated, contravened, breached by, or under which any default would occur
as a result of, the execution and delivery of this Agreement or the consummation of any of the transactions provided for in this
Agreement. |
|
(c) |
No
Agreements. No Person has any agreement or option, or any right or privilege (whether by law, pre-emptive or contractual) capable
of becoming an agreement or option, for the purchase, acquisition
or transfer of any of the Subject Securities, or any interest therein or right thereto, except pursuant to this Agreement. |
|
(d) |
Voting.
None of such Subject Securities is subject to any proxy, power of attorney, voting trust, vote pooling or other agreement with respect
to the right to vote, call meetings of any of the shareholders of SRx or give consents or approvals of any kind, except pursuant
to this Agreement. |
|
(e) |
Consents.
No consent, waiver, approval, authorization, exemption, registration, licence or declaration of or by, or filing with, or notification
to any Governmental Entity which has not been made or obtained is required to be made or obtained by the Securityholder in connection
with (i) the execution and delivery by the Securityholder and enforcement against the Securityholder of this Agreement, or (ii) the
consummation of any transactions by the Securityholder provided for herein. |
|
(f) |
Legal
Proceedings. There are no legal proceedings in progress or pending before any Governmental Entity or, to the knowledge of the
Securityholder, threatened against the Securityholder or any of its Affiliates, or any of the Subject Securities or other property
of the Securityholder or any of its Affiliates, and there is no judgment, decree or order against the Securityholder or its Affiliates,
or any of the Subject Securities or other property of the Securityholder or any of its Affiliates, that would adversely affect in
any manner the ability of the Securityholder to enter into this Agreement or adversely affect the Securityholder’s ability
to perform its obligations hereunder or the title of the Securityholder to any of its Subject Securities. |
|
(g) |
No
Commitment. None of the Subject Securities held by the Securityholder is the subject of any commitment, undertaking or agreement,
the terms of which would affect in any way the ability of the Securityholder to perform the Securityholder’s obligations with
respect to such Subject Securities as set out in this Agreement. |
3.2 |
Representations
and Warranties of Better Choice |
Better
Choice hereby represents and warrants to the Securityholder as follows, and acknowledges that the Securityholder is relying upon such
representations, warranties and covenants in entering into this Agreement:
|
(a) |
Better
Choice is a corporation duly incorporated and validly existing under the laws of Delaware and it has the requisite corporate power,
authority and capacity to enter into this Agreement and to perform its obligations hereunder; |
|
(b) |
this
Agreement has been duly executed and delivered by Better Choice and constitutes a legal, valid and binding agreement enforceable
by the Securityholder against Better Choice in accordance with its terms, subject, however, to limitations with respect to enforcement
imposed by law in connection with bankruptcy, insolvency, reorganization or other laws affecting creditors’ rights generally
and to the extent that equitable remedies such as specific performance and injunctions are only available in the discretion of the
court from which they are sought; |
|
(c) |
none
of the execution and delivery by Better Choice of this Agreement or the compliance by Better Choice with its obligations hereunder
will violate, contravene, result in any breach of, or be in conflict with, or constitute a default under, or create a state of facts
which after notice or lapse of time or both would constitute a default under, any term or provision of: (i) any organizational documents
of Better Choice; (ii) any contract to which Better Choice is a party or by which Better Choice is bound; (iii) any judgment, decree,
order or award of any Governmental Entity; or (iv) any applicable law, except in each case as would not reasonably be expected, either
individually or in the aggregate, to materially impair the ability of Better Choice to perform its obligations hereunder or that
would reasonably be expected to prevent or materially delay the completion of the Arrangement; and |
|
(d) |
there
are no legal proceedings in progress or pending against or, to the knowledge of Better Choice, threatened against Better Choice or
any of its Affiliates that would adversely affect in any manner the
ability of Better Choice to enter into this Agreement and to perform its obligations hereunder or that would reasonably be expected to
prevent or materially delay the completion of the Arrangement. |
ARTICLE
4
TERMINATION
This
Agreement shall terminate: (i) by a written instrument executed by each of the parties; (ii) in the event that the Arrangement Agreement
is terminated in accordance with its terms; (iii) on the Effective Time, or
(iv)
it being determined (by mutual agreement of Better Choice and SRx) that the SRx Securityholder Approval is not required.
4.2 |
Effect
of Termination |
If
this Agreement is terminated in accordance with this Article 4, the provisions of this Agreement will become void in relation to such
Securityholder and Better Choice and no such party shall have liability to such other party in respect of whom this Agreement has been
terminated, except in respect of a wilful, intentional or material breach of the representations, warranties, obligations, terms or conditions
of this Agreement which occurred prior to such termination in which case the non-breaching party to this Agreement shall be entitled
to pursue any and all remedies at law or equity which may be available to it.
ARTICLE
5
GENERAL
5.1 |
Fiduciary
Obligations |
Better
Choice agrees and acknowledges that the Securityholder is bound hereunder solely in his, her or its capacity as a securityholder of SRx
and that the provisions of this Agreement shall not be deemed or interpreted to bind the Securityholder or any of its directors, officers
or principal shareholders in his or her capacity as a director or officer of SRx or any of SRx’s subsidiaries. For the avoidance
of doubt, nothing in this Agreement shall limit or restrict any party from properly fulfilling his or her fiduciary duties as a director
or officer of SRx.
The
Securityholder will, from time to time, execute and deliver all such further documents and instruments and do all such acts and things
as Better Choice may reasonably require to effectively carry out or better evidence or perfect the full intent of the parties and meaning
of this Agreement.
5.3 |
Survival
of Representations and Warranties |
No
investigations made by or on behalf any party or any of its authorized agents at any time shall have the effect of waiving, diminishing
the scope of or otherwise affecting any representation, warranty or covenant made by any other party herein or pursuant hereto.
No
press release or other disclosure (public or otherwise) with respect to the existence or details of this Agreement or the Arrangement
shall be made by a Securityholder without the prior written consent of Better Choice, except to the extent required by applicable law.
The Securityholder hereby consents to the disclosure of the substance of this Agreement in any press release by Better Choice and to
the filing of this Agreement as an exhibit to any filing by Better Choice with the United States Securities and Exchange Commission.
Subject
to prior written notice to the Securityholder, Better Choice may assign all or part of its rights under this Agreement to an Affiliate
of Better Choice. Other then as expressly contemplated by Section 2.2(a), this Agreement shall not be otherwise assignable by the Securityholder
without the prior written consent of Better Choice.
Time
shall be of the essence of this Agreement.
This
Agreement will be governed by, and interpreted and enforced in accordance with, the laws in force in the Province of Ontario (excluding
any rule or principle of the conflict of laws which might refer such interpretation to the laws of another jurisdiction) and the federal
laws of Canada applicable therein. Each party hereto irrevocably submits to the non-exclusive jurisdiction of the courts of Ontario with
respect to any matter arising hereunder or related hereto. The parties to this Agreement hereby irrevocably and unconditionally waive
any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the matters contemplated hereby
in the courts of the Province of Ontario and hereby further irrevocably and unconditionally waive and agree not to plead or claim in
any such court that any such action, suit or proceeding so brought has been brought in an inconvenient forum. This Section 5.7 shall
survive the termination of this Agreement.
This
Agreement, including the appendices hereto constitutes the entire agreement between the parties pertaining to the subject matter hereof.
There are no representations, warranties, conditions, undertakings, commitments, other agreements or acknowledgements, whether direct
or collateral, express or implied, that form part of or affect this Agreement, or which induced any party hereto to enter into this Agreement
or on which reliance is placed by any party hereto, except as specifically set forth in this Agreement.
This
Agreement may be amended, modified or supplemented only by a written agreement signed by all of the parties hereto.
If
any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy,
all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that
any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that
the terms of this Agreement remain as originally contemplated to the fullest extent possible.
All
notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed to have been duly given
and received on the day it is delivered, provided, however, that it is delivered on a Business Day prior to 4:30 p.m. Toronto time in
the place of delivery or receipt. However, if notice is delivered after 4:30 p.m. Toronto time or if such day is not a Business Day then
the notice shall be deemed to have been given and received on the next Business Day. Notice shall be sufficiently given if delivered
(either in person, by courier service or other personal method of delivery), or if transmitted by e- mail to the following addresses
(or at such other addresses as shall be specified by any party by notice to the other given in accordance with these provisions;
|
a. |
in
the case of a notice to the Securityholder, to the Securityholder at the email address indicated opposite to the name of the Securityholder
in Appendix “A”; and |
|
b. |
in
the case of a notice to Better Choice: |
|
|
Better
Choice Company Inc. |
|
|
12400 Race Track Road |
|
|
Tampa, FL 33626 |
|
Attention:
|
Mike Young and Carolina Martinez |
|
E-mail:
|
myoung@cottcap.com / nmartinez@bttrco.com |
|
|
|
with a copy (which shall not constitute notice) to:
Wildeboer
Dellelce LLP
365 Bay Street, Suite 800
Toronto, Ontario M5H 2V1
|
Attention: |
Perry Dellelce and James Brown |
|
E-mail: |
perry@wildlaw.ca / jbrown@wildlaw.ca |
5.12 |
Specific
Performance and other Equitable Rights |
It
is recognized and acknowledged that a breach by any party of any material obligations contained in this Agreement will cause the other
party to sustain injury for which it would not have an adequate remedy at law for money damages. Accordingly, in the event of any such
breach, any aggrieved party shall be entitled to the remedy of specific performance of such obligations and interlocutory, preliminary
and permanent injunctive and other equitable relief in addition to any other remedy to which it may be entitled, at law or in equity,
and the Securityholder will waive, in any action for specific performance, interlocutory, preliminary and permanent injunctive relief
and/or any other equitable relief, the defence of adequacy of a remedy at law and any requirement for the securing or posting of any
bond in connection with the obtaining of any such relief.
Each
of the parties shall pay its respective legal, financial advisory and accounting costs and expenses incurred in connection with the preparation,
execution and delivery of this Agreement and all documents and instruments executed or prepared pursuant hereto and any other related
costs and expenses whatsoever and howsoever incurred.
This
Agreement may be executed in any number of counterparts. Each executed counterpart will be deemed to be an original. All executed counterparts
taken together will constitute one agreement.
To
evidence the fact that a party hereto has executed this Agreement, such party may send a copy of its executed counterpart to the other
parties hereto by Electronic Transmission and if sent by email, in Portable Document File (PDF) format. That party will be deemed to
have executed this Agreement on the date it sent such Electronic Transmission.
5.15 |
Independent
Legal Advice |
The
Securityholder acknowledges that:
|
(a) |
the
Securityholder has read this Agreement in its entirety, understands this Agreement and agrees to be bound by its terms and conditions; |
|
(b) |
the
Securityholder has been advised to seek independent legal advice with respect to the Securityholder executing and delivering this
Agreement and has received such advice or has, without undue influence, elected to waive the benefit of any such advice; and |
|
(c) |
the
Securityholder is entering into this Agreement voluntarily. |
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK.
SIGNATURE PAGES FOLLOW.]
IN
WITNESS WHEREOF the parties have executed this Agreement as of the date first written above.
Signature
Page to SRx Voting Agreement
|
BETTER CHOICE COMPANY INC. |
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Per: |
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Name: |
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Title: |
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Signature
Page to SRx Voting Agreement
APPENDIX
“A”
Subject
Securities
Securityholder
Name |
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SRx
Shares |
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SRx
RSUs |
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SRx
Warrants |
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Securityholder
Contact Email |
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APPENDIX
“B”
Arrangement
Agreement
See
attached.
SCHEDULE
G
SRx
SUPPORTING SHAREHOLDERS
All
Persons holding 5% or more of the SRx Shares (on a fully diluted basis) as of the date hereof.
Exhibit 99.1
Exhibt 99.2
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Grafico Azioni Better Choice (AMEX:BTTR)
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Da Ott 2024 a Nov 2024
Grafico Azioni Better Choice (AMEX:BTTR)
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Da Nov 2023 a Nov 2024