Full Press Release Details
AURORA CANNABIS INC.
ANANDIA LABORATORIES INC.
ARRANGEMENT AGREEMENT
Dated as of July 15, 2018
| Article 1 DEFINITIONS, INTERPRETATION AND SCHEDULES | 2 | |
| Section 1.1 Definitions | 2 | |
| Section 1.2 Interpretation Not Affected by Headings | 19 | |
| Section 1.3 Number and Gender | 19 | |
| Section 1.4 Date for Any Action | 19 | |
| Section 1.5 Statutory References | 20 | |
| Section 1.6 Currency | 20 | |
| Section 1.7 Invalidity of Provisions | 20 | |
| Section 1.8 Certain References and Phrases | 20 | |
| Section 1.9 Accounting Matters | 20 | |
| Section 1.10 Knowledge | 20 | |
| Section 1.11 Meaning of Certain Phrase | 21 | |
| Section 1.12 Subsidiaries | 21 | |
| Section 1.13 Schedules | 21 | |
| Article 2 THE ARRANGEMENT | 21 | |
| Section 2.1 Arrangement | 21 | |
| Section 2.2 Court Proceedings | 22 | |
| Section 2.3 Completion of Arrangement Filings | 23 | |
| Section 2.4 Effective Time | 24 | |
| Section 2.5 Closing | 24 | |
| Section 2.6 Consultation | 24 | |
| Section 2.7 [Reserved] | 25 | |
| Section 2.8 U.S. Securities Matters | 25 | |
| Section 2.9 Adjustment of Consideration | 26 | |
| Section 2.10 Lock-Up and Shareholder Agreements | 26 | |
| Section 2.11 Anandia Options | 26 | |
| Section 2.12 Anandia Warrants | 27 | |
| Section 2.13 Tax Matters | 27 | |
| Section 2.14 Tax Elections | 27 | |
| Article 3 REPRESENTATIONS AND WARRANTIES | 28 | |
| Section 3.1 Representations and Warranties of Anandia | 28 | |
| Section 3.2 Representations and Warranties of Aurora | 28 | |
| Section 3.3 Anandia Disclosure Letter | 28 | |
| Section 3.4 Aurora Disclosure Letter | 29 |
| Section 3.5 Survival of Representations and Warranties | 29 | |
| Article 4 COVENANTS | 29 | |
| Section 4.1 Covenants of Aurora | 29 | |
| Section 4.2 Covenants of Anandia | 32 | |
| Section 4.3 Regulatory Approvals | 40 | |
| Section 4.4 Indemnification and Insurance | 41 | |
| Section 4.5 Employment Matters | 42 | |
| Section 4.6 Confidentiality Agreement | 42 | |
| Article 5 CONDITIONS | 42 | |
| Section 5.1 Mutual Conditions | 42 | |
| Section 5.2 Aurora Conditions | 43 | |
| Section 5.3 Anandia Conditions | 44 | |
| Section 5.4 Notice and Cure Provisions | 45 | |
| Article 6 NON-SOLICITATION AND TERMINATION PAYMENTS | 45 | |
| Section 6.1 Anandia Covenant Regarding Non-Solicitation | 45 | |
| Section 6.2 Notice of Anandia Superior Proposal Determination | 49 | |
| Section 6.3 Anandia Termination Payment Event | 51 | |
| Section 6.4 Reimbursement of Expenses | 53 | |
| Article 7 AMENDMENT AND TERMINATION | 53 | |
| Section 7.1 Amendment | 53 | |
| Section 7.2 Termination | 54 | |
| Section 7.3 Effect of Termination | 56 | |
| Article 8 GENERAL | 56 | |
| Section 8.1 Notices | 56 | |
| Section 8.2 Remedies | 57 | |
| Section 8.3 Expenses | 58 | |
| Section 8.4 Time of the Essence | 58 | |
| Section 8.5 Entire Agreement | 58 | |
| Section 8.6 Further Assurances | 58 | |
| Section 8.7 Governing Law | 58 | |
| Section 8.8 Execution in Counterparts | 58 | |
| Section 8.9 Waiver | 59 | |
| Section 8.10 Third Party Beneficiaries | 59 | |
| Section 8.11 No Personal Liability | 59 | |
| Section 8.12 Enurement and Assignment | 59 |
| Schedule A Plan Of Arrangement | A-1 |
| Schedule B Form of Anandia Arrangement Resolution | B-1 |
| Schedule C Representations and Warranties of Anandia | C-1 |
| Schedule D Representations and Warranties of Aurora | D-1 |
| Schedule E List of Anandia Locked-Up Shareholders | E-1 |
| Schedule F Form of Consideration WArrant | F-1 |
| Schedule G Form of Coleman Escrow Agreement | G-1 |
| Schedule H Form of Page Escrow Agreement | H-1 |
| Schedule I Form of Coleman Acknowledgement and Indemnity Agreement | I-1 |
| Schedule J Form of Page Acknowledgement and Indemnity Agreement | J-1 |
| Schedule K Key Employees | K-1 |
ARRANGEMENT AGREEMENT
THIS ARRANGEMENT AGREEMENT (this
"Agreement") made as of July 13, 2018.
AURORA CANNABIS INC., a company
incorporated under the laws of the Province of British Columbia,
(hereinafter referred to as "Aurora")
ANANDIA LABORATORIES INC.,
a company incorporated under the laws of the Province of British Columbia,
(hereinafter referred to as "Anandia"
and together with Aurora, the "Parties" and each, a "Party")
and Anandia wish to enter into a business combination transaction providing for, among other things, the acquisition of all of
the issued and outstanding shares of Anandia by Aurora;
and Anandia propose to effect the transaction by way of a plan of arrangement of Anandia under the provisions of the Business
Corporations Act (British Columbia);
and Anandia negotiated in good faith the terms of a definitive arrangement agreement and elements of a plan of arrangement which
terms and elements are set forth in this Agreement and the Plan of Arrangement;
board of directors of each of Aurora and Anandia have unanimously determined that it would be in the best interest of each corporation
to enter into this Agreement and complete the transactions contemplated by this Agreement;
has entered into voting and support agreements dated the date hereof with the Anandia Locked-Up Shareholders (the "Anandia
Lock-Up Agreements"); and
Parties intend that the issuance of the Replacement Securities (as defined herein) will be exempt from the registration requirements
of the 1933 Act (as defined herein) pursuant to Section 3(a)(10) thereof and applicable U.S. state securities laws in reliance
upon such exemptions as may be available therefrom;
NOW THEREFORE in consideration
of the mutual covenants and agreements herein contained and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by each of the Parties, the Parties hereto hereby covenant and agree as follows:
DEFINITIONS, INTERPRETATION AND SCHEDULES
unless the context otherwise requires, the following words and terms shall have the meanings ascribed to them below:
| (uu) | ................................................................................................................................... ......................................................................................................................... ................... | |
| [Redacted - Defined term] |
| (fff) | ............................................................................................... ................................................................................................... ......................................... | |
| [Redacted - Defined term] |
| (jjj) | ................................................................................................................................... ....................................................... | |
| [Redacted - Defined term] |
[Redacted - Related defined terms]
| A | = | the number of Consideration Shares issuable per Anandia Share |
| B | = | the Purchase Price |
| C | = | the Issue Price |
| D | = | the aggregate number of Anandia Shares |
| (aaaaa) | ................................................................................................................................... ........................ | |
| [Redacted - Defined term] |
that if a change, effect, event, occurrence or state of facts referred to in clauses (i) through to and including (v) has a materially
disproportionate effect on that Party and its Subsidiaries, on a consolidated basis, relative to other comparable companies and
entities operating in the Canadian cannabis industry, such effect may be taken into account in determining whether a Material Adverse
Effect has occurred; and provided that references in this Agreement to dollar amounts are not intended to be, and shall not be
deemed to be, interpretive of the amount used for the purpose of determining whether a Material Adverse Effect has occurred or
whether a state of facts exists that has or could have a Material Adverse Effect;
| (rrrrr) | ......................................................... | |
| [Redacted - Related defined terms] |
| (wwwww) | ................................................................................................................... | |
| [Redacted - Defined term] |
Interpretation Not Affected by Headings
The division of this
Agreement into articles, sections, subsections, paragraphs and subparagraphs and the insertion of headings herein are for convenience
of reference only and shall not affect in any way the meaning or interpretation of this Agreement. The terms "this Agreement",
"hereof", "herein", "hereto", "hereunder" and similar expressions refer to this
Agreement and the schedules attached hereto and not to any particular article, section or other portion hereof and include any
agreement, schedule or instrument supplementary or ancillary hereto or thereto.
unless the context otherwise requires, words importing the singular only shall include the plural and vice versa, words importing
the use of either gender shall include both genders and neuter.
If the date on which
any action is required to be taken hereunder by any party hereto is not a Business Day, such action shall be required to be taken
on the next succeeding day that is a Business Day.
Statutory References
in this Agreement to a statute includes all regulations and rules made thereunder, all amendments to such statute or regulation
in force from time to time and any statute or regulation that supplements or supersedes such statute or regulation.
stated, all references in this Agreement to amounts of money are expressed in lawful money of Canada.
Invalidity of Provisions
Each of the provisions
contained in this Agreement is distinct and severable and a declaration of invalidity or unenforceability of any such provision
or part thereof by a court of competent jurisdiction shall not affect the validity or enforceability of any other provision hereof.
To the extent permitted by applicable Laws, the Parties hereto waive any provision of Law that renders any provision of this Agreement
or any part thereof invalid or unenforceable in any respect. The Parties hereto will engage in good faith negotiations to replace
any provision hereof or any part thereof that is declared invalid or unenforceable with a valid and enforceable provision or part
thereof, the economic effect of which approximates as much as possible the invalid or unenforceable provision or part thereof that
Certain References and Phrases
contract, license, lease, agreement, indenture, arrangement or commitment shall be a reference to such contract, license, lease,
agreement, indenture, arrangement or commitment, as amended, modified or supplemented from time to time in accordance with the
terms thereof. The words "the aggregate of", "the total of", "the sum of", or a phrase of similar
meaning means "the aggregate (or total or sum), without duplication, of." The term "made available" means
(i) copies of the subject materials were included in the Anandia Data Room or Aurora Data Room, as applicable, (ii) copies of the
subject materials were provided to Anandia or Aurora, as applicable, or (iii) the subject material was listed in the Anandia Disclosure
Letter or Aurora Disclosure Letter, as applicable, or referred to in the Anandia Data Room or Aurora Data Room, as applicable,
and copies were provided to the applicable Party if requested.
stated, all accounting terms used in this Agreement shall have the meanings attributable thereto under IFRS and all determinations
of an accounting nature required to be made hereunder shall be made in a manner consistent with IFRS.
"to the knowledge of Aurora" or "to Aurora's knowledge" or "to the knowledge of Anandia"
or "to Anandia's knowledge" are used in respect of Aurora, the Aurora Subsidiaries, Anandia or the Anandia Subsidiaries,
as applicable, such phrase shall mean, in respect of each representation and warranty or other statement which is qualified by
such phrase, that such representation and warranty or other statement is being made based upon: (a) in the case of Aurora and the
Aurora Subsidiaries, the actual collective knowledge, after reasonable inquiry, of those officers of Aurora and the Aurora Subsidiaries
set forth in Section 1.10 of the Aurora Disclosure Letter; and (b) in the case of Anandia and the Anandia Subsidiaries, the
actual collective knowledge, after reasonable inquiry, of those officers of Anandia and the Anandia Subsidiaries set forth in Section 1.10
of the Anandia Disclosure Letter.
Meaning of Certain Phrase
the phrase "in the ordinary course of business" or "ordinary course" and similar expressions shall, as
applicable, mean and refer to the ordinary course of business conduct of a Party (or its Subsidiaries) in a commercially reasonable
and business-like manner consistent with the past practices of such Party.
covenants or agreements contained herein relate, directly or indirectly, to a Subsidiary of Aurora or Anandia, each such provision
shall be construed as a covenant by Aurora or Anandia, respectively, to cause (to the fullest extent to which it is legally capable)
such Subsidiary to perform the required action.
The following schedules