Full Press Release Details
MATERIAL CHANGE REPORT
Item 1 Name and Address of Company
Aurora Cannabis Inc. ("Aurora" or
500-10355 Jasper Avenue
Item 2 Date of Material Change
A press release describing the material change was
disseminated by Aurora on August 25, 2022 through Cision PR Newswire and can be found on SEDAR at www.sedar.com.
Item 4 Summary of Material Change
Aurora announced that its wholly-owned subsidiary
("Aurora Sub") has acquired (the "Bevo Transaction") a 50.1% controlling interest in Bevo Agtech
Inc. ("Bevo Agtech"), the sole parent of Bevo Farms Ltd. ("Bevo Farms" and together with Bevo Agtech,
"Bevo"), one of the largest suppliers of propagated vegetables and ornamental plants in North America for cash consideration
of approximately $45 million, subject to customary adjustments, and up to an additional $12 million over a three-year period following
closing, conditional on Bevo successfully achieving certain financial milestones at its Site One facility in Langley, British Columbia
(the "Earnout"), which additional amount may be satisfied, at Aurora's election, in cash or through the issuance
of common shares in the capital of Aurora to the sellers of the common shares in the capital of Bevo Agtech (the "Bevo Vendors").
Concurrent with closing of the Bevo Transaction, Bevo
Agtech also entered into an agreement with another wholly-owned subsidiary of Aurora ("AMI") to acquire AMI's
wholly-owned subsidiary ("Aurora SkyCo"), the owner of the Aurora Sky facility in Edmonton, Alberta (the "Aurora
Sky Transaction" and together with the Bevo Transaction, the "Transaction") in exchange for future cash payments
of up to $25 million based on Bevo successfully achieving certain financial milestones at the Aurora Sky facility (the "Aurora
Sky Royalty"). Closing of the Aurora Sky Transaction is conditional upon receipt of certain third-party consents.
Item 5 Full Description of Material Change
Description of Material Change
Aurora announced that Aurora Sub has acquired a 50.1%
controlling interest in Bevo Agtech, the sole parent of Bevo Farms, one of the largest suppliers of propagated vegetables and ornamental
plants in North America for cash consideration of approximately $45 million, subject to customary adjustments, and up to an additional
$12 million over a three-year period following closing, conditional on Bevo successfully achieving certain financial milestones at its
Site One facility in Langley, British Columbia, which additional amount may be satisfied, at Aurora's election, in cash or through
the issuance of common shares in the capital of Aurora to the Bevo Vendors.
Concurrent with closing of the Bevo Transaction, Bevo
Agtech also entered into an agreement with AMI to acquire Aurora SkyCo, the owner of the Aurora Sky facility in Edmonton, Alberta in exchange
for future cash payments of up to $25 million based on Bevo successfully achieving certain financial milestones at the Aurora Sky facility.
Closing of the Aurora Sky Transaction is conditional upon receipt of certain third-party consents. If the Aurora Sky facility is sold
within the first three (3) years of closing of the Aurora Sky Transaction, AMI will be entitled to the proceeds from such sale.
The Bevo Shareholders Agreement
In connection with the Bevo Transaction, Aurora Sub
and the minority shareholders of Bevo Agtech entered into a unanimous shareholders agreement (the "Bevo Shareholders Agreement")
governing, among things, their respective shareholdings in Bevo Agtech, their rights and duties as shareholders of Bevo Agtech and the
management and operation of the Bevo Agtech and its subsidiaries.
The following is a summary of the material terms of
the Bevo Shareholders Agreement.
Director Nomination Rights and Committees
The Bevo Shareholders Agreement provides that the
board of directors of Bevo Agtech (the "Bevo Board"), which is currently fixed at five (5) directors, shall be comprised
of a majority of individuals nominated by Aurora Sub for so long as it holds at least 50.1% of the common shares of Bevo Agtech, failing
which, whether as a result of failing to exercise its pre-emptive rights or top up rights (each an "Aurora Dilution Event")
or disposing or transferring of certain of its common shares ("Bevo Shares") of Bevo Agtech (an "Aurora Disposition"):
if Aurora Sub owns less than 50.1% but greater than or equal to 30% of
the Bevo Shares, it shall be entitled to nominate two (2) individuals to the Bevo Board;
if Aurora Sub owns less than 30% but greater than or equal to 10% of the
Bevo Shares, it shall be entitled to nominate one (1) individual to the Bevo Board; and
if Aurora Sub owns less than 10% of the Bevo Shares, it shall not be entitled
to nominate any individuals to the Bevo Board.
Additionally, in the event that Aurora Sub is insolvent
or has committed an act of bankruptcy or similar act (an "Aurora Default"), it shall no longer be entitled to nominate
any individuals to the Bevo Board.
Aurora Sub will also lose its right to nominate a
majority of the individuals appointed to the Bevo Board in the event of a direct or indirect acquisition of more than 50% of the outstanding
equity securities of the Company by a third party (a "Change of Control"), in connection with which there is both:
(an "Adverse Change of Control").
Pre-Emptive and Top-Up Rights
The Bevo Shareholders Agreement provides Aurora Sub
and all Significant Shareholders with certain pre-emptive and top-up rights on issuances of securities by Bevo Agtech.
Restrictions on Transfer, Right of First Refusal
and Tag-Along Rights
The Bevo Shareholders Agreement contains restrictions
on transfer of the Bevo Shares subject to specified exceptions, including as described below.
The Bevo Shareholders Agreement provides that Bevo
shareholders may sell their Bevo Shares to a third party subject to providing Aurora Sub and the Significant Shareholders with a right
of first refusal to purchase such shares at the same price and on the same terms and conditions. Additionally, the Bevo Shareholders Agreement
provides that if the foregoing right of first refusal is not exercised, Bevo Shareholders shall have tag-along rights with respect to
any sale of a majority of a Bevo Shareholder's shares to a third party.
The Bevo Shareholders Agreement provides that if a
written, bona fide offer (a "Drag Along Offer") is made or proposed to any Bevo shareholders holding in excess of 66.67%
of the Bevo Shares that provides for the acquisition (either by way of a purchase, amalgamation, arrangement, corporate reorganization,
or other means of merger or acquisition) by an arms-length third party offeror of all of the then outstanding Bevo Shares at the same
price per Bevo Share (for each class of Bevo Shares) and otherwise substantially upon the same terms and conditions to all shareholders,
and the Drag Along Offer is irrevocably accepted or approved by the holders of at least 66.67% of the votes attached to the Bevo Shares,
then any Bevo shareholder who has not accepted or approved the Drag Along Offer is deemed, subject to certain conditions, to have accepted
Call, Put and Liquidity Rights
The Bevo Shareholders Agreement provides that, beginning
on the last day of the first fiscal quarter following closing of the Bevo Transaction until the earlier of:
(the "Bevo Call Right
upon the occurrence of an Adverse Change of Control,
the Significant Shareholders shall have the right (the "Bevo Call Right") to require Aurora Sub to sell all of its
Bevo Shares (the "Bevo Called Shares") to such Significant Shareholders at a price per Bevo Called Share which is based
The Bevo Shareholders Agreement provides that, at
any time following the Bevo Call Right Term, upon the occurrence of an Adverse Change of Control, the Significant Shareholders shall have
the right (the "Put Right") to require Aurora Sub to purchase all of the Bevo Shares owned by the Bevo shareholders
other than Aurora Sub (the "Put Shares") at a price per Put Share which is based on the fair market value of such Put
Shares at the time of exercise of the Put Right.
The Aurora Call Right
The Bevo Shareholders Agreement provides that, upon
the occurrence of either:
Aurora Sub shall have the right (the "Aurora
Call Right"), to purchase all of the Bevo Shares owned by the Bevo shareholders other than Aurora Sub (the "Aurora
Called Shares") at a price per Aurora Called Share based on the greater of:
The Bevo Liquidity Right
The Bevo Shareholders Agreement provides that, at