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SECOND AMENDING AGREEMENT
THIS SECOND AMENDING AGREEMENT (the "Second Amending Agreement") is made as of March 14, 2021.
IM CANNABIS CORP., a company existing under the laws of the Province of British Columbia
TRICHOME FINANCIAL CORP., a corporation existing under the laws of the Province of Ontario
WHEREAS the Purchaser and the Company entered into an arrangement agreement dated as of December 30, 2020 which contemplates an arrangement of the Company under Section 182 of the Business Corporations Act (Ontario), pursuant to which the Company shall be acquired by the Purchaser (as amended January 22, 2021, the "Arrangement Agreement");
AND WHEREAS the Plan of Arrangement is set forth as Schedule A to the Arrangement Agreement;
AND WHEREAS Section 8.1 of the Arrangement Agreement and Section 5.1 of the Plan of Arrangement allow the Parties to, inter alia, amend the Plan of Arrangement, at any time and from time to time, in accordance with the terms and conditions set forth therein;
AND WHEREAS the Purchaser and the Company wish to implement certain mechanical amendments to the Plan of Arrangement and a clerical amendment to the Arrangement Agreement, all as set forth below.
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the foregoing and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. All capitalized terms used but not otherwise defined in this Second Amending Agreement shall have the respective meanings ascribed to them in the Arrangement Agreement.
2. The Plan of Arrangement as set forth as Schedule A to the Arrangement Agreement is hereby deleted and replaced in its entirety with the amended and restated Plan of Arrangement attached hereto as Schedule A.
3. The words "Section 6.2(7)" in the definition of "Key Consents/Waivers" in section 1.1of the Arrangement Agreement is deleted and replaced with the words "Schedule C-24".
4. Except for the foregoing amendments, the Parties acknowledge and confirm that the Arrangement Agreement, as amended January 22, 2021, shall remain in full force and effect, unamended, and, upon the execution of this Second Amending Agreement, the Arrangement Agreement (as amended) and this Second Amending Agreement shall be deemed to constitute the entire Arrangement Agreement.
5. This Second Amending Agreement shall be binding upon and enure to the benefit of the Parties and their respective legal representatives, successors and permitted assigns. This Second Amending Agreement shall be governed by the laws of the Province of Ontario and the federal laws of Canada applicable therein.
6. This Second Amending Agreement may be executed in any number of counterparts (including counterparts by facsimile or any other form of electronic communication) and all such counterparts taken together shall be deemed to 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 Second Amending Agreement, and such facsimile or similar executed electronic copy shall be legally effective to create a valid and binding agreement between the Parties.
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IN WITNESS WHEREOF the Parties have executed this Second Amending Agreement as of the date first above written.
| IM CANNABIS CORP. | ||
| By: | (Signed) "Oren Shuster" | |
| Name: Oren Shuster Title: Chief Executive Officer |
| TRICHOME FINANCIAL CORP. | ||
| By: | (Signed) "Michael Ruscetta" | |
| Name: Michael Ruscetta Title: Chief Executive Officer |
PLAN OF ARRANGEMENT UNDER SECTION 182
OF THE BUSINESS CORPORATIONS ACT (ONTARIO)
Unless indicated otherwise, where used in this Plan of Arrangement, capitalized terms used but not defined shall have the meanings ascribed thereto in the Arrangement Agreement and the following terms shall have the following meanings (and grammatical variations of such terms shall have corresponding meanings):
"Arrangement" means an arrangement under Section 182(1) of the OBCA on the terms and subject to the conditions set out in this Plan of Arrangement, subject to any amendments or variations to this Plan of Arrangement made in accordance with the terms of the Arrangement Agreement or the provisions of this Plan of Arrangement or made at the direction of the Court in the Final Order with the prior written consent of the Company and the Purchaser, each acting reasonably.
"Arrangement Agreement" means the arrangement agreement dated as of December 30, 2020 between the Purchaser and the Company, as amended January 22, 2021, and as the same may be further amended, supplemented or otherwise modified from time to time in accordance with the terms thereof prior to the Effective Time, providing for, among other things, the Arrangement.
"Arrangement Resolution" means the special resolution of the Company Shareholders approving this Plan of Arrangement to be considered at the Company Meeting.
"Articles of Arrangement" means the articles of arrangement of the Company in respect of the Arrangement, required by the OBCA to be sent to the Director after the Final Order is made, which shall include this Plan of Arrangement and otherwise be in a form and content satisfactory to the Company and the Purchaser, each acting reasonably.
"Award Agreement" means any agreement between the Company and a participant in, or pursuant to, the Company PRSU, the Company Legacy Equity Incentive Plan and the Company Option Plan, in each case setting out the participant's entitlement to receive Company Legacy RSUs, Company Legacy PSUs, Company Legacy Options, Company PSUs, Company RSUs or Company Options, as the case may be, and the Company Shares issuable pursuant thereto upon settlement or exercise, as applicable.
"Business Day" means any day of the year, other than a Saturday, Sunday or any day on which major banks are closed for business in Toronto, Ontario.
"Certificate of Arrangement" means the certificate of arrangement issued by the Director pursuant to subsection 183(2) of the OBCA in respect of the Articles of Arrangement.
"Company" means Trichome Financial Corp., a corporation existing under the Laws of the Province of Ontario.
"Company Circular" means the notice of the Company Meeting and accompanying management information circular, including all schedules, appendices and exhibits to, and information incorporated by reference in, such management information circular, to be sent to the Company Shareholders in connection with the Company Meeting, as amended, supplemented or otherwise modified from time to time in accordance with the terms of the Arrangement Agreement.
"Company In-The-Money Option" means a Company Option having an In-The-Money Amount.
"Company Legacy Equity Incentive Plan" means the equity incentive plan of Trichome Financial Corp. (predecessor to the Company).
"Company Meeting" means the special meeting of Company Shareholders, including any adjournment or postponement of such special meeting in accordance with the terms of the Arrangement Agreement, to be called and held in accordance with the Interim Order to consider the Arrangement Resolution and for any other purpose as may be set out in the Company Circular and agreed to in writing by the Purchaser.
"Company Options" means options to acquire Company Shares granted pursuant to either of the Company Legacy Equity Incentive Plan or the Company Option Plan.
"Company Option Plan" means the share option plan approved by the Company Shareholders on July 8, 2019.
"Company Option Balance Shares" means in respect of a Company In-The-Money-Option, the number of Company Shares having a fair market value equal to the applicable source deductions in respect of such Company In-The-Money-Option.
"Company Option Shares" means the Company Shares to be issued to holders of Company In-The-Money Options pursuant to Section 2.3(f) of the Plan of Arrangement, which is equal to the In-The-Money Amount of such Company In-The-Money Options held by each Company Optionholder net of applicable source deductions, which shall be the amount obtained by dividing the applicable source deduction in respect of each Company In-The-Money Option held by such Company Optionholder by the Fair Market Value and rounding up to the nearest whole Company Share.
"Company Optionholder" means a holder of one or more Company Options.
"Company Out-Of-The-Money Option" means a Company Option that is not a Company In-The-Money Option.
"Company PRSU Plan" means the performance share unit and restricted share unit equity incentive plan of the Company approved by Company Shareholders on July 8, 2019.
"Company PSU Balance Shares" means the number of Company Shares resulting from the Company PSU Consideration less the Company PSU Net Payment.
"Company PSU Consideration" means, with respect to Company PSUs, one Company Share for each Company PSU.
"Company PSU Net Payment" means one Company Share for each Company PSU, net of applicable source deductions, which shall be the amount obtained by dividing the applicable source deduction in respect of a Company PSU Holder of each Company PSU by the Fair Market Value and rounding up to the nearest whole Company Share.
"Company PSU Holders" means the holders of Company PSUs.
"Company PSUs" means the outstanding performance share units of the Company issued pursuant to: (i) the Company Legacy Equity Incentive Plan; and (ii) the Company PRSU Plan.
"Company RSU Balance Shares" means the number of Company Shares resulting from the Company RSU Consideration less the Company RSU Net Payment.
"Company RSU Consideration" means, with respect to Company RSUs, one Company Share for each Company RSU.
"Company RSU Net Payment" means one Company Share for each Company RSU, net of applicable source deductions, which shall be the amount obtained by dividing the applicable source deduction in respect of a Company RSU Holder of each Company RSU by the Fair Market Value and rounding up to the nearest whole Company Share.
"Company RSU Holders" means the holders of Company RSUs.
"Company RSUs" means the outstanding restricted share units of the Company issued pursuant to: (i) the Company Legacy Equity Incentive Plan; and (ii) the Company PRSU Plan.
"Company Shareholders" means the registered or beneficial holders of Company Shares, as the context requires, except that with respect to Dissent Rights, Company Shareholders refers only to registered holders of Company Shares.
"Company Shares" means the common shares in the capital of the Company.
"Consideration" means the consideration to be received by Company Shareholders (other than Dissenting Holders) pursuant to this Plan of Arrangement, as consideration for their Company Shares and determined based on the Exchange Ratio.
"Court" means the Ontario Superior Court of Justice (Commercial List).
"Depositary" means any depositary or trust company, bank or financial institution as the Purchaser may appoint to act as depositary with the approval of the Company, acting reasonably, for the purpose of, among other things, exchanging certificates representing Company Shares for Purchaser Shares in connection with the Arrangement.
"Director" means the Director appointed pursuant to Section 278 of the OBCA.
"Dissent Rights" has the meaning specified in Section 3.1.
"Dissenting Holder" means a registered Company Shareholder who has validly exercised Dissent Rights in accordance with Section 3.1 and has not withdrawn or been deemed to have withdrawn such exercise of Dissent Rights and who is ultimately entitled to be paid the fair value of the Company Shares held by such registered Company Shareholder.
"Effective Date" means the date shown on the Certificate of Arrangement, giving effect to the Arrangement.
"Effective Time" means 12:01 a.m. on the Effective Date, or such other time as the Parties agree to in writing before the Effective Date.
"Exchange Ratio" means 0.981 of a Purchaser Share to be issued by the Purchaser for each one Company Share exchanged pursuant to the Arrangement, subject to adjustment in the manner and in the circumstances contemplated in Section 2.5 of this Plan of Arrangement.
"Fair Market Value" means the fair market value of the Company Shares on the Effective Date.
"Final Order" means the final order of the Court in a form acceptable to the Company and the Purchaser, each acting reasonably, approving the Arrangement, as such order may be amended by the Court (with the consent of both the Company and the Purchaser, each acting reasonably) at any time prior to the Effective Date or, if appealed, then, unless such appeal is withdrawn or denied, as affirmed or as amended (provided that any such amendment is acceptable to both the Company and the Purchaser, each acting reasonably) on appeal.
"Governmental Entity" means (i) any international, multinational, national, federal, provincial, state, regional, municipal, local or other government, governmental or public department, central bank, court, tribunal, arbitral body, commission, commissioner, board, bureau, ministry, agency or instrumentality, domestic or foreign, (ii) any subdivision or authority of any of the above, (iii) any quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of the foregoing or (iv) any stock exchange.
"In-The-Money Amount" means, in respect of a Company Option, the amount, if any, by which the Fair Market Value of the Company Shares that a holder is entitled to acquire on exercise of the Company Option immediately prior to the Effective Time exceeds the exercise price of such Company Option.
"Interim Order" means the interim order of the Court in a form acceptable to the Company and the Purchaser, each acting reasonably, providing for, among other things, the calling and holding of the Company Meeting, as such order may be amended by the Court with the consent of the Company and the Purchaser, each acting reasonably.
"Law" means, with respect to any Person, any and all applicable law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, notice, 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" means the letter of transmittal to be delivered by the Company to the Company Shareholders for use in connection with the Arrangement.
"Lien" means any mortgage, charge, pledge, hypothec, security interest, prior claim, encroachments, option, right of first refusal or first offer, occupancy right, covenant, assignment, lien (statutory or otherwise), defect of title, or restriction or adverse right or claim, or other third party interest or encumbrance of any kind, in each case, whether contingent or absolute.
"OBCA" means the Business Corporations Act (Ontario).
"Parties" means the Company and the Purchaser, and "Party" means either of them.
"Person" includes any individual, partnership, association, body corporate, organization, trust, estate, trustee, executor, administrator, legal representative, government (including Governmental Entity), syndicate or other entity, whether or not having legal status.
"Plan of Arrangement" means this plan of arrangement proposed under Section 182 of the OBCA, and any amendments or variations made in accordance with Section 8.1 of the Arrangement Agreement or Section 2.5 of this plan of arrangement or made at the direction of the Court in the Final Order with the consent of the Company and the Purchaser, each acting reasonably.
"Purchaser" means IM Cannabis Corp., a company existing under the Laws of the Province of British Columbia.
"Purchaser Shares" means the common shares in the authorized share structure of the Purchaser.
"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.
"Tax Act" means the Income Tax Act (Canada) and the regulations promulgated thereunder, each as amended.
"TJAC" means Trichome JWC Acquisition Corp., a corporation existing under the Laws of the Province of Ontario and a wholly-owned Subsidiary of the Company.
"TJAC Options" means options to purchase common shares of TJAC under the TJAC Option Plan.
"TJAC Option Ratio" means 1.283659659.
"TJAC Optionholders" means the holders of options to purchase common shares of TJAC under the TJAC Option Plan.
"TJAC Option Plan" means the equity incentive plan of TJAC implemented on August 28, 2020.
"U.S. Securities Act" means the United States Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
1.2 Interpretation Not Affected by Headings
The headings contained in this Plan of Arrangement are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Plan of Arrangement. The terms "this Plan of Arrangement", "hereof", "herein", "hereto", "hereunder" and similar expressions refer to this Plan of Arrangement and not to any particular Article, Section or Subsection hereof and include any agreement or instrument supplementary or ancillary hereto.
1.3 Date for any Action
If the date on which any action is required to be taken hereunder is not a Business Day, such action shall be required to be taken on the next succeeding day which is a Business Day.
1.4 Number and Gender
In this Plan of Arrangement, unless the context otherwise requires, words importing the singular include the plural and vice versa, and words importing gender include all genders and neuter.
1.5 References to Persons and Statutes
A reference to a Person includes any successor to that Person. Any reference to a statute or to a rule of a self-regulatory organization, including any stock exchange, refers to such statute or rule, and all rules and regulations, administrative policy statements, instruments, blanket orders, notices, directions and rulings issued or adopted under it, as it or they may have been or may from time to time be amended or re-enacted, unless stated otherwise.
Unless otherwise stated in this Plan of Arrangement, all references herein to amounts of money are expressed in lawful money of Canada.
1.7 Computation of Time
A period of time is to be computed as beginning on the day following the event that began the period and ending at 4:30 p.m. on the last day of the period, if the last day of the period is a Business Day, or at 4:30 p.m. on the next Business Day if the last day of the period is not a Business Day. If the date on which any action is required or permitted to be taken under this Plan of Arrangement by a Person is not a Business Day, such action shall be required or permitted to be taken on the next succeeding day that is a Business Day.
Time shall be of the essence in every matter or action contemplated hereunder. References to time are to Toronto time.
1.9 Certain Phrases, etc.
Wherever the word "including," "includes" or "include" is used in this Plan of Arrangement, it shall be deemed to be followed by the words "without limitation. The word "or" shall be disjunctive but not exclusive. The phrase "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." References herein to a Person in a particular capacity or capacities shall exclude such Person in any other capacity.
2.1 Arrangement Agreement
This Plan of Arrangement is made pursuant to and subject to the provisions of the Arrangement Agreement.