Full Press Release Details
[*] = Certain information contained in this document, marked by brackets,
has been omitted because it is both not material and is the type of information that we treat as private or confidential.
IMPLEMENTATION AGREEMENT
| Article 1 INTERPRETATION | 1 | ||
| Section 1.1 | Defined Terms | 1 | |
| Section 1.2 | Certain Rules of Interpretation | 13 | |
| Article 2 The Transactions | 14 | ||
| Section 2.1 | Transactions | 14 | |
| Section 2.2 | Transaction Agreements | 15 | |
| Section 2.3 | Asset Purchase and Sale | 15 | |
| Section 2.4 | Company Share Transfer | 15 | |
| Section 2.5 | Company Share Distribution | 15 | |
| Section 2.6 | Sequence of Events | 16 | |
| Article 3 Conditions to the Transactions | 17 | ||
| Section 3.1 | Mutual Conditions | 17 | |
| Section 3.2 | Conditions in Favour of SNDL | 17 | |
| Section 3.3 | Conditions in Favour of the Company | 18 | |
| Article 4 Covenants | 19 | ||
| Section 4.1 | The Company Meeting | 19 | |
| Section 4.2 | The Company Circular | 20 | |
| Section 4.3 | SNDL Transferred Stores | 20 | |
| Section 4.4 | Company Transferred Intellectual Property | 21 | |
| Section 4.5 | Interim Period Consents | 22 | |
| Section 4.6 | Covenants Relating to the Transactions | 22 | |
| Section 4.7 | Public Communications | 25 | |
| Section 4.8 | Notice and Cure Provisions | 26 | |
| Article 5 REPRESENTATIONS AND WARRANTIES | 26 | ||
| Section 5.1 | Representations and Warranties of the Company | 26 | |
| Section 5.2 | Representations and Warranties of SNDL | 26 | |
| Article 6 ADDITIONAL COVENANTS REGARDING NON-SOLICITATION | 27 | ||
| Section 6.1 | Non-Solicitation | 27 | |
| Section 6.2 | Notification of Company Acquisition Proposals | 28 | |
| Section 6.3 | Responding to a Company Acquisition Proposal | 28 | |
| Section 6.4 | Right to Match | 28 | |
| Article 7 TERM AND TERMINATION | 30 | ||
| Section 7.1 | Term | 30 | |
| Section 7.2 | Termination | 30 | |
| Section 7.3 | Effect of Termination/Survival | 32 |
| Article 8 GENERAL PROVISIONS | 32 | ||
| Section 8.1 | Amendments; Waiver | 32 | |
| Section 8.2 | Expenses | 32 | |
| Section 8.3 | Acknowledgment | 32 | |
| Section 8.4 | Notices | 33 | |
| Section 8.5 | Time of the Essence | 34 | |
| Section 8.6 | Waiver | 34 | |
| Section 8.7 | Entire Agreement | 34 | |
| Section 8.8 | Successors and Assigns | 34 | |
| Section 8.9 | Severability | 34 | |
| Section 8.10 | Governing Law | 34 | |
| Section 8.11 | Rules of Construction | 35 | |
| Section 8.12 | Counterparts | 35 |
SCHEDULES & APPENDICES
| SCHEDULE A | REPRESENTATIONS AND WARRANTIES OF THE COMPANY |
| SCHEDULE B | REPRESENTATIONS AND WARRANTIES OF SNDL |
| SCHEDULE C | KEY REGULATORY APPROVALS |
| APPENDIX A | STRATEGIC PARTNERSHIP AGREEMENT |
| APPENDIX B | AMENDED AND RESTATED MANAGEMENT AND ADMINISTRATIVE SERVICES AGREEMENT |
| APPENDIX C | AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT |
| APPENDIX D | AMENDED AND RESTATED COLLABORATION AND FINANCIAL REPORTING AGREEMENT |
| APPENDIX E | NEW CREDIT AGREEMENT |
IMPLEMENTATION AGREEMENT
THIS AGREEMENT is made as of December 20, 2022,
SNDL INC., a corporation existing
under the laws of the Province of Alberta ("SNDL")
NOVA CANNABIS INC., a corporation
existing under the laws of the Province of Alberta (the "Company", and together with SNDL, the "Parties",
consideration of the covenants and agreements herein contained, the Parties agree as follows:
As used in this Agreement, the following
terms have the following meanings:
"Action" means, with
respect to any Person, any litigation, legal action, lawsuit, claim, audit, demand, arbitration, indictment, enquiries, contractual dispute
resolution process, administrative, investigative proceedings, examination or other proceeding (whether civil, administrative, contractual,
quasi-criminal or criminal) before any Governmental Entity against or involving such Person or its business or affecting its assets.
meaning ascribed thereto in National Instrument 45-106-Prospectus Exemptions.
Agreement", "herein", "hereto" and "hereof" and similar expressions
refer to this arrangement agreement, as the same be amended, supplemented or otherwise modified from time to time in accordance with the
terms hereof and, where applicable, to the Schedules hereto, the Company Disclosure Letter and the SNDL Disclosure Letter.
"Alcanna" means Alcanna
Inc., a corporation incorporated pursuant to the laws of Canada.
"Alcanna Company Shares"
means the 35,750,000 Company Shares held by Alcanna.
"Amended and Restated CFR Agreement"
has the meaning ascribed thereto in Section 2.2(1)(d).
"Amended and Restated Investor
Rights Agreement" has the meaning ascribed thereto in Section 2.2(1)(c).
"Amended and Restated Management
and Administrative Services Agreement" has the meaning ascribed thereto in Section 2.2(1)(b).
"Appurtenances" means
with respect to any real property: (a) all buildings, structures, fixtures, improvements and appurtenances located on or forming part
of that real property, including those under construction; and (b) all rights of way, licenses, rights of occupation easements or other
similar rights appurtenant to and for the benefit of that real property.
"Asset Purchase Agreement"
means the asset purchase agreement to be entered into between SNDL and the Company on the Effective Date in respect of the conveyance
of all of SNDL's right, title and interest in and to the SNDL Transferred Store Assets to the Company (or to an affiliate as directed
"Authorization" means
with respect to any Person, any order, permit, approval, consent, waiver, licence (including Cannabis Retail Licences) or similar authorization
of any Governmental Entity having jurisdiction over the Person, whether by expiry or termination of an applicable waiting period or otherwise,
that is binding upon or applicable to such Person, or its business, assets or securities.
"Award" means any judgment,
decree, injunction, ruling, award, decision, determination, finding or order of any Governmental Entity.
means, with respect to any Person, books and records of such Person, including books of account, Tax records, sales and purchase records,
customer and supplier lists, technical documents including specifications, bills of materials and business reports, whether in written
"Breaching Party" has
the meaning ascribed thereto in Section 4.8(3).
"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, New York,
New York or Calgary, Alberta.
meaning given to such term in the Cannabis Act (Canada).
"Cannabis Laws" means,
collectively: (i) the Laws of Canada and each of the provinces and territories therein applicable to the production, manufacture, cultivation,
importation, exportation, advertisement, marketing, promotion, sale and/or distribution of cannabis, cannabis products and/or related
products, including, without limitation, the Cannabis Retail Laws, the Cannabis Act (Canada), the Cannabis Regulations (Canada)
and the Excise Act, 2001 (Canada); and (ii) the respective regulations and rules made and forms prescribed under such laws, together
with all applicable and legally enforceable published policy statements, orders and rulings of the applicable Governmental Entity in each
has the meaning given to such term in the Cannabis Regulations (Canada).
"Cannabis Retail Laws"
means, collectively: (i) the Laws of each of the provinces and territories of Canada applicable to the manufacture, advertisement, marketing,
promotion, wholesale purchase, wholesale sale, retail sale and/or distribution of cannabis, cannabis products and/or related products
and the establishment, ownership and/or operation of cannabis retail stores, including, without limitation, the Cannabis Licence Act,
2018 (Ontario), the Gaming, Liquor and Cannabis Act (Alberta) and the Cannabis Control (Saskatchewan) Act; and (ii)
the respective regulations and rules made and forms prescribed under such Laws, together with all applicable and legally enforceable published
policies, orders, rulings, terms and conditions, handbooks and guidelines of the applicable Governmental Entity in each such jurisdiction.
"Cannabis Retail Licences"
means, collectively, all licences, permits, authorizations, certifications and other approvals that may be issued or granted pursuant
to any Cannabis Retail Laws which authorize the holder thereof (and/or any directors, officers, employees, contractors and/or advisors
of the holder thereof): (i) to advertise, market, promote, wholesale purchase, sell at the retail level, supply and/or distribute cannabis
products; (ii) to establish, own and/or operate cannabis retail stores; and/or (iii) to engage in any activities that contribute to or
are otherwise involved in any of the foregoing.
"CFR Agreement" means
the collaboration and financial reporting agreement dated March 22, 2021 between Alcanna and the Company.
"Change in Recommendation"
has the meaning ascribed thereto in Section 7.2(1)(d)(ii).
"Company" has the meaning
ascribed thereto in the preamble hereto.
"Company Acquisition Proposal"
means, other than the transactions contemplated by this Agreement (including, for certainty, the Transactions) and except as disclosed
in writing to SNDL on or prior to the date of this Agreement, any proposal, expression of interest, inquiry or offer from, or public announcement
of an intention by, any Person, or group of Persons "acting jointly or in concert" within the meaning of National Instrument
62-104-Take-Over Bids and Issuer Bids, whether or not in writing and whether or not delivered to the Company, or the Company
Shareholders or any other securityholder of the Company (including any take-over bid initiated by advertisement or circular) and whether
or not subject to due diligence or other conditions, or whether in one transaction or a series of transactions, that relates to, or may
reasonably be expected to relate to:
"Company Board" means
the board of directors of the Company as constituted from time to time.
"Company Board Recommendation"
means the unanimous determination of the Company Board, after consultation with legal and financial advisors and following the receipt
of the unanimous recommendation of the Special Committee, that the Transactions are fair to the Company Shareholders (other than SNDL
and its affiliates) and in the best interests of the Company and the unanimous recommendation of the Company Board to the Company Shareholders
that they vote in favour of the Transaction Resolution.
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 holders of Common Shares of the
Company in connection with the Company Meeting.
"Company's Constating Documents"