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The Ontario Securities Commission
OSC Bulletin
April 25, 2019
Volume 42, Issue 17
(2019), 42 OSCB
The Ontario Securities Commission administers the
Securities Act of Ontario (R.S.O. 1990, c. S.5) and the
Commodity Futures Act of Ontario (R.S.O. 1990, c. C.20)
The Ontario Securities Commission Published under the authority of the Commission by:
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© Copyright 2019 Ontario Securities Commission
ISSN 0226-9325
Except Chapter 7 ©CDS INC.
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Email CustomerSupport.LegalTaxCanada@TR.comTable of Contents
Chapter 1 Notices ................................................... 3861 Chapter 12 Registrations ......................................... 3981
1.1 Notices .......................................................... 3861 12.1.1 Registrants..................................................... 3981
1.2 Notices of Hearing ........................................ 3861
1.3 Notices of Hearing with Related Chapter 13 SROs, Marketplaces,
Statements of Allegations ........................... 3861 Clearing Agencies and
1.4 Notices from the Office Trade Repositories ............................... 3983
of the Secretary ............................................ 3861 13.1 SROs ............................................................. 3983
1.5 Notices from the Office 13.1.1 IIROC – Minor Contravention Program
of the Secretary with Related and Early Resolution Offers – Request for
Statements of Allegations ........................... 3861 Comment ....................................................... 3983
13.1.2 Canadian Investor Protection Fund –
Chapter 2 Decisions, Orders and Rulings ............ 3863 Proposed Amendments to the Oversight
2.1 Decisions ...................................................... 3863 of CIPF – OSC Notice and Request
2.1.1 R.J. O’Brien & Associates Canada Inc. .......... 3863 for Comment .................................................. 3984
2.1.2 AGF Investments Inc. et al. ............................ 3867 13.1.3 MFDA Investor Protection Corporation –
2.2 Orders............................................................ 3873 Proposed Amendments to the Oversight
2.2.1 Green Growth Brands Inc. – ss. 5.1 of of MFDA IPC – OSC Notice and Request
OSC Rule 48-501 Trading During for Comment .................................................. 3986
Distributions, Formal Bids and Share 13.2 Marketplaces .................................................. (nil)
Exchange Transactions, s. 9.1 of 13.3 Clearing Agencies ......................................... (nil)
MI 61-101 Protection of Minority Security 13.4 Trade Repositories ........................................ (nil)
Holders in Special Transactions and s. 6.1
of NI 62-104 Take-Over Bids and Chapter 25 Other Information ................................... (nil)
Issuer Bids...................................................... 3873
2.2.2 DMDConnects Services Inc. .......................... 3880 Index............................................................................ 3989
2.2.3 Northcore Resources Inc. – s. 144 ................. 3882
2.2.4 Amundi Asset Management et al.
– ss. 78(1) and 80 of the CFA ........................ 3885
2.3 Orders with Related Settlement
Agreements.................................................... (nil)
2.4 Rulings ........................................................... (nil)
Chapter 3 Reasons: Decisions, Orders and
Rulings .................................................... (nil)
3.1 OSC Decisions ............................................... (nil)
3.2 Director’s Decisions ...................................... (nil)
Chapter 4 Cease Trading Orders ........................... 3895
4.1.1 Temporary, Permanent & Rescinding
Issuer Cease Trading Orders ......................... 3895
4.2.1 Temporary, Permanent & Rescinding
Management Cease Trading Orders .............. 3895
4.2.2 Outstanding Management & Insider
Cease Trading Orders .................................... 3895
Chapter 5 Rules and Policies.................................. (nil)
Chapter 6 Request for Comments .......................... (nil)
Chapter 7 Insider Reporting................................... 3897
Chapter 9 Legislation .............................................. (nil)
Chapter 11 IPOs, New Issues and Secondary
Financings ............................................. 3973
April 25, 2019 (2019), 42 OSCBChapter 1
Notices
THERE IS NO MATERIAL FOR THIS CHAPTER IN THIS ISSUE
April 25, 2019 (2019), 42 OSCB 3861Notices
This page intentionally left blank
April 25, 2019 (2019), 42 OSCB 3862Chapter 2
Decisions, Orders and Rulings
2.1 Decisions
2.1.1 R.J. O’Brien & Associates Canada Inc.
[Editor’s Note: This decision replaces RBC Dominion Securities Inc., published on April 4, 2019 at (2019), 42 OSCB
3087. RBC Dominion Securities Inc. was published in error and is a duplicate of the decision published on December 6,
2018 at (2018), 41 OSCB 9562.]
Headnote
Application for a ruling pursuant to section 74 of the Securities Act granting relief from the dealer registration requirement in
section 25 of the OSA to allow the Filer, an investment dealer and member of the Investment Industry Regulatory Organization
of Canada (IIROC), to use employees of a Designated Foreign Affiliate of the Filer for After-Hours Trading in securities on the
Bourse de Montréal Inc. – Relief granted, subject to terms and conditions
Statutes Cited
Securities Act, R.S.O. 1990, c. S.5, as am., ss. 25(1),74(1).
Instruments Cited
Multilateral Instrument 11-102 Passport System, s. 4.7.
March 29, 2019
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
ONTARIO
(the Jurisdiction)
AND
IN THE MATTER OF
THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS
IN MULTIPLE JURISDICTIONS
AND
IN THE MATTER OF
R.J. O’BRIEN & ASSOCIATES CANADA INC.
(the Filer)
DECISION
Background
The principal regulator in Ontario has received an application from the Filer for a decision under the securities legislation of the
Jurisdiction (the Legislation) exempting the Designated Foreign Affiliate Employees (as defined below) of the Filer, when
conducting Extended Hours Activities (as defined below) on the Bourse de Montréal Inc. (the MX), from the dealer registration
requirement in the Legislation, subject to the terms and conditions set out below (the Exemption Sought).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
(a) the Ontario Securities Commission is the principal regulator for this application; and
April 25, 2019 (2019), 42 OSCB 3863Decisions, Orders and Rulings
(b) the Filer has provided notice that Section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-
102) is intended to be relied upon by the Filer in each of the remaining provinces of Canada, other than
Québec (together with Ontario, the Jurisdictions).
Interpretation
Terms defined in MI 11-102 or National Instrument 14-101 Definitions have the same meaning if used in this decision unless
otherwise defined herein.
Representations
This decision is based upon the following facts represented by the Filer:
The Filer
1. The Filer is a corporation formed under the laws of Canada. The head office of the Filer is located in Toronto, Ontario.
2. The Filer is registered as an investment dealer under the securities legislation of all the provinces of Canada; is
registered as a futures commission merchant under the commodity futures legislation of Ontario and Manitoba; and is
registered as a dealer under the derivatives legislation of Québec.
3. The Filer is a member of the Investment Industry Regulatory Organization of Canada (IIROC) and an approved
participant of the MX.
4. The Filer is not in default of securities or commodity futures legislation in any jurisdiction of Canada.
5. R.J. O’Brien & Associates, LLC (RJOUS) is a limited liability company formed under the laws of the State of Delaware.
The head office of RJOUS is located in Chicago, Illinois, United States.
6. R.J. O’Brien Limited (RJOUK) is a private unlimited company incorporated in England and Wales. The head office of
RJOUK is located in London, England. Each of RJOUS and RJOUK are referred to herein as a “Designated Foreign
Affiliate”.
7. The Filer, RJOUS and RJOUK are privately-held businesses that are indirect subsidiaries and wholly-owned by the
O'Brien family of Chicago, Illinois.
8. RJOUS is a registered futures commission merchant with the U.S. Commodity Futures Trading Commission and
approved as a swap firm and a member of the National Futures Association.
9. RJOUK is a United Kingdom-based broker dealer in securities and dealer in derivatives. RJOUK is authorised by the
Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority.
10. RJOUS and RJOUK together hold memberships and/or have third-party clearing relationships with commodity and
financial futures exchanges and clearing associations, including the Chicago Mercantile Exchange Group, London
Stock Exchange, the US and Europe Intercontinental Exchange, Dubai Mercantile Exchange, CBOE Futures Exchange
and Eurex AG. Each of RJOUS and RJOUK may also carry positions reflecting trades executed on other exchanges
through affiliates and/or third-party clearing brokers.
The MX Extended Trading Hours Amendments
11. The MX, based in Montréal, Québec, operates an exchange for options, commodity futures contracts and commodity
futures options, and offers access to trading in those to market participants in Canada.
12. On July 9, 2018, the MX announced that the MX had approved amendments to its rules and procedures in order to
accommodate the extension of the MX’s trading hours. As a result of these amendments, commencing October 9,
2018, trading of certain products on the MX now commences at 2:00 a.m. Eastern Time (ET) rather than the current
6:00 a.m. ET.
13. As set out in MX Circular 111-18, in order to accommodate this earlier trading, the MX amended its rules to allow
participants on the MX to have employees of affiliated corporations, including foreign affiliates, become an approved
person of the MX participant and thus be able to handle trading requests originating from the MX participant’s clients or
clients of the MX participant’s affiliated corporations or subsidiaries.
April 25, 2019 (2019), 42 OSCB 3864Decisions, Orders and Rulings
Application of the dealer registration requirement to Designated Foreign Affiliate Employees
14. The Filer is an MX approved participant and each of RJOUS and RJOUK is an affiliated corporation. The Filer wishes
to make use of certain designated employees of RJOUS and RJOUK (the Designated Foreign Affiliate Employees)
to handle trading requests on the MX from the Filer’s clients and clients of the Filer’s affiliated corporations or
subsidiaries during the MX’s extended trading hours from 2:00 a.m. ET to 6:00 a.m. ET each day on which the MX is
open for trading (the Extended Hours Activities).
15. The dealer registration requirement under the Legislation requires an individual to be registered to act as a dealing
representative on behalf of a registered firm. The Exemption Sought is intended to provide the Filer with an exemption
from (i) the requirement that the Filer use only registered dealing representatives to conduct the Extended Hours
Activities; and (ii) the requirement that the employees of RJOUS and RJOUK who will be conducting the Extended
Hours Activities be registered as dealing representatives of the Filer.
16. The Filer seeks an exemption from the dealer registration requirement because, in the absence of such exemption,
each employee of RJOUS and RJOUK who was to trade on behalf of the Filer would be required to become individually
registered and licensed in Canada. The Filer believes this would be duplicative since the Designated Foreign Affiliate
Employees are certified under applicable US or UK law, would be supervised by the Filer’s designated supervisors and
would otherwise be subject to the conditions set forth below. The Filer believes this would be unduly onerous in light of
the limited trading activities the Designated Foreign Affiliate Employees would be conducting on behalf of the Filer,
namely only handling client orders, and only during the period from 2:00 a.m. ET to 6:00 a.m. ET.
17. The Filer has also applied to IIROC for an exemption from the registered representative requirements that are found in
IIROC Dealer Member Rules 18.2(a) and 18.2(c) and the requirement to enter into an employee or agent relationship
with the person conducting securities related business on its behalf that is found in IIROC Dealer Member Rule 39.3
and to register and complete proficiencies of a Trader under IIROC Dealer Member Rule 500.
18. The Filer anticipates that the IIROC Relief, if granted, will be subject to certain conditions, including:
(a) The Designated Foreign Affiliate Employees must be certified under the applicable laws of the US or UK in a
category that permits trading the types of products which they will be trading on the MX.
(b) The Designated Foreign Affiliate Employees will be permitted to accept and enter orders from clients of the
Filer or clients of the Filer’s affiliated corporations or subsidiaries during the period from 2:00 a.m. ET to 6:00
a.m. ET and will not be permitted to give advice.
(c) The Filer retains all responsibilities for its client accounts.
(d) The actions of the Designated Foreign Affiliate Employees will be supervised by specific designated
supervisors of the Filer (the Designated Supervisors), each of whom is qualified to supervise trading in
futures contracts, futures contract options and options.
(e) The Filer and each Designated Foreign Affiliate must jointly and severally undertake to ensure IIROC has,
upon request, prompt access to the audit trail of all trades that relate to Extended Hours Activities and records
relating thereto;
19. The Exemption Sought would apply to Designated Foreign Affiliate Employees who are designated and recorded on a
list maintained by the Designated Supervisors, which list must be provided to IIROC in writing and updated on at least
an annual basis.
20. The Filer and each of RJOUS and RJOUK will enter into an agency arrangement pursuant to which
(a) RJOUS and RJOUK will, among other things, agree to designate members of its staff to serve as Designated
Foreign Affiliate Employees who are properly registered, licensed, certified or authorized in their home
jurisdiction and sufficiently skilled and familiar to undertake such trading and front office activity, and further
agree that the activities of the Designated Foreign Affiliate Employees permitted under this exemptive relief
shall be supervised by the Designated Supervisors of the Filer; and
(b) the Filer will assume all responsibility for the actions of the Designated Foreign Affiliate Employees and of
RJOUS and RJOUK that relate to the Filer’s clients regarding this trading on MX, and the Filer will
acknowledge that it will be liable under IIROC rules for such actions.
21. All MX trading rules will apply to orders entered by the Designated Foreign Affiliate Employees.
April 25, 2019 (2019), 42 OSCB 3865Decisions, Orders and Rulings
22. Other than individual registration, all other existing Canadian regulatory requirements would continue to apply to this
arrangement, including without limitation:
(a) the Filer’s client accounts would continue to be carried on the books of the Filer;
(b) all communications with the Filer’s clients will continue to be in the name of the Filer; and
(c) the Filer’s client account monies, security and property will continue to be held by the Filer or its approved
custodian.
23. The Filer will establish and maintain written policies and procedures that address the performance and supervision
requirements relating to MX extended trading hours.
24. The Filer will disclose this extended trading hours arrangement to clients for its MX trading services.
Decision
The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make
the decision.
The decision of the principal regulator under the Legislation is that the Exemption Sought is granted so long as:
(a) the Designated Foreign Affiliate and the Designated Foreign Affiliate Employees are registered, licensed,
certified or authorized under the applicable laws of the foreign jurisdiction in which the head office or principal
place of business of the Designated Foreign Affiliate is located in a category that permits trading the type of
products which the Designated Foreign Affiliate Employees will be trading on the MX;
(b) the Designated Foreign Affiliate Employees are permitted to accept and enter orders from clients of the Filer
or clients of the Filer’s affiliated corporations or subsidiaries on behalf of the Filer during the period from 2:00
a.m. ET to 6:00 a.m. ET, and will not be permitted to give advice;
(c) the Filer retains all responsibilities for its client accounts;
(d) the actions of the Designated Foreign Affiliate Employees will be supervised by the Designated Supervisors,
each of whom is qualified to supervise trading in futures contracts, futures contract options and options;
(e) the Filer and the Designated Foreign Affiliate enter into an agency arrangement substantially as described in
paragraph 20, and such agreement remains in effect; and
(f) the Filer has applied for and obtained from IIROC an exemption from the registered representative
requirements that are found in the IIROC Dealer Member Rules, and any other requirements of IIROC that
IIROC reasonably determines is applicable to the Firm and the Designated Foreign Affiliate Employees in
connection with conducting the Extended Hours Activities (collectively, the IIROC Relief) and remains in
compliance with the terms and conditions of the IIROC Relief.
“Grant Vingoe”
Vice-Chair
Ontario Securities Commission
“M.C. Williams”
Commissioner
Ontario Securities Commission
April 25, 2019 (2019), 42 OSCB 3866Decisions, Orders and Rulings
2.1.2 AGF Investments Inc. et al.
Headnote
National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions – approval of investment fund mergers
– approval required because mergers do not meet the criteria for pre-approved reorganizations and transfers in National
Instrument 81-102 Investment Funds – certain terminating funds and continuing funds do not have substantially similar
fundamental investment objectives – certain mergers will not be a “qualifying exchange” or a tax-deferred transaction under the
Income Tax Act (Canada) – mergers to otherwise comply with pre-approval criteria, including securityholder vote, IRC approval
– securityholders provided with timely and adequate disclosure regarding the mergers.
Applicable Legislative Provisions
National Instrument 81-102 Investment Funds, ss. 5.5(1)(b), 5.7(1)(b), 19.1(2).
April 2, 2019
IN THE MATTER OF
THE SECURITIES LEGISLATION OF
ONTARIO
(the Jurisdiction)
AND
IN THE MATTER OF
THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS
IN MULTIPLE JURISDICTIONS
AND
IN THE MATTER OF
AGF INVESTMENTS INC.
(the Filer)
AND
AGF CANADIAN GROWTH EQUITY FUND,
AGF FLEX ASSET ALLOCATION FUND
(each, a Terminating Fund and collectively, the Terminating Funds)
DECISION
Background
The principal regulator in the Jurisdiction has received an application from the Filer on behalf of the Terminating Funds for a
decision under the securities legislation of the Jurisdiction (the Legislation) approving the proposed merger of AGF Canadian
Growth Equity Fund into AGFiQ Dividend Income Fund (the Taxable Merger), and the proposed merger of AGF Flex Asset
Allocation Fund into AGF Elements Conservative Portfolio (together with the Taxable Merger, the Mergers) pursuant to
paragraph 5.5(1)(b) of National Instrument 81-102 Investment Funds (NI 81-102) (the Approval Sought).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):
(a) the Ontario Securities Commission is the principal regulator for this application; and
(b) the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102)
is intended to be relied upon in each of the provinces and territories of Canada, other than Ontario (together
with Ontario, the Canadian Jurisdictions).
Interpretation
Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless
otherwise defined. The following additional terms shall have the following meanings:
April 25, 2019 (2019), 42 OSCB 3867Decisions, Orders and Rulings
Continuing Fund means each of AGF Elements Conservative Portfolio and AGFiQ Dividend Income Fund;
Fund or Funds means, individually or collectively, the Terminating Funds and the Continuing Funds;
IRC means the independent review committee for the Funds;
NI 81-106 means National Instrument 81-106 Investment Fund Continuous Disclosure;
NI 81-107 means National Instrument 81-107 Independent Review Committee for Investment Funds; and
Tax Act means the Income Tax Act (Canada).
Representations
This decision is based on the following facts represented by the Filer:
The Filer
1. The Filer is a corporation incorporated under the laws of the province of Ontario with its head office in Toronto, Ontario.
2. The Filer is the manager and trustee of the Funds and the portfolio manager of certain Funds.
3. The Filer is registered as an investment fund manager in Alberta, British Columbia, Ontario, Quebec and
Newfoundland and Labrador, as a portfolio manager in each of the Jurisdictions, as an exempt market dealer in
Alberta, British Columbia, Manitoba, Ontario, Quebec and Saskatchewan, as a mutual fund dealer in British Columbia,
Ontario and Quebec and as a commodity trading manager in Ontario.
4. The Filer is not in default of any requirement of securities legislation in any of the Canadian Jurisdictions.
The Funds
5. The Funds are open ended mutual funds established as trusts under the laws of Ontario.
6. Securities of the Funds are currently qualified for sale in the Canadian Jurisdictions under a simplified prospectus,
annual information form and fund facts documents dated April 26, 2018, as amended by Amendment No. 1 dated June
18, 2018 and Amendment No. 2 dated September 5, 2018, as they may be further amended (collectively, the Offering
Documents).
7. Each of the Funds is a reporting issuer under the applicable securities legislation of the Canadian Jurisdictions.
8. The Funds are not in default of any requirement of securities legislation of any of the Canadian Jurisdictions.
9. Other than circumstances in which the securities regulatory authority of a Canadian Jurisdiction has expressly
exempted a Fund therefrom, each of the Funds follows the standard investment restrictions and practices established
under NI 81-102.
10. All of the Continuing Funds have substantially similar valuation procedures to those of the Terminating Funds. The net
asset value for each series of the Funds is calculated on each day that the Toronto Stock Exchange is open for
business in accordance with the Funds’ valuation policy and as described in the Offering Documents.
11. Securities of the Funds are qualified investments under the Tax Act.
Reason for Approval Sought
12. Regulatory approval of the Mergers is required because each Merger does not satisfy all of the criteria for pre-
approved reorganizations and transfers set out in section 5.6 of NI 81-102. The pre-approval criteria are not satisfied in
the following ways:
(a) the fundamental investment objective of each Continuing Fund is not, or may not be considered to be,
“substantially similar” to the investment objective of its corresponding Terminating Fund; and
(b) the merger of AGF Canadian Growth Equity Fund into AGFiQ Dividend Income Fund will not be completed as
a “qualifying exchange” or as a tax-deferred transaction under the Tax Act.
April 25, 2019 (2019), 42 OSCB 3868Decisions, Orders and Rulings
13. The investment objectives of the Terminating Funds and the Continuing Funds are as follows:
Terminating Investment Objective Continuing Investment Objective
Fund Fund
AGF Canadian The Fund’s objective is to provide AGFiQ The Fund’s objective is to provide
Growth Equity long-term growth of capital by Dividend investors with long-term capital
Fund investing primarily in equity Income Fund appreciation along with the
securities of Canadian issuers. potential for monthly income,
primarily through investing in high
dividend yielding shares trading
on Canadian stock exchanges.
The Fund may also invest in
money market instruments and
fixed income investments issued
by corporations and governments
of Canada.
AGF Flex Asset The Fund’s objective is to provide AGF Elements The Portfolio’s objective is to
Allocation Fund total return over a market cycle, Conservative provide long-term returns with
with a focus on capital Portfolio lower risk by investing primarily in
preservation and risk a diversified mix of income, bond,
management. The Fund utilizes a money market and equity mutual
systematic investment framework funds.
to construct a diversified portfolio
consisting primarily of, but not
limited to, any combination of
global ETFs, equity securities,
fixed income, and short-term
instruments as well as cash and
cash equivalents.
14. Except as described in this decision, the proposed Mergers comply with all of the other criteria for pre-approved
reorganizations and transfers set out in section 5.6 of NI 81-102.
The Proposed Mergers
15. The Filer intends to reorganize the Funds as follows:
(a) AGF Canadian Growth Equity Fund will merge into AGFiQ Dividend Income Fund; and
(b) AGF Flex Asset Allocation Fund will merge into AGF Elements Conservative Portfolio.
16. The Taxable Merger will be effected on a taxable basis, while the other Merger will be effected on a tax-deferred basis.
17. In accordance with NI 81-106, a press release announcing the proposed Mergers was issued and filed via SEDAR on
February 27, 2019 and a material change report with respect to the proposed Mergers was filed via SEDAR on
February 27, 2019.
18. As required by NI 81-107, the Filer presented the terms of the Mergers to the IRC for its review. The IRC determined
that the Mergers, if implemented, will achieve a fair and reasonable result for each of the Funds.
19. Securityholders of each Terminating Fund will be asked to approve the applicable Mergers at a special meeting to be
held on or about April 17, 2019 (the Meeting).
20. The Filer is of the view that none of the Mergers will be a material change for any of the Continuing Funds, as the
assets of each Continuing Fund are larger than the assets of its corresponding Terminating Fund.
21. By way of order dated November 4, 2016, the Filer was granted relief (the Notice-and-Access Relief) from the
requirement set out in paragraph 12.2(2)(a) of NI 81-106 to send a printed management information circular to
securityholders while proxies are being solicited, and, subject to certain conditions, instead allows a notice-and-access
document (as described in the Notice-and-Access Relief) to be sent to such securityholders. In accordance with the
Filer’s standard of care owed to the Funds pursuant to securities legislation, the Filer will only use the notice-and-
April 25, 2019 (2019), 42 OSCB 3869Decisions, Orders and Rulings
access procedure for a particular meeting where it has concluded that it is appropriate and consistent with the
purposes of notice-and-access (as described in the Companion Policy to National Instrument 54-101 Communication
with Beneficial Owners of Securities of a Reporting Issuer) to do so, also taking into account the purpose of the
meeting and whether the Funds would obtain a better participation rate by sending the management information
circular with the other proxy-related materials.
22. Pursuant to the requirements of the Notice-and-Access Relief, a notice-and-access document and form of proxy in
connection with the Meeting, along with the most recent fund facts document(s) of the relevant series of the Continuing
Funds, were mailed to securityholders of the Terminating Funds commencing on March 15, 2019 and were
concurrently filed via SEDAR. The management information circular (the Circular), which the notice-and-access
document describes how to obtain, was also filed via SEDAR at the same time.
23. The tax implications of the Mergers and the differences between the investment objectives of the Terminating Funds
and the Continuing Funds and the IRC’s recommendation of the Mergers were described in the Circular so that the
securityholders of the Terminating Funds could consider this information before voting on the Mergers. The Circular
also described the various ways in which investors could obtain a copy of the simplified prospectus, annual information
form and fund facts documents for the Continuing Fund and its most recent interim and annual financial statements and
management reports of fund performance.
24. The Terminating Funds and the Continuing Funds are, and are expected to continue to be at all material times, mutual
fund trusts under the Tax Act and, accordingly, units of the Funds are "qualified investments" under the Tax Act for
registered retirement savings plans, registered retirement income funds, deferred profit sharing plans, registered
education savings plans, registered disability savings plans and tax free savings accounts.
25. When considering a merger of two or more funds, the Filer undertakes a thoughtful and extensive process to ensure its
fund line up meets the changing needs of investors. Once the Filer determines it is appropriate to no longer continue
offering a particular mandate, the Filer selects the appropriate continuing fund to receive the assets of the merging fund
by considering both qualitative and quantitative factors. The qualitative factors considered include the comparability of
investment objectives, investment strategies, risk rating, investment philosophy and portfolio construction. When
considering quantitative factors, the Filer reviews fund performance, the investment performance correlation between
the potential merging funds and continuing funds, any overlap in investment holdings, the asset allocation/sector
allocation/geographic allocation of each fund, fees for each series, the difference in assets under management
between the funds, a taxation analysis at both the fund and securityholder level and any unique factors that would be
applicable for the given merger. Once each of these items has been reviewed, the Filer formalizes the analysis and
recommends a continuing fund with which to proceed forward.
26. With respect to the proposed merger of AGF Flex Asset Allocation Fund into AGF Elements Conservative Portfolio, the
Filer determined that it was no longer viable to maintain these Funds as separate mandates. Both Funds aim to provide
long-term returns with lower risk using an asset allocation strategy to gain exposure to equities, fixed income and
money market instruments. Further, both Funds achieve their investment objectives by investing in other investment
funds. The Continuing Fund has a lower risk rating than the Terminating Fund. After considering the factors set out in
paragraph 25, AGF Elements Conservative Portfolio was selected as the Continuing Fund primarily due to the size of
the Continuing Fund and its lower risk rating.
27. With respect to the proposed merger of AGF Canadian Growth Equity Fund into AGFiQ Dividend Income Fund, the
Filer determined that it was no longer viable to maintain these Funds as separate mandates. Both Funds seek to
provide long-term capital growth by investing primarily in Canadian issuers, while the Continuing Fund seeks to also
provide potential for monthly income. Both Funds have identical risk ratings, high short-term and long-term
performance correlations and similar geographical equities exposure. After considering the factors set out in paragraph
25, AGFiQ Dividend Income Fund was selected as the Continuing Fund primarily due to the size of the Continuing
Fund and similarities in the overall investment experience in terms of risk, return and geographic exposure.
28. The Filer has determined that it would not be appropriate to effect the Taxable Merger as a "qualifying exchange" within
the meaning of section 132.2 of the Tax Act or as a tax-deferred transaction for the following reasons:
(a) to the extent that securityholders in the AGF Canadian Growth Equity Fund have an accrued capital loss on
their units, effecting the Taxable Merger on a taxable basis will afford them the opportunity to realize that loss
and use it against current capital gains or even carry it forward or back as permitted under the Tax Act;
(b) effecting the Taxable Merger on a taxable basis would preserve the loss carry-forwards in the Continuing
Fund; and
(c) effecting the Taxable Merger on a taxable basis is not expected to have a tax impact on the Continuing Fund.
April 25, 2019 (2019), 42 OSCB 3870Decisions, Orders and Rulings
29. If all required approvals for the Mergers are obtained, it is intended that the Mergers will occur after the close of
business on or about May 17, 2019 and no later than December 31, 2019 (the Merger Date). The Filer therefore
anticipates that securityholders of each Terminating Fund will become securityholders of the applicable Continuing
Fund after the close of business on the Merger Date.
30. The assets of each Terminating Fund to be acquired by its applicable Continuing Fund are currently or will, on the
Merger Date, be acceptable to the portfolio manager of the Continuing Fund and are, or will be, consistent with the
investment objectives of the Continuing Fund.
31. The Filer will pay for the costs of the Mergers. These costs consist mainly of brokerage charges associated with any
merger-related trades, legal, proxy solicitation, printing, mailing and regulatory fees.
32. No sales charges will be payable by securityholders of the Terminating Funds in connection with the Mergers.
33. Securityholders of each Terminating Fund will continue to have the right to redeem securities of the applicable
Terminating Fund at any time up to the close of business on the business day immediately before the Merger Date.
Merger Steps
34. The proposed Mergers will be structured as follows:
(a) Prior to the Merger Date, any investments of the Terminating Funds which are not suitable for the applicable
Continuing Funds or acceptable to the portfolio manager of the Continuing Funds will be sold. As a result, the
Terminating Funds may temporarily hold cash and/or money market instruments and may not be invested in
accordance with its investment objectives for a brief period of time prior to the Merger Date. The value of any
investments sold will depend on prevailing market conditions.
(b) Prior to the Merger Date, each Terminating Fund will distribute to its securityholders sufficient net income and
net realized capital gains, if any, so that the Terminating Fund will not be subject to tax under Part I of the Tax
Act for the taxation year that includes the Merger Date.
(c) The value of each Terminating Fund’s portfolios and other assets will be determined at the close of business
on the Merger Date in accordance with its declaration of trust.
(d) On the Merger Date, substantially all of the Terminating Funds’ assets will be transferred to the applicable
Continuing Fund (after reserving sufficient assets to satisfy its estimated liabilities, if any, as of the Merger
Date) in exchange for securities of the applicable Continuing Fund having an aggregate net asset value equal
to the aggregate value of the assets transferred by the applicable Terminating Funds, and the securities of the
Continuing Funds will be issued at the applicable series net asset value per security of the applicable
Continuing Fund as of the close of business on the Merger Date.
(e) Immediately thereafter, the securities of the Terminating Funds will be redeemed at their series net asset
value and such amount will be paid to securityholders of the Terminating Funds by way of the transfer of
securities of an equivalent series of the applicable Continuing Fund to each Terminating Fund securityholder
in an amount equal to the redemption proceeds realized from the Terminating Fund.
(f) Following the completion of the Mergers, the Terminating Funds will be wound up and terminated.
(g) Any outstanding unit certificates (if applicable) of the Terminating Funds will be cancelled.
Benefits of the Mergers
35. The Filer believes that the Mergers are beneficial to securityholders of each Terminating Fund and Continuing Fund for
the following reasons:
(a) the Mergers will result in a more streamlined and simplified product line-up that is easier for investors to
understand;
(b) the Mergers will eliminate similar fund offerings, thereby reducing the administrative and regulatory costs of
operating the Terminating Funds and the Continuing Funds as separate funds;
(c) a line-up consisting of fewer mutual funds that target similar types of investors will allow the Filer to
concentrate its marketing efforts to attract additional assets in the Continuing Funds. Ultimately this benefits
April 25, 2019 (2019), 42 OSCB 3871Decisions, Orders and Rulings
securityholders because it ensures that each Continuing Fund remains a viable, long-term investment vehicle
for existing and potential investors;
(d) the Continuing Funds have a portfolio of greater value, allowing for increased portfolio diversification
opportunities compared to the Terminating Funds;
(e) the Continuing Funds, as a result of their greater size, can spread operating expenses over a larger asset
base, which may positively impact the management expense ratio of each Continuing Fund;
(f) as AGF Canadian Growth Equity Fund has the same risk rating as its Continuing Fund and AGF Flex Asset
Allocation Fund has a higher risk rating than its Continuing Fund, securityholders of the Terminating Funds will
become investors in Continuing Funds that have a risk investment profile that is the same as, or lower than,
the risk profile of the Terminating Funds;
(g) securityholders of the Terminating Funds will receive units of the Continuing Funds that have an
administration fee that is either the same as, or lower than, that charged in respect of the series of units of the
Terminating Funds that they currently hold; and
(h) securityholders of the Terminating Funds will receive units of the Continuing Funds that have a management
fee that is either the same as, or lower than, that charged in respect of the series of units of the Terminating
Funds that they currently hold.
Decision
The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make
the decision.
The decision of the principal regulator under the Legislation is that the Approval Sought is granted.
“Stephen Paglia”
Investment Funds and Structured Products
Ontario Securities Commission
April 25, 2019 (2019), 42 OSCB 3872Decisions, Orders and Rulings
2.2 Orders
2.2.1 Green Growth Brands Inc. – ss. 5.1 of OSC Rule 48-501 Trading During Distributions, Formal Bids and Share
Exchange Transactions, s. 9.1 of MI 61-101 Protection of Minority Security Holders in Special Transactions and
s. 6.1 of NI 62-104 Take-Over Bids and Issuer Bids
Headnote
Section 6.1 of NI 62-104, section 9.1 of MI 61-101 and section 5.1 of OSC Rule 48-501 – Issuer bid – relief from the
requirements applicable to issuer bids in Part 2 of NI 62-104 and Part 3 of MI 61-101, and the restrictions set out in section 2.2
of OSC Rule 48-501 applicable to issuer-restricted persons during an issuer-restricted period – issuer proposes to repurchase a
specified number of its shares from one of its shareholders as part of a larger transaction involving the acceleration of the expiry
of a take-over bid initiated by the issuer and an agreement to negotiate a commercial arrangement between the issuer and the
target of such take-over bid – the selling shareholder is a related party of the issuer – the issuer is relying on the specified
markets exemption from the formal valuation requirement in MI 61-11 and the exemption from the minority approval requirement
in MI 61-101 as, at the time the transaction was agreed to, neither the fair market value of the subject matter of, nor the fair
market value of the consideration for, the transaction, insofar as it involves interested parties, exceeded 25% of the issuer's
market capitalization – issuer has received executed written consents from disinterested shareholders in respect of the share
repurchase holding a majority of the outstanding voting shares – each consenting party received all material information in
respect of the proposed transaction and had the opportunity to obtain independent legal advice – the issuer received an opinion
from an independent investment bank that is independent of all interested parties in respect of the share repurchase, that the
consideration to be paid pursuant to the share repurchase is fair, from a financial point of view, to the issuer's shareholders
(other than the selling shareholder) – the independent members of the issuer's board have unanimously determined that the
proposed transaction is in the best interests of the issuer and its shareholders (other than the selling shareholder) and that the
share repurchase will not adversely affect the issuer's financial position and will be accretive – the issuer has also received an
opinion from the independent investment bank that a liquid market for the shares exists and that it is reasonable to conclude
that, following the completion of the share repurchase, there will be a market for holders of shares who do not participate in the
share repurchase that is not materially less liquid than the market that existed at the time of the share repurchase – share
repurchase will not close until at least 10 calendar days after the granting of the order – share repurchase is exempt from the
requirements applicable to issuer bids in Part 2 of NI 62-104 and Part 3 of MI 61-101 and the issuer-restricted person
restrictions in section 2.2 of OSC Rule 48-501, subject to conditions, including that, at the time of the share repurchase, the
purchase price thereunder, on a per share basis, is not greater than the market price of the issuer's shares, as determined in
accordance with NI 62-104.
Statutes Cited
National Instrument 62-104 Take-Over Bids and Issuer Bids, Part 2 and s. 6.1.
Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions, Part 3 and s. 9.1.
Ontario Securities Commission Rule 48-501 Trading During Distributions, Formal Bids and Share Exchange Transactions, ss.
2.2 and 5.1.
IN THE MATTER OF
THE SECURITIES ACT,
R.S.O. 1990, c.S.5, AS AMENDED
AND
IN THE MATTER OF
GREEN GROWTH BRANDS INC.
ORDER
(Section 5.1 of Ontario Securities Commission Rule 48-501,
Section 9.1 of Multilateral Instrument 61-101 and
Section 6.1 of National Instrument 62-104)
UPON the application (the “Application”) of Green Growth Brands Inc. (the “Filer”) for an order pursuant to:
(a) section 6.1 of National Instrument 62-104 Take-Over Bids and Issuer Bids (“NI 62-104”) and section 9.1 of
Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101”)
exempting the Filer from the requirements applicable to issuer bids in Part 2 of NI 62-104 and Part 3 of MI 61-
101 (the “Issuer Bid Requirements”) in connection with the proposed purchase by the Filer (the “Share
Repurchase”) of an aggregate of 27,300,000 common shares of the Filer held by GA Opportunities Corp.
April 25, 2019 (2019), 42 OSCB 3873Decisions, Orders and Rulings
(“GAOC”, and such shares, the “Subject Shares”) in connection with the Proposed Transaction (as defined
below); and
(b) section 5.1 of Ontario Securities Commission Rule 48-501 Trading During Distributions, Formal Bids and
Share Exchange Transactions (“Rule 48-501”) exempting the Filer from the restrictions in section 2.2 of Rule
48-501 (the “Issuer-Restricted Person Restrictions”) in respect of the Subject Shares.
AND UPON considering the Application and the recommendation of staff of the Commission;
AND UPON the Filer, (and GAOC in respect of paragraphs 5, 6, 7, 10, 11, 18, 22, 23, 26, 42 and 47 as they relate to GAOC,
and Aphria in respect of paragraphs 9, 10, 11, 13, 14, 15, 17, 24, 25, 42, and 47 as they relate to Aphria) having represented to
the Commission that:
1. The Filer is a corporation existing under the Business Corporations Act (Ontario) (the “OBCA”) and in good standing.
The Filer’s registered office is 5300 Commerce Court West, 199 Bay Street, Toronto, ON, M5L 1B9 and its principal
place of business is 4300 East Fifth Avenue, Columbus, OH, 43219.
2. The Filer is a reporting issuer in British Columbia, Alberta, Ontario, Quebec, and Nova Scotia, and is not in default of
any requirement of securities legislation in the jurisdictions in which it is a reporting issuer.
3. The authorized capital of the Filer consists of an unlimited number of common shares (the “Common Shares”), and an
unlimited number of proportionate voting shares (the “PV Shares”, and together with the Common Shares, the “Voting
Shares”). As at March 31, 2019, the Filer had 188,226,166 Common Shares and 40,698 PV Shares outstanding. The
Common Shares are listed for trading on the Canadian Stock Exchange (the “CSE”) and on the OTCQB Venture
Market under the symbols “GGB” and “GGBXF”, respectively. The PV Shares are not listed on any marketplace.
4. The holders of Common Shares are entitled to one vote for each Common Share held, and holders of PV Shares are
entitled to 500 votes for each PV Share held.
5. GAOC is a corporation existing under the OBCA and in good standing. GAOC has its registered office at 2 Bloor Street
West, Suite #1805, Toronto, ON, M4W 3E2. GAOC is not a reporting issuer in any jurisdiction.
6. GAOC is the beneficial owner of 27,500,000 Common Shares, representing approximately 13.2% of the outstanding
Voting Shares as of March 31, 2019.
7. GAOC is a party to an amended and restated nomination rights agreement (the “Nomination Agreement”) dated
November 9, 2018 between the Filer and certain of its shareholders. Pursuant to the terms of the Nomination
Agreement, GAOC has the right to nominate one director of the Filer so long as it beneficially owns, directly or
indirectly, and in the aggregate, more than 5% of the issued and outstanding Common Shares (on a non-diluted basis).
GAOC has not exercised its rights under the Nomination Agreement and will not do so prior to the completion of the
Share Repurchase, at which time its rights under the Nomination Agreement will extinguish.
8. The Filer: (a) does not have beneficial ownership of, or control or direction over, any voting securities of GAOC or any
of its affiliates or associates; (b) does not have any representatives on the board of directors of GAOC or any of its
affiliates or associates, or the right to appoint any such representatives; and (c) does not have any relationships with
GAOC other than the Nomination Agreement and GAOC’s ownership interest in the Filer.
9. Aphria Inc. (“Aphria”) is a corporation existing under the OBCA and in good standing. Aphria is a reporting issuer in
British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island, and
Newfoundland. The common shares of Aphria (the “Aphria Shares”) are listed for trading on the Toronto Stock
Exchange (the “TSX”) and the New York Stock Exchange under the symbol “APHA”.
10. On September 24, 2018, GAOC and Aphria entered into a share purchase agreement pursuant to which certain third
party securities were purchased by GAOC from Aphria (the “Initial Share Purchase Agreement”). These securities
were sold by GAOC and the proceeds from the sale were used by GAOC to purchase 15,271,040 Common Shares at
$2.00 per Common Share. As payment for the third party securities, GAOC issued Aphria a promissory note in the
principal amount of $30,542,081 bearing interest at 12% per annum for a five year term (the “Initial GAOC
Promissory Note”). GAOC also granted Aphria an option to acquire the 15,271,040 Common Shares (the “First
Option”). The exercise price of the First Option is equal to the principal amount of the Initial GAOC Promissory Note.
The ability of Aphria to exercise the First Option is subject to certain conditions relating to the legalization of cannabis
federally in the United States and requires the approval of the TSX. In order to address certain U.S. regulatory matters,
GAOC has agreed that it would not, without the prior written consent of Aphria, cause or permit any amendment to the
terms of the First Option.
April 25, 2019 (2019), 42 OSCB 3874Decisions, Orders and Rulings
11. On November 24, 2018, GAOC and Aphria amended and restated the Initial Share Purchase Agreement to reflect the
purchase of additional third party securities by GAOC from Aphria. These securities were sold by GAOC and the
proceeds from the sale were used by GAOC to purchase 12,228,960 Common Shares at $2.00 per Common Share.
Concurrently, GAOC and Aphria amended and restated the Initial GAOC Promissory Note (the “GAOC Promissory
Note”) to reflect a principal amount of $55,000,000 bearing interest at 12% per annum for a five year term. GAOC also
orally agreed to extend the terms and conditions of the First Option to include the additional 12,228,960 Common
Shares, such that the option granted to Aphria by GAOC is in respect of all 27,500,000 Common Shares held by GAOC
(the “Option”).
12. After the close of trading on December 27, 2018, the Filer issued a press release (the “Intention Press Release”)
announcing its intention to make an offer to purchase all of the issued and outstanding Aphria Shares (the “Offer”). The
Offer was formally commenced with the filing of the take-over bid circular (the “Bid Circular”) on January 22, 2019 and
the publication of a newspaper advertisement on January 23, 2019. Pursuant to the Offer, holders of Aphria Shares
who tender to the Offer will receive 1.5714 Common Shares in exchange for each Aphria Share. Based on the closing
price of Common Shares on:
(a) December 24, 2018 (i.e. the last trading day prior to the Intention Press Release), the implied consideration
under the Offer was $6.68 per Aphria Share (compared to a closing market price of $7.56 per Aphria Share on
the TSX); and
(b) January 21, 2019 (i.e. the last trading day prior to the date of the Bid Circular), the implied consideration under
the Offer was $9.41 per Aphria Share (compared to a closing market price of $9.92 per Aphria Share on the
TSX).
13. On February 6, 2019, Aphria filed its directors’ circular (the “Aphria Circular”) in response to the Offer. The Aphria
Circular stated that, following receipt of the recommendation of a committee of independent directors, and an
inadequacy opinion from its financial advisor, the board of directors of Aphria unanimously concluded that the Offer is
undervalued and inadequate and not in the best interests of Aphria, Aphria’s shareholders or Aphria’s other
stakeholders. Accordingly, the board of directors of Aphria recommended that Aphria shareholders reject the Offer.
14. Subsequent to the Intention Press Release, representatives of the Filer and Aphria have engaged in various
discussions, including to determine whether a friendly acquisition transaction could be agreed to between the parties.
These discussions have not been successful.
15. Based on the current trading prices of the Aphria Shares and the Common Shares, each of the Filer and Aphria believe
that the market is not supportive of the Offer and that the Offer will fail to satisfy the statutory requirement that more
than 50% of the outstanding Aphria Shares (excluding the Filer’s 3,000,000 Aphria Shares) be deposited under the
Offer and not withdrawn. As of March 31, 2019, 17,741 (of the 250,306,607) Aphria Shares, representing 0.007% of the
issued and outstanding Aphria Shares, were deposited under the Offer.
16. Other than between January 10, 2019 and January 17, 2019, at no point since the Intention Press Release has the
implied consideration under the Offer for the Aphria Shares been equal to or greater than the market price of the Aphria
Shares on the TSX.
17. Given the anticipated failure of the Offer, and to reduce the uncertainty that both Aphria and the Filer believe exist as a
result of the market overhang created by the Offer, representatives of Aphria and the Filer have also discussed
alternatives (including taking no action and letting the Offer proceed to its expiry on May 9, 2019, potential joint
ventures, sharing intellectual property and limited unilateral or bilateral asset sales) which have culminated in a
proposed transaction (the “Proposed Transaction”) consisting of three cross-conditional components, namely:
(a) the acceleration of the expiry of the Offer;
(b) the concurrent Share Repurchase and termination of the Option and GAOC Promissory Note; and
(c) the agreement of the Filer and Aphria to, within three months of the completion of the Share Repurchase,
enter into good faith negotiations to conclude a commercial arrangement involving matters related to research
and development, licensing and/or distribution (the “Commercial Arrangement”).
18. The aggregate price payable by the Filer to GAOC for the Subject Shares is $89,000,000 (the “Purchase Price”), or
approximately $3.26 per Subject Share, representing an approximately:
(a) 19% discount to the closing price of the Common Shares on April 11, 2019; and
April 25, 2019 (2019), 42 OSCB 3875Decisions, Orders and Rulings
(b) 29% discount to the 20 day volume weighted average price of the Common Shares on April 11, 2019.
19. The Filer will satisfy payment of the Purchase Price to GAOC as and when due in accordance with the terms of the
Definitive Agreements (as defined below), which Purchase Price will be comprised of:
(a) a secured promissory note in the principal amount of $39,000,000, bearing interest at 3% per annum with a
term of six months (the “GGB Promissory Note”);
(b) the proceeds from the sale of the Filer’s 3,000,000 Aphria Shares following the expiry of the Offer; and
(c) the proceeds from the exercise of certain issued and outstanding warrants of the Filer (the “Warrants”, and
such exercise, the “Warrant Exercise”).
20. The Warrants were issued on November 9, 2018 in connection with a business combination of the Filer and consist of
an aggregate of 16,635,085 Warrants exercisable for Common Shares, with a weighted average exercise price of
$1.80 per Common Share, and 19,097 Warrants exercisable for PV Shares, with an exercise price of $900 per PV
Share, exercisable, in each case, until November 9, 2020. No holder of Warrants participating in the Warrant Exercise
will receive, directly or indirectly, in connection with such Warrant Exercise, any payment, beneficial enhancement or
inducement of any kind, for exercising his/her/its Warrants.
21. The proceeds received from the Filer upon the Warrant Exercise will be sufficient to satisfy amounts remaining under
the Purchase Price after taking into account the proceeds from the sale of the Filer’s 3,000,000 Aphria Shares and the
GGB Promissory Note.
22. GAOC will then transfer the $50,000,000 in cash received from the Filer to Aphria, and pay the proceeds received
under the GGB Promissory Note to Aphria in consideration for the termination of the Option and GAOC Promissory
Note.
23. Following completion of the Share Repurchase, GAOC will beneficially own 200,000 Common Shares (the “Remaining
Shares”), representing 0.12% of the outstanding Voting Shares (following the cancellation of the Subject Shares but
assuming that no Warrants are exercised). The Remaining Shares will be subject to a lock-up agreement between the
Filer and GAOC (or its permitted transferee) pursuant to which 16,666 Common Shares will be released per month for
a period of 12 months. Once released from the terms of the lock-up, GAOC (or its permitted transferee) will have full
discretion with respect to the Remaining Shares. The Remaining Shares will not be repurchased by the Filer.
24. Since December 2018, Aphria has been considering alternatives to unlocking the value underlying the Option and
Promissory Note and has worked with its financial advisor in connection with its consideration of same. Given the
restrictive provisions in the Option and the Promissory Note and the rules of the TSX, Aphria, with the assistance of,
and following discussions with, its financial advisor determined that there were very few, if any, alternatives to unlock or
derive near term value from the Option and the Promissory Note. Aphria has determined that the Filer repurchasing the
Common Shares subject to the Option would be in the best interests of Aphria.
25. For the purposes of the Proposed Transaction, the members of the board of directors of Aphria are independent of the
Filer and GAOC (excluding Shawn Dym, who is a former director of the Filer) and have unanimously determined that
the Proposed Transaction is in the best interests of Aphria.
26. GAOC has determined that the Share Repurchase is in the best interests of GAOC.
27. In connection with the Proposed Transaction, the Filer has received an oral opinion from its financial advisor,
Canaccord Genuity Corp. (“Canaccord”), an investment bank that is independent of all “interested parties” (as defined
below) in the Share Repurchase, stating that the consideration to be paid pursuant to the Share Repurchase is fair,
from a financial point of view, to the Filer’s shareholders (other than GAOC). Canaccord has completed all work
necessary to support the delivery of the long-form opinion in written form (the “Fairness Opinion”) and will deliver the
Fairness Opinion to the Filer within five business days of the date of this Order. For the purposes of this Order, all
references to “interested parties” will have the meaning ascribed to that term in MI 61-101, but will also include
Aphria.
28. For the purposes of the Proposed Transaction, the members of the board of directors of the Filer (the “Board”) are
independent directors within the meaning of MI 61-101, except for Peter Horvath, the current Chief Executive Officer of
the Filer, and Timothy Moore, the former Chief Executive Officer of the Filer.
29. The independent members of the Board have unanimously determined, acting in good faith, that:
April 25, 2019 (2019), 42 OSCB 3876You can also read
