Flora Growth : FRANCHISE GLOBAL HEALTH INC – Form 6-K

ARTICLE 1 INTERPRETATION

2

1.1.

Defined Terms

2

1.2.

Certain Rules of Interpretation

15

1.3.

Schedules

16

ARTICLE 2 THE ARRANGEMENT

16

2.1.

The Arrangement

16

2.2.

Interim Order

17

2.3.

The Company Meeting

18

2.4.

The Company Circular

19

2.5.

Final Order

20

2.6.

Court Proceedings

20

2.7.

Company Options, Company RSUs and Agent Compensation Options

21

2.8.

Effective Date

22

2.9.

Payment of Consideration

22

2.10.

Withholding Taxes

22

2.11.

U.S. Securities Law Matters

23

2.12.

Cooperation of Parties

23

ARTICLE 3 REPRESENTATIONS AND WARRANTIES

24

3.1.

Representations and Warranties of the Company

24

3.2.

Representations and Warranties of the Purchaser

24

ARTICLE 4 COVENANTS

24

4.1.

Conduct of Business of the Company

24

4.2.

Covenants of the Company Relating to the Arrangement

29

4.3.

Conduct of Business of the Purchaser

31

4.4.

Covenants of the Purchaser Relating to the Arrangement

32

4.5.

Regulatory Approvals

33

4.6.

Access to Information; Confidentiality

34

4.7.

Public Communications

34

4.8.

Notice Provisions

35

4.9.

Insurance and Indemnification

35

ARTICLE 5. COVENANTS REGARDING NON-SOLICITATION

36

5.1.

Non-Solicitation

36

5.2.

Notification of Acquisition Proposals

38

5.3.

Responding to an Acquisition Proposal

38

5.4.

Right to Match

39

5.5.

Breach by Subsidiaries and Representatives

41

ARTICLE 6 CONDITIONS

41

6.1.

Mutual Conditions Precedent

41

6.2.

Additional Conditions Precedent to the Obligations of the Purchaser

42

6.3.

Additional Conditions Precedent to the Obligations of the Company

43

6.4.

Satisfaction of Conditions

44

ARTICLE 7 TERM AND TERMINATION

44

7.1.

Term

44

7.2.

Termination

44

7.3.

Effect of Termination/Survival

46

7.4.

Company Expense Reimbursement and Company Termination Amount

46

7.5.

Purchaser Expense Reimbursement

49

ARTICLE 8 GENERAL PROVISIONS

49

8.1

Amendments

49

8.2.

Expenses

50

8.3.

Notices

50

8.4.

Time of the Essence

51

8.5.

Injunctive Relief

51

8.6.

Third Party Beneficiaries

51

8.7.

Waiver

52

8.8.

Entire Agreement

52

8.9.

Successors and Assigns

52

8.10.

Severability

52

8.11.

Governing Law

53

8.12.

Further Assurances

53

8.13.

Rules of Construction

53

8.14.

No Liability

53

8.15.

Counterparts

53

SCHEDULE A PLAN OF ARRANGEMENT

A-1

SCHEDULE B ARRANGEMENT RESOLUTION

B-1

SCHEDULE C COMPANY REPRESENTATIONS AND WARRANTIES

C-1

SCHEDULE D PURCHASER REPRESENTATIONS AND WARRANTIES

D-1

(a)

any change or development generally affecting the industries or segments in which such Party and its Subsidiaries operate or carry on their business;

(b)

any change or development in currency exchange, interest or inflation rates or in general economic, business, regulatory, political or market conditions or in financial, credit, commodities, securities or capital markets in Canada, the United States, Europe or globally;

(c)

any adoption, proposal, implementation, application or non-application or change in applicable Law or any interpretation of applicable Law by any Governmental Entity;

(d)

any change in IFRS or changes in applicable regulatory accounting requirements applicable to the industries in which it conducts business;

(e)

any hurricane, flood, tornado, earthquake or other natural disaster or man-made disaster;

(f)

the commencement or continuation of war, armed hostilities, including the escalation or worsening thereof, acts of terrorism, riots, insurrection, civil disorder, military conflicts, political instability or other armed conflict, national calamity, crisis or emergency, or any governmental response to any of the foregoing;

(g)

the commencement or continuation of an epidemic, pandemic or other outbreak of illness or public health event, including the escalation or worsening thereof;

(h)

the announcement of this Agreement or the transactions contemplated hereby;

(i)

any action taken (or omitted to be taken) by such Party or any of its Subsidiaries which is required to be taken (or omitted to be taken) pursuant to this Agreement or that is consented to by the other Party in writing;

(j)

any failure by such Party to meet any analysts’ estimates or expectations of such Party’s revenue, earnings or other financial performance or results of operations for any period, or any failure by such Party or any of its Subsidiaries to meet any internal budgets, plans or forecasts of its revenues, earnings or other financial performance or results of operations (it being understood that, without limiting the applicability of clauses (a) through (i) and (k) of this definition, the causes underlying such failure may be taken into account in determining whether a Material Adverse Effect has occurred); or

(k)

any change in the market price or trading volume of any securities of such Party (it being understood that, without limiting the applicability of clauses (a) through (j) of this definition, the causes underlying such change may be taken into account in determining whether a Material Adverse Effect has occurred), or any suspension of trading in securities generally on any securities exchange on which any securities of such Party trade,

(a)

Liens or deposits for Taxes or charges for electricity, gas, power, water and other utilities (i) which are not yet due and payable or delinquent or (ii) which are being contested in good faith by appropriate proceedings and in respect of which the applicable Governmental Entities are prevented from taking collection action during the valid contest of such amounts and in respect of which reserves have been provided in the most recently published consolidated financial statements of the Company in accordance with IFRS;

(b)

inchoate or statutory Liens of contractors, subcontractors, mechanics, workers, suppliers, materialmen, carriers and others in respect of the construction, maintenance, repair or operation of the Company Assets, provided that such Liens are related to obligations not yet due or delinquent, are not registered against title to any Company Assets and in respect of which adequate holdbacks are being maintained as required by applicable Law imposed by any Governmental Entity having jurisdiction over real property;

(c)

municipal by-laws, regulations, ordinances, zoning law, building or land use restrictions and other limitations imposed by any Governmental Entity having jurisdiction over real property and any other restrictions affecting or controlling the use, marketability or development of real property;

(d)

customary rights of general application reserved to or vested in any Governmental Entity to control or regulate any interest in the facilities in which the Company or any of its Subsidiaries conduct their business, provided that such Liens, encumbrances, exceptions, agreements, restrictions, limitations, contracts and rights (i) were not incurred in connection with any indebtedness, and (ii) do not, individually or in the aggregate, have a material adverse effect on the value or materially impair or add material cost to the use of the subject property;

(e)

Liens incurred, created and granted in the Ordinary Course to a public utility, municipality or Governmental Entity in connection with operations conducted with respect to the Company Assets, but only to the extent those Liens relate to costs and expenses for which payment is not yet due or delinquent;

(f)

easements, rights of way, restrictions, restrictive covenants, servitudes and similar rights in land including rights of way and servitudes for highways and other roads, railways, sewers, drains, gas and oil pipelines, gas and water mains, electric light, power, telephone, telegraph or cable television conduits, poles, wires and cables, that in each case do not materially adversely impact the use of such property as it is being used on the date of this Agreement;

(g)

such other imperfections or irregularities of title or Liens as do not individually or in the aggregate materially detract from the value or materially adversely affect the use of the properties or assets subject thereto or affected thereby or otherwise materially impair business operations at such properties; and

(h)

any Liens, other than those described above, that are (i) registered or of record as of the date hereof against title to real property comprising Company Assets in the applicable land registry offices or recording offices, or (ii) registered or recorded, as of the date hereof, against the Company Assets in a public personal property registry, or similar registry systems.

(i)

to the knowledge of the Company, it is deemed to refer to the actual or constructive knowledge of the Chief Executive Officer, President, and Chief Financial Officer, after making reasonable inquiries into the relevant subject matter together with reasonable inquiries of the applicable employees, consultants or directors of the Company or its Subsidiaries, in each case who are currently employed and not absent from work by reason of leave of absence or otherwise, or otherwise engaged by the Company, as applicable, with respect to the matters that are the subject of the representations and warranties; or

(ii)

to the knowledge of the Purchaser, it is deemed to refer to the actual or constructive knowledge of the Chief Executive Officer and Chief Financial Officer, after making reasonable inquiries into the relevant subject matter together with reasonable inquiries of the applicable employees, consultants or directors of the Purchaser or its Subsidiaries, in each case who are currently employed and not absent from work by reason of leave of absence or otherwise, or otherwise engaged by the Purchaser, as applicable, with respect to the matters that are the subject of the representations and warranties.

(i)

as required for quorum purposes (in which case the Company Meeting shall be adjourned and not cancelled), by applicable Law or by a valid Company Shareholder action (which action is not solicited or proposed by the Company or the Board); or

(ii)

as otherwise expressly permitted under this Agreement;

(i)

diligently pursue, and cooperate with the Purchaser in diligently pursuing, the Interim Order and the Final Order;

(ii)

provide legal counsel to the Purchaser with a reasonable opportunity to review and comment upon drafts of all material to be filed with the Court in connection with pursuing the Interim Order or the Final Order, and give reasonable consideration to all such comments;

(iii)

provide legal counsel to the Purchaser with copies of any notice of appearance, evidence or other documents served on the Company or its legal counsel in respect of the application for the Interim Order or the Final Order or any appeal from them, and any notice, written or oral, indicating the intention of any Person to appeal, or oppose the granting of, the Interim Order or the Final Order;

(iv)

not object to legal counsel to the Purchaser making such submissions on the hearing of the motion for the Interim Order and the application for the Final Order as such counsel considers appropriate, provided that the Company is advised of the nature of any submissions on a timely basis prior to the hearing and such submissions are consistent in all material respects with this Agreement and the Plan of Arrangement;

(v)

ensure that all material filed with the Court in connection with pursuing the Interim Order or the Final Order is consistent in all material respects with this Agreement and the Plan of Arrangement;

(vi)

oppose any proposal from any party that the Final Order contain any provision inconsistent with this Agreement;

(vii)

if at any time after the issuance of the Final Order and prior to the Effective Date the Company is required by the terms of the Final Order or by Law to return to Court with respect to the Final Order, it shall do so after notice to, and in consultation and cooperation with, the Purchaser; and

(viii)

not file any material with the Court in connection with pursuing the Interim Order or the Final Order or serve any such material, or agree to modify or amend any material so filed or served, except as contemplated by this Agreement or with the Purchaser’s prior written consent, which consent may not be unreasonably withheld, conditioned or delayed, provided that the Purchaser may, in its sole discretion, withhold its consent with respect to any increase in or variation in the form of the Consideration or other modification or amendment to such filed or served materials that expands or increases the Purchaser’s obligations or diminishes or limits the Purchaser’s rights set forth in any such filed or served materials or under this Agreement.

(i)

subject to clause (ii) below, conduct its business in the Ordinary Course and in accordance with applicable Laws; and

(ii)

use commercially reasonable efforts to maintain and preserve its business organization, assets (including, for greater certainty, the Company Assets), goodwill, employment relationships (other than those terminated for cause or by reason of resignation or retirement) and business relationships with other Persons with which the Company or any of its Subsidiaries have business relations.

(i)

amend its Constating Documents;

(ii)

split, combine, subdivide or reclassify any shares of its authorized share structure or other equity interests;

(iii)

declare, set aside or pay any dividend or other distribution on any shares of its authorized share structure or other equity interests (whether in cash, stock or property or any combination thereof);

(iv)

redeem, repurchase, or otherwise acquire or offer to redeem, repurchase or otherwise acquire any shares of its capital stock or other equity interests or any of its outstanding securities;

(v)

issue, deliver, sell, pledge or otherwise encumber, or authorize the issuance, delivery, sale, pledge or other encumbrance of any shares of its authorized share structure or other equity or voting interests, or any options, warrants or similar rights exercisable or exchangeable for or convertible into such shares or other equity or voting interests, except for: (i) the issuance of Company Common Shares issuable upon the exercise or settlement, as the case may be, of Company Options, Company RSUs or Agent Compensation Options outstanding on the date hereof; (ii) from the date hereof until December 1, 2022, the issuance of additional Company RSUs; and (iii) from the date hereof until December 1, 2022, the issuance of Company Common Shares in settlement of any claims, provided that, in any event, the total issued and outstanding Company Common Shares outstanding immediately prior to the Effective Time shall not exceed 149,563,674;

(vi)

reorganize, arrange, restructure, amalgamate or merge the Company or any of its Subsidiaries;

(vii)

adopt a plan of or resolutions providing for the complete or partial liquidation or dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries;

(viii)

acquire (by merger, consolidation, acquisition of stock or assets or otherwise), or commit to acquire, directly or indirectly, in one transaction or in a series of related transactions, assets, securities, properties, interests or businesses other than in the Ordinary Course;

(ix)

sell, pledge, lease, license, encumber (other than a Permitted Lien) or otherwise transfer any assets of the Company or of any of its Subsidiaries or any interest in any assets of the Company and its Subsidiaries, other than assets sold in the Ordinary Course or assets that are obsolete, damaged or destroyed;

(x)

make any capital expenditure or commitment to do so outside of the Ordinary Course;

(xi)

abandon or fail to diligently pursue any application for any material Authorizations, leases, permits or registrations for the Company or any of its Subsidiaries or take any action, or fail to take any action, that could lead to the termination of any material Authorizations, leases or registrations of the Company or any of its Subsidiaries;

(xii)

except as contemplated herein, allow the Company or any of its Subsidiaries to (A) amend or modify in any material respect, or terminate or waive any material right under, any Material Contract, (B) enter into any contract or agreement that would be a Material Contract if in effect on the date hereof, or (C) make any bid or tender after the date of this Agreement which, if accepted, would result in the Company being obligated to enter into a contract that would be a Material Contract if in effect on the date hereof (other than the renewal of a Contract in existence on the date hereof on terms materially consistent with terms in existence on the date hereof);

(xiii)

enter into any new, or amend the terms of any existing, lease, sublease, license, occupancy agreement or other agreement with respect to any real property;

(xiv)

in respect of any Company Assets, waive, release, surrender, abandon, let lapse, grant or transfer any material right or amend, modify or change, or agree to amend, modify or change, any existing material Authorization, right to use, lease, Material Contract or Intellectual Property;

(xv)

except as contemplated in Section 4.9 and except for renewals in the Ordinary Course, amend, modify, terminate, cancel or let lapse any material insurance (or re-insurance) policy of the Company or any Subsidiary in effect on the date of this Agreement, unless simultaneously with such termination, cancellation or lapse, replacement policies underwritten by insurance and re-insurance companies of nationally recognized standing providing coverage substantially similar to or greater than the coverage under the terminated, cancelled or lapsed policies are in full force and effect and the Company shall provide notice to the Purchaser in respect thereof;

(xvi)

prepay any long term indebtedness before its scheduled maturity or create, incur, assume or otherwise become liable for any indebtedness for borrowed money or guarantees thereof other than (i) indebtedness owing by one wholly-owned Subsidiary of the Company to the Company or another wholly-owned Subsidiary of the Company, or of the Company to another wholly-owned Subsidiary of the Company, or (ii) indebtedness entered into at the request of the Purchaser, in connection with the Arrangement, or where the Purchaser or any of its Affiliates is the lender;

(xvii)

make, change or revoke any loan or advance to, or any capital contribution or investment in, or assume, guarantee or otherwise become liable with respect to the liabilities or obligations of, any Person other than advances and capital contributions to wholly-owned Subsidiaries of the Company in the Ordinary Course or guarantees of the Company or a Subsidiary to the Purchaser or any of its Affiliates in connection with loans from the Purchaser or any of its Affiliates;

(xviii)

enter into any interest rate, currency, equity or commodity swaps, hedges, derivatives, forward sales contracts or similar financial instruments;

(xix)

take any action, knowingly permit any inaction or knowingly enter into any transaction that would have the effect of preventing the Purchaser from obtaining a full tax cost “bump” pursuant to paragraphs 88(1)(c) and (d) of the Tax Act in respect of the non-depreciable capital property owned by the Company or a Subsidiary of the Company for the purposes of the Tax Act upon an amalgamation with the Company or such Subsidiary or a winding-up of the Company or such Subsidiary into the Purchaser (or successor by amalgamation);

(xx)

make, change or revoke any material Tax election or designation, settle or compromise any material Tax claim, assessment, reassessment or liability, file any amended Tax Return, enter into, cancel or modify any material agreement with a Governmental Entity with respect to Taxes, surrender any right to claim a material Tax abatement, reduction, deduction, exemption, credit or refund, consent to the extension or waiver of the limitation period applicable to any material Tax matter or materially amend or change any of its methods or periods of reporting income, deductions or accounting for income Tax purposes, in each case, except as may be required by applicable Law;

(xxi)

make any material change in the Company’s methods of accounting, except as required by concurrent changes in IFRS or as otherwise required by applicable Law;

(xxii)

(A) make, or promise to make, any changes to any Collective Agreement, Employee Plan (other than changes to Employee Plans that are, in the opinion of the Company, necessary or desirable to give effect to or implement the Arrangement), written employment agreements and/or any other terms and conditions of employment applicable to any Company Employee, including granting, or promising to grant, any general increase in the rate of wages, salaries, benefits, bonuses or other remuneration of any Company Employees or independent contractor or making, or promising to make, any bonus or profit sharing distribution or similar payment of any kind, or adopting, or promising to adopt, or otherwise implement any employee or executive bonus or retention plan or program, except as required by the terms of any Collective Agreement, Employee Plan, written employment agreements or applicable Law, and/or offer employment to or hire any new Company Employees (other than any offers of employment or hiring in the Ordinary Course); or (B) announce, implement or effect any reduction in force, lay-off or early retirement program, severance program or other similar program or effort concerning the termination of employment of Company Employees (other than employee terminations in the Ordinary Course);

(xxiii)

except as may be required by applicable Law or the terms of any existing Employee Plan provided to the Purchaser prior to the date hereof (as such Employee Plans may be amended as, in the opinion of the Company, necessary or desirable to give effect to or implement the Arrangement) or any Contract (including, for greater certainty, in connection with any termination for cause): (A) increase any severance, change of control or termination pay to (or amend any existing arrangement with) any Company Employee or any director of the Company or any of its Subsidiaries; (B) enter into any employment, deferred compensation or other similar agreement (or amend any such existing agreement) with any director or officer or senior manager of the Company or, other than in the Ordinary Course, any Company Employee (other than a director or officer or senior manager); (C) enter into any employment, deferred compensation or other similar agreement (or amend any such existing agreement) with any Company Employee; (D) increase compensation, retention or incentive compensation or other benefits payable to any director or officer of the Company or any of its Subsidiaries or, other than in the Ordinary Course, any Company Employee (other than a director or officer); (E) loan or advance money or other property by the Company or its Subsidiaries to any of their present or former directors, officers or Company Employees; (F) terminate (other than for cause) or encourage the resignation of any Company Employee; or (G) increase, or agree to increase, any funding obligation or accelerate, or agree to accelerate, the timing of any funding contribution under any Employee Plan;

(xxiv)

adopt any new material Employee Plan or make any material amendments or improvements to any Employee Plan, except as required by Law or amendments to Employee Plans that are, in the opinion of the Company, necessary or desirable to give effect to or implement the Arrangement;

(xxv)

cancel, waive, release, assign, settle or compromise any material claims or rights;

(xxvi)

commence, waive, release, assign, settle, compromise or settle any litigation, proceeding or governmental investigation that is material or which imposes material restrictions on the operations of the Company or any of its Subsidiaries;

(xxvii)

enter into or amend any Contract with any broker, finder or investment banker, including any amendment of the engagement letters with the Financial Advisor; or

(xxviii)

authorize, agree, resolve or otherwise commit, whether or not in writing, to do any of the foregoing.

(i)

use commercially reasonable efforts to obtain and maintain all third party or other consents, waivers, permits, exemptions, orders, approvals, agreements, amendments or confirmations that are (i) required under the Material Contracts in connection with the Arrangement or (ii) required in order to maintain the Material Contracts in full force and effect following completion of the Arrangement, in each case, on terms that are reasonably satisfactory to the Purchaser, and without paying, and without committing itself or the Purchaser to pay, any consideration or incur any liability or obligation without the prior written consent of the Purchaser, such consent not to be unreasonably withheld, conditioned or delayed;

(ii)

other than in connection with obtaining the Regulatory Approvals in respect of the Company, which shall be governed by the provisions of Section 4.5, use commercially reasonable efforts, upon consultation with the Purchaser, to oppose, lift or rescind any injunction, restraining or other order, decree or ruling seeking to restrain, enjoin or otherwise prohibit or adversely affect the completion of the Arrangement and defend, or cause to be defended, any proceedings to which it is a party or brought against it or its directors or officers challenging the Arrangement or this Agreement, provided that neither the Company nor any of its Subsidiaries will consent to the entry of any judgment or settlement with respect to any such proceeding without the prior written approval of the Purchaser, such approval not to be unreasonably withheld, conditioned or delayed;

(iii)

use its commercially reasonable efforts to promptly satisfy all conditions precedent in this Agreement;

(iv)

carry out the terms of the Interim Order and the Final Order applicable to the Company and comply promptly with all requirements imposed by applicable Law on the Company or its Subsidiaries with respect to this Agreement or the Arrangement;

(v)

not take any action, or refrain from taking any commercially reasonable action, or permit any action to be taken or not taken, which is inconsistent with this Agreement or which would reasonably be expected to prevent, materially delay or otherwise impede the completion of the Arrangement; and

(vi)

subject to confirmation that insurance coverage is maintained or purchased in accordance with Section 4.9 and delivery by the Company and each member of the Board and each officer of mutual releases from all claims and potential claims in respect of the period prior to the Effective Time (subject to customary exceptions), use commercially reasonable efforts to assist in effecting the resignations of each of the Company’s and its Subsidiary’s respective directors and officers designated by the Purchaser, and cause them to be replaced as of the Effective Date by individuals nominated by the Purchaser.

(i)

the occurrence of any Material Adverse Effect in respect of the Company after the date hereof;

(ii)

any notice or other communication from any Person alleging (A) that the consent (or waiver, permit, exemption, order, approval, agreement, amendment or confirmation) of such Person is required in connection with this Agreement or the Arrangement, or (B) that such Person is terminating, may terminate, or is otherwise materially adversely modifying or may materially adversely modify its relationship with the Company or any of its Subsidiaries as a result of the Arrangement or this Agreement;

(iii)

unless prohibited by applicable Law, any notice or other communication from any Governmental Entity in connection with this Agreement (and the Company shall contemporaneously provide a copy of any such written notice or communication to the Purchaser); or

(iv)

any material filing, actions, suits, claims, investigations or proceedings commenced or, to its knowledge, threatened against, relating to or involving or otherwise affecting the Company or its Subsidiaries in connection with the Arrangement or this Agreement.

(i)

amend its Constating Documents, or amend or propose to amend the terms of the Purchaser Common Shares;

(ii)

issue, sell, grant or agree to or authorize any issue, sale or grant of, any common shares of the Purchaser or other securities of the Purchaser (other than (A) the issue of Purchaser Common Shares pursuant to options, warrants, convertible securities and other rights to acquire Purchaser Common Shares in accordance with their terms, (B) securities issued pursuant to any awards which may be granted under the Purchaser’s equity incentive plans as such plans exist on the date hereof, (C) pursuant to other existing obligations as of the date hereof as disclosed in the Purchaser Filings, and (D) pursuant to an equity financing of the Purchaser for gross proceeds not to exceed US$15,000,000;

(iii)

reduce its stated capital, or split, combine, subdivide or reclassify any of the Purchaser Common Shares or propose a rights offering of securities to the holders of the Purchaser Common Shares;

(iv)

adopt a plan of or resolutions, or enter into any agreement, providing directly or indirectly for the complete or partial liquidation or dissolution, merger, consolidation, restructuring, recapitalization, or sale of all or substantially all of the assets, of the Purchaser; or

(v)

take any action, or refrain from taking any action (subject to commercially reasonable efforts), or permit any action to be taken or not taken, inconsistent with the provisions of this Agreement or that would reasonably be expected to materially impede the completion of the transactions contemplated hereby.

(i)

other than in connection with obtaining the Regulatory Approvals in respect of the Purchaser, which shall be governed by the provisions of Section 4.5, use its commercially reasonable efforts, upon reasonable consultation with the Company, to oppose, lift or rescind any injunction, restraining or other order, decree or ruling seeking to restrain, enjoin or otherwise prohibit or adversely affect the completion of the Arrangement and defend, or cause to be defended, any proceedings to which it is a party or brought against it or its directors or officers challenging the Arrangement or this Agreement;

(ii)

use its commercially reasonable efforts to satisfy all conditions precedent in this Agreement;

(iii)

carry out the terms of the Interim Order and the Final Order applicable to the Purchaser and comply promptly with all requirements imposed by applicable Law on the Purchaser or with respect to this Agreement or the Arrangement;

(iv)

ensure that the Purchaser Common Shares to be issued pursuant to the Arrangement (i) will have been duly authorized and, upon issue, will be validly issued as fully paid and non-assessable shares in the capital of the Purchaser and (ii) will not be issued in violation of the Constating Documents of the Purchaser or any material agreement, contract, covenant, undertaking or commitment to which the Purchaser is bound; and

(v)

make application for and use its commercially reasonable efforts to obtain conditional approval for the listing and posting for trading on the Nasdaq of the Purchaser Common Shares to be issued pursuant to the Arrangement and otherwise comply with the Nasdaq requirements relevant to the Arrangement.

(i)

the occurrence of any Material Adverse Effect in respect of the Purchaser after the date hereof;

(ii)

any notice or other communication from any Person alleging that the consent (or waiver, permit, exemption, order, approval, agreement, amendment or confirmation) of such Person is required in connection with this Agreement or the Arrangement;

(iii)

unless prohibited by applicable Law, any notice or other communication from any Governmental Entity in connection with this Agreement (and the Purchaser shall contemporaneously provide a copy of any such written notice or communication to the Company); or

(iv)

any material filing, actions, suits, claims, investigations or proceedings commenced or, to the knowledge of the Purchaser, threatened against, relating to or involving or otherwise affecting the Purchaser or its Subsidiaries in connection with this Agreement or the Arrangement.

(i)

cause any of the representations or warranties of such Party contained in this Agreement to be untrue or inaccurate in any material respect on the date hereof or on the Effective Date; or

(ii)

result in the failure, in any material respect, to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by such Party under this Agreement.

(i)

make, solicit, initiate, encourage or otherwise knowingly facilitate (including by way of furnishing or providing copies of, access to, or disclosure of, any confidential information, properties, facilities, books or records of the Company or any Subsidiary) any inquiry, proposal or offer that constitutes or would reasonably be expected to constitute or lead to, an Acquisition Proposal;

(ii)

enter into or otherwise engage or participate in any discussions or negotiations with any Person (other than the Purchaser or any Person acting jointly or in concert with the Purchaser) or provide any information regarding any inquiry, proposal or offer that constitutes or would reasonably be expected to lead to, an Acquisition Proposal, or otherwise co-operate in any manner with, or assist or participate in, knowingly facilitate or encourage, any effort or attempt by any other person to make or complete any Acquisition Proposal, provided that the Company may (A) communicate with any Person for the sole purpose of clarifying the terms and conditions of any inquiry, proposal or offer made by such Person, (B) advise any Person of the restrictions of this Agreement, and (C) advise any Person making an Acquisition Proposal that the Board has determined that such Acquisition Proposal does not constitute, or is not reasonably expected to constitute or lead to, a Superior Proposal;

(iii)

make a Change in Recommendation;

(iv)

accept, approve, endorse or recommend, or publicly propose to accept, approve, endorse or recommend, or take no position or remain neutral with respect to, any Acquisition Proposal (it being understood that publicly taking no position or a neutral position with respect to an Acquisition Proposal for a period of no more than five Business Days following the announcement of such Acquisition Proposal will not be considered to be in violation of this Section 5.1 provided the Board has rejected such Acquisition Proposal and affirmed the Board Recommendation before the end of such five Business Day period); or

(v)

enter into or publicly propose to enter into any Contract in respect of an Acquisition Proposal (other than a confidentiality agreement permitted by, and in accordance with, Section 5.3).

(i)

discontinue access to and disclosure of all information, if any, to any such Person, including any data room and any confidential information, properties, facilities, books and records of the Company or any Subsidiary; and

(ii)

promptly request, and exercise all rights it has to require (A) the return or destruction of all copies of any confidential information regarding the Company or any Subsidiary provided to any Person other than the Purchaser, and (B) the destruction of all material including or incorporating or otherwise reflecting such confidential information regarding the Company or any Subsidiary, to the extent that such information has not previously been returned or destroyed, using its commercially reasonable efforts to ensure that such requests are fully complied with to the extent the Company is entitled.

(i)

the Board first determines in good faith, after consultation with its financial advisors and its outside legal counsel, that such Acquisition Proposal constitutes or would reasonably be expected to constitute or lead to a Superior Proposal;

(ii)

such Person was not restricted from making such Acquisition Proposal pursuant to an existing standstill or similar restriction;

(iii)

prior to providing any such copies, access, or disclosure, the Company enters into a confidentiality and standstill agreement with such Person having terms that are not less onerous than those set out in the LOI (unless such Person is already party to a confidentiality and standstill agreement on such terms) and any such copies, access or disclosure provided to such Person shall have already been (or shall reasonably promptly be) provided to the Purchaser;

(iv)

the Company did not breach or is not in breach of Section 5.1; and

(v)

the Company promptly provides the Purchaser with, prior to providing any such copies, access or disclosure, a true, complete and final executed copy of the confidentiality and standstill agreement referred to in Section 5.3(a)(iii).

(i)

the Person making the Superior Proposal was not restricted from making such Superior Proposal pursuant to an existing standstill, confidentiality or similar restriction;

(ii)

the Company has delivered to the Purchaser a written notice of the good faith determination of the Board, after consultation with its financial advisors and its outside legal counsel, that such Acquisition Proposal constitutes a Superior Proposal and of the intention of the Board to enter into such definitive agreement, together with a copy of the definitive agreement for the Superior Proposal and disclosure of the value, expressed in dollars, that the Board has, in consultation with its financial advisors, determined should be ascribed to any non-cash consideration offered under the Superior Proposal (collectively, the “Superior Proposal Notice“);

(iii)

at least five Business Days (the “Matching Period“) have elapsed from the date that is the later of the date on which the Purchaser received the Superior Proposal Notice and a copy of the proposed definitive agreement for the Superior Proposal from the Company;

(iv)

during any Matching Period, the Purchaser has had the opportunity (but not the obligation), in accordance with Section 5.4(b), to offer to amend this Agreement and the Arrangement in order for such Acquisition Proposal to cease to be a Superior Proposal;

(v)

if the Purchaser has offered to amend this Agreement and the Arrangement under Section 5.4(b), the Board has determined in good faith, after consultation with the Company’s financial advisors and outside legal counsel, that such Acquisition Proposal continues to constitute a Superior Proposal compared to the terms of the Arrangement as proposed to be amended by the Purchaser under Section 5.4(b);

(vi)

the Company did not breach any provision of Section 5.1 in connection with the preparation or making of such Superior Proposal and the Company has been and continues to be in compliance with Article 5; and

(vii)

prior to, or concurrently with, entering into such definitive agreement, the Company terminates this Agreement pursuant to Section 7.2(a)(iii)(B) and pays the Company Termination Amount to the Purchaser pursuant to Section 7.4.

(i)

or making available to the Purchaser and its affiliates and Representatives any information provided or made available to such person or its officers, directors, employees, consultants, advisors, agents or other Representatives (including solicitors, accountants, investment bankers and financial advisors) pursuant to any confidentiality agreement described in this Section 5.1; or

(ii)

the Purchaser and its affiliates and Representatives with any other information required to be given to it by the Company under this Article 5.

(i)

the mutual written agreement of the Parties;

(ii)

either the Company or the Purchaser, if:

(A)

the Required Approval is not obtained at the Company Meeting in accordance with the Interim Order, provided that a Party may not terminate this Agreement pursuant to this Section 7.2(a)(ii)(A) if the failure to obtain the Required Approval has been caused by, or is a result of, a breach by such Party of any of its representations or warranties under this Agreement or the failure of such Party to perform any of its covenants or agreements under this Agreement;

(B)

after the date of this Agreement, any Law is enacted, made, enforced, issued or amended, as applicable, that makes the completion of the Arrangement illegal or otherwise prohibits or enjoins the Company or the Purchaser from completing the Arrangement, and such Law has, if applicable, become final and non-appealable, provided the Party seeking to terminate this Agreement pursuant to this Section 7.2(a)(ii)(B) has used its commercially reasonable efforts or the efforts required by Section 4.5 to, as applicable, appeal or overturn such Law or otherwise have it lifted or rendered non-applicable in respect of the Arrangement; or

(C)

the Effective Time does not occur on or prior to the Outside Date, provided that a Party may not terminate this Agreement pursuant to this Section 7.2(a)(ii)(C) if the failure of the Effective Time to so occur has been caused by, or is a result of, a breach by such Party of any of its representations or warranties or the failure of such Party to perform any of its covenants or agreements under this Agreement;

(A)

a breach of any representation or warranty or failure to perform any covenant or agreement on the part of the Purchaser under this Agreement occurs that would cause any condition in Section 6.3(a) [Purchaser Representations and Warranties Condition] or Section 6.3(b) [Purchaser Covenants Condition] not to be satisfied, and such breach or failure is incapable of being cured or is not cured on or prior to the Outside Date; provided that the Company is not then in breach of this Agreement so as to cause any condition in Sections 6.1 [Mutual Conditions] or 6.2 [Purchaser Conditions] not to be satisfied;

(B)

prior to the approval by the Company Shareholders of the Arrangement Resolution, the Board authorizes the Company to enter into a definitive written agreement (other than a confidentiality agreement permitted by and in accordance with Section 5.3) with respect to a Superior Proposal in accordance with Section 5.4 of this Agreement and prior to or concurrently with such termination the Company (or another Person on behalf of the Company) pays the Company Termination Amount in accordance with Section 7.4 in consideration for the disposition of the Purchaser’s rights under this Agreement;

(C)

subject to obtaining the Final Order and the satisfaction or waiver of the other conditions precedent contained herein in its favour (other than conditions which, by their nature, are only capable of being satisfied as of the Effective Time), the Purchaser does not provide or cause to be provided to the Depositary sufficient Purchaser Common Shares as required pursuant to Section 2.10; or

(D)

there has occurred a Material Adverse Effect in respect of the Purchaser on or after the date of this Agreement that is incapable of being cured on or prior to the Outside Date; or

(A)

a breach of any representation or warranty or failure to perform any covenant or agreement on the part of the Company under this Agreement occurs that would cause any condition in Section 6.2(a) [Company Representations and Warranties Condition] or Section 6.2(b) [Company Covenants Condition] not to be satisfied, and such breach or failure is incapable of being cured or is not cured on or prior to the Outside Date; provided that the Purchaser is not then in breach of this Agreement so as to cause any condition in Sections 6.1 [Mutual Conditions] or 6.3 [Company Conditions] not to be satisfied;

(B)

the Board or any committee of the Board fails to unanimously (with any interested directors having abstained from voting) recommend or withdraws, amends, modifies or qualifies in a manner adverse to the Purchaser or publicly proposes or states its intention to do any of the foregoing, or fails to publicly reaffirm (without qualification) within five Business Days after having been requested in writing by the Purchaser, to do so, the Board Recommendation, or takes no position or a neutral position with respect to a publicly announced Acquisition Proposal for more than five Business Days after such Acquisition Proposal’s public announcement (in each case, a “Change in Recommendation“), or the Company breaches Article 5 in any respect; or

(C)

there has occurred a Material Adverse Effect in respect of the Company on or after the date of this Agreement that is incapable of being cured on or prior to the Outside Date.

(i)

by the Purchaser, pursuant to Section 7.2(a)(iv)(B) [Change in Recommendation or Material Breach of Section 5.1];

(ii)

by the Company pursuant to Section 7.2(a)(iii)(B) [Superior Proposal]; or

(iii)

by the Company or the Purchaser pursuant to Section 7.2(a)(ii)(A) [Failure of Shareholders to Approve] if:

(A)

after the announcement of this Agreement and prior to such termination, an Acquisition Proposal is proposed, offered or made or publicly announced or otherwise publicly disclosed by any Person other than the Purchaser or any of its Affiliates (and such Acquisition Proposal has not expired or been withdrawn at least five Business Days prior to the date of the Company Meeting); and

(B)

within 12 months following the date of such termination, (X) an Acquisition Proposal (whether or not such Acquisition Proposal is the same Acquisition Proposal referred to in clause (A) above) is completed, or (Y) the Company or one or more of its Subsidiaries, directly or indirectly, in one or more transactions, enters into a definitive written agreement in respect of an Acquisition Proposal (whether or not such Acquisition Proposal is the same Acquisition Proposal referred to in clause (A) above) and such Acquisition Proposal is later completed (whether or not within 12 months after such termination),

(i)

if a Company Termination Amount Event occurs due to a termination of this Agreement described in Section 7.4(b)(i), within two Business Days of the occurrence of such Company Termination Amount Event;

(ii)

if a Company Termination Amount Event occurs due to a termination of this Agreement described in Section 7.4(b)(ii), concurrently with such termination; or

(iii)

if a Company Termination Amount Event occurs due to a termination of this Agreement described in Section 7.4(b)(iii), on the completion of the Acquisition Proposal referred to in Section 7.4(b)(iii).

(i)

change the time for performance of any of the obligations or acts of the Parties;

(ii)

modify any representation or warranty contained in this Agreement or in any document delivered pursuant to this Agreement;

(iii)

modify any of the covenants contained in this Agreement and waive or modify performance of any of the obligations of the Parties; and/or

(iv)

modify any mutual conditions contained in this Agreement.

FLORA GROWTH CORP.

By:

(signed)“Luis Merchan”

Name: Luis Merchan

Title: Chief Executive Officer

FRANCHISE GLOBAL HEALTH INC.

By:

(signed) “Clifford Starke”

Name: Clifford Starke

Title: Chief Executive Officer

(a)

Headings, etc. The division of this Plan of Arrangement into Articles and Sections and the insertion of headings are for convenient reference only and do not affect the construction or interpretation of this Plan of Arrangement.

(b)

Currency. All references to dollars or to $ are references to Canadian dollars, unless specified otherwise.

(c)

Gender and Number. Any reference to gender includes all genders. Words importing the singular number only include the plural and vice versa.

(d)

Certain Phrases, etc. The words (i) “including”, “includes” and “include” mean “including (or includes or include) without limitation,” (ii) “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,” and (iii) unless stated otherwise, “Article”, “Section”, and “Schedule” followed by a number or letter mean and refer to the specified Article or Section of or Schedule to this Plan of Arrangement.

(e)

Statutes. Any reference to a statute refers to such statute and all rules, resolutions and regulations made under it, as it or they may have been or may from time to time be amended or re-enacted, unless stated otherwise.

(f)

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 5:00 p.m. on the last day of the period, if the last day of the period is a Business Day, or at 5:00 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 which is a Business Day.

(g)

Time References. References to time herein or in any Letter of Transmittal are to local time, Vancouver, British Columbia. Time shall be of the essence in every matter or action contemplated hereunder.

(a)

at the Effective Time:

(i)

pursuant to the terms of the Company Stock Option Plan, the Board shall prior to the Effective Time: (i) approve the acceleration of the vesting of all outstanding Company Options, subject to receipt of requisite regulatory approval (if any), and upon such approval each Company Option shall be deemed to be vested and exercisable prior to the Effective Time; and (ii) approve, conditional upon completion of the Arrangement, the termination and cancellation of all Company Options that have not been exercised prior to the Effective Time without payment of any consideration to the holders of such terminated and cancelled Company Options;

(ii)

the Company Stock Option Plan and all agreements relating to Company Options shall be terminated and of no further force or effect and neither the Company nor the Purchaser shall have any liability or obligations with respect to the Company Option Plan or any agreements relating to Company Options;

(iii)

in accordance with the terms of the Agent Compensation Options, each holder of an Agent Compensation Option outstanding immediately prior to the Effective Time shall receive upon the subsequent exercise of such holder’s Agent Compensation Option, in accordance with its terms and for the same aggregate consideration therefor, and shall accept in lieu of each Company Common Share to which such holder was theretofore entitled upon such exercise, the Consideration; and

(iv)

each Company RSU outstanding immediately prior to the Effective Time (whether vested or unvested) shall immediately vest and the Company shall allot and issue to each holder of a Company RSU such number of Company Common Shares (provided that no share certificates shall be issued with respect to such shares as are due to such holder) under the terms of the Company RSU Plan and thereafter the Company RSU Plan will terminate and none of the former holders of Company RSUs, the Company, the Purchaser or any of their respective successors or assigns shall have any rights, liabilities or obligations in respect of the Company RSU Plan.

(b)

immediately after the steps in Section 2.3(a):

(i)

each Company Common Share held by a Dissenting Shareholder who is ultimately determined to be entitled to be paid the fair value of his, her or its Company Common Shares in accordance with Article 3 (a “Dissenting Share“) shall be and shall be deemed to have been transferred to the Purchaser (free and clear of all Liens) in consideration for a debt claim against the Purchaser in an amount equal to the fair value of such Dissenting Share determined and payable in accordance with Article 3; and

(ii)

with respect to each Dissenting Share transferred to the Purchaser pursuant to Section 2.3(b)(i): (A) the registered holder of such Dissenting Share will cease to be the holder thereof or to have any rights as a holder thereof (other than the right to receive fair value of such Dissenting Share in accordance with Article 3) and the name of the registered holder thereof will be removed from the central securities register of the Company, (B) the holder of such Dissenting Share shall be deemed to have executed and delivered all consents, releases, assignments and waivers, statutory or otherwise, required to transfer and assign such Company Common Shares and (C) the Purchaser shall be and shall be deemed to be the transferee of such Dissenting Share (free and clear of all Liens) and will be entered in the central securities register of the Company as the sole holder thereof; and

(c)

immediately after the steps in Section 2.3(b):

(i)

each Company Common Share outstanding immediately prior to the Effective Time (including the Company Common Shares allotted and issued pursuant to Section 2.3(a)(iv) hereof but other than Dissenting Shares and Company Common Shares directly or indirectly owned by the Purchaser) shall be and shall be deemed to be transferred to the Purchaser (free and clear of all Liens) in exchange for the Consideration, provided (A) that the Purchaser Common Shares comprising the Consideration shall be subject to the Transfer Restrictions and Exceptions and (B) the certificates or any “direct registration system” statements or advice representing the Purchaser Common Shares comprising the Consideration shall bear (or, in the case of uncertificated Purchaser Common Shares, be deemed to bear) the Restricted Legend until the Release Date;

(ii)

with respect to each Company Common Share transferred to the Purchaser pursuant to Section 2.3(c)(i), (A) the holder of such Company Common Share will cease to be the holder thereof or to have any rights as a holder thereof (other than the right to receive the consideration such holder is entitled to receive pursuant to Section 2.3(c)(i)) and the name of the holder thereof will be removed from the central securities register of the Company, (B) the holder of such Company Common Share shall be deemed to have executed and delivered all consents, releases, assignments and waivers, statutory or otherwise, required to transfer and assign such Company Common Shares and (C) the Purchaser shall be and shall be deemed to be the transferee of such Company Common Share (free and clear of all Liens) and will be entered in the central securities register of the Company as the sole holder thereof; and

(iii)

each Company Shareholder (other than a Dissenting Shareholder) will be the holder of the aggregate number of Purchaser Common Shares issued to such Company Shareholder pursuant to Section 2.3(c)(i) and the securities registers of the Purchaser will be revised accordingly.

(a)

Registered holders of Company Common Shares may exercise rights of dissent (“Dissent Rights“) in connection with the Arrangement under Section 238 of the BCBCA, and in the manner set forth in Sections 237 to 247 of the BCBCA, as modified by the Interim Order and this Section 3.1; provided that, notwithstanding Section 242(1)(a) of the BCBCA, the written objection to the Arrangement Resolution and exercise of Dissent Rights must be received by the Company not later than 5:00 p.m. on the Business Day which is two Business Days prior to the Company Meeting (as it may be adjourned or postponed from time to time). Dissenting Shareholders who duly exercise their Dissent Rights and who:

(i)

are ultimately determined to be entitled to be paid fair value by the Purchaser for the Company Common Shares in respect of which they have exercised Dissent Rights shall be and shall be deemed to have irrevocably transferred such Company Common Shares to the Purchaser pursuant to Section 2.3(b) in consideration of the fair value of such Company Common Shares determined as of the close of business on the day before the Arrangement Resolution was adopted; or

(ii)

are not ultimately determined, for any reason, to be entitled to be paid fair value by the Purchaser for the Company Common Shares in respect of which they have exercised Dissent Rights shall be and shall be deemed to have participated in the Arrangement on the same basis as a Company Shareholder who has not exercised Dissent Rights and shall be entitled to receive only the consideration that such Company Shareholder would have been entitled to receive pursuant to Section 2.3(c) if such Company Shareholder had not exercised Dissent Rights,

and in no case will the Company, the Purchaser or any other Person be required to recognize such Dissenting Shareholders as holders of Company Common Shares after the completion of the steps set forth in Section 2.3(b) or 2.3(c), as the case may be, and each Dissenting Shareholder will cease to be entitled to the rights of a shareholder in respect of the Company Common Shares in relation to which such Dissenting Shareholder has exercised Dissent Rights and the central securities register of the Company will be amended to reflect that such former holder is no longer the holder of such Company Common Shares as and from the Effective Time.

(b)

For greater certainty, only registered holders of Company Common Shares shall be entitled to exercise Dissent Rights and, in addition to any other restrictions under Section 238 of the BCBCA, neither (i) holders of Company Options, Company RSUs or Agent Compensation Options, or (ii) the Company Shareholders who vote or have instructed a proxyholder to vote such holder’s Company Common Shares in favour of the Arrangement Resolution, shall be entitled to exercise Dissent Rights.

(a)

At or before the Effective Time, the Purchaser shall deposit or cause to deposited with the Depositary one or more certificates or book-entry advice statements representing the aggregate number of Purchaser Common Shares that such Company Shareholders are entitled to receive under Section 2.3(c).

(b)

As soon as practicable following the later of the Effective Time and the surrender by a Company Shareholder to the Depositary of a certificate or book-entry advice statement which immediately prior to the Effective Time represented outstanding Company Common Shares that were transferred to the Purchaser pursuant to Section 2.3(c), together with a duly completed and executed Letter of Transmittal and such additional documents and instruments as the Depositary may reasonably require, the former holder of such Company Common Shares will be entitled to receive in exchange therefor a certificate or book-entry advice statement representing the number of Purchaser Common Shares such holder is entitled to receive under Section 2.3(c), less any amounts withheld pursuant to Section 4.3, and any certificate so surrendered shall forthwith be cancelled.

(c)

Subject to Section 4.4, until surrendered as contemplated by this Section 4.1, each certificate or book-entry advice statement which immediately prior to the Effective Time represented Company Common Shares that were transferred under Section 2.3(c) shall be deemed after the Effective Time to represent only the right to receive a certificate representing the number of Purchaser Common Shares the former holder of such Company Common Shares is entitled to receive pursuant to Section 2.3(c) less any amounts withheld pursuant to Section 4.3.

(d)

No holder of Company Common Shares, Company Options, Company RSUs or Agent Compensation Options shall be entitled to receive any consideration with respect to such Company Common Shares, Company Options, Company RSUs or Agent Compensation Options other than consideration such holder is entitled to receive, if any, in accordance with Section 2.3 and this Section 4.1 and, for greater certainty, no such former holder will be entitled to receive any interest, dividends, premium or other payment in connection therewith.

(a)

The Company and the Purchaser may amend, modify and/or supplement this Plan of Arrangement at any time and from time to time prior to the Effective Time, provided that each such amendment, modification and/or supplement must be (i) set out in writing, (ii) approved by the Company and the Purchaser (each acting reasonably), (iii) filed with the Court and, if made following the Company Meeting, approved by the Court and (iv) communicated to or approved by the Company Shareholders if and as required by the Court.

(b)

Any amendment, modification or supplement to this Plan of Arrangement may be proposed by the Company at any time prior to the Company Meeting (provided that the Purchaser shall have consented thereto) with or without any other prior notice or communication and, if so proposed and accepted by the Persons voting at the Company Meeting (other than as may be required under the Interim Order), shall become part of this Plan of Arrangement for all purposes.

(c)

Any amendment, modification or supplement to this Plan of Arrangement that is approved or directed by the Court following the Company Meeting shall be effective only if such amendment, modification or supplement is consented to (i) in writing by each of the Company and the Purchaser (each acting reasonably), and (ii) if required by the Court, by some or all of the Company Shareholders voting in the manner directed by the Court.

(d)

Any amendment, modification or supplement to this Plan of Arrangement may be made following the Effective Date unilaterally by the Purchaser, provided that it concerns a matter which, in the reasonable opinion of the Purchaser, is of an administrative nature required to better give effect to the implementation of this Plan of Arrangement and is not adverse to the financial or economic interests of any former holder of Company Common Shares.

(e)

This Plan of Arrangement may be withdrawn prior to the Effective Time in accordance with the terms of the Arrangement Agreement.

1.

The arrangement (the “Arrangement“) under Part 9, Division 5 of the Business Corporations Act (British Columbia) (the “BCBCA“) involving Franchise Global Health Inc. (the “Company“) and Flora Growth Corp. (“Flora“), pursuant to the arrangement agreement between the Company and Flora dated October 21, 2022, as it may be modified, supplemented or amended from time to time in accordance with its terms (the “Arrangement Agreement“), as more particularly described and set forth in the management information circular of the Company dated ●, 2022 (the “Circular“) (as the Arrangement may be modified or amended in accordance with its terms), and all transactions contemplated thereby, are hereby authorized, approved and adopted.

2.

The plan of arrangement of the Company, as it has been or may be modified, supplemented or amended in accordance with the Arrangement Agreement and its terms (the “Plan of Arrangement“), the full text of which is set out as Appendix ●to the Circular, is hereby authorized, approved and adopted.

3.

The: (i) Arrangement Agreement and all the transactions contemplated therein; (ii) actions of the directors of the Company in approving the Arrangement and the Arrangement Agreement; and (iii) actions of the directors and officers of the Company in executing and delivering the Arrangement Agreement and any modifications, supplements or amendments thereto, and causing the performance by the Company of its obligations thereunder, are hereby ratified and approved.

4.

The Company is authorized and directed to apply for a final order from the Supreme Court of British Columbia (the “Court“) to approve the Arrangement on the terms set forth in the Arrangement Agreement and the Plan of Arrangement.

5.

Notwithstanding that this resolution has been passed (and the Arrangement adopted) by the holders of common shares of the Company (the “Company Shareholders“) or that the Arrangement has been approved by the Court, the directors of the Company are hereby authorized and empowered, without further notice to or approval of the Company Shareholders: (i) to amend, modify or supplement the Arrangement Agreement or the Plan of Arrangement to the extent permitted by their terms; and (ii) subject to the terms of the Arrangement Agreement, not to proceed with the Arrangement and any related transactions.

6.

Any one or more director or officer of the Company be and is hereby authorized and directed for and on behalf of the Company to make an application to the Court for an order approving the Arrangement, to execute, under the corporate seal of the Company or otherwise, and to deliver all such deeds, instruments, assurances, agreements, forms, waivers, notices, certificates, confirmations and such other documents as are necessary or desirable to give effect to these resolutions, the Arrangement and the Plan of Arrangement in accordance with the Arrangement Agreement.

7.

Any one or more officer or director of the Company is hereby authorized and directed, for and on behalf of the Company, to execute or cause to be executed and to deliver or cause to be delivered, all such other documents and instruments and to perform or cause to be performed all such other acts and things as, in such person’s opinion, may be necessary or desirable to give full force and effect to the foregoing resolutions, the Arrangement Agreement and the completion of the Arrangement and the matters authorized thereby, including all necessary filings and obtaining the necessary approvals, consents and acceptances of appropriate regulatory authorities, such determination to be conclusively evidenced by the execution and delivery of any such other document or instrument or the doing of any such other act or thing.

1.

Organization and Qualification. The Company and each of its Subsidiaries is a corporation or other entity duly incorporated, formed or organized, as applicable, validly existing and in good standing (or equivalent) under the laws of the jurisdiction of its incorporation, organization or formation, as applicable, and has all requisite power and authority to own, lease and operate its assets and properties and conduct its business as now owned and conducted. The Company and each of its Subsidiaries is duly qualified, registered, licensed or otherwise authorized to carry on business and is in good standing in each jurisdiction in which the character of its assets and properties, whether owned, leased, licensed or otherwise held, or the nature of its activities make such qualification, registration, licensing or other authorization necessary, and has all Authorizations required to own, lease and operate its properties and assets and to conduct its business as now owned and conducted, except as to the extent that any failure of the Company or any of its Subsidiaries to be so qualified, registered, licenced or authorized or to possess such Authorizations could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect in respect of the Company.

2.

Corporate Authorization. The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement. The execution, delivery and performance by the Company of its obligations under this Agreement and the completion of the Arrangement and the other transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of the Company and no other corporate proceedings on the part of the Company are necessary to authorize this Agreement or the completion of the Arrangement and the other transactions contemplated hereby and thereby other than approval by the Company Shareholders in the manner set forth in this Agreement, as required by the Interim Order and Law, and approval by the Court.

3.

Execution and Binding Obligation. This Agreement has been duly executed and delivered by the Company, and constitutes a legal, valid and binding agreement of the Company enforceable against it in accordance with their terms subject only to any limitation under bankruptcy, insolvency or other Laws affecting the enforcement of creditors’ rights generally and the discretion that a court may exercise in the granting of equitable remedies such as specific performance and injunction.

4.

Governmental Authorization. The execution, delivery and performance by the Company of its obligations under this Agreement and the completion of the Arrangement and the other transactions contemplated hereby and thereby do not require any Authorization or other action by or in respect of, or filing with, or notification to, any Governmental Entity by the Company or by any of its Subsidiaries other than: (a) the Interim Order and any approvals required by the Interim Order; (b) the Final Order; (c) filings under the BCBCA, and (d) filings with the Securities Authorities or the TSXV.

5.

Competition Act (Canada). Neither the aggregate value of the assets in Canada nor the gross revenues from sales in or from Canada generated by such assets exceeds the threshold established at section 110(3) of the Competition Act, each determined as of the time and in the manner prescribed in accordance with the Notifiable Transactions Regulations.

6.

Non-Contravention. The execution, delivery and performance by the Company of its obligations under this Agreement and the completion of the Arrangement and the other transactions contemplated hereby and thereby do not and will not (or would not with the giving of notice, the lapse of time or both):

(a)

contravene, conflict with, or result in any violation or breach of the Company’s Constating Documents or the organizational documents of any of its Subsidiaries;

(b)

assuming compliance with the matters referred to in Paragraph 4 above, contravene, conflict with or result in a violation or breach of any Law applicable to the Company or any of its Subsidiaries, or any of their respective properties or assets;

(c)

allow any Person to exercise any rights, require any consent or notice under or other action by any Person, or constitute a default under, or cause or permit the termination, cancellation, acceleration or other change of any right or obligation or the loss of any benefit to which the Company or any of its Subsidiaries is entitled (including by triggering any rights of first refusal or first offer, change in control provision or other restriction or limitation) under any Material Contract or any Authorization to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound; or

(d)

result in the creation or imposition of any Lien (other than Permitted Liens) upon any of the properties or assets of the Company or its Subsidiaries.

(a)

The authorized share structure of the Company consists of an unlimited number of Company Common Shares. As of close of business on October 19, 2022, there were 134,563,674 Company Common Shares issued and outstanding.

(b)

Schedule 3.1(7)(b) of the Company Disclosure Letter sets forth, as of the date hereof: (i) the number of outstanding Company Options and the aggregate number of Company Common Shares into which outstanding Company Options are exercisable; (ii) the number of outstanding Company RSUs and the aggregate number of Company Common Shares into which outstanding Company RSUs are exercisable; and (iii) the number of outstanding Agent Compensation Options and the aggregate number of Company Common Shares into which outstanding Agent Compensation Options are exercisable, and in each case, all holders thereof and the exercise price, the date of grant or issuance, the expiration date and vested amounts, where applicable.

(c)

All outstanding Company Common Shares have been duly authorized and validly issued, are fully paid and non-assessable (and no such shares have been issued in violation of any pre-emptive or similar rights), and all Company Common Shares issuable upon the exercise of the Company Options, Company RSUs and the Agent Compensation Options have been duly authorized and, upon issuance, shall be validly issued as fully paid and non-assessable. No Company Common Shares have been issued and no Company Options, Company RSUs or Agent Compensation Options have been granted in violation of any Law on the part of the Company or any pre-emptive or similar rights applicable to them.

(d)

Other than the Company Options, Company RSUs and the Agent Compensation Options, there are no issued, outstanding or authorized options, equity-based awards, warrants, calls, conversion, pre-emptive, redemption, repurchase, stock appreciation or other rights, or any other agreements, arrangements, instruments or commitments of any kind that obligate the Company or any of its Subsidiaries to, directly or indirectly, issue, register for sale, repurchase or redeem any securities of the Company or of any of its Subsidiaries, or give any Person a right to subscribe for or acquire, any securities of the Company or of any of its Subsidiaries.

(e)

There are no issued, outstanding or authorized notes, bonds, debentures or other evidences of indebtedness or any other agreements, arrangements, instruments or commitments of any kind that give any Person, directly or indirectly, the right to vote with holders of Company Common Shares on any matter except as required by Law.

(a)

The following information with respect to each Subsidiary of the Company is accurately set out in Schedule 3.1(8)(a) of the Company Disclosure Letter: (i) its name; (ii) its issued and authorized capital; (iii) the percentage of equity owned directly or indirectly by the Company, (iv) the name of and the percentage owned by registered holders of capital stock or other equity interests; and (v) its jurisdiction of incorporation, organization, formation, or governance.

(b)

The Company is, directly or indirectly, the registered and beneficial owner of all of the outstanding common shares or other equity interests of each of its Subsidiaries, free and clear of all Liens, all such shares or other equity interests so owned by the Company have been validly issued and are fully paid and non-assessable, as the case may be, and no such shares or other equity interests: (i) have been issued in violation of any Law or any pre-emptive or similar rights; or (ii) are subject to pre-emptive rights, rights of first refusal or similar rights created by statute, such Subsidiary’s organizational documents or any agreement binding upon the Company or any of its Subsidiaries. Except for the shares or other equity interests owned by the Company or by any of its Subsidiaries, directly or indirectly, in any Subsidiary of the Company, neither the Company nor any of its Subsidiaries is the registered or beneficial owner of any equity interest of any kind in, voting debt of, or any interest convertible into or exchangeable or exercisable for any equity interest in, any other Person.

(c)

Except as publicly disclosed in the Company Filings, the Company does not have any direct or indirect investment or proposed investment in any other Person.

9.

Shareholders’ and Similar Agreements. Except as disclosed in Schedule 3.1(9) of the Company Disclosure Letter, neither the Company nor any of its Subsidiaries is subject to, or affected by, any unanimous shareholders agreement and is not a party to any shareholder, pooling, voting, escrow, lock-up or other similar arrangement or agreement relating to the ownership, registration, transfer or voting of any of the securities of the Company or of any of its Subsidiaries or pursuant to which any Person other than the Company or any of its Subsidiaries may have any right or claim in connection with any existing or past equity interest in the Company or in any of its Subsidiaries.

10.

(a)

The Company is a “reporting issuer” or equivalent thereof and not on the list of reporting issuers in default under applicable Securities Laws in each of the provinces of Alberta and British Columbia and is not in default of any material requirements of any Securities Laws or the rules and regulations of the TSXV. No delisting, suspension of trading in or cease trading order with respect to any of its securities and, to the knowledge of the Company, no inquiry or investigation of any Securities Authority, is pending, in effect or ongoing or threatened. The Company Common Shares are listed on the TSXV and the Frankfurt Stock Exchange (the “FSE“). The Company does not have any securities listed for trading on any securities exchange other than the TSXV and FSE. None of the Company’s Subsidiaries is subject to any disclosure requirements under any securities laws in any jurisdiction in which such Subsidiary is formed or otherwise organized or operates.

(b)

The documents comprising the Company Filings as filed or furnished in all material respects with the requirements of applicable Securities Laws and, where applicable, the rules and policies of the TSXV and did not, as of the date filed (or, if amended or superseded by a subsequent filing prior to the date of this Agreement, on the date of such filing), contain any Misrepresentation. The Company has, since March 31, 2021, complied and is in compliance with applicable Securities Laws and the rules, policies and requirements of the TSXV in all material respects. The Company has timely filed with the Securities Authorities all material forms, reports, schedules, certifications, statements and other documents required to be filed by it under applicable Securities Laws and where applicable, the rules and policies of the TSXV since March 31, 2021. The Company has not filed any confidential material change report with the Securities Authorities which at the date hereof remains confidential. There are no outstanding or unresolved comments in comments letters that the Company has received from any Securities Authority with respect to any of the Company Filings and, to the knowledge of the Company, neither the Company nor any of the Company Filings are subject of an ongoing audit, review, comment or investigation by any Securities Authority or, in the case of the Company, the TSXV.

(c)

The Company is not subject to any cease trade order of any Securities Authority (other than a trading halt on the TSXV) and, to the knowledge of the Company, no investigation or other proceedings involving the Company that may operate to prevent or restrict trading of any securities of the Company are currently in progress or pending before the TSXV, or any Securities Authority.

11.

Financial Statements.

(a)

The audited consolidated financial statements of the Company (including any of the notes or schedules thereto and the auditors’ report thereon) for the year ended December 31, 2021, the audited consolidated financial statements of Franchise Cannabis Corp. (including any of the notes or schedules thereto and the auditors’ report thereon) for the year ended December 31, 2021 (collectively, the “Company Audited Financial Statements“) and the unaudited condensed interim consolidated financial statements of the Company for the three and six months ended June 30, 2022: (i) were prepared in accordance with IFRS, (ii) fairly present, in all material respects, the assets, liabilities (whether accrued, absolute, contingent or otherwise), consolidated financial position, results of operations or financial performance and cash flows of the Company and its respective Subsidiaries as of the dates set out in such statements and the consolidated financial position, results of operations or financial performance and cash flows of the Company and its respective Subsidiaries as at the dates and for the respective periods covered by such financial statements (except as may be expressly indicated in the notes to such financial statements) and (iii) reflect appropriate reserves in respect of contingent liabilities, if any. The Company does not intend to make any correction or restatement of, nor, to the knowledge of the Company, is there any basis for any correction or restatement of, any aspect of any of the financial statements referred to in this Paragraph (11)(a). Except as described in the notes to the Company Audited Financial Statements, there has been no material change in the Company’s or Franchise Cannabis Corp.’s accounting policies since December 31, 2021. There are no, nor are there any commitments to become a party to, any off-balance sheet transactions of the Company or of any of its Subsidiaries with unconsolidated entities or other Persons.

(b)

Since December 31, 2021, the financial books, records and accounts of the Company and each of its Subsidiaries: (i) have been maintained, in all material respects, in accordance with IFRS; (ii) are stated in reasonable detail; (iii) accurately and fairly reflect all the material transactions, acquisitions and dispositions of the Company and its Subsidiaries; and (iv) accurately and fairly reflect the basis of the Company’s financial statements for periods beginning on or after such date.

12.

Disclosure Controls and Internal Control over Financial Reporting.

(a)

The Company has established and maintains a system of internal control over financial reporting (as such term is defined in National Instrument 52-109 – Certification of Disclosure in Issuers’ Annual and Interim Filings(“NI 52-109“)) providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS and has otherwise complied with NI 52-109.

(b)

To the knowledge of the Company, none of the Company, any of its Subsidiaries, or any of their respective directors, officers, auditors, accountants or representatives has received or otherwise obtained knowledge of any material complaint, allegation, assertion, or claim, whether written or oral, regarding accounting, internal accounting controls or auditing matters, including any material complaint, allegation, assertion, or claim that the Company or any of its Subsidiaries has engaged in questionable accounting or auditing practices, or any expression of concern from its employees regarding questionable accounting or auditing matters.

13.

Auditors. The auditors of the Company are independent public accountants as required by applicable Laws and there is not now, and, to the knowledge of the Company, there has never been, any reportable event (as defined in National Instrument 51-102 – Continuous Disclosure Obligations) with the present or any former auditors of the Company.

14.

No Undisclosed Liabilities. There are no material liabilities or obligations of the Company or of any of its Subsidiaries of any type whatsoever, whether accrued, contingent or absolute, other than liabilities or obligations: (a) reflected or reserved against in the Company Audited Financial Statements (including any notes or schedules thereto and related management’s discussions and analysis); (b) that have not had, and would not reasonably be expected to have, a Material Adverse Effect in respect of the Company; or (c) incurred in connection with this Agreement.

15.

Absence of Certain Changes or Events. Since December 31, 2021, other than the transactions contemplated in this Agreement or as publicly disclosed in the Company Filings:

(a)

the business of the Company and of each of its Subsidiaries has been conducted in the Ordinary Course; and

(b)

there has not occurred any change, event, occurrence, effect or circumstance that, individually or in the aggregate, has had or could reasonably be expected to have a Material Adverse Effect in respect of the Company.

16.

Long-Term and Derivative Transactions. Neither the Company nor any of its Subsidiaries have any material obligations or liabilities, direct or indirect, vested or contingent in respect of any rate swap transactions, basis swaps, forward rate transactions, commodity swaps, commodity options, equity or equity index swaps, equity or equity index options, bond options, interest rate options, foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions or currency options or production sales transactions having terms greater than 90 days or any other similar transactions (including any option with respect to any of such transactions) or any combination of such transactions.

17.

Related Party Transactions. Other than transactions publicly disclosed in the Company Filings, neither the Company nor any of its Subsidiaries is indebted to any director, officer, employee or agent of, or independent contractor to, the Company, any of its Subsidiaries or any of their respective Affiliates (except for amounts due in the Ordinary Course such as salaries, bonuses, director’s fees, under Employee Plans or amounts owing under any contracting agreement with any such independent contractor or the reimbursement of Ordinary Course expenses). There are no Contracts (other than employment arrangements or independent contractor arrangements or otherwise as publicly disclosed in the Company Filings) with, or advances, loans, guarantees, liabilities or other obligations to, on behalf or for the benefit of, any shareholder, officer or director of the Company, any of its Subsidiaries or any of their respective Affiliates.

18.

No “Collateral Benefit”. To the knowledge of the Company, except as will be disclosed in the Company Circular, no related party (within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions) of the Company together with its associated entities, beneficially owns or exercises control or direction over 1{194d821e0dc8d10be69d2d4a52551aeafc2dee4011c6c9faa8f16ae7103581f6} or more of the outstanding Company Common Shares, except for related parties who will not receive a “collateral benefit” (within the meaning of such instrument) as a consequence of the transactions contemplated by this Agreement.

19.

Compliance with Laws. The Company and each of its Subsidiaries is, and, to the knowledge of the Company, since their respective dates of incorporation, organization or formation has been, in compliance with all applicable Laws, and neither the Company nor any of its Subsidiaries is, to the knowledge of the Company, under any investigation with respect to, has been charged or to the knowledge of the Company threatened to be charged with, or has received notice of, any violation or potential violation of any Law or a disqualification by a Governmental Entity except, in each case, as could not reasonably be expected to have a Material Adverse Effect in respect of the Company.

20.

Authorizations and Licenses.

(a)

The Company and each of its Subsidiaries own, possess or have obtained all Authorizations that are required by Law in connection with the operation of the business of the Company and each of its Subsidiaries as presently conducted, or in connection with the ownership, operation or use of the Company Assets, except as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect in respect of the Company.

(b)

The Company or its Subsidiaries, as applicable: (i) lawfully hold, own or use, and have complied with, all Authorizations that are required by Law in connection with the operation of the business of the Company and each of its Subsidiaries as presently conducted, except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect in respect of the Company; (ii) each such Authorization is valid and in full force and effect, and is renewable by its terms or in the Ordinary Course; (iii) to the knowledge of the Company, there are no facts, events or circumstances that may reasonably be expected to result in a failure to obtain or failure to be in compliance with all Authorizations as are necessary to conduct the business of the Company or its Subsidiaries; and (iv) to the knowledge of the Company, no event has occurred which, with the giving of notice, lapse of time or both, could constitute a default under, or in respect of, any Authorization, except, in each case, as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect in respect of the Company.

(c)

To the knowledge of the Company, no action, investigation or proceeding is pending in respect of or regarding any such Authorization and none of the Company or any of its Subsidiaries has received notice, whether written or oral, of revocation, non-renewal or amendments of any such Authorization, or of the intention of any Person to revoke, refuse to renew or amend any such Authorization, except, in each case, as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect in respect of the Company.

(d)

Neither the Company nor any of its Subsidiaries has given an undertaking or written assurance (whether legally binding or not) to any Governmental Entity (including any competition authority) under any anti-trust or similar legislation in any jurisdiction which remains current at the date of this Agreement.

(a)

Schedule 3.1(21)(a) of the Company Disclosure Letter sets out a complete and accurate list of all Material Contracts as of the date of this Agreement.

(b)

True and complete copies of the Material Contracts have been provided to the Purchaser and no such Material Contract has been rescinded, terminated or materially modified outside of the Ordinary Course.

(c)

To the knowledge of the Company, each Material Contract is a legal, valid, and binding obligation of the Company or a Subsidiary of the Company, as applicable, and in full force and effect and is enforceable by the Company or a Subsidiary of the Company, as applicable, in accordance with its terms (subject to bankruptcy, insolvency and other Laws affecting creditors’ rights generally, and to general principles of equity).

(d)

The Company and each of its Subsidiaries has performed in all material respects all respective obligations required to be performed by them to date under the Material Contracts and neither the Company nor any of its Subsidiaries is in material breach or default under any Material Contract, nor does the Company have knowledge of any condition that with the passage of time or the giving of notice or both would result in such a breach or default by the Company or any of its Subsidiaries.

(e)

Except as set out in the Company Disclosure Letter, none of the Company nor any of its Subsidiaries knows of, or has received any notice (whether written or oral) of, any material breach or default under nor, to the knowledge of the Company, does there exist any condition which with the passage of time or the giving of notice or both would result in such a material breach or default under any such Material Contract by any other party to a Material Contract.

(f)

Except as set out in the Company Disclosure Letter, none of the Company nor any of its Subsidiaries has received any notice (whether written or oral), that any party to a Material Contract intends to cancel, rescind, terminate or otherwise adversely modify or not renew its relationship with the Company or any of its Subsidiaries and, to the knowledge of the Company, no such action has been threatened.

22.

Intellectual Property. A true, complete and accurate list of all Intellectual Property owned or licensed by the Company that is material to the business, as presently conducted, of the Company and its Subsidiaries is set out in Schedule 3.1(22) of the Company Disclosure Letter, and: (a) the Company or one of its Subsidiaries own all right, title and interest in and to, or have validly licensed (and are not in material breach of such licenses), all Intellectual Property that is material to the business, as presently conducted, of the Company and its Subsidiaries; (b) the Intellectual Property that is owned, leased, licensed, used or held for use by to the Company and its Subsidiaries is sufficient, in all material respects, for conducting the business, as presently conducted, of the Company and its Subsidiaries; (c) the Company or one of its Subsidiaries own all right, title and interest in and to the Intellectual Property set out in Schedule 3.1(22) and all rights of the Company and its Subsidiaries in and to such Intellectual Property are unexpired and, to the knowledge of the Company, valid and enforceable; (d) to the knowledge of the Company, the conduct of the business of the Company and its Subsidiaries (including pursuant to the transactions contemplated by this Agreement) and the use by the Company and its Subsidiaries of any of the Intellectual Property owned by them did not and do not breach, violate, infringe or interfere with any Intellectual Property or other rights of any other Person; (e) to the knowledge of the Company, no third party is breaching, violating, infringing upon or interfering with the Intellectual Property owned by or licensed to the Company or any of its Subsidiaries; and (g) the Company and its Subsidiaries own or have validly licensed or leased (and are not in material breach of such licenses or leases) all IT Assets (including Software) that are material to the conduct of the business, as presently conducted, of the Company and its subsidiaries. Neither the Company nor any of its Subsidiaries has licensed others to use any material Intellectual Property or IT Assets, other than on a non-exclusive basis and in the Ordinary Course.

23.

Data Privacy and Cybersecurity. The Company and its Subsidiaries have established and implemented policies, programs, and procedures that are commercially reasonable to protect the confidentiality, integrity, and/or availability of the trade secrets and other information in their possession, custody, or control, and of their Software, IT Assets, products and services. Upon the Closing, and to the knowledge of the Company, the Company and its Subsidiaries will continue to have the right to use personal information on the same basis that the Company and its Subsidiaries were entitled to use such information immediately prior to the Closing. Except as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect in respect of the Company, to the knowledge of the Company, (i) there has been no loss, damage, or unauthorized access, disclosure, transfer or use of any personal information, trade secret, or otherwise protected business information in the possession, custody, or control of the Company or any Subsidiary, or maintained or processed on any of their behalf and (ii) there have been no material outages or breaches of, and to their knowledge there are no bugs, defects, backdoors, or malicious code in, any Software, IT Assets, product, or service owned, sold, licensed or used by the Company or any Subsidiary. Neither the Company nor any of its Subsidiaries has notified in writing, or been required to notify in writing, any Person of any personal data or network security- related incident, nor has the Company or any of its Subsidiaries received any written notice of any claims, investigations, or alleged violations of Law with respect to data security, personal data rights or privacy.

24.

U.S. Securities Compliance. The Company has issued no class of securities registered or required to be registered under the U.S. Exchange Act, and is not required to file reports under the U.S. Exchange Act; it is not an investment company within the meaning of the U.S. Investment Company Act.

25.

No Expropriation. No property or asset of the Company or any of its Subsidiaries has been taken or expropriated by any Governmental Entity nor, to the knowledge of the Company, has any Governmental Entity given notice of or commenced any proceeding to take or expropriate any such property or asset.

26.

Work Programs. The Company has not entered into any joint venture, work program or made any similar commitment or undertaking that has not been disclosed in the Company Filings.

27.

Title and Rights re: Other Assets. The Company and its Subsidiaries, as applicable, have good and valid title to all material properties and assets (in addition to the Company Assets) reflected in the Company Audited Financial Statements or valid leasehold or licence interests in all material properties and assets not reflected in such financial statements but used by the Company or any of its Subsidiaries, free and clear of all material Liens, other than the Permitted Liens, and there are no back-in rights, earn-in rights, purchase options, rights to first refusal or similar provisions or rights which would affect the interest of the Company or any of its Subsidiaries in any of the foregoing material properties and assets. No Person has any agreement or option or any right or privilege capable of becoming an agreement or option for the purchase from the Company or any of its Subsidiaries of any of the material assets of the Company or any of its Subsidiaries other than with the Company or as described or contemplated in this Agreement.

28.

Litigation. Except as disclosed in Schedule 3.1(28) of the Company Disclosure Letter, there are no claims, actions, suits, arbitrations, inquiries, investigations or proceedings pending, or, to the knowledge of the Company threatened, against the Company or any of its Subsidiaries, or, affecting any of their respective properties or assets that if determined adverse to the interests of the Company or its Subsidiaries, could reasonably be expected to have, individually or on the aggregate, a Material Adverse Effect in respect of the Company or would be reasonably expected to prevent or delay the completion of the Arrangement or the transactions contemplated hereby, nor, to the knowledge of the Company, are there any events or circumstances which would reasonably be expected to give rise to any such claim, action, suit, arbitration, inquiry, investigation or proceeding. There is no bankruptcy, liquidation, winding-up or other similar proceeding pending or in progress, or, to the knowledge of the Company, threatened against or relating to the Company or any of its Subsidiaries. Neither the Company nor any of its Subsidiaries, nor any of their respective properties or assets is subject to any outstanding judgment, order, writ, injunction or decree that could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect in respect of the Company or that could be reasonably expected to prevent or delay the completion of the Arrangement or the transactions contemplated hereby.

29.

Environmental Matters.

(a)

The Company and each of its Subsidiaries is, and since their respective dates of incorporation, organization or formation has been, in compliance, in all material respects, with all Environmental Laws;

(b)

except as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect in respect of the Company, none of the Company or any of its Subsidiaries have Released, and, to the knowledge of the Company, no other Person has Released, any Hazardous Substances in violation of Environmental Laws on, at, in, under or from any real property currently owned or leased by the Company or its Subsidiaries or, to the knowledge of the Company, real property previously owned or leased by the Company or any of its Subsidiaries;

(c)

there are no pending claims or, to the knowledge of the Company, threatened claims, against the Company or any of its Subsidiaries, arising out of any Environmental Laws;

(d)

the Company is not aware of, nor has it received: (i) any order or directive from a Governmental Entity which relates to environmental matters that could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect in respect of the Company; or (ii) any written regulatory demand or notice with respect to the material breach of any Environmental Law applicable to the Company or any of its Subsidiaries or the Company Assets;

(e)

the Company and its Subsidiaries are in possession of, and in compliance with, all material Authorizations required by Environmental Laws to own, lease and operate the Company Assets and to conduct their respective businesses, as now conducted; and

(f)

the Company has provided to the Purchaser copies of all material environmental reports relating to the currently and formerly owned and leased real property that are within the possession or control of the Company or any of its Subsidiaries.

Notwithstanding any provision in this Agreement to the contrary, this Paragraph (29) of Schedule C contains the exclusive representations and warranties in respect of Environmental Laws, Hazardous Substances or any other environmental matters or conditions, liabilities or losses relating to Environmental Laws, Hazardous Substances or any other environmental matters.

(a)

All written employment agreements of senior management of the Company have been provided to the Purchaser and such agreements are listed in Schedule 3.1(30)(a) of the Company Disclosure Letter.

(b)

Schedule 3.1(30)(b) of the Company Disclosure Letter identifies a complete list of the following information in respect of the Company Employees:

(i)

Employee number;

(ii)

Whether they are employed by the Company or a Subsidiary (and if employed by a Subsidiary, the specific Subsidiary with which they are employed);

(iii)

Position/title, classification or job band;

(iv)

Employment status (e.g. full-time, part-time, temporary, casual, seasonal, co-op student, non-union, unionized (and if unionized, the specific Collective Agreement which governs their employment));

(v)

Total annual remuneration, including a breakdown of hourly rate of pay or salary and applicable Employee Plans;

(vi)

Regular or standard hours of work per day and per week;

(vii)

Annual vacation entitlement and number of vacation days accrued and unused; and

(viii)

Original hire date or, for unionized employees, seniority date.

(c)

The Company and its Subsidiaries are in material compliance with all terms and conditions of all Laws respecting employment, including pay equity, employment equity, employment standards, labour, human rights, privacy, workers’ compensation and occupational health and safety, and there are no material pending or outstanding contractual, statutory, civil law and/or common law claims, demands, actions, applications, complaints, investigations, proceedings or orders under any such Law and to the knowledge of the Company there is no basis for such claims.

(d)

All amounts due or accrued for all salary, wages, bonuses, commissions and benefits under Employee Plans, Taxes, deductions and remittances and/or other similar accruals have either been paid or remitted or properly accrued (other than in respect of Company RSUs for which Taxes are borne by the holder(s) thereof) and are accurately reflected in the books and/or records of the Company or the applicable Subsidiary.

(e)

Other than as set forth in Schedule 3.1(30)(e) of the Company Disclosure Letter, neither the execution and delivery of this Agreement, shareholder or other approval of this Agreement nor the consummation of the transactions contemplated by this Agreement could, either alone or in combination with another event, (i) entitle any employee, director, officer or independent contractor of the Company or any of its Subsidiaries to termination or severance pay, any material increase in termination or severance pay or any change of control payment, (ii) accelerate the time of payment or vesting, or materially increase the amount of compensation due to any such employee, director, officer or independent contractor, (iii) directly or indirectly cause the Company or any of its Subsidiaries to transfer or set aside any assets to fund any material benefits under any Employee Plan, (iv) otherwise give rise to any material liability under any Employee Plan, (v) limit or restrict the right to merge, materially amend, terminate or transfer the assets of any Employee Plan on or following the Effective Time, (vi) require a “gross-up,” indemnification for, or payment to any individual for any taxes imposed under Section 409A or Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code“) or any other tax, or (vii) result in the payment of any amount that could, individually or in combination with any other such payment, constitute an “excess parachute payment” as defined in Section 280G(b)(1) of the Code.

(f)

To the knowledge of the Company, neither the Company nor any of its Subsidiaries is subject to any claim for wrongful dismissal, constructive dismissal or any other claim, complaint or litigation relating to employment, discrimination or termination of employment of any current or former Company Employee or relating to any failure to hire a candidate for employment that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect in respect of the Company.

(g)

The Company and its Subsidiaries are each properly registered with the applicable workplace safety and insurance board or workers’ compensation board, as applicable. To the knowledge of the Company, there are no material outstanding assessments, penalties, fines, liens, charges, surcharges, or other amounts due or owing pursuant to any workplace safety and insurance legislation or plan.

(h)

There are no material charges pending with respect to the Company or any of its Subsidiaries under applicable occupational health and safety legislation (“OHSL“). To the knowledge of the Company, the Company and each of its Subsidiaries have complied in all material respects with the material terms and conditions of OHSL, as well as any orders issued under OHSL and there are no appeals of any material orders under OHSL currently outstanding.

31.

Labour and Employment.

(a)

Neither the Company nor any of its Subsidiaries is a party to or otherwise bound by any Collective Agreements or engaged in any negotiations with respect to any collective bargaining or union agreement and no trade union, council of trade union, employee bargaining agency, works council or affiliated bargaining agent:

(i)

holds bargaining rights with respect to any Company Employees or any other Person(s) who perform work or services in connection with the Company and/or any of its Subsidiaries by way of statute, certification, interim certification, voluntary recognition, designation or successor rights; or

(ii)

has applied to be certified as the bargaining agent of any Employees or any other Person(s) who perform work or services in connection with the Company and/or any of its Subsidiaries.

(b)

There are no actual or, to the knowledge of the Company, threatened or pending application for certification or bargaining rights or letter of understanding, with respect to any current or former Company Employee.

(c)

There is no labour strike, dispute, lock-out, work slowdown or stoppage, picketing, boycotts or similar activities, pending or involving or, to the knowledge of the Company, threatened against the Company or any of its Subsidiaries, and no such event has occurred within the last two years.

(d)

There are no pending or, to the knowledge of the Company, threatened applications by any trade union to have the Company or any of its Subsidiaries declared a related, successor, and/or common employer pursuant to applicable Law in any jurisdiction in which the Company or any of its Subsidiaries carries on business.

(e)

Neither the Company nor any of its Subsidiaries has engaged in any unfair labour practice and there are no actual, pending or, to the knowledge of the Company, threatened unfair labour practice complaints, charges or similar disputes or proceedings pertaining to the Company or any of its Subsidiaries that, individual or in the aggregate, would reasonably be expected to have a Material Adverse Effect in respect of the Company.

(a)

Schedule 3.1(32)(a) of the Company Disclosure Letter lists all material Employee Plans. The Company has provided to the Purchaser true, correct and complete copies of all such Employee Plans as amended, together with all related material documentation in respect of each Employee Plan, including funding, trust and investment management agreements, insurance contracts, service agreements, award agreements, summary plan descriptions, consultants’ reports, actuarial reports, valuations, annual information returns, financial statements and asset statements and material correspondence with any Governmental Entity, for each of at least the last three years.

(b)

Except as required by Law, no Employee Plan provides for retiree or post- employment medical, disability, life insurance or other welfare benefits to any Person, and none of the Company or any of its Subsidiaries has any obligation to provide such benefits.

33.

Insurance.

(a)

Schedule 3.1(33)(a) of the Company Disclosure Letter sets out a complete and accurate list of all insurance policies of the Company and each of its Subsidiaries as of the date of this Agreement, true and complete copies of which have been provided to the Purchaser.

(b)

Each insurance policy currently in effect that insures the physical properties, business, operations and assets of the Company and its Subsidiaries, is valid and binding and in full force and effect and there is no material claim pending under any such policies as to which coverage has been questioned, denied or disputed. There is no material claim pending under any insurance policy of the Company or of any of its Subsidiaries that has been denied, rejected, questioned or disputed by any insurer or as to which any insurer has made any reservation of rights or refused to cover all or any material portion of such claims. All material proceedings covered by any insurance policy of the Company or of any of its Subsidiaries, have been properly reported to and accepted by the applicable insurer.

34.

Taxes.

(a)

The Company and each of its Subsidiaries has duly filed all Tax Returns required to be filed by them prior to the date hereof and all such Tax Returns are complete and correct in all material respects at the time of filing.

(b)

The Company and each of its Subsidiaries has not received or claimed a refund or credit with respect to Taxes to which it is not entitled.

(c)

The Company and each of its Subsidiaries has paid all Taxes which are due and payable, all assessments and reassessments, and all other Taxes due and payable by them on or before the date hereof, other than those which are being or have been contested in good faith and in respect of which reserves have been provided in the most recently published consolidated financial statements of the Company in accordance with IFRS. The Company and its Subsidiaries have provided adequate accruals in accordance with IFRS in the most recently published consolidated financial statements of the Company for any Taxes of the Company and each of its Subsidiaries for the period covered by such financial statements that have not been paid whether or not shown as being due on any Tax Returns. Since such publication date, no material liability in respect of Taxes not reflected in such statements or otherwise provided for has been assessed, proposed to be assessed, incurred or accrued, other than in the Ordinary Course.

(d)

The Company and its Subsidiaries are properly registered and licensed for purposes of paying, collecting or remitting all applicable Taxes under all applicable Tax Laws.

(e)

No material deficiencies, claims, litigation, proceedings, investigations, proposed adjustments or matters in controversy exist or have been asserted with respect to Taxes of the Company or any of its Subsidiaries, and neither the Company, nor any of its Subsidiaries, is a party to any material action or proceeding for assessment or collection of Taxes and no such event has been asserted or threatened against the Company or any of its Subsidiaries, or any of their respective assets.

(f)

No claim has been made by any Governmental Entity in a jurisdiction where the Company and any of its Subsidiaries does not file Tax Returns that the Company, or any of its Subsidiaries, as the case may be, is or may be subject to material Tax by that jurisdiction and neither the Company nor any of its Subsidiaries carries on business in a jurisdiction in which it does not file a Tax Return in respect of income.

(g)

There are no Liens (other than Permitted Liens) with respect to Taxes upon any of the assets of the Company or any assets of its Subsidiaries.

(h)

Each of the Company and its Subsidiaries has withheld, deducted or collected all material amounts required to be withheld, deducted or collected by it on account of Taxes, has remitted all such amounts to the appropriate Governmental Entity when required by Law to do so, and complied in all material respects with all applicable Laws relating to reporting of such Taxes.

(i)

There are no outstanding agreements, arrangements or waivers extending or waiving the statutory period of limitations applicable to any material claim for, the period for the collection or assessment or reassessment of Taxes due from the Company or any of its Subsidiaries, or extending the time for filing of any Tax Returns or for the payment of any Taxes by the Company or any of its Subsidiaries for any taxable period and no request for any such waiver or extension is currently pending.

(j)

The Company and each of its Subsidiaries has provided to the Purchaser true, correct and complete copies of all material Tax Returns, examination reports and statements of deficiencies for taxable periods, or transactions completed, for which the applicable statutory periods of limitations have not expired.

(k)

Except as disclosed in Schedule 3.1(34)(k) of the Company Disclosure Letter, none of the Company nor any of its Subsidiaries is a party to or bound by (A) any agreement or arrangement with a taxing authority or (B) any obligation under any Tax sharing, Tax allocation, Tax indemnity or similar agreement or arrangement (including any transfer pricing agreement or similar agreement relating to Taxes), or (C) any agreement under which the Company or any of its Subsidiaries could be (1) liable for any material Taxes or other claims of any party or (2) required to make payments with respect to any Tax benefits (whether actual Tax benefits or deemed Tax benefits) or Tax assets, including transaction Tax benefits arising from a prior transaction.

(l)

There are no facts, circumstances or events that exist or have existed which have resulted or may result in the application of any debt forgiveness, debt parking or property seizure provisions to the Company or any of its Subsidiaries under any Law relating to Taxes, including pursuant to section 80-80.4 of the Tax Act.

(m)

The Company and each of its Subsidiaries has complied in all material respects with the intercompany transfer pricing provisions of each applicable Law relating to Taxes, including section 247 of the Tax Act, including the contemporaneous documentation and disclosure requirements thereunder.

(n)

None of the Company nor any of its Subsidiaries has and no circumstances exist that could result in any liability for Taxes of any other Person including, for greater certainty, under sections 159 or 160 of the Tax Act (or any similar provisions of federal, state, local or foreign law).

35.

Bankruptcy and Insolvency. None of the Company or any of its Subsidiaries has made an assignment in favour of its creditors or a proposal in bankruptcy to its creditors or any class thereof nor has any petition for a receiving order been presented in respect of it. None of the Company or any of its Subsidiaries has initiated any Legal Proceedings with respect to a compromise or arrangement with its creditors or for its winding up, liquidation or dissolution and, to the knowledge of the Company, no such Legal Proceedings have been threatened by any other Person. No receiver has been appointed in respect of the Company or any of its Subsidiaries or any of their respective property or assets and no execution or distress has been levied upon any of their respective property or assets and, to the knowledge of the Company, no such Legal Proceedings have been threatened by any other Person.

36.

Opinion of Financial Advisor. The Board has received the Fairness Opinion and such Fairness Opinion has not been withdrawn or modified as of the date of this Agreement.

37.

Brokers. Except for the engagement letter between the Company and the Financial Advisor and the fees payable under or in connection with such engagement, no investment banker, broker, finder, financial advisor or other intermediary has been retained by or is authorized to act on behalf of the Company or any of its Subsidiaries or is entitled to any fee, commission or other payment from the Company or any of its Subsidiaries in connection with this Agreement or any other transaction contemplated by this Agreement. In Schedule 3.1(37) of the Company Disclosure Letter, the Company has disclosed to the Purchaser all fees, commissions or other payments that may be payable to the Financial Advisor in connection with this Agreement or any other transaction contemplated by this Agreement.

38.

Ownership of Purchaser Common Shares. As of the date hereof neither the Company nor any of its Subsidiaries, whether alone or together with any person under common control with the Company or any of its Subsidiaries or a person acting jointly or in concert with any of them, directly or indirectly, beneficially own or exercise control or direction over any securities of the Purchaser nor do they have any options, rights or entitlements to acquire any securities of the Purchaser.

39.

Board Approval. The Board after consultation with the financial and legal advisors, has unanimously (with any interested directors having abstained from voting): (i) determined that the Consideration to be received by the Company Shareholders pursuant to the Arrangement is fair to such holders and that the Arrangement is in the best interests of the Company; (ii) resolved to unanimously recommend that the Company Shareholders vote in favour of the Arrangement Resolution; and (iii) authorized the entering into of this Agreement and the performance by the Company of its obligations under this Agreement, and no action has been taken to amend, or supersede such determinations, resolutions, or authorizations.

40.

Anti-Bribery and Corruption. None of the Company nor any of its Subsidiaries, nor any of their respective directors, officers or employees nor, to the knowledge of the Company, any of their respective agents or representatives, have directly or indirectly, (i) offered, promised, made or authorized, or agreed to offer, promise, make or authorize, any contribution, expense, payment or gift of funds, property or anything else of value to or for the use or benefit of any Government Official for the purpose of securing action or inaction or a decision of a Governmental Entity or a Government Official, influence over such action, inaction or decision, or any improper advantage; or (ii) taken any action which is or would be otherwise inconsistent with or prohibited by any Anti-Corruption Law binding on the Company or any of its Subsidiaries. The operations of the Company and its Subsidiaries have been conducted at all times in compliance with all applicable Anti-Corruption Laws and over the past six years there has been no suit, action, investigation, inquiry, litigation or proceeding by or before any Governmental Entity, customer, business partner or any arbitrator or any internal investigation involving the Company or any of its Subsidiaries or, to the knowledge of the Company, any of their directors, officers, employees, agents or representatives with respect to Anti-Corruption Laws, and, to the knowledge of the Company, there are no circumstances likely to lead or give rise to any such suit, action, investigation, inquiry, litigation or proceeding and none are pending or threatened. The Company and its Subsidiaries are not ineligible nor considered by any Governmental Entity to be ineligible, to tender for any contract or business with, or be awarded any contract or business by, such Governmental Entity, or to tender for or perform any sub-contracting work under a contract with such Governmental Entity. Each of the Company and its Subsidiaries have instituted and maintain policies and procedures designed to ensure compliance with such legislation, including those for the detection, prevention and reporting of violations.

41.

Economic Sanctions and Export Controls. Each of the Company, its Subsidiaries, and their respective directors and officers, and, to the knowledge of the Company, the employees, agents and representatives of the Company and its Subsidiaries are, and, to the knowledge of the Company, for the past six years have been, in compliance with all applicable Trade Control Laws. Each of the Company and its Subsidiaries have instituted and maintain policies and procedures designed to ensure continued compliance with such legislation, including those for the detection, prevention and reporting of violations. The operations of each of the Company and its Subsidiaries have been conducted at all times in compliance with Trade Control Laws and over the past six years there has been no suit, action, investigation, inquiry, litigation or proceeding by or before any Governmental Entity, customer, business partner or any arbitrator or any internal investigation involving each of the Company or any of its Subsidiaries or, to the knowledge of the Company, any of their respective directors, officers, employees, agents or representatives with respect to Trade Control Laws, and, to the knowledge of the Company, there are no circumstances likely to lead or give rise to any such suit, action, investigation, inquiry, litigation or proceeding and none are pending or threatened.

(a)

Each of the Leased Premises are set out in Schedule 3.1(42)(a) of the Company Disclosure Letter. With respect to each of the Leased Premises, to the knowledge of the Company, each of the leases pursuant to which the Company or its Subsidiaries occupy is in good standing and in full force and effect, and the Company or its Subsidiaries has the exclusive right to occupy and use the Leased Premises to conduct the business of the Company or its Subsidiaries. The performance of obligations pursuant to and in compliance with the terms of this Agreement and the completion of the transactions, including the Arrangement, will not afford any of the parties to such leases or any other person the right to terminate such leases and to the knowledge of the Company or its Subsidiaries, no parties to such leases intend to terminate same.

(b)

To the knowledge of the Company, neither the Company nor its Subsidiaries have ever been in violation of, in connection with the ownership, use, maintenance or operation of the Leased Premises and assets, any Environmental Laws, except where such violation would not have a Material Adverse Effect.

(c)

Neither the Company nor any of its Subsidiaries has used the Leased Premises, or any facility which it previously owned or leased, to generate, manufacture, process, distribute, use, treat, store, dispose of, transport or handle any Hazardous Substances other than in compliance with Environmental Laws.

(a)

Except as disclosed in Schedule 3.1(43)(a) of the Company Disclosure Letter, the Company does not own any real property.

(b)

The Company has not entered into any agreement to sell, transfer, encumber, or otherwise dispose of or impair the right, title and interest of the Company or any Subsidiary in and to real property or the air, density and easement rights relating to the owned real property and for greater certainty has not granted to any person any right of first refusal, right of first opportunity, option or similar rights to purchase the real property or any interest therein or any part thereof.

(c)

The Company directly or indirectly is the legal and beneficial owner of the owned real property.

(d)

The Company or its Subsidiaries have good and marketable title in fee simple to the owned real property free and clear from all easements, rights-of-way, restrictions, mortgages, charges, liens, executions and other encumbrances other than those that do not, individually or in the aggregate, materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company or any of the Subsidiaries.

(e)

Except as would not be reasonably expected to result in Material Adverse Effect, all by-laws, zoning, licences, certificates, consents, approvals, rights, permits and agreements required to enable the real property to be used, operated and occupied in its current and intended manner are being complied with or have been obtained and are in good standing, or to the extent that any have not already been obtained, the same are not yet required and, if not yet required but the same are material, the Company has no reason to believe that the same will not be available prior to the time that the same are so required. All building services required for the proper functioning of the real property have been obtained, are functioning properly and are fit and suitable for their intended purpose.

(f)

There are no actions, suits or legal or administrative proceedings outstanding, pending, or threatened against the real property which would adversely affect the value of the real property, or the income, if any, generated by the real property.

(g)

The present use of the real property complies, in all material respects, with all; (i) applicable legal and contractual requirements with regard to the use, occupancy, construction and operation thereof, including, without limitation, all zoning, environmental, flood hazard, fire safety, health, handicapped facilities, building and other laws, ordinances, codes, regulations, orders and requirements of any Governmental Entity; (ii) building, occupancy and other permits, license and approvals; and (iii) declarations, easements, rights-of-way, covenants, conditions and restrictions of record.

1.

(a)

The Purchaser and each of its Subsidiaries is a corporation or other entity duly incorporated, formed or organized, as applicable, validly existing and in good standing (or equivalent) under the laws of the jurisdiction of its incorporation, organization or formation, as applicable, and has all requisite power and authority to own, lease and operate its assets and properties and conduct its business as now owned and conducted.

(b)

The Purchaser and each of its Subsidiaries is duly qualified, registered, licensed or otherwise authorized to carry on business and is in good standing in each jurisdiction in which the character of its assets and properties, whether owned, leased, licensed or otherwise held, or the nature of its activities make such qualification, registration, licensing or other authorization necessary, and has all Authorizations required to own, lease and operate its properties and assets and to conduct its business as now owned and conducted, except as to the extent that any failure of the Purchaser or any of its Subsidiaries to be so qualified, registered, licenced or authorized or to possess such Authorizations could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect in respect of the Purchaser.

2.

Corporate Authorization. The Purchaser has the requisite corporate power and authority to enter into and perform its obligations under this Agreement. The execution, delivery and performance by the Purchaser of its obligations under this Agreement and the completion of the Arrangement and the other transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of the Purchaser and no other corporate proceedings on the part of the Purchaser are necessary to authorize this Agreement or the completion of the Arrangement and the other transactions contemplated hereby.

3.

Board Approval. The board of directors of the Purchaser has approved the Arrangement and the execution and performance of this Agreement.

4.

Execution and Binding Obligation. This Agreement has been duly executed and delivered by the Purchaser, and constitutes a legal, valid and binding agreement of the Purchaser enforceable against it in accordance with its terms subject only to any limitation under bankruptcy, insolvency or other Laws affecting the enforcement of creditors’ rights generally and the discretion that a court may exercise in the granting of equitable remedies such as specific performance and injunction.

5.

Non-Contravention. The execution, delivery and performance by the Purchaser of its obligations under this Agreement and the completion of the Arrangement and the other transactions contemplated hereby do not and will not (or would not with the giving of notice, the lapse of time or both):

(a)

contravene, conflict with, or result in any violation or breach of the Purchaser’s Constating Documents or the organizational documents of any of its Subsidiaries;

(b)

contravene, conflict with or result in a violation or breach of any Law applicable to the Purchaser or any of its Subsidiaries, or any of their respective properties or assets; or

(c)

allow any Person to exercise any rights, require any consent or notice under or other action by any Person, or constitute a default under, or cause or permit the termination, cancellation, acceleration or other change of any right or obligation or the loss of any benefit to which the Purchaser or any of its Subsidiaries is entitled (including by triggering any rights of first refusal or first offer, change in control provision or other restriction or limitation) under any material contract or any material Authorization to which the Purchaser or any of its Subsidiaries is a party or by which the Purchaser or any of its Subsidiaries is bound unless it would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect or a material adverse effect on the Purchaser’s ability to consummate the Arrangement.

(a)

The authorized capital of the Purchaser consists of an unlimited number of Purchaser Common Shares. As of close of business on September 30, 2022, there were 77,379,469 Purchaser Common Shares issued and outstanding. A further 6,210,000 Purchaser Common Shares have been reserved for issuance upon the due and proper exercise of certain warrants of the Purchaser (the “Purchaser Warrants“) outstanding as of September 30, 2022, and a further 5,047,881 Purchaser Common Shares have been reserved for issuance upon the due and proper exercise of certain incentive options (“Purchaser Options“) outstanding as of September 30, 2022.

(b)

All outstanding Purchaser Common Shares have been duly authorized and validly issued, are fully paid and non-assessable (and no such shares have been issued in violation of any pre-emptive or similar rights), and all Purchaser Common Shares issuable upon the exercise of the Purchaser Options, and Purchaser Warrants have been duly authorized and, upon issuance, shall be validly issued as fully paid and non- assessable. No Purchaser Common Shares have been issued and no Purchaser Options or Purchaser Warrants have been granted in violation of any Law on the part of the Purchaser or any pre-emptive or similar rights applicable to them.

(c)

Except for Purchaser Common Shares issuable pursuant to the exercise of Purchaser Options and Purchaser Warrants or as disclosed in the Purchaser Filings, there are no issued, outstanding or authorized options, equity-based awards, warrants, calls, conversion, pre-emptive, redemption, repurchase, stock appreciation or other rights, or any other agreements, arrangements, instruments or commitments of any kind that obligate the Purchaser or any of its Subsidiaries to, directly or indirectly, issue, register for sale, repurchase or redeem any securities of the Purchaser or of any of its Subsidiaries, or give any Person a right to subscribe for or acquire, any securities of the Purchaser or of any of its Subsidiaries.

(d)

There are no issued, outstanding or authorized notes, bonds, debentures or other evidences of indebtedness or any other agreements, arrangements, instruments or commitments of any kind that give any Person, directly or indirectly, the right to vote with holders of Purchaser Common Shares on any matter except as required by Law.

7.

Purchaser Common Shares. All Purchaser Common Shares to be issued under this Agreement will, when issued in accordance with the terms of the Agreement, be validly issued as fully paid and non- assessable shares in the capital of the Purchaser.

8.

Share Ownership. The Purchaser and its Affiliates and persons acting jointly or in concert with the Purchaser and its Affiliates do not beneficially own or exercise control or direction over any Company Common Shares or other securities of the Company as of the date of this Agreement.

9.

Securities Law Matters.

(a)

The Purchaser is not a “reporting issuer” in any of the provinces or territories of Canada. The Purchaser Common Shares are quoted on the Nasdaq. The Purchaser is in compliance in all material respects with all rules, policies and other requirements of the Nasdaq applicable to it. Other than as disclosed in the Purchaser Filings, the Purchaser is not required to file reports with, or furnish reports to, any securities regulatory authority other than Nasdaq and the SEC.

(b)

The documents comprising the Purchaser Filings that were required to be filed pursuant to applicable Securities Laws comply as filed or furnished in all material respects with the requirements of applicable Securities Laws and, where applicable, the rules and policies of the Nasdaq and did not, as of the date filed (or, if amended or superseded by a subsequent filing prior to the date of this Agreement, on the date of such filing), contain any Misrepresentation. The Purchaser has, since May 13, 2021, complied and is in compliance with applicable Securities Laws and the rules, policies and requirements of the Nasdaq in all material respects. The Purchaser has timely filed with the Securities Authorities all material forms, reports, schedules, certifications, statements and other documents required to be filed by it under applicable Securities Laws and where applicable, the rules and policies of the Nasdaq since May 13, 2021. The Purchaser has not filed any confidential material change report, or equivalent thereof, with the Securities Authorities which at the date hereof remains confidential. There are no outstanding or unresolved comments in comments letters that the Purchaser has received from any Securities Authority with respect to any of the Purchaser Filings and, to the Purchaser’s knowledge, neither the Purchaser nor any of the Purchaser Filings are subject of an ongoing audit, review, comment or investigation by any Securities Authority, or in the case of the Purchaser, the Nasdaq.

(c)

The Purchaser is not subject to any cease trade or other order of the Nasdaq or any Securities Authority, and, to the knowledge of the Purchaser, no investigation or other proceedings involving the Purchaser that may operate to prevent or restrict trading of any securities of the Purchaser are currently in progress or pending before the Nasdaq or any Securities Authority.

10.

Financial Statements.

(a)

The audited consolidated financial statements of the Purchaser (including any of the notes or schedules thereto, the auditors’ report thereon) for the year ended December 31, 2021 and the unaudited interim condensed consolidated financial statements of the Purchaser for the six months ended June 30, 2022: (i) were prepared in accordance with IFRS, (ii) fairly present, in all material respects, the assets, liabilities (whether accrued, absolute, contingent or otherwise), consolidated financial position, results of operations or financial performance and cash flows of the Purchaser and its respective Subsidiaries as of the dates set out in such statements and the consolidated financial position, results of operations or financial performance and cash flows of the Purchaser and its respective Subsidiaries as at the dates and for the respective periods covered by such financial statements (except as may be expressly indicated in the notes to such financial statements) and (iii) reflect appropriate reserves in respect of contingent liabilities, if any. The Purchaser does not intend to make any material correction or restatement of, nor, to the knowledge of the Purchaser, is there any basis for any material correction or restatement of, any aspect of any of the financial statements referred to in this Paragraph (10)(a). Except as described in the notes to the Purchaser’s audited consolidated financial statements as at and for the fiscal year ended December 31, 2021 and the unaudited interim condensed consolidated financial statements for the six months ended June 30, 2022, there has been no material change in the Purchaser’s accounting policies since December 31, 2021. There are no, nor are there any commitments to become a party to, any off-balance sheet transactions of the Purchaser or of any of its Subsidiaries with unconsolidated entities or other Persons.

(b)

Since December 31, 2021, the financial books, records and accounts of the Purchaser and each of its Subsidiaries: (i) have been maintained, in all material respects, in accordance with IFRS; (ii) are stated in reasonable detail; (iii) accurately and fairly reflect all the material transactions, acquisitions and dispositions of the Purchaser and its Subsidiaries; and (iv) accurately and fairly reflect the basis of the Purchaser’s financial statements for periods beginning on or after such date.

11.

No Liabilities. Other than as set out or reflected in the interim condensed consolidated financial statements of the Purchaser for the six months ended June 30, 2022, or incurred in the Ordinary Course since the date of such financial statements or in connection with this Agreement, the Purchaser does not have any liabilities or obligations of any nature (whether absolute, accrued, contingent or otherwise).

12.

Compliance with Laws. The Purchaser and each of its Subsidiaries is, and, to the knowledge of the Purchaser, since May 13, 2021 has been, in compliance with all applicable Laws (including Environmental Laws) and neither the Purchaser nor any of its Subsidiaries is, to the knowledge of the Purchaser, under any investigation with respect to, has been charged or to the knowledge of the Purchaser threatened to be charged with, or has received notice of, any violation or potential violation of any Law or a disqualification by a Governmental Entity except, in each case, as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect in respect of the Purchaser.

13.

Environmental. None of the Purchaser nor any of its Subsidiaries have Released, and, to the knowledge of the Purchaser, no other Person has Released, any Hazardous Substances in violation of Environmental Laws on, at, in, under or from any real property currently owned or leased by the Purchaser or any of its Subsidiaries or, to the knowledge of the Purchaser, any real property previously owned or leased by the Purchaser or any of its Subsidiaries.

14.

Authorizations and Licenses.

(a)

The Purchaser and each of its Subsidiaries own, possess or have obtained all Authorizations that are required by Law in connection with the operation of the business of the Purchaser and each of its Subsidiaries as presently conducted, or in connection with the ownership, operation or use of the property of the Purchaser, except as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect in respect of the Purchaser.

(b)

The Purchaser or its Subsidiaries, as applicable, (i) lawfully hold, own or use, and have complied with, all such Authorizations that are required by Law in connection with the operation of the business of the Purchaser and each of its Subsidiaries as presently conducted, except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect in respect of the Purchaser, (ii) each such Authorization is valid and in full force and effect, and is renewable by its terms or in the Ordinary Course; and (iii) to the knowledge of the Purchaser, no event has occurred which, with the giving of notice, lapse of time or both, could constitute a default under, or in respect of, any Authorization, except, in each case, as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect in respect of the Purchaser.

15.

No Expropriation. No property or asset of the Purchaser or any of its Subsidiaries has been taken or expropriated by any Governmental Entity nor, to the knowledge of the Purchaser, has any Governmental Entity given notice of or commenced any proceeding to take or expropriate any such property or asset.

16.

Litigation. Other than as disclosed in the Purchaser Filings, there are no claims, actions, suits, orders, directives, arbitrations, inquiries, investigations or proceedings pending or threatened against the Purchaser or any of its Subsidiaries, or, to the knowledge of the Purchaser, affecting any of their respective properties or assets that if determined adverse to the interests of the Purchaser or its Subsidiaries, could reasonably be expected to have, individually or on the aggregate, a Material Adverse Effect in respect of the Purchaser or would be reasonably expected to prevent or delay the completion of the Arrangement or the transactions contemplated hereby, nor, to the knowledge of the Purchaser, are there any events or circumstances which would reasonably be expected to give rise to any such claim, action, suit, arbitration, inquiry, investigation or proceeding. There is no bankruptcy, liquidation, winding-up or other similar proceeding pending or in progress, or, to the knowledge of the Purchaser, threatened against or relating to the Purchaser or any of its Subsidiaries. Neither the Purchaser nor any of its Subsidiaries, nor any of their respective properties or assets is subject to any outstanding judgment, order, writ, injunction or decree that could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect in respect of the Purchaser or that would or would be reasonably expected to prevent or delay the completion of the Arrangement or the transactions contemplated hereby.

17.

Tax Status. The Purchaser is a taxable Canadian corporation within the meaning of the Tax Act.

18.

Tax Liability. The Purchaser and each Subsidiary has: (i) filed, or caused to be filed, all material Tax and information returns and reports which are required to be filed, and (ii) have paid, or caused to be paid, all material Taxes levied or imposed on it or its properties, income or assets (whether or not shown on a Tax or information return) including in its capacity as a tax withholding agent, except any Taxes that are being contested in good faith by appropriate proceedings where adequate reserves have been established in accordance with IFRS. The Purchaser and each Subsidiary has made adequate provision for the payment of all material Taxes not yet due. There are no Tax disputes existing or, to the knowledge of the Purchaser or any Subsidiary, pending involving the Purchaser or any Subsidiary which could reasonably be expected to have a Material Adverse Effect.

19.

Bankruptcy and Insolvency. None of the Purchaser or any of its Subsidiaries has made an assignment in favour of its creditors or a proposal in bankruptcy to its creditors or any class thereof nor has any petition for a receiving order been presented in respect of it. None of the Purchaser nor any of its Subsidiaries has initiated any Legal Proceedings with respect to a compromise or arrangement with its creditors or for its winding up, liquidation or dissolution and, to the knowledge of the Purchaser, no such Legal Proceedings have been threatened by any other Person. No receiver has been appointed in respect of the Purchaser or any of its Subsidiaries or any of their respective property or assets and no execution or distress has been levied upon any of their respective property or assets and, to the knowledge of the Purchaser, no such Legal Proceedings have been threatened by any other Person.

20.

Questionable Payments. Neither the Purchaser nor any Subsidiary has, and to the knowledge of the Purchaser and each Subsidiary, no director, officer, agent, employee or other Person associated with or acting on behalf of the Purchaser or its Subsidiaries or any subsidiary thereof has (i) used any corporate or entity funds for any unlawful contribution, gift, entertainment, or other unlawful expense relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate or entity funds; (iii) violated or is in violation of any provision of any applicable corrupt practices, bribery or similar Laws; or (iv) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment.

21.

Investment Canada Act. The Purchaser is a “WTO investor” within the meaning of the Investment Canada Act.