Source: http://oscbulletin.carswell.com/bb/osc/bb/4217/on4217.htm
Timestamp: 2019-05-25 01:52:15
Document Index: 399329104

Matched Legal Cases: ['art 2', 'art 3', 'art 2', 'art 3', 'art 2', 'art 3', 'art 4']

OSCB 42/17
Issue 42/17 - April 25, 2019
Ont. Sec. Bull. Issue 42/17
• R.J. O'Brien & Associates Canada Inc.
• AGF Investments Inc. et al.
• Green Growth Brands Inc. -- ss. 5.1 of OSC Rule 48-501 Trading During Distributions, Formal Bids and Share Exchange Transactions, s. 9.1 of MI 61-101 Protection of Minority Security Holders in Special Transactions and s. 6.1 of NI 62-104 Take-Over Bids and Issuer Bids
• DMDConnects Services Inc.
• Northcore Resources Inc. -- s. 144
• Amundi Asset Management et al. -- ss. 78(1) and 80 of the CFA
• IIROC -- Minor Contravention Program and Early Resolution Offers -- Request for Comment
• Canadian Investor Protection Fund -- Proposed Amendments to the Oversight of CIPF -- OSC Notice and Request for Comment
• MFDA Investor Protection Corporation -- Proposed Amendments to the Oversight of MFDA IPC -- OSC Notice and Request for Comment
[Editor's Note: This decision replaces RBC Dominion Securities Inc., published on April 4, 2019 at (2019), 42 OSCB 3087. RBC Dominion Securities Inc. was published in error and is a duplicate of the decision published on December 6, 2018 at (2018), 41 OSCB 9562.]
Application for a ruling pursuant to section 74 of the Securities Act granting relief from the dealer registration requirement in section 25 of the OSA to allow the Filer, an investment dealer and member of the Investment Industry Regulatory Organization of Canada (IIROC), to use employees of a Designated Foreign Affiliate of the Filer for After-Hours Trading in securities on the Bourse de Montréal Inc. -- Relief granted, subject to terms and conditions
Securities Act, R.S.O. 1990, c. S.5, as am., ss. 25(1),74(1).
IN THE MATTER OF THE SECURITIES LEGISLATION OF ONTARIO (the Jurisdiction) AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF R.J. O'BRIEN & ASSOCIATES CANADA INC. (the Filer)
(b) the Filer has provided notice that Section 4.7(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon by the Filer in each of the remaining provinces of Canada, other than Québec (together with Ontario, the Jurisdictions).
2. The Filer is registered as an investment dealer under the securities legislation of all the provinces of Canada; is registered as a futures commission merchant under the commodity futures legislation of Ontario and Manitoba; and is registered as a dealer under the derivatives legislation of Québec.
5. R.J. O'Brien & Associates, LLC (RJOUS) is a limited liability company formed under the laws of the State of Delaware. The head office of RJOUS is located in Chicago, Illinois, United States.
6. R.J. O'Brien Limited (RJOUK) is a private unlimited company incorporated in England and Wales. The head office of RJOUK is located in London, England. Each of RJOUS and RJOUK are referred to herein as a "Designated Foreign Affiliate".
7. The Filer, RJOUS and RJOUK are privately-held businesses that are indirect subsidiaries and wholly-owned by the O'Brien family of Chicago, Illinois.
8. RJOUS is a registered futures commission merchant with the U.S. Commodity Futures Trading Commission and approved as a swap firm and a member of the National Futures Association.
9. RJOUK is a United Kingdom-based broker dealer in securities and dealer in derivatives. RJOUK is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority.
10. RJOUS and RJOUK together hold memberships and/or have third-party clearing relationships with commodity and financial futures exchanges and clearing associations, including the Chicago Mercantile Exchange Group, London Stock Exchange, the US and Europe Intercontinental Exchange, Dubai Mercantile Exchange, CBOE Futures Exchange and Eurex AG. Each of RJOUS and RJOUK may also carry positions reflecting trades executed on other exchanges through affiliates and/or third-party clearing brokers.
12. On July 9, 2018, the MX announced that the MX had approved amendments to its rules and procedures in order to accommodate the extension of the MX's trading hours. As a result of these amendments, commencing October 9, 2018, trading of certain products on the MX now commences at 2:00 a.m. Eastern Time (ET) rather than the current 6:00 a.m. ET.
13. As set out in MX Circular 111-18, in order to accommodate this earlier trading, the MX amended its rules to allow participants on the MX to have employees of affiliated corporations, including foreign affiliates, become an approved person of the MX participant and thus be able to handle trading requests originating from the MX participant's clients or clients of the MX participant's affiliated corporations or subsidiaries.
14. The Filer is an MX approved participant and each of RJOUS and RJOUK is an affiliated corporation. The Filer wishes to make use of certain designated employees of RJOUS and RJOUK (the Designated Foreign Affiliate Employees) to handle trading requests on the MX from the Filer's clients and clients of the Filer's affiliated corporations or subsidiaries during the MX's extended trading hours from 2:00 a.m. ET to 6:00 a.m. ET each day on which the MX is open for trading (the Extended Hours Activities).
15. The dealer registration requirement under the Legislation requires an individual to be registered to act as a dealing representative on behalf of a registered firm. The Exemption Sought is intended to provide the Filer with an exemption from (i) the requirement that the Filer use only registered dealing representatives to conduct the Extended Hours Activities; and (ii) the requirement that the employees of RJOUS and RJOUK who will be conducting the Extended Hours Activities be registered as dealing representatives of the Filer.
16. The Filer seeks an exemption from the dealer registration requirement because, in the absence of such exemption, each employee of RJOUS and RJOUK who was to trade on behalf of the Filer would be required to become individually registered and licensed in Canada. The Filer believes this would be duplicative since the Designated Foreign Affiliate Employees are certified under applicable US or UK law, would be supervised by the Filer's designated supervisors and would otherwise be subject to the conditions set forth below. The Filer believes this would be unduly onerous in light of the limited trading activities the Designated Foreign Affiliate Employees would be conducting on behalf of the Filer, namely only handling client orders, and only during the period from 2:00 a.m. ET to 6:00 a.m. ET.
17. The Filer has also applied to IIROC for an exemption from the registered representative requirements that are found in IIROC Dealer Member Rules 18.2(a) and 18.2(c) and the requirement to enter into an employee or agent relationship with the person conducting securities related business on its behalf that is found in IIROC Dealer Member Rule 39.3 and to register and complete proficiencies of a Trader under IIROC Dealer Member Rule 500.
18. The Filer anticipates that the IIROC Relief, if granted, will be subject to certain conditions, including:
(a) The Designated Foreign Affiliate Employees must be certified under the applicable laws of the US or UK in a category that permits trading the types of products which they will be trading on the MX.
(b) The Designated Foreign Affiliate Employees will be permitted to accept and enter orders from clients of the Filer or clients of the Filer's affiliated corporations or subsidiaries during the period from 2:00 a.m. ET to 6:00 a.m. ET and will not be permitted to give advice.
(e) The Filer and each Designated Foreign Affiliate must jointly and severally undertake to ensure IIROC has, upon request, prompt access to the audit trail of all trades that relate to Extended Hours Activities and records relating thereto;
19. The Exemption Sought would apply to Designated Foreign Affiliate Employees who are designated and recorded on a list maintained by the Designated Supervisors, which list must be provided to IIROC in writing and updated on at least an annual basis.
20. The Filer and each of RJOUS and RJOUK will enter into an agency arrangement pursuant to which
(a) RJOUS and RJOUK will, among other things, agree to designate members of its staff to serve as Designated Foreign Affiliate Employees who are properly registered, licensed, certified or authorized in their home jurisdiction and sufficiently skilled and familiar to undertake such trading and front office activity, and further agree that the activities of the Designated Foreign Affiliate Employees permitted under this exemptive relief shall be supervised by the Designated Supervisors of the Filer; and
(b) the Filer will assume all responsibility for the actions of the Designated Foreign Affiliate Employees and of RJOUS and RJOUK that relate to the Filer's clients regarding this trading on MX, and the Filer will acknowledge that it will be liable under IIROC rules for such actions.
21. All MX trading rules will apply to orders entered by the Designated Foreign Affiliate Employees.
22. Other than individual registration, all other existing Canadian regulatory requirements would continue to apply to this arrangement, including without limitation:
(a) the Filer's client accounts would continue to be carried on the books of the Filer;
(b) all communications with the Filer's clients will continue to be in the name of the Filer; and
(c) the Filer's client account monies, security and property will continue to be held by the Filer or its approved custodian.
23. The Filer will establish and maintain written policies and procedures that address the performance and supervision requirements relating to MX extended trading hours.
24. The Filer will disclose this extended trading hours arrangement to clients for its MX trading services.
(b) the Designated Foreign Affiliate Employees are permitted to accept and enter orders from clients of the Filer or clients of the Filer's affiliated corporations or subsidiaries on behalf of the Filer during the period from 2:00 a.m. ET to 6:00 a.m. ET, and will not be permitted to give advice;
(e) the Filer and the Designated Foreign Affiliate enter into an agency arrangement substantially as described in paragraph 20, and such agreement remains in effect; and
IN THE MATTER OF THE SECURITIES LEGISLATION OF ONTARIO (the Jurisdiction) AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF AGF INVESTMENTS INC. (the Filer) AND AGF CANADIAN GROWTH EQUITY FUND, AGF FLEX ASSET ALLOCATION FUND (each, a Terminating Fund and collectively, the Terminating Funds)
Green Growth Brands Inc. -- ss. 5.1 of OSC Rule 48-501 Trading During Distributions, Formal Bids and Share Exchange Transactions, s. 9.1 of MI 61-101 Protection of Minority Security Holders in Special Transactions and s. 6.1 of NI 62-104 Take-Over Bids and Issuer Bids
Section 6.1 of NI 62-104, section 9.1 of MI 61-101 and section 5.1 of OSC Rule 48-501 -- Issuer bid -- relief from the requirements applicable to issuer bids in Part 2 of NI 62-104 and Part 3 of MI 61-101, and the restrictions set out in section 2.2 of OSC Rule 48-501 applicable to issuer-restricted persons during an issuer-restricted period -- issuer proposes to repurchase a specified number of its shares from one of its shareholders as part of a larger transaction involving the acceleration of the expiry of a take-over bid initiated by the issuer and an agreement to negotiate a commercial arrangement between the issuer and the target of such take-over bid -- the selling shareholder is a related party of the issuer -- the issuer is relying on the specified markets exemption from the formal valuation requirement in MI 61-11 and the exemption from the minority approval requirement in MI 61-101 as, at the time the transaction was agreed to, neither the fair market value of the subject matter of, nor the fair market value of the consideration for, the transaction, insofar as it involves interested parties, exceeded 25% of the issuer's market capitalization -- issuer has received executed written consents from disinterested shareholders in respect of the share repurchase holding a majority of the outstanding voting shares -- each consenting party received all material information in respect of the proposed transaction and had the opportunity to obtain independent legal advice -- the issuer received an opinion from an independent investment bank that is independent of all interested parties in respect of the share repurchase, that the consideration to be paid pursuant to the share repurchase is fair, from a financial point of view, to the issuer's shareholders (other than the selling shareholder) -- the independent members of the issuer's board have unanimously determined that the proposed transaction is in the best interests of the issuer and its shareholders (other than the selling shareholder) and that the share repurchase will not adversely affect the issuer's financial position and will be accretive -- the issuer has also received an opinion from the independent investment bank that a liquid market for the shares exists and that it is reasonable to conclude that, following the completion of the share repurchase, there will be a market for holders of shares who do not participate in the share repurchase that is not materially less liquid than the market that existed at the time of the share repurchase -- share repurchase will not close until at least 10 calendar days after the granting of the order -- share repurchase is exempt from the requirements applicable to issuer bids in Part 2 of NI 62-104 and Part 3 of MI 61-101 and the issuer-restricted person restrictions in section 2.2 of OSC Rule 48-501, subject to conditions, including that, at the time of the share repurchase, the purchase price thereunder, on a per share basis, is not greater than the market price of the issuer's shares, as determined in accordance with NI 62-104.
Ontario Securities Commission Rule 48-501 Trading During Distributions, Formal Bids and Share Exchange Transactions, ss. 2.2 and 5.1.
IN THE MATTER OF THE SECURITIES ACT, R.S.O. 1990, c.S.5, AS AMENDED AND IN THE MATTER OF GREEN GROWTH BRANDS INC.
ORDER (Section 5.1 of Ontario Securities Commission Rule 48-501, Section 9.1 of Multilateral Instrument 61-101 and Section 6.1 of National Instrument 62-104)
UPON the application (the "Application") of Green Growth Brands Inc. (the "Filer") for an order pursuant to:
(a) section 6.1 of National Instrument 62-104 Take-Over Bids and Issuer Bids ("NI 62-104") and section 9.1 of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions ("MI 61-101") exempting the Filer from the requirements applicable to issuer bids in Part 2 of NI 62-104 and Part 3 of MI 61-101 (the "Issuer Bid Requirements") in connection with the proposed purchase by the Filer (the "Share Repurchase") of an aggregate of 27,300,000 common shares of the Filer held by GA Opportunities Corp. ("GAOC", and such shares, the "Subject Shares") in connection with the Proposed Transaction (as defined below); and
(b) section 5.1 of Ontario Securities Commission Rule 48-501 Trading During Distributions, Formal Bids and Share Exchange Transactions ("Rule 48-501") exempting the Filer from the restrictions in section 2.2 of Rule 48-501 (the "Issuer-Restricted Person Restrictions") in respect of the Subject Shares.
AND UPON the Filer, (and GAOC in respect of paragraphs 5, 6, 7, 10, 11, 18, 22, 23, 26, 42 and 47 as they relate to GAOC, and Aphria in respect of paragraphs 9, 10, 11, 13, 14, 15, 17, 24, 25, 42, and 47 as they relate to Aphria) having represented to the Commission that:
1. The Filer is a corporation existing under the Business Corporations Act (Ontario) (the "OBCA") and in good standing. The Filer's registered office is 5300 Commerce Court West, 199 Bay Street, Toronto, ON, M5L 1B9 and its principal place of business is 4300 East Fifth Avenue, Columbus, OH, 43219.
2. The Filer is a reporting issuer in British Columbia, Alberta, Ontario, Quebec, and Nova Scotia, and is not in default of any requirement of securities legislation in the jurisdictions in which it is a reporting issuer.
3. The authorized capital of the Filer consists of an unlimited number of common shares (the "Common Shares"), and an unlimited number of proportionate voting shares (the "PV Shares", and together with the Common Shares, the "Voting Shares"). As at March 31, 2019, the Filer had 188,226,166 Common Shares and 40,698 PV Shares outstanding. The Common Shares are listed for trading on the Canadian Stock Exchange (the "CSE") and on the OTCQB Venture Market under the symbols "GGB" and "GGBXF", respectively. The PV Shares are not listed on any marketplace.
4. The holders of Common Shares are entitled to one vote for each Common Share held, and holders of PV Shares are entitled to 500 votes for each PV Share held.
5. GAOC is a corporation existing under the OBCA and in good standing. GAOC has its registered office at 2 Bloor Street West, Suite #1805, Toronto, ON, M4W 3E2. GAOC is not a reporting issuer in any jurisdiction.
6. GAOC is the beneficial owner of 27,500,000 Common Shares, representing approximately 13.2% of the outstanding Voting Shares as of March 31, 2019.
7. GAOC is a party to an amended and restated nomination rights agreement (the "Nomination Agreement") dated November 9, 2018 between the Filer and certain of its shareholders. Pursuant to the terms of the Nomination Agreement, GAOC has the right to nominate one director of the Filer so long as it beneficially owns, directly or indirectly, and in the aggregate, more than 5% of the issued and outstanding Common Shares (on a non-diluted basis). GAOC has not exercised its rights under the Nomination Agreement and will not do so prior to the completion of the Share Repurchase, at which time its rights under the Nomination Agreement will extinguish.
8. The Filer: (a) does not have beneficial ownership of, or control or direction over, any voting securities of GAOC or any of its affiliates or associates; (b) does not have any representatives on the board of directors of GAOC or any of its affiliates or associates, or the right to appoint any such representatives; and (c) does not have any relationships with GAOC other than the Nomination Agreement and GAOC's ownership interest in the Filer.
9. Aphria Inc. ("Aphria") is a corporation existing under the OBCA and in good standing. Aphria is a reporting issuer in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland. The common shares of Aphria (the "Aphria Shares") are listed for trading on the Toronto Stock Exchange (the "TSX") and the New York Stock Exchange under the symbol "APHA".
10. On September 24, 2018, GAOC and Aphria entered into a share purchase agreement pursuant to which certain third party securities were purchased by GAOC from Aphria (the "Initial Share Purchase Agreement"). These securities were sold by GAOC and the proceeds from the sale were used by GAOC to purchase 15,271,040 Common Shares at $2.00 per Common Share. As payment for the third party securities, GAOC issued Aphria a promissory note in the principal amount of $30,542,081 bearing interest at 12% per annum for a five year term (the "Initial GAOC Promissory Note"). GAOC also granted Aphria an option to acquire the 15,271,040 Common Shares (the "First Option"). The exercise price of the First Option is equal to the principal amount of the Initial GAOC Promissory Note. The ability of Aphria to exercise the First Option is subject to certain conditions relating to the legalization of cannabis federally in the United States and requires the approval of the TSX. In order to address certain U.S. regulatory matters, GAOC has agreed that it would not, without the prior written consent of Aphria, cause or permit any amendment to the terms of the First Option.
11. On November 24, 2018, GAOC and Aphria amended and restated the Initial Share Purchase Agreement to reflect the purchase of additional third party securities by GAOC from Aphria. These securities were sold by GAOC and the proceeds from the sale were used by GAOC to purchase 12,228,960 Common Shares at $2.00 per Common Share. Concurrently, GAOC and Aphria amended and restated the Initial GAOC Promissory Note (the "GAOC Promissory Note") to reflect a principal amount of $55,000,000 bearing interest at 12% per annum for a five year term. GAOC also orally agreed to extend the terms and conditions of the First Option to include the additional 12,228,960 Common Shares, such that the option granted to Aphria by GAOC is in respect of all 27,500,000 Common Shares held by GAOC (the "Option").
12. After the close of trading on December 27, 2018, the Filer issued a press release (the "Intention Press Release") announcing its intention to make an offer to purchase all of the issued and outstanding Aphria Shares (the "Offer"). The Offer was formally commenced with the filing of the take-over bid circular (the "Bid Circular") on January 22, 2019 and the publication of a newspaper advertisement on January 23, 2019. Pursuant to the Offer, holders of Aphria Shares who tender to the Offer will receive 1.5714 Common Shares in exchange for each Aphria Share. Based on the closing price of Common Shares on:
(a) December 24, 2018 (i.e. the last trading day prior to the Intention Press Release), the implied consideration under the Offer was $6.68 per Aphria Share (compared to a closing market price of $7.56 per Aphria Share on the TSX); and
(b) January 21, 2019 (i.e. the last trading day prior to the date of the Bid Circular), the implied consideration under the Offer was $9.41 per Aphria Share (compared to a closing market price of $9.92 per Aphria Share on the TSX).
13. On February 6, 2019, Aphria filed its directors' circular (the "Aphria Circular") in response to the Offer. The Aphria Circular stated that, following receipt of the recommendation of a committee of independent directors, and an inadequacy opinion from its financial advisor, the board of directors of Aphria unanimously concluded that the Offer is undervalued and inadequate and not in the best interests of Aphria, Aphria's shareholders or Aphria's other stakeholders. Accordingly, the board of directors of Aphria recommended that Aphria shareholders reject the Offer.
14. Subsequent to the Intention Press Release, representatives of the Filer and Aphria have engaged in various discussions, including to determine whether a friendly acquisition transaction could be agreed to between the parties. These discussions have not been successful.
15. Based on the current trading prices of the Aphria Shares and the Common Shares, each of the Filer and Aphria believe that the market is not supportive of the Offer and that the Offer will fail to satisfy the statutory requirement that more than 50% of the outstanding Aphria Shares (excluding the Filer's 3,000,000 Aphria Shares) be deposited under the Offer and not withdrawn. As of March 31, 2019, 17,741 (of the 250,306,607) Aphria Shares, representing 0.007% of the issued and outstanding Aphria Shares, were deposited under the Offer.
16. Other than between January 10, 2019 and January 17, 2019, at no point since the Intention Press Release has the implied consideration under the Offer for the Aphria Shares been equal to or greater than the market price of the Aphria Shares on the TSX.
17. Given the anticipated failure of the Offer, and to reduce the uncertainty that both Aphria and the Filer believe exist as a result of the market overhang created by the Offer, representatives of Aphria and the Filer have also discussed alternatives (including taking no action and letting the Offer proceed to its expiry on May 9, 2019, potential joint ventures, sharing intellectual property and limited unilateral or bilateral asset sales) which have culminated in a proposed transaction (the "Proposed Transaction") consisting of three cross-conditional components, namely:
(a) the acceleration of the expiry of the Offer;
(b) the concurrent Share Repurchase and termination of the Option and GAOC Promissory Note; and
(c) the agreement of the Filer and Aphria to, within three months of the completion of the Share Repurchase, enter into good faith negotiations to conclude a commercial arrangement involving matters related to research and development, licensing and/or distribution (the "Commercial Arrangement").
18. The aggregate price payable by the Filer to GAOC for the Subject Shares is $89,000,000 (the "Purchase Price"), or approximately $3.26 per Subject Share, representing an approximately:
(a) 19% discount to the closing price of the Common Shares on April 11, 2019; and
(b) 29% discount to the 20 day volume weighted average price of the Common Shares on April 11, 2019.
19. The Filer will satisfy payment of the Purchase Price to GAOC as and when due in accordance with the terms of the Definitive Agreements (as defined below), which Purchase Price will be comprised of:
(a) a secured promissory note in the principal amount of $39,000,000, bearing interest at 3% per annum with a term of six months (the "GGB Promissory Note");
(b) the proceeds from the sale of the Filer's 3,000,000 Aphria Shares following the expiry of the Offer; and
(c) the proceeds from the exercise of certain issued and outstanding warrants of the Filer (the "Warrants", and such exercise, the "Warrant Exercise").
20. The Warrants were issued on November 9, 2018 in connection with a business combination of the Filer and consist of an aggregate of 16,635,085 Warrants exercisable for Common Shares, with a weighted average exercise price of $1.80 per Common Share, and 19,097 Warrants exercisable for PV Shares, with an exercise price of $900 per PV Share, exercisable, in each case, until November 9, 2020. No holder of Warrants participating in the Warrant Exercise will receive, directly or indirectly, in connection with such Warrant Exercise, any payment, beneficial enhancement or inducement of any kind, for exercising his/her/its Warrants.
21. The proceeds received from the Filer upon the Warrant Exercise will be sufficient to satisfy amounts remaining under the Purchase Price after taking into account the proceeds from the sale of the Filer's 3,000,000 Aphria Shares and the GGB Promissory Note.
22. GAOC will then transfer the $50,000,000 in cash received from the Filer to Aphria, and pay the proceeds received under the GGB Promissory Note to Aphria in consideration for the termination of the Option and GAOC Promissory Note.
23. Following completion of the Share Repurchase, GAOC will beneficially own 200,000 Common Shares (the "Remaining Shares"), representing 0.12% of the outstanding Voting Shares (following the cancellation of the Subject Shares but assuming that no Warrants are exercised). The Remaining Shares will be subject to a lock-up agreement between the Filer and GAOC (or its permitted transferee) pursuant to which 16,666 Common Shares will be released per month for a period of 12 months. Once released from the terms of the lock-up, GAOC (or its permitted transferee) will have full discretion with respect to the Remaining Shares. The Remaining Shares will not be repurchased by the Filer.
24. Since December 2018, Aphria has been considering alternatives to unlocking the value underlying the Option and Promissory Note and has worked with its financial advisor in connection with its consideration of same. Given the restrictive provisions in the Option and the Promissory Note and the rules of the TSX, Aphria, with the assistance of, and following discussions with, its financial advisor determined that there were very few, if any, alternatives to unlock or derive near term value from the Option and the Promissory Note. Aphria has determined that the Filer repurchasing the Common Shares subject to the Option would be in the best interests of Aphria.
25. For the purposes of the Proposed Transaction, the members of the board of directors of Aphria are independent of the Filer and GAOC (excluding Shawn Dym, who is a former director of the Filer) and have unanimously determined that the Proposed Transaction is in the best interests of Aphria.
26. GAOC has determined that the Share Repurchase is in the best interests of GAOC.
27. In connection with the Proposed Transaction, the Filer has received an oral opinion from its financial advisor, Canaccord Genuity Corp. ("Canaccord"), an investment bank that is independent of all "interested parties" (as defined below) in the Share Repurchase, stating that the consideration to be paid pursuant to the Share Repurchase is fair, from a financial point of view, to the Filer's shareholders (other than GAOC). Canaccord has completed all work necessary to support the delivery of the long-form opinion in written form (the "Fairness Opinion") and will deliver the Fairness Opinion to the Filer within five business days of the date of this Order. For the purposes of this Order, all references to "interested parties" will have the meaning ascribed to that term in MI 61-101, but will also include Aphria.
28. For the purposes of the Proposed Transaction, the members of the board of directors of the Filer (the "Board") are independent directors within the meaning of MI 61-101, except for Peter Horvath, the current Chief Executive Officer of the Filer, and Timothy Moore, the former Chief Executive Officer of the Filer.
29. The independent members of the Board have unanimously determined, acting in good faith, that:
(a) the Proposed Transaction is in the best interests of the Filer and its shareholders (other than GAOC);
(b) in considering the Proposed Transaction as a whole, the Share Repurchase will not adversely affect the financial position of the Filer and will be accretive to the Filer;
(c) the Share Repurchase, and the issuance of Voting Shares upon the exercise of Warrants to fund the Share Repurchase, will not materially affect control of the Filer.
30. The Filer agreed to the terms of the Share Repurchase in order to facilitate the Proposed Transaction, and not to give preferential treatment to GAOC or Aphria, or to provide a method for the Filer to purchase the Subject Shares. The Filer believes that:
(a) the Proposed Transaction reduces uncertainty by eliminating the market overhang created by the outstanding Offer which is impeding the ability of the Filer to move forward in implementing its business plans;
(b) the Proposed Transaction will be accretive to the Filer as a result of the significant difference between the Purchase Price, on a per share basis, and the current trading price of the Common Shares;
(c) the Commercial Arrangement may provide the Filer with research and development, licensing and/or distribution opportunities;
(d) the elimination of GAOC's position in the Filer is important as it allows for the extinguishment of GAOC's rights under the Nomination Agreement, and because the interests of GAOC do not necessarily align with those of the other shareholders of the Filer; and
(e) shareholders of the Filer (other than GAOC) will be able to sell their Common Shares on the market for cash proceeds in excess of the Purchase Price, on a per share basis.
31. The Share Repurchase is an integral part of the Proposed Transaction. As a result of the fact that no shareholders of the Filer, other than GAOC, are a party to the Proposed Transaction, it is not possible for the Filer to offer to acquire Common Shares from all holders of Common Shares on the same terms and conditions as those contemplated by the Share Repurchase.
32. GAOC is a "related party" of the Filer (as such term is defined in MI 61-101) and the Share Repurchase is a "related party transaction" under paragraph (a) of that definition in MI 61-101.
33. Paragraph 5.5(b) of MI 61-101 (the "Specified Markets Exemption") exempts related party transactions from the formal valuation requirement if no securities of the issuer are listed or quoted on the TSX, Aequitas NEO Exchange Inc., the New York Stock Exchange, the American Stock Exchange, the NASDAQ Stock Market, or a stock exchange outside of Canada and the United States other than the Alternative Investment Market of the London Stock Exchange or the PLUS markets operated by PLUS Markets Group plc. The Filer is able to satisfy the Specified Markets Exemption and is relying on same in respect of the Share Repurchase.
34. Paragraph 5.7(1)(a) of MI 61-101 (the "25% Market Cap Exemption") exempts related party transactions from the minority approval requirement if, at the time the transaction is agreed to, neither the fair market value of the subject matter of, nor the fair market value of the consideration for, the transaction, insofar as it involves interested parties, exceeds 25% of the issuer's market capitalization. The Share Repurchase is able to satisfy the conditions of the 25% Market Cap Exemption and accordingly, the Filer is relying on same in respect of the Share Repurchase.
35. The Share Repurchase constitutes an "issuer bid" for the purposes of NI 62-104 and MI 61-101, to which the Issuer Bid Requirements would apply. The Share Repurchase cannot be made in reliance upon the exemptions from the Issuer Bid Requirements set out in Part 4 of NI 62-104 and section 3.4 of MI 61-101.
36. Paragraph 3.4(b) of MI 61-101 (the "Liquid Market Exemption") exempts an issuer from the requirement to obtain a formal valuation in connection with an issuer bid if: (a) a liquid market exists; (b) it is reasonable to conclude that, following the completion of the bid, there will be a market for holders of the securities who do not tender to the bid that is not materially less liquid than the market that existed at the time of the making of the bid; and (c) if an opinion is provided by a person qualified and independent of all interested parties to the issuer bid to the issuer that there is a liquid market in the class at the date the transaction is publicly announced. The Filer has obtained an oral liquidity opinion from Canaccord in accordance with the requirements of MI 61-101 and is able to satisfy the conditions of the Liquid Market Exemption. Canaccord has completed all work necessary to support the delivery of the liquidity opinion in written form (the "Liquidity Opinion") and will deliver the Liquidity Opinion to the Filer within five business days of the date of this Order.
37. The Filer has received executed written consents in support of the Share Repurchase from holders of Voting Shares (the "Consenting Shareholders") holding a majority of the outstanding Voting Shares, other than Voting Shares held by: (a) interested parties for a related party transaction; (b) related parties of an interested party, unless the related party meets that description solely in its capacity as a director or senior officer of one or more entities that are neither interested parties nor issuer insiders of the Filer; or (c) a joint actor with a person or company referred to in (a) or (b) above, in respect of the Share Repurchase (such excluded persons, the "Excluded Persons"). Each Consenting Shareholder has had the opportunity to obtain independent legal advice.
38. Each Consenting Shareholder was provided with:
(a) draft versions of the definitive agreements to be entered into by the Filer, GAOC and Aphria (collectively, the "Definitive Agreements") documenting the Proposed Transaction;
(b) written confirmation that the Filer will not enter into the Definitive Agreements unless and until delivery by Canaccord of a favourable oral Fairness Opinion and Liquidity Opinion; and
(c) a written undertaking by the Filer to provide a copy of the Transaction Disclosure Documents (as defined below) as soon as they become available.
39. No Consenting Shareholder (including those Consenting Shareholders that are not related parties of the Filer) has received, or will receive, any collateral benefit in respect of the Share Repurchase, the Warrant Exercise or in connection with agreeing to provide its written consent.
40. Each Consenting Shareholder will be provided with a copy of the following documents (collectively, the "Transaction Disclosure Documents"), which documents will also be filed on SEDAR:
(a) the final form of Definitive Agreements;
(b) the news release (the "News Release") of the Filer announcing the execution of the Definitive Agreements, and the related material change report (the "MCR"). The MCR will contain the information required pursuant to section 5.2 and paragraphs 5.3(3)(g) and (h) of MI 61-101. Additionally, the News Release and MCR will also disclose:
(i) the material terms and conditions of the Definitive Agreements;
(ii) that the Proposed Transaction is conditional upon, among other things, receipt of exemptive relief from the Issuer Bid Requirements from the Commission; and
(iii) that the Filer has been granted exemptive relief from the Issuer Bid Requirements in connection with the Share Repurchase;
(c) the Fairness Opinion; and
(d) the Liquidity Opinion.
41. Each Consenting Shareholder will also be provided with any document issued and filed by the Filer on SEDAR in respect of the Share Repurchase prior to the closing of the Share Repurchase.
42. At the time that the Filer, GAOC and Aphria agreed to the Purchase Price, and entered into the Definitive Agreements, none of the Filer, GAOC or Aphria, or their respective personnel who negotiated the Share Repurchase or made, participated in the making of, or provided advice in connection with, the decision to enter into the Definitive Agreements, was aware of any "material change" or "material fact" (each as defined in the Securities Act (Ontario)) with respect to the Filer or the Voting Shares that has not been generally disclosed.
43. As the Filer is an "issuer-restricted person" for the purposes of Rule 48-501 and the Definitive Agreements will be entered into prior to the expiry of the Offer during an "issuer-restricted period" (as defined in Rule 48-501), the Filer requires relief from the Issuer-Restricted Person Restrictions.
44. The Filer has not bid for or purchased, and will not bid for or purchase, any Common Shares on a published market during the "issuer-restricted period" (as defined in Rule 48-501) that applies until the expiry of the Offer.
45. The Share Repurchase will not occur if the Purchase Price, on a per share basis, is greater than the market price (determined in accordance with NI 62-104) of the Common Shares.
46. The Filer is not required to obtain any approval of its shareholders in connection with the Proposed Transaction at a meeting called for such purpose under corporate or securities laws.
47. No third party consents or approvals (including from governmental, regulatory or self-regulatory organizations such as the TSX) are required by any of the Filer, GAOC or Aphria for any of the actions comprising the Proposed Transaction.
48. The Share Repurchase will not close until at least 10 calendar days after the granting of this Order.
IT IS ORDERED pursuant to section 6.1 of NI 62-104 and section 9.1 of MI 61-101 that the Filer be exempt from the Issuer Bid Requirements in connection with the Share Repurchase, and pursuant to section 5.1 of Rule 48-501 that the Filer be exempt from the Issuer-Restricted Person Restrictions in respect of the Subject Shares, provided that:
(a) as at the time of the entering into of the Definitive Agreements, the Board is of the view that the Share Repurchase, and the Proposed Transaction as a whole, are in the best interests of the Filer and its shareholders (other than GAOC);
(b) as at the time of the closing of the Share Repurchase, no third party consents or approvals (including from governmental, regulatory or self-regulatory organizations such as the TSX) are required by any of the Filer, GAOC or Aphria in connection with the Share Repurchase;
(c) no holder of Warrants participating in the Warrant Exercise has received, or will receive, directly or indirectly, in connection with such Warrant Exercise, any payment, beneficial enhancement or inducement of any kind, for exercising his/her/its Warrants;
(d) as at the time of the closing of the Share Repurchase, the Filer is in possession of executed written consents from Consenting Shareholders holding, in the aggregate, a majority of the outstanding Voting Shares, other than Voting Shares held by Excluded Persons;
(e) no Consenting Shareholder (including those Consenting Shareholders that are not related parties of the Filer) has received, or will receive, any collateral benefit in respect of the Share Repurchase, the Warrant Exercise or in connection with agreeing to provide its written consent;
(f) prior to the closing of the Share Repurchase, each Consenting Shareholder has received all material information in respect of the Share Repurchase, including the Transaction Disclosure Documents and this Order;
(g) the Filer does not, and did not, bid for or purchase any Common Shares on a published market during the "issuer-restricted period" (as defined in Rule 48-501); and
(h) the Purchase Price, on a per share basis, is not greater than the market price (determined in accordance with NI 62-104) of the Common Shares.
DATED at Toronto this 12th day of April, 2019.
DMDConnects Services Inc.
Decision No: 2019-IC-0007
File No: 26625
IN THE MATTER OF THE SECURITIES LEGISLATION OF QUÉBEC AND ONTARIO (the Jurisdictions) AND IN THE MATTER OF THE PROCESS FOR CEASE TO BE A REPORTING ISSUER APPLICATIONS AND IN THE MATTER OF DMDCONNECTS SERVICES INC. (the Filer)
(b) the Filer has provided notice that subsection 4C.5(1) of Regulation 11-102 respecting Passport System (chapter V-1.1, r. 1) (Regulation 11-102) is intended to be relied upon in British Columbia, Alberta and Manitoba;
Terms defined in Regulation 14-101 respecting Definitions (chapter V-1.1, r. 3), in Regulation 11-102 and, in Regulation 14-501Q respecting Definitions (chapter V-1.1, r. 4) have the same meaning if used in this order, unless otherwise defined.
1. the Filer is not an OTC reporting issuer under Regulation 51-105 respecting Issuers Quoted in the U.S. Over-the-Counter Markets (chapter V-1.1, r. 24.1);
3. no securities of the Filer, including debt securities, are traded in Canada or another country on a marketplace as defined in Regulation 21-101 respecting Marketplace Operation (chapter V-1.1, r. 5)or any other facility for bringing together buyers and sellers of securities where trading data is publicly reported;
Northcore Resources Inc. -- s. 144
IN THE MATTER OF THE SECURITIES ACT, R.S.O. 1990, CHAPTER S.5, AS AMENDED (the Act) AND IN THE MATTER OF NORTHCORE RESOURCES INC.
Amundi Asset Management et al. -- ss. 78(1) and 80 of the CFA
IN THE MATTER OF THE COMMODITY FUTURES ACT, R.S.O. 1990, CHAPTER C. 20, AS AMENDED (the CFA) AND IN THE MATTER OF AMUNDI ASSET MANAGEMENT, AMUNDI (UK) LTD. AND AMUNDI SGR S.P.A.
Amendment #1 to Final Simplified Prospectus dated April 22, 2019
Received on April 22, 2019
Amendment #1 to Final Simplified Prospectus dated April 17, 2019
Received on April 18, 2019
Project #2774212
Amendment #1 to Final Annual Information Form dated April 16, 2019
Received on April 16, 2019
Project #2858300
AGF Canadian Growth Equity Fund (formerly, AGF Canadian Stock Fund)
Final Simplified Prospectus dated April 18, 2019
NP 11-202 Receipt dated April 18, 2019
Mutual Fund Series, Series D, Series F, Series FV, Series I, Series O, Series Q, Series S, Series T, Series V, Series W and Classic Series Securities
Final Simplified Prospectus dated April 15, 2019
NP 11-202 Receipt dated April 16, 2019
Series F and O units
Project #2890504
Amendment #1 dated April 15, 2019 to Final Simplified Prospectus dated April 15, 2019
NP 11-202 Receipt dated April 22, 2019
1832 Asset Management G.P. Inc.
Project #2881028
Guardian Fixed Income Select Fund (formerly, Guardian Private Wealth Bond Fund)
Series C Units, Series F Units, Series I Units, Series W Units
Worldsource Financial Management Inc. and Worldsource Securities Inc.
Project #2887706
Series A, Series A2 and Series F Units @ net asset value
Project #2887141
Combined Preliminary and Pro Forma Long Prospectus dated Apr 22, 2019
NP 11-202 Preliminary Receipt dated Apr 22, 2019
Preliminary Long Form Prospectus dated April 16, 2019
NP 11-202 Preliinary Receipt dated April 17, 2019
Project #2902576
Preliminary Simplified Prospectus dated April 16, 2019
NP 11-202 Preliminary Receipt dated April 16, 2019
Series E2 units
Series S5 units
Series P3 units
Series P2T5 units
Series E1T5 units
Series S8 units
Series E3T5 units
Series F8 units
Series P3T5 units
Series E2T5 units
Series P2 units
Series F5 units
Series E3 units
Series T8 units
Series E1 units
Series P1 units
Series T5 units
Series P1T5 units
Project #2901592
Preliminary Short Form Prospectus dated April 17, 2019
NP 11-202 Preliminary Receipt dated April 18, 2019
$30,002,000.00 -- 2,143,000 Units
Price: C$14.00 per Unit
Project #2901568
Preliminary Long Form Prospectus dated April 18, 2019
NP 11-202 Preliminary Receipt dated April 19, 2019
No securities are being offered pursuant to this prospectus (the "Prospectus").
Project #2903581
Preliminary Long Form Prospectus dated April 15, 2019
Project #2900295
Preliminary Short Form Prospectus dated April 16, 2019
$200,490,000.00 -- 3,260,000 Stapled Units
Price: $0.85 per Offered Share
Project #2901227
Project #2901504
Final CPC Prospectus dated April 15, 2019
Maximum Offering: $600,000.00 (6,000,000 Common Shares)
Project #2835576
Heritage Cannabis Holdings Corp. (formerly Umbral Energy Corp.)
NP 11-202 Preliminary Receipt dated April 17, 2019
$15,052,000.00 -- 28,400,000 Units
Price: C$0.53 per Unit
Project #2902533
Preliminary Shelf Prospectus dated April 18, 2019
Project #2903390
Final Short Form Prospectus dated April 17, 2019
NP 11-202 Receipt dated April 19, 2019
16,000,000 Subscription Receipts ($4,000,000.00)
Price: C$0.25 per Subscription Receipt
Project #2863671
Preliminary Long Form Prospectus dated April 17, 2019
25,000,000 Class A Restricted Voting Units
NP 11-202 Receipt dated April 17, 2019
$8,000,000.00 -- 10,000,000 Common Shares
Price: C$0.80 per Common Share
Project #2900130
Amended and Restated Preliminary Long Form Prospectus dated April 18, 2019
5,500,000 Common Shares -- $550,000.00
Project #2865767
Preliminary CPC Prospectus dated April 17, 2019
MINIMUM OFFERING: $250,000.00 (2,500,000 Trust Units)
MAXIMUM OFFERING: $500,000.00 (5,000,000 Trust Units)
Price: C$0.10 per Trust Unit
Project #2903155
Troilus Gold Corp. (formerly Pitchblack Resources Ltd.)
$7,000,600.00 -- 8,236,000 Common Shares
Price: C$0.85 per Offered Share
Project #2900894
$12,000,000.00 -- 9.5% UNSECURED CONVERTIBLE DEBENTURE UNITS
Janus Capital Management Inc.
Portfolio Manager & Exempt Market Dealer
IIROC -- Minor Contravention Program and Early Resolution Offers -- Request for Comment
MINOR CONTRAVENTION PROGRAM AND EARLY RESOLUTION OFFERS
IIROC is proposing amendments to its Consolidated Enforcement, Examination and Approval Rules to implement the Minor Contravention Program (MCP). IIROC is also proposing to adopt a Staff Policy Statement on Early Resolution Offers (the Staff Policy Statement).
The MCP and the Staff Policy Statement would expand the options available to IIROC Enforcement Staff to address wrongdoing in a fair and proportionate manner. The MCP would provide a more efficient means to resolve cases that cannot be adequately addressed by way of a cautionary letter but do not warrant formal disciplinary proceedings. The Staff Policy Statement would promote the efficient resolution of cases by encouraging settlement agreements at an earlier point in the enforcement process.
A copy of the IIROC Notice and appendices is also published on our website at www.osc.gov.on.ca. The comment period ends on July 24, 2019.
Canadian Investor Protection Fund -- Proposed Amendments to the Oversight of CIPF -- OSC Notice and Request for Comment
PROPOSED AMENDMENTS TO THE OVERSIGHT OF CIPF
Staff of the Ontario Securities Commission (Staff) are publishing for public comment certain proposed changes to the Approving Regulators' oversight of CIPF. These proposed changes are composed of the following:
• Proposed amendments to the terms and conditions of CIPF's approval as an investor protection fund;
• Proposed amendments to CIPF's reporting requirements; and
• Proposed new Memorandum of Understanding (MOU) between the Approving Regulators governing their oversight of CIPF.
CIPF contributes to the security of investors and confidence in Canada's capital markets. CIPF is approved as a protection plan to provide protection within prescribed limits to eligible clients of Investment Industry Regulatory Organization of Canada (IIROC) member firms suffering losses if client property comprising securities, cash, and other property held by such IIROC member firms is unavailable as a result of the insolvency of the IIROC member firm.
Given the passage of time since the current (i) terms and conditions of CIPF's Approval Order and (ii) Memorandum of Understanding between CIPF and its Approving Regulators were first put in place, Staff initiated a review to streamline and modernize the documents as they were no longer consistent with current oversight practices. Therefore, Staff are proposing to update CIPF's oversight regime to:
• Require prior approval for amendments CIPF proposes to make it its Coverage Policies,
• Make CIPF's reporting requirements a condition of its approval as an investor protection fund,
• Ensure that CIPF's appeals process can continue to operate efficiently and effectively in the event of a large and complex insolvency by enabling CIPF's board to appoint appeals adjudicators who are not CIPF board members,
• Improve efficiencies and reduce the number of ad hoc requests from the Approving Regulators by amending and reorganizing CIPF's reporting requirements, and
• Update and sign a new MOU between the Approving Regulators to govern our oversight of CIPF.
A more detailed overview of the various proposed amendments is included below.
B. Key Proposed Amendments to CIPF's Approval Order
• CIPF will be required to seek prior approval for proposed changes to its Coverage Policies.
• CIPF's board will be granted the ability to appoint adjudicators to conduct appeals who are not CIPF directors.
• Instead of CIPF's reporting requirements being described in a memorandum of understanding between CIPF and the Approving Regulators, the reporting requirements will be a part of the Approval Order.
• Reporting requirements will be removed from the current MOU and revised reporting requirements will be appended to CIPF's Approval Order.
• Reporting requirements will be categorized as:
• regular reporting; or
• notification only.
• Multiple date specific reporting requirements will be combined and amended into one semi-annual and one annual report.
• Events for which notification is required will be divided into 3 separate sub-categories: (1) prior, (2) immediate, and (3) prompt.
• A few specific new reporting requirements will be added including:
• an annual certification of compliance with CIPF's terms and conditions of approval as an investor protection fund;
• notification of information security breaches; and
• prior notice before publication of any document expected to have a significant impact on CIPF's mandate.
• Certain other information will be required upon Staff request.
C. Key Details of the Proposed New MOU
• Each Approving Regulator will withdraw from the current MOU with CIPF and a new MOU will be concluded among the Approving Regulators.
• Protocols will be appended to the MOU to:
• clarify that oversight reviews will be risk-based and that oversight review reports will be published; and
• provide guidance on the Approving Regulators' approval process for proposed changes to documents for which prior approval is required (including guidance on whether proposed changes will be deemed housekeeping or should be published for public comment).
Staff are seeking comment on all aspects of the documents which can be found on our website at www.osc.gov.on.ca.
You are asked to provide your comments in writing, via e-mail and delivered on or before June 24, 2019 addressed to the attention of the Secretary of the Commission, Ontario Securities Commission, 20 Queen Street West, Toronto, Ontario, M5H 3S8, e-mail: comments@osc.gov.on.ca.
Colm Dowds
Tel: 416-263-7659
cdowds@osc.gov.on.ca
MFDA Investor Protection Corporation -- Proposed Amendments to the Oversight of MFDA IPC -- OSC Notice and Request for Comment
PROPOSED AMENDMENTS TO THE OVERSIGHT OF MFDA IPC
Staff of the Ontario Securities Commission (Staff) are publishing for public comment certain proposed changes to the Approving Regulators' oversight of the MFDA IPC. These proposed changes are composed of the following:
• Proposed amendments to the terms and conditions of the MFDA IPC's approval as an investor protection fund;
• Proposed amendments to the MFDA IPC's reporting requirements; and
• Proposed new Memorandum of Understanding (MOU) between the Approving Regulators governing their oversight of the MFDA IPC.
The MFDA IPC is a not-for-profit corporation established by the Mutual Fund Dealers Association of Canada (MFDA) to administer a protection plan for the benefit of clients of mutual fund dealers that are MFDA member firms.
The MFDA IPC is approved as a protection plan to provide protection within prescribed limits to eligible clients of MFDA member firms suffering losses if client property comprising securities, cash, and other property held by such MFDA member firms is unavailable as a result of the insolvency of the MFDA member firm.
In order to streamline and modernize its oversight of the MFDA IPC and ensure its oversight is consistent with current oversight practices, Staff are proposing to update the MFDA's oversight regime by:
• Clearly stating which documents the MFDA IPC requires prior approval to change.
• Amending and reorganizing the MFDA IPC's reporting requirements to improve efficiencies and reduce the number of ad hoc requests from the Approving Regulators.
• Putting an MOU in place to govern the Approving Regulators' oversight of the MFDA IPC.
B. Key Proposed Amendments to the MFDA IPC's Approval Order
• MFDA IPC will only be required to seek prior approval for proposed changes to its Coverage Policies and by-laws.
• an annual certification of compliance with the MFDA IPC's terms and conditions of approval as an investor protection fund;
• prior notice before publication of any document expected to have a significant impact on the MFDA IPC's mandate.
• An MOU will be concluded among the Approving Regulators for the first time.