SUPERIOR COURT OF JUSTICE – ONTARIO

COMMERCIAL LIST

RE: IN THE MATTER OF the Companies’ Creditors Arrangement Act , R.S.C. 1985, c. C-36, as amended;

AND IN THE MATTER OF a plan of compromise or arrangement of PCAS Patient Care Automation Services Inc. and 2163279 Ontario Inc., Applicants

BEFORE: D. M. Brown J.

COUNSEL:
S. Babe and I. Aversa, for the Applicants

M. Wasserman and J. MacDonald, for the Monitor, PricewaterhouseCoopers Inc.

J. Porter and A. Shepherd, for 2320714 Ontario Inc., the DIP Lender

B. O’Neill, for Castcan Investments (secured creditor)

R. M. Slattery, for Royal Bank of Canada (secured creditor)

M. Laugesen and G. Finlayson, for the Successful Bidder, DashRx, LLC

C. Besant, for Walgreen Co.

A. Scotchmer, for Lanworks Inc.

P. Saunders, a shareholder, for himself and other shareholders

B. Jaffe, for Merge, a potential bidder

S-A. Wilson, for Dan Brintnell, a shareholder

HEARD: June 5 and 6, 2012

REASONS FOR DECISION

I. Request for sale approval, vesting and distribution orders under the CCAA

[ 1 ] PCAS Patient Care Automation Services Inc. and 2163279 Ontario Inc. move under the Companies’ Creditors Arrangement Act for orders approving the agreement of purchase and sale between the Applicants and DashRx, LLC (“DashRx”) dated May 29, 2012 (the “Purchase Agreement”), vesting the Purchased Assets in DashRx and distributing the sale proceeds, together with certain other related orders, including the termination of this CCAA proceeding.

[ 2 ] At the continuation of the hearing on June 6, 2012, I granted the requested orders. These are my reasons for so doing.

II. The proposed sale

A. The sales and investor solicitation process

[ 3 ] The Applicants are healthcare technology companies which were developing an automated pharmacy dispensing platform. They were in the pre-commercialization phase of operations and encountered financing difficulties. The Initial Order under the CCAA was made by Morawetz J. on March 23, 2012; it appointed PricewaterhouseCoopers Inc. as Monitor.

[ 4 ] The subsequent history of this matter is set out my previous Reasons. [1]

[ 5 ] On May 14, 2012, I approved a sale and investor solicitation process (“SISP”). The Applicants developed the SISP with the assistance of the Monitor, the Monitor's agent, PricewaterhouseCoopers Corporate Finance Inc. ("PwCCF") and the DIP Lender. The SISP sought to maximize stakeholder value either through (i) a going concern sale of the Applicants' business and assets or (ii) new investment and a plan of compromise or arrangement. The SISP set out the procedural and substantive requirements for a qualified purchase or investment bid (a "Qualified Bid").

[ 6 ] A feature of the approved SISP was the DIP Lender's "stalking horse" bid under which the DIP Lender would pay the Stalking Horse Price by a release of the DIP Indebtedness and the assumption of the outstanding senior secured claims. The terms of the Stalking Horse Bid were not required to be emulated in other Qualified Bids; the Stalking Horse Bid served to set a floor price in the SISP. The Stalking Horse Agreement was posted in the Applicants’ data-room.

[ 7 ] The SISP was conducted by the Applicants with the support and assistance of the Monitor. Under the terms of the SISP, bids were due by 12:00 p.m. on May 24, 2012. Two bids, including the DashRx bid, were received before the Bid Deadline, and one further bid was received on May 24, 2012, but after the Bid Deadline. These three bids were reviewed in a series of meetings held by the Applicants, the DIP Lender, the Monitor and their counsel on May 24 and May 25, 2012.

[ 8 ] In a Confidential Appendix to its Seventh Report the Monitor described the financial terms of each bid and disclosed the materials filed by each bidder, as well as the written communications with each bidder.

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_________ (original signed by) ___________

D. M. Brown J.

Date : June 9, 2012