Pet Valu Canada Inc. – s. 4(b) of the Regulation

Headnote

Consent given to an offering corporation under the Business Corporations Act (Ontario) to continue under the Business Corporations Act (British Columbia).

Statutes Cited

Business Corporations Act, R.S.O. 1990, c. B.16, as am., s. 181.

Securities Act, R.S.O. 1990, c. S.5, as am.

Regulations Cited

Regulation made under the Business Corporations Act, Ont. Reg. 289/00, as am., s. 4(b).

IN THE MATTER OF

R.R.O. 1990, REGULATION 289/00 AS AMENDED

(the Regulation) MADE UNDER THE

BUSINESS CORPORATIONS ACT (ONTARIO)

R.S.O. 1990. c. B.16, AS AMENDED (the OBCA)

AND

IN THE MATTER OF

PET VALU CANADA INC.

CONSENT

(Subsection 4(b) of the Regulation)

UPON the application of Pet Valu Canada Inc. (the Applicant) to the Ontario Securities Commission (the Commission) requesting the consent of the Commission for the Applicant to continue into another jurisdiction pursuant to subsection 4(b) of the Regulation.

AND UPON considering the application and the recommendation of the staff of the Commission;

AND UPON the Applicant having represented to the Commission that:

1. The Applicant was continued under the OBCA on May 23, 1993 under the name Pet Valu Inc. by Articles of Amalgamation of the same date and was continued in its current form under the name Pet Valu Canada Inc. by Articles of Arrangement dated April 23, 1996.

2. The Applicant's head and registered office is located at 7300 Warden Avenue, Suite 106, Markham, Ontario L3R 9Z6. Following completion of the Continuance (defined below), the registered office of the Applicant will be located at 1600 Cathedral Place, 925 West Georgia Street, Vancouver, British Columbia V6C 3L2.

3. The Applicant has an authorized share capital consisting of an unlimited number of common shares, an unlimited number of non-voting exchangeable shares (exchangeable on a one-for-one basis for common shares of the Applicant's parent company, Pet Valu, Inc., a Delaware company), 7,000,000 Class A convertible preferred non-voting shares, 176,845 Class B convertible preferred non-voting shares and one Class C voting preferred share, of which one common share and 9,853,440 exchangeable shares (the "Exchangeable Shares") were issued and outstanding as of July 24, 2009. The Exchangeable Shares are generally non-voting in the Applicant but carry the right to vote in the Applicant's parent, Pet Valu, Inc., through a voting and exchange trust agreement.

4. The Applicant is an offering corporation under the OBCA and is a reporting issuer under the Securities Act (Ontario) (the "Act"). The Applicant is also a reporting issuer or its equivalent under the securities legislation of the provinces of British Columbia, Alberta and Manitoba (together, the "Legislation").

5. The Applicant's one outstanding common share is held by Pet Valu, Inc., and the Exchangeable Shares are listed and posted for trading on the Toronto Stock Exchange (the "TSX") under the symbol "PVC".

6. On July 5, 2009, the Applicant announced that it had entered into an agreement with affiliates of Roark Capital Partners II AIV AG, L.P. ("Roark"), whereby Roark would indirectly acquire all of the issued and outstanding share capital of the Applicant, including the Exchangeable Shares, pursuant to a plan of arrangement transaction to be effected under the laws of British Columbia (the "Announced Transaction"). Under the Announced Transaction, and subject to the terms and conditions thereof, the holders of Exchangeable Shares are to be paid Cdn$13.68 cash for their shares at closing.

7. In order to accommodate tax structuring objectives of the Announced Transaction, the Applicant must be a company continued under the Business Corporations Act (British Columbia) (the "BCBCA") no later than immediately prior to the special meeting of holders of the Exchangeable Shares to consider and, if deemed acceptable, approve the Announced Transaction (the "Meeting"). The Meeting is scheduled to be held on August 25, 2009.

8. The Meeting will be held under the laws of British Columbia.

9. In connection with the Meeting, the Applicant has caused an information circular to be mailed to shareholders which discloses full particulars of the Announced Transaction, including details of the proposed Continuance, the anticipated timing thereof and any substantive differences between the OBCA and the BCBCA.

10. The consent of the holders of Exchangeable Shares is not required for the Applicant to continue under the BCBCA.

11. The Applicant intends to apply (the "Application for Continuance") to the Director under the OBCA for authorization to continue under the BCBCA pursuant to section 181 of the OBCA (the "Continuance"). Pursuant to subsection 4(b) of the Regulation, where a corporation is an offering corporation, the Application for Continuance must be accompanied by a consent from the Commission.

12. The Applicant will remain a reporting issuer under the Act and the Legislation after the Continuance but intends to apply to cease its reporting obligations under the Act and the Legislation following completion of the Announced Transaction.

13. The Applicant is not in default of any of the provisions of the Act or the regulations or rules made thereunder and is not in default under the Legislation.

14. The Applicant is not in default of any of the rules, regulations or policies of the TSX.

15. The Applicant is not a party to any proceeding or, to the best of its knowledge, information and belief, pending proceeding under the OBCA, the Act or the Legislation.

16. Pet Valu, Inc., the only holder of common shares of the Applicant authorized the Continuance of the Applicant by shareholder resolution dated July 14, 2009.

17. The material rights, duties and obligations of a corporation governed by the BCBCA are substantially similar to those of a corporation governed by the OBCA.

18. The Continuance is proposed to be made because the Applicant believes it to be in the best interest of the Applicant to continue as a corporation and conduct its affairs in accordance with the laws of the Province of British Columbia. It is a condition precedent to the completion of the Announced Transaction that the Applicant be continued as a limited company under the laws of British Columbia. In the event that the Announced Transaction is not completed, the Applicant intends to continue to Ontario under the OBCA.

THE COMMISSION HEREBY CONSENTS to the continuance of the Applicant as a corporation under the BCBCA.

DATED at Toronto, Ontario this 4th day of August, 2009.