Execution Copy
VISIBLE GENETICS INC.
COMMON SHARES PURCHASE AGREEMENT
DECEMBER 14, 1999
TO EACH OF THE INVESTORS
WHO ARE SIGNATORIES HERETO
Ladies and Gentlemen:
Visible Genetics Inc., an Ontario corporation (the "Company"), hereby agrees
with each of you as follows:
1. Authorization of Sale of the Securities.
The Company has, or before the Closing (as defined below) will have,
authorized the sale and issuance of shares of its common shares, no par value
(the "Common Stock"). The Common Stock sold hereunder shall be referred to
herein as the "Shares."
2. Agreement to Sell and Purchase the Shares.
2.1 Sale of Shares. Subject to the terms of this Common Shares
Purchase Agreement (this "Purchase Agreement"), at the Closing (as defined in
Section 3.1 hereof), the Company agrees to sell to each of the Investors who has
executed a counterpart execution page to this Purchase Agreement (each,
"Investor"), and each Investor agrees to purchase from the Company, the
aggregate number of Shares set forth above such Investor's signature on the
counterpart execution page hereof, at a purchase price of US$15 per Share,
provided that the aggregate purchase price for the Shares sold to the Investors
pursuant to this Agreement shall not be less than $15 million.
2.2 Separate Agreement. Each Investor shall severally, and not
jointly, be liable for only the purchase of the Shares that appears above such
Investor's signature and that relates to such Investor. The Company's agreement
with each of the Investors is a separate agreement, and the sale of Shares to
each of the Investors is a separate sale. The obligations of each Investor
hereunder are expressly not conditioned on the purchase by any or all of the
other Shares such other Investors have agreed to purchase.
2.3 Acceptance of Proposed Purchase of Shares. Each Investor
understands and agrees that the Company, in its sole discretion, reserves the
right to accept or reject, in whole or in part, any proposed purchase of Shares.
The Company shall have no obligation hereunder with respect to any Investors
until the Company shall execute and deliver to such Investors an executed copy
of this Purchase Agreement. If this Purchase Agreement is not executed and
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delivered by the Company or the offering is terminated, this Purchase Agreement
shall be of no further force and effect.
3. Closing and Delivery.
3.1 Closing. The closing of the purchase and sale of the Shares
pursuant to this Purchase Agreement (the "Closing") shall be held
contemporaneously (the "Closing Date") with the satisfaction or waiver of all
conditions to Closing set forth in Sections 6 and 7 hereof, at 10:00 a.m. (New
York Time) at the offices of ▇▇▇▇ Marks ▇▇▇▇▇ LLP, located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, or on such other date and place as may be agreed to by the
Company and the Investors. Prior to the Closing, each Investors shall execute
any related agreements or other documents required to be executed hereunder.
3.2 Delivery of the Shares at the Closing. At the Closing, the
Company shall deliver to each Investor stock certificates registered in the name
of such Investor, or in such nominee name(s) as designated by such Investor,
representing the Shares to be purchased by such Investor at the Closing as set
forth in the Schedule of Investors against payment of the purchase price for
such Shares by means of a wire transfer of same day funds to an account
designated by the Company in a written notice to PaineWebber Incorporated. The
name(s) in which the stock certificates are to be issued to each Investor are
set forth in the Investor's counterpart execution page hereto, as completed by
each Investor.
4. Representations and Warranties of the Company.
The Company represents and warrants to the Investors that:
4.1 Corporate Organization
(a) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the Province of Ontario. True and
complete copies of the Company's Restated Articles of Incorporation and By-law
No. 3 (collectively, the "Organizational Documents") have been filed by the
Company with the United States Securities and Exchange Commission (the "SEC")
and provided to the Investors.
(b) The Company has all requisite power and authority and has all
necessary approvals, licenses, permits and authorization to own, operate or
lease its properties and to carry on its business as now conducted, except where
the failure to have any such approval, license, permit or authorization would
not reasonably be expected to have a material adverse effect on the business,
properties, or financial condition of the Company and its subsidiaries taken as
a whole (a "Material Adverse Effect"). The Company has all requisite power and
authority to execute and deliver this Purchase Agreement and the Registration
Rights Agreement dated the date hereof between the Company and the Investors
(the "Registration Rights Agreement" and with the Purchase Agreement, the
"Transaction Documents") and to perform its obligations hereunder and
thereunder.
(c) The Company has filed all necessary documents to qualify to
do business as a foreign corporation in, and the Company is in good standing
under the laws of, each jurisdiction
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in which the conduct of the Company's business or the nature of the properties
owned or leased by the Company requires such qualification, except where the
failure to so qualify would not reasonably be expected to have a Material
Adverse Effect.
4.2 Subsidiaries
(a) Schedule 4.2 sets forth; (i) the name of each subsidiary of
the Company, other than subsidiaries that are dormant or that do not carry on
business activities; (ii) the name of each corporation, partnership, joint
venture or other entity (other than such subsidiaries) in which the Company or
any of its subsidiaries has, or pursuant to any agreement has the right or
obligation to acquire at any time by any means, directly or indirectly, an
equity interest or investment; (iii) in the case of each of such corporations
described in clauses (i) and (ii) above, (A) the jurisdiction of incorporation
and (B) the capitalization thereof and the percentage of each class of voting
capital stock owned by the Company or any of its subsidiaries.
(b) Each subsidiary of the Company listed on Schedule 4.2 has
been duly organized, is validly existing and in good standing under the laws of
the jurisdiction of its organization, has the corporate power and authority to
own and lease its properties and to conduct its business and is duly registered,
qualified and authorized to transact business and is in good standing in each
jurisdiction in which the conduct of its business or the nature of its
properties requires such registration, qualification or authorization, except
where the failure to be so qualified would not reasonably be expected to have a
Material Adverse Effect. All of the issued and outstanding equity or other
participating interests of each subsidiary have been duly authorized and validly
issued, are fully paid and non-assessable, and, to the extent owned by the
Company as indicated on Schedule 4.2, are owned free and clear of any mortgage,
pledge, lien, encumbrance, security interest, claim or equity, except as set
forth on Schedule 4.2.
(c) For purposes of this Purchase Agreement, "subsidiary" shall
mean any (i) Person (as hereinafter defined in Section 4.5) of which the Company
(or other specified Person) shall own directly or indirectly through a
subsidiary, a nominee arrangement or otherwise (A) at least a majority of the
outstanding voting capital stock (or other outstanding voting shares of
beneficial interest) or (B) at least a majority of the partnership, membership,
joint venture or similar interests, or (ii) in which the Company (or other
specified Person) is a general partner or joint venturer.
4.3 Capitalization
(a) The authorized capital stock of the Company consists of an
unlimited number of shares of Common Stock and an unlimited number of preferred
shares, without par value ("Preferred Stock"). As of the close of business on
the date one business day prior to the date hereof, 9,682,631 shares of Common
Stock were issued and outstanding, (ii) 33,948 shares of Series A Convertible
Preferred Stock were issued and outstanding, (iii) 3,208,680 shares of Common
Stock were reserved for issuance under the Company's employee stock option plans
listed on Schedule 4.3(a) in the amounts stated in such schedule, (iv) 5,207,739
shares of Common Stock were reserved for issuance under the Company's
outstanding warrants and convertible securities, and (v) there were no bonds,
debentures, notes or other evidences of
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indebtedness issued or outstanding having the right to vote on any matters on
which the Company's stockholders may vote.
(b) All of the outstanding shares of Common Stock and Preferred
Stock of the Company have been duly and validly issued and are fully paid and
non-assessable, and were issued in accordance with all applicable United States
federal and state and Canadian federal and provincial securities laws. Upon
issuance, sale and delivery as contemplated by this Purchase Agreement, the
Shares will be duly authorized, validly issued, fully paid and non-assessable
shares, free of all preemptive or similar rights.
(c) Except for the rights which attach to the outstanding Series
A Convertible Preferred Stock as described in the Restated Articles of
Incorporation of the Company and the options which are listed on Schedule 4.3(a)
and the warrants, options and convertible securities which are listed on
Schedule 4.3(c) hereto, on the Closing Date, there will be no shares of Common
Stock, Preferred Stock or any other equity security of the Company issuable upon
exercise, conversion or exchange of any security of the Company nor will there
be any rights, options or warrants outstanding or other agreements to acquire
shares of Common Stock or any other equity security of the Company nor will the
Company be contractually obligated to purchase, redeem or otherwise acquire any
outstanding shares of Common Stock. Except as set forth on Schedule 4.3(c), (i)
no stockholder of the Company is entitled to any preemptive or similar rights to
subscribe for shares of capital stock of the Company, (ii) the Company has not
agreed to register any of its securities under the Securities Act (other than
pursuant to the Registration Rights Agreement) and (iii) there are no existing
voting trusts or similar agreements to which the Company or any of its
subsidiaries is a party with respect to the voting of the capital stock of the
Company or any of its subsidiaries.
4.4 Corporate Proceedings, etc. The Company has full corporate power
to execute and deliver each Transaction Document, to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby. The execution, delivery and performance of the Transaction
Documents by the Company and each of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action on the part
of the Company. No other corporate action on the part of the Company is
necessary to authorize the execution, delivery and performance of the
Transaction Documents by the Company and each of the transactions contemplated
hereby and thereby, and upon such execution and delivery (assuming the
Transaction Documents are executed and delivered by the other parties thereto),
each of the Transaction Documents shall constitute a valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except that (i) the enforceability hereof and thereof may be subject to
applicable bankruptcy, insolvency or other similar laws, now or hereinafter in
effect, affecting creditors rights generally, and (ii) the availability of the
remedy of specific performance or injunctive or other forms of equitable relief
may be subject to equitable defenses and would be subject to the discretion of
the court before which any proceeding therefor may be brought.
4.5 Consents and Approvals. Except as set forth in Schedule 4.5, the
execution and delivery by the Company of the Transaction Documents, the
performance by the Company of its obligations hereunder and thereunder and the
consummation by the Company of the transactions
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contemplated hereby and thereby do not require the Company or any of its
subsidiaries to obtain any consent, approval or action of, or make any filing
with or give any notice to, any individual, firm, corporation, partnership,
limited liability company, trust or other entity (collectively, "Person") or
public, governmental or judicial authority or agency (collectively,
"Governmental Entity"), including, but not limited to, pursuant to the
Competition Act (Canada) and the Investment Canada Act, as amended.
4.6 Absence of Conflicts, etc. Except as set forth in Schedule 4.6,
the execution and delivery by the Company of the Transaction Documents do not,
and, the fulfillment of the terms hereof and thereof by the Company, and the
issuance of the Shares, will not, result in a breach of any of the terms,
conditions or provisions of, or constitute a default under, or permit the
acceleration of rights under or termination of, the Organizational Documents,
any material agreement to which the Company or its subsidiaries is a party, or
any order, judgment, rule or regulation of any Governmental Entity having
jurisdiction over the Company or any, of its subsidiaries or over their
respective properties or businesses, except for such defaults that would not
reasonably be expected to have a Material Adverse Effect.
4.7 SEC Reports
(a) The Company has filed with the SEC, among other reports (i)
Annual Reports on Form 20-F for the fiscal years ended December 31, 1997 and
1998 as filed with the United States Securities and Exchange Commission (the
"SEC"), (ii) all other documents filed with the SEC (pursuant to Section 13,
14(a) and 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) and the Canadian securities regulatory authorities since
January 1, 1996 and (iii) all registration statements filed with the SEC since
January 1, 1996, which are all the documents (other than preliminary material)
that the Company filed or was required to file with the SEC or the Canadian
securities regulatory authorities from that date through the date hereof
(clauses (i) through (iii) being referred to herein collectively as the "SEC
Reports"). Except to the extent they may have been subsequently amended or
otherwise modified prior to the date hereof by subsequent reporting or filings,
as of their respective dates, the SEC Reports (as the same may have been amended
or otherwise modified) complied in all material respects with the requirements
of the Securities Act of 1933, as amended (the "Securities Act") or the Exchange
Act and the rules and regulations of the SEC thereunder applicable to such
reports and registration statements. Except to the extent they may have been
subsequently amended or otherwise modified prior to the date hereof by
subsequent reporting or filings, as of their respective dates, the SEC Reports
did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(b) The audited consolidated financial statements as at and for
the period ended December 31, 1998 of the Company included in the SEC Reports
(the "1998 Financial Statements") comply as to form in all material respects
with accounting requirements of the Securities Act or the Exchange Act, as
applicable, and with the published rules and regulations of the SEC with respect
thereto. The 1998 Financial Statements (i) have been prepared in accordance with
generally accepted accounting principles in the United States of America
("GAAP") applied on a consistent basis (except as may be indicated therein or in
the notes
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thereto), (ii) present fairly, in all material respects, the financial position
of the Company and its subsidiaries as of the dates thereof and the results of
their operations and cash flows for the periods then ended and (iii) are in all
material respects in agreement with the books and records of the Company and its
subsidiaries.
(c) Except as otherwise disclosed in a Form 6-K filed by the
Company on July 7, 1999, the unaudited interim financial statements of the
Company as at and for all periods commencing on or after January 1, 1999
included in the SEC Reports comply as to form in all material respects with
accounting requirements of the Securities Act or the Exchange Act, as
applicable, and with the published rules and regulations of the SEC with respect
thereto. Except as otherwise disclosed in a Form 6-K filed by the Company on
July 7, 1999, the condensed financial statements included in the SEC Reports:
(i) have been prepared in accordance with GAAP applied on a consistent basis
(except as may be indicated therein or in the notes thereto); (ii) present
fairly, in all material respects, the financial position of the Company and its
subsidiaries as of the dates thereof and the results of their operations and
cash flows for the periods then ended subject to normal year-end audit
adjustments and any other adjustments described therein and the fact that
certain information and notes have been condensed or omitted in accordance with
the Exchange Act and the rules and regulations promulgated thereunder; and (iii)
are in all material respects in agreement with the books and records of the
Company and its subsidiaries.
(d) The Company and its subsidiaries keep proper accounting
records in which all material assets and liabilities, and all material
transactions, of the Company and its subsidiaries are recorded in conformity
with applicable accounting principles. No part of the Company's or any of its
subsidiaries, accounting system or records, or access thereto, is under the
control of a Person who is not an employee of the Company or such subsidiary.
(e) The Company, along with its subsidiaries, had less than
$25,000,000 of aggregate sales in the United States in the most recently
completed fiscal year, and as of September 30, 1999 owned, either directly or
indirectly, assets in the United States with an aggregate book value of less
than $15,000,000.
4.8 Absence of Certain Developments. Except as disclosed in the SEC
Reports filed with the SEC on or prior to the date hereof or in Schedule 4.8,
and except for the transactions contemplated by this Purchase Agreement, since
December 31, 1998, (i) the Company and each of its subsidiaries has conducted
its business only in the ordinary and usual course in accordance with past
practice, and (ii) there have not occurred any events or changes (including the
incurrence of any liabilities of any nature, whether or not accrued, contingent
or otherwise) that have had, or is reasonably likely in the future to have,
individually or in the aggregate, a Material Adverse Effect.
4.9 Compliance with Law
(a) Neither the Company nor any of its subsidiaries is in
violation of any laws, ordinances, governmental rules or regulations to which it
is subject, except for violations which would not reasonably be expected to have
a Material Adverse Effect, including without limitation laws or regulations
relating to human therapeutic or diagnostic products or devices, the
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environment or to occupational health and safety and, except as set forth in
Schedule 4.9, no material expenditures are or will be required in order to cause
its current operations or properties to comply with any such law, ordinances,
governmental rules or regulations. Neither the Company nor any of its
subsidiaries has received written notice of violation of any law, ordinance,
governmental rule or regulation, which if violated, would reasonably be expected
to have a Material Adverse Effect. No investigation or review by any
Governmental Entity with respect to the Company or any of its subsidiaries is
pending or, to the best of the Company's knowledge, threatened nor has any
Governmental Entity indicated an intention to conduct the same, except for an
investigation or review conducted as a result of an application or other filing
made by the Company.
(b) Neither the Company or any of its subsidiaries nor, to the
Company's knowledge, any of the officers, directors, employees, agents or other
representatives of the Company or any of its subsidiaries or affiliates (as that
term is defined in Rule 405 promulgated under the Securities Act
("Affiliates")), has, directly or indirectly, made or authorized any payment,
contribution or gift of money, property, or services, whether or not in
contravention of applicable law, (i) as a kickback or bribe to any Person or
(ii) to any political organization, or the holder of or any aspirant to any
elective or appointive public office except as permitted by applicable law and
for personal political contributions not involving the direct or indirect use of
funds of the Company or any of its subsidiaries.
(c) The Company and its subsidiaries have all licenses, permits,
franchises or other governmental authorizations necessary to the ownership of
their property or to the conduct of their respective businesses, except for
those which if violated or not obtained would reasonably be expected (and except
for any of the foregoing relating to Intellectual Property which are covered by
the provisions of Section 4.18) to have a Material Adverse Effect. Neither the
Company nor any subsidiary has finally been denied any application for any such
licenses, permits, franchises or other governmental authorizations necessary to
its business.
4.10 Litigation. There is no legal action, suit, arbitration or other
legal, administrative or other governmental investigation, inquiry or proceeding
(whether federal, state, local or foreign) pending or, to the best of the
Company's knowledge, threatened against or affecting the Company or any
subsidiary or any of their respective properties, assets or businesses which,
either alone or in the aggregate, would reasonably be expected to have a
Material Adverse Effect or prevent or delay the consummation of the transactions
contemplated by the Transaction Documents. The Company is not aware of any fact
which might result in or form the basis for any such action, suit, arbitration,
investigation, inquiry or other proceeding. Except as set forth in Schedule
4.10, neither the Company nor any subsidiary is subject to any order, writ,
judgment, injunction, decree, determination or award of any Governmental Entity
against it.
4.11 Material Contracts. Neither the Company nor any of its
subsidiaries is in default (or would be in default with notice or lapse of time,
or both) under, is in violation (or would be in violation with notice or lapse
of time, or both) of, or has otherwise breached, any material indenture, note,
credit agreement, loan document, lease, license or other agreement (unless such
default has been waived), which default, alone or in the aggregate with all
other such defaults, would reasonably be expected to have a Material Adverse
Effect. All material agreements to
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which the Company or any of its subsidiaries is a party, reflecting all
amendments thereto through the date of filing, have been filed by the Company
with the SEC pursuant to the requirements of the Securities Act and the Exchange
Act. Except as set forth in Schedule 4.11, each material agreement to which the
Company or any of its subsidiaries is a party is in full force and effect and is
binding upon the Company and, to the best of the Company's knowledge, is binding
upon such other parties, in each case in accordance with its terms. There are no
material unresolved disputes involving the Company or any of its subsidiaries
under any material agreement.
4.12 Absence of Undisclosed Liabilities. Except as disclosed on
Schedule 4.12 and except for indebtedness or liabilities that are reflected or
reserved against in the most recent financial statements included in the SEC
Reports, neither the Company nor any of its subsidiaries has any debt,
obligation or liability of a kind required by GAAP to be reflected on a balance
sheet (whether accrued, absolute, contingent, liquidated or otherwise, whether
due or to become due and whether or not known to the Company) arising out of any
transaction entered into at or prior to the Closing, or any act or omission at
or prior to the Closing, or any state of facts existing at or prior to the
Closing, except current liabilities incurred and obligations under agreements
entered into since December 31, 1998, each in the usual and ordinary course of
business none of which (individually or in the aggregate) would reasonably be
expected to have a Material Adverse Effect.
4.13 Labor Relations and Employment
(a) Except as set forth in Schedule 4.13(a), (i) to the best of
the Company's knowledge, there are no union claims to represent the employees of
the Company or any of its subsidiaries; (ii) neither the Company nor any of its
subsidiaries is a party to or bound by any collective bargaining or similar
agreement with any labor organization, or work rules or practices agreed to with
any labor organization or employee association applicable to employees of the
Company or any of its subsidiaries; (iii) none of the employees of the Company
or any of its subsidiaries is represented by any labor organization and the
Company does not have any knowledge of any current union organizing activities
among the employees of the Company or any of its subsidiaries, nor to the
Company's knowledge does any question concerning representation exist concerning
such employees; (iv) the Company and its subsidiaries are in compliance with all
applicable laws respecting employment and employment practices, terms and
conditions of employment, wages, hours of work, occupational safety and health,
equal opportunity, collective bargaining and payment of social security or
social insurance premiums, as applicable, except where the failure to be in
compliance would not reasonably be expected to have a Material Adverse Effect,
and are not engaged in any discriminatory employment practices or unfair labor
practices under applicable law, ordinance or regulation; (v) there is no unfair
labor practice charge or complaint against the Company or any of its
subsidiaries pending or, to the best of the Company's knowledge, threatened
before any state or foreign agency; (vi) neither the Company nor any of its
subsidiaries has received written notice of the intent of any federal, state,
local or foreign agency responsible for the enforcement of labor or employment
laws to conduct an investigation with respect to or relating to the Company or
any of its subsidiaries and no such investigation is in progress; and (vii)
there are no complaints, lawsuits or other proceedings pending or, to the best
of the Company's knowledge, threatened in any forum by or on behalf of any
present or former employee of the Company or any of its subsidiaries alleging
breach of any
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express or implied contract of employment, any law or regulation governing
employment or the termination thereof or other discriminatory, wrongful or
tortious conduct in connection with the employment relationship, except for any
complaints, lawsuits or other proceedings which would not reasonably be expected
to have a Material Adverse Effect.
(b) Except as set forth in Schedule 4.13(b), the employment of
all Persons and officers employed by the Company or any of its subsidiaries is
terminable at will without any penalty or severance obligation of any kind on
the part of the Company or such subsidiary. All sums due for employee
compensation and benefits, including, without limitation, retiree benefits, and
all vacation time owing to any employees of the Company or any of its
subsidiaries have been duly and adequately accrued in all material respects on
the accounting records of the Company and its subsidiaries in accordance with
GAAP.
(c) Except as set forth on Schedule 4.13(c), the Company and its
subsidiaries have in force written confidentiality and non-disclosure agreements
and patent/copyright/invention assignment agreements with, and requires as a
condition of employment the execution of such agreements by, all of its
technical research employees, all research consultants, all of its officers and
such other members of its staff as in the regular course of their duties are
reasonably likely to receive material confidential information regarding the
Company, its Intellectual Property (as hereinafter defined) and its current and
prospective business plans.
(d) The Company is not aware that any of its officers or key
employees or any officers or key employees of its subsidiaries is obligated
under any contract (including licenses, covenants or commitments of any nature)
or other agreement, or subject to any judgment, decree or order of any
Governmental Entity, that would interfere with the use of such employee's best
efforts to promote the interests of the Company or that would conflict with the
Company's business as currently conducted.
(e) Except as set forth in Schedule 4.13(e), the Company is not
aware that any officer or key employee, or that any group of key employees,
intends to terminate their employment with the Company or any of its
subsidiaries, nor does the Company have a present intention to terminate the
employment of any of the foregoing.
4.14 Employee Benefit Plans.
(a) With respect to Employee Benefit Plans (as hereinafter
defined) of the Company and its subsidiaries: (i) the fair market value of the
assets of each funded Employee Benefit Plan, if any, the liability of each
insurer for any Employee Benefit Plan funded through insurance or any book
reserve established for any other Employee Benefit Plan, together with any
accrued contributions, is sufficient to procure or provide for the accrued
benefit obligations, as of the date hereof, with respect to all current and
former participants in such Employee Benefit Plan according to the actuarial
assumptions and valuations, if any, most recently used to determine employer
contributions to and liabilities of such Employee Benefit Plan, and no
transaction contemplated by this Purchase Agreement shall cause such assets or
insurance obligations or any book reserve to be less than such benefit
obligations; (ii) each Employee Benefit Plan has been maintained and
administered, in all material respects, in accordance with its terms and with
all
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applicable provisions of law (including rules and regulations thereunder); and
(iii) each Employee Benefit Plan which is required to be registered with any
Governmental Entity has been registered and maintained in good standing with the
appropriate Governmental Entity, except where the failure to be so registered or
to maintain good standing would not reasonably be expected to have a Material
Adverse Effect.
(b) For purposes of this Purchase Agreement, "Employee Benefit
Plan" shall mean all material employee benefit or executive compensation
arrangements, perquisite programs or payroll practices, including, without
limitation, any such arrangements or payroll practices providing severance pay,
sick leave, vacation pay, salary continuation for disability, retirement
benefits, deferred compensation, bonus pay, incentives pay, stock options
(including those held by Directors, employees, and consultants), hospitalization
insurance, medical insurance, life insurance, scholarships or tuition
reimbursements, that are maintained by the Company or any of its subsidiaries or
to which the Company or any subsidiary is obligated to contribute thereunder for
current or former employees of the Company or any subsidiary.
4.15 Real Property
(a) The Company and its subsidiaries do not own any real property
in whole or in part.
(b) Schedule 4.15 lists all real property leased by the Company
or its subsidiaries as well as the commencement and expiration dates of all
leases relating thereto (the "Leased Real Property"). The Company or one of its
subsidiaries has a valid and existing lease or sublease for each property
subsumed within the Leased Real Property. All leases covering any of the Leased
Real Property are valid and enforceable by the Company or one of its
subsidiaries, as the case may be, in accordance with their respective terms, are
in full force and effect, except that the enforceability thereof may be subject
to applicable bankruptcy, insolvency or other similar laws, now or hereinafter
in effect, affecting creditors rights generally, and the availability of the
remedy of specific performance or injunctive or other forms of equitable relief
may be subject to equitable defenses and would be subject to the discretion of
the court before which any proceeding therefor may be brought, and have not been
modified, supplemented or terminated in any material respect except as set forth
in Schedule 4.15, and there is not under any such lease any default by the
Company or one of its subsidiaries or, to the best of the Company's knowledge,
by any landlord or lessor under any such lease except for any such default which
would not reasonably be expected to have a Material Adverse Effect. The
facilities and real properties covered by the Leased Real Property constitute
all of the facilities and real properties presently used by the Company or its
subsidiaries.
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4.16 Condition of Properties. All facilities, machinery, equipment,
fixtures, vehicles and other properties owned, leased or used by the Company and
its subsidiaries are in good operating condition and repair (normal wear and
tear excepted), are reasonably fit and usable for the purposes for which they
are being used, are adequate and sufficient for the Company's or such
subsidiary's business and conform with all applicable ordinances, regulations
and laws except where the failure to conform with the applicable ordinances,
regulations or laws would not reasonably be expected to have a Material Adverse
Effect.
4.17 Environmental Matters.
(a) The Company and its subsidiaries (i) are in compliance with
all Environmental Laws; (ii) have obtained all necessary Environmental Permits,
all of which are in full force and effect; and (iii) are in compliance with all
terms and conditions of such Environmental Permits, except for any failure to
comply or the absence of any such permit which would not reasonably be expected
to have a Material Adverse Effect.
(b) Neither the Company nor any of its subsidiaries has violated
or done any act which would reasonably be expected to result in liability under,
or have otherwise failed to act in a manner which would reasonably be expected
to expose any of them to liability under, any Environmental Law except for any
liability that would not reasonably be expected to have a Material Adverse
Effect. No event has occurred which, upon the passage of time, the giving of
notice, or failure to act would reasonably be expected to give rise to liability
to the Company or any of its subsidiaries under any Environmental Law except for
any liability that would not reasonably be expected to have a Material Adverse
Effect.
(c) No Hazardous Material has been released, spilled, discharged,
dumped, or disposed of, by the Company, or otherwise come to be located in, at,
beneath or near any of the Leased Real Property as a result of the Company's
action including properties formerly owned, operated or otherwise controlled by
the Company or any of its subsidiaries (i) in violation of any Environmental Law
or (ii) in such manner as would reasonably be expected to result in
environmental liability to the Company or any of its subsidiaries.
(d) To the Company's knowledge, there have been and are no: (i)
aboveground or underground storage tanks; (ii) surface impoundments for
Hazardous Materials; (iii) wetlands as defined under any Environmental Law; or
(iv) asbestos or asbestos containing materials or polychlorinated biphenyl
("PCB") or PCB-containing equipment, located within any portion of the Leased
Real Property.
(e) No liens currently encumber any Leased Real Property in
connection with any actual or alleged liability of the Company under any
Environmental Law.
(f) (i) Neither the Company nor any of its subsidiaries has
received any written notice, claim, demand, suit or request for information from
any Governmental Entity or private entity with respect to any liability or
alleged liability under any Environmental Law, nor to the knowledge of the
Company has any other entity whose liability, in whole or in part, may be
attributed to the Company or any of its subsidiaries, received any such notice,
claim, demand, suit
-11-
or request for information; (ii) neither the Company nor any of its subsidiaries
has ongoing negotiations with or agreements with any Governmental Entity or
other Person or entity relating to any Remedial Action or other claim arising
under or related to any Environmental Law.
(g) Neither the Company nor any of its subsidiaries has disposed,
or arranged for the disposal, of any Hazardous Materials at any facility that is
or has ever been the subject of investigation or response action under the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
ss. 9601 et seq. ("CERCLA"), Resource Conservation and Recovery Act, 42 U.S. C.
ss. 6901 et seq. ("RCRA"), or any state or Canadian law of similar effect.
(h) The Company does not have in its possession any environmental
studies and reports pertaining to any of the Leased Real Property.
For purposes of this Purchase Agreement, the following terms shall have
the following meanings:
"Environmental Laws" shall mean any statute, regulation, ordinance,
order, decree, treaty, agreement, compact, common law duty or other requirement
of United States, Canadian or international law relating to protection of human
health, safety or the environment (including, without limitation, ambient air,
surface water, groundwater, wetlands, soil, surface and subsurface strata).
"Environmental Permits" shall mean all permits, licenses, approvals,
authorizations, consents or registrations required under any applicable
Environmental Law.
"Hazardous Materials" shall mean any chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, hazardous
materials, hazardous wastes, radioactive materials, petroleum or petroleum
products.
"Remedial Action" shall mean any action required to: (i) clean up,
remove or treat Hazardous Materials; (ii) prevent a release or threat of release
of any Hazardous Material; (iii) perform pre-remedial studies, investigations or
post-remedial monitoring and care; or (iv) cure a violation of Environmental Law
4.18 Intellectual Property
(a) Except as described in Schedule 4.18(a), the Company or one
of its subsidiaries owns or has the valid right to use, free and clear of all
liens and other encumbrances or claims of any nature, except for liens or other
encumbrances that are not material, all of the Intellectual Property necessary
for the conduct of the business of the Company or any of its subsidiaries,
except where the failure to own or have the right to use any item of
Intellectual Property would not reasonably be expected to have a Material
Adverse Effect. Except as noted on Schedule 4.18(a), all Intellectual Property
that is material to the Company, is valid, subsisting, unexpired, in proper form
and enforceable and all renewal fees and other maintenance fees that have fallen
due on or prior to the effective date of this Agreement have been paid.
-12-
(b) Except as set forth on Schedule 4.18(b), there is no claim,
suit, action or proceeding pending or, to the best of the Company's knowledge,
threatened against the Company or one of its subsidiaries: (i) alleging any
conflict or infringement with any third party's proprietary rights; or (ii)
challenging the Company or one of its subsidiaries, ownership or use, or the
validity or enforceability of any Intellectual Property; and to the Company's
knowledge no listed application or registration/patent of the Company is the
subject of any patent interference proceeding or similar proceeding. Except as
set forth on Schedule 4.18(b), there is no claim, suit, action or proceeding
pending or, to best of the Company's knowledge, threatened by the Company or one
of its subsidiaries, alleging any third party's intellectual property rights
conflict or infringe the Intellectual Property of the Company or one of its
subsidiaries.
(c) Any (i) material license, sublicense and other agreements in
which the Company or one of its subsidiaries grant rights to any Person to use
the Intellectual Property; (ii) material license, sublicense and other agreement
in which any Person grants rights to the Company or one of its subsidiaries to
use the Intellectual Property of such Person; or (iii) material consent,
indemnification, forbearance to ▇▇▇, settlement agreement or cross-licensing
arrangement relating to the Intellectual Property or the intellectual property
of any third party to which the Company or one of its subsidiaries is a party,
which is described by the Company in its Annual Report on Form 20-F for the year
ended December 31, 1998 or in any subsequent filing made with the SEC, is
correct in all material respects except as the same may have been supplemented
or modified by a later filing with the SEC. Except as previously disclosed,
neither the Company nor any of its subsidiaries is under any obligation to pay
royalties or similar payments in connection with any license, nor will the
Company or any of its subsidiaries be, as a result of the execution and delivery
of the Transaction Documents or the performance of its obligations hereunder or
thereunder, in breach of any license, sublicense or other agreement relating to
the Intellectual Property except for any such breach which would not reasonably
be expected to have a Material Adverse Effect. As to each material license
agreement to which the Company or one of its subsidiaries is a party, the
Company or such subsidiary is current in the payment of all royalties due
thereunder.
(d) Except as set forth in Schedule 4.18(d), no former or present
employee, officer or director of the Company or any of its subsidiaries holds
any right, title or interest, directly or indirectly, in whole or in part, in or
to any Intellectual Property.
(e) The Company or one of its subsidiaries owns or has the right
to use all computer software, software systems and databases and all other
information systems currently used in the business of the Company or any of its
subsidiaries, including, without limitation, all computer software used in the
business of the Company on personal computers by employees of the Company or any
of its subsidiaries.
For purposes of this Purchase Agreement, "Intellectual Property" shall
mean all of the following, owned or used in the business of the Company or any
of its subsidiaries: (i) trademarks and service marks (registered or
unregistered), trade dress, trade names and other names and slogans embodying
business or product goodwill or indications of origin, all applications or
registrations in any jurisdiction pertaining to the foregoing and all goodwill
associated therewith; (ii) patents, patentable inventions, discoveries,
improvements, ideas, know-how, formula
-13-
methodology, processes, technology and computer programs, software and databases
(including source code, object code, development documentation, programming
tools, drawings, specifications and data) and all applications or registrations
in any jurisdiction pertaining to the foregoing, including all reissues,
continuations, divisions, continuations-in-part, renewals or extensions thereof;
(iii) trade secrets, including confidential and other non-public information,
and the right in any jurisdiction to limit the use or disclosure thereof; (iv)
copyrights in writings, designs, mask works or other works, and applications or
registrations in any jurisdiction for the foregoing; (v) database rights; (vi)
Internet Web sites, domain names and registrations or applications for
registration thereof; (vii) licenses, immunities, covenants not to ▇▇▇ and the
like relating to any of the foregoing; (viii) books and records describing or
used in connection with any of the foregoing; and (ix) claims or causes of
action arising out of or related to infringement or misappropriation of any of
the foregoing.
4.19 Regulatory Matters
(a) As to each product subject to the jurisdiction of the U.S.
Food and Drug Administration ("FDA") under the Federal Food, Drug and Cosmetic
Act and the regulations thereunder ("FDCA") (each such product, a "Regulated
Product") that is manufactured, tested, distributed and/or marketed by the
Company or any of its subsidiaries, such Regulated Product is being
manufactured, tested, distributed and/or marketed in substantial compliance with
all applicable requirements under FDCA and similar state and foreign laws and
regulations, including but not limited to those relating to investigational use,
premarket clearance, good manufacturing practices, labeling, advertising, record
keeping, filing of reports and security.
(b) To the Company's knowledge, there are no rule making or
similar proceedings before the FDA or comparable federal, Canadian, state,
provincial, local or foreign government bodies which involve or, to the
Company's actual knowledge, affect the Company or any of its subsidiaries which,
if the subject of an action unfavorable to the Company or any of its
subsidiaries, would have a Material Adverse Effect.
(c) The description of the results of tests or evaluations
contained in the Company's Investigational Device Exemption submission, dated
November 11, 1998 (the "IDE"), are accurate and complete in all material
respects, and the Company has no knowledge-of any other tests or evaluations,
the results of which reasonably call into question the results described or
referred to in the IDE. Except as set forth on Schedule 4.19, neither the
Company nor any of its subsidiaries has received any written notices or
correspondence from the FDA or any other governmental agency requiring the
termination, suspension or modification of any tests or evaluations conducted on
behalf of the Company or any of its subsidiaries.
4.20 Year 2000. Except as set forth in Schedule 4.20, in the SEC
Reports or as would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect, the Company's computer software,
hardware, firmware and other similar or related items of automated, computerized
and/or software system(s) that are relied on by, or sold or provided with
equipment or materials sold or provided by, the Company or its subsidiaries in
the conduct of their respective businesses, (A) will not malfunction prior to,
on, or after January 1, 2000 as a consequence of the change of century or
millennium associated with that date, and (B) are, as
-14-
applicable, able to process dates and calculate spans of dates within and
between the twentieth and twenty-first centuries prior to, including and
following January 1, 2000, including by: (i) correctly recognizing all valid
dates, including September 9, 1999 and January 1, 2001, (ii) properly
recognizing leap years, including recognizing year 2000 as a leap year with 366
days and February 29, 2000 as a leap year day, and (iii) properly interfacing
with the same or other systems, where designed to have the capacity to
interface, so as to preserve proper processing of date information, including by
automatic conversion of date information into and from a four digit and two
digit date format as appropriate, provided, however, that (a) the
representations and warranties contained in this Section 4.20 shall only apply
if the software, firmware or hardware is used in accordance with the
documentation therefor, and all other products used in combination with such
software, firmware or hardware properly exchange date data with the software,
firmware or hardware and (b) to the extent that any of the representations and
warranties contained in this Section 4.20 are made by the Company with respect
to computer software, hardware, firmware and other similar or related items of
automated, computerized and/or software systems that are manufactured,
assembled or provided by parties other than the Company or its subsidiaries, the
representations and warranties provided by the Company are provided to the best
of the Company's knowledge.
4.21 Tax Matters. Except as set forth on Schedule 4.21, there are no
United States or Canadian federal, state, provincial, county, municipal or local
taxes or comparable foreign taxes due and payable by the Company or any of its
subsidiaries which have not been paid. The provisions for taxes on the
consolidated balance sheet of the Company for the year ended December 31, 1998
are sufficient for the payment of all accrued and unpaid United States and
Canadian federal, state, provincial, county, municipal and local taxes or
comparable foreign taxes of the Company and its subsidiaries whether or not
assessed or disputed as of the date of such balance sheet. The Company and each
of its subsidiaries has duly filed all United States and Canadian federal,
state, provincial, county, municipal and local or comparable foreign tax returns
required to have been filed by it and there are in effect no waivers of
applicable statutes of limitations with respect to taxes for any year. Except as
set forth on Schedule 4.21, neither the Company nor any of its subsidiaries has
been subject to a tax audit of any kind, whether in Canada, the United States or
other jurisdiction in which such entity conducts business.
4.22 Insurance. The Company and its subsidiaries and their respective
properties are insured in such amounts, against such losses and with such
insurers as are prudent when considered in light of the nature of the properties
and businesses of the Company and its subsidiaries. Schedule 4.22 sets forth a
complete and accurate list of the insurance policies of the Company and its
subsidiaries as in effect on the date hereof, including in each case the
applicable coverage limits, deductibles and the policy expiration dates. No
written notice of any termination or threatened termination of any of such
policies has been received by the Company or any of its subsidiaries and such
policies are in full force and effect.
4.23 Transactions with Related Parties. Except as set forth in the
Company's Annual Report on Form 20-F for its fiscal year ended December 31, 1998
or in Schedule 4.23, neither the Company nor any subsidiary is a party to any
agreement with any of the Company's directors, officers or shareholders or any
Affiliate or family member of any of the foregoing under which it: (i) leases
any real or personal property other than automobiles (either to or from such
Person), (ii)
-15-
licenses real or personal property or Intellectual Property (either to or from
such Person), (iii) is obligated to purchase any tangible or intangible asset
from or sell such asset to such Person, (iv) purchases products or services from
such Person, or (v) has borrowed money from or lent money to such Person. Except
as set forth in Schedule 4.23, to the best of the Company's knowledge, there
exist no agreements among shareholders of the Company, except as contemplated by
the Transaction Documents, to act in concert with respect to their voting or
holding of Company securities.
4.24 Interest in Competitors. Neither the Company, nor any or its
subsidiaries, nor any of their respective officers nor, to the best of the
Company's knowledge, directors, has any interest, either by way of contract or
by way of investment (other than as holder of not more than 2% of the
outstanding capital stock of a publicly traded Person) or otherwise, directly or
indirectly, in any Person other than the Company and its subsidiaries that (i)
provides any services or designs, produces or sells any product or product lines
or engages in any activity similar to or competitive with any activity currently
conducted by the Company or any of its subsidiaries or (ii) has any direct or
indirect interest in any asset or property, real or personal, tangible or
intangible, of the Company.
4.25 Private Offering. Neither the Company nor anyone acting on its
behalf shall offer the Shares for issue or sale to, or solicit any offer to
acquire, any of the same from, anyone so as to bring the issuance and sale of
the Shares within the provisions of Section 5 of the Securities Act. Based upon
the representations of the Investors set forth in Section 4, the offer, issuance
and sale of the Shares, are and will be exempt from the registration and
prospectus delivery requirements of the Securities Act, and have been registered
or qualified (or are exempt from registration and qualification) under the
registration, permit or qualification requirements of all applicable state
securities laws, and are qualified for distribution or are exempt from such
requirements for qualification under applicable Canadian federal and provincial
securities laws.
4.26 Material Facts. This Agreement and the other Transaction
Documents do not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements contained therein or
herein, in light of the circumstances in which they were made, not misleading.
5. Representations, Warranties and Covenants of the Investors.
5.1 Investment Representations. Each Investor, severally and not
jointly, represents and warrants to and covenants with the Company that:
(a) Investor is knowledgeable, sophisticated and experienced in
making, and is qualified to make, decisions with respect to investments in
shares presenting an investment decision like that involved in the purchase of
the Shares, including investments in securities issued by the Company, and has
requested, received, reviewed and considered all information Investors deems
relevant (including the SEC Reports) in making an informed decision to purchase
the Shares.
-16-
(b) Investor is purchasing the Shares in the ordinary course of
its business for its own account for investment only and with no present
intention of distributing the Shares or any arrangement or understanding with
any other persons regarding the distribution of the Shares (except for transfers
to "affiliates," meaning, for purposes of this Section 5.1(b), with respect to
an Investors, any other person directly or indirectly controlling, controlled by
or under direct or indirect common control with such Investors).
(c) Investor shall not, directly or indirectly, offer, sell,
pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase
or otherwise acquire or take a pledge of) any of the securities purchased
hereunder except in compliance with the Securities Act, applicable Blue Sky
laws, and the rules and regulations promulgated thereunder, and any applicable
Canadian laws, rules or regulations.
(d) Investor has completed or caused to be completed the
information requested on the Investors' counterpart execution page and the
Registration Questionnaire, attached as Appendix I to the Registration Rights
Agreement for use in preparation of the Registration Statement, and the answers
thereto are true and correct in all material respects as of the date hereof and
will be true and correct, in all material respects, as of the effective date of
the Registration Statement (provided that Investors shall be entitled to update
such information by providing notice thereof to the Company prior to the
effective date of such Registration Statement).
(e) Investor has, in connection with its decision to purchase the
Shares, relied with respect to the Company and its affairs solely upon the SEC
Reports and the representations and warranties of the Company contained herein.
(f) Investor is an "accredited investor" within the meaning of
Rule 501 of Regulation D promulgated under the Securities Act.
(g) Investor has full right, power, authority and capacity to
enter into this Purchase Agreement and the Registration Rights Agreement and to
perform the transactions contemplated hereby and thereby. This Purchase
Agreement and the Registration Rights Agreement have been duly authorized,
executed and delivered by the Investor. Assuming due authorization, execution
and delivery by each of the other parties hereto and thereto, this Purchase
Agreement and the Registration Rights Agreement are valid and binding
obligations of Investor, enforceable against it in accordance with their terms,
except as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors' rights
generally or by general equitable principles
5.2 Ability to Bear Risk. Investor is able to bear the economic risk
of holding the Shares for an indefinite period, including the loss of Investors'
entire investment. The Shares were not offered or sold to Investors by any form
of general solicitation or advertising.
5.3 Independent Advice. Investor understands that nothing in the SEC
Reports, this Purchase Agreement, the Registration Rights Agreement or any other
materials presented to Investors in connection with the purchase and sale of the
Shares constitutes legal, tax or
-17-
investment advice and that no independent legal counsel retained by the Company
has reviewed these documents and materials on Investor's behalf. Investor has
consulted such legal, tax and investment advisors as it, in its sole discretion,
has deemed necessary or appropriate in connection with its purchase of the
Shares.
5.4 No Transferability. Investor understands that: (a) subject to
Section 5.1(b), the Shares shall not be transferable in the absence of
registration under the Securities Act or an exemption therefrom or in the
absence of compliance with any term of this Purchase Agreement; (b) the Company
shall provide stop transfer instructions to its transfer agent with respect to
the Shares in order to enforce the restrictions contained in this Section 5.4;
and (c) each certificate representing Shares shall be in the name of Investor
and shall bear substantially the following legends (in addition to any legends
required under applicable securities laws):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS
OF ANY JURISDICTION, AND MAY ONLY BE SOLD,
PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF BY
AN INVESTOR IF SUBSEQUENTLY REGISTERED UNDER THE
SECURITIES ACT AND REGISTERED OR QUALIFIED UNDER
ANY APPLICABLE STATE SECURITIES LAWS, UNLESS
EXEMPTIONS FROM SUCH REGISTRATION AND
QUALIFICATION REQUIREMENTS ARE AVAILABLE."
The legend contained in this Section 5.4 may be removed from a stock certificate
immediately upon receipt by the Company's transfer agent of a certificate
substantially in the form of Exhibit A attached hereto, if being sold pursuant
to the Registration Statement if then effective, and such other documentation as
the Company's transfer agent may routinely require, including, but not limited
to, an opinion of counsel. Notwithstanding the foregoing, such Shares must be
held in certificated form until all restrictive legends required by applicable
law may be removed in accordance with applicable law.
6. Conditions to Company's Obligations at the Closing.
The Company's obligations to complete the sale and issuance of the
Shares and to deliver Shares to each Investor, individually, as set forth in the
Schedule of Investors shall be subject to the following conditions (to the
extent not waived by the Company):
6.1 Payment for Shares. Each Investor shall have paid to the Company
the purchase price for the Shares purchased by it.
6.2 Representations and Warranties Correct. The representations and
warranties made by such Investors in Section 5 hereof shall be true and correct
when made, and shall be true and correct on the Closing.
-18-
6.3 Minimum Sale. The aggregate purchase price for the Shares sold to
Investors pursuant to this Agreement shall not be less than $15 million.
7. Conditions to Investors' Obligations at the Closing.
Each Investor's obligation to accept delivery of the Shares and to pay
for the Shares shall be subject to the following conditions (to the extent not
waived by such Investors):
7.1 Registration Rights Agreement. The Company shall have executed
and delivered the Registration Rights Agreement.
7.2 Representations and Warranties Correct. The representations and
warranties made by the Company in Section 4 shall be true and correct as of the
Closing.
7.3 Covenants Performed. The Company shall have performed and
complied in all material respects with all of its obligations under this
Purchase Agreement which are to be performed or complied with on or prior to the
Closing.
7.4 Legal Opinions.
(a) Investors shall have received from ▇▇▇▇ Marks & ▇▇▇▇▇ LLP,
counsel to the Company, an opinion letter addressed to the Investors, dated as
of the date of the Closing, in a form acceptable to PaineWebber Incorporated
(the "Placement Agent"), the Investors and their respective counsel, subject to
customary assumptions and qualifications.
(b) Investors shall have received from ▇▇▇▇▇▇▇, Spring, ▇▇▇▇▇▇▇▇
& Kichler, counsel to the Company, an opinion letter addressed to the Investors,
dated as of the date of the Closing, in a form acceptable to the Placement Agent
and the Investors and their respective counsel, subject to customary assumptions
and qualifications.
(c) Investors shall have received from ▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇,
P.C., counsel to the Company, an opinion letter addressed to the Investors,
dated as of the date of the Closing, in a form acceptable to the Placement Agent
and the Investors and their respective counsel, subject to customary assumptions
and qualifications.
(d) Investors shall have received from ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, counsel
to the Company, an opinion letter relating to intellectual property matters
addressed to the Investors, dated as of the date of the Closing, in a form
acceptable to the Placement Agent and the Investors and their respective
counsel, subject to customary assumptions and qualifications.
7.5 Minimum Sale. The aggregate purchase price for the Shares sold to
the Investors pursuant to this Agreement shall not be less than $15 million.
8. Miscellaneous.
8.1 Waivers and Amendments. Neither this Purchase Agreement nor any
provision hereof may be changed, waived, discharged, terminated, modified or
amended except upon the
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written consent of the Company and holders of at least a majority of the Shares,
or, in the case of non-material or ministerial amendments, upon the written
consent of the Company and the Placement Agent.
8.2 Headings. The headings of the various sections of this Purchase
Agreement have been inserted for convenience of reference only and shall not be
deemed to be part of this Purchase Agreement.
8.3 Broker's Fee. The Company and each Investor (severally and not
jointly) hereby represent that, except for amounts to be paid by the Company to
the Placement Agent and certain other financial advisers as set forth in the
Company's engagement letter with the Placement Agent, there are no brokers or
finders entitled to compensation in connection with the sale of the Shares, and
shall indemnify each other for any such fees for which they are responsible.
8.4 Severability. In case any provision contained in this Purchase
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
8.5 Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed effectively given: (a) upon
personal delivery to the party to be notified, (b) when sent by confirmed
facsimile if sent during normal business hours of the recipient; if not, then on
the next business day, (c) upon receipt when sent by first-class registered or
certified mail, return receipt requested, postage prepaid, or (d) upon receipt
after deposit with a nationally recognized overnight express courier, postage
prepaid, specifying next day delivery with written verification of receipt. All
communications shall be sent to the party to be notified at the address as set
forth below or at such other address as such party may designate by ten (10)
days advance written notice to the Company. All communications shall be
addressed as follows:
(a) if to the Company, to:
Visible Genetics Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Executive Officer
with a copy so mailed to:
▇▇▇▇ Marks & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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and to:
▇▇▇▇▇▇▇, Spring, ▇▇▇▇▇▇▇▇ & Kichler
Suite 700
40 ▇▇▇▇▇▇▇▇ Avenue West
Toronto, Ontario
M2N 6K9
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
(b) if to the Investors, at the address as set forth on the
Counterpart Execution Page of this Purchase Agreement.
8.6 Governing Law; Exclusive Jurisdiction. This Purchase Agreement
shall be governed by and construed in accordance with the laws of the State of
New York as applied to contracts entered into and performed entirely in New York
by New York residents, without regard to conflicts of law principles. The
parties hereto (a) agree that any suit, action or other proceeding arising out
of this Agreement shall be brought only in the courts of the State of New York
or the courts of the United States located within the State of New York, in each
case in the County of New York, (b) consent and submit to the exclusive
jurisdiction of each such court in any such suit, action or proceeding and (c)
waive any objection which they, or any of them, may have to personal
jurisdiction or the laying of venue of any such suit, action or proceeding in
any of such courts, and agree not to seek to change venue.
8.7 Counterparts. This Purchase Agreement may be executed in two or
more counterparts, each of which shall constitute an original, but all of which,
when taken together, shall constitute but one instrument, and shall become
effective when one or more counterparts have been signed by each party hereto
and delivered to the other parties.
8.8 Survival of Representations, Warranties and Agreements.
Notwithstanding any investigation made by any party to this Purchase Agreement,
all covenants, agreements, representations and warranties made by the Company
and each Investors herein and in the certificates for the securities delivered
pursuant hereto shall survive the execution of this Purchase Agreement, the
delivery to the Investors of the Shares and the payment therefor until the
expiration of the Registration Period as defined in the Registration Rights
Agreement.
8.9 Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto. Neither the terms "successors" nor "assigns" as used herein
shall include any Person who purchases Shares from any Investor after the
Closing and is not an affiliate of an Investor.
8.10 Entire Agreement. This Purchase Agreement and other documents
delivered pursuant hereto, including the exhibits, constitute the full and
entire understanding and agreement between the parties with regard to the
subjects hereof and thereof.
8.11 Payment of Fees and Expenses. Each of the Company and the
Investors shall bear its own expenses and legal fees incurred on its behalf with
respect to this Purchase
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Agreement, the Registration Rights Agreement and the transactions contemplated
hereby and thereby; provided, however, that the Company shall (i) pay the costs
of one legal counsel for all Investors up to a maximum of $25,000; (ii) bear the
costs in connection with the Registration Statement (pursuant to the
Registration Rights Agreement) and (iii) reimburse the Placement Agent for
certain fees and expenses incurred by the Placement Agent in connection with the
transactions contemplated hereby, as set forth in the engagement letter with the
Placement Agent. If any action at law or in equity is necessary to enforce or
interpret the terms of this Purchase Agreement, the prevailing party shall be
entitled to reasonable attorney's fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
8.12 Confidentiality. Each Investor acknowledges and agrees that any
information or data it has acquired or hereafter shall acquire pursuant to this
Agreement or the Registration Rights Agreement from the Company was received and
shall be received by such Investor in confidence except any such information or
data which at the time of disclosure was in the public domain or was readily
available through public sources other than as a result of any breach of the
terms hereof or the Registration Rights Agreement or was known to the Investor
prior to receipt from the Company or was obtained from a third party not in
violation of any confidentiality, non-disclosure or similar obligations of such
third party or the Investor (the "Confidential Information"). Except to the
extent authorized by the Company and required by any federal or state law, rule
or regulation or any decision or order of any court or regulatory authority,
each Investor agrees that it will refrain from disclosing any such Confidential
Information to any Person other than to any agent, attorneys, accountants,
employees, officers and directors of Investor (collectively, "agents") who need
to know such information in connection with Investor's purchase of the Shares,
and who agree to be bound by the confidentiality provisions of this Purchase
Agreement. In the event that Investor or its agents are required by federal or
state or other law, rule or regulation or any decision or order of any court or
regulatory authority to release such information or data, it shall give the
Company sufficient prior notice so that the Company may seek a stay or other
release or waiver from disclosing such information. Each Investor agrees not to
use to the detriment of the Company or for the benefit of any other Person or
Persons, or misuse in any way, any Confidential Information of the Company.
8.13 Knowledge. The phrases "knowledge," "to the Company's knowledge,"
"to the Company's best knowledge," "of which the Company is aware" and similar
language as used herein shall mean the actual knowledge and current awareness,
or knowledge which a reasonable person would have acquired following a
reasonable investigation, of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
[The rest of this page intentionally left blank]
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If this Purchase Agreement is satisfactory to you, please so indicate
by signing the acceptance on a counterpart execution page to this Purchase
Agreement and return such counterpart to the Company whereupon this Purchase
Agreement will become binding between us in accordance with its terms.
Visible Genetics Inc.
an Ontario corporation
By:____________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President and Chief Executive Officer
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Common Shares Purchase Agreement
Counterpart Execution Page
By signing below, the undersigned agrees to the terms of the Visible Genetics
Inc. Common Shares Purchase Agreement and to purchase the number of Shares set
forth below.
Number of Shares being purchased:
______________________________________
INVESTORS:
______________________________________
By:___________________________________
Name:
Title:
Address:___________________________
___________________________
___________________________
Facsimile:_________________________
Please complete the following:
1. The exact name that your _________________________
Shares are to be registered in
(this is the name that will
appear on your Shares
certificate(s)). You may use a
nominee name if appropriate:
2. The relationship between the _________________________
Investors of the Shares and
the Registered Holder listed
in response to item 1 above:
3. The mailing address and _________________________
facsimile number of the
Registered Holder listed in _________________________
response to item 1 above (if
different from above): Fascimile:_______________
_________________________
4. (For United States Investors:)
The Social Security Number or
Tax Identification Number of
the Registered Holder listed
in the response to item 1
above:
Exhibit A
---------
VISIBLE GENETICS INC.
INVESTORS' CERTIFICATE OF RESALE OF THE SHARES
The undersigned, an officer of, or other person duly authorized by
____________________________________________________ hereby certifies that
[fill in official name of individual of institution]
he/she [said institution] is the Investors of the Shares evidenced by the
attached stock certificate(s) and as such, sold such Shares on _________ in
[date]
accordance with registration statement number ______________ and the requirement
[fill in the number of or otherwise
identify registration statement]
of delivering a current prospectus of the Company has been complied with in
connection with such sale.
Print or Type:
Name of Investors (Individual or _________________________________
Institution):
Name of Individual representing Investors _________________________________
(if an Institution):
Title of Individual representing Investors _________________________________
(if an Institution):
Signature by:
Individual Investors or Individual
representing Investors: _________________________________