EXHIBIT 10.27
VISIBLE GENETICS INC.
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COMMON SHARE PURCHASE AGREEMENT
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DECEMBER 24, 2001
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. AGREEMENT TO SELL AND PURCHASE THE SHARES.
1.1 SALE OF SHARES. Subject to the terms of this Common Share 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
common shares, without par value ("COMMON SHARES") set forth above such
Investor's signature on the counterpart execution page hereof, at a purchase
price of $US8.34, PROVIDED, THAT, the aggregate purchase price for the Shares
sold to the Investors pursuant to this Agreement shall be $22 million. The
Common Shares sold hereunder shall be referred to herein as the "SHARES."
1.2 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.
1.3 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
delivered by the Company or the offering is terminated, this Purchase Agreement
shall be of no further force and effect.
1.4 USE OF PROCEEDS. The proceeds of the sale of Shares by the Company
may be used for general corporate purposes.
2. CLOSING AND DELIVERY.
2.1 CLOSING. The closing of the purchase and sale of the Shares
pursuant to this Purchase Agreement (the "CLOSING") shall be held
contemporaneously with the satisfaction or waiver of all conditions to Closing
set forth in Sections 5 and 6 hereof. The Closing shall take place on December
24, 2001 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.
2.2 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 MPM BioEquities Master Fund,
LLC ("MPM"). 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.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to the Investors that:
3.1 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, Articles of
Amendment dated July 15, 1999 ("ARTICLES OF AMENDMENT") and By-law No. 3
(collectively, the "ORGANIZATIONAL DOCUMENTS") have been 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, prospects 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 in which the conduct of the Company's business or
the nature of the properties
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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.
3.2 SUBSIDIARIES
(a) SCHEDULE 3.2 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 3.2 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 3.2, are owned free and clear of any mortgage,
pledge, lien, encumbrance, security interest, claim or equity, except as set
forth on SCHEDULE 3.2.
(c) For purposes of this Purchase Agreement, "SUBSIDIARY" shall mean
any (i) Person (as hereinafter defined in Section 3.5) 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.
3.3 CAPITALIZATION
(a) The authorized capital stock of the Company consists of an
unlimited number of shares of Common Shares and an unlimited number of preferred
shares, without par value ("PREFERRED SHARES"). As of the close of business on
December 20, 2001, 16,559,301 Common Shares were issued and outstanding, (ii)
25,153 Series A Convertible Preferred Shares, without par value ("SERIES A
PREFERRED SHARES"), were issued and outstanding, which, including dividends
accrued through October 15, 2001, were convertible into 2,777,880 Common Shares,
(iii) 2,401,639 Common Shares were outstanding under the Company's employee
stock option plans listed on SCHEDULE 3.3(A), (iv) 936,473 Common Shares were
reserved for issuance under the Company's outstanding warrants, and (v) there
were no bonds, debentures, notes or other
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evidences of indebtedness issued or outstanding having the right to vote on any
matters on which the Company's shareholders may vote. From December 20, 2001 to
the date hereof, the Company has not issued any shares or capital stock nor has
the Company issued any instruments convertible into shares of capital stock.
(b) All of the outstanding Common Shares and Preferred Shares 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
Preferred Shares as described in the Articles of Amendment of the Company and
the options which are listed on SCHEDULE 3.3(A) and the warrants, options and
convertible securities which are listed on SCHEDULE 3.3(C) hereto, on the
Closing Date, there will be no shares of Common Shares, Preferred Shares 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 Shares 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 Shares. Except as set forth on SCHEDULE 3.3(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.
3.4 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 duly authorized, 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, (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,
and (iii) the rights
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to indemnity or contribution may be limited by Federal or state securities law
or public policy underlying such laws.
3.5 CONSENTS AND APPROVALS. Except as set forth in SCHEDULE 3.5, 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 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.
3.6 ABSENCE OF CONFLICTS, ETC. Except as set forth in SCHEDULE 3.6, 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 breaches or defaults that would not reasonably be
expected to have a Material Adverse Effect.
3.7 SEC REPORTS
(a) 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 Company and each of the Company's SEC Reports
(as defined below) (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, and the Company's 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. "SEC Reports" means
the following Company reports filed or furnished by the Company with or to the
United States Securities and Exchange Commission ("SEC"): (i) Annual Reports on
Form 20-F for the fiscal years ended December 31, 1999 and 2000; (ii) periodic
reports on Form 6-K since January 1, 2000, (iii) all other documents filed by
the Company with the SEC (pursuant to Sections 13, 14(a) and 15(d) of the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT")) since January
1, 2000; and (iv) all registration statements since January 1, 2000. The SEC
Reports are all the documents (other than preliminary material) that the Company
filed or was required to file with the SEC from January 1, 2000 through the date
hereof.
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(b) The audited consolidated financial statements as at and for the
period ended December 31, 2000 of the Company included in the SEC Reports (the
"2000 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 2000 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 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) The unaudited interim financial statements of the Company as at and
for all periods commencing on or after January 1, 2001 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. 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.
3.8 ABSENCE OF CERTAIN DEVELOPMENTS. Except as disclosed in the SEC
Reports filed with or furnished to the SEC on or prior to the date hereof or in
SCHEDULE 3.8, and except for the transactions contemplated by this Purchase
Agreement, since December 31, 2000, (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.
3.9 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
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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 environment or to occupational health and
safety and, except as set forth in SCHEDULE 3.9, 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 nor 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, (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 in each case as
permitted by applicable law and except 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 not reasonably be expected to have
a Material Adverse Effect (and except for any of the foregoing relating to
Intellectual Property which are covered by the provisions of Section 3.18).
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.
3.10 LITIGATION. Except as set forth on SCHEDULE 3.10 or in any SEC
Report, 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 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 3.10, neither the
Company nor any subsidiary is subject to any order, writ, judgment, injunction,
decree, determination or award of any Governmental Entity against it.
3.11 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
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would be in violation with notice or lapse of time, or both) of, or has
otherwise breached, any 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 which the
Company or any of its subsidiaries is a party (reflecting all amendments thereto
through the date of filing), which are required to be filed with the SEC, 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 3.11, 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 such material agreement.
3.12 ABSENCE OF UNDISCLOSED LIABILITIES. Except as disclosed on
SCHEDULE 3.12 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, 2000, 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.
3.13 LABOR RELATIONS AND EMPLOYMENT
(a) Except as set forth in SCHEDULE 3.13(A), (i) to 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
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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 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 3.13(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 3.13(C), the Company and its
subsidiaries have in force written confidentiality and non-disclosure agreements
and patent/copyright/ invention assignment agreements with, and require 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 3.13(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.
3.14 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 to the extent
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required by applicable law, 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 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.
3.15 REAL PROPERTY
(a) The Company and its subsidiaries do not own any real property in
whole or in part.
(b) SCHEDULE 3.15 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 3.15, 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
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properties covered by the Leased Real Property constitute all of the facilities
and real properties presently used by the Company or its subsidiaries.
3.16 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.
3.17 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) To the Company's knowledge, 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, except in the case of each of the foregoing where
such action or omission is not reasonably believed to have a Material Adverse
Effect.
(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.
11
(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 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 other than those covered by or
included in Section 3.19 hereof 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 other than those
covered by or included in Section 3.19 hereof.
"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
3.18 INTELLECTUAL PROPERTY
(a) Except as described in SCHEDULE 3.18(A), the Company or one of its
subsidiaries owns or, with respect to Intellectual Property licensed to the
Company, or one of its subsidiaries from third parties, has the valid right to
use, free and clear of all liens and other encumbrances or claims of any nature
("LIENS") which result from or are related to actions or
12
omissions of the Company or any of its subsidiaries and, to our knowledge, free
and clear of Liens which result from or are related to the actions or omissions
of third parties, except in each case for Liens that are not material and do not
interfere with the use of such Intellectual Property, 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 on the business, properties and financial conditions of the
Company and its subsidiaries taken as a whole. Except as set forth on SCHEDULE
3.18(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; provided that the representation and warranty in
this sentence is made to our knowledge with respect to Intellectual Property
licensed by the Company or one of its subsidiaries from third parties.
(b) Except as set forth on SCHEDULE 3.18(B), there is no claim, suit,
action or proceeding pending or, to 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 3.18(B), there is no claim, suit, action or proceeding pending or, to
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) Except as set forth in SCHEDULE 3.18(C), 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.
(d) 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 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,
13
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.
3.19 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 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 be reasonably
likely to have a Material Adverse Effect.
(c) Except as set forth on SCHEDULE 3.19, 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.
3.20 TAX MATTERS. Except as set forth on SCHEDULE 3.20, 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 other than any unpaid taxes which
individually or in the aggregate are not reasonably expected to have a Material
Adverse Effect and unpaid taxes which are being contested in good faith by the
Company or one of its subsidiaries and for which the Company has recorded
adequate reserves in accordance with GAAP. The provisions for taxes on the
consolidated balance sheet of the Company for the year ended December 31, 2000
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
14
SCHEDULE 3.20, 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.
3.21 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 3.21 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.
3.22 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,
2000, in any subsequent SEC Report or in SCHEDULE 3.22, 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) 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 3.22, to 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.
3.23 INTEREST IN COMPETITORS. Except as set forth in Section 3.18 or
Schedules 3.18(a), (b) or (c), neither the Company, nor any or its subsidiaries,
nor, to the Company's knowledge, any of their respective officers or 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.
3.24 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.
15
3.25 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.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE INVESTORS.
4.1 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 Investor deems
relevant (including but not limited to, the SEC Reports) in making an informed
decision to purchase the Shares.
(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 4.1(b), with respect to an
Investor, 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.
16
(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; and
(h) Investor is a resident of the city and state set forth under its
name on the Counterpart Execution Page hereof and is not a resident of Canada or
any province of Canada.
4.2 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 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.
4.3 NO TRANSFERABILITY. Investor understands that: (a) subject to
Section 4.1(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 4.4;
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."
17
5. 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 in writing by the Company):
5.1 PAYMENT FOR SHARES. Each Investor shall have paid to the Company
the purchase price for the Shares purchased by it, in accordance with provisions
of Section 2.2.
5.2 REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties made by such Investors in Section 4 hereof shall be true and correct
as of the Closing.
5.3 COVENANTS PERFORMED. Each Investor 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
Closing.
5.4 MINIMUM SALE. The aggregate purchase price for the Shares sold to
Investors pursuant to this Agreement shall not be less than $20 million.
5.5 APPROVAL OF COMPANY'S BOARD OF DIRECTORS. The Company's Board of
Directors shall have adopted resolutions authorizing the execution, delivery and
performance of the Transaction Documents and the transactions contemplated
therein.
6. 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):
6.1 REGISTRATION RIGHTS AGREEMENT. The Company shall have executed and
delivered the Registration Rights Agreement.
6.2 REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties made by the Company in Section 4 shall be true and correct as of the
Closing.
6.3 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.
6.4 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 the Investors and their counsel,
▇▇▇▇▇▇▇ Procter LLP ("▇▇▇▇▇▇▇ PROCTER") subject to customary assumptions and
qualifications.
18
(b) Investors shall have received from Osler, ▇▇▇▇▇▇ & Harcourt 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 the Investors and ▇▇▇▇▇▇▇
Procter, subject to customary assumptions and qualifications.
6.5 MINIMUM SALE. The aggregate purchase price for the Shares sold to
the Investors pursuant to this Agreement shall not be less than $20 million.
6.6 APPROVAL OF COMPANY'S BOARD OF DIRECTORS. The Company's Board of
Directors shall have adopted resolutions authorizing the execution, delivery and
performance of the Transaction Documents and the transactions contemplated
therein.
7. MISCELLANEOUS.
7.1 WAIVERS AND AMENDMENTS. Neither this Purchase Agreement nor any
provision hereof may be changed, waived, discharged, terminated, modified or
amended except upon the 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 MPM.
7.2 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.
7.3 BROKER'S FEE. The Company and each Investor (severally and not
jointly) hereby represent that 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.
7.4 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.
7.5 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 or refusal of receipt when sent by
first-class registered or certified mail, return receipt requested, postage
prepaid, or (d) upon receipt or refusal of 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 other party. 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: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
(b) if to the Investors, at the address as set forth on the Counterpart
Execution Page of this Purchase Agreement with a copy to ▇▇▇▇▇▇▇ Procter LLP,
Exchange Place, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, telephone: (617)
▇▇▇-▇▇▇▇; facsimile: (▇▇▇) ▇▇▇-▇▇▇▇; Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, P.C.
7.6 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.
7.7 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.
7.8 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 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.
7.9 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,
20
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.
7.10 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.
7.11 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 Agreement, the Registration Rights Agreement and the
transactions contemplated hereby and thereby; PROVIDED, HOWEVER, that the
Company shall pay the reasonable fees and expenses of one legal counsel for all
Investors in connection with all such agreements and the transactions
contemplated hereby and thereby, FURTHER PROVIDED, THAT, without its prior
written approval, the Company shall have no obligation to pay any such fees and
expenses which exceed $25,000 in the aggregate. The foregoing shall not limit
the obligation of the parties under the indemnification obligations set forth in
Section 2.5 of the Registration Rights Agreement.
7.12 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 (a) 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, the Registration Rights Agreement or any other agreement or
fiduciary obligation by which such Investor is bound, or (b) was known to the
Investor prior to receipt from the Company other than as a result of any breach
of any of the terms hereof, the Registration Rights Agreement, or any other
agreement or fiduciary obligation by which such Investor is bound, or (c) was
obtained from a third party not in violation of any confidentiality,
non-disclosure or similar obligations or any fiduciary 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. The Investors will be liable for any breach by their agents of the
provisions of this Section 7.12. In the event that an Investor or its agents are
requested or required by law, rule or regulation or any decision or order of any
court or regulatory authority to disclose all or any part of the information
contained in the Confidential Information, each such Investor agrees that: (a)
the Investor will provide the Company with immediate written notice of any such
request or requirement so that the Company may seek an appropriate protective
order or other remedy; (b) the Investor will not oppose, and will cooperate with
the Company in, seeking such order or remedy; and (c) in all events, including,
but not limited to (i) the Company not obtaining a protective order or other
remedy that covers all of such Confidential Information or (ii) the Company
waiving any provision of this Purchase
21
Agreement, the Investor will disclose only that portion of the Confidential
Information which in the written opinion of the Investor's counsel the Investor
is legally compelled to disclose, and the Investor will exercise its best
efforts to ensure that confidential treatment will be accorded to that portion
of the Confidential Information that is being disclosed. 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.
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 ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇.
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22
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.
By:
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Financial Officer
By:
--------------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: General Counsel
23
COMMON SHARE PURCHASE AGREEMENT
COUNTERPART EXECUTION PAGE
By signing below, the undersigned agrees to the terms of the Visible Genetics
Inc. Common Share 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):
Facsimile:
--------------------
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: