OPHTHALMIC TECHNOLOGIES INC. SHARE PURCHASE AGREEMENT April 11, 2007
OPHTHALMIC
TECHNOLOGIES INC.
April 11,
2007
OPHTHALMIC
TECHNOLOGIES INC
This
Share Purchase Agreement
(the
“Agreement”)
is
made and entered into as of April 11, 2007, by and among Ophthalmic
Technologies, Inc.,
an
Ontario corporation (the “Company”);
and
Exegenics Inc., a Delaware corporation (the “Investor”).
Recitals
| Whereas, |
the
Company has authorized the issuance from treasury of an aggregate
of 67.94
common shares (the “Shares”);
and
|
| Whereas, |
the
Investor desires to purchase the Shares on the terms and conditions
set
forth herein; and
|
| Whereas, |
the
Company desires to issue the Shares to Investor on the terms and
conditions set forth herein.
|
Now
Therefore,
in
consideration of the foregoing recitals and the mutual promises,
representations, warranties, and covenants hereinafter set forth, the parties
hereto agree as follows:
| 1. |
Agreement
to Sell and Purchase
|
| 1.1 |
Issuance
and Purchase. Subject
to the terms and conditions hereof, at the Closing (as hereinafter
defined) the Company hereby agrees to issue to the Investor, and
the
Investor agrees to purchase from the Company, that number of common
shares
of the Company equivalent to, but not exceeding, one-third (1/3)
of the
Company’s issued and outstanding share capital, for an aggregate purchase
price of US$5 million (the “Investment Amount”), constituting, at the
Closing, 67.94 Shares at a purchase price of US $73,594.35 per
Share.
|
| 1.2 |
Authorization
of Shares.
The Shares, when issued and allotted in accordance herewith: (a)
will be
duly authorized, validly issued, fully paid, non-assessable and free
of
pre-emptive or similar rights; (b) shall have the rights, preferences
and
privileges as set forth in the Articles of Incorporation of the Company
attached hereto as Exhibit
1.2
(the “Articles”);
and (c) will be free and clear of any liens, security interests or
third
party rights created by the
Company.
|
| 1.3 |
Investor’s
Proportion of Company Share Capital.
As
stated in Section 1.1 above, the Shares shall constitute on the Closing
Date (as defined below), one-third (1/3) of the Company’s issued and
outstanding share capital on a fully diluted basis, after giving
effect to
the consummation of all transactions contemplated at the Closing,
subject
to Section 1.4 below, and treating all options, warrants, convertible
securities and rights to purchase securities of the Company, on an
as-exercised and as-converted basis (“Fully
Diluted Basis”),
all as reflected in the Company’s capitalization table attached hereto as
Exhibit
1.3.
|
|
1.4
|
Cancellation
of Impugned Shareholder Shares. Notwithstanding
Section 1.3 above, the Parties acknowledge that it is their present
intention that for the purposes of resolving certain issues as between
the
Company and any Impugned Shareholders (as defined below) which will
result
in the purchase for cancellation (“Cancellation”) by the Company, of all
or part of the share capital of the Company held by such Impugned
Shareholders, that if, as a consequence of any such Cancellation,
the
shareholding of the Investor then exceeds one-third (1/3) of the
share
capital of the Company taken as a proportion to the holdings of the
shareholders remaining after such Cancellation (the “Original
Shareholders”, which term expressly
excludes
any Impugned Shareholder), then, in each such instance, the Investor
shall
sell, for nominal consideration, and the Original Shareholders shall
purchase, in their Pro-Rata Proportions (as defined below), that
number of
the Shares held by the Investor necessary to adjust the proportionate
shareholding of the Investor so that it constitutes only one-third
(1/3)
of the fully-diluted issued and outstanding share capital of the
Company
as at the date of each such Cancellation.
|
|
1.5
|
Financing
of Cancellation.
Subject to Section 1.7 below, in the event of any such Cancellation
of
Impugned Shareholder shareholdings as contemplated in Section 1.4
above,
the Company shall pay only a nominal amount of the aggregate consideration
payable in respect of all such Cancellations taken together. Any
additional funds required, to the extent such required funds exceed
nominal amounts, shall be borne by the Original Shareholders (as
defined
in Section 1.4) in their Pro-Rata Proportions, or in such proportions
as
the Original Shareholders may agree, in writing, as at the time of
such
Cancellation. Alternatively, and in the sole discretion of the Original
Shareholders, where the Original Shareholders are required to bear
the
cost of any such Cancellation of Impugned Shareholder shareholdings,
the
Original Shareholders may elect instead to purchase such shareholdings
from the Impugned Shareholder, at the transfer price determined under
the
relevant dispute settlement agreement, in their Pro-Rata Proportions,
or
in such proportions as the Original Shareholders may agree, in writing,
as
at the time of such purchase provided, however, that any such purchase
shall not have the effect of reducing the proportionate shareholding
of
the Investor so that it constitutes less than one-third (1/3) of
the
fully-diluted issued and outstanding share capital of the Company
as at
the date of each such purchase.
|
|
1.6
|
Defined
Terms.
For the purposes of Sections 1.4 and 1.5 above, “Pro-Rata Proportion”
means, with respect to any Original Shareholder as at the date of
each
such Cancellation, the percentage of Shares it owned directly or
indirectly as at the Closing is of the total number of the issued
and
outstanding Shares of the Company as at the Closing time, without
taking
into account the shareholdings of any Impugned Shareholder. For greater
certainty, the Pro-Rata Proportion with respect to any Original
Shareholder will be the fraction that has as its numerator the total
number of issued and outstanding Shares of the Company held by such
Original Shareholder as at the Closing time and as its denominator
the
total number of all issued and outstanding Shares of the Company
held by
all Original
Shareholders as at the Closing time. For the purposes Sections 1.4
and 1.5
above, “Impugned Shareholder” means each of Nidek Co. Ltd. (“Nidek”) and
▇▇▇▇-▇▇▇▇ Chaduc (“Chaduc”).
|
|
1.7
|
Special
Provisions - Nidek Cancellation. Notwithstanding
Section 1.5 above, the Parties acknowledge that it is their present
intention that, for the purposes of financing a Cancellation of Nidek
shares, the Company shall pay the purchase price of the shares up
to the
amount otherwise paid to the Company by Nidek as part of any settlement
agreement. Any funds required in excess of this amount, to the extent
such
required funds exceed nominal amounts, shall be borne by the Original
Shareholders in accordance with the provisions of Section 1.5 above.
|
2
| 2. |
Closing,
Registration and Payment
|
| 2.1 |
Closing.
The closing of the sale and purchase of the Shares under this Agreement
(the “Closing”)
shall take place at 10:00 a.m. on April 11, 2007, at the Company's
offices or at such other time or place as the Company and Investor
may
mutually agree (such date is hereinafter referred to as the “Closing
Date”).
|
| 2.2 |
Transactions
at Closing.
At the Closing, the following transactions and actions shall be taken, and
all such transactions and actions shall be deemed to take place
simultaneously:
|
2.2.1 The
Investor shall pay to the Company the sum of US $5 million, by way of wire
or
electronic transfer of immediately available funds to the Company’s bank account
or by such other form of payment acceptable to the Company;
2.2.2 The
Company shall issue to the Investor 67.94 Shares.
2.2.3 The
Company shall further deliver to the Investor the following
documents:
(a) Validly
executed share certificate, issued in the name of Exegenics Inc., and
representing the Shares issued to the Investor at the Closing;
(b) A
copy of
the resolutions of the Board of Directors of the Company, approving: (i) the
execution, delivery and performance of this Agreement; and (ii) the issuance
of
the Shares to the Investor at the Closing, against and subject to payment of
the
Investment Amount;
(c) Any
other
document or instrument to be provided by the Company reasonably necessary or
expedient to give full effect to the sale and purchase of the Shares and
otherwise to the consummation of all the transactions contemplated
herein.
| 2.3 |
Conditions
to Closing by the Investor.
The obligations of the Investor to take any action required of it
hereunder to be taken at the Closing are subject to the fulfillment
at or
before the Closing of the following conditions precedent, any one
or more
of which may be waived in whole or in part by the Investor in its
sole
discretion:
|
2.3.1 Representations
and Warranties.
The
representations and warranties made by the Company in this Agreement shall
have
been true and correct in all material respects when made, and shall be true
and
correct in all material respects as of the Closing as if made on the date of
the
Closing.
3
2.3.2 Covenants.
All
covenants, agreements, and conditions contained in this Agreement to be
performed or complied with by the Company prior to or at the Closing shall
have
been performed or complied with in all material respects, prior to or at the
Closing.
2.3.3 Consents
etc.
The
Company shall have secured all permits, consents, approvals, resolutions and
authorizations that shall be necessary or required lawfully for the Company
to
consummate this Agreement and to issue the Shares to be purchased by the
Investor at the Closing.
2.3.4 Delivery
of Documents.
All the
documents to be delivered by the Company to the Investor at the Closing shall
be
in form and substance reasonably satisfactory to the Investor.
2.3.5 Proceedings
and Documents.
All
corporate and other proceedings in connection with the transactions contemplated
by this Agreement and all documents and instruments incident to such
transactions shall be reasonably satisfactory in substance and form to the
Investor, and the Investor shall have received all such counterpart originals
or
certified or other copies of such documents as the Investor may reasonably
request.
2.3.6 No
Judgment or Order.
There
shall not be on the date of the Closing any judgment or order of a court of
competent jurisdiction or any ruling, regulation or order of any authority
which
would prohibit or have the effect of preventing consummation of the transactions
contemplated by this Agreement.
| 2.4 |
Conditions
to Closing by the Company.
The obligations of the Company to take any action required of the
Company
hereunder to be taken at the Closing are subject to the fulfillment
at or
before the Closing of the following conditions, which conditions
may be
waived in whole or in part by the Company, and which waiver shall
be at
the sole discretion of the Company:
|
2.4.1 Covenants.
All
covenants, agreements and conditions contained in this Agreement to be
performed, or complied with, by the Investor prior to or at the Closing shall
have been performed or complied with by the Investor prior to or at the
Closing.
2.4.2 Representations
and Warranties.
The
representations and warranties made by the Investor in this Agreement shall
have
been true and correct when made, and shall be true and correct as of the date
of
the Closing.
2.4.3 Consents,
etc.
The
Company shall have secured all consents and approvals, as provided in Section
2.3.3 above.
2.4.4 No
Judgment or Order.
There
shall not be on the date of the Closing any judgment or order of a court of
competent jurisdiction or any ruling, regulation or order of any authority
which
would prohibit or have the effect of preventing consummation of the transactions
contemplated by this Agreement.
4
| 3. |
Representations
and Warranties of the
Company
|
Except
as
set forth on a Schedule of Exceptions delivered by the Company to the Investor
at the Closing, which is attached hereto as Exhibit 3,
the
Company hereby represents and warrants to the Investor as of the date of this
Agreement as set forth below.
| 3.1 |
Organization,
and Qualification.
The Company is a Company duly organized and validly existing under
the
laws of Ontario, Canada. The Company has all requisite corporate
power and
authority to own and operate its properties and assets, to issue
and sell
the Shares, and to carry out the provisions of this Agreement and
to carry
on its business as presently conducted.
|
| 3.2 |
Subsidiaries.
The Company does not own or control any equity security or other
interest
of any other corporation, limited partnership or other business
entity.
|
| 3.3 |
Capitalization;
Voting Rights.
|
| (a) | The authorized share capital of the Company, immediately prior to the Closing, consists of (i) an unlimited number of shares of Common Stock with no par value (“Common Stock”), of which 132.48 shares are issued and outstanding; |
| (b) | Other than as set forth on the Schedule of Exceptions and in Note 8 of the Financial Statements, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or shareholder agreements, or agreements of any kind for the purchase or acquisition from the Company of any of its securities. |
| (c) | All issued and outstanding shares of the Company’s Common Stock (i) have been duly authorized and validly issued and are fully paid and non-assessable, and (ii) were issued in compliance with all applicable Canadian laws concerning the issuance of such securities. |
|
(d)
|
The
rights, preferences, privileges and restrictions of the Shares are
as
stated in the
Articles. The consummation of the transactions contemplated hereunder
will
not result in any anti-dilution adjustment or other similar adjustment
to
any outstanding securities or instruments of the Company. When issued
in
compliance with the law, the provisions of this Agreement and the
Articles, the Shares will be validly issued, fully paid and
non-assessable, and will be free of any liens or encumbrances other
than
liens and encumbrances created by or imposed upon the Investor;
provided,
however,
that the Shares may be subject to restrictions on transfer under
U.S.,
Canadian or any applicable state or provincial securities laws as
set
forth herein, or as otherwise required by such laws at the time a
transfer
is proposed.
|
|
(e)
|
Exhibit
1.3 describes the capitalization of the Company immediately prior
to the
Closing.
|
5
| 3.4 |
Authorization.
The Company has the full power and authority to execute, enter into
and
perform its obligations under this Agreement. The Agreement has been
duly
authorized by all of the necessary corporate actions, and the same
constitute or will constitute (as applicable) valid and legally binding
obligations of the Company, enforceable against it in accordance
with
their respective terms, all except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance,
and any other laws of general application affecting enforcement of
creditors' rights generally, and as limited by laws relating to the
availability of specific performance, injunctive relief or other
equitable
remedies.
|
| 3.5 |
Financial
Statements.
The Company has made available to the Investor its Financial Reports
as of
April 30, 2006 (the “Financial
Statements”
and the “Financial
Statement Date”
respectively), copies of which are attached hereto as Exhibit
3.5.
The Financial Statements, together with the notes thereto, are complete
and correct in all material respects, have been prepared in accordance
with generally accepted accounting principles in Canada, applied
on a
consistent basis throughout the periods indicated, except as disclosed
therein.
|
| 3.6 |
Liabilities.
Except as set forth in the Schedule of Exceptions, the Company has
no
debts and, to the best of its knowledge, knows of no contingent
debts, not
disclosed in the financial statements, except current debts incurred
in
the ordinary course of business which have not been, either in any
individual case or in the aggregate, materially adverse.
|
| 3.7 |
Agreements;
Action.
Except as set forth in the Schedule of Exceptions, there are no
agreements, understandings, instruments, contracts, proposed transactions,
judgments, orders, writs or decrees to which the Company is a party
or to
its knowledge by which it is bound which may involve (i) obligations
(contingent or otherwise) of, or payments to, the Company in excess
of
$10,000, or (ii) the transfer or license of any patent, copyright,
trade
secret or other proprietary right to or from the Company (other than
licenses arising from the purchase of “off the shelf” or other standard
products).
|
| 3.8 |
Obligations
to Related Parties.
Except as set forth in the Schedule of Exceptions or the Financial
Statements, there are no obligations of the Company to officers,
directors, shareholders, or employees of the Company other than (a)
for
payment of salary for services rendered and (b) reimbursement for
reasonable expenses incurred on behalf of the Company. No officer,
director or shareholder, or any member of their immediate families,
is,
directly or indirectly, interested in any material contract with
the
Company (other than such contracts as relate to any such person’s
ownership of shares or other securities of the Company). The Company
is
not a guarantor or indemnitor of any indebtedness of any other person
or
corporation.
|
| 3.9 |
Changes.
Except as set forth in the Schedule of Exceptions, since the Financial
Statement Date, there has not been to the Company’s knowledge:
|
| (a) |
Any
change in the assets, liabilities or operations of the Company from
that
reflected in the Financial Statements, other than changes in the
ordinary
course of business, none of which individually or in the aggregate
has had
a material adverse effect on
such assets, liabilities or operations of the Company; Since the
date of
the Financial statements it is expected that sales will decrease
for
fiscal 2007 as a result of ongoing supply issues with the Company’s major
supplier for the OCT/SLO product, Newport Corporation. The Company’s
payable to Newport Corporation has also increased. Both these issues
have
been addressed to the satisfaction of Newport and the Company in
a
purchase order, a draft of which is attached hereto, which deals
with both
supply and payable issues.
|
| (b) | Any damage, destruction or loss whether or not covered by insurance, materially and adversely affecting the properties, business or prospects or financial condition of the Company; |
6
| (c) | Any change, except in the ordinary course of business, in the contingent obligations of the Company by way of guaranty, endorsement, indemnity, warranty or otherwise; |
| (d) | Any waiver by the Company of a valuable right or of a material debt owed to it; |
| (e) | Any direct or indirect loans by the Company to any shareholder, employee, officer or director of the Company, |
| (f) | Any material change in any compensation arrangement or agreement with any employee, officer, director or shareholder; |
| (g) | Any declaration or payment of any dividend or other distribution of the assets of the Company; |
| (h) |
Any
debt, obligation or liability incurred, assumed or guaranteed by
the
Company, except those for immaterial amounts and for other liabilities
incurred in the ordinary course of
business;
|
| (i) | Any sale, assignment or transfer of any patent, trademarks, copyrights, trade secret or other intangible assets; or |
| (j) | Any change in any material agreement to which the Company is a party or by which it is bound. |
| 3.10 |
Title
to Properties and Assets; Liens, Etc.
The Company has good and marketable title to its properties and assets,
including the properties and assets reflected in the Financial Statements,
and good title to its leasehold estates, in each case subject to
no
mortgage, pledge, lien, lease, encumbrance or charge (a “Lien”), other
than (a) those resulting from taxes which have not yet become delinquent,
(b) minor liens and encumbrances which do not materially detract
from the
value of the property subject thereto or materially impair the operations
of the Company, and (c) those that have otherwise arisen in the ordinary
course of business. The Company is in compliance with all material
terms
of each agreement to which it is a party or is otherwise bound.
|
| 3.11 |
Intellectual
Property.
|
| (a) |
To
the best of its knowledge the Company owns or possesses sufficient
legal
rights to all patents, trademarks, service marks, trade names, copyrights,
trade secrets, licenses, information and other proprietary rights
and
processes necessary for its business as now conducted and as presently
proposed to be conducted, without any known infringement of the rights
of
others. There are no outstanding options, licenses or agreements
of any
kind relating to the foregoing proprietary rights, nor is the Company
bound by or a party to any options, licenses or agreements of any
kind
with respect to the patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses, information and other proprietary
rights and processes of any other person or entity other than such
licenses or agreements arising from the purchase of “off the shelf” or
standard products.
|
7
| (b) | Except with respect to the Zeiss letters, which have been disclosed to the Investor, the Company has not received any communications alleging that the Company has violated by conducting its business as presently proposed, would violate any of the patents, trademarks, service marks, trade names, copyrights or trade secrets or other proprietary rights of any other person or entity, nor is the Company aware of any basis therefore. |
| (c) | None of the key employees of the Company (as named in Section 3.16 hereto) 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 court or administrative agency, that would interfere with their duties to the Company or that would conflict with the Company’s business as presently proposed to be conducted. Each former and current employee, officer and consultant of the Company has executed a proprietary information and inventions agreement. No former and current employee, officer or consultant of the Company has excluded works or inventions made prior to his or her employment with the Company from his or her assignment of inventions pursuant to such employee, officer or consultant’s proprietary information and inventions agreement. |
| 3.12 |
Compliance
with Other Instruments.
The Company is not in violation or default of any term of its current
Articles, or of any provision of any mortgage, indenture, contract,
agreement or instrument to which it is party or by which it is bound,
or
of any judgment, decree, order, writ. The execution, delivery, performance
of, and compliance with this Agreement, and the issuance and sale
of the
Shares pursuant hereto, will not, with or without the passage of
time or
giving of notice, result in any such violation, or be in conflict
with or
constitute a default under any such term, or result in the creation
of any
mortgage, pledge, lien, encumbrance or charge upon any of the properties
or assets of the license, authorization or approval applicable to
the
Company, it business or operations or any of its assets or properties.
|
| 3.13 |
Litigation.
Except as set forth in the Schedule of Exceptions, there is no
action,
suit, proceeding or investigation pending or, to the Company’s knowledge,
currently threatened against the Company that questions the validity
of
this Agreement, or the right of the Company to enter into any of
such
agreements, or to consummate the transactions contemplated hereby
or
thereby, or which would reasonably be expected to result, either
individually or in the aggregate, in any material adverse change
in the
assets, conditions, affairs or prospects of the Company, financially
or
otherwise, or any change in the current equity ownership of the
Company,
nor is the Company aware that there is any basis for any of the
foregoing.
|
8
| 3.14 |
Tax
Returns and Payments.
The Company has filed all tax returns required to be filed by it.
All
taxes shown to be due and payable on such returns, any assessments
imposed, and to the Company’s knowledge all other taxes due and payable by
the Company on or before the Closing, have been paid or will be
paid prior
to the time they become delinquent. The Company has no knowledge
of any
liability of any tax to be imposed upon its properties or assets
as of the
date of this Agreement that is not adequately provided for.
|
| 3.15 |
Employees.
The Company has no collective bargaining agreements with any of
its
employees.
|
| 3.16 |
Obligations
of Key Employees.
Each Key employee of the Company is currently devoting substantially
all
of his or her business time to the conduct of the business of the
Company.
The Company is not aware that any key employee of the Company is
planning
to work less than full time at the Company in the future. No Key
Employee
is currently working or, to the Company’s knowledge, plans to work for a
competitive enterprise, whether or not such key employee is or
will be
compensated by such enterprise. The Company’s Key Employees have executed
with the Company employment agreements that include a non-competition
and
confidentiality provisions. For the purpose of this Section, the
term “Key
Employee” shall refer to ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇ is also involved in a property management company
that
manages amongst other, family controlled real estate. ▇▇▇▇▇▇ ▇▇▇▇▇
is not
involved in the day to day management of the property management
company.
|
| 3.17 |
Registration
Rights and Voting Rights.
The
Company has not agreed to grant any registration rights, including
piggyback rights, to any person or
entity.
|
| 3.18 |
Compliance
with Laws; Permits.
The Company is not aware of any violation of any applicable statute,
rule,
regulation, order or restriction of any domestic or foreign government
or
any instrumentality or agency thereof in respect of the conduct of
its
business or the ownership of its properties which violation would
materially and adversely affect the business, assets, liabilities,
financial condition, operations or prospects of the Company No
governmental orders, permissions, consents, approvals or authorizations
are required to be obtained and no registrations or declarations
are
required to be filed in connection with the execution and delivery
of this
Agreement and the issuance of the Shares, except such as has been
duly and
validly obtained or filed, or with respect to any filings that must
be
made, or tax to be paid, after the Closing, as will be filed in a
timely
manner. The Company has all franchises, permits, licenses and any
similar
authority necessary for the conduct of its business as now being
conducted
by it, the lack of which could materially and adversely affect the
business, properties or financial condition of the Company and believes
it
can obtain, without undue burden or expense, any similar authority
for the
conduct of its business as planned to be conducted.
|
| 3.19 |
Full
Disclosure.
The Company has provided the Investor with all information requested
by
the Investor in connection with its decision to purchase the Shares
including all information reasonably necessary to make such investment
decision. To the Company’s knowledge, neither this
Agreement, the exhibits and schedules hereto nor any other document
delivered by the Company to Investor or their attorneys or agents
in
connection herewith or therewith or with the transactions contemplated
hereby or thereby, contain any untrue statement of a material fact
nor, to
the best of the Company’s knowledge, omit to state a material fact
necessary in order to make the statements contained herein or therein
not
misleading
|
9
| 3.20 |
Insurance.
The Company has general commercial, product liability, fire and casualty
insurance, with coverage customary for companies similarly situated
to the
Company.
|
| 4. |
Representations
and Warranties of the Investor
|
| The Investor hereby represents and warrants to the Company as follows (such representations and warranties do not lessen or obviate the representations and warranties of the Company set forth in this Agreement). |
| 4.1 |
Requisite
Power and Authority.
Investor has all necessary power and authority under all applicable
provisions of law to execute and deliver this Agreement and to
carry out
its provisions. All action on Investor’s part required for the lawful
execution and delivery of this Agreement has been or will be effectively
taken prior to the Closing. Upon its execution and delivery, this
Agreement will be a valid and binding obligation of Investor, enforceable
in accordance with its terms, except (a) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws
of
general application affecting enforcement of creditors’ rights, and (b) as
limited by general principles of equity that restrict the availability
of
equitable remedies.
|
| 4.2 |
Investment
Representations.
Investor hereby represents and warrants as follows:
|
| (a) |
Investor
Bears Economic Risk.
Investor has substantial experience in evaluating and investing
in private
placement transactions of securities in companies similar to
the Company
so that it is capable of evaluating the merits and risks of its
investment
in a development-stage company and has the capacity to protect
its own
interests. Investor must bear the economic risk of this investment
indefinitely. Investor understands that the Company has no present
intention to offer to the public or register the Shares or any
of its
Common Stock. Investor is aware that its investment should be
regarded as
highly speculative and may cause it substantial or total loss
of its
investment.
|
|
(b)
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Entirely
for own Account; Accredited Investor. Investor
is purchasing the Shares for investment for its account, not as
nominee or
agent, and not with the current view to, or for resale in connection
with,
any distribution thereof. It is an “accredited investor” within the
meaning of (i) Rule 501 of Regulation D promulgated under the U.S.
Securities Act of 1933, as amended; and (ii) National Instrument
45-106 -
Prospectus and Registration Exemptions. It is able to bear the
economic
risks of the investment in the Company and, consequently, without
limiting
the generality of the foregoing, is able to hold the Shares for
an
indefinite period of time and has a sufficient net worth to sustain
a loss
of its entire investment in the Company in the event such loss
should
occur.
|
| (c) |
InvestorCan
Protect Its Interest.
Investor represents that by reason of its, or its management’s, business
or financial experience, Investor has the capacity to protect its
own
interests in connection with the transactions contemplated in the
Agreement. Further, Investor is aware of no publication of any
advertisement or promotion in connection with the transactions
contemplated in the Agreement.
|
10
| (d) |
Company
Information.
Investor has received and reviewed such data provided to it by
the Company
regarding the Company as it deemed appropriate and has had an opportunity
to discuss the Company’s business, management and financial affairs with
directors, officers and management of the Company and has had the
opportunity to review the Company’s operations and facilities. Investor
has also had the opportunity to ask questions of and receive answers
from,
the Company and its management regarding the terms and conditions
of this
investment.
|
| (e) |
No
Public
Market.
Investor understands that the Shares that it is purchasing are
characterized as “restricted securities” inasmuch as they are being
acquired from the Company in a transaction not involving a public
offering. Investor acknowledges that the Shares may be held indefinitely
and understands that no public market now exists for any of the
Shares
issued by the Company and that the Company has made no assurances
that a
public market will ever exist for the Company’s shares.
|
| (f) |
Legend.
Investor acknowledges that the certificates evidencing the Shares
will
bear the following legend:
|
“UNLESSPERMITTED
UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE
THE
SECURITY BEFORE AUGUST 12, 2007.”
6. OPTION
ARRANGEMENTS
6.1 For
and
in consideration of the Closing of the purchase and sale transaction
contemplated herein, each of the Company shareholders listed on the signature
page hereto hereby grant to the Investor an options (collectively, the
“Options”), granting it the irrevocable right to purchase from such shareholder
all of such shareholder’s right, title and interest in and to the capital stock
of the Company (the “Selling Shareholders”). The Company undertakes to dedicate
best efforts to procure, within four (4) weeks from the date hereof, Options
from any other shareholders of the Company not executing this agreement. The
aforesaid options shall extend for the greater of a period of (i) six (6) months
from the date of this Agreement and (ii) three (3) months after completion
of
the audits described in clause (c) below and shall vest effective the date
hereof, at an exercise price per share to be determined in accordance with
the
following formula. The exercise price per share for each option shall be payable
in shares of the common stock of the Investor, par value $0.01 per share (the
“eXeg Common Stock”), and shall be equal to the Aggregate Exercise Price divided
by 135.88. The Aggregate Exercise Price shall be equal to a number of shares
of
eXeg Common Stock determined by dividing the sum of US $10 million by the eXeg
Share Price. eXeg Share Price shall be equal to the average per share closing
price of eXeg Common Stock for the ten (10) trading days ended on the second
business day prior to the exercise of the Option; provided, however, that
notwithstanding the foregoing, the eXeg Share Price shall not exceed US $3.55
nor be less than US $3.20.
11
The
Options shall be predicated on the understanding that:
| (a) |
the
share purchase transaction to be effected by the exercise of the
Option
shall be structured so as to be tax neutral to the Selling Shareholders
and the Investor (which structure may include the transfer of shares
through a Nova Scotia unlimited liability corporation, or such other
mechanism as may be approved by the tax advisors of the parties;
|
| (b) |
the
Options shall be subject to compliance with applicable law in Ontario
respecting shareholders’ rights;
|
| (c) |
the
Company shall dedicate its best efforts to arranging for audits to
be
conducted in a timely fashion respecting the Company’s fiscal years 2006
and 2007. The audits shall be prepared in accordance with generally
accepted accounting principles in Canada (GAAP).
|
6.2 Conduct
of the Company Prior to the Option Closing Date.
Unless
the Investor otherwise agrees in writing and except as otherwise set forth
in
this Agreement, between the date of this Agreement and the closing or expiration
of the Options (the “Option Closing Date”), the Company will: (i) conduct its
business only in the ordinary course of business, (ii) use its reasonable
efforts to keep available the services of its present officers and employees
material to its business operations and (iii) use its reasonable efforts to
preserve its current relationships with its customers, suppliers, distributors,
licensors, officers and other key employees and other persons with which it
has
significant business relationships.
| (a) |
Between
the date of this Agreement and the Option Closing Date, the Company
shall
confer with the Investor from time to time as reasonably requested
by the
Investor to discuss any material changes or developments in the
operational matters of the
Company.
|
| (b) |
Except
as expressly provided in this Agreement, between the date of this
Agreement and the Option Closing Date, the Company will not do
any of the
following without the prior written consent of the Investor:
|
|
(i)
|
create
any Lien on any of its properties or assets (whether tangible or
intangible),
|
|
(ii)
|
sell,
assign, transfer, lease or otherwise dispose of or agree to sell,
assign,
transfer, lease or otherwise dispose of any its fixed assets or cancel
any
indebtedness owed to it.
|
|
(iii)
|
change
any method of accounting or accounting practice used by it, other
than
such changes required by GAAP.
|
|
(iv)
|
issue
or sell any additional shares of the capital stock of, or other equity
interests in it, or securities convertible into or exchangeable for
such
shares or equity interests, or issue or grant any options, warrants,
calls, subscription rights or other rights of any kind to acquire
additional shares of such capital stock, such other equity interests
or
such securities.
|
12
|
(v)
|
amend
the Company’s Articles.
|
|
(vi)
|
declare,
set aside or pay any dividend or distribution with respect to any
share of
its capital stock or declare or effectuate a stock dividend, stock
split
or similar event.
|
| (vii) | issue any note, bond, or other debt security or create, incur, assume, or guarantee any indebtedness for borrowed money or capitalized lease obligation. |
|
(viii)
|
make
any capital investment in, make any loan to, or acquire the securities
or
assets of any other person or
entity.
|
|
(ix)
|
enter
into any new or additional agreements or materially modify any existing
agreements relating to the employment of any officer or any written
agreements of any of its employees, except in the ordinary course
of
business.
|
|
(x)
|
make
any payments outside of the ordinary course of business to any of
the its
officers, directors, employees or stockholders. or
|
|
(xi)
|
agree
to take any of the actions specified in this Section
6.2.
|
| 7. |
Miscellaneous
|
| 7.1 |
Entire
Agreement.
This Agreement and the Schedules and Exhibits attached hereto
fully
embraces the legal relationship between the Parties, and no previous
agreements, memoranda of agreements, letters, negotiations, promises,
consents, undertakings, representations, warranties or documents
which
were applied, exchanged, or signed by or between any of the Parties
prior
to the signing of this Agreement shall have any force or effect
with
respect to the subject matter
hereof.
|
| 7.2 |
Survival.
The representations, warranties, covenants and agreements made herein
shall survive any investigation made by the Investor and the closing
of
the transactions contemplated hereby for a period of two years following
the Closing. All statements as to factual matters contained in any
certificate or other instrument delivered by or on behalf of the
Company
pursuant hereto in connection with the transactions contemplated
hereby
shall be deemed to be representations and warranties by the Company
hereunder solely as of the date of such certificate or
instrument.
|
| 7.3 |
Reports.
Within
90 (ninety) days after the end of each quarter and fiscal year, the
Company shall deliver to the Investor a cop of: (i) a balance sheet
of the
Company as at the end of such period, and (ii) statement of income,
consolidated statements of shareholders' equity and cash flows and
consolidating schedule of investment activities for purchases of
property
and equipment of the Company for such period, all in reasonable detail,
prepared in accordance with generally accepted accounting practices
in
Canada, consistently applied (“GAAP”), and fairly presenting, in all
material respects, the financial position of the Company on and its
results of operations and cash flows, subject to changes resulting
from
normal year-end adjustments that will not be material in amount or
effect.
In the case of the annual reports, such reports shall set forth in
comparative form the figures for the prior fiscal year and the
corresponding figures from the consolidated plan and financial forecast
for the current fiscal year described below. As soon as practicable
but in
any event no later than the last day of each fiscal year, the Company
shall deliver to the Investor a forecast and budget for each of the
next
succeeding 12 (twelve) months of the consolidated balance sheet and
the
statements of income, cash flows and stockholders' equity of the
Company
together with an outline of the major assumptions upon which the
forecast
is based.
|
13
| 7.4 |
Successors
and Assigns.
The Company shall not sell, assign, transfer, or otherwise convey
any of
its rights or delegate any of its duties under this Agreement, except
to a
company which has succeeded to substantially all of the business
and
assets of the Company in compliance with this Agreement and has assumed
in
writing its obligations under this Agreement. Except as otherwise
provided
herein, the terms and conditions of this Agreement shall inure to
the
benefit of and be binding upon the respective successors, assigns,
executors and administrators of the Parties. Nothing in this Agreement,
express or implied, is intended to confer upon any party other than
the
Parties or their respective successors and permitted assigns any
rights,
obligations, or liabilities under or by reason of this
Agreement.
|
| 7.5 |
Governing
Law; Jurisdiction.
This Agreement shall be governed by and construed according to the
laws of
the State of Florida, without regard to the conflict of laws provisions
thereof.
|
| 7.6 |
Severability.
If one or more provisions of this Agreement is held to be illegal,
invalid
or unenforceable under applicable law, such provision shall be excluded
from this Agreement, and the balance of the Agreement shall be interpreted
as if such provision were so excluded and shall be enforceable in
accordance with its terms; provided, however, that in such event
this
Agreement shall be interpreted so as to give effect, to the greatest
extent consistent with and permitted by applicable law, to the meaning
and
intention of the excluded provision as determined by such court of
competent jurisdiction.
|
| 7.7 |
Amendment
and Waiver.
The
failure of any Party at any time or times to require performance
of any
provision hereof or to enforce any right with respect thereto, shall
in no
manner affect the right of such Party at a later time to enforce
the same
and shall in no way be construed to be a waiver of such provision
or
right.
Any term of this Agreement may be amended only with the written consent
of
the Company and the Investor.
|
| 7.8 |
Delays
or Omissions.
It is agreed that no delay or omission to exercise any right, power
or
remedy accruing to any party, upon any breach, default or non-compliance
by another party under this Agreement, or the Articles, shall impair
any
such right, power or remedy, nor shall it be construed to be a waiver
of
any such breach, default or non-compliance, or any acquiescence therein,
or of or in any similar breach, default or non-compliance thereafter
occurring. It is further agreed that any waiver, permit, consent
or
approval of any kind or character on the Investor’s part of any breach,
default, or non-compliance under this Agreement, or under the Articles
or
any waiver on such party’s part of any provisions or conditions of the
Agreement or Articles must be in writing and shall be effective only
to
the extent specifically set forth in such writing. All remedies,
either
under this Agreement, the Articles, by law, or otherwise afforded
to any
party, shall be cumulative and not alternative.
|
14
| 7.9 |
Notices.
All notices required or permitted 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 telex or facsimile if sent during
normal business hours of the recipient, if not, then on the next
business
day, (c) three (3) business days after having been sent by registered
or
certified mail, return receipt requested, postage prepaid, or (d)
one (1)
business day after deposit with a nationally recognized overnight
courier,
specifying next day delivery, with written verification of receipt.
All
communications shall be sent to the Company and to the Investor at
their
respective addresses as set forth on the signature page hereof or
at such
other address as the Company or Investor may designate by written
notice
to the other parties hereto.
|
| 7.10 |
Expenses.
The Company shall pay all costs and expenses that it incurs with
respect
to the negotiation, execution, delivery and performance of the Agreement,
including the reasonable fees and disbursements of counsel to the
Investor, which fees and disbursements shall not exceed
$40,000.
|
| 7.11 |
Titles
and Subtitles.
The titles of the sections and subsections of the Agreement are for
convenience of reference only and are not to be considered in construing
this Agreement.
|
| 7.12 |
Counterparts
and Facsimile Signature.
This Agreement may be executed in any number of counterparts and
by means
of facsimile signature, each of which shall be an original, but all
of
which together shall constitute one
instrument.
|
| 7.13 |
Confidentiality.
The parties hereto agree that, except with the prior written consent
of
the Company, it shall at all times keep confidential and not divulge,
furnish or make accessible to anyone any confidential information,
knowledge or data concerning or relating to the business or financial
affairs of the Company to which the Investor has been or shall become
privy by reason of this Agreement, discussions or negotiations relating
to
this Agreement, the performance of its obligations hereunder or the
ownership of the Shares purchased hereunder. The provisions of this
Section shall be in addition to, and not in substitution for, the
provisions of any separate non-disclosure agreement which may have
been
executed by the parties hereto.
|
| 7.14 |
Pronouns.
All pronouns contained herein, and any variations thereof, shall
be deemed
to refer to the masculine, feminine or neutral, singular or plural,
as to
the identity of the parties hereto may require.
|
| 7.15 |
Further
Assurances. From
time to time after the Closing Date, each party shall, at the request
of
the other party, execute and deliver such additional conveyances,
transfers and other assurances as may be reasonably required to
effectively transfer the Shares to the Investor and the adjustments
provided for in subsection 1.4 hereof and otherwise to carry out
the
intent of this Agreement.
|
[The
remainder of this page intentionally left blank]
15
In
Witness Whereof,
the
parties have executed this Share
Purchase Agreement
as of
the date set forth in the first paragraph hereof.
|
Ophthalmic
Technologies Inc.
By:
_______________________________
Name:
_____________________________
Address:
37
Kodiak Crescent,
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Fax:
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Exegenics
Inc.
By:
_______________________________
Name:
_____________________________
Address:
Fax:
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The
following constitute the Selling Shareholders referenced in Article 6 hereof
and, by their execution below, agree to the provisions of Article
6.
|
1161983
ONTARIO LIMITED
|
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Per:
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|
Name:
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Title:
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▇▇▇▇▇
CORPORATION LIMITED
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Per:
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Name:
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Title:
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Witness
Name:
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Witness
Name:
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Witness
Name:
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