Exhibit D
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SUBSCRIPTION AGREEMENT
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BETWEEN
NEUROCHEM INC.
AND
PP LUXCO HOLDINGS II, S.A.R.L.
AND
PICCHIO PHARMA INC.
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COMMON SHARES
AND
WARRANTS
JULY 25, 2002
TABLE OF CONTENTS
1. DEFINITIONS 2
2. SUBSCRIPTION FOR UNITS AND SUBSCRIPTION PRICE 3
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY 4
4. REPRESENTATIONS AND WARRANTIES OF PP LUXCO AND PPI 10
5. POST-CLOSING COVENANTS 10
6. SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND
INDEMNIFICATION 11
7. PUBLIC ANNOUNCEMENTS 12
8. FEES AND EXPENSES 12
9. NOTICES 12
10. MISCELLANEOUS PROVISIONS 14
SUBSCRIPTION AGREEMENT
ENTERED INTO AT MONTREAL, Province of Quebec, on this 25 th day of July 2002.
BETWEEN: PP LUXCO HOLDINGS II, S.A.R.L. an entity duly incorporated under
the laws of Luxembourg, herein acting and represented by Stephane
Hadet, its Manager, duly authorized for the purposes hereof as he
so declares
(hereinafter referred to as the "PP LUXCO")
AND: PICCHIO PHARMA INC., an entity duly incorporated under the Canada
Business Corporations Act, having its head office at 000 Xxxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxx, herein acting and represented
by Xxxxxx Xxxxxxxxxx, its Vice President, Business Development and
Legal Affairs, duly authorized for the purposes hereof as he so
declares;
(hereinafter referred to as the "PPI")
AND: (PP Luxco and PPI hereinafter collectively referred to as the
"INVESTOR") NEUROCHEM INC., a corporation duly incorporated under
the Canada Business Corporations Act, having its head office at
0000, Xxxxxxxxx-Xxxxxxx, Xxxxx 000, Xxxxx-Xxxxxxx, Xxxxxx, X0X
0X0, herein acting and represented by Xxx Xxxxxx, its Vice
President Finance and Chief Financial Officer, duly authorized for
the purposes hereof as he so declares;
(hereinafter referred to as the "COMPANY")
WHEREAS on June 19, 2002, the Company accepted the Investor's private
placement offer dated that date (the "PRIVATE PLACEMENT PROPOSAL"), in which the
Investor indicated the principal terms on which it would be willing to subscribe
for common shares of the share capital of the Company together with Warrants;
and
WHEREAS, in order to give effect to the foregoing, the Company and the
Investor wish to enter into this agreement with a view to determining the terms
and conditions of the aforesaid subscription;
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NOW, THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:
1. DEFINITIONS
The following terms and expressions, where used in this agreement and
in the Schedules hereto, have the following meaning, unless the context
requires otherwise:
1.1 "COMMON SHARES" means common shares of the Company;
1.2 "CVMQ" means the Commission des valeurs mobilieres du Quebec;
1.3 "COMPANY INTELLECTUAL PROPERTY" means all intellectual Property
relating to the operation of the business of the Company, the
whole as more fully described in Schedule B hereto;
1.4 "ENCUMBRANCES" mortgages, hypothecs, charges, pledges, security
interests, liens, encumbrances, actions, claims, demands and
equities of any nature whatsoever or howsoever arising and any
rights or privileges capable of becoming any of the foregoing;
1.5 "FINANCIAL STATEMENTS" means the audited consolidated financial
statements of the Company, the accompanying notes and the
auditors' report thereon for the year ended June 30, 2001,
together with each subsequent unaudited interim financial
statements, as filed with the regulatory authorities under the
applicable Securities Laws as of the date hereof;
1.6 "INTELLECTUAL PROPERTY" means all rights in trade-marks and
trade-names, patents, patent applications, discoveries, processes,
designs, including industrial designs, inventions, specifications,
software, technical information, know-how, technologies, formulae,
copyrights, databases, data, models, templates, prototypes in use
or under development, results and knowledge obtained directly or
indirectly from the completion of research and development
projects and not in the public domain, including all improvements
to or amendments of any of the foregoing rights, rights pertaining
to their registration or to applications for registration or
renewal thereof in all territories or jurisdictions, licences,
sublicences or concessions, and all other intellectual property
rights required for or relating to the operation of a business or
arising therefrom;
1.7 "MATERIAL ADVERSE EFFECT" means a material adverse effect on the
financial position, business, affairs, prospects, shareholders'
equity or results of operations of the Company;
1.8 "MATERIAL FACT" means a material fact for purposes of the
Securities Laws;
1.9 "MISREPRESENTATIONS" has the meaning given to it in the Securities
Laws;
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1.10 "PERMANENT INFORMATION RECORD" means information concerning the
Company contained in (i) the Financial Statements of the Company,
(ii) the management proxy circular dated October 30, 2001
distributed in connection with the annual and special meeting of
shareholders of the Company held on December 5, 2001, (iii) the
annual information form of the Company dated November 16, 2001 for
the year ended June 30, 2001, and (iv) management's discussion and
analysis of the financial condition and results of operations for
the year ended June 30, 2001, as filed with the regulatory
authorities pursuant to the applicable Securities Laws;
1.11 "PLAN" means the amended and restated stock option plan of the
Company;
1.12 "PP LUXCO'S SECURITIES" means collectively the 2,800,000 Common
Shares and the 2,800,000 Warrants to be issued to PP Luxco under
section 2;
1.13 "PRIVATE PLACEMENT PROPOSAL" has the meaning given to it in the
recitals hereto;
1.14 "SECURITIES LAWS" means collectively the securities laws
applicable in Alberta, British Columbia, Ontario and Quebec and
the regulations thereunder, as well as policies published by the
securities commissions or similar regulatory authorities in such
provinces;
1.15 "SHARES" means collectively the 2,800,000 Common Shares to be
issued to PP Luxco pursuant to section 2;
1.16 "SUBSCRIPTION PRICE" means the subscription price for each Unit as
provided in subsection 2.1;
1.17 "SUBSIDIARY" has the meaning given to that term pursuant to the
current provisions of the Canada Business Corporations Act;
1.18 "UNDERLYING SHARES" means collectively the 2,800,000 Common Shares
issuable upon the exercise of the Warrants;
1.19 "UNITS" has the meaning given to it in subsection 2.1;
1.20 "WARRANTS" means collectively the 2,800,000 warrants issued
pursuant to the warrant certificate in the form attached hereto as
Schedule A, entitling PP Luxco, subject to exercise of the
warrants at the price and on the terms indicated in Schedule A, to
subscribe for up to 2,800,000 Common Shares.
2. SUBSCRIPTION FOR UNITS AND SUBSCRIPTION PRICE
2.1 PP Luxco hereby subscribes for 2,800,000 units (the "UNITS"), each
Unit consisting of one Common Share and one Warrant for a total
consideration of $7,000,000, representing a price of $2.50 per
Unit (such price being hereinafter referred to as the
"SUBSCRIPTION PRICE").
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2.2 The Company accepts PP Luxco's subscription and issues to PP Luxco
the Shares and the Warrants as fully paid and non-assessable for
the aggregate Subscription Price and in accordance with the terms
and conditions set out herein.
2.3 The Company acknowledges receipt from PP Luxco of an amount of
$7,000,000 in complete and final payment of the aggregate
Subscription Price for the Shares and the Warrants. PP Luxco
acknowledges receipt from the Company of a certificate registered
in PP Luxco's name representing the Shares and a certificate
representing the Warrants.
2.4 The Subscription Price for each Unit is allocated as follows: (i)
an amount of $2.49 attributed to the subscription price for the
Common Share included in such Unit, (ii) an amount of $0.01
attributed to the subscription price for the Warrant included in
such Unit.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Investor and hereby
acknowledges that PP Luxco is relying on such representations and
warranties for the purposes of subscribing for Units pursuant to this
agreement, that:
3.1 The Permanent Information Record at the applicable date of filing
with the regulatory authorities pursuant to the applicable
Securities Laws (i) complied with the requirements of the
Securities Laws; (ii) did not contain any Misrepresentations;
(iii) constituted full, true and plain disclosure of all the
Material Facts relating to the Common Shares and the Company; and
(iv) did not omit to state any Material Fact required to be stated
therein or necessary to make the statements therein not misleading
in light of the circumstances in which they were made.
3.2 The Company has not sustained, since June 30, 2001, any material
loss relating to its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labour
dispute or court or governmental action, order or decree or from
any regulatory body having jurisdiction. Since March 31, 2002: (i)
the Company has not incurred any liabilities or obligations
(absolute, accrued, contingent or otherwise) or entered into any
transactions not in the ordinary course of business that are
material to them (except transactions contemplated by this
agreement); and (ii) there has not been any material adverse
change, or any development which could be reasonably interpreted
to have a Material Adverse Effect (including potential material
adverse changes arising from pending or, to the best of the
Company's knowledge, threatened claims or contingent liabilities),
in or affecting the affairs, management, financial position,
shareholders' equity or results of operations of the Company.
3.3 The Company has good and marketable title to all property owned by
it which is material, individually or in the aggregate, free of
any Encumbrance of any kind,
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except as mentioned in SCHEDULE 3.3. Any property held under lease
by the Company which is material, individually or in the
aggregate, to it is held by it under valid, subsisting and
enforceable leases with such exceptions as are not material,
individually or in the aggregate to the Company.
3.4 The Company (a) has been duly incorporated, organized and is
validly existing as a corporation in good standing under the laws
of its jurisdiction of incorporation, with corporate power and
authority to own, lease and operate its property and assets, to
conduct its business as now conducted and as currently proposed to
be conducted and to carry out the provisions hereof; and (b) where
required or material, has been duly qualified as an
extra-provincial or foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or conducts
any business.
3.5 The Company has an authorized share capital consisting of an
unlimited number of Common Shares and an unlimited number of
Preferred Shares, 18,070,780 Common Shares of which are issued and
outstanding.
3.6 All of the issued and outstanding shares of the share capital of
the Company have been duly authorized and validly issued and are
fully paid and non-assessable.
3.7 The Shares have been duly authorized and are validly issued to PP
Luxco as fully paid and non-assessable and will be freely
negotiable after the expiry of the applicable holding period.
3.8 The Underlying Shares have been duly authorized and reserved for
issuance and, subject to exercise of the Warrants in accordance
with their terms and conditions, will be validly issued to PP
Luxco as fully paid and non-assessable and will be freely
negotiable after the expiry of the applicable holding period, if
any.
3.9 The Company has no operating subsidiaries.
3.10 The Company is not in violation of its constating documents,
by-laws or resolutions of its directors or shareholders or in
default in the performance of any indenture, hypothec, mortgage,
deed of trust, loan agreement, lease or other agreement or
instrument to which it is a party or by which it is bound or to
which any of its property or assets is subject, which violation,
default or defaults, individually or in the aggregate, would have
a Material Adverse Effect.
3.11 The compliance by the Company with all of the provisions of this
agreement and the consummation of the transactions contemplated
herein:
3.11.1 will not conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a
default under, any agreements to which it is a party or
result in the creation or imposition of any lien, prior
claim, charge or encumbrance on any of the property or
assets of the Company pursuant to the terms of any
indenture, hypothec,
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mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which the Company is a party or
by which the Company is bound or to which any of the
property or assets of the Company are subject;
3.11.2 will not result in any violation of the provisions of the
constating documents, by-laws or resolutions of the
directors or shareholders of the Company; and
3.11.3 will not result in any violation of any statute or any
order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any
of its properties;
other than, in the case of paragraphs 3.11.1 and 3.11.3 above, any
breach, default, violation or conflict which, individually or in
the aggregate, will not have a Material Adverse Effect.
3.12 No consent, approval, authorization, order, registration, filing,
deposit or qualification of or with any court or governmental or
regulatory agency or body or any person, firm, corporation or
entity is required for the consummation by the Company of the
transactions contemplated by this agreement, except for the
written consent of more than 50% of the Shareholders of the
Company relating to the issuance of 1,095,000 of the 2,8000,000
Warrants, the consent of the Toronto Stock Exchange (the "TSX"),
the filing with the CVMQ of the relevant notice in respect of the
Shares, the Warrants and the Underlying Shares and the payment of
the filing fees associated therewith as required by the Securities
Laws and of the duly signed Private Placement Questionnaire and
Undertaking. The Shares and the Underlying Shares have been
conditionally approved for listing on the TSX subject to
compliance only with customary listing conditions.
3.13 The Company has not been served or otherwise received notice of
any legal or governmental proceedings and there are no legal or
governmental proceedings to which the Company is a party or of
which any property or assets of the Company is the subject which
is reasonably likely, individually or in the aggregate, to have a
Material Adverse Effect or which might reasonably be expected to
materially and adversely affect the consummation by the Company of
the transactions contemplated by this agreement. To the best of
the Company's knowledge, no such proceedings are threatened
(implicitly or otherwise) or contemplated by governmental or
regulatory authorities or any other parties. Schedule 3.13
contains the list of all the litigation, pending or threatened,
involving the Company, relating to claims with a value of $50,000
or more.
3.14 The Company holds all of the permits, licences and like
authorizations necessary for it to carry on its business in each
jurisdiction where such business is carried on. Each of such
permits, licences and like authorizations is in good standing and
the Company is not in default with respect to filings to be
effected or conditions to
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be fulfilled in order to maintain such permits, licences or like
authorizations in good standing, such as might produce a Material
Adverse Effect.
3.15 The Company is not in violation of any law, ordinance,
administrative or governmental rule or regulation or court decree
applicable to it, nor is it not in compliance with any term or
condition of, nor has it failed to obtain, any licence, permit,
franchise or other administrative or governmental authorization
necessary to the ownership of its property or to the conduct of
its business, which violation, non-compliance of failure to obtain
would, individually or in the aggregate, have a Material Adverse
Effect or which might reasonably be expected to materially and
adversely affect the consummation by the Company of the
transactions contemplated by this agreement. All such licences,
permits, franchises or other administrative or governmental
authorizations which are so required are valid and subsisting and
in good standing and none of the same contains any term,
provision, condition or limitation which has or would reasonably
be expected to affect or restrict in a materially adverse manner
the operation of the business of the Company, as now carried on or
proposed to be carried on.
3.16 The Company is not aware of any legislation or regulations which
would have a Material Adverse Effect.
3.17 There are no issued or outstanding (a) securities or obligations
of the Company convertible into or exchangeable for any shares of
the share capital of the Company; (b) warrants, rights or options
to subscribe for or purchase from the Company any such shares of
the share capital of the Company, any other securities of the
Company or any such convertible or exchangeable securities or
obligations; or (c) obligations for the Company to issue, purchase
or redeem such shares, such other securities, any such convertible
or exchangeable securities or obligations, or any such warrants,
rights, options or obligations, except pursuant to the provisions
hereof and as disclosed in SCHEDULE 3.17.
3.18 The Company has full corporate power and authority to enter into
this agreement, to issue the Shares, the Warrants and the
Underlying Shares and to consummate the transactions provided for
herein and to do all things and take all actions required to be
done or taken hereunder.
3.19 The execution of this agreement and the performance of the
obligations of the Company arising therefrom have been duly
authorized by all necessary corporate action required to be taken
by the Company.
3.20 This agreement has been duly and validly authorized, executed and
delivered by the Company and constitutes a valid and binding
obligation of the Company enforceable against it in accordance
with its terms, subject to the qualification that enforcement
thereof is subject to applicable bankruptcy, insolvency,
reorganization or other laws affecting creditors' rights generally
and the
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qualification that specific performance and injunctive relief are
awarded at the discretion of the court before which they may be
validly sought.
3.21 The Financial Statements are true and accurate, present fairly
the financial position and condition of the Company as at the date
indicated and the results of its operations for the period
specified, reflect all material liabilities (absolute, accrued,
contingent or otherwise) of the Company as at the date indicated
and have been prepared in conformity with generally accepted
accounting principles in Canada applied on a consistent basis.
3.22 The definitive form of certificate for the Shares is in due and
proper form under the laws governing the Company and complies with
the requirements of the TSX.
3.23 With such exceptions as are not material to the Company (a) the
Company has duly and on a timely basis filed all tax returns
required to be filed by it, has paid all taxes due and payable by
it and has paid all assessments and reassessments and all other
taxes, governmental charges, penalties, interest and other fines
due and payable by it and which were claimed by any governmental
authority to be due and owing and adequate provision has been made
for taxes payable for any completed fiscal period for which tax
returns are not yet required to be filed; (b) there are no
agreements, waivers or other arrangements providing for an
extension of time with respect to the filing of any tax return or
payment of any tax, governmental charge or deficiency by the
Company and there are no actions, suits, proceedings,
investigations or claims threatened or pending against the Company
in respect of taxes, governmental charges or assessments or any
matters under discussion with any governmental authority relating
to taxes, governmental charges or assessments asserted by any such
authority, and (c) the Company has no reason to believe that it
may be subject to an assessment or proceeding under section 245 of
the Income Tax Act (Canada) or any equivalent provision of any
applicable tax law.
3.24 The Company owns or has a right or interest in all the Company
Intellectual Property, free and clear of any Encumbrances; except
in the case of any Company Intellectual Property licenced to the
Company as disclosed in SCHEDULE 3.24. Complete and accurate
copies of all agreements whereby any rights in any of the Company
Intellectual Property have been granted or licenced to the Company
have been provided to the Investor. All registrations of Company
Intellectual Property that are material to the business of the
Company have been properly made in jurisdictions where such
registrations are necessary or desirable, including, without any
limitation, in the U.S. and Japan.
3.25 Except as indicated in SCHEDULE 3.25 hereto, the Company has the
exclusive right to use all of the Company Intellectual Property
and the Company has not granted any licence or other rights to any
other person in respect of the Company Intellectual Property.
Complete and accurate copies of all agreements whereby any
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rights in any of the Company Intellectual Property have been
granted or licenced by the Company to any other person have been
provided to the Investor.
3.26 No officer, employee, consultant or other service provider of the
Company has any rights in the Company Intellectual Property and,
if applicable, each such officer, employee, consultant or other
service provider has signed, in favour of the Company, an
assignment of his or her rights, and waiver of his or her moral
rights, in any Intellectual Property made or designed by such
officer or employee during the course of his or her employment
with the Company or by such consultant or other service provider
during the course of his or her performance of services on behalf
of the Company.
3.27 The conduct of the business of the Company and the use by the
Company of the Company Intellectual Property does not to the best
of its knowledge after due inquiry infringe any Intellectual
Property rights of a third party and the Company is not aware of
any infringement or breach by any third party of the Company
Intellectual Property. The Company confirms that it has not been
the object of any legal proceedings relating to an infringement of
Intellectual Property rights of any third party and that the
Company has not received any demand letter or other notice
alleging that it has infringed the Intellectual Property rights of
any third party. The Company confirms that it is not aware of any
state of facts that casts doubt on the validity or enforceability
of any of the Company Intellectual Property.
3.28 Other than in its agreement with Amersham Health plc, wherein the
Company agrees not to compete in the area of diagnostic imaging of
Alzheimer's Disease, the Company is not a party to and is not
bound by a covenant not to compete or other covenant or agreement
that includes a covenant limiting its ability to compete in any
sector or territory or materially restricting its business or
areas of operation.
3.29 The Company keeps in force property, liability and business
insurance, including directors' liability insurance, with
recognized insurers. Each of such policies covers reasonable risks
and is for amounts that a prudent administrator carrying on a
similar business would keep in force and each of such policies is
in force. The Company is not in default to comply with any of the
terms and conditions of any of such policies and has not omitted
to give a notice or file a claim under any of such policies in a
timely manner; there has been no claim under the insurance
policies since the date of the Financial Statements.
3.30 Each of the clinical testing agreements executed by the Company
with clinical investigation/testing sites contains a covenant by
the other party to obtain the necessary approvals to proceed with
clinical testing.
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3.31 The Company confirms that effective upon closing of the
transactions contemplated herein, Xx. Xxxxxxxxx Xxxxxxx will have
been validly appointed Director and Chairman of the Board of the
Company.
4. REPRESENTATIONS AND WARRANTIES OF PP LUXCO AND PPI
Each of PP Luxco and PPI hereby represents and warrants to the Company
on its own behalf as follows and acknowledges that the Company is
relying on such representations and warranties for purposes of issuance
of the Units hereunder:
4.1 PP Luxco has full power and authority to enter into this
agreement, to subscribe for the Units hereunder and to consummate
the transactions provided for herein and do all things necessary
and expedient hereunder.
4.2 The execution of this agreement and the performance of the
obligations of each of PP Luxco and PPI arising therefrom have
been duly authorized by all necessary corporate action required to
be taken by them.
4.3 This agreement has been duly and validly authorized, executed and
delivered by each of PP Luxco and PPI and constitutes a valid and
binding obligation of each of PP Luxco and PPI enforceable against
each of them in accordance with its terms, subject to the
qualification that enforcement thereof is subject to applicable
bankruptcy, insolvency, reorganization or other laws affecting
creditors' rights generally and the qualification that specific
performance and injunctive relief are awarded at the discretion of
the court before which they may be validly sought.
4.4 The execution and delivery of this agreement by each of PP Luxco
and PPI and compliance by each of PP Luxco and PPI with all of the
provisions thereof shall not cause PP Luxco or PPI to be in
violation of its constating documents, by-laws or resolutions or
in default under any agreement or instrument to which PP Luxco or
PPI is a party or by which it is bound.
5. POST-CLOSING COVENANTS
The Company covenants to the Investor as follows:
5.1 Representation at the Board of Directors. At the first meeting of
the Company's shareholders to occur after the date hereof at which
directors of the Company are to be elected, and at each such
meeting thereafter, the Company shall cause a total of three (3)
nominees of PPI (out of a minimum of 7 directors) to be included
in the management slate of nominees to be presented for election
to the Company's board of directors at such meeting. To that end,
the Company shall take all such reasonable steps, execute all such
documents and do all such acts and things as may be required to
cause the three nominees of PPI (including the appointment of Xx.
Xxxxxxxxx Xxxxxxx as Chairman of the Company) to be included in
the management slate of nominees for election to the Company's
board of directors at every meeting of shareholders called for
such purpose. If, between meetings of the
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Company's shareholders, a nominee of PPI ceases to be a director
of the Company for any reason, PPI shall have the right, but not
the obligation, to cause the Company to fill the vacancy created
on the board of directors as a result thereof and to cause such
director to be replaced with another nominee to be designated by
PPI, such nominee to hold office until the next meeting of the
Company's shareholders at which directors of the Company are to be
elected at which time the remaining provisions of this Section
shall continue to apply. PPI's right to have its three nominees
included in each management slate for the election to the
Company's board of directors in accordance with this Section shall
commence on the date hereof and shall terminate on the date that
PPI ceases to beneficially hold at least 15% of the outstanding
Common Shares (including shares issuable upon exercise of the
Warrants), indirectly or directly, in the aggregate.
5.2 Underlying Shares. As long as Warrants are beneficially held by
PPI, directly or indirectly, the Company covenants to the
Investors to set aside and keep available a sufficient number of
Common Shares (or, if the Common Shares have been converted,
exchanged or reclassified or replaced in any other manner by other
securities, a sufficient number of such other securities) to
permit exercise of all of the Warrants.
5.3 Necessary Requirements. The Company shall satisfy all necessary
requirements and shall take all necessary steps after the date
hereof to permit the listing of the Shares and the Underlying
Shares on the TSX and shall satisfy all requirements (including
the filing requirement and payment of fees) of the Securities Laws
applicable to the transactions contemplated herein.
6. SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND INDEMNIFICATION
6.1 Survival. The representations and warranties of the parties
contained herein shall continue in full force and effect after the
date hereof, notwithstanding any inquiries made before or after
the date hereof, for period of two (2) years except that (i) in
the event of fraud, they shall survive indefinitely, (ii) the
representations and warranties contained in subsections 3.4 to
3.8, 3.9 and 3.17 to 3.20 and those contained in subsections 4.1
to 4.3 shall survive indefinitely, (iii) the representations and
warranties contained in subsection 3.1 shall survive for a period
of three (3) years, and (iv) the representations and warranties
contained in subsection 3.23 shall survive until the expiry of the
limitation period provided by the applicable legislation.
6.2 Indemnification by the Company. Without prejudice to any other
remedy which may be exercised by the Investor, the Company
undertakes to indemnify and save and hold each of PP Luxco and PPI
harmless from all damages, losses or expenses, direct or indirect,
that they may sustain or incur as a result of any inaccuracy of
the representations and warranties or any breach of the covenants
of the Company contained herein (including any damages, losses or
expenses, such
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as legal fees and other legal expenses, sustained or incurred as a
result of a third-party claim).
6.3 Indemnification by PP Luxco and PPI. Without prejudice to any
other remedy that may be exercised by the Company, each of PP
Luxco and PPI undertakes, on its own behalf, to save and hold the
Company harmless from all damages, losses or expenses, direct or
indirect, that the Company may sustain or incur as a result of any
inaccuracy of the representations and warranties or any breach of
the covenants of the Investor contained herein (including any
damages, losses or expenses, such as legal fees and other legal
expenses, sustained or incurred as a result of a third-party
claim).
6.4 Maximum Liability. The Company shall cease to be liable for any
loss incurred by the Investor for which indemnification may be
sought in accordance with this Agreement when the aggregate
indemnities paid by the Company to the Investor hereunder exceed
$7,000,000 on a pre-tax basis (that is, without taking into
account any tax savings by the Investor).
7. PUBLIC ANNOUNCEMENTS
Neither the Investor nor the Company may issue any press release or
make any public announcement with respect to the existence and terms of
this agreement without the prior consent of the other parties, subject
to the regulatory obligations of the Company as a publicly-held
company.
8. FEES AND EXPENSES
The fees and expenses related to this transaction will be paid as
provided in the Private Placement Proposal.
The above-mentioned expenses must be paid on the date hereof, subject
to receipt of supporting documents.
9. NOTICES
9.1 Any notice or other communication to be given or made hereunder
must be given or made in writing and will be deemed properly given
if delivered to the addressee by messenger or by mail or if sent
by fax and addressed as follows:
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TO THE INVESTOR:
PP LUXCO HOLDINGS II, S.A.R.L.
00 Xxxxxx Xxxxxxxx
X-0000 Xxxxxxxxxx
Attention: Stephane Hadet,
Manager
Fax NO.: + 000-00 000
WITH A COPY TO:
PICCHIO PHARMA INC.
000 Xxxxxx Xxxxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxx
X0X 0X0
Attention: Xxxxxx Xxxxxxxxxx,
Vice-President, Business Development and Legal Affairs
Fax No.: (000) 000-0000
TO THE COMPANY:
NEUROCHEM INC.
0000 Xxxxxxxxx-Xxxxxxx Xxxxxx
Xxxxx 000
Xx-Xxxxxxx, Xxxxxx
X0X 0X0
Attention: Xx. Xxxxx Xxxxxxxxxx,
President and Chief Executive Officer
Fax No.: (000) 000-0000
9.2 Any notice sent in accordance herewith shall be deemed to have been
received by the addressee at the time of its delivery if delivered by
messenger or by bailiff or on the fifth (5th) business day following
its mailing if mailed or on the next business day after its sending if
sent by fax. However if normal postal or fax services are interrupted
by an event of force majeure, the party sending the notice must use a
service which has not been interrupted or deliver the notice by
messenger so that the other party receives it rapidly. Either party may
notify to the
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other party any change of address for purposes hereof in the
manner indicated hereinabove.
10. MISCELLANEOUS PROVISIONS
10.1 The recitals and the Schedules hereto form an integral part
hereof.
10.2 All sums of money referred to in this agreement are expressed in
Canadian currency and all payments are to be made in Canadian
currency.
10.3 The parties undertake to take any action and to execute any
document to give full effect to the provisions of this agreement.
10.4 The waiver by one party of any breach by the other party of any
provision of this agreement shall not constitute a waiver of any
subsequent breach of the same provision or of any other provision.
No provision of this agreement shall be deemed to have been waived
by a party unless that party has recorded the waiver in writing.
10.5 This agreement constitutes the entire agreement between the
parties and replaces any agreement or contract, proposal,
representation, negotiation or agreement, whether verbal or in
writing, previously entered into between the parties and relating
to the matters discussed herein, including the Private Placement
Proposal.
10.6 The headings of the sections of this agreement are inserted for
ease of reference only and may not be used to construe the
agreement.
10.7 Every provision of this agreement shall be severable and the
invalidity of a provision shall not have the effect of making any
of the other provisions hereof invalid.
10.8 This agreement may not be amended except by an instrument in
writing executed by all the parties hereto.
10.9 Where required by the context, the singular includes the plural,
the masculine gender includes the feminine gender and the neuter
gender and vice-versa.
10.10 This agreement is governed by the laws in force in the province
of Quebec and any legal proceeding or action that arises herefrom
shall be instituted before the courts of Quebec, which shall have
exclusive jurisdiction.
10.11 Each signed counterpart hereof shall be deemed to be an original
and all such originals taken together shall constitute one and the
same instrument.
10.12 For purposes of this agreement, the parties elect domicile at
their respective addresses indicated in section 9 with the
exception of PP Luxco which hereby elects domicile in Xxxxxxxx,
Xxxxxx, Xxxxxx.
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10.13 This agreement and the rights and obligations arising herefrom
and the Warrants and associated rights may not be assigned in
whole or in part by an Investor without the prior written
agreement of the Company, except to affiliates of such Investor.
For greater certainty there are no restrictions on the transfer of
the Shares and Underlying Shares except for the holding period
that applies pursuant to the Securities Laws, if any.
IN WITNESS WHEREOF THE PARTIES HAVE EXECUTED THIS AGREEMENT AT THE DATE AND
PLACE FIRST HEREINABOVE MENTIONED.
PP LUXCO HOLDINGS II, S.A.R.L.
By: /s/ Stephane Hadet
---------------------
Name: Stephane Hadet
Title: Manager
PICCHIO PHARMA INC.
By: /s/ Xxxxxx Xxxxxxxxxx
----------------------
Name: Xxxxxx Xxxxxxxxxx
Title: Vice President, Business Development
NEUROCHEM INC
By: /s/ Xxx Xxxxxx
----------------------
Name: Xxx Xxxxxx
Title: VP Finance & CFO
SCHEDULE A
THIS WARRANT SHALL EXPIRE AND BE OF NO FURTHER LEGAL EFFECT
UNLESS DULY EXERCISED WITHIN THE TIME HEREIN PROVIDED
NEUROCHEM INC.
(Incorporated under the laws of Canada)
July 25,2002
RIGHT TO PURCHASE UP TO 2,800,000 COMMON SHARES
WARRANT
FOR THE PURCHASE OF
COMMON SHARES
THIS IS TO CERTIFY THAT for value received, PP Luxco Holdings II s.a.r.l. (the
"HOLDER"), shall be entitled to subscribe for and purchase, during the period
herein provided, up to 2,800,000 fully paid and non-assessable Common Shares,
subject to adjustment as provided herein (the "WARRANT SHARES") in the capital
of Neurochem Inc. (the "CORPORATION") at an exercise price of $3.13 per share,
subject to adjustment as provided herein (the "WARRANT EXERCISE PRICE"). Any
rights hereunder not exercised before the Expiry Time (as defined hereinafter)
shall expire and become of no further legal effect whatsoever.
This Warrant is issued pursuant to, and subject to the provision of, the
subscription agreement dated July 25, 2002 among the Corporation, the Holder and
Picchio Pharma Inc. (the "SUBSCRIPTION AGREEMENT").
Subject to the provisions of the following paragraph, this Warrant may be
exercised in whole (or in part) at any time during the period commencing on the
date hereof until the Expiry Time. The "EXPIRY TIME" of this Warrant shall be
5:00 p.m. (Montreal time) on July 25, 2005.
This Warrant may be exercised by the Holder hereof, in whole or in part, by
surrender of this Warrant, accompanied by a duly completed subscription form,
substantially in the form of Schedule 1 hereto, at the office of the
Corporation, 0000, Xxxxxxxxx-Xxxxxxx, Xxxxx 000, Xxxxx-Xxxxxxx, Xxxxxx, Xxxxxx,
X0X 0X0 (or such other address as the Corporation shall designate by way of
prior written notice to the Holder), together with a certified cheque or bank
draft payable
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to or to the order of the Corporation in payment of the aggregate Warrant
Exercise Price for the Warrant Shares exercised at such time.
As soon as practicable following the exercise of this Warrant, the Corporation
shall issue the Warrant Shares that the Holder has purchased upon such exercise
and deliver a certificate for the Warrant Shares so purchased to the Holder.
The Corporation covenants and agrees that all Warrant Shares which may be issued
upon the exercise of this Warrant will, upon issuance, be fully paid and
non-assessable and free of all liens, charges and encumbrances. The Corporation
further covenants and agrees that, during the period within which this Warrant
may be exercised, the Corporation will at all times have authorized and reserved
a sufficient number of Common Shares or other applicable shares, securities or
other property to provide for the issuance of all Warrant Shares upon the
exercise of this Warrant.
The Corporation covenants that in the event that this Warrant is only partially
exercised, following such partial exercise the Corporation will make and deliver
a new Warrant in the name of the Holder representing the remaining Warrant
Shares available for subscription and purchase by the Holder (the "NEW
WARRANT"). It is understood that the New Warrant shall be identical to this
Warrant, with the exception of the number of remaining Warrant Shares available
for purchase.
IN ADDITION TO THE FOREGOING, THE FOLLOWING TERMS AND CONDITIONS SHALL GOVERN
THIS WARRANT:
1. If the Corporation shall at any time subdivide its outstanding Common
Shares into a greater number of shares, the Warrant Exercise Price
shall be proportionately decreased and the number of Warrant Shares
entitled to be purchased proportionately increased, and conversely,
if the outstanding Common Shares of the Corporation shall be
consolidated into a smaller number of shares, the Warrant Exercise
Price shall be proportionately increased and the number of Warrant
Shares entitled to be purchased hereunder shall be proportionately
decreased accordingly.
2. If at any time after the date hereof and prior to the Expiry Time
there is a reorganization or reclassification of the capital stock of
the Corporation outstanding or a change of the Common Shares into
other shares or into other securities or other reorganization (other
than as contemplated under Section 1 hereto), or a consolidation,
amalgamation or merger of the Corporation with or into any other
corporation or other entity (other than a consolidation, amalgamation
or merger which does not result in any reclassification of the
outstanding Common Shares or a change of the Common Shares into other
shares), or a transfer of the undertaking or assets of the
Corporation as an entity or substantially as an entity to another
corporation or other entity in which the holders of Common Shares are
entitled to receive shares, other securities or other property (each
one of the foregoing being referred to herein as a "REORGANIZATION"),
the Holder hereof shall have the right to
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purchase and receive, and shall accept for the same aggregate
consideration, upon the basis and upon the terms and conditions
specified in this Warrant and in lieu of the Warrant Shares
immediately theretofore issuable upon the exercise of the Warrant,
such shares or other securities as would have been issued or
delivered with respect to or in exchange for such number of
outstanding Common Shares equal to the number of Warrant Shares
issuable upon the exercise in full of this Warrant, had such
Reorganization taken place immediately after such exercise. The
Corporation shall not effect any Reorganization unless, prior to or
simultaneously with the consummation thereof, the successor
corporation (if other than the Corporation), resulting from such
Reorganization, shall assume, by written instrument executed and
mailed or delivered to the Holder of this Warrant, the obligation to
deliver such Holder such shares or securities in accordance with the
foregoing provisions.
3. If and whenever at any time after the date hereof and prior to the
Expiry Time, the Corporation fixes a record date for the issue or the
distribution to all or substantially all the holders of Common Shares
of (i) securities of the Corporation, including rights, options or
warrants to acquire securities or other property or assets (including
evidences of indebtedness) of the Corporation or (ii) any property or
other assets, in either case as a stock dividend and in any case if
such issuance or distribution does not constitute a dividend paid in
the ordinary course or a Reorganization (any of such non-excluded
events being called a "SPECIAL DISTRIBUTION"), the Warrant Exercise
Price will be adjusted effective immediately after such record date
to a price determined by multiplying the Warrant Exercise Price in
effect on such record date by a fraction:
(a) the numerator of which will be
(i) the product of the number of Common Shares
outstanding on such record date and the current
market price of the Common Shares on such record
date; less
(ii) the fair market value, as determined by action of
the directors of the Corporation (whose
determination will be conclusive), to the holders of
Common Shares of such securities or property or
other assets so issued or distributed in the Special
Distribution; and
(b) the denominator of which will be the product of the number
of Common Shares outstanding on such record date and the
current market price of the Common Shares on such record
date.
To the extent that any Special Distribution is not so made,
the Warrant Exercise Price will be readjusted effective
immediately to the Warrant Exercise Price.
4. For the purposes of Sections 1 through 3 above,
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(a) "CURRENT MARKET PRICE" at any date means the weighted average
closing price per Common Share for the twenty (20)
consecutive trading days ending on the fifth (5th) trading
day before such date on the Toronto Stock Exchange or, if the
Common Shares are not listed thereon, on such stock exchange,
quotation system or over-the-counter market on which the
Common Shares are listed or quoted as may be selected for
such purpose by the directors of the Corporation;
(b) "DIVIDEND PAID IN THE ORDINARY COURSE" means dividends
howsoever paid on the Common Shares in any financial year of
the Corporation which are designated as such by action of the
directors of the Corporation acting reasonably;
(c) the adjustments provided for in Sections 1 through 3 are
cumulative and will, in the case of adjustments to the
Warrant Exercise Price, be computed to the nearest one-tenth
of one cent and will be made successively whenever an event
referred to therein occurs, subject to the following
subsections of this Section; and
(d) no adjustment in the Warrant Exercise Price will be required
unless such adjustment would result in a change of at least
1% in the prevailing Warrant Exercise Price; provided,
however, that any adjustments which, except for the
provisions of this subsection would otherwise have been
required to be made, will be carried forward and taken into
account in any subsequent adjustment.
5. The Corporation shall not be required to issue fractional shares in
satisfaction of its obligations hereunder. If any fractional interest
in shares would, except for the provisions of this Section 5, be
deliverable upon any exercise of this Warrant, the number of shares
deliverable upon such exercise shall be rounded down to the next whole
number and the amount of the Warrant Exercise Price payable by the
Holder shall be reduced accordingly in respect of such fractional
interest not required to be issued or delivered by the Corporation.
6. Upon any adjustment of the number of Warrant Shares subject to this
Warrant, then and in each case the Corporation shall give written
notice thereof to the Holder at the Holder's address in the books of
the Corporation, which notice shall state the number of shares or
other securities subject to the Warrant resulting from such
adjustment, and shall upon receipt of the written request of the
Holder set forth in reasonable detail the method of calculation and
the facts upon which such calculation is based.
7. The Corporation shall make all required filings under applicable
securities laws and, if applicable, by-laws, rules and regulations of
the Toronto Stock Exchange and any other stock exchange or quotation
system on which the Common Shares of the Corporation may be listed or
quoted, to report the issuance of this Warrant to the Holder and the
purchase of Warrant Shares hereunder, and shall pay all fees or other
governmental charges in connection with such filing.
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8. The Corporation shall use its best efforts to:
(a) maintain the listing of the Common Shares on the Toronto Stock
Exchange and to ensure that the Warrant Shares issuable upon
exercise of this Warrant will be listed and posted for trading
on the Toronto Stock Exchange; and
(b) comply with its reporting issuer obligations under the
Securities Act (Quebec) and equivalent provisions, if any, of
applicable securities laws in each other Province of Canada.
9. This Warrant shall not entitle the Holder hereof to any rights as a
shareholder of the Corporation, including, without limitation, voting
rights or the right to receive the payment of dividends.
10. This Warrant and the rights relating thereto may not be assigned, in
whole or in part, by the Holder without the prior written consent of
the Corporation, except to affiliates of the Holder.
11. If this Warrant is mutilated, lost, worn out, stolen or destroyed, the
Corporation, and provided that the Holder furnishes such evidence of
loss, theft or destruction as the Corporation may require, will issue
and deliver a new warrant in replacement thereof.
12. Subject to the terms hereof, this Warrant shall enure to the benefit
of and shall be binding upon the Holder and the Corporation and their
respective successors and permitted assigns.
13. Any notice or other communication to be given or made hereunder must
be given or made as specifically provided for herein or, failing
specific instructions, in accordance with Section 9 of the
Subscription Agreement.
14. All sums of money mentioned herein are expressed in Canadian currency
and all payments hereunder are to be made in that currency.
15. This Warrant shall be governed by and construed in accordance with the
laws of the Province of Quebec and the federal laws of Canada
applicable therein.
For purposes of this Warrant, the Holder elects domicile at Xxxxxxxx,
Xxxxxx, Xxxxxx.
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IN WITNESS WHEREOF Neurochem Inc. has caused this Warrant to be signed by its
duly authorized officer and to be dated July 25, 2002.
NEUROCHEM INC.
PER: /S/ Xxx Xxxxxx
-------------------
XXX XXXXXX
