SHARE PURCHASE AGREEMENT BETWEEN 4325231 CANADA INC. AND LORUS THERAPEUTICS INC. MADE AS OF July 10, 2007 McCarthy Tétrault LLP
EXHIBIT
99.2
[GeneSense
Share Purchase Agreement]
BETWEEN
4325231
CANADA INC.
AND
MADE
AS OF
July
10, 2007
XxXxxxxx
Xxxxxxxx LLP
TABLE
OF CONTENTS
|
ARTICLE
1 -
|
INTERPRETATION
|
1
|
|
1.01
|
Definitions
|
1
|
|
1.02
|
Headings
|
2
|
|
1.03
|
Extended
Meanings
|
3
|
|
1.04
|
Statutory
References
|
3
|
|
1.05
|
Accounting
Principles
|
3
|
|
1.06
|
Currency
|
3
|
|
1.07
|
Schedules
|
3
|
|
ARTICLE
2 -
|
PURCHASE
AND SALE
|
3
|
|
2.01
|
Shares
to be Sold and Purchased
|
3
|
|
2.02
|
Purchase
Price
|
4
|
|
2.03
|
Satisfaction
of Purchase Price
|
4
|
|
2.04
|
Closing
|
4
|
|
2.05
|
Closing
Adjustment
|
4
|
|
ARTICLE
3 -
|
REPRESENTATIONS
AND WARRANTIES
|
5
|
|
3.01
|
Vendor’s
Representations and Warranties
|
5
|
|
3.02
|
Purchaser’s
Representations and Warranties
|
6
|
|
3.03
|
Survival
of Representations, Warranties and Covenants
|
6
|
|
ARTICLE
4 -
|
COVENANTS
|
7
|
|
4.01
|
Cooperation
|
7
|
|
4.02
|
Cooperation
on Tax Matters
|
7
|
|
ARTICLE
5 -
|
CONDITIONS
|
7
|
|
5.01
|
Conditions
for the Benefit of the Purchaser
|
7
|
|
5.02
|
Conditions
for the Benefit of the Vendor
|
8
|
|
ARTICLE
6 -
|
GENERAL
|
9
|
|
6.01
|
Further
Assurances
|
9
|
|
6.02
|
Time
of the Essence
|
9
|
|
6.03
|
Benefit
of the Agreement
|
9
|
|
6.04
|
Entire
Agreement
|
9
|
|
6.05
|
Amendments
and Waiver
|
9
|
|
6.06
|
Notices
|
10
|
|
6.07
|
Governing
Law
|
11
|
|
6.08
|
Counterparts
|
11
|
|
6.09
|
Facsimiles
|
11
|
THIS
AGREEMENT made as of July 10, 2007;
B
E T W E E N:
LORUS
THERAPEUTICS INC., a corporation incorporated under the laws of Canada
(the “Purchaser”),
-
and -
4325231
CANADA INC., a corporation incorporated under the laws of Canada (the
“Vendor”).
WHEREAS
the Vendor is the beneficial owner of the Shares;
AND
WHEREAS TEMIC is the registered owner of the Shares and has consented to
the
sale of the Shares as contemplated herein;
AND
WHEREAS the Vendor desires to sell and the Purchaser desires to purchase
the
Shares upon and subject to the terms and conditions hereinafter set
forth;
NOW
THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises
and the
covenants and agreements herein contained the parties hereto agree as
follows:
ARTICLE
1 - INTERPRETATION
|
1.01
|
Definitions
|
In
this Agreement, unless something in the subject matter or context is
inconsistent therewith:
“Agreement”
means this share purchase agreement, including its recitals and schedules,
as
amended from time to time and all amendments made hereto by written agreement
between the Vendor and the Purchaser.
“Applicable
Law” means
|
|
(i)
|
any
applicable domestic or foreign law including any statute, subordinate
legislation or treaty, and
|
|
|
(ii)
|
any
applicable guideline, directive, rule, standard, requirement, policy,
order, judgment, injunction, award or decree of a Governmental
Authority
having the force of law.
|
“Assumed
Liabilities” means the liabilities described in Schedule B attached to
this Agreement;
“Business
Day” means a day other than a Saturday, Sunday or statutory holiday
in
the Province of Ontario.
“Charges”
means all liens, charges, encumbrances and/or rights of others.
“Closing
Date” means July 10, 2007 or such other date as may be agreed to in
writing between the Vendor and the Purchaser.
“Closing
Statement” has the meaning set forth in Section 2.05(1).
“Corporation”
means GeneSense Technologies Inc., a corporation incorporated under the laws
of
Canada.
“Governmental
Authority” means any domestic or foreign legislative, executive,
judicial or administrative body or person having or purporting to have
jurisdiction in the relevant circumstances.
“Newco
Note 2” has the meaning set forth in Section 2.03(1)(b).
“Permitted
Encumbrances” means the Charges described in Schedule C attached to
this Agreement.
“Prepaid
Expenses and Receivables Transfer Agreement” means the prepaid expenses
and receivables transfer agreement dated as of July 10, 2007 between the
Vendor
and GeneSense Technologies Inc.
“Purchase
Price” has the meaning set forth in Section 2.02.
“Share
Pledge Agreement” has the meaning set forth in Section
3.01(c).
“Shares”
means all of the issued and outstanding common shares of the
Corporation.
“Tangible
Business Assets Transfer Agreement” means the tangible business assets
transfer agreement dated as of July 10, 2007 between the Vendor and GeneSense
Technologies Inc.
“Tax
Act” means the IncomeTax Act (Canada).
“TEMIC”
means The Xxxx Xxxxx Investment Corporation.
“Time
of Closing” means 12:01 a.m. (Toronto Time) on the Closing
Date.
|
1.02
|
Headings
|
The
division of this Agreement into Articles and Sections and the insertion of
headings are for convenience of reference only and shall not affect the
construction or interpretation of this Agreement. The terms “this
Agreement”, “hereof”, “hereunder” and similar expressions refer to this
Agreement and not to any particular Article, Section or other portion
-
2
-
hereof
and include any agreement supplemental hereto. Unless something in
the subject matter or context is inconsistent therewith, references herein
to
Articles and Sections are to Articles and Sections of this
Agreement.
|
1.03
|
Extended
Meanings
|
In
this Agreement words importing the singular number only include the plural
and
vice versa, words importing any gender include all genders and words
importing persons include individuals, corporations, limited and unlimited
liability companies, general and limited partnerships, associations, trusts,
unincorporated organizations, joint ventures and Governmental
Authorities. The term “including” means “including without limiting
the generality of the foregoing”.
|
1.04
|
Statutory
References
|
In
this Agreement, unless something in the subject matter or context is
inconsistent therewith or unless otherwise herein provided, a reference to
any
statute is to that statute as now enacted or as the same may from time to
time
be amended, re-enacted or replaced and includes any regulations made
thereunder.
|
1.05
|
Accounting
Principles
|
Wherever
in this Agreement reference is made to a calculation to be made or an action
to
be taken in accordance with generally accepted accounting principles, such
reference will be deemed to be to the generally accepted accounting principles
from time to time approved by the Canadian Institute of Chartered Accountants,
or any successor institute, applicable as at the date on which such calculation
or action is made or taken or required to be made or taken.
|
1.06
|
Currency
|
All
references to currency herein are to lawful money of Canada.
|
1.07
|
Schedules
|
The
following are Schedules to this Agreement:
Schedule
A - Newco Note 2; and
Schedule
B - Assumed Liabilities.
ARTICLE
2 - PURCHASE AND SALE
|
2.01
|
Shares
to be Sold and
Purchased
|
Upon
and subject to the terms and conditions hereof, the Vendor will sell the
Shares
to the Purchaser and the Purchaser will purchase the Shares from the Vendor,
as
of the Time of Closing on the Closing Date.
-
3
-
|
2.02
|
Purchase
Price
|
The
purchase price payable to the Vendor for the Shares (such amount being
hereinafter referred to as the “Purchase Price”) will
be [XXX], subject to adjustment in accordance with Section
2.05, which amount the parties estimate to be the fair market value of the
Shares.
|
2.03
|
Satisfaction
of Purchase Price
|
(1) The
Purchase Price will be satisfied in full as follows:
|
|
(a)
|
by
the assumption, fulfillment and performance by the Purchaser, from
and
after the Time of Closing, of the Assumed Liabilities;
and
|
|
|
(b)
|
by
the issuance by the Purchaser to the Vendor of a demand non-interest
bearing promissory note in the aggregate principal amount
of [XXX] (the “New Lorus Note
2”), substantially in the form of the promissory note attached
hereto as Schedule A.
|
|
2.04
|
Closing
|
The
sale and purchase of the Shares shall be completed at the Time of Closing
at the
offices of XxXxxxxx Xxxxxxxx XXX, Xxxxx 0000, Xxxxxxx Xxxxxxxx Xxxx Xxxxx,
Xxxxxxx-Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx.
|
2.05
|
Closing
Adjustment
|
(1) On
or before the date that is 90 days after the Closing Date,
the Purchaser will prepare and deliver to the Vendor a statement of adjustments
detailing any changes in the valuation of the underlying assets arising as
a
result of the permitted price adjustments in the Tangible Business Assets
Transfer Agreement and the Prepaid Expenses and Receivables Transfer Agreement
or the Assumed Liabilities transferred hereunder which in part form the basis
of
the valuation of the Shares and detailing the particulars of any required
adjustments to the calculation of the Purchase Price (the “Closing
Statement”). If requested by the Vendor, the Purchaser will
permit the Vendor and its auditors and other representatives to review the
working papers and other documentation used or prepared in connection with
the
preparation of, or that otherwise form the basis of, the Closing
Statement.
(2) If
the Closing Statement, as determined by the Purchaser, exceeds, or is less
than,
the Purchase Price, the aggregate principal amount of the Newco Note 2 will
be
increased, or decreased, accordingly.
-
4
-
ARTICLE
3 - REPRESENTATIONS AND WARRANTIES
|
3.01
|
Vendor’s
Representations and
Warranties
|
The
Vendor hereby makes to the Purchaser the following representations and
warranties and acknowledges that the Purchaser is relying upon such
representations and warranties in connection with entering into this
Agreement:
|
|
(a)
|
The
Corporation is a corporation duly incorporated, organized and subsisting
under the laws of Canada with the corporate power to own its assets
and to
carry on its business.
|
|
|
(b)
|
The
authorized capital of the Corporation consists of (i) an unlimited
number
of common shares, and (ii) an unlimited number of preferred
shares.
|
|
|
(c)
|
All
of the issued and outstanding Shares are beneficially owned by
the Vendor
and pledged to TEMIC pursuant to a share pledge agreement dated
October 6,
2004 (the “Share Pledge
Agreement”).
|
|
|
(d)
|
The
Vendor has the power, authority and right to enter into and deliver
this
Agreement and to transfer the legal and beneficial title and ownership
of
the Shares to the Purchaser, subject to all existing Charges, including
the Share Pledge Agreement.
|
|
|
(e)
|
This
Agreement constitutes a valid and legally binding obligation of
the
Vendor, enforceable against the Vendor in accordance with its terms
subject to applicable bankruptcy, insolvency, reorganization and
other
laws of general application limiting the enforcement of creditors’ rights
generally and to the fact that specific performance is an equitable
remedy
available only in the discretion of the
court.
|
|
|
(f)
|
Neither
the entering into nor the delivery of this Agreement nor the completion
of
the transactions contemplated hereby by the Vendor will result
in the
violation of:
|
|
|
(i)
|
any
of the provisions of the constating documents or by-laws of the
Vendor or
of the Corporation;
|
|
|
(ii)
|
any
agreement or other instrument to which the Vendor or the Corporation
is a
party or by which the Vendor or the Corporation is bound;
or
|
|
|
(iii)
|
any
Applicable Law in respect of which the Vendor or the Corporation
must
comply, except to the extent that such violation would not reasonably
be
expected to limit in any material manner the operations of the
Corporation’s business as they are presently
conducted.
|
|
|
(g)
|
The
Vendor is not a non-resident person within the meaning of section
116 of
the Tax Act.
|
-
5
-
|
3.02
|
Purchaser’s
Representations and
Warranties
|
The
Purchaser hereby makes to the Vendor the following representations and
warranties and acknowledges that the Vendor is relying upon such representations
and warranties in connection with entering into this Agreement:
|
|
(a)
|
The
Purchaser is a corporation duly incorporated, organized and subsisting
under the laws of Canada with the corporate power to own its assets
and to
carry on its business.
|
|
|
(b)
|
The
Purchaser has the power, authority and right to enter into and
deliver
this Agreement and to complete the transactions contemplated to
be
completed by the Purchaser
hereunder.
|
|
|
(c)
|
This
Agreement constitutes a valid and legally binding obligation of
the
Purchaser, enforceable against the Purchaser in accordance with
its terms
subject to applicable bankruptcy, insolvency, reorganization and
other
laws of general application limiting the enforcement of creditors’ rights
generally and to the fact that specific performance is an equitable
remedy
available only in the discretion of the
court.
|
|
|
(d)
|
Neither
the entering into nor the delivery of this Agreement nor the completion
of
the transactions contemplated hereby by the Purchaser will result
in a
violation of:
|
|
|
(i)
|
any
of the provisions of the constating documents or by-laws of the
Purchaser;
|
|
|
(ii)
|
any
agreement or other instrument to which the Purchaser is a party
or by
which the Purchaser is bound; or
|
|
|
(iii)
|
any
Applicable Law.
|
|
3.03
|
Survival
of Representations, Warranties and
Covenants
|
|
(1)
|
The
respective representations and warranties of the Vendor and the
Purchaser
contained in this Agreement shall survive the completion of the
sale and
purchase of the Shares herein provided for and, notwithstanding
such
completion, will continue in full force and effect for a period
of two
years from the Closing Date.
|
|
(2)
|
The
respective covenants of the Vendor and the Purchaser contained
in this
Agreement shall survive the completion of the sale and purchase
of the
Shares herein provided for and, notwithstanding such completion,
shall
continue in full force and effect for the benefit of the Vendor
or the
Purchaser, as applicable, in accordance with the terms
thereof.
|
-
6
-
ARTICLE
4 - COVENANTS
|
4.01
|
Cooperation
|
Each
of the Purchaser and the Vendor shall use commercially reasonable efforts,
at
the expense of the Purchaser, to provide such information and assistance
as is
reasonably necessary to assist the Purchaser in obtaining all necessary
consents, approvals, conveyances, assurances, assignments or any other
documentation necessary or reasonably required by the Purchaser to transfer
all
of the Vendor’s right, title and interest in and to the Purchased Assets to the
Purchaser, subject to all existing Charges.
|
4.02
|
Cooperation
on Tax Matters
|
Each
of the Vendor and the Purchaser will, to the extent reasonably within such
party’s control, taking into account such party’s access to books and records,
furnish or cause to be furnished to each other, at the expense of the Purchaser,
as promptly as practicable, such information and assistance, and provide
additional information and explanations of any materials provided, relating
to
the Purchased Assets as is reasonably necessary for the filing of any tax
returns, for the preparation of any audit, and for the prosecution or defence
of
any Claim, suit or proceeding relating to any adjustment or proposed adjustment
with respect to taxes.
ARTICLE
5 - CONDITIONS
|
5.01
|
Conditions
for the Benefit of the
Purchaser
|
|
(1)
|
The
sale by the Vendor and the purchase by the Purchaser of the Shares
is
subject to the following conditions which are for the exclusive
benefit of
the Purchaser to be performed or complied with at or prior to the
Time of
Closing:
|
|
|
(a)
|
the
representations and warranties of the Vendor set forth in Section
3.01
will be true and correct at the Time of Closing with the same force
and
effect as if made at and as of such
time;
|
|
|
(b)
|
the
Vendor shall have performed or complied with all of the terms,
covenants
and conditions of this Agreement to be performed or complied with
by the
Vendor at or prior to the Time of
Closing;
|
|
|
(c)
|
the
Purchaser shall be furnished with such certificates, affidavits
or
statutory declarations of the Corporation and of the Vendor or
of officers
of the Corporation and of the Vendor as the Purchaser or the Purchaser’s
counsel may reasonably think necessary in order to establish that
the
terms, covenants and conditions contained in this Agreement to
have been
performed or complied with by the Vendor or by the Corporation,
as the
case may be, at or prior to the Time of Closing have been performed
and
complied with and that the representations and warranties of the
Vendor
herein given are true and correct at the Time of
Closing;
|
-
7
-
|
|
(d)
|
there
will have been obtained from all appropriate Governmental Authorities
such
approvals or consents as are required to permit the change of ownership
of
the Shares contemplated hereby and to permit the business of the
Corporation to be carried on as now
conducted;
|
|
|
(e)
|
no
action or proceeding in Canada will be pending or threatened by
any person
to enjoin, restrict or prohibit
|
|
|
(i)
|
the
sale and purchase of the Shares contemplated hereby;
or
|
|
|
(ii)
|
the
right of the Corporation to conduct the business of the Corporation;
and
|
|
|
(f)
|
all
necessary steps and proceedings will have been taken to permit
the Shares
to be duly and regularly transferred to the
Purchaser.
|
|
(2)
|
In
case any term or covenant of the Vendor or condition to be performed
or
complied with for the benefit of the Purchaser at or prior to the
Time of
Closing shall not have been performed or complied with at or prior
to the
Time of Closing, the Purchaser may, without limiting any other
right that
the Purchaser may have, at its sole option,
either:
|
|
|
(a)
|
rescind
this Agreement by notice to the Vendor, and in such event the Purchaser
shall be released from all obligations hereunder;
or
|
|
|
(b)
|
waive
compliance with any such term, covenant or condition in whole or
in part
on such terms as may be agreed upon without prejudice to any of
its rights
of rescission in the event of non-performance of any other term,
covenant
or condition in whole or in part.
|
|
5.02
|
Conditions
for the Benefit of the
Vendor
|
|
(1)
|
The
sale by the Vendor and the purchase by the Purchaser of the Shares
is
subject to the following conditions which are for the exclusive
benefit of
the Vendor to be performed or complied with at or prior to the
Time of
Closing:
|
|
|
(a)
|
the
representations and warranties of the Purchaser set forth in Section
3.02
shall be true and correct at the Time of Closing with the same
force and
effect as if made at and as of such
time;
|
|
|
(b)
|
the
Purchaser shall have performed or complied with all of the terms,
covenants and conditions of this Agreement to be performed or complied
with by the Purchaser at or prior to the Time of
Closing;
|
|
|
(c)
|
the
Vendor shall be furnished with such certificates, affidavits or
statutory
declarations of the Purchaser or of officers of the Purchaser as
the
Vendor or the Vendor’s counsel may reasonably think necessary in order to
establish that the
|
-
8
-
|
|
|
terms,
covenants and conditions contained in this Agreement to have
been
performed or complied with by the Purchaser at or prior to the
Time of
Closing have been performed and complied with and that the representations
and warranties of the Purchaser herein given are true and correct
at the
Time of Closing; and
|
|
|
(d)
|
the
Purchaser will have delivered to the Vendor an original executed
copy of
Newco Note 2.
|
|
(2)
|
In
case any term or covenant of the Purchaser or condition to be performed
or
complied with for the benefit of the Vendor at or prior to the
Time of
Closing shall not have been performed or complied with at or prior
to the
Time of Closing, the Vendor may, without limiting any other right
that the
Vendor may have, at its sole option,
either:
|
|
|
(a)
|
rescind
this Agreement by notice to the Purchaser, and in such event the
Vendor
shall be released from all obligations
hereunder; or
|
|
|
(b)
|
waive
compliance with any such term, covenant or condition in whole or
in part
on such terms as may be agreed upon without prejudice to any of
its rights
of rescission in the event of non-performance of any other term,
covenant
or condition in whole or in part.
|
ARTICLE
6 - GENERAL
|
6.01
|
Further
Assurances
|
Each
of the Vendor and the Purchaser shall from time to time execute and deliver
all
such further documents and instruments and do all acts and things as the
other
party may reasonably require to effectively carry out or better evidence
or
perfect the full intent and meaning of this Agreement.
|
6.02
|
Time
of the Essence
|
Time
shall be of the essence of this Agreement.
|
6.03
|
Benefit
of the Agreement
|
This
Agreement shall enure to the benefit of and be binding upon the respective
heirs, executors, administrators, successors and permitted assigns of the
parties hereto.
|
6.04
|
Entire
Agreement
|
Except
for the various collateral agreements entered into in connection with the
Arrangement, this Agreement constitutes the entire agreement between the
parties
hereto with respect to the subject matter hereof and cancels and supersedes
any
prior understandings and agreements between the parties hereto with respect
thereto. There are no representations,
-
9
-
warranties,
terms, conditions, undertakings or collateral agreements, express, implied
or
statutory, between the parties other than as expressly set forth in this
Agreement.
|
6.05
|
Amendments
and Waiver
|
No
modification of or amendment to this Agreement shall be valid or binding
unless
set forth in writing and duly executed by both of the parties hereto and
no
waiver of any breach of any term or provision of this Agreement shall be
effective or binding unless made in writing and signed by the party purporting
to give the same and, unless otherwise provided, shall be limited to the
specific breach waived.
|
6.06
|
Notices
|
Any
demand, notice or other communication to be given in connection with this
Agreement shall be given in writing and shall be given by personal delivery,
by
registered mail or by electronic means of communication addressed to the
recipient as follows:
To
the Vendor:
0
Xxxxxxxx Xxxx
Xxxxxxx,
Xxxxxxx X0X 0X0
Fax
No.: 000-000-0000
Email: xxxxxxxxx@xxxxxxxxxx.xxx
Attention: Director
of Finance
To
the Purchaser:
0
Xxxxxxxx Xxxx
Xxxxxxx,
Xxxxxxx X0X 0X0
Fax
No.: 000-000-0000
Email: xxxxxxxxx@xxxxxxxxxx.xxx
Attention: Director
of Finance
or
to such other address, individual or electronic communication number as may
be
designated by notice given by either party to the other. Any demand,
notice or other communication given by personal delivery shall be conclusively
deemed to have been given on the day of actual delivery thereof and, if given
by
registered mail, on the fourth Business Day following the deposit thereof
in the
mail and, if given by electronic communication, on the day of transmittal
thereof if given during the normal business hours of the recipient and on
the
Business Day during which such normal business hours next occur if not given
during such hours on any day. If the party giving any demand, notice
or other communication knows or ought reasonably to know of any difficulties
with the postal system which might affect the delivery of mail, any such
demand,
-
10
-
notice
or other communication shall not be mailed but shall be given by personal
delivery or by electronic communication.
|
6.07
|
Governing
Law
|
This
Agreement is governed by and will be construed in accordance with the laws
of
the Province of Ontario and the laws of Canada applicable therein.
|
6.08
|
Counterparts
|
This
Agreement may be executed in any number of counterparts, each of which will
be
deemed to be an original and all of which taken together will be deemed to
constitute one and the same instrument.
|
6.09
|
Facsimiles
|
Delivery
of an executed signature page to this Agreement by any party by electronic
transmission will be as effective as delivery of a manually executed copy
of
this Agreement by such party.
[Remainder
of page left intentionally blank.]
-
11
-
IN
WITNESS WHEREOF the parties have executed this Agreement.
|
4325231
CANADA INC.
|
|||
|
Per:
|
“Xxxxxx
Xxxxx”
|
||
|
Per:
|
“Xxxxxx
Xxxxxxxx”
|
||
|
Per:
|
“Xxxxxx
Xxxxx”
|
||
|
Per:
|
“Xxxxxx
Xxxxxxxx”
|
||
-
12
-
Schedule
A
Newco
Note 2
PROMISSORY
NOTE
FOR
VALUE RECEIVED, the undersigned hereby promises to pay the sum of
[XXX] in lawful money of Canada, without interest, to or to
the
order of 4325231 Canada Inc. on demand.
All
payments hereunder will be made without days of grace, presentment, protest,
notice of dishonour or any other notice whatsoever, all of which are hereby
expressly waived by the maker and each endorser hereof.
The
principal amount hereof may at any time be repaid in full without notice
or
bonus.
This
Promissory Note will be governed by and construed in accordance with the
laws of
the Province of Ontario and the federal laws of Canada applicable
therein.
DATED
as of •, 2007.
|
Per:
|
||
|
Name:
|
||
|
Title:
|
||
Schedule
B
Assumed
Liabilities
|
|
•
|
Liabilities
in the aggregate amount of [XXX] relating to
accounts payable, accrued liabilities and transaction costs in
connection
with the arrangement of the Vendor’s business by way of plan of
arrangement under Section 192(3) of the Canada Business Corporations
Act.
|
