SECURITIES PURCHASE AGREEMENT
Exhibit 99.1
THIS SECURITIES PURCHASE
AGREEMENT (this “Agreement”), dated as of
January 8, 2010, is made by and among OccuLogix, Inc. (the “Company”), a Delaware
corporation with executive offices located at 00000 Xxxxxxx Xxxxxx, Xxxxx 000,
Xxx Xxxxx, XX, and the parties executing the Investor Signature Page attached
hereto (each, an “Investor” and, collectively,
the “Investors”).
BACKGROUND
A.
The Company has
authorized the sale and issuance of up to a number of shares equal to the sum of
(i) 3,321,919 shares and (ii) $2,000,000 divided by the Additional Closing
Purchase Price (defined below) (the “Shares”), of the Company’s
common stock, $0.001 par value per share (the “Common Stock”).
B.
On the terms and subject to the
conditions set forth herein, each Investor hereby irrevocably subscribes for and
agrees to purchase from the Company, and the Company is willing to sell to such
Investor, a number of Shares equal to the amount set forth below such Investor’s
name on the Investor Signature Page (the “Subscription Amount”) divided
by the applicable Purchase Price (as defined below).
C.
The proceeds from the sale of the Shares will be
used for working capital and general corporate purposes.
NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement
and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the Company and the Investors hereby agree as
follows:
ARTICLE
I
THE
SHARES
1.1
Purchase and Sale of Shares;
Closing.
(a)
Subject to all of
the terms and conditions hereof, the Company hereby agrees to issue and sell to
each of the Investors, and each of the Investors hereby confirms its irrevocable
subscription for and offer to purchase, the number of the Shares equal to the
Subscription Amount, divided by the applicable Purchase Price. The
obligation of the Investors to purchase the Shares are several and not
joint. The aggregate number of the Shares issued hereunder shall not
exceed 14,285,714 (the “Maximum
Share Amount”).
(b)
The Company may conduct up
to two closings (each, a “Closing”) to effect the
issuance of the Shares. The initial Closing (the “Initial Closing”) shall take
place on the date hereof. If an additional Closing is required
because the Company determines to seek Stockholder Approval (as defined below),
then the Company shall conduct such additional Closing (the “Additional Closing”) on or
about the third business day after Stockholder Approval is obtained or on such
other date after Stockholder Approval is obtained as the Company and Xxxxxxxx
Securities Inc. (the “Canadian
Placement Agent”), the placement agent for the Investors resident in
Canada, may agree.
(c)
Prior to each Closing, each Investor (provided that such
Investor is participating in such Closing) shall deliver its Subscription Amount
into the trust account of the Company’s counsel, Xxxxxx Xxxxxxx Xxxxxxxx &
Xxxxxx, P.C. (the “Trust
Account”) in accordance with the wire instructions attached hereto as
Schedule C.
(d)
The per share purchase price of Shares, with
respect to which an Investor has delivered its Subscription Amount prior to the
Initial Closing Date, shall equal 80% of the volume weighted average price of
the Company’s common stock on the NASDAQ Capital Market for the ten-trading day
period immediately preceding the Initial Closing Date (the “Initial Closing Purchase
Price”). The per share purchase price of Shares, with respect
to which an Investor will have delivered its Subscription Amount following the
Initial Closing Date but prior to the Additional Closing Date, shall equal 80%
of the volume weighted average price of the Company’s common stock on the NASDAQ
Capital Market for the ten-trading day period immediately preceding the
Additional Closing Date (the “Additional Closing Purchase
Price”). In this Agreement, “Purchase Price” means the
Initial Closing Purchase Price or the Additional Closing Purchase Price, as
applicable.
(e)
Each Investor acknowledges that the NASDAQ Capital
Market rules impose a limit on the number of the Shares that the Company may
issue without first obtaining Stockholder Approval (such number of Shares, the
“Initial Closing
Maximum”). At the Initial Closing, the Company shall issue the
Shares subscribed for by Investors which have submitted their Subscription
Amount prior to the Initial Closing; provided, however
that, if the aggregate number of such Shares would exceed the Initial Closing
Maximum, then the number of Shares issued to each Investor at the Initial
Closing shall be reduced on a pro rata basis, such that the aggregate number of
the Shares actually issued at the Initial Closing (the “Initial Closing Shares”)
equals the Initial Closing Maximum. In that event, only an amount
equal to the product of (i) the Initial Closing Purchase Price and (ii) the
number of the Initial Closing Shares shall be released to the Company from the
Trust Account. The balance of the aggregate Subscription Amount shall
remain in the Trust Account, and Shares subscribed for by the Investors in
excess of the Initial Closing Maximum (the “Remaining Shares”) shall
remain unissued; provided, however,
that each of the Investors promptly shall be refunded its portion of the balance
of the aggregate Subscription Amount remaining in the Trust Account (A) if,
within ten days of the Initial Closing, the Company fails to initiate efforts to
obtain Stockholder Approval or (B) if Stockholder Approval is not obtained at
the first meeting of the Company’s stockholders called for that
purpose. Such refund, if any, will be made within three business days
of the determination that such refund is required to be made pursuant to this
Section 1.1(e). At the Additional Closing, if any, the Remaining
Shares shall be issued to the Investors and the balance of the aggregate
Subscription Amount remaining in the Trust Account immediately following the
Initial Closing shall be released to the Company. For greater
certainty, the Initial Closing Maximum shall take into account, and include, the
number of shares of the Common Stock that will be required to be issued to the
Canadian Placement Agent at the Initial Closing pursuant to the Agency Agreement
(as defined below).
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(f)
If the sum of (i) the number of
the Initial Closing Shares and (ii) the number of the Remaining Shares is less
than the Maximum Share Amount, then the Company may offer for sale (but shall
not be obligated to do so), at the Additional Closing Purchase Price, additional
Shares in a number not to exceed the difference between the Maximum Share Amount
and such sum (the “Additional
Shares”). At or prior to the Additional Closing, if any,
subscribers for the Additional Shares shall execute and deliver this Agreement
as of the date hereof and shall be an Investor hereunder, with all of the rights
and obligations of an Investor hereunder. For greater certainty, in
accordance with Section 1.1(c), prior to the Additional Closing, subscribers for
the Additional Shares shall deliver the Subscription Amount for the Additional
Shares into the Trust Account. At the Additional Closing, the
Additional Shares shall be issued and the aggregate Subscription Amount for the
Additional Shares shall be released to the Company from the Trust
Account.
(g)
The Company shall use commercially
reasonable efforts to obtain Stockholder Approval as soon as practicable after
the Initial Closing. However, if the Company’s board of directors or
duly appointed committee thereof (the “Board”), in good faith,
determines that it shall not be commercially reasonable to do so (including by
reason of the anticipated costs of doing so exceeding the anticipated proceeds
of sale of the Remaining Shares and the Additional Shares), then the Company
shall not be required to seek Stockholder Approval and the aggregate
Subscription Amount then being held in the Trust Account shall be returned to
the Investors promptly and, in any event, within three business
days.
(h)
In the event that any of the Subscription
Amount is refunded or returned to the Investors pursuant to this Section 1.1,
each of the Investors will be entitled to receive its proportionate share of any
interest that may have accrued in the Trust Account on the Subscription Amount
being refunded or returned. The Company’s good faith determination of
each Investor’s entitlement to interest shall be final and binding.
(i)
The Company hereby grants to each Investor
resident in the Provinces of Alberta, British Columbia and Québec contractual
rights of action for a misrepresentation in the Time of Sale Information (as
defined below) equivalent to those provided by statute to Investors resident in
the Province of Ontario.
1.2
Authorization of Canadian
Placement Agent. Each of the Investors that is a resident of
Canada hereby irrevocably authorizes the Canadian Placement Agent, in its
discretion, to act as such Investor’s representative and hereby appoints the
Canadian Placement Agent, with full power of substitution, as its true and
lawful attorney with full power and authority in such Investor’s place and
stead:
(a)
to receive certificates representing the Shares;
to execute, in such Investor’s name and on its behalf, all closing receipts and
documents; to complete and correct any errors or omissions in any form or
document provided by such Investor, including this Agreement and any schedules
and exhibits hereto, in connection with the subscription for the Shares; and to
exercise any rights of termination contained in the agency agreement, by and
between the Company and the Canadian Placement Agent, related to the offering
contemplated hereby (the “Agency
Agreement”);
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(b)
to extend such time periods and to waive, in
whole or in part, any representations, warranties, covenants or conditions for
the Investors’ benefit contained in this Agreement, the Agency Agreement or any
ancillary or related document; and
(c)
to determine, in its sole discretion,
whether any condition precedent to Closing is satisfied; and
(d)
without limiting the generality of the foregoing,
to negotiate, settle, execute, deliver and amend the Agency
Agreement.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES
2.1
Representations and
Warranties of the Company. The Company hereby represents and
warrants to the Investors as follows:
(a)
Time of Sale
Information. The offering memorandum, dated as of November 11,
2009, related to this offering, including all of the documents and information
incorporated by reference therein, and this Agreement (collectively, the “Time of Sale Information”),
when taken as a whole, does not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading.
(b)
Subsidiaries. The
Company has no subsidiaries other than those listed in Exhibit 21 to its Annual
Report on Form 10-K for the year ended December 31, 2008. Except as
disclosed in the Time of Sale Information, the Company owns, directly or
indirectly, all of the capital stock or comparable equity interests of each
subsidiary free and clear of any lien, and all the issued and outstanding shares
of capital stock or comparable equity interest of each subsidiary are validly
issued and are fully paid, non-assessable and free of pre-emptive and similar
rights.
(c)
Organization and
Qualification. Each of the Company and its subsidiaries is an
entity duly organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation or organization (as applicable), with the
requisite legal authority to own and use its properties and assets and to carry
on its business as currently conducted. Neither the Company nor any
subsidiary is in violation of any of the provisions of its respective
certificate or articles of incorporation, bylaws or other organizational or
charter documents, except, in the case of the subsidiaries, where the violation
would not, individually or in the aggregate, have, or reasonably be expected to
result in, a Material Adverse Effect (defined below). For purposes of
this Agreement, “Material
Adverse Effect” means (i) a material adverse effect on the results of
operations, assets, business or financial condition of the Company and its
subsidiaries, taken as a whole on a consolidated basis, or (ii) material and
adverse impairment of the Company’s ability to perform its obligations under
this Agreement, provided that none of the following alone shall be deemed, in
and of itself, to constitute a Material Adverse Effect: (A) a change in the
market price or trading volume of the shares of the Common Stock or (B) changes
in general economic conditions or changes affecting the industry in which the
Company operates generally (as opposed to Company-specific changes) so long as
such changes do not have a disproportionate effect on the Company and its
subsidiaries, taken as a whole. Each of the Company and its
subsidiaries is duly qualified to do business and is in good standing as a
foreign corporation or other entity in each jurisdiction in which the nature of
the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as
the case may be, would not, individually or in the aggregate, have or reasonably
be expected to result in a Material Adverse Effect.
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(d)
Authorization;
Enforcement. With the exception of Stockholder Approval, if
required, the Company has the requisite corporate authority to enter into and to
consummate the transactions contemplated by this Agreement and otherwise to
carry out its obligations hereunder. The execution and delivery by
the Company of this Agreement and the consummation by it of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of the Board, and no further consent or action is required on the
part of the Company, other than Stockholder Approval, if
required. This Agreement has been duly authorized, executed and
delivered by the Company and constitutes valid and binding obligations of the
Company enforceable against the Company in accordance with its terms, except as
may be limited by (i) applicable bankruptcy, insolvency, reorganization or other
laws of general application relating to or affecting the enforcement of
creditors’ rights generally and (ii) the effect of rules of law governing the
availability of specific performance and other equitable remedies.
(e)
No
Conflicts. The execution, delivery and performance of this
Agreement and the consummation by the Company of the transactions contemplated
hereby do not, and will not, (i) conflict with or violate any provision of the
Company’s or any subsidiary’s certificate or articles of incorporation, bylaws
or other organizational or charter documents, (ii) conflict with, or constitute
a default (or an event that, with notice or lapse of time or both, would become
a default) under, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of,
any agreement, credit facility, debt or other instrument (evidencing a Company
or subsidiary debt or otherwise) or other understanding to which the Company or
any subsidiary is a party or by which any property or asset of the Company or
any subsidiary is bound, or affected, except to the extent that such conflict,
default, termination, amendment, acceleration or cancellation right would not
reasonably be expected to have a Material Adverse Effect, or (iii) result in a
violation of any law, rule, regulation, order, judgment, injunction, decree or
other restriction of any court or governmental authority to which the Company or
a subsidiary is subject (including, assuming the continued validity and accuracy
of the representations and warranties of the Investors set forth in Section 2.2
hereof, U.S. federal and state securities laws and regulations, Canadian
provincial securities laws and regulations and the rules and regulations of any
self-regulatory organization to which the Company or its securities are subject,
including all applicable trading markets), or by which any property or asset of
the Company or a subsidiary is bound or affected, except to the extent that such
violation would not reasonably be expected to have a Material Adverse
Effect.
(f)
The
Shares. The Shares are duly authorized and, when issued and
paid for in accordance with this Agreement, will be duly and validly issued,
fully paid and nonassessable, free and clear of all liens (other than those
imposed by the Investors) and will not be subject to pre-emptive or similar
rights of stockholders. Assuming the continued validity and accuracy of each
Investor’s representations and warranties contained in Section 2.2 hereof, the
offer and sale of the Shares to the Investors pursuant to this Agreement are
exempt from the registration requirements of the Securities Act and from the
prospectus and registration requirements of the securities acts or similar
statutes of each of the provinces of Canada and all regulations, rules, policy
statements, notices and blanket orders or rulings thereunder applicable to the
Company or the Investor, as applicable (“Canadian Securities
Laws”).
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(g)
Capitalization. The
aggregate number of shares and type of all authorized, issued and outstanding
classes of capital stock, options and other securities of the Company (whether
or not presently convertible into or exercisable or exchangeable for shares of
capital stock of the Company) is described in all material respects in the Time
of Sale Information. All outstanding shares of capital stock are duly
authorized, validly issued, fully paid and nonassessable and have been issued in
compliance in all material respects with all applicable securities
laws. Except as disclosed in the Time of Sale Information and
employee equity incentives, the Company did not have outstanding at September
30, 2009, any other options, script rights to subscribe to, calls or commitments
of any character whatsoever relating to, or securities, rights or obligations
convertible into or exercisable or exchangeable for, or entered into any
agreement giving any individual or corporation, partnership, trust, incorporated
or unincorporated association, joint venture, limited liability company or joint
stock company (each a “Person”) any right to
subscribe for or acquire, any shares of the Common Stock, options or convertible
securities. Except as disclosed in the Time of Sale Information, and
except for customary adjustments as a result of stock dividends, stock splits,
combinations of shares, reorganizations, recapitalizations, reclassifications or
other similar events, there are no anti-dilution or price adjustment provisions
contained in any security issued by the Company (or in any agreement providing
rights to security holders) and the issuance and sale of the Shares will not
obligate the Company to issue shares of the Common Stock or other securities to
any Person (other than the Investors) and will not result in a right of any
holder of securities to adjust the exercise, conversion, exchange or reset price
under such securities. To the knowledge of the Company, except as
disclosed in the Time of Sale Information and any Schedules 13D or 13G filed
with the United States Securities and Exchange Commission (the “SEC”) pursuant to Rule 13d-1
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) by reporting
persons, no Person or group of related Persons beneficially owns (as determined
pursuant to Rule 13d-3 under the Exchange Act), or has the right to acquire, by
agreement with or by obligation binding upon the Company, beneficial ownership
of in excess of 5% of the outstanding Common Stock.
(h)
Since the date of the latest audited financial
statements included within the Time of Sale Information, except as disclosed in
the Time of Sale Information, (i) there has been no event, occurrence or
development that, individually or in the aggregate, has had or that would result
in a Material Adverse Effect, (ii) the Company has not incurred any material
liabilities other than (A) trade payables and accrued expenses incurred in the
ordinary course of business consistent with past practice and (B) liabilities
not required to be reflected in the Company’s financial statements pursuant to
generally accepted accounting principles in the United States (“GAAP”) or required to be
disclosed in filings made with the SEC or pursuant to the requirements of
Canadian Securities Laws, (iii) the Company has not altered its method of
accounting or changed its auditors, (iv) the Company has not declared or made
any dividend or distribution of cash or other property to its stockholders, in
their capacities as such, or purchased, redeemed or made any agreements to
purchase or redeem any shares of its capital stock (except for repurchases by
the Company of shares of capital stock held by employees, officers, directors or
consultants pursuant to an option of the Company to repurchase such shares upon
the termination of employment or services) and (v) the Company has not issued
any equity securities to any officer, director or Affiliate (as defined below),
except pursuant to existing Company stock-based plans. For purposes
of this Agreement, “Affiliate” means any Person
that, directly or indirectly through one or more intermediaries, controls or is
controlled by or is under common control with a Person, as such terms are used
in and construed under Rule 144 promulgated under the Securities Act of 1933, as
amended (the “Securities
Act”).
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(i)
Absence of
Litigation. Except as disclosed in the Time of Sale
Information, there is no action, suit, claim or proceeding, or, to the Company’s
knowledge, inquiry or investigation, before or by any court, public board,
government agency, self-regulatory organization or body pending or, to the
knowledge of the Company, threatened against or affecting the Company or any of
its subsidiaries that would be reasonably expected, individually or in the
aggregate, to have a Material Adverse Effect.
(j)
Compliance. Except
as set forth in the Time of Sale Information, neither the Company nor any
subsidiary, except in each case as would not, individually or in the aggregate,
reasonably be expected to have or result in a Material Adverse Effect, (i) is in
default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default by
the Company or any subsidiary under), nor has the Company or any subsidiary
received written notice of a claim that it is in default under or that it is in
violation of, any indenture, loan or credit agreement or any other agreement or
instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is in
violation of any order of any court, arbitrator or governmental body or (iii) is
or has been in violation of any statute, rule or regulation of any governmental
authority.
(k)
Title to
Assets. The Company and its subsidiaries own no real
property. The Company and its subsidiaries have good title in all
personal property owned by them that is material to the business of the Company
and its subsidiaries, free and clear of all liens, except as disclosed in the
Time of Sale Information and for liens that do not, individually or in the
aggregate, have or result in a Material Adverse Effect. Any real
property and facilities held under lease by the Company and its subsidiaries are
held by them under valid, subsisting and enforceable leases of which the Company
and its subsidiaries are in material compliance.
(l)
No General Solicitation; No
Directed Selling Efforts; Placement Agent’s Fees. Neither the
Company, nor any of its Affiliates, nor any Person acting on its or their
behalf, has engaged in any form of general solicitation or general advertising
(within the meaning of Regulation D of the Securities Act) or any directed
selling efforts (within the meaning of Regulation S of the Securities Act) in
connection with the offer and sale of the Shares to the Investors pursuant to
this Agreement. The Company shall be responsible for the payment of
any placement agent’s fees, financial advisory fees or broker’s commission
(other than for Persons engaged by any Investor or his, her or its investment
advisor) relating to, or arising out of, the purchase and sale of the Shares
pursuant to this Agreement. The Company has engaged the Canadian
Placement Agent as its exclusive placement agent in Canada in connection with
the purchase and sale of the Shares pursuant to this Agreement. Other
than the Canadian Placement Agent, the Company has not engaged any placement
agent or other agent in connection with the purchase and sale of the Shares
pursuant to this Agreement.
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(m) Investment Company
Act. The Company is not, and will not be as a result of the
application of the proceeds from sale of the Shares contemplated hereby,
required to be registered as an “investment company” within the meaning of the
Investment Company Act of 1940, as amended.
(n)
Patents and
Trademarks. The Company owns or possesses adequate rights or
licenses to use, all trademarks, trade names, service marks, service xxxx
registrations, service names, patents, patent rights, copyrights, inventions,
licenses, approvals, governmental authorizations, trade secrets and other
intellectual property rights (“Intellectual Property Rights”)
necessary to conduct its business as now conducted, other than as would not have
or reasonably be expected to have a Material Adverse Effect. None of
the Company’s registered trademarks, copyright registrations or issued patents
(collectively, “Registered
Intellectual Property”) have expired or terminated, or are expected to
expire or terminate within three years from the date of this Agreement, except
such Registered Intellectual Property which, if expired or terminated, would
not, individually or in the aggregate, have, or reasonably be expected to result
in, a Material Adverse Effect. Neither the Company nor any of its
subsidiaries is the subject of any claim of infringement or misappropriation by
the Company or any of its subsidiaries of Intellectual Property Rights of
others. Except as disclosed in the Time of Sale Information, there is
no proceeding being made or brought, or to the knowledge of the Company, being
threatened, against the Company or its subsidiaries regarding their respective
Intellectual Property Rights.
(o)
Insurance. The
Company and its subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are deemed
by the management of the Company to be prudent and customary in the businesses
and locations in which the Company and its subsidiaries are engaged and located,
respectively.
(p)
Regulatory
Permits. The Company and its subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state, provincial, local or foreign regulatory authorities necessary to conduct
their respective businesses as described in the Time of Sale Information (“Material Permits”), except
where the failure to possess such permits does not, individually or in the
aggregate, have, or would not reasonably be expected to result in, a Material
Adverse Effect, and neither the Company nor any subsidiary has received any
written notice of proceedings relating to the revocation or modification of any
Material Permit.
(q)
Internal Accounting
Controls. The Company and its subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management’s general or
specific authorizations, (ii) transactions are recorded as necessary to permit
the preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences.
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(r)
Xxxxxxxx-Xxxxx
Act. The Company is in compliance in all material respects
with applicable requirements of the Xxxxxxxx-Xxxxx Act of 2002 and applicable
rules and regulations promulgated by the SEC thereunder, except where such
non-compliance would not have, individually or in the aggregate, a Material
Adverse Effect.
(s)
Foreign Corrupt
Practices. Neither the Company nor any of its subsidiaries
nor, to the knowledge of the Company, any director, officer, agent, employee or
other Person acting on behalf of the Company or any of its subsidiaries has, in
the course of its actions for, or on behalf of, the Company (i) used any
corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expenses relating to political activity, (ii) made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds, (iii) violated or is in violation of any
provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or (iv)
made any unlawful bribe, rebate, payoff, influence payment, kickback or other
unlawful payment to any foreign or domestic government official or
employee.
(t)
Labor
Matters. Neither the Company nor any of its subsidiaries is a
party to any collective bargaining agreement or employs any member of a
union. The Company and its subsidiaries are in compliance in all
material respects with all applicable federal, state, provincial, local and
foreign laws and regulations respecting labor, employment and employment
practices and benefits, terms and conditions of employment and wages and hours,
except where failure to be in compliance would not, either individually or in
the aggregate, reasonably be expected to result in a Material Adverse
Effect.
(u)
Tax
Status. The Company and each of its subsidiaries (i) has made
or filed all foreign, federal and state income and all other tax returns,
reports and declarations required by any jurisdiction to which it is subject,
except for any which the failure to make or file would not be reasonably
expected to have, individually or in the aggregate, a Material Adverse Effect,
(ii) has paid all taxes and other governmental assessments and charges that are
material in amount, shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith, and (iii) has set
aside on its books provision reasonably adequate for the payment of all taxes
for periods subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes in any material amount
claimed to be due by the taxing authority of any jurisdiction, and the officers
of the Company know of no basis for any such claim.
(v)
Public Disclosure Documents;
Financial Statements. The Company has filed all reports
required to be filed by it under the Exchange Act, including pursuant to Section
13(a) or 15(d) thereof, and under Canadian Securities Laws, for the 12 months
preceding the date hereof on a timely basis or has received a valid extension of
such time of filing and has filed any such Public Disclosure Documents (as
defined below) prior to the expiration of any such extension. Such
reports required to be filed by the Company under the Exchange Act, including
pursuant to Section 13(a) or 15(d) thereof, and under Canadian Securities Laws,
together with any materials filed or furnished by the Company under the Exchange
Act and Canadian Securities Laws, whether or not any such reports were required,
are referred to herein, collectively, as the “Public Disclosure
Documents”. The Public Disclosure Documents filed by the
Company, when they were filed with the SEC, conformed in all material respects
with the requirements of the Exchange Act and the rules and regulations of the
SEC promulgated thereunder, and Canadian Securities Laws, and none of the Public
Disclosure Documents, when filed by the Company, contained any untrue statement
of a material fact or omitted to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. The financial statements of the Company
(including the related notes thereto) included in the Public Disclosure
Documents comply in all material respects with the applicable accounting
requirements of the Securities Act and the Exchange Act, as applicable, and
Canadian Securities Laws with respect thereto as in effect at the time of
filing. Such financial statements have been prepared in conformity
with GAAP, except as may be otherwise specified in such financial statements,
the notes thereto and except that unaudited financial statements may not contain
all footnotes required by GAAP or may be condensed or summary statements, and
fairly present in all material respects the consolidated financial position of
the Company and its subsidiaries as of and for the dates thereof and the results
of operations and cash flows for the periods then ended, subject, in the case of
unaudited financial statements, to normal, year-end audit
adjustments. The Company has filed all agreements or instruments
required to be filed with the SEC under the Exchange Act pursuant to Item
601(b)(10) of Regulation S-K promulgated under the Securities Act or analogous
provisions of Canadian Securities Laws.
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2.2
Representations, Warranties
and Acknowledgements of the Investors. Each Investor, as to
itself only and for no other Investor, hereby represents and warrants to, and
agrees with, the Company as follows, and each Investor resident in Canada, as to
itself only and for no other Investor, represents and warrants to and agrees
with, the Canadian Placement Agent as follows:
(a)
Such Investor is resident in the
jurisdiction set out on such Investor’s respective signature page of this
Agreement. Such address was not created and is not used solely for
the purpose of acquiring Shares and such Investor was solicited to purchase in
such jurisdiction.
(b)
If such Investor is not a person resident in
Canada or the United States, the subscription for Shares by such Investor is
being made pursuant to exemptions under, and does not contravene any of the,
applicable securities legislation in the jurisdiction in which such Investor
resides and does not give rise to any obligation of the Company to prepare and
file a prospectus or similar document or to register the Shares or to be
registered with or to file any report or notice with any governmental or
regulatory authority or to otherwise comply with any continuous
disclosure obligations under the applicable securities legislation of the
jurisdiction in which such Investor resides.
(c)
Such Investor is subscribing for Shares as principal for its
own account and not for the benefit of any other Person (within the meaning of
applicable Canadian Securities Laws, as defined below). If it is
subscribing as agent for a disclosed principal, it has disclosed the name of the
disclosed principal on the Investor Signature Page of this Agreement and
acknowledges that the Company may be required by law to disclose to certain
Canadian regulatory authorities the identity of each disclosed principal for
whom such Investor is acting.
(d)
In the case of a subscription for Shares by an Investor acting as
trustee or agent for a fully managed account or as agent for a disclosed
principal, such Investor is duly authorized to execute and deliver this
Agreement and all other necessary documentation in connection with such
subscription on behalf of the fully managed account or disclosed principal, as
applicable and this Agreement has been duly authorized, executed and delivered
by or on behalf of and constitutes a legal, valid and binding agreement of, the
fully managed account or disclosed principal, as applicable.
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(e)
In the case of a subscription
for Shares by an Investor acting as principal, this Agreement (and all other
documentation in connection with such subscription) has been duly authorized,
executed and delivered by, and constitutes a legal, valid and binding agreement
of, such Investor. This Agreement is enforceable in accordance with
its terms against such Investor.
(f)
If such Investor is a Canadian resident, (i)
such Investor is not a U.S. Person (as defined by Rule 902 of Regulation S,
promulgated the Securities Act) or subscribing for Shares for the account of a
U.S. Person or for resale in the United States and such Investor confirms that
the Shares have not been offered to such Investor in the United States and that
this Agreement has not been signed in the United States, (ii) such Investor is
acquiring the Shares in an offshore transaction, (iii) the purchase of the
Shares is not part of a plan or scheme to evade the registration requirements of
the Securities Act, (iv) such Investor may not engage in any hedging
transactions with regard to the Shares unless in compliance with the Securities
Act, (v)(A) if in the future such Investor decides to offer, resell, pledge or
otherwise transfer any of the Shares, such Shares may be offered, resold,
pledged or otherwise transferred only (1) in the United States to a person whom
the seller reasonably believes is a qualified institutional buyer in a
transaction meeting the requirements of Rule 144A, (2) outside the United States
in a transaction complying with the provisions of Rule 904 of Regulation S, (3)
pursuant to an exemption from registration under the Securities Act provided by
Rule 144 (if available), or (4) pursuant to an effective registration statement
under the Securities Act, in each of cases (1) through (4) in accordance with
any applicable securities laws of any State of the United States, and that (B)
such Investor will, and each subsequent holder is required to, notify any
subsequent purchaser of the relevant security of the resale restrictions
referred to in (A) above and the other restrictions described below and (vi) the
Company reserves the right to request certifications, opinions of counsel or
other evidence to establish compliance with the foregoing restrictions and other
provisions of the Securities Act.
(g)
Such Investor has been advised to consult its own
legal advisors with respect to the execution, delivery and performance by it of
this Agreement and the transactions contemplated by this Agreement, including
but not limited to, trading in the Shares and with respect to the resale
restrictions imposed by the securities laws of the jurisdiction in which such
Investor resides and other applicable securities laws, and acknowledges that no
representation has been made respecting the applicable hold periods imposed by
Canadian Securities Laws or other resale restrictions applicable to such
securities which restrict the ability of such Investor (or others for whom it is
contracting hereunder) to resell such securities, that such Investor (or others
for whom it is contracting hereunder) is solely responsible to find out what
these restrictions are and such Investor is solely responsible (and the Company
is not in any way responsible) for compliance with applicable resale
restrictions and such Investor is aware that it (or beneficial persons for whom
it is contracting hereunder) may not be able to resell such securities except in
accordance with limited exemptions under the Canadian Securities Laws and other
applicable securities laws, including those of the United States.
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(h)
Such Investor is not purchasing Shares with
knowledge of material information concerning the Company that has not been
generally disclosed.
(i)
The subscription for Shares by such Investor
has not been made through or as a result of, and the distribution of Shares to
such Investor is not being accompanied by any advertisement, including without
limitation in printed public media, radio, television or telecommunications,
including electronic display, or as part of a general solicitation.
(j)
No Person has made any written or oral
representations that (i) any Person will resell or repurchase the Shares, (ii)
that any Person will refund all or any part of the Purchase Price (other than as
contemplated explicitly in this Agreement) or (iii) as to the future price or
value of the Common Stock.
(k)
The Shares will bear, as of the date of each
Closing, legends substantially in the following form and with the necessary
information inserted:
“UNLESS
PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT
TRADE THE SECURITY BEFORE MAY 9, 2010.
“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE LISTED ON THE TORONTO STOCK
EXCHANGE (“TSX”); HOWEVER, THE SAID SECURITIES CANNOT BE TRADED THROUGH THE
FACILITIES OF TSX SINCE THEY ARE NOT FREELY TRANSFERABLE, AND CONSEQUENTLY ANY
CERTIFICATE REPRESENTING SUCH SECURITIES IS NOT “GOOD DELIVERY” IN SETTLEMENT OF
TRANSACTIONS ON TSX.”
“THE
SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED, PLEDGED OR HYPOTHECATED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF
REGULATION S PROMULGATED UNDER THE SECURITIES ACT, PURSUANT TO REGISTRATION
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM
REGISTRATION. HEDGING TRANSACTIONS INVOLVING THE SHARES REPRESENTED
HEREBY MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES
ACT. THIS CERTIFICATE MUST BE SURRENDERED TO THE COMPANY OR ITS
TRANSFER AGENT AS A CONDITION PRECEDENT TO THE SALE, PLEDGE, HYPOTHECATION OR
ANY OTHER TRANSFER OF ANY INTEREST IN ANY OF THE SHARES REPRESENTED BY THIS
CERTIFICATE. THE COMPANY IS REQUIRED HEREUNDER TO REFUSE TO REGISTER ANY
TRANSFER OF THESE SECURITIES NOT MADE IN ACCORDANCE WITH REGULATION S, PURSUANT
TO REGISTRATION UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM REGISTRATION.”
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(l)
The Company is relying on the
representations, warranties and covenants contained herein and in the applicable
schedules attached hereto to determine such Investor’s eligibility to subscribe
for Shares under securities laws applicable in the United States and
Canada. Such Investor undertakes to immediately notify the Company of
any change in any statement or other information relating to such Investor set
forth in such applicable schedules which takes place prior to each Closing
applicable to such Investor.
(m) The
funds representing the Purchase Price which will be advanced by such Investor to
the Company hereunder, will not represent proceeds of crime for the purposes of
the Proceeds of Crime (Money
Laundering) and Terrorist Financing Act (Canada) (the “PCMLTFA”) and such Investor
acknowledges that the Company may in the future be required by law to disclose
such Investor’s name and other information relating to this Agreement and such
Investor’s subscription hereunder, on a confidential basis, pursuant to the
PCMLTFA. To the best of such Investor’s knowledge, (a) none of the
Purchase Price to be provided by such Investor (i) has been or will be derived
from or related to any activity that is deemed criminal under the laws of
Canada, the United States, or any other jurisdiction, or (ii) is being tendered
on behalf of a Person who has not been identified to such Investor, and (b) it
shall promptly notify the Company if such Investor discovers that any of such
representations ceases to be true, and provide the Company with appropriate
information in connection therewith.
(n)
Such Investor acknowledges that this
Agreement and the schedules hereto require it to provide certain personal
information to the Company. Such information is being collected by
the Company for the purposes of completing the Offering, which includes, without
limitation, determining such Investor’s eligibility to purchase Shares under the
securities laws applicable in the United States and Canada and other applicable
securities laws, preparing and registering certificates representing Shares and
completing filings required by any stock exchange or securities regulatory
authority. Such Investor’s personal information may be disclosed by
the Company to: (i) stock exchanges or securities regulatory authorities, (ii)
the Canada Revenue Agency, and (iii) any of the other parties involved in the
Offering, including legal counsel and may be included in record books in
connection with the Offering. By executing this Agreement, such
Investor is deemed to be consenting to the foregoing collection, use and
disclosure of its personal information. Such Investor also consents
to the filing of copies or originals of any of its documents as may be required
to be filed with any stock exchange or securities regulatory authority in
connection with the transactions contemplated hereby. Such Investor
has the authority to provide the consents and acknowledgements set out in this
paragraph on behalf of each disclosed principal. The Company may
establish and maintain a file of such Investor’s personal information for the
purposes set out above, which will be accessible at 00000 Xxxxxxx Xxxxxx, Xxxxx
000, Xxx Xxxxx, Xxxxxxxxxx 00000. Authorized employees and agents of
the Company will have access to such Investor’s personal
information. Such Investor may request access to, or correction of,
his or her personal information in the Company’s possession by writing to the
foregoing address, to the attention of Xxxx Dumencu, Chief Financial
Officer.
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(o)
The information provided by such Investor on
its Investor Signature Page of this Agreement identifying the name, address and
telephone number of such Investor, and the aggregate Purchase Price of the
Shares purchased by such Investors as well as the applicable Closing date and
the exemption that such Investor is relying on in purchasing Shares will be
disclosed to the Ontario Securities Commission, and such information is being
indirectly collected by the Ontario Securities Commission under the authority
granted to it under securities legislation. This information is being collected
for the purposes of the administration and enforcement of the securities
legislation of Ontario. Such Investor (and for certainty, including
each disclosed principal) hereby authorizes the indirect collection of such
information by the Ontario Securities Commission. In the event such
Investor has any questions with respect to the indirect collection of such
information by the Ontario Securities Commission, such Investor should contact
the Ontario Securities Commission, Administrative Support Clerk at the Ontario
Securities Commission at (000) 000-0000 or in person or writing at Xxxxx 0000,
Xxx 00, 00 Xxxxx Xxxxxx West, Toronto, Ontario M5H 3S8.
(p)
Organization;
Authority. In the case of an Investor that is not a natural
person, (i) such Investor is an entity duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization and has the
requisite corporate, partnership or other power and authority to enter into this
Agreement, to subscribe for and purchase Shares as contemplated herein and to
carry out its obligations hereunder, and (ii) the execution and delivery of this
Agreement have been duly authorized by all necessary corporate, partnership or
other action on the part of such Investor. In the case of all
Investors, whether or not a natural person, this Agreement has been duly
executed and delivered by such Investor and constitutes a valid and binding
obligation of such Investor, enforceable against him, her or it in accordance
with its terms, except as may be limited by (A) applicable bankruptcy,
insolvency, reorganization or other laws of general application relating to or
affecting the enforcement of creditors’ rights generally and (B) the effect of
rules of law governing the availability of specific performance and other
equitable remedies.
(q)
No Public Sale or
Distribution. Such Investor will be acquiring Shares, in the
ordinary course of business for its account and not with a view towards, or for
resale in connection with, the public sale or distribution thereof, and such
Investor covenants that it will not resell its Shares except pursuant to sales
registered under the Securities Act or under an exemption from such registration
and in compliance with applicable U.S. federal and state securities laws or
applicable statutory resale restrictions imposed by the applicable Canadian
provincial and territorial securities laws and regulations of the Canadian
jurisdiction in which the Investor resides and in compliance with other
applicable Canadian provincial and territorial securities laws and regulations,
and such Investor does not have a present arrangement to effect any distribution
of Shares to or through any person or entity.
(r)
Investor
Status. On the date such Investor was offered Shares, such
Investor is and will be, respectively, (i) an “accredited investor” as
defined in Rule 501(a) promulgated under Regulation D of the Securities Act and
(ii) an “accredited
investor” as defined in National Instrument 45-106 Prospectus and
Registration Exemptions. Such Investor has properly completed,
executed and delivered to the Company the applicable “accredited investor”
certificate set forth in the schedules hereto and the information contained
therein is true and correct.
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(s)
Experience of
Investor. There are risks associated with the purchase of and
investment in the Shares, and such Investor, either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of
entering into this Agreement and paying its Purchase Price and the merits and
risks of the prospective investment in the Shares, and such Investor has so
evaluated such merits and risks. Such Investor understands that it
must bear the economic risk of an investment in the Shares, indefinitely and is
able to bear such risk and to afford a complete loss of such
investment.
(t)
Access to
Information. Such Investor has reviewed the Time of Sale
Information and has been afforded (i) the opportunity to ask such questions as
it has deemed necessary of, and to receive answers from, representatives of the
Company concerning the terms and conditions of this Agreement and the merits and
risks of the prospective investment in the Shares, (ii) access to information
about the Company and its subsidiaries and their respective financial condition,
results of operations, business, properties, management and prospects sufficient
to enable him, her or it to evaluate the terms and conditions of this Agreement
and the merits and risks of the prospective investment in the Shares and (iii)
the opportunity to obtain such additional information that the Company possesses
or can acquire without unreasonable effort or expense that is necessary to make
an informed decision. Other than the Time of Sale Information, such
Investor has not been provided with, or received, any documents that may be
construed as an “offering memorandum” under applicable Canadian Securities
Laws.
(u)
No Governmental
Review. Such Investor understands that no U.S. federal or
state agency, Canadian provincial or territorial securities commission or any
other government or governmental agency has reviewed or passed on or made, or
will pass on or make, any recommendation or endorsement of the Shares or the
fairness or suitability of the prospective investment in the
Shares.
(v)
Financing
Activities. The Investor understands that the Company may,
from time to time after the date hereof seek additional financing which may
adversely affect the interest of such Investor.
(w) Securities
Transactions. If such Investor is a U.S. Person, it has not
engaged, directly or indirectly, and no person or entity acting on behalf of or
pursuant to any understanding with such Investor has engaged, in any purchases
or sales of any securities of the Company since the time such Investor was first
contacted by the Company, or by any other person or entity, regarding an
investment in the Company, including this Agreement and the transactions
contemplated herein.
(x)
Restricted
Securities. If such Investor is a U.S. Person, it understands
that the Shares, will be characterized as “restricted securities” under
U.S. federal securities laws inasmuch as, if issued, they will be acquired from
the Company in a transaction not involving a public offering and that, under
U.S. federal securities laws and applicable regulations, the Shares may be
resold without registration under the Securities Act only in certain limited
circumstances. Such Investor acknowledges that all certificates
representing any of the Shares will bear a restrictive legend to the foregoing
effect and hereby consents to the transfer agent for the Common Stock making a
notation on its records to implement the restrictions on transfer described
herein. Such Investor acknowledges that the Shares will not be
qualified for distribution to the public in Canada and that such Investor will
not, directly or indirectly, offer or re-sell the Shares in Canada or to any
Canadian resident, or to any person or entity who is acting on behalf of a
Canadian resident or to any person or entity whom it believes intends to
re-offer, re-sell or deliver any of the Shares in Canada, unless permitted under
applicable Canadian provincial and territorial securities laws and
regulations.
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(y)
No Legal, Tax or Investment
Advice. Such Investor understands that nothing in this
Agreement or any other materials presented by or on behalf of the Company to
him, her or it in connection with this Agreement and the transactions
contemplated herein, including the prospective investment in the Shares,
constitutes legal, tax or investment advice. Such Investor has
consulted such legal, tax and investment advisors as it, in its sole discretion,
has deemed necessary or appropriate in the circumstances. Such
Investor is not relying on the Company or its counsel in this
regard.
(z)
Connected and Related
Issuer. Such Investor understands that (i) the Company may be
considered a “connected issuer” and/or a “related issuer” of the Canadian
Placement Agent (as those terms are defined in National Instrument
33-105—Underwriting Conflicts), (ii) the Canadian Placement Agent is an
Affiliate of Xxxxx Xxxxxxxx, the Company’s Chairman of the Board and Chief
Executive Officer, (iii) the Canadian Placement Agent owns 192,480 shares of the
Common Stock, representing approximately 2% of the Company’s issued and
outstanding capital stock (before giving effect to the offering hereunder), (iv)
the terms of the offering hereunder (including the pricing terms) were
negotiated and settled by Xx. Xxxxxxxx, on behalf of the Company, and the
Canadian Placement Agent and (v) the Canadian Placement Agent will not receive
any benefit in connection with the offering hereunder, other than the
compensation payable to the Canadian Placement Agent pursuant to the Agency
Agreement. In addition, such Investor understands that the Company
has entered into an advisory agreement with an Affiliate of the Canadian
Placement Agent and of Xx. Xxxxxxxx under which that Affiliate is providing
corporate finance advisory services to the Company for
remuneration.
ARTICLE
III
CONDITIONS
OF CLOSING AND TERMINATION
3.1
Closing Conditions in Favor
of the Investors. The obligation of each of the Investors to
pay the aggregate Purchase Price for the Shares to be purchased by such Investor
is subject to the satisfaction, or the waiver by such Investor, at or prior to
the applicable Closing, of each of the following conditions:
(a) Representations and
Warranties. The representations and warranties of the Company
contained herein shall be true and correct in all material respects as of such
Closing.
(b)
Performance. The
Company shall have performed, satisfied and complied with, in all material
respects, all covenants, agreements and conditions required by this Agreement to
be performed, satisfied or complied with by it at or prior to such
Closing.
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(c)
NASDAQ and TSX
Approval. The Company shall have received all requisite
approvals for such Closing from NASDAQ and the Toronto Stock
Exchange.
(d)
Stockholder
Approval. The Company shall have received stockholder
approval, if required by the rules of the NASDAQ Capital Market or otherwise,
for the issuance of Shares at such Closing (“Stockholder
Approval”).
3.2
Closing Conditions in Favor
of the Company. The entering into of this Agreement by the
Company with each of the Investors, and the acceptance by the Company of such
Investor’s payment for Shares, is subject to the satisfaction, or the waiver by
the Company, at or prior to the applicable Closing, of each of the following
conditions:
(a)
Representations and
Warranties. The representations and warranties of such
Investor contained herein shall be true and correct in all material respects as
of such Closing.
(b)
Accredited
Investor Certificate. Such Investor shall have completed and
executed and delivered the applicable Accredited Investor
Certificate.
(c)
Performance. Such
Investor shall have performed, satisfied and complied with, in all material
respects, all other covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by him, her or it at or
prior to such Closing.
(d)
NASDAQ and TSX
Approval. The Company shall have received all requisite
approvals for such Closing from NASDAQ and the Toronto Stock
Exchange.
(e)
Stockholder
Approval. The Company shall have received Stockholder
Approval, if required for such Closing.
3.3
Termination. This
Agreement may be terminated and the offer, sale and issuance of the Remaining
Shares and Additional Shares may be abandoned at any time prior to the
Additional Closing, notwithstanding the receipt by the Company of Stockholder
Approval:
(a)
by duly
authorized mutual written consent executed by the Company and a Majority in
Interest (as defined below);
(b)
automatically if the
Additional Closing does not occur on or prior to the date that is the 90th day
following the earlier of (i) the date of the Initial Closing and (ii) January
30, 2010.
For
greater certainty, in accordance with the authorization and appointment in
Section 1.2 of this Agreement given to the Canadian Placement Agent by the
Investors resident in Canada, the Canadian Placement Agent is authorized to act
for and on behalf of such Investors with respect to, or in connection with, all
matters relating to this Section 3.3. In addition, the Company hereby
agrees that, upon the termination of the Agency Agreement, the obligations
hereunder of all Investors resident in Canada automatically shall become null
and void and each such Investor automatically shall cease to be a party
hereto.
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ARTICLE
IV
GENERAL
4.1
Amendments;
Waivers. No provision of this Agreement may be amended or
waived except in a written instrument signed, (i) in the case of an amendment,
by the Company and Investors holding a majority of the number of Shares then
outstanding (a “Majority in
Interest”) or (ii) in the case of a waiver, by the party against whom
enforcement of any such waiver is sought, provided that, in the
case of waiver by or on behalf of all of the Investors, such written instrument
shall be signed by Investors representing a Majority in
Interest. Notwithstanding the foregoing, Investors purchasing
Additional Shares may become parties to this Agreement without any amendment of
this Agreement pursuant to this paragraph or any consent or approval of any
other Investor by executing and delivering an Investor Signature Page. No waiver of any default
with respect to any provision, condition or requirement of this Agreement shall
be deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of any party to exercise any right hereunder in any
manner impair the exercise of any such right. For greater certainty,
in accordance with the authorization and appointment in Section 1.2 of this
Agreement given to the Canadian Placement Agent by the Investors resident in
Canada, the Canadian Placement Agent is authorized to act for and on behalf of
such Investors with respect to, or in connection with, any and all amendments to
this Agreement and/or waivers of provisions hereof.
4.2
Notices. Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (a) the date of transmission, if such notice or
communication is delivered via facsimile or e-mail at the facsimile number or
e-mail address referred to in this Section 4.2 prior to 6:30 p.m. (Eastern time)
on a business day in the city of San Diego, California (“Business Day”), (b) the next
Business Day after the date of transmission, if such notice or communication is
delivered via facsimile or e-mail at the facsimile number or e-mail address
referred to in this Section 4.2 on a day that is not a Business Day or later
than 6:30 p.m. (Eastern time) on any Business Day, (c) the Business Day
following the date of deposit with a nationally recognized overnight courier
service or (d) upon actual receipt by the party to whom such notice is required
to be given. The addresses, facsimile numbers and e-mail addresses
for such notices and communications are those set forth on the signature pages
hereof, or such other address, facsimile number or e-mail address as may be
designated in writing hereafter, in the same manner, by the relevant party
hereto.
4.3
Survival. All
representations and warranties and covenants herein shall survive the execution
and delivery of this Agreement and the advance by each of the Investors of its
Purchase Price for one year.
4.4
Headings. The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof.
4.5
Meaning of
“Including”. The word “including”, whenever used in this
Agreement, shall be deemed to be followed by the phrase “without
limitation”.
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4.6
Entire
Agreement. This Agreement contains the entire understanding of
the parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings, oral or written, with respect to such matters,
which the parties acknowledge have been merged into such agreements and
exhibits. At or after the applicable Closing, and without further
consideration, the parties hereto will make, do and execute and deliver, or
cause to be made, done and executed and delivered, such further acts, deeds,
assurances, documents and things as may be reasonably requested by any of the
other parties hereto in order to give practical effect to the intention of the
parties hereunder.
4.7
Successors and
Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and permitted
assigns.
4.8
No Third Party
Beneficiaries. Except as provided in the Agency Agreement and
in Sections 1.2 and 2.2 of this Agreement, this Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person or entity
4.9
Governing Law;
Venue. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY,
ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
4.10 THE
PARTIES HERETO HEREBY IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF
THE COURTS OF THE STATE OF CALIFORNIA FOR THE ADJUDICATION OF ANY DISPUTE
BROUGHT BY ANY OF THE PARTIES HERETO, IN CONNECTION HEREWITH OR WITH ANY
TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN, AND HEREBY IRREVOCABLY
WAIVE, AND AGREE NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING BROUGHT BY ANY
OF THE OTHER PARTIES HERETO, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE
JURISDICTION OF ANY SUCH COURT OR THAT SUCH SUIT, ACTION OR PROCEEDING IS
IMPROPER.
4.11 Execution. This
Agreement may be executed by one or more of the parties hereto on any number of
separate counterparts (including by facsimile or e-mail transmission), all of
which when taken together shall be considered one and the same
agreement. In the event that any signature is delivered by facsimile
transmission or e-mail attachment, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile or e-mail-attached
signature page were an original thereof.
4.12 Severability. If
any provision of this Agreement is held to be invalid or unenforceable in any
respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired thereby and the
parties will attempt to agree upon a valid and enforceable provision that is a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Agreement.
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4.13 Language. The
parties hereto confirm their express wish that this Agreement and all documents
and agreement directly or indirectly relating hereto be drawn up in the English
language. Les
parties reconnaissent leur volonté expresse que la présente ainsi que tous les
documents et contrats s’y rattachant directement ou indirectement soient rédigés
en anglais.
[SIGNATURE
PAGES TO FOLLOW]
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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized signatories as of the date first
indicated above.
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By:
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/s/
Xxxxxxx Dumencu
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Name:
Xxxxxxx Dumencu
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Title:
Chief Financial Officer
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Address for Notices:
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Attention: CFO
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00000
Xxxxxxx Xxxxxx, Xxxxx 000
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Xxx
Xxxxx, Xxxxxxxxxx 00000
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(Signature Page to Securities
Purchase Agreement)
Investor Signature
Page
By his,
her or its execution and delivery of this signature page, the Investor hereby
joins in and agrees to be bound by the terms and conditions of the Securities
Purchase Agreement (the “Securities Purchase
Agreement”), by and among OccuLogix, Inc., the Investors (as defined
therein) and authorizes this signature page to be attached to the Securities
Purchase Agreement or counterparts thereof. If the undersigned is
signing as agent for a principal (beneficial purchaser) and is not purchasing as
trustee or agent for accounts fully managed by it, fill in the information
regarding beneficial purchaser below.
Name of
Investor:
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By:
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Holder Name:
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Address:
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Tel.
No.:
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Subscription Amount:
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Beneficial
Purchaser:
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(Name
of Principal)
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(Principal’s
Address)
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(Signature Page to Securities
Purchase Agreement)
SCHEDULE
A
U.S.
ACCREDITED INVESTOR CERTIFICATE
This
Accredited Investor Certificate is being delivered to the Company pursuant to
the Securities Purchase Agreement. Capitalized terms used in this
Accredited Investor Certificate, but not defined herein, have the respective
meanings attributed to such terms in the Securities Purchase Agreement. Investor
agrees to furnish any additional information the Company deems necessary in
order to verify the information provided below.
The
Investor hereby acknowledges that the Company is relying on this Accredited
Investor Certificate to determine the Investor’s suitability for investment in
the Loan and investment, if any, in the Securities pursuant to the Securities
Purchase Agreement (collectively, the “Investment”) and hereby
represents and warrants and certifies that, as of the Closing, the
Investor:
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Category
I
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£
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The
Investor is an individual (not a partnership, corporation, etc.) whose
individual net worth, or joint net worth with his or her spouse, presently
exceeds $1,000,000.
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Explanation. In
calculating net worth, you may include equity in personal property and
real estate, including your principal residence, cash, short term
investments, stock and securities. Equity in personal property
and real estate should be based on the fair market value of such property
less debt secured by such property.
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Category
II
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£
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The
Investor is a corporation, partnership, business trust or a non profit
organization within the meaning of Section 501(c)(3) of the Internal
Revenue Code of 1986, as amended, that was not formed for the specific
purpose of acquiring the securities offered and that has total assets in
excess of $5,000,000.
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Category
III
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£
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The
Investor is an individual (not a partnership, corporation, etc.) who
reasonably expects an individual income in excess of $200,000 in the
current year and had an individual income in excess of $200,000 in each of
the last two years (including foreign income, tax exempt income and the
full amount of capital gains and losses but excluding any income of the
Investor’s spouse or other family members and any unrealized capital
appreciation);
Or
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£
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The
Investor is an individual (not a partnership, corporation, etc.) who,
together with his or her spouse, reasonably expects joint income in excess
of $300,000 for the current year and had joint income in excess of
$300,000 in each of the last two years (including foreign income, tax
exempt income and the full amount of realized capital gains and
losses).
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Category
IV
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£
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The
Investor is a director or executive officer of the
Company.
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Category
V
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£
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The
Investor is a bank, savings and loan association or credit union,
insurance company, registered investment company, registered business
development company, licensed small business investment company, or
employee benefit plan within the meaning of Title 1 of ERISA whose plan
fiduciary is either a bank, insurance company or registered investment
advisor or whose total assets exceed $5,000,000.
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Describe entity:
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Category
VI
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£
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The
Investor is a private business development company as defined in Section
202(a)(22) of the Investment Advisors Act of 1940.
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Category
VII
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£
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The
Investor is a trust with total assets in excess of $5,000,000, not formed
for the specific purpose of acquiring the securities offered, whose
purchase is directed by a sophisticated person (a person who either alone
or with his or her purchaser representative(s) has such knowledge and
experience in financial and business matters that he or she is capable of
evaluating the merits and risks of the prospective
investment). A copy of the declaration of trust or trust
agreement and a representation as to the sophistication of the person
directing purchases for the trust is enclosed.
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Category
VIII
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£
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The
Investor is a self directed employee benefit plan for which all persons
making investment decisions are “accredited investors” within one or more
of the categories described above.
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Category
IX
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£
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The
Investor is an entity in which all of the equity owners are “accredited
investors” within one or more of the categories described
above. If relying upon this
category alone, each equity owner must complete a separate copy of this
agreement.
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Describe
entity:
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Category
X
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£
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The
Investor does not come within any of the Categories I – IX set forth
above.
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- 2
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SCHEDULE
B
CANADIAN
ACCREDITED INVESTOR CERTIFICATE
TO: OCCULOGIX,
INC. (THE “COMPANY”)
This
Accredited Investor Certificate is being delivered to the Company pursuant to
the Securities Purchase Agreement. Capitalized terms used in this
Accredited Investor Certificate, but not defined herein, have the respective
meanings attributed to such terms in the Securities Purchase Agreement. The
undersigned agrees to furnish any additional information the Company deems
necessary in order to verify the information provided below.
(A) In
connection with the purchase by the undersigned of Shares, the Investor, on its
own behalf and on behalf of each disclosed principal for whom the Investor is
acting (collectively, the “Subscriber”) hereby
represents, warrants, covenants and certifies to the Company and acknowledges
that the Company and its counsel are relying thereon) that:
1.
Subscriber is purchasing Shares as principal for its own account and not for the
benefit of any other person;
2.
the Subscriber was not created or used solely to purchase or hold securities as
an “accredited investor” as described in paragraph (m) below;
3.
upon execution of this Schedule B by the Subscriber, this Schedule B shall be
incorporated into and form part of the Securities Purchase
Agreement;
4.
Subscriber is a resident or otherwise subject to the securities laws of the
Province of ___________________________________________ and is an
“accredited investor” as defined in NI 45-106 by virtue of being one of the
following, as indicated by an “X” or “” xxxx placed in the space designated
therefor:
{XXXX ONE
OF THE FOLLOWING CATEGORIES}
£ (a)
a Canadian
financial institution, or a Schedule III bank
£ (b)
the Business Development
Bank of Canada incorporated under the Business Development Bank of Canada Act
(Canada)
£ (c)
a subsidiary of any person referred to in
paragraphs (a) or (b), if the person owns all of the voting securities of the
subsidiary, except the voting securities required by law to be owned by
directors of that subsidiary
£ (d)
a person registered under the securities legislation of
a jurisdiction of Canada as an adviser or dealer, other than a person registered
solely as a limited market dealer registered under one or both of the Securities
Act (Ontario) or the Securities Act (Newfoundland and Labrador)
£ (e)
an individual registered or formerly registered
under the securities legislation of a jurisdiction of Canada as a representative
of a person referred to in paragraph (d)
£ (f)
the Government of Canada or a jurisdiction of Canada, or any crown
corporation, agency or wholly owned entity of the Government of Canada or a
jurisdiction of Canada
£ (g)
a municipality, public board or commission in Canada and a metropolitan
community, school board, the Comité de gestion de la taxe scolaire de l’île de
Montréal or an intermunicipal management board in Québec
£ (h)
any national, federal, state, provincial, territorial or municipal government of
or in any foreign jurisdiction, or any agency of that government
£ (i)
a pension fund that is regulated by either the Office of the Superintendent of
Financial Institutions (Canada) or a pension commission or similar regulatory
authority of a jurisdiction of Canada
£ (j)
an individual who, either alone or with a spouse, beneficially owns, directly or
indirectly, financial assets having an aggregate realizable value that before
taxes, but net of any related liabilities, exceeds $1,000,000
£ (k)
an individual whose net income before taxes exceeded $200,000 in each of the two
most recent calendar years or whose net income before taxes combined with that
of a spouse exceeded $300,000 in each of the two most recent calendar years and
who, in either case, reasonably expects to exceed that net income level in the
current calendar year
£ (l)
an individual who, either alone or with a spouse, has net assets of at least
$5,000,000
£ (m)
a person, other than an individual or investment fund, that has net assets of at
least $5,000,000 as shown on its most recently prepared financial
statements
£ (n)
an investment fund that distributes or has distributed its securities only to
(i) a person that is or was an accredited investor at the time of the
distribution, (ii) a person that acquires or acquired securities in the
circumstances referred to in sections 2.10 [Minimum investment amount] and 2.19
[Additional investment in investment funds] of NI 45-106, or (iii) a person
described in paragraph (i) or (ii) that acquires or acquired securities under
section 2.18 [Investment fund reinvestment] of NI 45-106
£ (o)
an investment fund that distributes or has distributed securities under a
prospectus in a jurisdiction of Canada for which the regulator or, in Quebec,
the securities regulatory authority has issued a receipt
£ (p)
a trust company or trust corporation registered or authorized to carry on
business under the Trust and Loan Companies Act (Canada) or under comparable
legislation in a jurisdiction of Canada or a foreign jurisdiction, acting on
behalf of a fully managed account managed by the trust company or trust
corporation, as the case may be
- 2
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£ (q)
a person acting on behalf of a
fully managed account managed by that person, if that person (i) is registered
or authorized to carry on business as an adviser or the equivalent under the
securities legislation of a jurisdiction of Canada or a foreign jurisdiction,
and (ii) in Ontario, is purchasing a security that is not a security of an
investment fund
£ (r)
a registered charity under the Income Tax Act
(Canada) that, in regard to the trade, has obtained advice from an eligibility
adviser or an adviser registered under the securities legislation of the
jurisdiction of the registered charity to give advice on the securities being
traded
£ (s)
an entity organized in a foreign jurisdiction that is analogous to
any of the entities referred to in paragraphs (a) through (d) or paragraph (i)
in form and function
£ (t)
a person in respect of which all of the owners of interests, direct, indirect or
beneficial, except the voting securities required by law to be owned by
directors, are persons that are accredited investors
£ (u)
an investment fund that is advised by a person registered as an adviser or a
person that is exempt from registration as an adviser
£ (v)
a person that is recognized or designated by the securities regulatory
authority, or, except in Ontario and Quebec, the regulator as an accredited
..
For the
purposes hereof, the following definitions are included for
convenience:
1)
“Canadian financial
institution” means (i) an association governed by the Cooperative Credit Associations
Act (Canada) or a central cooperative credit society for which an order
has been made under section 473(1) of that Act, or (ii) a bank, loan
corporation, trust company, trust corporation, insurance company, treasury
branch, credit union, caisse populaire, financial services cooperative, or
league that, in each case, is authorized by an enactment of Canada or a
jurisdiction of Canada to carry on business in Canada or a jurisdiction of
Canada;
2)
“entity” means a company,
syndicate, partnership, trust or unincorporated organization;
3)
“financial
assets” means cash, securities, or any a contract of insurance, a deposit
or an evidence of a deposit that is not a security for the purposes of
securities legislation;
4)
“founder” means, in
respect of an issuer, a person who, (i) acting alone, in conjunction, or in
concert with one or more persons, directly or indirectly, takes the initiative
in founding, organizing or substantially reorganizing the business of the
issuer, and (ii) at the time of the trade is actively involved in the business
of the issuer;
- 3
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5)
“fully managed account”
means an account of a client for which a person makes the investment decisions
if that person has full discretion to trade in securities for the account
without requiring the client’s express consent to a transaction;
6)
“investment fund” means
a mutual fund or a non-redeemable investment fund, and, for greater certainty in
British Columbia, includes an employee venture capital corporation that does not
have a restricted constitution, and is registered under Part 2 of the Employee Investment Act
(British Columbia), R.S.B.C. 1996 c. 112, and whose business objective is making
multiple investments and a venture capital corporation registered under Part 1
of the Small Business Venture
Capital Act (British Columbia), R.S.B.C. 1996 c. 429 whose business
objective is making multiple investments;
7)
“mutual fund” means an
issuer whose primary purpose is to invest money provided by its security holders
and whose securities entitle the holder to receive on demand, or within a
specified period after demand, an amount computed by reference to the value of a
proportionate interest in the whole or in part of the net assets, including a
separate fund or trust account, of the issuer;
8)
“non-redeemable investment
fund” means an issuer,
(A) whose
primary purpose is to invest money provided by its securityholders,
(B) that
does not invest,
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(i)
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for
the purpose of exercising or seeking to exercise control of an issuer,
other than an issuer that is a mutual fund or a non-redeemable investment
fund, or
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(ii)
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for
the purpose of being actively involved in the management of any issuer in
which it invests, other than an issuer that is a mutual fund or a
non-redeemable investment fund, and
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(C) that
is not a mutual fund;
9)
“person” includes (i) an
individual, (ii) a corporation, (iii) a partnership, trust, fund and an
association, syndicate, organization or other organized group of persons,
whether incorporated or not, and (iv) an individual or other person in that
person’s capacity as a trustee, executor, administrator or personal or other
legal representative;
10)
“related liabilities” means
liabilities incurred or assumed for the purpose of financing the acquisition or
ownership of financial assets or liabilities that are secured by financial
assets;
11)
“Schedule III bank” means an
authorized foreign bank named in Schedule III of the Bank Act
(Canada);
- 4
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12)
“spouse” means an individual
who (i) is married to another individual and is not living separate and apart
within the meaning of the Divorce Act (Canada), from
the other individual, (ii) is living with another individual in a marriage-like
relationship, including a marriage-like relationship between individuals of the
same gender, or (iii) in Alberta, is an individual referred to in paragraph (i)
or (ii), or is an adult interdependent partner within the meaning of the Adult Interdependent Relationships
Act (Alberta); and
13)
“subsidiary” means an issuer
that is controlled directly or indirectly by another issuer and includes a
subsidiary of that subsidiary.
In NI
45-106 a person or company is an affiliate of another person or company if one
of them is a subsidiary of the other, or if each of them is controlled by the
same person.
In NI
45-106 a person (first person) is considered to control another person (second
person) if (a) the first person, directly or indirectly, beneficially owns or
exercises control or direction over securities of the second person carrying
votes which, if exercised, would entitle the first person to elect a majority of
the directors of the second person, unless that first person holds the voting
securities only to secure an obligation, (b) the second person is a partnership,
other than a limited partnership, and the first person holds more than 50% of
the interests of the partnership, or (c) the second person is a limited
partnership and the general partner of the limited partnership is the first
person.
The
foregoing representations contained in this certificate are true and accurate as
of the date of this certificate and will be true and accurate as of the Closing
time. If any such representations shall not be true and accurate
prior to the Closing time, the undersigned shall give immediate written notice
of such fact to the Company prior to the Closing time.
[SIGNATURE
PAGE TO FOLLOW]
- 5
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IN
WITNESS WHEREOF, the Investor has duly executed this Accredited Investor
Certificate as of the Closing.
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IF
THE INVESTOR IS AN ENTITY:
|
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(Name
of Entity – Please Print)
|
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By:
|
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Name:
|
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Title:
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IF
THE INVESTOR IS AN INDIVIDUAL:
|
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(Name –
Please Print)
|
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(Signature)
|
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(Address)
|
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(Telephone)
|
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(Facsimile)
|
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(E-Mail)
|
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SCHEDULE
C
TRUST
ACCOUNT WIRE INSTRUCTIONS
WIRES IN
ACCOUNT
NAME:
THE
BANK:
ACCOUNT
NUMBER:
ABA/TRANSIT
NUMBER:
INTERNATIONAL
WIRES
SWIFT
CODE:
BANK
TELEX NUMBER:
REFERENCE:
(THIS
IS MANDATORY FOR ALL WIRES)
Note
**It is
CRITICAL
that REFERENCE be provided so that wires may be easily identified when
received.
**PLEASE
DO NOT DEPOSIT CHECKS TO THE WSGR TRUST ACCOUNT AT ANY BANK
BRANCH. These funds will not be brought to WSGR's attention and will
have to be HELD for a minimum of 7-10 working days while an inquiry is made at
the bank for deposit detail. HELD funds WILL NOT be
disbursable.
