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EXHIBIT 10.13
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (the "Agreement") is made as of October
6, 1998 (the "Effective Date"), by and between GENETRONICS BIOMEDICAL LTD., a
corporation organized under the laws of British Columbia, Canada (the
"Company"), and XXXXXXX & XXXXXXX DEVELOPMENT CORPORATION, a New Jersey
corporation ("JJDC").
RECITAL:
WHEREAS, JJDC desires to purchase from the Company, and the Company
desires to sell to JJDC, shares of the Company's common stock, upon the terms
and subject to the conditions set forth herein and in connection with the
execution of (i) a separate Supply Agreement of even date herewith by and among
ETHICON, INC., a New Jersey corporation and affiliate of JJDC ("Ethicon"),
GENETRONICS, INC., a California corporation and a wholly-owned subsidiary of the
Company ("Sub"), and the Company (the "Supply Agreement"), and (ii) a separate
License Agreement of even date herewith by and among Ethicon, Sub and the
Company, attached hereto as Exhibit A (the "License Agreement" and, together
with the Supply Agreement, the "Ancillary Agreements").
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties hereto agree as follows:
1. Purchase and Sale of Share.
(a) Subject to the terms and conditions of this Agreement, at
the Closing (as defined hereinafter), the Company agrees to sell to JJDC and
JJDC agrees to purchase from the Company, that number of shares (the "Shares")
of the Company's common shares, no par value (the "Common Stock"), determined by
dividing six million dollars (U.S. $6,000,000) by the Share Price (as defined
below), for an aggregate purchase price (the "Purchase Price") of six million
dollars (U.S. $6,000,000). For the purposes hereof, "Share Price" shall mean the
arithmetic average of the closing prices of the Common Stock, as reported by The
Toronto Stock Exchange or such other principal securities exchange or market on
which the Common Stock is then traded, for the twenty (20) trading day period
immediately preceding the date hereof; provided, however, that in the event that
the Common Stock is not traded on any trading day during such period, then the
closing price of the Common Stock on such day shall be deemed to be the closing
price of the most recent previous trading day on which the Common Stock was
traded on such exchange or market.
(b) The purchase and sale of the Shares shall take place at
the offices of the Company, at 10:00 am. Eastern time on such date (the "Closing
Date") as the parties shall mutually agree (the "Closing").
(c) At the Closing, the Company will deliver to JJDC a
certificate or certificates, registered in JJDC's name, representing the Shares,
and JJDC shall deliver an amount equal to the Purchase Price to the Company by
certified check payable to the Company
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or wire transfer of immediately available funds to an account specified by the
Company.
2. Representations and Warranties of the Company. The Company hereby represents
and warrants to JJDC that:
2.1 Organization and Corporate Power. The Company is a corporation duly
organized, validly existing and in good standing under the laws of British
Columbia, Canada, and is qualified to do business as a foreign corporation in
each jurisdiction where failure to qualify would have a Material Adverse Effect
on the Company. For purposes of this Agreement, a "Material Adverse Effect" or
"Material Adverse Change" shall mean, with respect to the Company, any material
adverse effect or change in the condition (financial or other), business,
results of operations, prospects, assets, liabilities or operations of the
Company or on the ability of the Company to consummate any of the transactions
contemplated hereby, or any material event or condition that would, with or
without the passage of time, constitute such a material adverse effect or
change. The Company has full power and authority to own its property, to carry
on its business as presently conducted and to carry out the transactions
contemplated hereby. The copies of the Certificate of Incorporation, Memorandum
and Articles and Bylaws of the Company, as amended to date, which have been
furnished to JJDC by the Company, are correct and complete.
2.2 Authorization. The Company has full power to execute, deliver and
perform this Agreement, the Ancillary Agreements and any other agreement entered
into by the Company in connection with this Agreement. Each such agreement has
been duly executed and delivered by the Company and is the legal, valid and,
assuming due execution by the other parties hereto and thereto, binding
obligation of the Company, enforceable against the Company in accordance with
its terms, subject to applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws affecting creditors' rights generally, and to
general equitable principles. The execution, delivery and performance of this
Agreement, including the sale, issuance and delivery of the Shares, and the
Ancillary Agreements, and each other agreement entered into by the Company in
connection with this Agreement, has been duly authorized by all necessary
corporate action of the Company.
2.3 Capitalization. When issued in accordance with the terms of this
Agreement, the Shares will be duly authorized, validly issued and outstanding,
fully paid and nonassessable, free of any liens, encumbrances, preemptive rights
or rights of first refusal and, subject to reliance on the representations and
warranties of JJDC set forth in Section 3, will be issued in compliance with all
applicable Canadian provincial and U.S. federal and state securities laws. The
entire authorized capital of the Company consists of 200,000,000 shares
consisting of (i) 100,000,000 shares of Common Stock and (ii) 100,000,000 shares
of Class A Preferred Stock. The shares of Common Stock outstanding are duly
authorized, validly issued and outstanding, fully paid and nonassessable, and
were issued in compliance with all applicable Canadian provincial and U.S.
federal and state securities laws. No shares of Common Stock or preferred stock
are held in the Company's treasury. There are no outstanding securities,
warrants, rights of first refusal, options or other rights to purchase or
acquire, or exchangeable for or convertible into, any shares of Common Stock or
preferred stock, except for options to purchase shares of Common Stock issued
pursuant to the Company's Stock Option Plan, and warrants to purchase up to
200,000 shares of Common Stock at Cdn. $4.73 per share. The Company has reserved
4,700,000 shares
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of Common Stock under its stock option plans. There are no preemptive rights
with respect to the issuance or sale by the Company of any of its securities.
Upon consummation of the transactions contemplated hereby, JJDC will acquire
good and valid title to the Shares, free and clear of any encumbrances, liens,
claims, charges or assessments of any nature whatever.
2.4 Subsidiaries. The Company has no subsidiaries and no investments,
directly or indirectly, in any other corporation or business organization except
for Genetronics, Inc. The Company is not a participant in any joint venture or
partnership.
2.5 Financial Statements. The audited consolidated balance sheets and
statements of operations and cash flow for the Company included in the Public
Reports.(as defined below) (collectively, the "Financial Statements") are
complete and correct in all matters and respects, are in accordance with the
books and records of the Company, have been prepared in accordance with U.S. and
Canadian generally accepted accounting principles (as applicable), consistently
applied, and fairly present the financial position of the Company as of each
such date and the results of operations for each such period then ended.
2.6 Absence of Undisclosed Liabilities. Except as and to the extent
reflected or stated in the Financial Statements, the Company has no debts,
liabilities or obligations of any nature, whether accrued or absolute, assigned
or otherwise, or whether due or to become due, that would have been required to
be reflected in, reserved against or otherwise described in the Financial
Statements or in the notes thereto in accordance with GAAP which were not (a)
fully reflected in, reserved against or otherwise described therein or the notes
thereto or (b) incurred in the ordinary course of business consistent with past
practice since June 30, 1998.
2.7 Absence of Certain Developments. Since the date of the Company's
interim financial statements for the period ended June 30, 1998 (the "Interim
Statements"), (a) there has not been any Material Adverse Change with respect to
the Company, and (b) the Company has not entered into any transaction except in
the ordinary course of business and consistent with past practice, or entered
into any agreement (contingent or otherwise) to do so.
2.8 Title to Properties. Except as disclosed in the Financial
Statements, the Company has good and marketable title to, or has a valid
leasehold interest in, or a valid license for, all of the properties and assets
reflected in the Financial Statements, free and clear of all mortgages, security
interests, liens, restrictions or encumbrances other than (i) the lien of
current taxes not yet due and payable and (ii) possible minor liens and
encumbrances which do not in any case, individually or in the aggregate,
materially detract from the value of the property subject thereto or materially
impair the operations of the Company, would not represent a Material Adverse
Change, and which have not arisen otherwise than in the ordinary course of
business.
2.9 Tax Matters.
(a) All taxes, including, without limitation, income, excise,
property, sales, transfer, use, franchise, payroll, employees' income
withholding and social security taxes imposed or assessed by the United States
or by any foreign country or by any state, municipality, subdivision or
instrumentality of the United States or of any foreign country, or by any other
taxing authority, which are due or payable by the Company, and all interest,
penalties and
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additions thereon, whether disputed or not, have been paid in full; all tax
returns or other documents required to be filed in connection therewith have
been accurately prepared and duly and timely filed; and the Company is not the
beneficiary of any extension of time within which to file any such returns. The
Company has not been delinquent in the payment of any foreign or domestic tax,
assessment or governmental charge or deposit and has no tax deficiency or claim
outstanding, assessed or, to the best of its knowledge, proposed against it, and
there is no basis for any such deficiency or claim. No issues have been raised
(or are currently pending) by the U.S. Internal Revenue Service or Revenue
Canada or any other taxing authority in connection with any of the returns and
reports referred to above, and no waivers of statutes of limitations have been
given or requested with respect to the Company in connection therewith. The
provisions for taxes in the Financial Statements are sufficient for the payment
of all accrued and unpaid federal, provincial, state, county and local taxes of
the Company.
(b) The Company is not a party to or bound by any tax
indemnity, tax sharing or tax allocation agreement.
(c) The Company is not presently a member nor has it ever been
a member of an affiliated group of corporations within the meaning of Section
1504 of the Internal Revenue Code of which it is or was not the parent company.
2.10 No Defaults. The Company is not in violation of any term or
provision of (a) its Certificate of Incorporation, Memorandum and Articles or
Bylaws, as amended to date, or in any material respect any note, indenture,
mortgage, lease, agreement, contract, purchase order or other material
instrument, document or agreement to which the Company is a party or by which it
or any of its properties or assets is bound or affected or (b) any order, writ,
injunction or decree of any court or any federal, provincial, state, municipal
or other governmental department, authority, commission, board, bureau, agency
or instrumentality, domestic or foreign. There exists no condition, event or act
which constitutes, or which after notice, lapse of time or both, would
constitute a material default under any of the foregoing.
2.11 Intellectual Property. The Company owns or possesses sufficient
legal rights to all material patents, trademarks, service marks, trade names,
copyrights, trade secrets, information, proprietary rights, licenses, inventions
and processes necessary for the conduct of its business as now conducted, and as
proposed to be conducted, without conflict with or infringement of the rights of
others. There are no outstanding options, licenses, or agreements of any kind
relating to the foregoing, nor is the Company bound by or a party to any
options, licenses or agreements of any kind with respect to the patents,
trademarks, service marks, trade names, copyrights, trade secrets, licenses,
information, proprietary rights and processes of any other person or entity,
which would be material to the Company's business as conducted or, to the best
of the Company's knowledge, as proposed to be conducted. The Company has not
received any communications alleging, nor is the Company aware, to the best of
its knowledge, of any basis for such allegation, that the Company has violated,
or by conducting its business as proposed, would violate any of the patents,
trademarks, service marks, tradenames, copyrights or trade secrets or other
proprietary rights of any other person or entity. No other firm, corporation,
association or person (i) has notified the Company that it is claiming any
ownership of or right to use any of the Company's patents, trademarks, service
marks, tradenames, copyrights or trade secrets or other proprietary rights, or
(ii) to the best of the Company's knowledge, is infringing
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upon any such patents, trademarks, service marks, tradenames, copyrights or
trade secrets or other proprietary rights. The Company is not aware, to the best
of its knowledge, that any of its employees is obligated under any contract
(including, licenses, covenants or commitments of any nature) or other
agreement, or subject to any judgment, decree or order of any court or
administrative agency, that would interfere with the use of such employee's best
efforts to promote the interests of the Company or that would conflict with the
Company's business as presently conducted. Neither the execution nor delivery of
this Agreement, nor the carrying on of the Company's business by the employees
of the Company, nor the conduct of the Company's business as proposed, will, to
the best of the Company's knowledge, conflict with or result in a breach of the
terms, conditions or provisions of, or constitute a default under, any contract,
covenant or instrument under which any of such employees are now obligated. Each
employee of or consultant to the Company with access to confidential or
proprietary information has executed a proprietary information agreement
obligating such employee or consultant to hold all such information in
confidence. The Company does not believe, to the best of its knowledge, that it
is or will be necessary to utilize any inventions of any of its employees (or
people it currently intends to hire) made prior to their employment by the
Company.
2.12 Effect of Transaction. The execution, delivery and performance of
this Agreement and the transactions contemplated hereby by the Company, and
compliance with the provisions hereof by the Company, do not and will not, with
or without the passage of time or the giving of notice or both, (a) violate any
provision of law, statute, rule or regulation or any ruling, writ, injunction,
order, judgment or decree of any court, administrative agency or other
governmental body applicable to the Company, or (b) conflict with or result in
any breach of any of the terms, conditions or provisions of, or constitute a
default (or give rise to any right of termination, cancellation or acceleration)
under, or result in the creation of any lien, security interest, charge or
encumbrance upon any of the properties or assets of the Company, under the
Certificate of Incorporation, Memorandum or Articles or Bylaws, as amended to
date, of the Company or any material note, indenture, mortgage, lease,
agreement, contract, purchase order or other instrument, document or agreement
to which the Company is a party or by which it or any of its properties or
assets is bound or affected, except in any case where such occurrence would not
have a Material Adverse Effect on the Company.
2.13 No Governmental Consent or Approval Required. Based in part on the
representations made by JJDC in Section 3 of this Agreement, no authorization,
consent, approval or other order of, declaration to, or registration,
qualification, designation or filing with, any federal, provincial, state or
local governmental agency or body is required for or in connection with the
valid and lawful authorization, execution and delivery by the Company of this
Agreement, the Ancillary Agreements or any other agreement entered into by the
Company in connection with this Agreement, and the consummation of the
transactions contemplated hereby or thereby, or for or in connection with the
valid and lawful authorization, issuance, sale and delivery of the Shares, other
than the qualification (or taking of such action as may be necessary to secure
an exemption from qualification if available) of the offer and sale of the
Shares under the applicable state and provincial securities laws, which filings
and qualifications, if required, will be accomplished in a timely manner so as
to comply with such qualification or exemption from qualification requirements.
2.14 Litigation. Except as disclosed in the Interim Statements, there
is no (a) claim,
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arbitration, action, suit, proceeding or investigation at law or in equity or by
or before any governmental instrumentality or other agency pending, or to the
best knowledge of the Company, threatened against the Company, or (b) judgment,
decree, injunction or order of any court, governmental department, commission,
agency, instrumentality or arbitrator against the Company, nor, to the best
knowledge of the Company, does there exist any basis therefor.
2.15 Securities Laws. Assuming that JJDC's representations and
warranties contained in Section 3 of this Agreement are true and correct, the
offer, issuance and sale of the Shares are and will be exempt from the
registration and prospectus delivery requirements of the Securities Act of 1933,
as amended (the "1933 Act"), and of the Canadian Act (as defined hereinafter),
and have been registered or qualified (or are exempt from registration,
qualification and prospectus filing requirements) under the registration,
permit, qualification or prospectus filing requirements of all applicable
provincial and state securities laws.
2.16 Business. The Company has complied in all material respects with
all federal, provincial, state, local or foreign laws, ordinances, regulations
or orders applicable to the business of the Company as presently or previously
conducted, or as proposed to be conducted. The Company has all material federal,
provincial, state, local and foreign governmental licenses and permits that are
required for the conduct of its business presently or previously conducted by
the Company, which licenses and permits are in full force and effect, and no
violations are outstanding or uncured with respect to any such licenses or
permits and no proceeding is pending or, to the best knowledge of the Company,
threatened to revoke or limit any thereof.
2.17 Brokerage. There are no claims for brokerage commissions or
finder's fees or similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement made by or on behalf of
the Company and the Company agrees to indemnify and hold JJDC harmless against
any damages incurred as a result of any such claim.
2.18 Insurance. The Company maintains in full force such types and
amounts of insurance issued by issuers of recognized responsibility insuring the
Company, with respect to its liability, workers' compensation, business and
properties, in such amounts and against such losses and risks as are adequate
against risks usually insured against by Persons (as hereinafter defined)
operating similar businesses and properties.
2.19 Public Reports. The Company has provided to JJDC true and complete
copies of all reports, schedules, forms, statements and other documents (the
"Public Reports") filed by the Company with (i) the SEC under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), (ii) the British Columbia
Securities Commission (the "BCSC") under the Securities Act (British Columbia)
(the "British Columbia Act"), and (iii) the Ontario Securities Commission (the
"OSC" and, together with the BCSC, the "Canadian SC") under the Securities Act
(Ontario) (the "Ontario Act" and, together with the British Columbia Act, the
"Canadian Act"), since December 31, 1994. The Public Reports include all the
reports the Company has been required to file under the Exchange Act or the
Canadian Act since that date. As of their respective dates, (i) the Public
Reports complied in all material respects with the requirements of the Exchange
Act and the Canadian Act, as applicable, and the rules and regulations
promulgated thereunder, and (ii) none of the Public Reports contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the
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statements therein not misleading.
2.20 Investment Company. The Company is not an "investment company"
within the meaning of the Investment Company Act of 1940, as amended, and will
not, as a result of the transactions contemplated hereby, become an "investment
company."
2.21 Registration Rights. Except as set forth herein, the Company is
not under any contractual obligation to register any of its currently
outstanding securities or any of its securities that may hereafter be issued.
2.22 Disclosure. The Company has provided JJDC with all the information
that it has requested for deciding whether to purchase the Shares at the
Closing. Neither the Financial Statements, this Agreement, nor any other written
document, certificate, instrument or statement furnished or made available in
connection with the transactions contemplated hereby contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained herein and therein not misleading.
2.23 Employees. There are no controversies or labor troubles pending
or, to the best knowledge of the Company, threatened between the Company and its
employees. JJDC will not incur through consummation of any of the transactions
contemplated by the Agreement any liability in respect of employees of the
Company or any of its employee benefit plans.
3. Representations and Warranties and Other Agreements of JJDC.
3.1 Representations and Warranties. JJDC hereby represents and warrants
to the Company that:
a. Authorization. JJDC has full power and authority to
execute, deliver and perform this Agreement and to purchase the Shares. This
Agreement has been duly executed and delivered by JJDC and, assuming due
execution by the Company hereto, this Agreement constitutes the valid and
legally binding obligation of JJDC, enforceable against JJDC in accordance with
its terms, subject to applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws affecting creditors' rights generally, and to
general equitable principles.
b. Purchase Entirely for Own Account. The Shares to be
received by JJDC will be acquired for investment for JJDC's own account, not as
a nominee or agent and not with a view to the distribution of any part thereof.
JJDC has no present intention of selling, granting any participation in, or
otherwise distributing the Shares. JJDC does not have any contract, undertaking,
agreement or arrangement with any person to sell, transfer, or grant
participation to such person or to any third person, with respect to any of the
Shares.
c. Restrictions on Disposition. JJDC covenants that in no
event will it dispose of any of the Shares (other than pursuant to Rule 144
promulgated under the 1933 Act ("Rule 144") or outside the United States in
accordance with Regulation S under the 1933 Act or pursuant to a registration
statement filed with the SEC pursuant to the 1933 Act) unless and until (i) JJDC
shall have notified the Company of the proposed disposition and shall have
furnished the Company with a statement of the circumstances surrounding the
proposed disposition, and
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(ii) if requested by the Company, JJDC shall have furnished the Company with an
opinion of JJDC's counsel, reasonably satisfactory in form and substance to the
Company and the Company's counsel, to the effect that (a) such disposition will
not require registration under the 1933 Act or (b) appropriate action necessary
for compliance with the 1933 Act and any applicable state, provincial, local or
foreign law has been taken. The restrictions on transfer imposed by this Section
3.1(c) shall cease and terminate as to the Shares when: (i) such Shares shall
have been effectively registered under the 1933 Act and sold by the holder
thereof in accordance with such registration, or (ii) an opinion of the kind
described in the preceding sentence states that all future transfers of such
Shares by the holder thereof would be exempt from registration under the 1933
Act. Each certificate evidencing the Shares shall bear an appropriate
restrictive legend as set forth in Section 3.3 below, except that such
certificate shall not be required to bear such legend after a transfer thereof
if the transfer was made in compliance with Rule 144 or Rule 904 of Regulation S
under the 1933 Act or pursuant to a registration statement or, if the opinion of
counsel referred to above is issued and provides that such legend is not
required in order to establish compliance with any provisions of the 1933 Act.
d. Receipt of Information. JJDC has been furnished access to
the business records of the Company and all such additional information and
documents as JJDC has requested and has been afforded an opportunity to ask
questions of and receive answers from representatives of the Company concerning
the terms and conditions of this Agreement and the purchase of the Shares.
e. Brokerage. There are no claims for brokerage commissions or
finder's fees or similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement or agreement made by or
on behalf of JJDC, and JJDC agrees to indemnify and hold the Company harmless
against any damages incurred as a result of any such claims.
f. Organization and Corporate Power. JJDC is a corporation
duly organized, validly existing and in good standing under the laws of the
State of New Jersey.
g. Investment Experience. JJDC acknowledges that it can bear
the economic risk of its investment and has such knowledge and experience in
financial or business matters that it is capable of evaluating the merits and
risks of the investment in the Shares. JJDC also represents that it has not been
organized solely for the purpose of acquiring the Shares.
h. Accredited Investor. JJDC is an "Accredited Investor"
within the meaning of 501 of Regulation D promulgated under the 1933 Act or a
"Qualified Institutional Buyer" within the meaning of 144A promulgated under the
1933 Act.
3.2 Further Provisions Regarding Disposition.
a. Transfer to Affiliates. Notwithstanding the provisions of
Section 3.1(c) above, no registration statement or opinion of counsel shall be
necessary for a transfer by JJDC of the Shares to a subsidiary, shareholder or
Affiliate of JJDC, if the transferee agrees in writing to be subject to the
terms hereof to the same extent as if such transferee were JJDC hereunder.
b. New Certificates. Whenever the restrictions imposed by this
Section 3.1(c)
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shall terminate as herein provided, the holder of the Shares as to which such
restrictions have terminated shall be entitled to receive from the Company,
without expense, one or more new certificates not bearing restrictive legends
and not containing any reference to the restrictions imposed by this Agreement.
3.3 Legend. It is understood that, subject to Sections 3.1(c) and
3.2(b), the certificates evidencing the Shares shall bear substantially the
following legends:
(a) THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT
TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE
144 OF SUCH ACT OR OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF
REGULATION S UNDER SUCH ACT. THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO A HOLD PERIOD AND MAY NOT BE TRADED IN BRITISH COLUMBIA UNTIL [four
months from closing] EXCEPT AS PERMITTED BY THE SECURITIES ACT (BRITISH
COLUMBIA) AND THE RULES AND REGULATIONS MADE THEREUNDER. DELIVERY OF THIS
CERTIFICATE MAY NOT CONSTITUTE "GOOD DELIVERY" IN SETTLEMENT OF TRANSACTIONS ON
STOCK EXCHANGES IN CANADA. A NEW CERTIFICATE BEARING NO LEGEND MAY BE OBTAINED
FROM THE COMPANY'S TRANSFER AGENT UPON DELIVERY OF A DECLARATION IN THE FORM
ATTACHED HERETO AS SCHEDULE "A".
(b) Any legend required by the laws of any other applicable
jurisdiction.
4. Conditions of JJDC's obligations at Closing. The obligations of JJDC
to purchase Shares at the Closing are subject to the fulfillment on or prior to
the Closing of each of the following conditions, any of which may be waived by
JJDC:
(a) Representations and Warranties. The representations and
warranties of the Company contained in Section 2 shall be true in all material
respects (provided that to the extent any representation or warranty has a
materiality qualification it shall not be further qualified by the use of the
word material in this Section 4.1) on and as of the Closing Date with the same
effect as though such representations and warranties had been made on and as of
the Closing Date.
(b) Performance. The Company shall have performed and complied
with all agreements, obligations, and conditions contained in this Agreement
that are required to be performed or complied with by it on or before the
Closing.
(c) Qualifications. All authorizations, approvals, or permits,
if any, of any governmental authority or regulatory body of the United States,
Canada or of any province or state that are required in connection with the
lawful issuance and sale of the Shares to JJDC pursuant to this Agreement shall
have been duly obtained and shall be effective on and as of the Closing.
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(d) Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated at the Closing and
all documents incident thereto shall be reasonably satisfactory in form and
substance to JJDC and JJDC's counsel, and JJDC shall have received all such
counterpart original and certified or other copies of such documents as JJDC may
reasonably request.
(e) Opinion of Company Counsel. JJDC shall have received from
Catalyst Corporate Finance Lawyers and Xxxxxx Godward LLP, counsel for the
Company, opinions addressed to JJDC covering the matters set forth in Sections
2.1, 2.2, 2.3 (as to the due authorization, valid issuance, full payment and
non-accessibility of the Shares), 2.12, 2.13, 2.15, and 2.20 hereof.
(f) Compliance Certificate. The Chief Executive Officer of the
Company shall deliver to JJDC at the Closing a certificate certifying that (i)
the representations and warranties of the Company contained in Section 2 are
true in all material respects (provided that to the extent any representation or
warranty has a materiality qualification it shall not be further qualified by
the use of the word material in this Section 4.1(f)), (ii) the Company has
performed and complied in all material respects with all agreements,
obligations, and conditions contained in this Agreement that are required to be
performed or complied with by it on or before the Closing, and (iii) there has
been no Material Adverse Change in the Company since the date of the Interim
Statements.
(g) Required Consents. All waiting periods applicable to the
Closing under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvement Act of 1976, as
amended (including any extension thereof by reason of a request for additional
information) shall have expired or been terminated and no action shall have been
instituted, or shall be threatened or pending, by the United States Justice
Department (the "DOJ") or the Federal Trade Commission (the "FTC") challenging
or seeking to enjoin the consummation of the transactions contemplated at the
Closing, which action shall not have been withdrawn or terminated.
(h) TSE Listing. The Shares shall have been approved for
conditional listing on The Toronto Stock Exchange, subject to the requirements
in the notice of issuance which is attached hereto as Exhibit B.
5. Conditions of the Company's Obligations at Closing. The obligations of the
Company under Section 1 of this Agreement are subject to the fulfillment on or
prior to the Closing of each of the following conditions, any of which may be
waived by the Company:
5.1 Representations and Warranties. The representations and warranties
of JJDC contained in Section 3 shall be true in all material respects (provided
that to the extent any representation or warranty has a materiality
qualification it shall not be further qualified by the use of the word material
in this Section 5.1) on and as of the date of the Closing with the same effect
as though such representations and warranties had been made on and as of the
date of the Closing.
5.2. JJDC shall have performed and complied in all material respects
(provided that to the extent any representation or warranty has a materiality
qualification it shall not be further
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qualified by the use of the word material in this Section 5.2) with all
agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing.
5.3 Qualifications. All material authorizations, approvals, or permits,
if any, of any governmental authority or regulatory body of the United States,
Canada or of any province or state that are required in connection with the
lawful issuance and sale of the Shares at the Closing to JJDC pursuant to this
Agreement shall have been duly obtained and shall be effective on and as of the
date of the Closing.
6. Registration of Shares.
6.1 Definitions. Unless the context otherwise requires, the terms
defined in this Section 6 shall have the meanings herein specified for all
purposes of this Agreement, applicable to both the singular and plural forms of
any of the terms herein defined.
"Board" means the Board of Directors of the Company.
"Holder" of any security means the record or beneficial owner
of such security or any permitted assignee thereof.
"Holders of a Majority of the Registrable Securities" means
the Person or Persons who are the Holders of greater than 50% of the shares of
Registrable Securities then outstanding.
"Person" means any natural person, corporation, trust,
association, company, partnership, joint venture or other entity or any
government, governmental agency, instrumentality or political subdivision.
The terms "register," "registered" and "registration" refer to
a registration effected by preparing and filing a registration statement in
compliance with the 1933 Act, and the declaration for ordering of the
effectiveness of such registration statement.
"Registrable Securities" means (i) the shares of Common Stock
of the Company sold pursuant to this Agreement and (ii) any Common Stock issued
or issuable with respect to the Common Stock referred to in clause (i) above by
way of a stock dividend or stock split or in connection with a combination of
shares, reclassification, recapitalization, merger or consolidation or
reorganization; provided, however that such shares of Common Stock shall only be
treated as Registrable Securities if and so long as they have not been (x) sold
to or through a broker or dealer or underwriter in a public distribution or a
public securities transaction, or (y) sold in a transaction exempt from the
registration and prospectus delivery requirements of the 1933 Act pursuant to
Rule 144 or Rule 904 of Regulation S thereunder so that all the transfer
registrations and restrictive legends with respect to such Common Stock are
removed upon the consummation of such sale and the Company receives either (x)
an opinion of counsel for the Company (with a copy to the seller of such Common
Stock), which shall be in form and content, reasonably satisfactory to the
Company, to the effect that such Common Stock in the hands of the purchaser is
freely transferable without restriction or registration under the 1933 Act in
any public or private transaction or, (y) in the event of a sale outside the
United States, upon the delivery of a declaration in the form attached hereto as
Schedule "A".
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"Registrable Securities then outstanding" means the number of
shares of Common Stock which are Registrable Securities and (i) are then issued
and outstanding or (ii) are then issuable pursuant to the exercise or conversion
of then outstanding and then exercisable options, warrants or convertible
securities.
6.2 Required Registration.
(a) Pursuant to the terms and subject to the conditions
hereof, if at any time after six (6) months from the date hereof, the Company
shall receive a written request therefor from the Holders of at least 30 percent
of the Registrable Securities then outstanding, the Company agrees to prepare
and file promptly a registration statement under the 1933 Act covering the
shares of Registrable Securities which are the subject of such request and
agrees to use its best efforts to cause such registration statement to become
effective as expeditiously as possible. Upon the receipt of such request, the
Company agrees to give prompt written notice to all Holders of Registrable
Securities that such registration is to be effected. The Company agrees to
include in such registration statement such shares of Registrable Securities for
which it has received written request to register such shares by the Holders
thereof within twenty (20) days after the receipt by the Holders of written
notice from the Company.
(b) The Company shall be obligated to prepare, file and cause
to become effective only two registration statements pursuant to this Section
6.2. A registration required to be effected by the Company pursuant to this
Section 6.2 shall not be deemed to have been effected (i) unless a registration
statement with respect thereto has become effective, (ii) if, after it has
become effective, such registration is interfered with by any stop order,
injunction, or other order or requirement of the SEC or other governmental
agency or court, for any reason not attributable to the Holders initiating the
registration request hereunder (the "Initiating Holders") with respect to such
registration statement, and has not thereafter become effective or (iii) if the
conditions to closing specified in the underwriting agreement, if any, entered
into in connection with such registration are not satisfied or waived, other
than by reason of a failure on the part of the Initiating Holders with respect
to such registration statement.
(c) If the Initiating Holders intend to distribute the
Registrable Securities covered by their request by means of an underwriting,
they agree to provide the Company with the name of the managing underwriter or
underwriters (the "managing underwriter") that a majority interest of the
Initiating Holders propose to employ, as part of their request made pursuant to
this Section 6.2, and the Company agrees to include such information in its
written notice referred to in Section 6.2(a). In such event, the right of any
Holder to registration pursuant to this Section 6.2 shall be conditioned upon
such Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting (unless otherwise mutually
agreed by the Holders of a Majority of the Registrable Securities initiating
such request for registration and such Holder). All Holders proposing to
distribute their securities through such underwriting agree to enter into
(together with the Company) an underwriting agreement with the managing
underwriter or underwriters elected for such underwriting, in the manner set
forth above, provided that such underwriting agreement is in customary form and
is reasonably acceptable to the Holders of a majority of the shares of
Registrable Securities to be included in such registration.
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(d) Notwithstanding the foregoing, if the managing underwriter
of an underwritten distribution advises the Company and the Holders of
Registrable Securities participating in such registration in writing that in its
good faith judgment the number of shares of Registrable Securities and the other
securities requested to be included in such registration exceeds the number of
shares of Registrable Securities and the other securities which can be sold in
such offering, then (i) the other securities so requested to be included in such
registration shall initially be reduced and the number of shares of Registrable
Securities so requested to be included in such registration shall subsequently
be reduced, together to that number of shares which in the good faith judgment
of the managing underwriter can be sold in such offering and (ii) the reduced
number of Registrable Securities to be included in the underwriting shall be
allocated pro rata among all Holders of Registrable Securities participating in
such registration. Those Registrable Securities which are excluded from the
underwriting by reason of the managing underwriter's marketing limitation shall
not be included in such registration and shall be withheld from the market by
the Holders thereof for a period, not in excess of 120 days, which the managing
underwriter reasonably determines is necessary to effect the underwritten public
offering.
(e) Without the prior written consent of the Holders holding
at least sixty-six and sixty seven hundredths percent (66.67%) of the
then-outstanding Registrable Securities, the Company will not, after the date
hereof, grant registration rights permitting any holder of Company securities to
include such other holder's securities, by a "piggyback" registration right in
any demand registration effected under this Section 6.2.
6.3 "Piggyback" Registration.
(a) Each time the Company shall determine to file a
registration statement under the 1933 Act (other than pursuant to Section 6.2
hereof and other than on Form X-0, X-0 or a registration statement on Form S-1
covering solely any employee benefit plan) in connection with the proposed offer
and sale for money of any of its securities either for its own account or on
behalf of any other security holder, the Company agrees to give promptly written
notice of its determination to all Holders of Registrable Securities. Upon the
written request of a Holder of any shares of Registrable Securities given within
twenty (20) days after the receipt of such written notice from the Company, the
Company agrees to cause all such Registrable Securities, the Holders of which
have so requested registration hereof, to be included in such registration
statement and to use its best efforts to cause such registration statement to
become effective under the 1933 Act, all to the extent requisite to permit the
sale or other disposition by the prospective seller or sellers of the
Registrable Securities to be so registered. In the event that the proposed
registration by the Company is, in whole or in part, an underwritten public
offering of securities of the Company, any request pursuant to this Section
6.3(a) to register Registrable Securities may specify that such securities are
to be included in the underwriting (i) on the same terms and conditions as the
shares of Common Stock, if any, otherwise being sold through underwriters, under
such registration, or (ii) on terms and conditions comparable to those normally
applicable to offerings of Common Stock in reasonably similar circumstances in
the event that no shares of Common Stock other than Registrable Securities are
being sold through underwriters in such registration.
(b) If the registration of which the Company gives written
notice pursuant to
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Section 6.3(a) is for a public offering involving an underwriting, the Company
agrees to so advise the Holders as a part of its written notice. In such event
the right of any Holder to registration pursuant to this Section 6.3 shall be
conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting to the
extent provided herein. All Holders proposing to distribute their Registrable
Securities through such underwriting agree to enter into (together with the
Company and the other Holders distributing their securities through such
underwriting) an underwriting agreement with the underwriter or underwriters
selected for such underwriting by the Company.
(c) Notwithstanding any other provision of this Section 6.3,
if the managing underwriter of an underwritten distribution advises the Company
and the Holders of the Registrable Securities requesting participation in such
registration in writing that in its good faith judgment the number of shares of
Registrable Securities and the other securities requested to be registered under
this Section 6.3 exceeds the number of shares of Registrable Securities and
other securities which can be sold in such offering, then (i) the number of
shares of Registrable Securities and other securities so requested to be
included in the offering shall be reduced to that number of shares which in the
good faith judgment of the managing underwriter can be sold in such offering
(except for shares to be issued by the Company in a public offering, which shall
have priority over the Registrable Securities), and (ii) such reduced number of
shares shall be allocated among all participating Holders of Registrable
Securities and holders of other securities in proportion, as nearly as
practicable, to the respective number of shares of Registrable Securities and
other securities held by such Holders at the time of filing the registration
statement. All Registrable Securities and other securities which are excluded
from the underwriting by reason of the managing underwriter's marketing
limitation and all other Registrable Securities not originally requested to be
so included shall not be included in such registration and shall be withheld
from the market by the Holders thereof for a period, not in excess of one
hundred eighty (180) days, which the managing underwriter reasonably determines
is necessary to effect the underwritten public offering.
6.4 Registration Expenses.
(a) The Company shall pay all expenses incurred in effecting
the registration of Registrable Securities pursuant to Section 6 including,
without limitation, all federal, provincial and state registration,
qualification and filing fees, printing expenses, fees and disbursements of
counsel for the Company, reasonable fees and disbursements of one counsel for
the participating Holders together, blue sky fees and expenses, and the expense
of any special audits incident to or required by any such registration, but not
including underwriting discounts, commissions and expenses.
(b) Notwithstanding the foregoing, in the event that a
registration pursuant to Section 6.2 is requested by the Initiating Holders and
such request is withdrawn prior to the filing of a registration statement by the
Company, or such Holders cause the Company to withdraw a registration statement
prior to its effectiveness, then either (i) the Initiating Holders and other
Holders requesting inclusion of their shares in such registration shall bear pro
rata all fees, costs and expenses of the registration and preparation of the
registration statement or (ii) such requested registration shall be deemed to be
one of the registrations the Company is required to effect pursuant to Section
6.2 hereof. Notwithstanding the foregoing, however, if at
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the time of the withdrawal, the Initiating Holders and the other Holders have
learned of a Material Adverse Change with respect to the Company from that known
to such Holders at the time of their request, then such Holders shall not be
required to pay any of such registration expenses and shall retain their rights
pursuant to Section 6.2.
6.5 Registration Procedures. If and whenever the Company is required by
the provisions of Section 6 to effect the registration of Registrable Securities
under the 1933 Act, the Company will, as expeditiously as possible:
(a) prepare and file with the SEC a registration statement
which includes the Registrable Securities and use its best efforts to cause such
registration statement to become and remain effective until the distribution
described in the registration statement has been completed;
(b) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective and
to comply with the provisions of the 1933 Act with respect to the sale or other
disposition of Registrable Securities covered by such registration statement
whenever a Holder shall desire to sell or otherwise dispose of the same;
(c) furnish to each participating Holder (and to each
underwriter, if any, of Registrable Securities) such number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the 1933 Act, and such other documents, as such Holder may
reasonably request in order to facilitate the public sale or other disposition
of the Registrable Securities;
(d) use its best efforts to register or qualify the
Registrable Securities covered by such registration statement under such
provincial or state securities or blue sky laws of such jurisdiction as each
participating Holder shall reasonably request and do any and all other acts and
things which may be necessary under such securities or blue sky laws to enable
such Holder to consummate the public sale or other disposition of the
Registrable Securities in such jurisdictions, except that the Company shall not
for any purpose be required to consent generally to service of process or
qualify to do business as a foreign corporation in any jurisdiction wherein it
is not so qualified;
(e) before filing the registration statement or prospectus or
amendments or supplements thereto, furnish to counsel selected by the
participating Holders copies of such documents proposed to be filed which shall
be subject to the reasonable approval of such counsel;
(f) in the event of any underwritten offering, along with the
Holders, enter into and perform its obligations under an underwriting agreement,
in usual and customary form, with the managing underwriter of such offer;
(g) notify the participating Holders at any time when a
prospectus relating to any Registrable Securities covered by such registration
statement is required to be delivered under the 1933 Act, of the happening of
any event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements
15.
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therein not misleading in light of the circumstances then existing and promptly
file such amendments and supplements as may be necessary so that, as thereafter
delivered to such Holders of such Registrable Securities, such prospectus shall
not include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing and use its best
efforts to cause each such amendment and supplement to become effective;
(h) furnish at the request of the participating Holders on the
date that such Registrable Securities are delivered to the underwriters for sale
in connection with a registration pursuant to Section 6 (i) an opinion, dated
such date, of the counsel representing the Company, for purposes of such
registration, in form and substance as is customarily given by company counsel
to the underwriters in an underwritten public offering addressed to the
underwriters, if any, and to such Holders, and (ii) a letter dated such date,
from the independent certified public accountants of the Company, in form and
substance as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering, addressed to the underwriters
and to such Holders; and
(i) use its best efforts to cause all such Registrable
Securities to be listed on the securities exchange, if any, on which the Common
Stock is then listed.
6.6 Form F-3 or S-3 Registration. In case the Company shall receive
from any Holder or Holders a written request or requests that the Company effect
a registration on Form F-3 or S-3 and any related qualification or compliance
with respect to all or a part of the Registrable Securities owned by such Holder
or Holders, the Company will:
(a) promptly give written notice of the proposed registration,
and any related qualification or compliance, to all other Holders; and
(b) as soon as practicable, effect such registration and all
such qualifications and compliance as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such Holder's or
Holders' Registrable Securities as are specified in such request, together with
all or such portion of the Registrable Securities of any other Holder or Holders
joining in such request as are specified in a written request given within 15
business days after receipt of such written notice from the Company; provided,
however, that the Company shall not be obligated to effect any such
registration, qualification or compliance pursuant to this Section 6.6: (i) if
Form F-3 or S-3 is not available for such offering by the Holders; (ii) if the
Holders, together with the holders of any other securities of the Company
entitled to inclusion in such registration, propose to sell Registrable
Securities and such other securities (if any) at an aggregate price to the
public (net of any underwriters' discounts or commissions) of less than Five
Hundred Thousand Dollars ($500,000.00); (iii) if the Company shall furnish to
the Holders a certificate signed by the President or Chief Executive Officer of
the Company stating that in the good faith judgment of the Board, it would be
seriously detrimental to the Company and its stockholders for such Form F-3 or
S-3 Registration to be effected at such time, in which event the Company shall
have the right to defer the filing of the Form F-3 or S-3 Registration Statement
for a period of not more than ninety (90) days after receipt of the request of
the Holder or Holders under this Section 6.6; provided, however, that the
Company shall not utilize this right more than once in any 12-
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month period; (iv) if the Company has, within the 12month period preceding the
date of such request, already effected one registration on Form F-3 or S-3 that
includes Registrable Securities of the Holders pursuant to this Section 6.6 and
other similar provisions granting rights to registration on Form F-3 or S-3; or
(v) in any particular jurisdiction in which the Company would be required to
qualify to do business or to execute a general consent to service of process in
effecting such registration, qualification or compliance.
(c) Subject to the foregoing, the Company shall file a
registration statement covering the Registrable Securities and other securities
so requested to be registered as soon as practicable after receipt of the
request or requests of the Holders. Registrations effected pursuant to this
Section 6.6 shall not be counted as demands for registration effected pursuant
to Section 6.2.
6.7 Indemnification. In the event Registrable Securities are registered
pursuant to this Section 6:
(a) To the extent permitted by law, the Company will indemnify
and hold harmless each Holder of Registrable Securities which are included in a
registration statement pursuant to the provisions of this Agreement and any
underwriter (within the meaning of the 0000 Xxx) with respect to the Registrable
Securities, and each officer, director, employee and agent thereof and each
person, if any, who otherwise controls such Holder or underwriter (within the
meaning of the 1933 Act), against any losses or claims, damages, expenses or
liabilities, joint or several, to which they may become subject under the 1933
Act, the Exchange Act or other federal or state law, or otherwise, insofar as
such losses, claims, damages, expenses or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue or allegedly untrue statement
of any material fact contained in the registration statement for the Registrable
Securities, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto, or any document incident to
the registration or qualification of any Registrable Securities, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or allegedly necessary to make the statements
therein not misleading or arise out of any violation or alleged violation by the
Company of the 1933 Act, the Exchange Act, any state securities law or any rule
or regulation promulgated under the 1933 Act, the Exchange Act or any state
securities law; and will reimburse such Holder, any underwriter, officer,
director, employee, agent or controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this Section 6.7(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage, expense, liability or action
if such settlement is effected without the written consent of the Company, which
shall not be unreasonably withheld, nor shall the Company be liable under this
Section 6.7(a) to such Holder, underwriter, officer, director, employee, agent
or controlling person for any such loss, claim, damage, expense, liability or
action to the extent that it arises out of, or is based upon, an untrue
statement or allegedly untrue statement or omission or alleged omission made in
connection with such registration statement, preliminary prospectus, final
prospectus, or amendments or supplements thereto, in reliance upon and in
conformity with information furnished in writing expressly for use in connection
with such registration by such Holder, underwriter, officer, director, employee,
agent or controlling person.
17.
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(b) To the extent permitted by law, each Holder of Registrable
Securities which are included in a registration statement pursuant to the
provisions of this Agreement will indemnify and hold harmless the Company, each
of its employees, agents, directors and officers, each person, if any, who
controls the Company within the meaning of the 1933 Act, and any underwriter
(within the meaning of the 0000 Xxx) against any losses, claims, damages, or
liabilities to which the Company or any such person or underwriter may become
subject, under the 1933 Act, the Exchange Act or other federal or state law or
otherwise, insofar as such losses, claims, damages, expenses or liabilities (or
actions in respect thereof) arise out of, or are based upon any untrue or
allegedly untrue statement of any material fact contained in a registration
statement for the Registrable Securities, including any preliminary prospectus
or final prospectus contained therein or any amendments or supplements thereto,
or any document incident to the registration or qualification of any Registrable
Securities, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or allegedly
necessary to make the statements therein not misleading; in each case to the
extent that such untrue statement or allegedly untrue statement or omission or
alleged omission was made in such registration statement, preliminary
prospectus, or amendments or supplements thereto, in reliance upon and in
conformity with information furnished in writing by such Holder expressly for
use in connection with such registration; provided, however, that the indemnity
agreement contained in this Section 6.7(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, expense, liability or action if such
settlement is effected without the written consent of such Holder, which shall
not be unreasonably withheld; and such Holder will reimburse the Company or any
such person or underwriter for any legal or other expenses reasonably incurred
by the Company or any such person or underwriter in connection with
investigating or defending such loss, claim, damage, liability, expense or
action.
(c) Promptly after receipt by an indemnified party under this
Section 6.7 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against any indemnifying party
under this Section 6.7, notify the indemnifying party in writing of the
commencement thereof and generally summarize such action. The indemnifying party
shall have the right to participate in and to assume the defense thereof with
counsel mutually satisfactory to the parties. An indemnifying party shall not
have the right to direct the defense of such an action on behalf of an
indemnified party if such indemnified party has reasonably concluded that there
may be defenses available to it that are different from or additional to those
available to the indemnifying party; provided, however, that in such event, the
indemnifying party shall bear the fees and expenses of only one (1) separate
counsel for all indemnified parties. The failure to notify in writing an
indemnifying party promptly of the commencement of any such action if
prejudicial to the ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
6.7, but the omission so to notify in writing the indemnifying party will not
relieve such party of any liability that such party may have to any indemnified
party otherwise than under this Section 6.7.
(d) To the extent permitted by law, the indemnification
provided for under this Section 6.7 will remain in full force and effect
regardless of any investigation made by or on behalf of the indemnified party or
any officer, director or controlling person (within the meaning of the 0000 Xxx)
of such indemnified party and will survive the transfer of any securities.
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(e) If for any reason the foregoing indemnity is unavailable
to, or is insufficient to hold harmless an indemnified party, then the
indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of such losses, claims, damages, liabilities or
expenses (i) in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party on the one hand and the indemnified
party on the other or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, or provides a lesser sum to the indemnified party
than the amount hereinafter calculated, in such proportion as is appropriate to
reflect not only the relative benefits received by the indemnifying party on the
one hand and the indemnified party on the other but also the relative fault of
the indemnifying party and the indemnified party as well as any other relevant
equitable considerations. Notwithstanding the foregoing, no underwriter, if any,
shall be required to contribute any amount in excess of the amount by which the
total price at which the securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which
underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 0000
Xxx) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The obligation of any underwriters to
contribute pursuant to this Section 6.7(e) shall be several in proportion to
their respective underwriting commitments and not joint.
6.8 Reports under Exchange Act. With a view to making available to the
Holders the benefits of Rule 144 promulgated under the 1933 Act and any other
rule or regulation of the SEC that may at any time permit a Holder to sell
Registrable Securities to the public without registration, and with a view to
making it possible for any such Holder to register the Registrable Securities
pursuant to a registration on Form F-3 or S-3, the Company agrees to:
(a) make and keep available public information, as those terms
are understood and defined in Rule 144, at all times;
(b) file with the Canadian SC and the SEC in a timely manner
all reports and other documents required of the Company under the Canadian Act,
the 1933 Act and the Exchange Act; and
(c) furnish to a Holder owning any Registrable Securities upon
request (i) a written statement by the Company that it has complied with the
reporting requirements of the Ontario Act, Rule 144, the 1933 Act and the
Exchange Act, or that it qualifies as a registrant whose Registrable Securities
may be resold pursuant to Form F-3 or S-3 (at any time after it so qualifies),
(ii) a copy of the most recent annual or quarterly report of the Company and
such other reports and documents so filed by the Company, and (iii) such other
information as may be reasonably required in availing any Holder of Registrable
Securities of any rule or regulation of the SEC which permits the selling of any
such Registrable Securities without registration or pursuant to such form.
6.9 Transferability. The right to cause the Company to register
Registrable Securities granted by the Company to the Holders under this
Agreement may be assigned by any Holder to a transferee or assignee of any
Registrable Securities, provided that the Company must receive written notice
prior to or at the time of said transfer, stating the name and address of said
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transferee or assignee and identifying the securities with respect to which such
rights are being assigned.
6.10 Granting of Registration Rights. The Company shall not, without
the prior written consent of the Holders of at least 66.67% of the Registrable
Securities then outstanding, grant any rights to any Persons to register any
shares of capital stock or other securities of the Company if such rights could
reasonably be expected to conflict with, or be on a parity with, the rights of
the Holders of Registrable Securities.
6.11 The Company agrees to maintain the listing of the Company's Common
Stock on The Toronto Stock Exchange, AMEX, NASDAQ Small Cap or NASDAQ NMS in
good standing for so long as JJDC owns the Shares.
6.12 The registration rights granted pursuant to this Agreement shall
terminate on the second anniversary of this Agreement.
7. Miscellaneous.
7.1 Survival of Warranties. The warranties, representations,
agreements, covenants and undertakings of the Company or JJDC contained in or
made pursuant to this Agreement shall survive the execution and delivery of this
Agreement and each Closing and shall in no way be affected by an investigation
of the subject matter thereof made by or on behalf of JJDC or the Company.
7.2 Incorporation by Reference. All Exhibits and Schedules appended to
this Agreement are herein incorporated by reference and made a part hereof.
7.3 Successor and Assignees. All terms, covenants, agreements,
representations, warranties and undertakings in this Agreement made by and on
behalf of any of the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto (including transferees
of any Shares) whether so expressed or not, subject to Sections 6.9.
7.4 Amendments and Waivers. (a) Any provision of this Agreement may be
amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by JJDC and the Company or, in the case of
a waiver, by the party against whom the waiver is to be effective.
(b) No failure or delay by either party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
7.5 Governing Law. This Agreement shall be deemed a contract made under
the laws of the State of New Jersey and, together with the rights or obligations
of the parties hereunder, shall be construed under and governed by the laws of
such State.
7.6 Notice . All notices, requests, consents and demands shall be in
writing and shall
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be deemed given when (i) personally delivered, (ii) mailed in a registered or
certified envelope, postage prepaid or (iii) sent by Federal Express or another
nationally recognized overnight delivery service (paid by sender):
to the Company at:
Genetronics Biomedical Ltd.
00000 Xxxxxxxx Xxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000-0000
Fax: (000) 000-0000
Attention: President
with a copy to:
Xxxxxx Godward LLP
0000 Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxx, Xxxxxxxxxx 00000-0000
Fax: (000) 000-0000
Attention: X. Xxxxxxxxxx Xxxxxxxx, Esq.
or to JJDC at:
Xxxxxxx & Xxxxxxx Development Corporation
Xxx Xxxxxxx & Xxxxxxx Xxxxx
Xxx Xxxxxxxxx, Xxx Xxxxxx 00000
Fax: (000) 000-0000
Attention: President
with a copy to:
Xxxxxxx & Xxxxxxx
Xxx Xxxxxxx & Xxxxxxx Xxxxx
Xxx Xxxxxxxxx, Xxx Xxxxxx 00000
Fax: (000) 000-0000
Attention: Office of General Counsel
or such other address as may be furnished in writing by a party to the other
party hereto.
7.7 Counterparts. This Agreement may be executed in counterparts, all
of which together shall constitute one and the same instrument.
7.8 Effect of Headings. The section and paragraph headings herein are
for convenience only and shall not affect the construction hereof.
7.9 Entire Agreement. This Agreement, the Ancillary Agreements and the
Exhibits and Schedules hereto and thereto constitute the entire agreement among
the Company and JJDC with respect to the subject matter hereof. There are no
representations, warranties, covenants or undertakings with respect to the
subject matter hereof other than those expressly set forth herein.
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This Agreement supersedes all prior agreements between the parties with respect
to the Shares purchased hereunder and the subject matter hereof.
7.10 Publicity. The Company shall not originate any publicity, news
release or other public announcement, written or oral, whether relating to the
performance under this Agreement or the existence of any arrangement between the
parties, without the prior written consent of JJDC, except where such publicity,
news release or other public announcement is required by law; provided that in
such event, JJDC shall be consulted by the Company in connection with any such
publicity, news release or other public announcement prior to its release and
shall be provided with a copy thereof and shall respond to the Company within a
reasonable period of time following receipt thereof.
7.11 Severability. The invalidity or unenforceability of any provision
hereof shall in no way affect the validity or enforceability of any other
provision.
IN WITNESS WHEREOF, this Agreement has been executed as of the date
first above written, by the duly authorized representatives of the parties
hereto.
GENETRONICS BIOMEDICAL LTD. GENETRONICS BIOMEDICAL LTD.
By: /s/ Xxxx Xxxxxxxx By: /s/ Xxxxxx Xxxx
--------------------------- -----------------------------
Name: Xxxx Xxxxxxxx Name: Xxxxxx Xxxx
Title: President and CEO Title: Senior Vice President
XXXXXXX & XXXXXXX
DEVELOPMENT CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxx, Ph.D.
Title: Vice President
22.
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"SCHEDULE "A"
FORM OF DECLARATION FOR REMOVAL OF LEGEND
To: Trust Company,
As registrar and transfer agent for Common Shares of
Genetronics Biomedical Ltd.
The undersigned (a) acknowledges that the sale of the securities of
Genetronics Biomedical Ltd. (the "Company") to which this declaration relates is
being made in reliance on Rule 904 of Regulation S under the United States
Securities Act of 1933, as amended (the "1933 Act"), and (b) certifies that (1)
the seller is not an affiliate of the Company as defined in Rule 405 under the
1933 Act, (2) the offer of such securities was not made to a U.S. person and
either (A) at the time the buy order was originated, the buyer was not a U.S.
person, or the seller and any person acting on its behalf reasonably believed
that the buyer was not a U.S. person, or (B) the transaction was executed in, on
or through the facilities of The Toronto Stock Exchange or any other designated
offshore securities market as defined in Regulation S under the 1933 Act and
neither the seller nor any person acting on its behalf knows that the
transaction has been prearranged with a buyer which is a U.S. person, (3)
neither the seller nor any affiliate of the seller nor any person acting on any
of their behalf has engaged or will engage in any directed selling efforts in
the United States in connection with the offer and sale of such securities, (4)
the sale is bona fide and not for the purpose of "washing off' the resale
restrictions imposed because the securities are "restricted securities" (as such
term is defined in Rule 144(a)(3) under the 1933 Act), (5) the seller does not
intend to replace the securities sold in reliance on Rule 904 under the 1933 Act
with fungible unrestricted securities and (6) the contemplated sale is not a
transaction, or part of a series of transactions which, although in technical
compliance with Regulation S, is part of a plan or scheme to evade the
registration provisions of the 1933 Act. Terms used herein have the meanings
given to them by Regulation S under the 1933 Act.
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EXHIBIT "A"
FORM OF LICENSE AND DEVELOPMENT AGREEMENT
[Recital]
24.
