Exhibit 1.1
ASPREVA PHARMACEUTICALS CORPORATION
(continued under the British Columbia Business Corporations Act)
Common Shares
PURCHASE AGREEMENT
Dated: March , 2005
TABLE OF CONTENTS
PURCHASE AGREEMENT................................................................................................1
SECTION 1. Representations and Warranties.......................................................4
(a) Representations and Warranties by the Company...................................................4
(i) Compliance with Registration Requirements............................................4
(ii) Independent Accountants..............................................................5
(iii) Financial Statements.................................................................5
(iv) No Material Adverse Change in Business...............................................6
(v) Good Standing of the Company.........................................................6
(vi) Capitalization.......................................................................6
(vii) Authorization of Agreement...........................................................7
(viii) Authorization and Description of Securities..........................................7
(ix) Absence of Defaults and Conflicts....................................................8
(x) Absence of Labor Dispute.............................................................8
(xi) Absence of Proceedings...............................................................8
(xii) Absence of Rulemaking or Similar Proceedings.........................................9
(xiii) Accuracy of Exhibits.................................................................9
(xiv) Possession of Intellectual Property..................................................9
(xv) Absence of Further Requirements.....................................................10
(xvi) Possession of Licenses and Permits..................................................10
(xvii) Regulatory Authorities..............................................................11
(xviii) Compliance with Health Care Laws....................................................12
(xix) Title to Property...................................................................13
(xx) U.S. Investment Company Act.........................................................13
(xxi) Environmental Laws..................................................................13
(xxii) No Stabilization or Manipulation....................................................14
(xxiii) Registration Rights.................................................................14
(xxiv) Other Reports and Information.......................................................14
(xxv) Taxes...............................................................................14
(xxvi) Employee Benefit Plans..............................................................14
(xxvii) Insurance...........................................................................15
(xxviii) Compliance with Laws................................................................15
(xxix) U.S. Foreign Corrupt Practices Act..................................................15
(xxx) Internal Accounting Controls........................................................15
(xxxi) Disclosure Controls and Procedures..................................................15
(xxxii) No Broker...........................................................................16
(xxxiii) Principal Stockholders..............................................................16
(xxxiv) Non-Arm's Length Transactions.......................................................16
(xxxv) U.S. Xxxxxxxx-Xxxxx Act.............................................................16
(xxxvi) Statistical and Market Data.........................................................16
(xxxvii) French Language Documents...........................................................16
(xxxviii) Not Foreign Property................................................................16
(xxxix) Office..............................................................................16
(xl) Business Purpose....................................................................16
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(xli) Employees...........................................................................17
(xlii) Registrar & Transfer Agent..........................................................17
(xliii) Form of Common Shares...............................................................17
(xliv) Stamp Tax...........................................................................17
(b) Officer's Certificates.........................................................................17
SECTION 2. Sale and Delivery to Underwriters; Closing..........................................17
(a) Initial Securities.............................................................................17
(b) Option Securities..............................................................................17
(c) Payment........................................................................................18
(d) Denominations; Registration....................................................................18
(e) Sub-underwriter Notification...................................................................19
SECTION 3. Covenants of the Company............................................................19
(a) Compliance with Securities Regulations and Commission Requests.................................19
(b) PREP Procedures................................................................................20
(c) Filing of Amendments...........................................................................20
(d) Delivery of Filed Documents....................................................................20
(e) Delivery of Prospectuses.......................................................................20
(f) Continued Compliance with Securities Laws......................................................20
(g) "Blue Sky" Qualifications......................................................................21
(h) Rule 158.......................................................................................21
(i) Use of Proceeds................................................................................21
(j) Restriction on Sale of Securities..............................................................21
(k) Listing........................................................................................22
(l) Reporting Requirements.........................................................................22
(m) Compliance with NASD Rules.....................................................................22
(n) Controls and Procedures........................................................................22
(o) U.S. Xxxxxxxx-Xxxxx Act........................................................................23
(p) Translation Opinions...........................................................................23
(q) Translation Opinions -- Financial Statements...................................................23
(r) Lock-Up Agreements.............................................................................23
SECTION 4. Payment of Expenses.................................................................23
(a) Expenses.......................................................................................23
(b) Termination of Agreement.......................................................................24
SECTION 5. Conditions of Underwriters' Obligations.............................................24
(a) Effectiveness of Registration Statement and Receipt of Mutual Reliance
Review System Decision Document..............................................................24
(b) Opinion of Canadian Counsel for Company........................................................25
(c) Opinion of U.S. Counsel for Company............................................................25
(d) Opinion of Swiss Counsel for Company...........................................................25
(e) Opinion of Special Regulatory Counsel for Company..............................................25
(f) Opinion of Special Intellectual Property Counsel for Company...................................25
(g) Opinion of U.S. Counsel for Underwriters and the Sub-underwriter...............................26
(h) Opinion of Canadian Counsel for Underwriters and the Sub-underwriter...........................26
(i) Officers' Certificate..........................................................................26
(j) Accountant's Comfort Letter....................................................................26
(k) Bring-down Comfort Letter......................................................................27
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(l) No Objection...................................................................................27
(m) Lock-up Agreements.............................................................................27
(n) Approval of Listing............................................................................27
(o) Conditions to Purchase of Option Securities....................................................27
(i) Opinion of Canadian Counsel for Company.............................................27
(ii) Opinion of U.S. Counsel for Company.................................................27
(iii) Opinion of Swiss Counsel for Company................................................27
(iv) Opinion of Special Regulatory Counsel for Company...................................27
(v) Opinion of Special Intellectual Property Counsel for Company........................28
(vi) Opinion of U.S. Counsel for Underwriters and the Sub-underwriter....................28
(vii) Opinion of Canadian Counsel for Underwriters and the Sub-underwriter................28
(viii) Officer's Certificate...............................................................28
(ix) Bring-down Comfort Letter...........................................................28
(p) Additional Documents...........................................................................28
(q) Termination of Agreement.......................................................................28
SECTION 6. Indemnification.....................................................................29
(a) Indemnification of Underwriters and the Sub-underwriter........................................29
(b) Indemnification of Company, Directors and Officers.............................................30
(c) Actions against Parties; Notification..........................................................30
(d) Settlement without Consent if Failure to Reimburse.............................................31
(e) Indemnification for Reserved Securities........................................................31
SECTION 7. Contribution........................................................................31
SECTION 8. Representations, Warranties and Agreements to Survive Delivery......................33
SECTION 9. Termination of Agreement............................................................33
(a) Termination; General...........................................................................33
(b) Liabilities....................................................................................34
SECTION 10. Default by One or More of the Underwriters..........................................34
SECTION 11. Agent for Service; Submission to Jurisdiction; Waiver of Immunities.................34
SECTION 12. Notices.............................................................................35
SECTION 13. Parties.............................................................................35
SECTION 14. GOVERNING LAW AND TIME..............................................................35
SECTION 15. Effect of Headings..................................................................36
SECTION 16. Counterparts........................................................................36
SECTION 17. Judgment Currency...................................................................36
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SCHEDULES
Schedule A - List of Underwriters...................................................... Sch A-1
Schedule B - Pricing Information....................................................... Sch B-1
Schedule C - List of Persons and Entities Subject to Lock-up.......................... Sch C-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Canadian Counsel................................ A-1
Exhibit B - Form of Opinion of Company's U.S. Counsel ................................... B-1
Exhibit C - Form of Opinion of Company's Swiss Counsel................................... C-1
Exhibit D - Form of Opinion of Company's Special Regulatory Counsel...................... D-1
Exhibit E - Form of Opinion of Company's Special Intellectual Property
Counsel................................................................................... E-1
Exhibit F - Form of Lock-up Letter ...................................................... F-1
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ASPREVA PHARMACEUTICALS CORPORATION
(continued under the British Columbia Business Corporations Act)
Common Shares
PURCHASE AGREEMENT
March , 2005
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
as Representatives of the several Underwriters
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
World Financial Center, North Tower
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000-0000
Ladies and Gentlemen:
Aspreva Pharmaceuticals Corporation, a company continued under the
British Columbia Business Corporations Act (the "Company") confirms its
agreement with Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ("Xxxxxxx Xxxxx"), and each of the other Underwriters named in
Schedule A hereto (collectively, the "Underwriters", which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom Xxxxxxx Xxxxx is acting as representatives (in such capacity,
the "Representatives"), with respect to the issue and sale by the Company and
the purchase by the Underwriters, acting severally and not jointly, of the
respective numbers of Common Shares, without par value, of the Company ("Common
Shares") set forth in said Schedule A and with respect to the grant by the
Company to the Underwriters, acting severally and not jointly, of the option
described in Section 2(b) hereof to purchase all or any part of additional
Common Shares to cover over-allotments, if any. The aforesaid Common Shares
(the "Initial Securities") to be purchased by the Underwriters and all or any
part of the Common Shares subject to the option described in Section 2(b)
hereof (the "Option Securities") are hereinafter called, collectively, the
"Securities".
The Company understands that the Underwriters propose to make a public
offering of the Securities in the United States and in each of the provinces of
Canada upon the terms set forth in the U.S. Prospectus (as defined below) and
the Canadian Prospectus (as defined below),
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respectively, as soon as the Underwriters deem advisable after this Agreement
has been executed and delivered.
The Company and the Underwriters agree that up to _______ shares of the
Securities to be purchased by the Underwriters (the "Reserved Securities") shall
be reserved for sale by the Underwriters to certain eligible employees and
persons having business relationships with the Company (the "Invitees"), as part
of the distribution of the Securities by the Underwriters, subject to the terms
of this Agreement, the applicable rules, regulations and interpretations of the
National Association of Securities Dealers, Inc. and all other applicable laws,
rules and regulations. To the extent that such Reserved Securities are not
orally confirmed for purchase by Invitees by the end of the first business day
after the date of this Agreement, such Reserved Securities may be offered to the
public as part of the public offering contemplated hereby.
The Company has filed with the United States Securities and Exchange
Commission (the "Commission") a registration statement on Form F-1 (No.
333-122234), as amended, including the related preliminary prospectus or
prospectuses, covering the registration of the Securities under the U.S.
Securities Act of 1933, as amended (the "1933 Act"). Promptly after execution
and delivery of this Agreement, the Company will prepare and file a prospectus
in accordance with the provisions of Rule 430A ("Rule 430A") of the rules and
regulations of the Commission under the 1933 Act (the "1933 Act Regulations")
and paragraph (b) of Rule 424 ("Rule 424(b)") of the 1933 Act Regulations. The
information included in such prospectus that was omitted from such registration
statement at the time it became effective but that is deemed to be part of such
registration statement at the time it became effective pursuant to paragraph (b)
of Rule 430A is referred to as "Rule 430A Information." Each prospectus used in
the United States before such registration statement became effective, and any
prospectus that omitted the Rule 430A Information, that was used in the United
States after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called a "U.S. preliminary prospectus." Such registration
statement, including the exhibits and any schedules thereto, at the time it
became effective, and including the Rule 430A Information, is herein called the
"Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. The final prospectus in
the form first furnished to the Underwriters for use in connection with the
offering of the Securities is herein called the "U.S. Prospectus." For purposes
of this Agreement, all references to the Registration Statement, any U.S.
preliminary prospectus, the U.S. Prospectus or any amendment or supplement to
any of the foregoing shall be deemed to include the copy filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
system ("XXXXX").
The Company has prepared and filed with the British Columbia Securities
Commission in the province of British Columbia (the "Reviewing Authority") and
with the securities regulatory authorities (the "Qualifying Authorities") in
each of the other provinces of Canada (the "Qualifying Provinces") a preliminary
PREP prospectus relating to the Securities (in the English and French languages,
as applicable, the "Preliminary PREP Prospectus"), an amended and restated
preliminary PREP prospectus relating to the Securities (in the English and
French languages, as applicable, the "Amended Preliminary PREP Prospectus") and
a second amended
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and restated preliminary PREP prospectus relating to the Securities (in the
English and French languages, as applicable, the "Second Amended Preliminary
PREP Prospectus"). The Company has filed the Preliminary PREP Prospectus, the
Amended Preliminary PREP Prospectus and the Second Amended Preliminary PREP
Prospectus with the Reviewing Authority and the Qualifying Authorities pursuant
to National Policy 43-201 - Mutual Reliance Review System for Prospectuses and
Annual Information Forms and its related memorandum of understanding, and the
Reviewing Authority is acting as principal regulator. The Company has also filed
the Preliminary PREP Prospectus, the Amended Preliminary PREP Prospectus and the
Second Amended Preliminary PREP Prospectus with the Reviewing Authority and the
Qualifying Authorities pursuant to National Instrument 44-103 - Post-Receipt
Pricing (the "PREP Procedures"). The Reviewing Authority has issued a
preliminary Mutual Reliance Review System Decision Document for the Preliminary
PREP Prospectus, the Amended Preliminary PREP Prospectus and the Second Amended
Preliminary PREP Prospectus.
In addition, the Company (A) has prepared and filed with the Reviewing
Authority and the Qualifying Authorities, a final PREP prospectus relating to
the Securities (in the English and French languages, as applicable, the "Base
PREP Prospectus") which omits the PREP Information (as hereinafter defined) in
accordance with the PREP Procedures, and (B) will prepare and file, promptly
after the execution and delivery of this Agreement, with the Reviewing Authority
and the Qualifying Authorities, in accordance with the PREP Procedures, a
supplemented PREP prospectus setting forth the PREP Information (in the English
and French languages, as applicable, the "Supplemented PREP Prospectus"). The
information included in the Supplemented PREP Prospectus that is omitted from
the Base PREP Prospectus and which is deemed under the PREP Procedures to be
incorporated by reference in the Base PREP Prospectus as of the date of the
Supplemented PREP Prospectus is referred to herein as the "PREP Information".
The Preliminary PREP Prospectus, the Amended Preliminary PREP
Prospectus, the Second Amended Preliminary PREP Prospectus and the Base PREP
Prospectus are herein collectively called the "Canadian Preliminary Prospectus".
The Base PREP Prospectus for which a final Mutual Reliance Review System
Decision Document has been received from the Reviewing Authority on behalf of
itself and the Qualifying Authorities, including the PREP information
incorporated by reference therein, is herein referred to as the "Canadian
Prospectus", except that, if, after the execution of this Agreement, a
Supplemented PREP Prospectus containing the PREP Information is thereafter filed
with the Reviewing Authority and the Qualifying Authorities, the term "Canadian
Prospectus" shall refer to such Supplemented PREP Prospectus. Canadian
securities laws (the "Canadian Securities Laws") means, collectively, the
applicable securities laws of each of British Columbia and the Qualifying
Provinces and the respective regulations and rules made under those securities
laws together with all applicable policy statements, blanket orders and rulings
of the Reviewing Authority and the Qualifying Authorities, as applicable, and
the securities legislation and policies of each other relevant jurisdiction.
The Company understands that a portion of the Securities may be offered
and sold in a public offering in the Province of British Columbia and the
Qualifying Provinces conducted through Xxxxxxx Xxxxx Canada Inc. (the
"Sub-underwriter"), an affiliate of Xxxxxxx Xxxxx,
4
pursuant to the Canadian Prospectus. The Sub-underwriter, subject to the terms
and conditions set forth herein, agrees and covenants with the Company to use
reasonable efforts to sell the Securities in the Province of British Columbia
and the Qualifying Provinces. Any Securities so sold will be purchased by the
Sub-underwriter from Xxxxxxx Xxxxx at the Closing Time at a price equal to the
purchase price as set forth in Schedule B hereto or such purchase price less an
amount to be mutually agreed upon by the Sub-underwriter and Xxxxxxx Xxxxx,
which amount shall not be greater than the underwriting commission as set forth
in Schedule B hereto.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter and the Sub-underwriter as of the
date hereof, as of the Closing Time referred to in Section 2(c) hereof, and as
of each Date of Delivery (if any) referred to in Section 2(b) hereof, and agrees
with each Underwriter and the Sub-underwriter, as follows:
(i) Compliance with Registration Requirements. Each of the
Registration Statement, any Rule 462(b) Registration Statement and any
post-effective amendment thereto has become effective under the 1933
Act and no stop order suspending the effectiveness of the Registration
Statement, any Rule 462(b) Registration Statement or any post-effective
amendment thereto has been issued under the 1933 Act and no proceedings
for that purpose have been instituted or are pending or, to the
knowledge of the Company, are contemplated by the Commission, and any
request on the part of the Commission for additional information has
been complied with. A final Mutual Reliance Review System Decision
Document has been received from the Reviewing Authority on behalf of
itself and the Qualifying Authorities in respect of the Base PREP
Prospectus and no order suspending the distribution of the Securities
has been issued by the Reviewing Authority or any of the Qualifying
Authorities.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective under the 1933 Act and at all times subsequent thereto
up to and including the Closing Time (as defined in Section 2(c)) (and
if any Option Securities are purchased, at the Date of Delivery): (A)
the Registration Statement, the Rule 462(b) Registration Statement and
any amendments and supplements thereto complied and will comply in all
material respects with the requirements of the 1933 Act and the 1933
Act Regulations; (B) the Canadian Prospectus complied and will comply
in all material respects with the Canadian Securities Laws applicable
in the Province of British Columbia as interpreted and applied by the
Reviewing Authority (including the PREP Procedures) and the Canadian
Securities Laws applicable in the Qualifying Provinces; (C) neither the
Registration Statement, the Rule 462(b) Registration Statement nor any
amendment or supplement thereto contained or will contain 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; (D) the U.S. Prospectus, any U.S. Preliminary Prospectuses
and any supplement thereto or prospectus wrapper prepared in connection
therewith, at their respective times of issuance and at the Closing
Time, complied and will comply in all material respects with any
applicable laws or regulations of jurisdictions outside the United
States and Canada in which the U.S. Prospectus and such U.S.
Preliminary Prospectuses, as amended or
5
supplemented, if applicable, are distributed in connection with the
offer and sale of Reserved Securities; and (E) the Canadian Prospectus
and any amendments or supplements thereto constituted and will
constitute full, true and plain disclosure of all material facts
relating to the Company and the Securities, and each of the U.S.
Prospectus, the Canadian Prospectus, and any amendments or supplements
thereto, did not and will not include an untrue statement of a material
fact or omit 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. Notwithstanding anything to the contrary
contained in this subsection, the representations and warranties
contained in this subsection do not apply to statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Company by any Underwriter through Xxxxxxx Xxxxx or the
Sub-underwriter expressly for use in the Registration Statement, the
U.S. Prospectus, the Canadian Prospectus or any amendment or supplement
thereto.
Each U.S. Preliminary Prospectus and the prospectus filed as
part of the Registration Statement as originally filed or as part of
any amendment thereto complied when so filed in all material respects
with the 1933 Act Regulations and each U.S. Preliminary Prospectus and
the U.S. Prospectus delivered to the Underwriters for use in connection
with this offering was identical to the electronically transmitted
copies thereof filed with the Commission pursuant to XXXXX, except to
the extent permitted by Regulation S-T.
(ii) Independent Accountants. The accountants who audited the
consolidated financial statements included in the U.S. Prospectus and
the Canadian Prospectus, are independent public accountants as required
by the 1933 Act and the 1933 Act Regulations and are independent with
respect to the Company within the meaning of the British Columbia
Business Corporations Act and applicable Canadian Securities Laws, and,
to the Company's knowledge, such accountants are not in violation of
the auditor independence requirements of the Xxxxxxxx-Xxxxx Act of 2002
and the rules and regulation promulgated thereunder (collectively, the
"Xxxxxxxx-Xxxxx Act") with respect to the Company.
(iii) Financial Statements. The consolidated financial
statements included in the Registration Statement, the U.S. Prospectus
and the Canadian Prospectus, together with the related notes, present
fairly the financial position of the Company and its consolidated
subsidiaries at the dates indicated and the consolidated statements of
operations and shareholders' deficiency and cash flows of the Company
and its consolidated subsidiaries for the periods specified; such
financial statements have been prepared in accordance with generally
accepted accounting principles in the United States of America ("GAAP")
applied on a consistent basis throughout the periods presented. The
selected consolidated financial data and the summary consolidated
financial data included in the U.S. Prospectus and the Canadian
Prospectus present fairly the information shown therein and have been
compiled on a basis consistent with that of the audited consolidated
financial statements included in the U.S. Prospectus and the Canadian
Prospectus.
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(iv) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement, the U.S. Prospectus and the Canadian Prospectus, except as
otherwise stated therein, (A) there has been no material adverse
change, or any development that would be reasonably expected to result
in a material adverse change, in the condition, financial or otherwise,
or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or
not arising in the ordinary course of business (a "Material Adverse
Effect"), (B) there have been no transactions entered into by the
Company or any of its subsidiaries, other than those in the ordinary
course of business, which are material with respect to the Company and
its subsidiaries considered as one enterprise, (C) there is no
transaction that is likely to be entered into by the Company that would
be required to be disclosed in the Registration Statement, the U.S.
Prospectus or the Canadian Prospectus, (D) the Company has no material
contingent obligations that are not disclosed in the Registration
Statement, the U.S. Prospectus and the Canadian Prospectus, and (E)
there has been no dividend or distribution of any kind declared, paid
or made by the Company on any class of its share capital.
(v) Good Standing of the Company. The Company is a corporation
duly continued, validly existing and in good standing under the laws of
the Province of British Columbia and has the corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the U.S. Prospectus and the Canadian
Prospectus; and the Company is not required to be duly qualified or
registered to transact business in any other jurisdiction in which it
carries on business, except where the failure so to qualify or register
would not result in a Material Adverse Effect. The only subsidiaries of
the Company are Aspreva Pharmaceuticals SA and Aspreva Pharmaceuticals,
Inc. Each subsidiary of the Company is a corporation duly organized,
validly existing and in good standing under the laws of its
jurisdiction of incorporation, has the corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the U.S. Prospectus and the Canadian Prospectus; and each
subsidiary of the Company is duly qualified or registered as a foreign
corporation to transact business and is in good standing in each other
jurisdiction in which such qualification or registration is required
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or register
would not result in a Material Adverse Effect.
(vi) Capitalization. The authorized, issued and outstanding
share capital of the Company is as set forth in the U.S. Prospectus and
the Canadian Prospectus under the caption "Description of Capital
Stock" and in the column entitled "Actual" under the caption
"Capitalization" (except for any subsequent issuances pursuant to this
Agreement, pursuant to reservations, agreements or employee benefit
plans referred to in the U.S. Prospectus and the Canadian Prospectus or
pursuant to the exercise of convertible securities or options referred
to in the U.S. Prospectus and the Canadian Prospectus). All of the
issued and outstanding shares in the capital of the Company have been
duly authorized and validly issued and are fully paid and
non-assessable and have been issued in compliance with all U.S.
securities laws and Canadian Securities Laws; none of the outstanding
shares in the capital of the Company was issued in violation of the
preemptive or other similar rights of any securityholder of the Company
or any other
7
person. Except as disclosed in the U.S. Prospectus and the Canadian
Prospectus, the Company does not have any options or warrants to
purchase, or, except pursuant to rights that terminate at the Closing
Time and do not apply to the issuance of the Securities, any
pre-emptive rights or other rights to subscribe for or to purchase any
securities or obligations convertible into, or any contracts or
commitments to issue or sell, any of its share capital or any such
options, rights, convertible securities or obligations except for
options granted subsequent to the date of the information provided in
the U.S. Prospectus and the Canadian Prospectus pursuant to the
Company's employee stock option plan disclosed in the U.S. Prospectus
and the Canadian Prospectus. The description of the Company's stock
option and other stock plans or arrangements, and the options or other
rights granted thereunder, as set forth in the U.S. Prospectus and the
Canadian Prospectus, accurately and fairly presents the information
required under the 1933 Act and the 1933 Act Regulations or the
Canadian Securities Laws to be disclosed with respect to such plans,
arrangements, options and rights. Except as disclosed in the U.S.
Prospectus and the Canadian Prospectus, to the knowledge of the
Company, there are no agreements, arrangements or understandings among
or between any shareholder of the Company with respect to the Company
or the voting or disposition of the Company's capital stock that will
survive the sale of the Securities pursuant to this Agreement. All of
the issued and outstanding shares in the capital of each subsidiary of
the Company have been duly authorized and validly issued and are fully
paid and non-assessable and, except for three shares in the capital of
Aspreva Pharmaceuticals SA and except as described in the U.S.
Prospectus and the Canadian Prospectus, are owned by the Company
directly, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity; one share in the capital of Aspreva
Pharmaceuticals SA is registered in the name of each of Xxxxxx Xxxxx,
Xxxxxxx Xxxxxxxx and Xxxxxx Xxxxx, which shares are beneficially owned
by the Company; none of the outstanding shares in the capital of each
subsidiary of the Company was issued in violation of the preemptive or
other similar rights of any securityholder of such subsidiary or any
other person. No subsidiary of the Company is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from
making any other distribution on such subsidiary's capital stock, from
repaying to the Company any loans or advances to such subsidiary from
the Company or from transferring any of such subsidiary's property or
assets to the Company or any other subsidiary of the Company, except as
described in or contemplated by the U.S. Prospectus and the Canadian
Prospectus.
(vii) Authorization of Agreement. The Company has the
corporate power and authority to execute, deliver and perform its
obligations under this Agreement and this Agreement has been duly
authorized, executed and delivered by the Company.
(viii) Authorization and Description of Securities. The
Securities have been duly authorized for issuance and sale to the
Underwriters pursuant to this Agreement and, when issued and delivered
by the Company pursuant to this Agreement against payment of the
consideration set forth herein, will be validly issued and fully paid
and non-assessable; the Common Shares, including without limitation the
associated share purchase rights under the Company's Stockholder Rights
Plan, conform to the description relating thereto contained in the U.S.
Prospectus and the Canadian Prospectus and such description conforms to
the rights set forth in the instruments defining the same; and the
8
issuance of the Securities is not subject to the preemptive or other
similar rights of any securityholder of the Company or any other
person.
(ix) Absence of Defaults and Conflicts. Neither the Company
nor any of its subsidiaries is in violation of its Articles or Notice
of Articles or in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note,
lease, license or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which it or any of its
subsidiaries may be bound, or to which any of the property or assets of
the Company or any of its subsidiaries is subject (collectively,
"Agreements and Instruments") except for such defaults that would not
reasonably be expected to result in a Material Adverse Effect. The
execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated herein and in the U.S.
Prospectus and the Canadian Prospectus (including the authorization,
issuance, sale and delivery of the Securities and the use of the
proceeds from the sale of the Securities as described in the U.S.
Prospectus and the Canadian Prospectus under the caption "Use of
Proceeds") and compliance by the Company with its obligations hereunder
have been duly authorized by all necessary corporate action and do not
and will not, whether with or without the giving of notice or passage
of time or both, conflict with or constitute a breach of, or default or
Repayment Event (as defined below) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any subsidiary pursuant to, the Agreements and
Instruments (except for such conflicts, breaches or defaults, Repayment
Events or liens, charges or encumbrances that would not reasonably be
expected to result in a Material Adverse Effect), nor will such action
result in any violation or conflict with the provisions of the charter
or by-laws of the Company or any subsidiary or any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any subsidiary or any of their
assets, properties or operations. As used herein, a "Repayment Event"
means any event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting on
such holder's behalf) the right to require the repurchase, redemption
or repayment of all or a portion of such indebtedness by the Company or
any subsidiary.
(x) Absence of Labor Dispute. No labor dispute with the
employees of the Company or any subsidiary exists or, to the knowledge
of the Company, is imminent, and the Company is not aware of any
existing or imminent labor disturbance by the employees of any of its
or any subsidiary's principal suppliers, manufacturers, customers or
contractors, which, in either case, may reasonably be expected to
result in a Material Adverse Effect.
(xi) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, threatened, against or affecting the
Company or any subsidiary, which is required to be disclosed in the
U.S. Prospectus or the Canadian Prospectus, or which might reasonably
be expected to result in a Material Adverse Effect, or which might
reasonably be expected to materially and
9
adversely affect the properties or assets thereof or the consummation
of the transactions contemplated in this Agreement or the performance
by the Company of its obligations hereunder; the aggregate of all
pending legal or governmental proceedings to which the Company or any
subsidiary is a party or of which any of their respective property or
assets is the subject which are not described in the U.S. Prospectus or
the Canadian Prospectus, including ordinary routine litigation
incidental to the business of the Company, would not reasonably be
expected to result in a Material Adverse Effect.
(xii) Absence of Rulemaking or Similar Proceedings. There are
no rulemaking or similar proceedings before the U.S. Food and Drug
Administration ("FDA"), the Department of Health and Human Services,
the Centers for Medicare and Medicaid Services or any other federal,
state, local or governmental bodies having authority over the Company's
activities (each a "Governmental Authority"), published in the Federal
Register or otherwise known to the Company, which would reasonably be
expected to have a Material Adverse Effect.
(xiii) Accuracy of Exhibits. There are no statutes,
regulations, contracts or documents which are required to be described
in the Registration Statement, the U.S. Prospectus or the Canadian
Prospectus or to be filed as exhibits thereto which have not been so
described and filed as required.
(xiv) Possession of Intellectual Property. The Company and its
subsidiaries own, or have licensed, or has the right to employ, all
Intellectual Property necessary for the conduct of the Company's
business as now conducted or as proposed in the Registration Statement,
the U.S. Prospectus and the Canadian Prospectus to be conducted except
as such failure to own, license or have such rights would not
reasonably be expected to have a Material Adverse Effect. Except as set
forth in the Registration Statement, the U.S. Prospectus and the
Canadian Prospectus under the captions "Business -- Intellectual
Property" and "Business -- Third Party Contracts", (i) to the knowledge
of the Company, there is no infringement, misappropriation or violation
by third parties of any such Intellectual Property, except as such
infringement, misappropriation or violation would not reasonably be
expected to have a Material Adverse Effect; (ii) there is no pending
or, to the knowledge of the Company, threatened action, suit,
proceeding or claim by others challenging the Company's rights in or to
any such Intellectual Property, and the Company is unaware of any facts
which would form a reasonable basis for any such claim, except as such
pending or threatened actions, suits, proceedings or claims would not
reasonably be expected to have a Material Adverse Effect; (iii) the
Intellectual Property owned by the Company and to the knowledge of the
Company, the Intellectual Property licensed to the Company have not
been adjudged invalid or unenforceable, in whole or in part, and there
is no pending or, to the knowledge of the Company, threatened action,
suit, proceeding or claim by others challenging the validity or scope
of any such Intellectual Property, and the Company is unaware of any
facts which would form a reasonable basis for any such claim, except as
such pending or threatened actions, suits, proceedings or claims would
not reasonably be expected to have a Material Adverse Effect; (iv)
there is no pending or, to the knowledge of the Company, threatened
action, suit, proceeding or claim by others that the Company infringes,
misappropriates or otherwise violates any Intellectual Property or
other proprietary rights of others, the
10
Company has not received any written notice of such claim and the
Company is unaware of any other fact which would form a reasonable
basis for any such claim, except as such infringement, misappropriation
or violation would not reasonably be expected to have a Material
Adverse Effect; and (v) to the Company's knowledge, no employee of the
Company is in or has ever been in violation of any term of any
employment contract, patent disclosure agreement, invention assignment
agreement, non-competition agreement, non-solicitation agreement,
nondisclosure agreement or any restrictive covenant to or with a former
employer where the basis of such violation relates to such employee's
employment with the Company or actions undertaken by the employee while
employed with the Company, except as such violation would not
reasonably be expected to have a Material Adverse Effect. The CellCept
Collaboration and Promotion Agreement (the "Roche Agreement") by and
among Aspreva Pharmaceuticals S.A., Xxxxxxxx-Xx Xxxxx Inc. and X.
Xxxxxxxx-Xx Xxxxx Ltd. (Xxxxxxxx-Xx Xxxxx Inc. and X. Xxxxxxxx-Xx Xxxxx
Ltd. collectively, "Roche"), as amended to date, has been duly executed
and delivered by Aspreva Pharmaceuticals S.A. and Roche, and the Roche
Agreement, as amended to date, constitutes a legally valid and binding
obligation of Roche, enforceable against Roche in accordance with its
terms, subject to the effect of bankruptcy, insolvency, reorganization
or other similar laws relating to or affecting the rights or remedies
of creditors, and the effects of general principles of equity, whether
considered in a proceeding in equity or at law. "Intellectual Property"
shall mean all patents, patent rights, patent applications, trade and
service marks, trade and service xxxx registrations, trade names,
copyrights, licenses, inventions, trade secrets, technology, know-how
and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures. Each of the current employees of
the Company, including for greater certainty each of the officers of
the Company, has entered into an agreement with the Company assigning
to the Company all Intellectual Property (including moral rights) to
which such employee may have a claim that were created during the term
of employment of the employee, and each current employee of the
Company, including for greater certainty each of the officers of the
Company, has entered into an appropriate confidentiality agreement with
the Company.
(xv) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company of
its obligations hereunder, in connection with the offering, issuance or
sale of the Securities hereunder or the consummation of the
transactions contemplated by this Agreement, except (A) such as have
been already obtained or as may be required under the 1933 Act or the
1933 Act Regulations or state securities laws, (B) such as have been
obtained under the laws and regulations of jurisdictions outside the
United States and Canada in which the Reserved Securities are offered
and (C) such as have been obtained, or as may be required, under the
Canadian Securities Laws.
(xvi) Possession of Licenses and Permits. Except in each case
as would not individually or in an aggregate be reasonably expected to
have a Material Adverse Effect, (A) the Company and its subsidiaries
possess such permits, certificates, licenses, approvals, consents and
other authorizations (collectively, "Governmental Licenses") issued by
the appropriate federal, provincial, state, local or foreign regulatory
agencies or
11
bodies necessary to conduct the business now operated by them; (B) the
Company and its subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses; (C) all of the
Governmental Licenses are valid and in full force and effect; and (D)
neither the Company nor any of its subsidiaries has received any notice
of proceedings relating to the revocation or modification of any such
Governmental Licenses.
(xvii) Regulatory Authorities. Except as described in the
Registration Statement, the U.S. Prospectus and the Canadian
Prospectus, the Company: (i) is and at all times has been in full
compliance with all statutes, rules, regulations, ordinances, orders,
decrees and guidances applicable to the ownership, testing,
development, manufacture, packaging, processing, recordkeeping, use,
distribution, marketing, labeling, promotion, sale, offer for sale,
storage, import, export or disposal of any product manufactured or
distributed by or for the Company ("Applicable Laws"), except where the
failure to so comply would not reasonably be expected, singly or in the
aggregate, to result in a Material Adverse Effect; (ii) has not
received any U.S. FDA Form 483, notice of adverse finding, warning
letter, untitled letter or other correspondence or notice from the U.S.
FDA or any other Governmental Authority alleging or asserting
noncompliance with any Applicable Laws or any licenses, certificates,
approvals, clearances, authorizations, permits and supplements or
amendments thereto required by any such Applicable Laws
("Authorizations"), except such U.S. FDA Forms 483, notices, letters or
other correspondence of violation as would not reasonably be expected,
singly or in the aggregate, to result in a Material Adverse Effect;
(iii) possesses all Authorizations required for the conduct of its
business, and such Authorizations are valid and in full force and
effect and are not in violation of any term of any such Authorizations,
except where the failure to possess such Authorization or the violation
of such Authorization would not reasonably be expected, singly or in
the aggregate, to result in a Material Adverse Effect; (iv) has not
received notice of any pending or threatened claim, suit, proceeding,
hearing, enforcement, audit, investigation, arbitration or other action
from any Governmental Authority or third party alleging that any
company operation or activity is in violation of any material
Applicable Laws or Authorizations and has no knowledge or reason to
believe that any such Governmental Authority or third party is
considering any such claim, suit, proceeding, hearing, enforcement,
audit, investigation, arbitration or other action; (v) has not received
notice that any Governmental Authority has taken, is taking or intends
to take action to limit, suspend, modify or revoke any material
Authorizations and has no knowledge or reason to believe that any such
Governmental Authority is considering such action; (vi) has, or has had
on its behalf, filed, declared, obtained, maintained or submitted all
reports, documents, forms, notices, applications, records, claims,
submissions and supplements or amendments as required by any Applicable
Laws or Authorizations, except where the failure to so file, declare,
obtain, maintain or submit would not reasonably be expected, singly or
in the aggregate, to result in a Material Adverse Effect and that all
such reports, documents, forms, notices, applications, records, claims,
submissions and supplements or amendments were materially complete and
correct on the date filed (or were corrected or supplemented by a
subsequent submission); and (vii) has not, either voluntarily or
involuntarily, initiated, conducted, or issued or caused to be
initiated, conducted or issued, any recall, market withdrawal or
replacement, safety alert, warning, "dear doctor" letter, investigator
notice,
12
or other notice or action relating to an alleged lack of safety
or efficacy of any product or product candidate, any alleged product
defect, or violation of any material Applicable Laws or Authorizations;
the Company is not aware of any facts that would cause the Company to
initiate any such notice or action; and the Company does not have any
knowledge or reason to believe that any Governmental Authority or third
party intends to initiate any such notice or action. The clinical
trials conducted by or on behalf of the Company that are described in
the Registration Statement, the U.S. Prospectus and the Canadian
Prospectus were and, if still pending, are being conducted in all
material respects in compliance with experimental protocols, procedures
and controls pursuant to accepted professional scientific standards and
applicable local, state and federal laws, rules, regulations and
guidances, including, but not limited to, the U.S. federal Food, Drug
and Cosmetic Act and implementing regulations at 21 C.F.R. Parts 50,
54, 56, 58 and 312. The descriptions of the studies, tests and
preclinical and clinical trials, including the related results and
regulatory status, contained in the Registration Statement, the U.S.
Prospectus and the Canadian Prospectus are accurate and complete in all
material respects. The Company is not aware of any studies, tests or
trials the results of which reasonably call into question in any
material respect the clinical trial results described or referred to in
the Registration Statement, the U.S. Prospectus and the Canadian
Prospectus, when viewed in the context in which such results are
described and the clinical state of development. Except as described in
the Registration Statement, the U.S. Prospectus and the Canadian
Prospectus, the Company has not received any notices, correspondence or
other communication from the U.S. FDA, an Institutional Review Board,
or other governmental agency or non-governmental authority requiring or
recommending the termination, suspension or material modification of
any clinical trials conducted by, or on behalf of, the Company or in
which the Company has participated.
(xviii) Compliance with Health Care Laws. Without limiting the
generality of clause (xvii) above and except as described in the
Registration Statement, the U.S. Prospectus and the Canadian
Prospectus, neither the Company or any subsidiary, nor the Company's or
any subsidiary's business operations is in violation of any Health Care
Laws, except where the failure to be in compliance would not reasonably
be expected to result in a Material Adverse Effect. For purposes of
this Agreement, "Health Care Laws" means: (i) the U.S. federal Food,
Drug and Cosmetic Act, and the regulations promulgated thereunder; (ii)
all U.S and Canadian federal, state and provincial fraud and abuse
laws, including, without limitation, the U.S. federal Anti-Kickback
Statute (42 U.S.C. Section 1320a-7b(b)), the U.S. Xxxxx Law (42 U.S.C.
Section 1395nn), the U.S. civil False Claims Act (31 U.S.C. Section
3729 et seq.), Sections 1320a-7 and 1320a-7a of Title 42 of the United
States Code and the regulations promulgated pursuant to such statutes;
(iii) the U.S. Health Insurance Portability and Accountability Act of
1996 and the regulations promulgated thereunder; (iv) the U.S.
Controlled Substances Act; (v) Titles XVIII and XIX of the U.S. Social
Security Act and the regulations promulgated thereunder; (vi) the U.S.
Medicare Prescription Drug, Improvement, and Modernization Act of 2003
and the regulations promulgated thereunder; (vii) quality, safety and
accreditation standards and requirements of all applicable state and
provincial laws or regulatory bodies; and (viii) any and all other
applicable health care laws, regulations, manual provisions, policies
and administrative guidance, each of (i) through (viii) as may be
amended from time to time.
13
(xix) Title to Property. The Company and its subsidiaries have
good and marketable title to all real property owned by the Company and
its subsidiaries and good title to all other properties owned by them
in each case, free and clear of all mortgages, pledges, liens, security
interests, claims, restrictions or encumbrances of any kind except such
as (A) are described in the U.S. Prospectus and the Canadian Prospectus
or (B) do not, singly or in the aggregate, materially affect the value
of such property and do not interfere with the use made and proposed to
be made of such property by the Company or any of its subsidiaries; and
all of the leases and subleases material to the business of the Company
and its subsidiaries, considered as one enterprise, and under which the
Company or any of its subsidiaries holds properties described in the
U.S. Prospectus and the Canadian Prospectus, are in full force and
effect, and neither the Company nor any subsidiary has any notice of
any material claim of any sort that has been asserted by anyone adverse
to the rights of the Company or any subsidiary under any of the leases
or subleases mentioned above, or affecting or questioning the rights of
the Company or such subsidiary to the continued possession of the
leased or subleased, premises under any such lease or sublease.
(xx) U.S. Investment Company Act. The Company is not, and upon
the issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the U.S.
Prospectus and the Canadian Prospectus will not be, an "investment
company" as such term is defined in the U.S. Investment Company Act of
1940, as amended (the "1940 Act").
(xxi) Environmental Laws. Except as described in the U.S.
Prospectus and the Canadian Prospectus and except as would not, singly
or in the aggregate, result in a Material Adverse Effect, (A) neither
the Company nor any of its subsidiaries is in violation of any federal,
provincial, state, local, municipal or foreign statute, law, rule,
regulation, ordinance, code, policy or rule of common law or civil law
or any judicial or administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment, relating
to pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata) or wildlife, including, without
limitation, laws and regulations relating to the release or threatened
release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) the Company and its subsidiaries have all permits,
authorizations and approvals required under any applicable
Environmental Laws and are in compliance with their requirements, (C)
there are no pending or, to the knowledge of the Company, threatened
administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Laws against
the Company or any of its subsidiaries and (D) there are no events or
circumstances that might reasonably be expected to form the basis of an
order for clean up or remediation, or an action, suit or proceeding by
any private party or governmental body or agency, against or affecting
the Company or any of its subsidiaries relating to Hazardous Materials
or any Environmental Laws.
14
(xxii) No Stabilization or Manipulation. Neither the Company
nor, to its knowledge, any of its officers, directors or affiliates,
has taken or will take, directly or indirectly, any action designed to,
or that might be reasonably expected to, cause or result in
stabilization or manipulation of the price of the Securities.
(xxiii) Registration Rights. There are no persons with
registration rights or other similar rights to have any securities of
the Company registered or qualified for distribution pursuant to the
Registration Statement, the Canadian Prospectus or otherwise registered
by the Company under the 1933 Act or qualified for distribution under
any Canadian provincial securities legislation that have not been
validly waived with respect to the filing of the Registration Statement
and the Canadian Prospectus, and the offering of the Securities.
(xxiv) Other Reports and Information. There are no reports or
information that in accordance with the requirements of the Reviewing
Authority or the Qualifying Authorities must be made publicly available
in connection with the offering of the Securities that have not been
made publicly available as required, and there are no documents
required to be filed with the Reviewing Authority or the Qualifying
Authorities in connection with the Canadian Prospectus that have not
been filed as required.
(xxv) Taxes. The Company and its subsidiaries have filed all
necessary United States, Canadian and foreign federal, state,
provincial and local income, payroll, franchise, property, ad valorem,
estimated and other tax returns and have paid all taxes shown as due
thereon or with respect to any of their properties or any transactions
to which they are a party in all material aspects, and there is no tax
deficiency that has been, or is likely to be, asserted against the
Company or any of its subsidiaries or any of their properties or assets
that would result in a Material Adverse Effect. There are no liens for
taxes (other than for taxes not yet due and payable) on any of the
assets or properties of the Company, other than liens that would not
result in a Material Adverse Effect. There are no pending or, to the
knowledge of the Company, threatened audits, investigations, disputes
or claims for or relating to taxes.
(xxvi) Employee Benefit Plans. Each employee benefit plan,
within the meaning of Section 3(3) of the U.S. Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), that is maintained,
administered or contributed to by the Company or any of its affiliates
for employees or former employees of the Company and its affiliates has
been maintained in compliance in all material respects with its terms
and the requirements of any applicable statutes, orders, rules and
regulations, including but not limited to ERISA and the Internal
Revenue Code of 1986, as amended (the "U.S. Code"); no prohibited
transaction, within the meaning of Section 406 of ERISA or Section 4975
of the U.S. Code, has occurred with respect to any such plan excluding
transactions effected pursuant to a statutory or administrative
exemption; and for each such plan that is subject to the funding rules
of Section 412 of the U.S. Code or Section 302 of ERISA, no
"accumulated funding deficiency" as defined in Section 412 of the U.S.
Code has been incurred, whether or not waived, and the fair market
value of the assets of each such plan (excluding for these purposes
accrued but unpaid contributions) exceeds the present value
15
of all benefits accrued under such plan determined using reasonable
actuarial assumptions.
(xxvii) Insurance. Except as disclosed in the U.S. Prospectus
and the Canadian Prospectus, the Company and its subsidiaries are
insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as are customary in the businesses
in which they engage; the Company has no reason to believe that it and
its subsidiaries will not be able to renew their existing insurance
coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its
business at a cost that would not result in a Material Adverse Effect.
(xxviii) Compliance with Laws. The Company and its
subsidiaries are in compliance with, and conduct their businesses in
conformity with, all applicable U.S. and Canadian federal, state,
provincial, local and foreign laws, rules and regulations and all
applicable ordinances, judgments, decrees, orders, units and
injunctions of any court or governmental agency or body, except where
the failure to so comply would not reasonably be expected to result in
a Material Adverse Effect.
(xxix) U.S. Foreign Corrupt Practices Act. Neither the Company
nor any of its subsidiaries nor, to the knowledge of the Company, any
director, officer, agent, employee or other person associated with or
acting on behalf of the Company or any of its subsidiaries has (i) used
any corporate funds for any unlawful contribution, gift, entertainment
or other unlawful expense 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; or (iv) made any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment.
(xxx) Internal Accounting Controls. The Company and each of
its subsidiaries maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (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 existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(xxxi) Disclosure Controls and Procedures. The Company has
established and maintains disclosure controls and procedures (as such
term is defined in Rule 13a-15(e) under the Exchange Act), which (i)
are designed to ensure that material information relating to the
Company, including its consolidated subsidiary, is made known to the
Company's principal executive officer and its principal financial
officer by others within those entities, particularly during the
periods in which the periodic reports required under the Exchange Act
are being prepared and (ii) are effective in all material respects to
perform the functions for which they were established.
16
(xxxii) No Broker. Other than as contemplated by this
Agreement, there is no broker, finder or other party that is entitled
to receive from the Company any brokerage or finder's fee or other fee
or commission as a result of any of the transactions contemplated by
this Agreement.
(xxxiii) Principal Stockholders. To the knowledge of the
Company, after due inquiry, except as disclosed in the U.S. Prospectus
and the Canadian Prospectus, none of the directors or officers or
shareholders of the Company listed under "Principal Stockholders" in
the U.S. Prospectus and the Canadian Prospectus is or has ever been
subject to prior criminal or bankruptcy proceedings(within the
preceding ten years) in the United States, Canada or elsewhere.
(xxxiv) Non-Arm's Length Transactions. To the knowledge of the
Company, after due inquiry, except as disclosed in the U.S. Prospectus
and the Canadian Prospectus, neither the Company nor any subsidiary is
a party to any contract, agreement or understanding with any officer,
director, employee or any other person not dealing at arm's length with
the Company or any subsidiary which is required to be disclosed by the
1933 Act or applicable securities legislation of the Province of
British Columbia or the Qualifying Provinces.
(xxxv) U.S. Xxxxxxxx-Xxxxx Act. There is and has been no
failure on the part of the Company or any of the Company's directors or
officers, in their capacities as such, to comply with any applicable
provision of the U.S. Xxxxxxxx-Xxxxx Act and the rules and regulations
promulgated in connection therewith, including without limitation
Section 402 related to loans.
(xxxvi) Statistical and Market Data. The statistical and
market related data and the report, study and clinical trial derived
data included in the U.S. Prospectus and the Canadian Prospectus are
based on or derived from sources the Company believes are reliable and
accurate and statements made which are based on the Company's belief
are statements which the Company believes in good faith to be accurate.
(xxxvii) French Language Documents. The French language
version of each of the Canadian Preliminary Prospectus, the Base PREP
Prospectus and the Supplemented PREP Prospectus, together with each
document incorporated therein by reference, including the financial
statements and other financial data contained therein, is in all
material respects a complete and proper translation of the English
language versions thereof.
(xxxviii) Not Foreign Property. The Company's Common Shares
are not "foreign property" for purposes of the Income Tax Act (Canada).
(xxxix) Office. The Company maintains an office in Canada.
(xl) Business Purpose. The purpose of the business of the
Company is not to derive income from, or to derive profits from the
disposition of shares, interests in trusts, indebtedness, annuities,
commodities, commodities futures, currency, real property, interests in
funds or entities other than corporations, partnerships and trusts,
interests or
17
options in respect of property described above or any combination of properties
described above.
(xli) Employees. The Company employs in Canada more than five
employees full time in the active conduct of the business of the
Company.
(xlii) Registrar & Transfer Agent. Computershare Investor
Services Inc. has been duly appointed as the registrar and transfer
agent for the Common Shares in Canada at its offices in Vancouver,
British Columbia and Xxxxxxx, Xxxxxxx, and Computershare Trust Company,
Inc., has been duly appointed as the registrar and transfer agent for
the Common Shares in the United States at its offices in Golden,
Colorado.
(xliii) Form of Common Shares. The definitive form of
certificate representing the Common Shares has been duly approved and
adopted by the Company and conforms to the requirements, if any, of the
British Columbia Business Corporations Act, the Toronto Stock Exchange
(the "TSX"), and the governing documents of the Company.
(xliv) Stamp Tax. No transfer taxes, stamp duty, registration
or documentary taxes, duties or similar charges are payable under the
laws of Canada or any political subdivision thereof, required to be
paid in connection with the creation, issuance, sale and delivery to
the Underwriters of the Securities or the authorization, execution,
delivery and performance of this Agreement or the resale of Securities
by an Underwriter to U.S. or Canadian residents.
(b) Officer's Certificates. Any certificate signed by any officer of
the Company delivered to the Representatives or to counsel for the Underwriters
and the Sub-Underwriter shall be deemed a representation and warranty by the
Company to each Underwriter and the Sub-underwriter as to the matters covered
thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell Initial Securities to the Underwriters,
and each Underwriter, severally and not jointly, agrees to purchase from the
Company at the price per share set forth in Schedule B, the number of Initial
Securities set forth in Schedule A opposite the name of such Underwriter, plus
any additional number of Initial Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company hereby grants an option to the Underwriters, severally
and not jointly, to purchase up to an additional Common Shares at the
price per share set forth in Schedule B, less an amount per share equal to any
dividends or distributions declared by the Company and payable on the Initial
Securities but not payable on the Option Securities. The option hereby granted
will expire 30 days after the date hereof and may be exercised in whole or in
part from time to time only for the purpose of covering over-allotments which
may be made in connection with the offering and distribution of the Initial
Securities upon notice by the Representatives to the Company setting forth the
number
18
of Option Securities as to which the several Underwriters are then
exercising the option and the time and date of payment and delivery for such
Option Securities. Any such time and date of delivery (a "Date of Delivery")
shall be determined by the Representatives, but shall not be later than seven
full business days after the exercise of said option, nor in any event prior to
the Closing Time, as hereinafter defined. If the option is exercised as to all
or any portion of the Option Securities, each of the Underwriters, acting
severally and not jointly, will purchase that proportion of the total number of
Option Securities then being purchased which the number of Initial Securities
set forth in Schedule A opposite the name of such Underwriter bears to the total
number of Initial Securities, subject in each case to such adjustments as the
Representatives in their discretion shall make to eliminate any sales or
purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Xxxxxx
& Xxxxxxx LLP, 000 Xxxx Xxxxxx Xxxxx, 00xx Xxxxx, Xxxxx Xxxx, Xxxxxxxxxx, or at
such other place as shall be agreed upon by the Representatives and the Company,
at 8:30 A.M. (Eastern time) on the third (fourth, if the pricing occurs after
4:30 P.M. (Eastern Time) on any given day) business day after the date hereof
(unless postponed in accordance with the provisions of Section 10), or such
other time not later than ten business days after such date as shall be agreed
upon by the Representatives and the Company (such time and date of payment and
delivery being herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representatives
and the Company, on each Date of Delivery as specified in the notice from the
Representatives to the Company.
Payment shall be made to the Company by wire transfer of immediately
available (same day) funds to the bank account designated by the Company not
less than 24 hours prior to the Closing Time or relevant Date of Delivery,
against delivery to the Representatives for the respective accounts of the
Underwriters of certificates for the Securities to be purchased by them. It is
understood that each Underwriter has authorized Xxxxxxx Xxxxx, for its account,
to accept delivery of, receipt for, and make payment of the purchase price for,
the Initial Securities and the Option Securities, if any, which it has agreed to
purchase. Payment to the Company with respect to Securities the Underwriters
have sold or expect to sell in the United States and any other jurisdiction
outside Canada shall be made in U.S. dollars and payment to the Company with
respect to Securities the Underwriters have sold or expect to sell in Canada
shall be made in Canadian dollars, as set forth in Schedule B hereto. Xxxxxxx
Xxxxx, individually and not as representative of the Underwriters, may (but
shall not be obligated to) make payment of the purchase price for the Initial
Securities or the Option Securities, if any, to be purchased by any Underwriter
whose funds have not been received by the Closing Time, or the relevant Date of
Delivery, as the case may be, but such payment shall not relieve such
Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial
Securities and the Option Securities, if any, shall be in such denominations and
registered in such names as the Representatives may request in writing at least
two full business days before the Closing Time or the relevant Date of Delivery,
as the case may be. The Initial Securities and the Option
19
Securities, if any, will be made available for examination and packaging by the
Representatives in The City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
(e) Sub-underwriter Notification. The Sub-underwriter shall notify
Xxxxxxx Xxxxx at least 48 hours prior to the Closing Time (or Time of Delivery,
as applicable) of the number of the Securities to be sold by the Sub-underwriter
in the Province of British Columbia and the Qualifying Provinces and, subject to
the completion of the purchase of the Securities by Xxxxxxx Xxxxx hereunder,
Xxxxxxx Xxxxx agrees to sell to the Sub-underwriter, and the Sub-underwriter
agrees to purchase from Xxxxxxx Xxxxx, at a price equal to the purchase price
set forth in Schedule B hereto or at such purchase price less an amount to be
mutually agreed upon by the Sub-underwriter and Xxxxxxx Xxxxx, which amount
shall not be greater than the underwriting commission as set forth in Schedule B
hereto, such number of the Securities at the Closing Time (or Time of Delivery
as applicable).
SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter and the Sub-underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements of Rule 430A
or Rule 434, as applicable, and the PREP Procedures; and will notify the
Underwriters and the Sub-underwriter promptly, and confirm the notice in
writing, (i) when any post-effective amendment to the Registration Statement
shall have been filed with the Commission or shall have become effective, and
when any supplement to the U.S. Prospectus or the Canadian Prospectus or any
amended U.S. Prospectus or Canadian Prospectus shall have been filed, (ii) of
the receipt of any comments from the Commission, the Reviewing Authority or any
Qualifying Authority, (iii) of any request by the Commission to amend the
Registration Statement or to amend or supplement the U.S. Prospectus or for
additional information or of any request by the Reviewing Authority to amend or
supplement the Base PREP Prospectus or the Canadian Prospectus or for additional
information, (iv) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus, or of the suspension of the
qualification of the Securities for offering or sale in any jurisdiction, or of
the institution or, to the knowledge of the Company, threatening of any
proceedings for any such purpose, and (v) of the issuance by the Reviewing
Authority, any Qualifying Authority or any stock exchange of any order having
the effect of ceasing or suspending the distribution of the Securities or the
trading in the securities of the Company, or of the institution or, to the
knowledge of the Company, threatening of any proceedings for any such purpose.
The Company will promptly effect the filings necessary pursuant to Rule 424(b)
and will take such steps as it deems necessary to ascertain promptly whether the
form of prospectus transmitted for filing under Rule 424(b) was received for
filing by the Commission and, in the event that it was not, it will promptly
file such prospectus. The Company will use every reasonable effort to prevent
the issuance of any such stop order or of any order preventing or suspending
such use or such order ceasing or suspending the distribution of the Securities
or the trading in the Securities of the Company and, if any such order is
issued, to obtain the lifting thereof at the earliest possible time.
20
(b) PREP Procedures. The Company will take such steps as it deems
necessary to ascertain promptly whether the form of Supplemented PREP Prospectus
was received for filing by the Reviewing Authority and the Qualifying
Authorities and, in the event that any such prospectuses were not received for
filing, it will promptly file any such prospectus not then received for filing.
(c) Filing of Amendments. The Company will not at any time file or make
any amendment to the Registration Statement, any amendment or supplement to the
Base PREP Prospectus, or any amendment or supplement to any prospectus included
in the Registration Statement at the time it becomes effective, the U.S.
Supplemented Prospectus or the Supplemented PREP Prospectus, of which the
Representatives shall not have previously been advised and furnished a copy a
reasonable time prior to such filing or amendment or to which the
Representatives or counsel to the Representatives shall have objected.
(d) Delivery of Filed Documents. The Company has furnished or will
deliver to each of the Representatives, the Sub-underwriter and counsel to the
Representatives, without charge, a copy of the Canadian Preliminary Prospectus,
the Base PREP Prospectus, the Canadian Prospectus, and any amendments or
supplements thereto, approved, signed and certified as required by the
securities laws of the Province of British Columbia and the Qualifying Provinces
and signed copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith) and signed copies of all
consents and certificates of experts. The copies of the Registration Statement
and each amendment thereto furnished to the Underwriters will be identical to
the electronically transmitted copies thereof filed with the Commission pursuant
to XXXXX, except to the extent permitted by Regulation S-T.
(e) Delivery of Prospectuses. The Company has delivered to each
Underwriter and the Sub-underwriter, without charge, as many copies of each U.S.
Preliminary Prospectus and Canadian Preliminary Prospectus as such Underwriter
and the Sub-underwriter have reasonably requested, and the Company hereby
consents to the use of such copies for the purposes permitted by the 1933 Act
and applicable Canadian Securities Laws. The Company will deliver to each
Underwriter and the Sub-underwriter, without charge, during the period when the
U.S. Prospectus is required to be delivered under the 1933 Act or the 1934 Act
and during the period when the Canadian Prospectus is required to be delivered
under applicable Canadian Securities Laws, but no later than the first business
day after the date hereof, such number of copies of the U.S. Prospectus and
Canadian Prospectus, respectively (each as supplemented or amended) as such
Underwriter and the Sub-underwriter may reasonably request. The U.S. Prospectus
and any amendments or supplements thereto furnished to the Underwriters will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(f) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations and the Canadian Securities Laws
so as to permit the completion of the distribution of the securities as
contemplated in this Agreement and in the U.S. Prospectus and the Canadian
Prospectus. If at any time when a prospectus is required by the 1933 Act or
applicable Canadian Securities Laws to be delivered in connection with sales of
the Securities, any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the Underwriters or the
Sub-underwriter or for the Company, acting
21
reasonably, to amend the Registration Statement or amend or supplement the U.S.
Prospectus or the Canadian Prospectus in order that the U.S. Prospectus or the
Canadian Prospectus will not include any untrue statements of a material fact or
omit to state a material fact necessary in order to make the statements therein
not misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of such
counsel, acting reasonably, at any such time to amend the Registration Statement
or amend or supplement the U.S. Prospectus or the Canadian Prospectus in order
to comply with the requirements of the 1933 Act or the 1933 Act Regulations or
the Canadian Securities Laws, the Company will promptly prepare and file with
the Commission and with the Reviewing Authority and the Qualifying Authorities,
subject to Section 3(b), such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or the
U.S. Prospectus or the Canadian Prospectus comply with such requirements, and
the Company will furnish to the Underwriters and the Sub-underwriter such number
of copies of such amendment or supplement as the Underwriters and the
Sub-underwriter may reasonably request.
(g) "Blue Sky" Qualifications. The Company will use its best efforts,
in cooperation with the Underwriters, to qualify the Securities for offering and
sale under the applicable securities laws of such states and other jurisdictions
(domestic or foreign) as the Representatives may designate and to maintain such
qualifications in effect for a period of not less than one year from the later
of the effective date of the Registration Statement and any Rule 462(b)
Registration Statement; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Securities have been so qualified, the Company will
file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not less
than one year from the later of the effective date of the Registration Statement
and any Rule 462(b) Registration Statement.
(h) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act and the regulations thereunder.
(i) Use of Proceeds. The Company will use the net proceeds received by
it from the sale of the Securities in the manner specified in the U.S.
Prospectus and the Canadian Prospectus under "Use of Proceeds".
(j) Restriction on Sale of Securities. During a period of 180 days from
the date of the U.S. Prospectus and the Canadian Prospectus, the Company will
not, without the prior written consent of Xxxxxxx Xxxxx, (i) directly or
indirectly, offer, pledge, sell, contract to sell, sell any option or contract
to purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, lend or otherwise transfer or dispose of any Common Shares
or any securities convertible into or exercisable or exchangeable for Common
Shares or file any registration statement under the 1933 Act with respect to any
of the foregoing or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Common Shares, whether any such
22
swap or transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Shares or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to (A) the Securities to be sold hereunder,
(B) any Common Shares issued, or options to purchase Common Shares granted,
pursuant to existing employee plans of the Company referred to in the U.S.
Prospectus and the Canadian Prospectus, or (C) any Common Shares issued by the
Company upon the exercise of an option or warrant or the conversion of a
security outstanding on the date hereof and referred to in the U.S. Prospectus
and the Canadian Prospectus. Notwithstanding the foregoing, if (x) during the
last 17 days of the 180-day restricted period the Company issues an earnings
release or material news or a material event relating to the Company occurs, or
(y) prior to the expiration of the 180-day restricted period, the Company
announces that it will release earnings results during the 16-day period
beginning on the last day of the 180-day period, the restrictions imposed in
this clause shall continue to apply until the expiration of the 18-day period
beginning on the issuance of the earnings release or the occurrence of the
material news or material event.
(k) Listing. The Company has obtained the conditional approval of the
TSX for the listing of the Securities on the TSX and will use its best efforts
to satisfy any requirements of the TSX to the listing thereof within the time
specified in such approval. The Company has obtained the approval (subject to
notice of issuance) of The NASDAQ Stock Market to quote the Securities and will
use its best efforts to effect, and commercially reasonable efforts to maintain,
the quotation of the Securities on the NASDAQ National Market.
(l) Reporting Requirements. The Company, during the period when the
U.S. Prospectus or the Canadian Prospectus is required to be delivered under the
1933 Act or under applicable Canadian Securities Laws, will file all documents
required to be filed by the Company with (i) the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the rules and
regulations of the Commission thereunder, and (ii) with the Province of British
Columbia and the Qualifying Provinces in accordance with applicable Canadian
Securities Laws.
(m) Compliance with NASD Rules. The Company hereby agrees that it will
ensure that the Reserved Securities will be restricted as required by the U.S.
National Association of Securities Dealers, Inc. (the "NASD") or the NASD rules
from sale, transfer, assignment, pledge or hypothecation for a period of three
months following the date of this Agreement. The Underwriters will notify the
Company as to which persons will need to be so restricted. At the request of the
Underwriters, the Company will direct the transfer agent to place a stop
transfer restriction upon such securities for such period of time. Should the
Company release, or seek to release, from such restrictions any of the Reserved
Securities, the Company agrees to reimburse the Underwriters for any reasonable
expenses (including, without limitation, legal expenses) they incur in
connection with such release.
(n) Controls and Procedures. During a period of at least one year from
the date of this Agreement, the Company and its subsidiaries will maintain such
disclosure controls and procedures (as such term is defined in Rule 13a-15(e)
under the Exchange Act), which (i) are designed to ensure that material
information relating to the Company, including its consolidated subsidiary, is
made known to the Company's principal executive officer and its principal
financial officer by others within those entities, particularly during the
periods in which the
23
periodic reports required under the Exchange Act are being prepared and (ii) are
effective in all material respects to perform the functions for which they were
established.
(o) U.S. Xxxxxxxx-Xxxxx Act. During a period of at least one year
from the date of this Agreement, the Company and its subsidiaries will comply
with all effective applicable provisions of the U.S. Xxxxxxxx-Xxxxx Act.
(p) Translation Opinions. The Company shall cause Xxxxx Xxxxxx &
Harcourt LLP to deliver to the Underwriters and the Sub-underwriter opinions,
dated the date of the filing of the French language versions of each of the Base
PREP Prospectus and the Supplemented PREP Prospectus, to the effect that the
French language version of each such prospectus (other than the financial
statements and other financial data contained therein or omitted therefrom), is
in all material respects a complete and proper translation of the English
language versions thereof. The Company shall cause Xxxxx Xxxxxx & Harcourt LLP
to deliver to the Underwriters and the Sub-underwriter similar opinions as to
the French language translation of any information contained in any amendments
or supplements to the Base PREP Prospectus or the Supplemented PREP Prospectus,
in form and substance satisfactory to the Underwriters and the Sub-underwriter,
prior to the filing thereof with the Reviewing Authority.
(q) Translation Opinions--Financial Statements. The Company shall
cause Ernst & Young LLP to deliver to the Underwriters and the Sub-underwriter
opinions, dated the date of the filing of the French language versions of each
of the Base PREP Prospectus and the Supplemented PREP Prospectus, to the effect
that the financial statements and other financial data contained in the French
language version of each such prospectus is in all material respects a complete
and proper translation of the English language versions thereof. The Company
shall cause Ernst & Young LLP to deliver to the Underwriters and the
Sub-underwriter similar opinions as to the French language translation of any
information contained in any amendments or supplements to the Base PREP
Prospectus or the Supplemented PREP Prospectus, in form and substance
satisfactory to the Underwriters and the Sub-underwriter, prior to the filing
thereof with the Reviewing Authority.
(r) Lock-Up Agreements. The Company will use its best efforts to
ensure that those persons listed in Schedule C hereto comply with the conditions
contained in the agreements signed by such persons substantially in the form of
Exhibit F hereto.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) and of each amendment thereto, the U.S
Preliminary Prospectuses, the Canadian Preliminary Prospectuses, the U.S.
Prospectus, the Base PREP Prospectus, the Canadian Prospectus and any amendments
or supplements thereto, and the cost of furnishing copies thereof to the
Underwriters and the Sub-underwriter, (ii) the preparation, printing and
delivery to the Underwriters and the Sub-underwriter of this Agreement, any
Agreement among Underwriters and such other documents as may be required in
connection with the offering, purchase, sale, issuance or delivery of the
Securities, (iii) the preparation, issuance and delivery of the certificates for
the Securities to the
24
Underwriters and the Sub-underwriter including any stock or other transfer taxes
and any stamp or other duties payable upon the sale, issuance or delivery of the
Securities to the Underwriters and the Sub-underwriter, (iv) the fees and
disbursements of the Company's counsel, accountants and other advisors, (v) the
qualification of the Securities under applicable securities laws in accordance
with the provisions of Section 3(g) hereof, including filing fees and the
reasonable fees and disbursements of counsel for the Underwriters in connection
therewith and in connection with the preparation of the Blue Sky Survey and any
supplement thereto, (vi) the printing and delivery to the Underwriters and the
Sub-underwriter of commercial copies of each preliminary prospectus, and of the
U.S. Prospectus and the Canadian Prospectus and any amendments or supplements
thereto, (vii) the preparation, printing and delivery to the Underwriters of
commercial copies of the Blue Sky Survey and any supplement thereto, (viii) the
fees and expenses of any transfer agent or registrar for the Securities, (ix)
the filing fees incident to, and the reasonable fees and disbursements of
counsel to the Underwriters and the Sub-underwriter in connection with, the
review by the National Association of Securities Dealers, Inc. (the "NASD") of
the terms of the sale of the Securities, (x) the fees and expenses incurred in
connection with the listing of the Securities on the TSX and inclusion of the
Securities in the NASDAQ National Market and (xi) all costs and expenses of the
Underwriters, including the fees and disbursements of counsel for the
Underwriters, in connection with matters related to the Reserved Securities
which are designated by the Company for sale to Invitees. It is understood,
however, that except as provided in this Section 4(a) and Section 4(b) below,
the Underwriters and the Sub-underwriter will pay all of their own costs and
expenses, including (without limitation) the fees of their counsel.
(b) Termination of Agreement. If this Agreement is terminated by
the Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the Underwriters and the
Sub-underwriter for all of their out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the Underwriters and the
Sub-underwriter.
SECTION 5. Conditions of Underwriters' Obligations. The
obligations of the several Underwriters hereunder are subject to the accuracy of
the representations and warranties of the Company contained in Section 1 hereof
or in certificates of any officer of the Company or any subsidiary of the
Company delivered pursuant to the provisions hereof, to the performance by the
Company of their covenants and other obligations hereunder, and to the following
further conditions:
(a) Effectiveness of Registration Statement and Receipt of Mutual
Reliance Review System Decision Document. The Registration Statement, including
any Rule 462(b) Registration Statement, has become effective and the Base PREP
Prospectus has been filed with the Reviewing Authority and with the Qualifying
Authorities and a final Mutual Reliance Review System Decision Document obtained
therefor; and at the Closing Time no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, no order having
the effect of ceasing or suspending the distribution of the Securities or the
trading in the securities of the Company or any other securities of the Company
shall have been issued or proceedings therefor initiated or threatened by any
securities commission, securities regulatory authority or stock exchange in the
United States or Canada, and any request on the part of the Commission, the
25
Reviewing Authority or any Qualifying Authority for additional information shall
have been complied with to the reasonable satisfaction of counsel to the
Underwriters and the Sub-underwriter. A U.S. Prospectus containing the Rule 430A
Information and a Supplemented PREP Prospectus containing the PREP Information
shall have been filed, respectively, with the Commission in accordance with Rule
424(b) (or a post-effective amendment providing such information shall have been
filed and declared effective in accordance with the requirements of Rule 430A)
and with the Reviewing Authority and with the Qualifying Authorities in
accordance with the PREP Procedures.
(b) Opinion of Canadian Counsel for Company. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Farris, Vaughan, Xxxxx & Xxxxxx, Canadian counsel for the Company, in
form and substance satisfactory to counsel for the Underwriters and the
Sub-underwriter, together with signed or reproduced copies of such opinion for
each of the Underwriters and the Sub-underwriter to the effect set forth in
Exhibit A hereto. In giving such opinion such counsel may rely, as to all
matters governed by the laws of jurisdictions other than the Province of British
Columbia and the federal laws of Canada applicable therein, upon the opinions of
counsel satisfactory to the Representatives.
(c) Opinion of U.S. Counsel for Company. At Closing Time, the
Representatives shall have received the favorable opinion dated as of the
Closing Time, of Xxxxxx Godward LLP, United States counsel for the Company,
together with signed or reproduced copies of such opinion for each of the other
Underwriters and the Sub-underwriter, in form and substance satisfactory to
counsel for the Underwriters and the Sub-underwriter to the effect set forth in
Exhibit B hereto.
(d) Opinion of Swiss Counsel for Company. At Closing Time, the
Representatives shall have received the favorable opinion dated as of the
Closing Time, of Pestalozzi Lachenal Xxxxx, Swiss counsel for the Company,
together with signed or reproduced copies of such opinion for each of the other
Underwriters and the Sub-underwriter, in form and substance satisfactory to
counsel for the Underwriters and the Sub-underwriter to the effect set forth in
Exhibit C hereto.
(e) Opinion of Special Regulatory Counsel for Company. At Closing
Time, the Representatives shall have received the favorable opinion dated as of
the Closing Time, of Arent Fox PLLC, special regulatory counsel for the Company,
together with signed or reproduced copies of such opinion for each of the other
Underwriters and the Sub-underwriter, in form and substance satisfactory to
counsel for the Underwriters and the Sub-underwriter to the effect set forth in
Exhibit D hereto.
(f) Opinion of Special Intellectual Property Counsel for Company.
At Closing Time, the Representatives shall have received the favorable opinion
dated as of the Closing Time, of Xxxxxxxx & Xxxxxxxx LLP, special intellectual
property counsel for the Company, together with signed or reproduced copies of
such opinion for each of the other Underwriters and the Sub-underwriter, in form
and substance satisfactory to counsel for the Underwriters and the
Sub-underwriter to the effect set forth in Exhibit E hereto.
26
(g) Opinion of U.S. Counsel for Underwriters and the
Sub-underwriter. At Closing Time, the Representatives shall have received the
favorable opinion, dated as of Closing Time, of Xxxxxx & Xxxxxxx LLP, United
States counsel for the Underwriters and the Sub-underwriter, together with
signed or reproduced copies of such opinion for each of the other Underwriters,
in form and substance satisfactory to the Representatives. In giving such
opinion such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York and the federal law of
the United States, upon the opinions of counsel satisfactory to the
Representatives. Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company and its subsidiaries and certificates of
public officials.
(h) Opinion of Canadian Counsel for Underwriters and the
Sub-underwriter. At Closing Time, the Representatives shall have received the
favorable opinion, dated as of Closing Time, of Torys LLP, Canadian counsel for
the Underwriters and the Sub-underwriter, together with signed or reproduced
copies of such opinion for each of the other Underwriters, in form and substance
satisfactory to the Representatives. In giving such opinion such counsel may
rely, as to all matters governed by the laws of jurisdictions other than the
laws of the Province of Ontario and the federal laws of Canada applicable
therein upon the opinions of counsel satisfactory to the Representatives. Such
counsel may also state that, insofar as such opinion involves factual matters,
they have relied, to the extent they deem proper, upon certificates of officers
of the Company and its subsidiaries and certificates of public officials.
(i) Officers' Certificate. At Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the U.S. Prospectus and the Canadian Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, and the Representatives shall have received a
certificate of each of the Chief Executive Officer of the Company and the Chief
Financial Officer of the Company, dated as of Closing Time, to the effect that
(i) there has been no such material adverse change, (ii) the representations and
warranties in Section 1(a) hereof are true and correct with the same force and
effect as though expressly made at and as of Closing Time, (iii) the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to Closing Time, (iv) no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been instituted or are pending or, to the
knowledge of the Company, are contemplated by the Commission, and (v) no order
having the effect of ceasing or suspending the distribution of the Securities
shall have been issued and no proceedings for that purpose have been instituted
or are pending or, to the knowledge of the Company, are contemplated by any
securities commission or securities regulatory authority in Canada.
(j) Accountant's Comfort Letter. At the time of the execution of
this Agreement, the Representatives shall have received from Ernst & Young LLP,
a letter dated such date, in form and substance satisfactory to the
Representatives together with signed or reproduced copies of such letter for
each of the other Underwriters and the Sub-underwriter containing statements and
information of the type ordinarily included in accountants' "comfort letters" to
U.S. underwriters with respect to the financial statements and certain financial
information contained in the U.S. Prospectus and the Canadian Prospectus.
27
(k) Bring-down Comfort Letter. At Closing Time, the
Representatives shall have received from Ernst & Young LLP, a letter, dated as
of Closing Time, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (j) of this Section, except that the
"specified date" referred to shall be a date not more than three business days
prior to Closing Time.
(l) No Objection. The NASD shall have confirmed that it has not
raised any objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.
(m) Lock-up Agreements. At the date of this Agreement, the
Representatives shall have received an agreement substantially in the form set
forth in Exhibit F hereto, signed by signed by all directors and officers of the
Company and all holders of the Company's equity securities or other instruments
convertible into equity securities.
(n) Approval of Listing. At Closing Time, the Securities shall
have been approved for inclusion in the NASDAQ National Market, subject only to
official notice of issuance. The TSX shall have approved the listing and posting
for trading of the Securities immediately following Closing Time, subject only
to official notice of issuance.
(o) Conditions to Purchase of Option Securities. In the event that
the Underwriters and the Sub-underwriter exercise their option provided in
Section 2(b) hereof to purchase all or any portion of the Option Securities, the
representations and warranties of the Company contained herein and the
statements in any certificates furnished by the Company hereunder shall be true
and correct as of each Date of Delivery and, at the relevant Date of Delivery,
the Representatives shall have received:
(i) Opinion of Canadian Counsel for Company. The
favorable opinion of Farris, Vaughan, Xxxxx & Xxxxxx, Canadian counsel
for the Company, in form and substance satisfactory to counsel for the
Underwriters and the Sub-underwriter, dated such Date of Delivery,
relating to the Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the opinion required by
Section 5(b) hereof.
(ii) Opinion of U.S. Counsel for Company. The favorable
opinion of Xxxxxx Godward LLP, U.S. counsel for the Company, in form
and substance satisfactory to counsel for the Underwriters and the
Sub-underwriter, dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to
the same effect as the opinion required by Section 5(c) hereof.
(iii) Opinion of Swiss Counsel for Company. The favorable
opinion of Pestalozzi Lachenal Xxxxx, Swiss counsel for the Company, in
form and substance satisfactory to counsel for the Underwriters and the
Sub-underwriter, dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to
the same effect as the opinion required by Section 5(d) hereof.
(iv) Opinion of Special Regulatory Counsel for Company.
The favorable opinion of Arent Fox PLLC, special regulatory counsel for
the Company, in form and substance satisfactory to counsel for the
Underwriters and the Sub-underwriter, dated such Date of
28
Delivery, relating to the Option Securities to be purchased on such
Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(e) hereof.
(v) Opinion of Special Intellectual Property Counsel for
Company. The favorable opinion of Xxxxxxxx & Xxxxxxxx LLP, special
intellectual property counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters and the Sub-underwriter,
dated such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(f) hereof.
(vi) Opinion of U.S. Counsel for Underwriters and the
Sub-underwriter. The favorable opinion of Xxxxxx & Xxxxxxx LLP, U.S.
counsel for the Underwriters and the Sub-underwriter, dated such Date
of Delivery, relating to the Option Securities to be purchased on such
Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(g) hereof.
(vii) Opinion of Canadian Counsel for Underwriters and the
Sub-underwriter. The favorable opinion of Torys LLP, Canadian counsel
for the Underwriters and the Sub-underwriter, dated such Date of
Delivery, relating to the Option Securities to be purchased on such
Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(h) hereof.
(viii) Officer's Certificate. A certificate, dated such Date
of Delivery, of the Chief Executive Officer of the Company and the
Chief Financial Officer of the Company confirming that the certificate
delivered at Closing Time pursuant to Section 5(i) hereof remains true
and correct as of such Date of Delivery.
(ix) Bring-down Comfort Letter. A letter from Ernst &
Young LLP, in form and substance satisfactory to the Representatives
and dated such Date of Delivery, to the effect that they reaffirm the
statements made in the letter furnished to the Representatives pursuant
to Section 5(j) hereof, except that the "specified date" in the letter
furnished pursuant to this paragraph shall be a date not more than
three days prior to such Date of Delivery.
(p) Additional Documents. At Closing Time, and at each Date of
Delivery, counsel for the Underwriters and the Sub-underwriter shall have been
furnished with such documents, including certificates as to tax matters, and
opinions as they may require for the purpose of enabling them to pass upon the
issuance and sale of the Securities as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the Securities
as herein contemplated shall be satisfactory in form and substance to the
Representatives and counsel for the Underwriters and the Sub-underwriter.
(q) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or in the case of any condition to the purchase of Option Securities
on a Date of Delivery which is after the Closing Time, the obligations of the
several Underwriters and the Sub-underwriter to purchase the
29
relevant Securities, may be terminated by the Representatives by notice to the
Company at any time at or prior to Closing Time or such Date of Delivery, as the
case may be, and such termination shall be without liability of any party to any
other party except as provided in Section 4 and except that Sections 1, 6, 7 and
8 shall survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters and the Sub-underwriter. The
Company agrees to indemnify and hold harmless each Underwriter and the
Sub-underwriter and each person, if any, who controls any Underwriter or any
Sub-underwriter within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement (or any amendment thereto), including the
Rule 430A Information, or the omission or alleged omission therefrom of
a material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included in
any preliminary prospectus or the U.S. Prospectus, the Canadian
Prospectus including the PREP Information (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
or arising out of any untrue statement or alleged untrue statement of a
material fact included in any materials or information provided to
investors by, or with the approval of, the Company in connection with
the marketing of the offering of the Common Stock (the "Marketing
Materials"), including any roadshow or investor presentations made to
investors by the Company (whether in person or electronically) or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading;
(ii) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(d) below) any such settlement is effected
with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Xxxxxxx
Xxxxx), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
30
provided, however, that this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through Xxxxxxx Xxxxx expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the PREP Information, or any preliminary prospectus, the U.S.
Prospectus, the Canadian Prospectus (or any amendment or supplement thereto),
and provided further that this indemnity agreement with respect to any untrue
statement contained in or omission from any U.S. Preliminary Prospectus or
Canadian Preliminary Prospectus, shall not inure to the benefit of any
Underwriter (or any affiliates of any Underwriter or any person controlling an
Underwriter) from whom the person asserting any such loss, liability, claim,
damage or expense purchased any of the Securities which are the subject thereof
if such person was not sent or given a copy of the U.S. Prospectus or Canadian
Prospectus, respectively at or prior to the written confirmation of the sale of
such Securities to such person and the untrue statement contained in or omission
from such U.S. Preliminary Prospectus or Canadian Preliminary Prospectus was
corrected in the U.S. Prospectus or Canadian Prospectus, respectively, unless
the failure to deliver a U.S. Prospectus or Canadian Prospectus, respectively is
the result of noncompliance by the Company with Section 3(d) hereof. This
indemnity will be in addition to any liability that the Company might otherwise
have.
(b) Indemnification of Company, Directors and Officers. Each
Underwriter and the Sub-underwriter severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who signed the
Registration Statement or the Canadian Prospectus and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act against any and all loss, liability, claim, damage and
expense described in the indemnity contained in subsection (a) of this Section,
as incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), including the Rule 430A Information, or any preliminary
prospectus or the U.S. Prospectus, the Canadian Prospectus, including the PREP
Information (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
or the Sub-underwriter through Xxxxxxx Xxxxx expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the U.S. Prospectus, the Canadian Prospectus including the PREP Information
(or any amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this
indemnity agreement. In the case of parties indemnified pursuant to Section 6(a)
above, counsel to the indemnified parties shall be selected by Xxxxxxx Xxxxx,
and, in the case of parties indemnified pursuant to Section 6(b) above, counsel
to the indemnified parties shall be selected by the Company. An indemnifying
party may participate at its own expense in the defense of any such action;
provided, however, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the
31
indemnifying parties be liable for fees and expenses of more than one counsel
(in addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution could
be sought under this Section 6 or Section 7 hereof (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of each
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(ii) or settlement of any claim in connection
with any violation referred to in Section 6(e) effected without its written
consent if (i) such settlement is entered into more than 45 days after receipt
by such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall have received notice of the terms of such settlement at least 30
days prior to such settlement being entered into and (iii) such indemnifying
party shall not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement.
(e) Indemnification for Reserved Securities. In connection with
the offer and sale of the Reserved Securities, the Company agrees to indemnify
and hold harmless the Underwriters, their Affiliates and selling agents and each
person, if any, who controls any Underwriter within the meaning of either
Section 15 of the 1933 Act or Section 20 of the 1934 Act, from and against any
and all loss, liability, claim, damage and expense (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending, investigating or settling any such action or claim), as incurred, (i)
arising out of the violation of any applicable laws or regulations of
jurisdictions other than the United States and Canada where Reserved Securities
have been offered; (ii) arising out of any untrue statement or alleged untrue
statement of a material fact contained in any prospectus wrapper or other
material prepared by or with the consent of the Company for distribution to
Invitees in connection with the offering of the Reserved Securities or caused by
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading; (iii)
caused by the failure of any Invitee to pay for and accept delivery of Reserved
Securities which have been orally confirmed for purchase by any Invitee by the
end of the first business day after the date of the Agreement; or (iv) related
to, or arising out of or in connection with, the offering of the Reserved
Securities.
SECTION 7. Contribution. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and
32
expenses incurred by such indemnified party, as incurred, (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company on
the one hand and the Underwriters and the Sub-underwriter on the other hand from
the offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and of the Underwriters and the Sub-underwriter on the other hand in
connection with the statements or omissions, or in connection with any violation
of the nature referred to in Section 6(e) hereof, which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters and the Sub-underwriter on the other hand in connection with the
offering of the Securities pursuant to this Agreement shall be deemed to be in
the same respective proportions as the total net proceeds from the offering of
the Securities pursuant to this Agreement (before deducting expenses) received
by the Company and the total underwriting commission received by the
Underwriters, in each case as set forth on the cover of the U.S. Prospectus,
bear to the aggregate initial public offering price of the Securities as set
forth on such cover.
The relative fault of the Company on the one hand and the Underwriters
and the Sub-underwriter on the other hand shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or by the Underwriters and the
Sub-underwriter and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission, or
any violation of the nature referred to in Section 6(e) hereof.
The Company and the Underwriters and the Sub-underwriter agree that it
would not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Underwriters and the
Sub-underwriter were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this Section 7. The aggregate amount of losses,
liabilities, claims, damages and expenses incurred by an indemnified party and
referred to above in this Section 7 shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue or alleged untrue statement or
omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter and no
Sub-underwriter 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 such Underwriter or the Sub-underwriter has otherwise been
required to pay by reason of any such untrue or alleged untrue statement or
omission or alleged omission.
33
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.
For purposes of this Section 7, each person, if any, who controls an
Underwriter or the Sub-underwriter within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act shall have the same rights to contribution as
such Underwriter or Sub-underwriter, and each director of the Company, each
officer of the Company who signed the Registration Statement or the Canadian
Prospectus, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Company. The Underwriters' respective obligations
to contribute pursuant to this Section 7 are several in proportion to the number
of Initial Securities set forth opposite their respective names in Schedule A
hereto and not joint. The Sub-underwriter's obligation to contribute pursuant to
this Section 7 is in proportion to the number of Initial Securities it purchased
from Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries delivered pursuant hereto, shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any
Underwriter, any Sub-underwriter or controlling person, or by or on behalf of
the Company, and shall survive delivery of the Securities to, and payment for
the Securities by, the Underwriters and the Sub-underwriter.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the U.S. Prospectus
(exclusive of any supplement thereto) and the Canadian Prospectus (exclusive of
any supplement thereto), any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or Canada,
or in the international financial markets, any outbreak of hostilities or
escalation thereof or other calamity or crisis or any change or development
involving a prospective change in United States, Canadian or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Representatives impracticable or
inadvisable to market the Securities or to enforce contracts for the sale of the
Securities, or (iii) if trading in any securities of the Company has been
suspended or materially limited by the Commission, the Reviewing Authority, any
Qualifying Authority, any other securities commission or securities regulatory
authority in Canada or the TSX or the NASDAQ National Market, or if trading
generally on the New York Stock Exchange, the TSX, or in the NASDAQ National
Market has been suspended or materially limited, or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices have been required, by
any of said exchanges or by such system or by order of the Commission, the
Reviewing Authority, any Qualifying Authority, any other securities commission
or securities regulatory
34
authority in Canada, the National Association of Securities Dealers, Inc. or any
other governmental authority, or a material disruption has occurred in
commercial banking or securities settlement or clearance services in the United
States or Canada, or (iv) if a banking moratorium has been declared by either
United States federal, New York state or Canadian federal authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the Underwriters. If one or
more of the Underwriters shall fail at Closing Time or a Date of Delivery to
purchase the Securities which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the Representatives shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters or the Sub-underwriter, or any other underwriters,
to purchase all, but not less than all, of the Defaulted Securities in such
amounts as may be agreed upon and upon the terms herein set forth; if, however,
the Representatives shall not have completed such arrangements within such
24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of
the number of Securities to be purchased hereunder, the non-defaulting
Underwriters or the Sub-underwriter shall be obligated, each severally and not
jointly, to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters or the Sub-underwriter, or
(b) if the number of Defaulted Securities exceeds 10% of the
number of Securities to be purchased on such date, this Agreement or, with
respect to any Date of Delivery which occurs after Closing Time, the obligation
of the Underwriters to purchase and of the Company to sell the Option Securities
to be purchased and sold on such Date of Delivery, shall terminate without
liability on the part of any non-defaulting Underwriter or the Sub-underwriter.
No action taken pursuant to this Section 10 shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, or in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Option Securities,
as the case may be, either the Representatives or the Company shall have the
right to postpone the Closing Time or the relevant Date of Delivery, as the case
may be, for a period not exceeding seven days in order to effect any required
changes in the Registration Statement, the U.S. Prospectus or the Canadian
Prospectus or in any other documents or arrangements. As used herein, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 10.
SECTION 11. Agent for Service; Submission to Jurisdiction;
Waiver of Immunities. By the execution and delivery of this Agreement, the
Company (i) acknowledges that it has, by
35
separate written instrument, irrevocably designated and appointed CT Corporation
System (or any successor) (together with any successor, the "Agent for
Service"), as its registered agent upon which process may be served in any suit
or proceeding arising out of or relating to this Agreement or the Securities,
that may be instituted in any federal or state court in the State of New York,
or brought under federal or state securities laws, and acknowledges that the
Agent for Service has accepted such designation, (ii) submits to the
non-exclusive jurisdiction of any such court in any such suit or proceeding, and
(iii) agrees that service of process upon the Agent for Service (or any
successor) and written notice of said service to the Company (mailed or
delivered to its Chief Financial Officer at its principal office in Victoria,
British Columbia, Canada), shall be deemed in every respect effective service of
process upon the Company in any such suit or proceeding. The Company further
agrees to take any and all action, including the execution and filing of any and
all such documents and instruments, as may be necessary to continue such
designation and appointment of the Agent for Service in full force and effect so
long as any of the Securities shall be outstanding.
To the extent that the Company has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service of notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, it
hereby irrevocably waives such immunity in respect of its obligations under the
above-referenced documents, to the extent permitted by law.
SECTION 12. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives, c/o Merrill Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated at 0 Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, attention of Xxxxx Xxxxxxx; notices to the Company shall be directed
to it at #1203, 0000 Xxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0 Xxxxxx,
Attention: Chief Financial Officer.
SECTION 13. Parties. This Agreement shall inure to the benefit of
and be binding upon the Underwriters, the Sub-underwriter, the Company and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Underwriters and the Sub-underwriter, the Company and their respective
successors and the controlling persons and officers and directors referred to in
Sections 6 and 7 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the Underwriters
and the Sub-underwriter, the Company and their respective successors, and said
controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Securities from any Underwriter or the Sub-underwriter shall be
deemed to be a successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
EXCEPT AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK
CITY TIME.
36
SECTION 15. Effect of Headings. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
SECTION 16. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but all
such counterparts shall together constitute one and the same Agreement.
SECTION 17. Judgment Currency. In respect of any judgment or
order given or made for any amount due hereunder that is expressed and paid in a
currency (the "Judgment Currency") other than United States dollars, the Company
will indemnify each Underwriter against any loss incurred by such Underwriter as
a result of any variation as between (i) the rate of exchange at which the
United States dollar amount is converted into the judgment currency for the
purpose of such judgment or order and (ii) the rate of exchange at which an
Underwriter is able to purchase United States dollars with the amount of
judgment currency actually received by such Underwriter. The foregoing indemnity
shall constitute a separate and independent obligation of the Company and shall
continue in full force and effect notwithstanding any such judgment or order as
aforesaid. The term "rate of exchange" shall include any premiums and costs of
exchange payable in connection with the purchase of or conversion into United
States dollars.
37
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the Underwriters, the Sub-underwriter, the Company in accordance with its
terms.
Very truly yours,
ASPREVA PHARMACEUTICALS
CORPORATION
By:
------------------------------
Name:
Title:
38
CONFIRMED AND ACCEPTED,
as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
BANC OF AMERICA SECURITIES LLC
PACIFIC GROWTH EQUITIES, LLC
BMO XXXXXXX XXXXX INC.
BY: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By:
---------------------------------------
Authorized Signatory
XXXXXXX XXXXX CANADA INC.
By:
---------------------------------------
Authorized Signatory
SCHEDULE A
List of Underwriters
Number of
Name of Underwriter Initial Securities
------------------- ------------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated.......................................... -
Banc of America Securities LLC.................................... -
Pacific Growth Equities, LLC...................................... -
BMO Xxxxxxx Xxxxx Inc............................................. -
------------
Total............................................................. -
============
Sch A-1
SCHEDULE B
Pricing Information
[------------------]
- Common Shares
(without par value)
1. The initial public offering price per share for the Securities,
determined as provided in Section 2, shall be US$- per share for
Securities initially offered in the United States or elsewhere outside
Canada, or Cdn$- (being based on the equivalent of the United States
dollar price per share based on the noon buying rate in The City of New
York for cable transfers in Canadian dollars as certified for customs
purposes by the Federal Reserve Bank of New York (the "Noon Buying
Rate") on the date hereof) for Securities initially offered in Canada.
2. The purchase price per share for the Securities sold or expected to be
sold in the United States or elsewhere outside Canada to be paid by the
several Underwriters shall be US$- being an amount equal to the initial
public offering price set forth above less US$- per share, representing
the underwriting commission as set forth in paragraph 3 below; the
purchase price per share for the Securities sold or expected to be sold
in Canada to be paid by the several Underwriters shall be Cdn$-, being
an amount equal to the initial offering price in Canada set forth above
less Cdn$- per share, representing the underwriting commission as set
forth in paragraph 3 below (being based on the equivalent of the
corresponding United States dollar amount based on the Noon Buying Rate
on the date hereof); provided that the purchase price per share for any
Option Securities purchased upon the exercise of the over-allotment
option described in Section 2(b) shall be reduced by an amount per
share equal to any dividends or distributions declared by the Company
and payable on the Initial Securities but not payable on the Option
Securities.
3. The underwriting commission per share payable for the Securities to be
paid by the Company shall be US$- per share for Securities initially
offered in the United States or elsewhere outside Canada, or Cdn$-
(being based on the equivalent of the Noon Buying Rate on the date
hereof) for Securities initially offered in Canada.
Sch B-1
SCHEDULE C
List of Persons and Entities Subject to Lock-up
Sch C-1
EXHIBIT A
FORM OF OPINION OF COMPANY'S CANADIAN COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
A-1
EXHIBIT B
FORM OF OPINION OF COMPANY'S U.S. COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(c)
B-1
EXHIBIT C
FORM OF OPINION OF COMPANY'S SWISS COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(d)
C-1
EXHIBIT D
FORM OF OPINION OF COMPANY'S SPECIAL REGULATORY COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(e)
D-1
EXHIBIT E
FORM OF OPINION OF COMPANY'S SPECIAL INTELLECTUAL PROPERTY COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(f)
E-1
EXHIBIT F
FORM OF LOCK-UP LETTER
__________, 200_
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated,
as Representative of the several
Underwriters to be named in the
within-mentioned Purchase Agreement
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Proposed Public Offering by Aspreva Pharmaceuticals Corporation
Dear Sirs:
The undersigned, a shareholder and/or an option holder and/or an
officer and/or director of Aspreva Pharmaceuticals Corporation, a corporation
incorporated under the laws of Canada (the "Company"), understands that Xxxxxxx
Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx
Xxxxx") proposes to enter into a Purchase Agreement (the "Purchase Agreement")
with the Company providing for the public offering of the Company's common
shares ("Common Shares") (the Common Shares that will be issued in the public
offering contemplated by the Purchase Agreement are herein referred to as the
"Securities"). In recognition of the benefit that such an offering will confer
upon the undersigned as a shareholder and/or an officer and/or director of the
Company, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned agrees with each
underwriter to be named in the Purchase Agreement that, during a period of 180
days from the date of the Purchase Agreement (the "Lock-Up Period"), the
undersigned will not, without the prior written consent of Xxxxxxx Xxxxx,
directly or indirectly, (i) offer, pledge, sell (including any sale pursuant to
Rule 144 under the Securities Act of 1933, as amended), contract to sell, sell
any option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant for the sale of, or otherwise dispose of or
transfer any Common Shares (including, without limitation, Common Shares which
may be deemed to be beneficially owned by such shareholder in accordance with
the rules and regulations of the Securities and Exchange Commission or the
securities legislation of any province or territory of Canada and Common Shares
which may be issued upon exercise of any option or warrant) or any securities
convertible into or exchangeable or exercisable for Common Shares, whether now
owned or hereafter acquired by the undersigned or with respect to which the
undersigned has or hereafter acquires the power of disposition, or file, or
cause to be filed, any registration statement or prospectus with respect to any
of the foregoing (collectively, the "Lock-Up Securities") or (ii) enter into any
swap or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Lock-Up Securities, whether any such swap or transaction is to be settled by
delivery of Common Shares or other securities, in cash or otherwise.
F-1
Notwithstanding the foregoing, if:
(1) during the last 17 days of the Lock-Up Period, the Company issues
an earnings release or material news or a material event relating to
the Company occurs; or
(2) prior to the expiration of the Lock-Up Period, the Company
announces that it will release earnings results or becomes aware that
material news or a material event will occur during the 16 days
immediately following the last day of the Lock-Up Period,
the restrictions imposed by this letter shall continue to apply until the
expiration of the 18-day period beginning on the issuance of the earnings
release or the occurrence of the material news or material event, as applicable,
unless Xxxxxxx Xxxxx waives, in writing, such extension, provided, however, that
in no event shall the Lock-Up Period be extended beyond 214 days after the date
of the Purchase Agreement.
Notwithstanding the foregoing, and subject to the conditions below, the
undersigned may transfer the Lock-Up Securities without the prior written
consent of Xxxxxxx Xxxxx, provided that (1) Xxxxxxx Xxxxx receives a signed
lock-up agreement for the balance of the Lock-Up Period from each donee,
trustee, distributee, or transferee, as the case may be, (2) any such transfer
shall not involve a disposition for value, (3) such transfers are not required
to be reported in any public report or filing with the Securities Exchange
Commission, or otherwise and (4) the undersigned does not otherwise voluntarily
effect any public filing or report regarding such transfers:
(i) as a bona fide gift or gifts; or
(ii) to any trust for the direct or indirect benefit of the
undersigned or the immediate family of the undersigned; or
(iii) as a distribution to limited partners, members or
beneficiaries of the undersigned, as applicable, if the
undersigned is a limited partnership, limited liability
company or a trust, or to the estates of any such partners,
members or beneficiaries; or
(iv) to the undersigned's affiliates or stockholders if the
undersigned is a corporation.
Furthermore, the undersigned may sell Common Shares purchased by the
undersigned on the open market following the public offering contemplated hereby
if and only if (i) such sales are not required to be reported in any public
report or filing with the Securities Exchange Commission, or otherwise and (ii)
the undersigned does not otherwise voluntarily effect any public filing or
report regarding such sales.
The aggregate amount of Lock-Up Securities transferred by the
undersigned pursuant to either of the two preceding paragraphs shall not exceed
200,000 Common Shares (such number of Common Shares to be proportionately
adjusted upon the occurrence after the date of this Lock-Up Letter of any stock
dividend, stock split or combination affecting the outstanding Common Shares).
For purposes of this lock-up agreement, "immediate family" shall mean
any relationship by blood, marriage or adoption, not more remote than first
cousin.
The undersigned hereby acknowledges and agrees that written notice of
any extension of the Lock-Up Period pursuant to the terms of this Lock-Up Letter
will be delivered by Xxxxxxx Xxxxx to the Company (in accordance with Section 12
of the Purchase Agreement) and that any such notice properly delivered will be
deemed to have been given to, and received by, the undersigned. The undersigned
F-2
further agrees that, prior to engaging in any transaction or taking any other
action that is subject to the terms of this lock-up agreement during the period
from the date of this lock-up agreement to and including the 34th day following
the expiration of the Lock-Up Period, it will give notice thereof to the Company
and will not consummate such transaction or take any such action unless it has
received written confirmation from the Company that the Lock-Up Period (as may
have been extended pursuant to the terms of the Lock-Up Letter) has expired.
The undersigned agrees that it will not, without the prior written
consent of Xxxxxxx Xxxxx, during the lock-up period, including any extension
thereof, make any demand for, or exercise any right with respect to, the
registration of any Common Shares or any securities convertible into or
exchangeable or exercisable for Common Shares. The undersigned further agrees
that the Company may, with respect to any Common Shares for which the
undersigned is the record or beneficial holder, cause the transfer agent for the
Company to note stop transfer instructions with respect to such Common Shares on
the transfer books and records of the Company.
The undersigned understands that the Company and the Underwriters will
proceed with the public offering in reliance on this Lock-Up Letter. The
undersigned hereby represents and warrants that the undersigned has full power
and authority to enter into this Lock-Up Letter and that, upon request, the
undersigned will execute any additional documents necessary or desirable in
connection with the enforcement hereof. Any obligations of the undersigned shall
be binding upon the successors and assigns of the undersigned.
This Lock-Up Letter shall automatically terminate upon the earliest to
occur, if any, of: (a) either Xxxxxxx Xxxxx on the one hand, or the Company, on
the other hand, advising the other in writing, prior to the execution of the
Purchase Agreement, that it has determined not to proceed with the public
offering, (b) termination of the Purchase Agreement entered into between the
Company and Xxxxxxx Xxxxx before the sale of the Securities, or (c) June 30,
2005, in the event that the registration statement related to the public
offering has not been declared effective by that date.
Very truly yours,
-------------------------------------
(Print name of entity, if applicable)
Signature:
---------------------------
Print name:
--------------------------
Title:
-------------------------------
(if applicable)
Address:
-----------------------------
-----------------------------
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F-3