1
Exhibit 4.A
SHARE PURCHASE AGREEMENT entered into in the Province of Quebec this 17th day of
January, 1990.
BY AND BETWEEN: NORTH AMERICAN VACCINE, INC., a
corporation duly existing under the
Canada Business Corporations Act,
having its head office in the
Montreal Urban Community, Quebec
(hereinafter referred to as "▇▇▇▇")
PARTY OF THE FIRST PART
AND: IAF BIOCHEM INTERNATIONAL INC., a
corporation duly existing under
Part 1A of the Quebec Companies
Act, having its head office in the
City of Laval, Quebec
(hereinafter referred to as "BioChem")
PARTY OF THE SECOND PART
WHEREAS ▇▇▇▇ has been duly constituted and has a valid existence under
the provisions of the Canada Business Corporations Act and will directly or
through its subsidiaries, engage in the research, development, manufacturing
and marketing of human immuno-biological products;
WHEREAS the offering of approximately 9,034,412 common shares of ▇▇▇▇
will be registered under the provisions of the United States Securities Act of
1933;
WHEREAS approximately 13,735,399 common shares of ▇▇▇▇ will be approved
for listing on the American Stock Exchange ("AMEX");
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WHEREAS BioChem is desirous of subscribing for approximately four
million five hundred and seventeen thousand two hundred and six (4,517,206)
common shares (the "Common Shares") and one million (1,000,000) Series A
preferred shares (the "Preferred Shares") in the share capital of ▇▇▇▇,
issuable from the treasury of ▇▇▇▇, (hereinafter collectively referred to as
the "Shares"), and certain options, warrants or other rights to acquire
additional shares of ▇▇▇▇ (the "Options"), the whole on the terms and
conditions hereinafter set out;
WHEREAS the consideration for the issuance of the Shares and the
Options is i) the sum of five million dollars in lawful currency of the United
States (U.S. $5,000,000) payable by wire transfer of immediately available U.S.
funds by BioChem to ▇▇▇▇ on the Closing Date, ii) the issuance by BioChem on
the Closing Date of four hundred ninety eight thousand nine hundred eighty four
(498,984) common shares of Biochem and iii) the transfer by BioChem to ▇▇▇▇ of
certain technology and other interests, pursuant to the Technology Transfer
Agreement, (i), ii) and iii) are hereinafter referred to as the "Purchase
Price"), the whole on the terms and conditions hereinafter set out;
WHEREAS ▇▇▇▇ is desirous of issuing the Shares and Options to BioChem
in the numbers and for the Purchase Price as aforesaid, the whole subject to
the terms and conditions hereinafter set forth:
NOW, THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:
SECTION ONE
INTERPRETATION
1.1 Definitions: - Unless the subject matter or context otherwise
requires:
(a) "American Vaccine" means American Vaccine Corporation, a
corporation incorporated under the laws of Delaware.
(b) "AMVAX" means Amvax, Inc., a wholly-owned subsidiary of American
Vaccine incorporated under the laws of Delaware.
(c) "Agreement" means this Agreement and any instrument supplemental
or ancillary hereto;
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and the expressions "recital", "Article", "section",
"subsection", "paragraph" and "subparagraph" followed by a
number or letter or combination thereof mean and refer to the
specified recital, Article, section, subsection, paragraph or
subparagraph of this Agreement.
(d) "American Vaccine Financial Statements" means the audited
financial statements of American Vaccine on a consolidated basis
as of and for the period ended December 31, 1988.
(e) "American Vaccine Unaudited Financial Statements" means the
unaudited financial statements of American Vaccine on a
consolidated basis as of and for the period ended June 30, 1989.
(f) "Assignment and Amendment Agreement" means the agreement made as
of January 9, 1990 among CPDL, BioChem and ▇▇▇▇ pursuant to
which the CPDL Agreements are assigned to ▇▇▇▇.
(g) "BioChem Common Shares" means the four hundred and ninety eight
thousand nine hundred eighty four (498,984) common shares of
BioChem to be issued to ▇▇▇▇ as part of the Purchase Price.
(h) "BioChem Financial Statements" means the audited financial
statements of BioChem as of and for the period ended January 31,
1989.
(i) "BioChem Unaudited Financial Statements" means the unaudited
financial statements of BioChem as of and for the period ended
July 31, 1989.
(j) "Closing" means the completion of all procedures and the
delivery of all documents and opinions required to consummate
the transactions contemplated herein and the payment of the
Purchase Price; and "Closing Date" means the date specified in
section 3.1 on which the Closing shall occur.
(k) "Common Shares" means the approximately 4,517,206 common shares,
no par value, of the share capital of ▇▇▇▇ to be issued to
BioChem.
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(l) "CPDL" means Canadian Patents and Development Limited.
(m) "CPDL Agreements" means the agreements entered into between
BioChem and the Canadian Patents Development Limited dated July
27, 1987 and June 27, 1988 respectively.
(n) "The Frost Group" means Frost-Nevada Limited Partnership, IVAX
Corporation and Dr. ▇▇▇▇▇▇▇ ▇▇▇▇▇.
(o) "IAF Vaccines" means the corporation to be formed in the event
that the IAF Vaccines Transaction is completed and of which
BioChem will hold all of the voting equity.
(p) "IAF Vaccines Transaction" means the proposed acquisition of the
vaccine division of Institut ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ by IAF Vaccines
pursuant to the terms of the memorandum of agreement entered
into between Institut ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ and BioChem dated December
21, 1989.
(q) "▇▇▇▇ Merger Sub" means ▇▇▇▇ Acquiring Corp., a wholly-owned
subsidiary of ▇▇▇▇ incorporated under the laws of Delaware.
(r) "NTIS" means the National Technical Information Service, a
primary operating unit of the United States Department of
Commerce.
(s) "NTIS Agreement" means the License Agreement entered into
between Selcore Laboratories, Inc. (the predecessor of American
Vaccine) and NTIS on March 25, 1988.
(t) "Options" means such options and warrants of ▇▇▇▇ as will permit
BioChem to maintain its 50% fully diluted ownership as of the
Closing Date of the issued and outstanding Common Shares of ▇▇▇▇
after giving effect to the transactions contemplated by this
Agreement, the terms of which are described in Schedule 1
hereto.
(u) "Preferred Shares" means the one million (1,000,000) Series A
Preferred Shares, no par value, of the share capital of ▇▇▇▇ to
be issued to BioChem on the Closing Date.
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(v) "Pertussis Technology" means the inventions commonly known as
methods of preparing toxoid and fermentation level cultivation
of Bordetella pertussis and all technical knowledge and
techniques relating generally to the inventions and which
inventions, technical knowledge and techniques are the subject
of the NTIS Agreement and the Sekura Agreement.
(w) "Purchase Price" means i) the sum of five million dollars in
lawful currency of the United States (US $5,000,000) payable by
wire transfer of immediately available U.S. funds by BioChem to
▇▇▇▇ on the Closing Date, ii) the BioChem Common Shares and iii)
certain technology and other interests to be transferred on the
Closing Date by BioChem to ▇▇▇▇ pursuant to the Technology
Transfer Agreement.
(x) "Registration Statement" means the preliminary registration
statement on Form S-4 as filed with the Securities and Exchange
Commission by ▇▇▇▇ on October 17, 1989 and all exhibits and
amendments thereto, including without limitation, the Annual
Report of American Vaccine on Form 10-K for the year ended
December 31, 1988 and the Quarterly Reports on Form 10-Q of
American Vaccine for the quarters ended March 31, 1989 and June
30, 1989.
(y) "Reorganization" means the merger of ▇▇▇▇ Merger Sub with and
into American Vaccine as described in the Registration
Statement.
(z) "Sekura Agreement" means the Amended and Restated Pertussis
Vaccine Patent License Agreement entered into between Selcore
Laboratories, Inc. (the predecessor of American Vaccine) and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ on October 13, 1987.
(aa) "Shareholders' Agreement" means the agreement dated January 17,
1990 among BioChem and The Frost Group in substantially the form
of Schedule 2 hereto.
(ab) "Shares" means the Common Shares and Preferred Shares.
(ac) "Technology Transfer Agreement" means the agreement dated
January 17, 1990 between BioChem and ▇▇▇▇ and substantially in
the form of Schedule 3 hereto.
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1.2 Schedules: The following Schedules attached or referred to in this
Agreement are an integral part of this Agreement:
Schedule 1 - Terms of the Options
Schedule 2 - Form of Shareholders' Agreement
Schedule 3 - Form of Technology Transfer Agreement
Schedule 4 - Registration Rights
1.3 Extended Meanings: - Words importing the singular number include
the plural and vice versa and words importing the masculine gender
include the feminine and neuter genders.
1.4 Interpretation Not Affected by Headings: - The division of this
Agreement into sections and the insertion of headings are for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement.
1.5 Applicable Law: - This Agreement shall be deemed to have been made in
the Province of Quebec and shall be interpreted in accordance with and
be governed by the laws of Quebec and the laws of Canada applicable
therein.
1.6 Funds: - All dollar amounts referred to in this Agreement are in lawful
money of the United States, unless otherwise stated.
1.7 Paramountcy: - If any provision of this Agreement conflicts with the
incorporating documents or any by-law of ▇▇▇▇, American Vaccine or
AMVAX, the provisions of this Agreement shall prevail to the extent
permitted by law.
1.8 Severability: - In the event that any provision or provisions of this
Agreement is or are illegal under the laws of the Province of Quebec,
then such provision or provisions shall be deemed not to have been
written into this Agreement and the remaining terms and provisions
thereof shall subsist and remain enforceable. Upon the determination
that any such provision is invalid, illegal or unenforceable, the
parties hereto shall negotiate in good faith to modify this Agreement
so as to effect the original intent of the parties as closely as
possible in order that the transactions contemplated hereby are
fulfilled to the extent possible.
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1.9 Business Day: - In the event that any action to be taken hereunder
falls on a Saturday, Sunday or any legal holiday ("non-business day")
either in Canada or the United States, then such action shall be taken
on the next succeeding day other than a non-business day.
SECTION TWO
SUBSCRIPTION
2.1 Subscription for Shares: Subject to the terms and conditions hereof,
BioChem agrees to purchase, on the Closing Date, approximately four
million five hundred seventeen thousand two hundred six (4,517,206)
Common Shares of ▇▇▇▇, one million (1,000,000) Series A Preferred
Shares of ▇▇▇▇ and Options to acquire approximately one million one
hundred ninety two thousand seven hundred ninety nine (1,192,799)
Common Shares of ▇▇▇▇ for an aggregate consideration equal to the
Purchase Price.
2.2 Exercise of Options:
(a) Schedule 1 hereto sets forth certain information concerning the
options and warrants of ▇▇▇▇ (the "▇▇▇▇ Options") granted to the
holders specified in Schedule 1. ▇▇▇▇ shall have the right, by action
of the Board of Directors, at any time and from time to time, to change
any of the terms of the ▇▇▇▇ Options set forth in Schedule 1. Any
reference in this Agreement to "the terms set forth in Schedule 1"
shall refer to the terms of the ▇▇▇▇ Options as they may be changed
from time to time by action of the ▇▇▇▇ Board of Directors.
(b) BioChem may exercise its Options in accordance with the terms set
forth in Schedule 1 with respect to the corresponding ▇▇▇▇ Options only
if and to the extent that any holder thereof exercises its ▇▇▇▇ Options
and for the same number of ▇▇▇▇ common shares for which such Options
are exercised. The Options shall lapse and be of no further legal
effect as, when and to the extent that the corresponding ▇▇▇▇ Options
lapse and become without legal effect.
(c) Within five (5) business days following the exercise of any ▇▇▇▇
Options, ▇▇▇▇ shall furnish BioChem with a written notice of such
exercise specifying (i) the number of common shares of ▇▇▇▇
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issued upon the exercise of such ▇▇▇▇ Options, (ii) the purchase price
paid to ▇▇▇▇ for such common shares, (iii) the expiry date of such ▇▇▇▇
Options and (iv) such other information concerning such exercise of
▇▇▇▇ Options as ▇▇▇▇ shall ▇▇▇▇ appropriate. BioChem shall have the
right to exercise such number of Options as shall result in the
issuance to BioChem of the same number of common shares as were issued
to the holder or holders of the ▇▇▇▇ Options exercised as described
above by paying in cash the purchase price of the common shares by the
later of 90 days from receipt of such notice or the expiry date of such
▇▇▇▇ Options.
2.3 Allocation: The parties agree to allocate the amount of the Purchase
Price as follows:
(i) as to the Options the sum of U.S. $3,382,062;
(ii) as to the Preferred Shares: (a) the sum of U.S. $1,617,938, and
(b) 463,206.2 of the BioChem Common Shares;
(iii) as to the Common Shares: (a) 35,777.8 of the BioChem Common
Shares, and (b) the interests to be transferred by BioChem to
▇▇▇▇ pursuant to Section 2 of the Technology Transfer Agreement.
The parties shall jointly elect under the provisions of the Income Tax
Act (Canada) and the Quebec Taxation Act that BioChem's proceeds of disposition
of the intangible consideration and ▇▇▇▇'▇ cost of the intangible consideration
shall be an amount equal to the adjusted cost base of the intangible
consideration to BioChem. The parties further agree to jointly make the
necessary elections and to execute and file the prescribed election forms and
any other documents required pursuant to section 85 of the Income Tax Act
(Canada) and the corresponding sections of the Taxation Act (Quebec) and any
regulations under such Acts.
SECTION THREE
CLOSING
3.1 Closing Date: The Closing of the purchase by BioChem of the Shares and
Options shall take place at the offices of Stikeman, ▇▇▇▇▇▇▇ at ▇▇▇▇
▇▇▇▇-▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ on February 27,
1990 at 10:00 a.m. or such other date, time or place as the parties
hereto may mutually agree but in no event
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prior to the filing of a Certificate of Merger with the Office of the
Secretary of State of the State of Delaware with respect to the
consummation of the Reorganization.
3.2 Conditions of Closing in favour of BioChem: The obligation of BioChem
to purchase the Shares and the Options as contemplated under Section 2
hereof and to perform its other obligations hereunder is subject to (i)
the simultaneous completion of the Reorganization, and (ii) the
fulfillment of the following conditions precedent being satisfied on or
prior to the Closing Date, it being understood that the said conditions
are for the exclusive benefit of BioChem and may be waived in writing,
in whole or in part, by BioChem at any time prior to the Closing Date:
(a) the common shares of ▇▇▇▇ shall be listed or approved for
listing on AMEX;
(b) the representations and warranties contained in Section 4.1
hereof shall be true, correct and complete in all material
respects on and as of the date made and on the Closing Date and
on the Closing Date ▇▇▇▇ shall deliver a certificate confirming
the foregoing in form and substance satisfactory to BioChem;
(c) the Shareholders' Agreement shall have been executed and
delivered by all parties thereto;
(d) except as disclosed in the Registration Statement i) no action,
suit or proceeding against ▇▇▇▇, American Vaccine or AMVAX shall
have been instituted or threatened before or by any U.S.,
Canadian or other court or tribunal or governmental agency or
other regulatory or administrative agency or commission or other
third party, and no legislation, rule or regulation shall have
been proposed, implemented or enacted which action, suit,
proceeding or legislation, rule or regulation seeks to restrain
or prohibit or otherwise challenge the legality or validity of
the transactions contemplated hereby or of the Reorganization
and ii) no material adverse change in (or any condition or event
which would have a material adverse effect on) the business,
assets, capitalization or financial condition of American
Vaccine on a consolidated basis since June 30, 1989 shall have
occurred;
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(e) all orders, exemptions and rulings from applicable regulatory
authorities where such are required to be obtained shall have
been received;
(f) counsel to BioChem shall have delivered to BioChem an opinion
confirming that the transactions contemplated hereby do not
result in any material adverse Canadian income tax consequences
for BioChem;
(g) all proceedings shall have been taken by ▇▇▇▇ and American
Vaccine in accordance with applicable law as are required to
complete the transactions contemplated hereby including
completion of the Reorganization;
(h) the Board of Directors of American Vaccine and ▇▇▇▇, as the case
may be, shall have approved the purchase by BioChem of the
Shares and the options and the shareholders of American Vaccine
shall have approved the Reorganization and American Vaccine and
▇▇▇▇, as the case may be, shall have provided BioChem with
certified copies of resolutions duly adopted by its Board of
Directors in connection with the foregoing;
(i) BioChem shall have received legal opinions in form and substance
satisfactory to it from Stikeman, ▇▇▇▇▇▇▇ and from Shaw,
Pittman, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇;
(j) ▇▇▇▇ shall have delivered to BioChem one or more certificates,
duly registered in the name of BioChem, representing the Common
Shares and Preferred Shares purchased by it, and such agreements
and instruments as shall be necessary to issue or vest title to
the Options in BioChem;
(k) all documents shall have been executed in a manner that is
satisfactory in form and substance to BioChem;
(l) BioChem shall have obtained all consents, amendments and
modifications to any agreements or other documents which are
required in order to consummate, validly and enforceably, the
transactions contemplated herein.
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3.3 Conditions of Closing in favour of ▇▇▇▇: The obligation of ▇▇▇▇ to sell
the Shares and the Options as contemplated under Section 2 hereof and
to perform its other obligations hereunder is subject to the following
conditions precedent being satisfied on or prior to the Closing Date,
it being understood that the said conditions are for the exclusive
benefit of ▇▇▇▇ and may be waived in whole or in part by ▇▇▇▇ at any
time prior to the Closing Date:
(a) the representations and warranties contained in Section 4.2
hereof shall be true, correct and complete in all material
respects on and as of the date made and on the Closing Date and
on the Closing Date BioChem shall deliver a certificate
confirming the foregoing in form and substance satisfactory to
▇▇▇▇ and counsel to ▇▇▇▇;
(b) (i) no action, suit or proceeding against ▇▇▇▇, BioChem,
American Vaccine or AMVAX shall have been instituted or
threatened before or by any U.S., Canadian or other court or
tribunal or governmental agency or other regulatory or
administrative agency or commission or other third party, and no
legislation, rule or regulation shall have been proposed,
implemented or enacted which action, suit, proceeding or
legislation, rule or regulation seeks to restrain or prohibit or
otherwise challenge the legality or validity of the transactions
contemplated hereby and (ii) no material adverse change in (or
any condition or event which would have a material adverse
effect on) the business, assets, capitalization or financial
condition of BioChem since July 31, 1989 shall have occurred
(except any change resulting from the IAF Vaccines Transaction
or the financing thereof or the acquisition of voting rights by
the holders of the BioChem Preferred Shares in accordance with
the terms currently attached to such shares, it being
understood, in this latter case, that the occurrence of any
change that gives rise to the acquisition of such voting rights
is not an excepted material adverse change for the purposes
hereof);
(c) all orders, exemptions and rulings from applicable regulatory
authorities where such are required to be obtained shall have
been received;
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(▇) ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇ shall have delivered to
American Vaccine an opinion confirming that the transactions
contemplated hereby (including the Reorganization) will not
result in any material adverse income tax consequences for
American Vaccine;
(e) all proceedings shall have been taken by BioChem in accordance
with applicable law as are required to complete the transactions
contemplated hereby;
(f) the Board of Directors of BioChem shall have approved the
transactions contemplated hereby and BioChem shall have
furnished ▇▇▇▇ with certified copies of resolutions duly adopted
by its Board of Directors in connection with the foregoing;
(g) ▇▇▇▇ shall have received a legal opinion in form and substance
satisfactory to it from Stikeman, ▇▇▇▇▇▇▇;
(h) Bear, ▇▇▇▇▇▇▇ & Co., Inc. ("Bear ▇▇▇▇▇▇▇") shall have delivered
to the Board of Directors of American Vaccine an opinion as to
the fairness of the purchase by BioChem of the Shares and the
Options and of the Reorganization to the American Vaccine
Stockholders from a financial point of view;
(i) BioChem shall have executed and delivered the Technology
Transfer Agreement and the Assignment and Amendment Agreement;
(j) BioChem shall have paid the cash portion of the Purchase Price,
shall have delivered to ▇▇▇▇ one or more share certificates duly
registered in the name of ▇▇▇▇ representing the Biochem Common
Shares and shall have transferred certain technology and other
interests to ▇▇▇▇ pursuant to the Technology Transfer Agreement;
(k) the Shareholders' Agreement shall have been executed and
delivered by all parties thereto;
(l) all documents shall have been executed in a manner that is
satisfactory in form and substance to ▇▇▇▇;
(m) American Vaccine and AMVAX shall have obtained all consents,
amendments and modifications to any
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agreements or other documents which are required in order to
consummate, validly and enforceably, the transactions
contemplated herein;
SECTION FOUR
REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of ▇▇▇▇: ▇▇▇▇ represents and warrants,
for itself and American Vaccine and AMVAX, to BioChem as follows:
(a) that ▇▇▇▇, American Vaccine and AMVAX are validly existing
corporations in good standing under the laws of their
jurisdictions of incorporation and that each has all necessary
corporate power to execute and deliver the Agreement and all
related agreements contemplated hereby and to complete the
transactions contemplated hereby;
(b) that the authorization, execution, delivery or performance by
▇▇▇▇ of the Agreement is not in conflict with and does not or
will not result in a breach or after notice or lapse of time or
both will not result in a breach of any of the terms or
provisions of ▇▇▇▇'▇ articles or by-laws or of the material
contracts, agreements or undertakings to which it is a party or
to which it may be subject, as the case may be;
(c) the authorized share capital of ▇▇▇▇ consists of an unlimited
number of common shares and an unlimited number of preferred
shares issuable in series of which approximately 9,034,412
common shares and 2,000,000 Series A preferred shares will, on
the Closing Date, have been duly authorized for issuance and
sale and when issued and delivered by ▇▇▇▇ pursuant to this
Agreement and the Agreement and Plan of Merger among ▇▇▇▇, ▇▇▇▇
Merger Sub and American Vaccine dated as of October 25, 1989
(the "Merger Agreement") against payment of the consideration
set out in the Agreement and the Merger Agreement, will be
validly issued and fully paid and non-assessable;
(d) the authorized share capital of American Vaccine consists of ten
million (10,000,000) shares of common stock, $.01 par value per
share, and two million (2,000,000) shares of preferred stock
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$.01 par value per share, issuable in series, and all of the
issued and outstanding capital stock of American Vaccine is
legally issued and outstanding as fully paid and non-assessable;
(e) the authorized share capital of AMVAX consists of 1,000,000
shares of common stock s.01 par value per share and 250,000
shares of preferred stock $30.00 par value per share, and all of
the issued and outstanding capital stock of AMVAX is legally
issued and outstanding as fully paid and nonassessable;
(f) that as of the Closing Date, ▇▇▇▇ will own beneficially all of
the issued and outstanding shares of American Vaccine which in
turn as of the Closing Date will own all of the issued and
outstanding shares of AMVAX, and that each of ▇▇▇▇, American
Vaccine and AMVAX is duly licensed, qualified to do business and
in good standing in all jurisdictions in which they carry on
their business except where failure to do so does not have a
material adverse effect on each such corporation respectively;
(g) that American Vaccine has no subsidiary, affiliated corporation
or controlling interest in any partnership, joint venture or
similar entity except for AMVAX;
(h) that AMVAX has no subsidiary, affiliate corporation or
controlling interest in any partnership, joint venture or
similar entity;
(i) the American Vaccine Financial Statements present fairly in all
material respects the financial position of American Vaccine on
a consolidated basis as of December 31, 1988 and the results of
operations and cash flow for the nine months then ended, in
conformity with U.S. generally accepted accounting principles;
(j) the American Vaccine Unaudited Financial Statements present
fairly in all material respects the financial position of
American Vaccine on a consolidated basis as of June 30, 1989 and
the results of operations and cash flow for the six months then
ended, in conformity with U.S. generally accepted accounting
principles;
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(k) except as disclosed in the Registration Statement, since June
30, 1989, there has been no material adverse change to the
assets, liabilities, or financial position of American Vaccine
on a consolidated basis other than changes arising in the
ordinary course of business;
(l) that there are no outstanding agreements, options, commitments,
rights or privileges, preemptive or contractual, giving any
person the right to purchase or otherwise acquire any securities
of ▇▇▇▇, American Vaccine and AMVAX, except for the outstanding
Series A Preferred Stock of American Vaccine and stock options
and warrants of American Vaccine as set forth in Schedule 1
hereto and except as otherwise disclosed in the Agreement;
(m) that as of the Closing Date, (i) ▇▇▇▇ and American Vaccine will
have made all necessary filings with all governmental and
regulatory authorities, securities commissions and exchanges
required to effect the transactions contemplated hereby, (ii)
▇▇▇▇, American Vaccine and AMVAX will have duly filed all tax
returns that are required to have been filed in applicable
jurisdictions, (iii) each such return is complete, accurate and
in compliance with applicable law and regulations in all
material respects, and (iv) each of ▇▇▇▇, American Vaccine and
AMVAX will have paid or provided for all such taxes of any
nature whatsoever, with any related penalties, interest and
liabilities, that are or would be shown on such tax returns as
due and payable on or before the Closing Date, other than such
taxes as are being contested in good faith;
(n) that no order suspending or prohibiting the sale or the trading
of shares or of any securities of ▇▇▇▇, American Vaccine and
AMVAX has been issued by any court, securities commission or
regulatory authority and no proceedings for such purpose are
pending or, to ▇▇▇▇'▇ knowledge, threatened;
(o) except as disclosed in the Registration Statement and except for
claims which have been provided for or reserved against in the
most recent balance sheet of the applicable corporation
furnished to BioChem, or except as disclosed and
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accepted by the other party in the Agreement, there are no
asserted claims or unasserted claims of which ▇▇▇▇, American
Vaccine or AMVAX is aware, as it pertains to each corporation,
against such corporation or any litigation, action, suit or
other claim by or before any court, tribunal, governmental
agency or authority, securities commission or regulatory body
that is material to the business, affairs, property or assets of
▇▇▇▇ or American Vaccine on a consolidated basis, as the case
may be including, without limitation, claims for breach of
warranty or product liability, claims challenging the ownership
or use by any such corporation of any material asset and claims
asserting the invalidity of this Agreement or seeking to prevent
any of the transactions contemplated hereby;
(p) except as disclosed in the Registration Statement, to the best
of ▇▇▇▇'▇ knowledge after reasonable investigation, i) the
Pertussis Technology, including all intellectual property rights
therein, the use thereof, and the marketing and distribution of
products produced through such use, do not infringe upon any
patent, copyright, trade secret or other proprietary right held
by any third party; (ii) no proceedings have been instituted,
are pending or threatened which challenge the rights granted to
American Vaccine under the NTIS Agreement and the Sekura
Agreement or the validity of NTIS's and/or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇'▇
intellectual property rights in the Pertussis Technology and
(iii) none of the patents, copyrights, or other proprietary
rights of NTIS and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ in the Pertussis Technology
are being infringed upon by others, and none of such rights are
subject to any outstanding order or judgment;
(q) the NTIS Agreement and the Sekura Agreement constitute valid and
binding contracts enforceable according to their terms;
(r) except as disclosed in the Registration Statement, there are no
pending, or to the best of ▇▇▇▇'▇ knowledge, after reasonable
investigation, threatened disputes or controversies with the
manufacturers, suppliers, customers, consultants and others
having business
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relations with ▇▇▇▇, American Vaccine or AMVAX and each such
corporation has taken all reasonable security measures to
protect the secrecy, confidentiality and value of its respective
proprietary and confidential technology and know-how and, to the
best of ▇▇▇▇'▇ knowledge after reasonable investigation, such
technology and know-how is not in the public domain, nor has it
been used, divulged, or appropriated for the benefit of any
person other than such corporations;
(s) AMVAX has entered into a valid and enforceable agreement with
the National Institute of Child Health and Human Development
("NICHD") which provides for payments of up to U.S. $3,500,000
payable for work performed during the period from March 6, 1989
to March 5, 1990 of which AMVAX has, as of June 30, 1989
received U.S. $362,704;
(t) the Registration Statement does not contain any untrue statement
of a material fact or omit any material fact required to be
stated therein or necessary in order to make the statements
therein not misleading in light of the circumstances under which
they were made; provided however, that ▇▇▇▇ makes no
representation or warranty with respect to the information
contained in or omitted from the Registration Statement
regarding BioChem or the Institut ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇;
(u) the representations and warranties contained in this Section 4.1
shall be true in all material respects on and as of the Closing
Date with the same force and effect as though such
representations and warranties had been made on and as of the
Closing Date and shall survive any investigations by or on
behalf of BioChem and shall survive the Closing.
4.2 Representations and Warranties of BioChem: BioChem represents and
warrants to ▇▇▇▇ as follows:
(a) that it is a corporation validly incorporated and organized and
is validly subsisting and in good standing under the laws of its
jurisdiction of incorporation and that it has all necessary
corporate power to execute and deliver the Agreement and all
related agreements contemplated hereby and to complete the
transactions contemplated hereby;
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(b) that none of the authorization, execution, delivery or
performance by BioChem of the Agreement is in conflict with and
none of them does or will result in a breach of or does or will
create a state of facts which after notice or lapse of time or
both will result in a breach of any of the terms or provisions
of its articles or by-laws or of the material contracts,
agreements or undertakings to which BioChem may be a party or
may be subject, as the case may be;
(c) the authorized capital of BioChem consists of an unlimited
number of common shares and ten million (10,000,000) preferred
shares having a paid up capital of one hundred thousand dollars
($100,000) of which seven million three hundred two thousand one
hundred sixty five (7,302,165) common shares and ten million
(10,000,000) preferred shares are legally issued and outstanding
as fully paid and non-assessable and that on the Closing Date
the BioChem Common Shares will have been duly authorized for
issuance and sale to ▇▇▇▇ and will be legally issued and
outstanding as fully paid and nonassessable;
(d) that there are no outstanding agreements, options, commitments,
rights or privileges, preemptive or contractual, giving any
person the right to purchase or otherwise acquire any securities
of BioChem except for stock options and warrants of BioChem for
an aggregate number of 1,646,451 common shares of BioChem and
except as otherwise disclosed in the Agreement;
(e) the BioChem Financial Statements have been prepared in
accordance with Canadian generally accepted accounting
principles applied on a consistent basis and fairly present the
assets, liabilities and shareholders' equity of BioChem as well
as its financial position for the period ended on such a day;
(f) the BioChem Unaudited Financial Statements have been prepared in
accordance with Canadian generally accepted accounting
principles applied on a consistent basis and fairly present the
assets, liabilities and shareholders' equity of BioChem as well
as its financial position for the period ended on such a day;
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(g) since July 31, 1989, there has been no material adverse change
to the assets, liabilities, or financial position of BioChem
other than changes arising in the ordinary course of business;
(h) that as of the Closing Date, (i) BioChem will have made all
necessary filings with all governmental and regulatory
authorities, securities commissions and exchanges required to
effect the transactions contemplated hereby, (ii) BioChem will
have duly filed all tax returns that are required to have been
filed in applicable jurisdictions, (iii) each such return is
complete, accurate and in compliance with applicable law and
regulations in all material respects, and (iv) BioChem will have
paid or provided for all such taxes of any nature whatsoever,
with any related penalties, interest and liabilities, that are
or would be shown on such tax returns as due and payable on or
before the Closing Date, other than such taxes as are being
contested in good faith;
(i) that no order suspending the sale or the trading of shares or of
any securities of BioChem has been issued by any court,
securities commission or regulatory authority and no proceedings
for such purpose are pending or, to BioChem's knowledge,
threatened;
(j) except as disclosed in the Registration Statement, or except for
claims which have been provided for or reserved against in the
most recent balance sheet of BioChem furnished to ▇▇▇▇, or
except as disclosed and accepted by the other party in the
Agreement, there are no asserted claims or unasserted claims of
which BioChem is aware or any litigation, action, suit or other
claim by or before any court, tribunal, governmental agency or
authority, securities commission or regulatory body that is
material to the business, affairs, property or assets of
BioChem;
(k) that the CPDL Agreements, the Technology Transfer Agreement and
the Assignment and Amendment Agreement constitute valid and
binding contracts enforceable according to their terms;
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(l) that the Registration Statement with respect to the information
provided by or pertaining to BioChem or the Institut
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇, or to BioChem's knowledge, with respect to
▇▇▇▇, does not contain an untrue statement of any material fact
or omit any material fact required to be stated therein or
necessary in order to make the statements therein not misleading
in light of the circumstances under which they were made;
(m) the representations and warranties set out at Section 8 (a) of
the Technology Transfer Agreement are true and correct;
(n) no consent, approval or other action of any third party is
required to be obtained by BioChem, or to BioChem's knowledge,
by ▇▇▇▇ in connection with the transactions contemplated in this
Agreement except the consent of CPDL to the Assignment and
Amendment Agreement and the requisite approvals of securities
regulatory authorities and stock exchanges, each of which shall
be obtained by BioChem prior to the Closing;
(o) the representations and warranties contained in this Section 4.2
shall be true in all material respects on and as of the Closing
Date with the same force and effect as though such
representations and warranties had been made on and as of the
Closing Date and shall survive any investigations by or on
behalf of ▇▇▇▇ and shall survive the Closing.
SECTION FIVE
COVENANTS
5.1 Covenants: ▇▇▇▇ (for itself and for American Vaccine and AMVAX) on one
part and BioChem, on the other part, each covenant and agree during the
period commencing on the date hereof and continuing until the Closing
Date, except as required in order to consummate the transactions
contemplated hereby and except as required by law:
(a) to carry on their respective business in, and only in, the
ordinary course in substantially the same manner as heretofore
conducted and, to the
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extent consistent with such business to use all reasonable
efforts to preserve intact their present business organizations
and keep available the services of their present officers and
employees and others having business dealings with them to the
end that their respective goodwill and business shall be
maintained;
(b) not to declare any dividends on or make other distributions in
respect of their outstanding shares and not to amend their
respective Articles or By-laws;
(c) not to issue, authorize or propose the issuance of, or purchase
or propose the purchase of, any shares of their respective
capital stock of any class or securities convertible into, or
rights, warrants or options to acquire, any such shares or other
convertible securities (other than such as are currently
outstanding or contemplated by either corporation pursuant to
written agreements, stock option plans, warrants, letters of
intent, private placements or other commitments and which have
been disclosed to the other party hereto in the Agreement);
(d) not to acquire, or agree to acquire, by amalgamating, merging or
consolidating with, purchasing substantially all of the assets
of or otherwise, any business or any corporation, partnership,
association or other business organization or division thereof,
which acquisition would be material to the business or financial
condition of the affected corporation (except in the case of
BioChem, the IAF Vaccines Transaction);
(e) not to sell, lease or otherwise dispose of any of their assets
that are material, individually or in the aggregate, to their
respective business or financial condition (except that American
Vaccine may enter into a lease or purchase arrangement with
respect to a manufacturing facility located in Beltsville,
Maryland, upon terms and conditions subject to the approval of
BioChem, such approval not to be unreasonably withheld);
(f) in the case of ▇▇▇▇ not to guarantee the payment of indebtedness
or incur indebtedness for money borrowed except in the ordinary
course of business or issue or sell any debt securities;
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(g) to cooperate fully with each other in making available and
providing access to all books, records, documents, management
personnel and their independent auditors.
SECTION SIX
SURVIVAL
6.1 Survival of Representations, Warranties, Covenants and Undertakings:
The representations, warranties, covenants and undertakings of BioChem
and ▇▇▇▇ contained in this Agreement shall survive the Closing;
provided, however, that except as otherwise provided in Section Seven,
the representations and warranties contained in Section Four shall
terminate on the second anniversary of the Closing Date. Except as
otherwise provided herein, no claim shall be made for the breach of any
representation or warranty contained in Section Four or under any
certificate delivered with respect thereto under this Agreement after
the date on which such representations and warranties terminate as set
forth in this Section Six.
SECTION SEVEN
INDEMNIFICATION
7.1 Indemnification by BioChem: BioChem agrees to indemnify and hold
harmless ▇▇▇▇, American Vaccine and AMVAX and their affiliates,
successors and assigns from and against any and all (a) claims,
demands, liabilities, losses, costs or damages (collectively, "Loss")
and (b) reasonable attorneys', legal assistants' and accountants' fees
and expenses (collectively, "Expense") incurred by ▇▇▇▇, American
Vaccine and AMVAX and their affiliates, successors and assigns in
connection with or arising from (i) any breach by BioChem of any of its
covenants in this Agreement or in any agreement or instrument
contemplated hereby or thereby; (ii) any failure of BioChem to perform
any of its obligations in this Agreement or any agreement or instrument
contemplated hereby or thereby; or (iii) any breach of any
representation of any warranty or the inaccuracy of any representation
of BioChem contained or referred to in this Agreement or any
certificate referred to
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herein delivered by or on behalf of BioChem pursuant hereto or thereto.
The indemnification provided for in this Section 7.1 shall terminate
two (2) years after the Closing Date (and no claims shall be made by
▇▇▇▇, American Vaccine and AMVAX or their affiliates, successors or
assigns under this Section 7.1 thereafter), except that the
indemnification by BioChem shall continue as to (a) the covenant of
BioChem set forth in Section 8.9, as to which no time limitation shall
apply; (b) the representation and warranty set forth in Section 4.2(h),
which shall expire no earlier than the date of expiration of the
applicable period stipulated in the applicable statute of limitations
with respect to liability for any such taxes, penalties, interest or
liabilities; and (c) any Loss or Expense of which ▇▇▇▇, American
Vaccine and AMVAX or their affiliates, successors or assigns has
notified BioChem in accordance with the requirements of Section 7.3 on
or prior to the date such indemnification would otherwise terminate in
accordance with this Section 7.1, as to which the obligation of BioChem
shall continue until the liability of BioChem shall have been
determined pursuant to this Section Seven, and BioChem shall have
reimbursed ▇▇▇▇, American Vaccine and AMVAX and their affiliates,
successors or assigns for the full amount of such Loss and Expense in
accordance with this Section Seven.
7.2 Indemnification by ▇▇▇▇: ▇▇▇▇ agrees to indemnify and hold harmless
BioChem and its affiliates, successors and assigns from and against any
and all Loss and Expense incurred by BioChem and its affiliates,
successors and assigns in connection with or arising from (a) any
breach by ▇▇▇▇ of any of its covenants or agreements in this Agreement
or any agreement or instrument contemplated hereby or thereby; (b) any
failure by ▇▇▇▇ to perform any of its obligations under this Agreement
or any agreement or instrument contemplated hereby or thereby; or (c)
any breach of any warranty or the inaccuracy of any representation of
▇▇▇▇ contained or referred to in this Agreement or in any certificate
referred to herein delivered by or on behalf of ▇▇▇▇ pursuant hereto or
thereto. The indemnification provided for in this Section 7.2 shall
terminate two (2) years after the Closing Date (and no claims shall be
made by BioChem or its affiliates, successors or assigns under this
Section 7.2 thereafter), except that the indemnification by ▇▇▇▇ shall
continue as to i) the covenant of ▇▇▇▇ set forth
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in Section 8.9 as to which no time limitation shall apply; ii) the
representation and warranty set forth in Section 4.1(m) which shall
expire no earlier than the date of the expiration of the applicable
period stipulated in the applicable statute of limitations with respect
to liability for any such taxes, penalties, interest and liabilities;
and iii) any Loss or Expense of which BioChem or its affiliates,
successors or assigns has notified ▇▇▇▇ in accordance with the
requirements of Section 7.3 on or prior to the date such
indemnification would otherwise terminate in accordance with this
Section 7.2, as to which the obligation of ▇▇▇▇ shall continue until
the liability of ▇▇▇▇ shall have been determined pursuant to this
Section Seven, and ▇▇▇▇ shall have reimbursed BioChem and its
affiliates, successors and assigns for the full amount of such Loss and
Expense in accordance with this Section Seven.
7.3 Notice of Claims: If ▇▇▇▇ or BioChem believes that any of the persons
indemnified under this Section Seven has suffered or incurred any Loss
or Expense, ▇▇▇▇ or BioChem shall so notify the other promptly in
writing describing such Loss or Expense, the amount thereof, if known,
and the method of computation of such Loss or Expense, all with
reasonable particularity and containing a reference to the provisions
of this Agreement or any other agreement or any certificate delivered
pursuant hereto or thereto in respect of which such Loss or Expense
shall have occurred. If any action at law or suit in equity is
instituted by or against a third party with respect to which any of the
indemnified persons intends to claim any liability or expense as Loss
or Expense under this Section Seven, any such indemnified person shall
promptly notify the indemnifying party of such action or suit.
7.4 Third Party Claim:
(a) Subject to paragraph (b) of this Section 7.4, the persons
indemnified under this Section Seven shall have the right to
conduct and control through counsel of their choosing, any third
party claim, action or suit, and the persons indemnified may
compromise or settle the same; provided that any of the
indemnified persons shall give the indemnifying party advance
notice of any proposed compromise or settlement and the
indemnifying party shall have the right to
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approve or reject such proposed compromise or settlement. The
indemnified person shall permit the indemnifying party to
participate in the defense of any such action or suit through
counsel chosen by it; provided that the fees and expenses of
such counsel shall be borne by the indemnifying party. Subject
to paragraph (b) of this Section 7.4, any compromise or
settlement with respect to a claim for money damages effected
after the indemnifying party by notice or settlement shall
discharge the indemnifying party from liability with respect to
the subject matter thereof, and no amount in respect thereof
shall be claimed as Loss or Expense under this Section Seven.
(b) If the remedy sought in any action or suit referred to in
paragraph (a) of this Section 7.4 is solely money damages and
will have no continuing effect on the business of any
indemnified person, the indemnifying party shall have 15
business days after receipt of the notice referred to in the
last sentence of Section 7.3 to notify the indemnified persons
that it elects to conduct and control such action or suit. If
the indemnifying party does not give the foregoing notice, the
indemnified persons shall have the right to defend, contest,
settle or compromise such action or suit in the exercise of
their exclusive discretion, and the indemnifying party shall,
upon request from any of the indemnified persons, promptly pay
to such indemnified persons in accordance with the other terms
of this Section Seven the amount of any Loss and all related
Expenses resulting from such third-party claim. If the
indemnifying party gives the foregoing notice, the indemnifying
party shall have the right to undertake, conduct and control,
through counsel of its own choosing and at the sole expense of
the indemnifying party, the conduct and settlement of such
action or suit, and the indemnified persons shall cooperate with
the indemnifying party in connection therewith; provided that
(i) the indemnifying party shall not thereby permit to exist any
lien, encumbrance or other adverse charge upon any asset of any
indemnified person; (ii) the indemnifying party shall permit the
indemnified persons to participate in such conduct or settlement
through counsel chosen by
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the indemnified persons, but the fees and expenses of such
counsel shall be borne by the indemnified persons except as
provided in clause (iii) below; and (iii) the indemnifying party
shall agree promptly to reimburse to the extent required under
this Section Seven the indemnified persons for the full amount
of any Loss resulting from such action or suit and all related
Expenses incurred by the indemnified persons, except fees and
expenses of counsel for the indemnified persons incurred after
the assumption of the conduct and control of such action or suit
by the indemnifying party. So long as the indemnifying party is
contesting any such action or suit in good faith, the
indemnified persons shall not pay or settle any such action or
suit. Notwithstanding the foregoing, the indemnified persons
shall have the right to pay or settle any such action or suit;
provided that in such event the indemnified persons shall waive
any right to indemnity therefore by the indemnifying party, and
no amount in respect thereof shall be claimed as Loss or Expense
under this Section Seven.
SECTION EIGHT
MISCELLANEOUS
8.1 Registration Rights: The parties agree that they shall have the
respective registration rights in connection with the subsequent
offering of the BioChem Common Shares and the Common Shares as set
forth in Schedule 4 hereto which Schedule is made a part of this
Agreement and is incorporated herein by reference.
8.2 ▇▇▇▇ not to vote its BioChem Common Shares: ▇▇▇▇ covenants and agrees
with BioChem that, for so long as it holds BioChem Common Shares,
neither it nor any other person shall exercise the voting rights
conferred by any of the BioChem Common Shares, unless and until:
i) ▇▇▇▇ shall have sold or otherwise transferred any of the BioChem
Common Shares to a person which is not a shareholder of ▇▇▇▇ and
is not related to ▇▇▇▇ or to a ▇▇▇▇ shareholder, in which event,
only those BioChem Common Shares that have been
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so sold or transferred shall confer voting rights;
ii) a secured creditor which is not a shareholder of ▇▇▇▇ and is not
related to ▇▇▇▇ or to a ▇▇▇▇ shareholder shall, pursuant to a
bona fide loan, guarantee or other instrument of indebtedness,
have become the owner by foreclosure of any BioChem Common
Shares, in which event, only those BioChem Common Shares in
respect of which ownership was so acquired shall confer voting
rights; or
iii) BioChem shall have issued and sold common shares from treasury
to a person other than ▇▇▇▇, a shareholder of ▇▇▇▇ or a person
related to ▇▇▇▇ or to a ▇▇▇▇ shareholder pursuant to a private
placement or public offering, including an issuance and sale to
directors and officers of BioChem (excluding however, the
issuance and sale of shares pursuant to employee or executive
share purchase or stock option plans), but only to the extent of
the number of BioChem Common Shares as is equal to the number of
common shares so issued and sold by BioChem,
provided that any sale, transfer or disposition in foreclosure pursuant
to any agreement, plan or loan in existence as of the Closing Date
shall not be taken into account for purposes of clauses (i), (ii) and
(iii) of this Section 8.2.
8.3 Voting in favour of adoption of ▇▇▇▇ Share Option Plan: BioChem agrees
to exercise the voting rights conferred by the Shares in favour of the
adoption of the ▇▇▇▇ Share Option Plan to be adopted pursuant to the
Agreement and Plan of Merger dated as of October 25, 1989, by and among
▇▇▇▇, ▇▇▇▇ Merger Sub and American Vaccine.
8.4 Termination or Amendment: This Agreement may be terminated at any time
prior to the filing and effectiveness of the Certificate of Merger with
the Secretary of State of Delaware in accordance with the applicable
provisions of the Delaware General Corporation Law (i) by mutual
consent of the Boards of Directors of ▇▇▇▇ and BioChem, (ii) by either
▇▇▇▇ or BioChem if the share purchase has not been consummated by March
31, 1990 (unless such party's breach caused the delay), or (iii) by
either ▇▇▇▇ or BioChem if the
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other party is in breach of its obligations under this Agreement. In
addition, this Agreement may be amended, modified or supplemented by
mutual agreement in writing of the Boards of Directors of ▇▇▇▇ and
BioChem at any time prior to the effective time referred to
hereinabove.
In the event that this Agreement shall be terminated pursuant to this
Section 8.4, all further obligations of the parties hereto (other than
Section 8.9) shall be terminated without further liability of either
party to the other, provided that nothing herein shall relieve any
party from its liability for its willful breach of this Agreement.
8.5 Notices: Any notice required or permitted to be given hereunder shall
be given by facsimile transmission, by registered mail or by personal
delivery (including delivery by courier) to the party for whom it is
intended, addressed as follows:
TO ▇▇▇▇: c/o American Vaccine
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇.▇.▇.
Fax #: ▇▇▇-▇▇▇-▇▇▇▇
Attention: President
with a copy to: American Vaccine
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇.▇.▇.
Fax #: ▇▇▇-▇▇▇-▇▇▇▇
Attention: President
with a copy to: Shaw, Pittman, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇
Fax #: ▇▇▇-▇▇▇-▇▇▇▇
Attention: L. ▇▇▇▇▇ ▇▇▇▇▇
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TO BIOCHEM: IAF BioChem International Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇
Fax #: ▇▇▇-▇▇▇-▇▇▇▇
Attention: President
Any notice, if delivered, shall be deemed to have been given or made on
the date on which it was transmitted by facsimile or delivered in
person or if mailed, shall be deemed to have been given on the third
business day following the day on which it was mailed.
8.6 Further documents: The parties hereto undertake to do, sign, execute
and deliver such other things, deeds of documents required to give full
effect to the Agreement and the transactions contemplated hereby.
8.7 Binding effect: This Agreement may not be assigned by either party
hereto without the prior written consent of the other party hereto and
shall enure to the benefit of and be binding upon the parties hereto
and their respective successors and permitted assigns.
8.8 Counterparts: This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which taken together
shall constitute one and the same instrument.
8.9 Confidential Nature of Information: Each party agrees that it will
treat in confidence all documents, materials and other information
("Confidential Information") which it shall have obtained regarding the
other party (including all information regarding American Vaccine and
AMVAX) during the course of the negotiations leading to the
consummation of the transactions contemplated hereby and the
preparation of this Agreement and other related documents, and, in
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the event the transactions contemplated hereby shall not be
consummated, each party will return to the other party all copies of
Confidential Information which have been furnished in connection
therewith and neither party shall retain duplicates or copies of such
Confidential Information nor use such Confidential Information for any
business advantage. The obligation of each party to treat such
documents, materials and other information in confidence shall not
apply to any information which (i) such party can demonstrate was
already lawfully in its possession prior to the disclosure thereof by
the other party, (ii) is known to the public and did not become so
known through any violation of a legal obligation, (iii) became known
to the public through no fault of such party or (iv) is later lawfully
acquired by such party from other sources.
8.10 Letter Agreement: The Agreement supersedes the letter agreement entered
into between BioChem and American Vaccine dated as of July 28, 1989 as
amended.
IN WITNESS WHEREOF the parties hereto have duly executed this agreement
on the date first hereinabove mentioned.
NORTH AMERICAN VACCINE INC.
Per:/s/ ▇▇▇▇▇▇ Mates
-----------------------------
Name and Title
▇▇▇▇▇▇ Mates, Ph.D.
President
IAF BIOCHE NTERNATIONAL INC.
Per:/s/
---------------------------
Name and Title
31
INTERVENTION
For good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, American Vaccine and AMVAX, jointly and
severally with ▇▇▇▇ (American Vaccine and AMVAX hereby waiving the benefit of
division and discussion) hereby i) make all representations and warranties made
by ▇▇▇▇ in Section 4.1 of the Share Purchase Agreement entered into between
BioChem and ▇▇▇▇ dated January 17, 1990 (the "Share Purchase Agreement") (the
"▇▇▇▇ Representations and Warranties"), only to the extent such representations
and warranties concern American Vaccine or AMVAX, provided that where the ▇▇▇▇
Representations and Warranties are made to the knowledge of ▇▇▇▇, the
representations and warranties made by American Vaccine or AMVAX as the case
may be, are made to their respective knowledge and ii) agree to be jointly and
severally bound with ▇▇▇▇ by the covenants, undertakings and obligations of
▇▇▇▇ set out at Sections 3.2, 5.1, 6.1 and 7.2 of the Share Purchase Agreement.
DATED this 17th day of January, 1990.
AMERICAN VACCINE CORPORATION
Per:/s/
---------------------------------
Name and Title: President
Per:/s/
---------------------------------
Name and Title Sr. V.P.
AMVAX, INC.
Per:/s/
---------------------------------
Name and Title: President
Per:/s/
---------------------------------
Name and Title: President
32
Schedule 1
to the Share Purchase Agreement
entered into on January 17, 1990
between North American Vaccine, Inc.
and IAF BioChem International Inc.
Name of Number Exercise Vesting Expiry (1) Payment to
Holder of shares Price Date Date Exercise
------- --------- -------- ------- ---------- -----------
▇▇▇▇ Flanzreich 5,000 $6.75 / / / / $33,750.00
▇▇▇▇▇▇▇ ▇▇▇▇▇ 30,000 $7.75 4/4/89 4/4/94 $232,500.00
▇▇▇▇▇▇▇ ▇▇▇▇▇ 30,000 $7.75 4/4/90 4/4/94 $232,500.00
▇▇▇▇▇▇▇ ▇▇▇▇▇ 40,000 $7.75 4/4/91 4/4/94 $310,000.00
▇▇▇▇▇ ▇▇▇▇▇▇ 107,546 $1.06 9/15/89 5/16/92 $113,998.76
▇▇▇▇▇ ▇▇▇▇▇▇ 25,000 $6.75 9/15/89 1/ /94 $168,750.00
▇▇▇▇▇ ▇▇▇▇▇▇ 25,000 $6.75 9/15/90 1/ /94 $168,750.00
▇▇▇▇▇ ▇▇▇▇▇▇ 25,000 $6.75 9/15/91 1/ /94 $168,750.00
▇▇▇▇▇ ▇▇▇▇▇▇ 25,000 $6.75 9/15/92 1/ /94 $168,750.00
▇▇▇▇▇▇▇ ▇▇▇▇▇ 15,000 $7.25 / / / / $10,875.00
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 2,500 $7.25 5/17/90 5/17/94 $18,125.00
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 2,500 $7.25 5/17/91 5/17/94 $18,125.00
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 2,500 $7.25 5/17/92 5/17/94 $18,125.00
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 2,500 $7.25 5/17/93 5/17/94 $18,125.00
▇▇▇▇ ▇▇▇▇▇▇▇ 10,000 $2.00 11/13/86 11/13/91 $20,000.00
▇▇▇▇ ▇▇▇▇▇▇▇▇ 30,000 $7.75 4/4/89 4/4/94 $232,500.00
▇▇▇▇ ▇▇▇▇▇▇▇▇ 30,000 $7.75 4/4/90 4/4/94 $232,500.00
▇▇▇▇ ▇▇▇▇▇▇▇▇ 40,000 $7.75 4/4/91 4/4/94 $310,000.00
-------------------------
(1) If such Expiry Date for any ▇▇▇▇ Options is accelerated pursuant to the
terms of the applicable Option Agreement, the Expiry Date for the corresponding
BioChem Options shall be the later of the date 30 days following the accelerated
Expiry Date or the date 30 days following receipt by BioChem of written notice
pursuant to Section 2.2(c) of the Share Purchase Agreement.
33
- 2 -
▇▇▇▇▇▇ ▇▇▇▇▇▇ 5,000 $7.25 (2) 2/14/94 $36,250.00
▇▇▇▇▇▇ ▇▇▇▇▇▇ 5,000 $7.25 (3) 2/14/94 $36,250.00
[UNREADABLE] Maan 5,000 $7.25 __/__/__ __/__/__ $36,250.00
▇▇▇
Wenlii Lin 5,500 $7.25 2/14/89 2/14/94 $39,875.00
Wenlii Lin 5,500 $7.25 2/14/90 2/14/94 $39,875.00
Wenlii Lin 5,500 $7.25 2/14/91 2/14/94 $39,875.00
Wenlii Lin 5,500 $7.25 2/14/92 2/14/94 $39,875.00
Wenlii Lin 5,500 $7.25 2/14/93 2/14/94 $39,875.00
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 15,000 $7.25 __/__/__ __/__/__ $108,750.00
▇▇▇▇▇▇ Mates 30,000 $7.75 4/4/89 4/4/94 $232,500.00
▇▇▇▇▇▇ Mates 30,000 $7.75 4/4/90 4/4/94 $232,500.00
▇▇▇▇▇▇ Mates 40,000 $7.75 4/4/91 4/4/94 $310,000.00
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 5,000 $7.75 4/4/89 4/4/94 $38,750.00
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 5,000 $7.75 4/4/90 4/4/94 $38,750.00
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 5,000 $7.75 4/4/91 4/4/94 $38,750.00
▇▇▇▇▇▇▇ ▇▇▇▇▇ 25,000 $7.25 5/17/90 5/17/94 $181,250.00
▇▇▇▇▇▇▇ ▇▇▇▇▇ 25,000 $7.25 5/17/91 5/17/94 $181,250.00
▇▇▇▇▇▇▇ ▇▇▇▇▇ 25,000 $7.25 5/17/92 5/17/94 $181,250.00
▇▇▇▇▇▇▇ ▇▇▇▇▇ 25,000 $7.25 5/17/93 5/17/94 $181,250.00
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 1,250 $7.75 10/21/89 4/4/94 $9,687.50
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 1,250 $7.75 3/5/90 4/4/94 $9,687.50
-----------
(2) The date of completion of American Vaccine's Beltsville plant.
(3) The date on which American Vaccine's Beltsville plant commences operation.
34
- 3 -
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 1,250 $7.75 7/3/90 (4) 4/4/94 $ 9,687.50
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 1,250 $7.75 10/31/90(4) 4/4/94 $ 9,687.50
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 1,250 $7.75 2/28/91(4) 4/4/94 $ 9,687.50
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 1,250 $7.75 6/28/91(4) 4/4/94 $ 9,687.50
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 1,250 $7.75 10/26/91(4) 4/4/94 $ 9,687.50
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 1,250 $7.75 2/23/92(4) 4/4/94 $ 9,687.50
▇▇▇▇▇▇ ▇▇▇▇▇▇ 54,565 $0.004 9/15/89 5/16/92 $ 618.26
▇▇▇▇▇▇ ▇▇▇▇▇▇ 25,000 $6.75 9/15/89 1/__/94 $168,750.00
▇▇▇▇▇▇ ▇▇▇▇▇▇ 25,000 $6.75 9/15/90 1/__/94 $168,750.00
▇▇▇▇▇▇ ▇▇▇▇▇▇ 25,000 $6.75 9/15/91 1/__/94 $168,750.00
▇▇▇▇▇▇ ▇▇▇▇▇▇ 25,000 $6.75 9/15/92 1/__/94 $168,750.00
▇▇▇▇▇▇ ▇▇▇▇▇▇ 12,500 $6.75 __/__/__ __/__/__ $ 84,375.00
▇▇▇▇▇▇ ▇▇▇▇▇▇ 12,500 $6.75 __/__/__ __/__/__ $ 84,375.00
▇▇▇▇▇▇ ▇▇▇▇▇▇ 3,500 $2.75 8/22/86 8/22/91 $ 9,625.00
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 30,000 $8.25 4/4/89 4/4/94 $247,500.00
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 30,000 $8.25 4/4/90 4/4/94 $247,500.00
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 40,000 $8.25 4/4/91 4/4/94 $330,000.00
Yan-▇▇▇▇ ▇▇▇▇▇ 5,000 $7.75 4/4/89 4/4/94 $ 38,750.00
Yan-▇▇▇▇ ▇▇▇▇▇ 5,000 $7.75 4/4/90 4/4/94 $ 38,750.00
Yan-▇▇▇▇ ▇▇▇▇▇ 5,000 $7.75 4/4/91 4/4/94 $ 38,750.00
WARRANTS
Name of Number of Exercise Vesting Expiry Payment to
Warrant Holder Shares Price Date Date Exercise
-------------- --------- -------- ------- ------ ----------
▇.▇. ▇▇▇▇ & Co. 64,688 $4.80 7/31/86 7/31/90 $310,502.40
--------------
(4) Vesting is also conditioned upon the exercise by the National Institute of
health of its option to review its contract with American Vaccine for the
provision of bulk pertussis toxoid for each such 120-day period.
35
SCHEDULE 2
SHAREHOLDERS' AGREEMENT
(See Exhibit 9.1 to the Registration Statement)
36
SCHEDULE 3
TECHNOLOGY TRANSFER AGREEMENT
See Exhibit 2.4 to the Registration Statement)
37
SCHEDULE 4
REGISTRATION RIGHTS
SECTION ONE
BIOCHEM REGISTRATION RIGHTS
1.1. Certain Definitions. As used in this Section 1 to Schedule 4 of
the Share Purchase Agreement entered into between North American Vaccine, Inc.
and IAF BioChem International Inc. on January 17, 1990, (the "Share Purchase
Agreement") the following terms shall have the following respective meanings,
and all other defined terms shall have the meanings ascribed thereto in the
Share Purchase Agreement.
"Registrable Securities" shall mean (i) the Common Shares and (ii) any
▇▇▇▇ common shares issued pursuant to the Options or issued or issuable in
respect of the Common Shares, upon any stock split, stock dividend,
recapitalization, or similar event, so long as the Common Shares and any ▇▇▇▇
common shares issued in respect of the Common Shares are owned by BioChem.
The terms "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
"Registration Expenses" shall mean all expenses incurred by ▇▇▇▇ in
complying with Sections 1.2 and 1.3 hereof, including, without limitation, all
registration, qualification and filing fees, printing expenses, escrow fees,
fees and disbursements of counsel for ▇▇▇▇, blue sky fees
38
-2-
and expenses (including those of counsel for the underwriters(s)), marketing
expenses and the expense of any special audits incident to or required by any
such registration (but excluding the compensation of regular employees of ▇▇▇▇
which shall be paid by ▇▇▇▇).
"SEC" shall mean the Securities and Exchange Commission or any other
Federal agency at the time administering the Securities Act.
"Selling Expenses" shall mean all underwriting discounts, selling
commissions and stock transfer taxes applicable to the securities registered by
BioChem and all fees and disbursements of counsel for BioChem.
"Securities Act" shall mean the Securities Act of 1933.
1.2. Requested Registration. (a) Request for Registration. BioChem
shall have a one time right pursuant to this Section 1.2 to request ▇▇▇▇ to
register the offering of up to all but not less than 25% of BioChem's
Registrable Securities owned by BioChem as of the Closing Date. In case ▇▇▇▇
shall receive from BioChem a written request pursuant to Section 1.2(b) hereof
that ▇▇▇▇ effect any registration, qualification or compliance with respect to
the Registrable Securities, ▇▇▇▇ will, as soon as practicable, use its best
efforts to effect such registration, qualification or compliance (including,
without limitation, the execution of an undertaking to file post-effective
amendments, appropriate qualification under applicable blue sky or other state
securities laws and appropriate compliance with applicable regulations issued
under the Securities Act and any other governmental
39
-3-
requirements or regulations) as may be so requested and as would permit or
facilitate the sale and distribution of all Registrable Securities owned by
BioChem; provided, however, that ▇▇▇▇ shall not be obligated to take any action
to effect any such registration, qualification or compliance pursuant to this
Section 1.2:
(i) in any particular jurisdiction in which ▇▇▇▇ would be required to
execute a general consent to service of process in effecting such registration,
qualification or compliance unless ▇▇▇▇ is already subject to service in such
jurisdiction and except as may be required by the Securities Act;
(ii) prior to the first anniversary of the Closing Date;
(iii) during the period starting with the date 50 days prior to ▇▇▇▇'▇
estimated date of filing of, and ending on the date 90 days immediately
following the effective date of any registration statement pertaining to
securities of ▇▇▇▇ (other than a registration of securities in a Rule 145
transaction or with respect to an employee benefit plan); provided that ▇▇▇▇ is
actively employing in good faith all reasonable efforts to cause such
registration statement to become effective and that ▇▇▇▇'▇ estimate of the date
of filing of such registration statement is made in good faith;
(iv) after ▇▇▇▇ has effected one such registration pursuant to this
subparagraph 1.2(a) and such registration has been declared or ordered
effective;
40
-4-
(v) if ▇▇▇▇ shall furnish to BioChem a certificate signed by the
President of ▇▇▇▇ stating that in the good fath judgment of the Board of
Directors it would be seriously detrimental to ▇▇▇▇ or its shareholders for a
registration statement to be filed in the near future, in which case ▇▇▇▇'▇
obligation to use its best efforts to register, qualify or comply under this
Section 1.2 shall be deferred not more than once for a period not to exceed 90
days; or
(vi) after the fifth anniversary of the Closing Date;
Subject to the foregoing clauses (i) through (vi), ▇▇▇▇ shall file a
registration statement covering an offering of the Registrable Securities so
requested to be registered as soon as practicable after receipt of the request
of BioChem.
(b) Notice. The right of BioChem to registration pursuant to Section
1.2 shall be conditioned upon ▇▇▇▇'▇ receipt of written notice from BioChem
which shall include a description of BioChem's proposed plan of distribution of
its Registrable Securities and the underwriting arrangements, if any. In the
context of such registration with a view to a non-exempt offering, ▇▇▇▇ shall
have the right to approve such plan of distribution and underwriting
arraigements, which approval will not be unreasonably withheld. Nothing herein
shall apply to an offering by way of private placement.
1.3. Piggyback Registration Rights.
(a) Notice of Registration. If, at any time or from time to time, ▇▇▇▇
shall determine to register any of its
41
-5-
securities, either for its own account or the account of a securityholder or
holders (other than BioChem) exercising their respective demand registration
rights, other than (i) a registration relating solely to employee benefit
plans, or (ii) a registration relating solely to a SEC Rule 145 transaction,
▇▇▇▇ will:
(A) promptly give to BioChem written notice thereof; and
(B) include in such registration (and any related qualification under
blue sky laws or other compliance), and in any underwriting involved therein,
all the Registrable Securities specified in a written request or requests, made
within 30 days after receipt of such written notice from ▇▇▇▇ by BioChem;
provided, however, that ▇▇▇▇ shall have no obligation to include in such
registration a number of Registrable Securities equal to less than 25% of the
Registrable Securities owned by BioChem as of the Closing Date.
(b) Underwriting. If the registration of which ▇▇▇▇ gives notice is for
a registered public offering involving an underwriting, ▇▇▇▇ shall so advise
BioChem as a part of the written notice given pursuant to Section 1.3(a) above.
In such event, the right of BioChem to registration pursuant to Section 1.3(a)
shall be conditioned upon BioChem's participation in such underwriting and the
inclusion of Registrable Securities in the underwriting to the extent provided
herein. BioChem, if it is proposing to distribute its Registrable Securities
through such underwriting, shall (together with ▇▇▇▇) enter into an
underwriting agreement in customary form with the managing underwriter selected
for
42
-6-
such underwriting by ▇▇▇▇. Notwithstanding any other provision of this Section
1.3, if the managing underwriter determines that marketing factors require a
limitation of the number of Registrable Securities to be underwritten, the
managing underwriter may limit the Registrable Securities to be included in
such registration or completely exclude the Registrable Securities from such
registration. ▇▇▇▇ shall so advise BioChem of the number of Registrable
Securities that may be included in the registration and underwriting. If
BioChem disapproves of the terms of any such underwriting, it may elect to
withdraw therefrom, without the loss to BioChem of any rights under this
Section 1, by written notice to ▇▇▇▇ and the managing underwriter. Any
securities excluded or withdrawn from such underwriting shall be withdrawn from
such registration, and shall not be transferred in a public distribution prior
to 90 days after the effective date of the registration statement relating
thereto. ▇▇▇▇ may include common shares held by shareholders other than BioChem
in a registration statement pursuant to Section 1.2 and this Section 1.3 only
if, and to the extent, the amount of Registrable Securities includable in such
registration would not thereby be diminished.
(c) Right to Terminate Registration. ▇▇▇▇ shall have the right to
terminate or withdraw any registration initiated by it under this Section 1.3
prior to the effectiveness of such registration whether or not BioChem has
elected to include securities in such registration.
(d) Termination of Registration Rights. BioChem's registration rights
under this Section 1.3 shall terminate on the fifth anniversary of the Closing
Date.
43
-7-
1.4. Expenses of Registration. All Registration Expenses and Selling
Expenses incurred in connection with a registration pursuant to Section 1.2
shall be borne by BioChem; provided, however, that in the event one or more
holders of ▇▇▇▇ common shares exercise any piggyback registration rights with
respect to a registration under Section 1.2, BioChem shall have no obligation
to pay for that portion of the Registration Expenses incurred as a result of
such holder's or holders' exercise of such piggyback registration rights. All
Selling Expenses incurred in connection with any registration pursuant to
Section 1.3 shall be borne by BioChem and a pro rata share of the Registration
Expenses incurred in connection with any registration pursuant to Section 1.3
shall be borne by BioChem on the basis of the number of Registrable Securities
so registered divided by the aggregate number of shares registered pursuant to
such registration.
1.5. Registration Procedures. In the case of each registration,
qualification or compliance effected by ▇▇▇▇ pursuant to this Section 1, ▇▇▇▇
will keep BioChem advised in writing as to the initiation of each registration,
qualification and compliance and as to the completion thereof. At the expense
of BioChem and/or ▇▇▇▇ as determined pursuant to Section 1.4, ▇▇▇▇ will:
(a) prepare and file with the SEC a registration statement with respect
to such securities and use its best efforts to cause such registration
statement to become and remain effective for at least 120 days, and prepare and
file with the SEC such amendments to such registration statement and
supplements to the prospectus contained therein as may be necessary to keep
such registration statement effective
44
-8-
or current, as the case may be, for at least 120 days; provided that no such
registration shall constitute a shelf registration under Rule 415 promulgated
by the SEC under the Securities Act;
(b) enter into a written underwriting agreement in customary form and
substance reasonably satisfactory to ▇▇▇▇, BioChem and the managing underwriter
or underwriters of the public offering of such securities, if the offering is
to be underwritten in whole or in part;
(c) furnish to BioChem if it is participating in such registration and
to the underwriters of the securities being registered such reasonable number
of copies of the registration statement, preliminary prospectus, final
prospectus and such other documents as such underwriters may reasonably request
in order to facilitate the public offering of such securities;
(d) use its best efforts to register or qualify the securities covered
by such registration statement under such state securities or blue sky laws of
such jurisdictions as BioChem may reasonably request within ten days prior to
the original filing of such registration statement, except that ▇▇▇▇ shall not
for any purpose be required to execute a general consent to service of process
or to qualify to do business as a foreign corporation in any jurisdiction where
it is not so qualified;
(e) notify BioChem, promptly after it shall receive notice thereof, of
the time when such registration statement has become effective or a supplement
to any prospectus forming a part of such registration statement has been filed;
45
-9-
(f) notify BioChem promptly of any request by the SEC for the amending
or supplementing of such registration statement or prospectus or for additional
information;
(g) prepare and file with the SEC promptly upon the request of BioChem,
any amendments or supplements to such registration statement or prospectus
which, in the reasonable opinion of counsel for BioChem, is required under the
Securities Act or the rules and regulations thereunder in connection with the
distribution of the Registrable Securities by BioChem;
(h) prepare and promptly file with the SEC, and promptly notify BioChem
of the filing of, such amendment or supplement to such registration statement
or prospectus as may be necessary to correct any statements or omissions if, at
the time when a prospectus relating to such securities is required to be
delivered under the Securities Act, any event has occurred as the result of
which any such registration statement or prospectus contains an untrue
statement of a material fact or omits to state any material fact necessary to
make the statements therein, not misleading, in the light of the circumstances
in which they were made;
(i) in case BioChem or any underwriter for BioChem is required to
deliver a prospectus at a time when the prospectus then in effect may no longer
be used under the Securities Act, prepare promptly upon request such amendment
or amendments to such registration statement and such prospectuses as may be
necessary to permit compliance with the requirements of the Securities Act;
46
-10-
(j) advise BioChem, promptly after it shall receive notice or obtain
knowledge thereof, of the issuance of any stop order by the SEC suspending the
effectiveness of such registration statement or the initiation or threatening
of any proceeding for that purpose and promptly use its best efforts to prevent
the issuance of any stop order or to obtain its withdrawal if such stop order
should be issued; and
(k) at the request of BioChem, furnish on the effective date of the
registration statement and, if such registration includes an underwritten
public offering, at the closing provided for in the underwriting agreement, (i)
an opinion, dated each such date, of the counsel representing ▇▇▇▇ for the
purposes of such registration, addressed to the underwriters, if any, and to
BioChem, covering such matters with respect to the registration statement, the
prospectus and each amendment or supplement thereto, proceedings under state
and Federal securities laws, other matters relating to ▇▇▇▇, the securities
being registered and the offer and sale of such securities as are customarily
the subject of opinions of issuer's counsel provided to underwriters in
underwritten public offerings, and (ii) to the extent ▇▇▇▇'▇ accounting firm is
willing to do so, a letter dated each such date, from the independent certified
public accountants of ▇▇▇▇, addressed to the underwriters, if any, and to
BioChem, stating that they are independent certified public accountants of
▇▇▇▇, addressed to the underwriters, if any, and to BioChem, stating that they
are independent certified public accountants within the meaning of the
Securities Act and that in the opinion of such accountants the financial
statements and other financial data of ▇▇▇▇ included in the registration
statement or the prospectus or any amendment or supplement thereto comply in
all material respects with the applicable accounting
47
-11-
requirements of the Securities Act, and additionally covering such other
financial matters, including information as to the period ending not more than
five business days prior to the date of such letter with respect to the
registration statement and prospectus, as the underwriters or BioChem may
reasonably request.
1.6. Indemnification. (a) ▇▇▇▇ will indemnify BioChem, each of its
officers, directors and partners, and each person controlling BioChem within
the meaning of Section 15 of the Securities Act, with respect to which
registration, qualification or compliance has been effected pursuant to this
Section 1, and each underwriter, if any, and each person who controls any
underwriter within the meaning of Section 15 of the Securities Act, against all
expenses, claims, losses, damages or liabilities (or actions in respect
thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
registration statement, prospectus, offering circular or other document, or any
amendment or supplement thereto, incident to any such registration,
qualification or compliance, or based on any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances in which they were
made, not misleading, or any violation by ▇▇▇▇ of any rule or regulation
promulgated under the Securities Act applicable to ▇▇▇▇ in connection with any
such registration, qualification or compliance, and ▇▇▇▇ will reimburse
BioChem, each of its officers, directors and partners, and each person
controlling BioChem, each such underwriter and
48
-12-
each person who controls any such underwriter, for any legal and any other
expenses reasonably incurred in connection with investigating, preparing or
defending any such claim, loss, damage, liability or action, provided that ▇▇▇▇
will no. be liable in any such case to the extent that any such claim, loss,
damage, liability or expense arises out of or is based on any untrue statement
or omission or alleged untrue statement or omission, made in reliance upon and
in conformity with written information furnished to ▇▇▇▇ by an instrument duly
executed by BioChem or any such controlling person or underwriter expressly for
use therein.
(b) BioChem will indemnify ▇▇▇▇, each of its directors and officers,
each underwriter, if any, of ▇▇▇▇'▇ securities covered by such a registration
statement and each person who controls ▇▇▇▇ or such underwriter within the
meaning of Section 15 of the Securities Act, against all expenses, claims,
losses, damages or liabilities (or actions in respect thereof), including any
of the foregoing incurred in settlement of any litigation, commenced or
threatened, arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any such registration statement,
prospectus, offering circular or other document, or any amendment or supplement
thereto, incident to any such registration, qualification or compliance, or
based on any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading, and will
reimburse ▇▇▇▇, each such underwriter and each person who controls any such
underwriter, for any legal and any other expenses reasonably incurred in
connection with investigating, preparing or defending any
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such claim, loss, damage, liability or action, in each case to the extent, but
only to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or other document in reliance upon and in
conformity with written information furnished to ▇▇▇▇ by an instrument duly
executed by BioChem expressly for use therein.
(c) Each party entitled to indemnification under this Section 1.6 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be sought,
and shall permit the Indemnifying Party to assume the defense of any such claim
or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 1 unless the failure
to give such notice is materially prejudicial to an Indemnifying Party's
ability to defend such action. No Indemnifying Party, in the defense of any
such claim or litigation, shall, except with the consent of each Indemnified
Party, consent to entry of any judgement or enter into any settlement which
does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation.
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1.7. Information by BioChem. It shall be a condition precedent to the
obligations of ▇▇▇▇ to effect a registration pursuant to this Section 1 that
BioChem shall furnish to ▇▇▇▇ such information regarding BioChem, the
Registrable Securities held by it and the distribution proposed by BioChem as
▇▇▇▇ may request in writing and as shall be required in connection with any
registration qualification or compliance referred to in this Section 1.
1.8. No Transfer of Registration Rights. The rights to cause ▇▇▇▇ to
register securities granted to BioChem under Section 1.2 and 1.3 are not
assignable in connection with any transfer or assignment of Registrable
Securities by BioChem or otherwise.
1.9. Limitation on Injunctions. BioChem shall not have any right to
obtain or seek an injunction restraining or otherwise delaying any registration
as the result of any controversy that might arise with respect to the
interpretation or implementation of the provisions of this Section 1.
SECTION TWO
▇▇▇▇ REGISTRATION RIGHTS
2.1. Certain Definitions. As used in this Section 2 to Schedule 4 of
the Share Purchase Agreement, the following terms shall have the following
respective meanings, and all other defined terms shall have the meaning
ascribed thereto in the Share Purchase Agreement.
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"Commissions" shall mean the securities commissions of the Provinces of
Quebec and Ontario.
"Securities" shall mean (i) the BioChem Common Shares and (ii) any
BioChem common shares issued or issuable in respect of the BioChem Common
Shares, upon any stock split, stock dividend, recapitalization, or similar
event, so long as the BioChem Common Shares and any BioChem Common Shares
issued in respect of the BioChem Common Shares are owned by ▇▇▇▇.
The terms "qualify," and "qualified for distribution" refer to
qualification for distribution (including, where appropriate, distribution to
the public) of Securities effected by preparing and filing with the Commissions
a prospectus in compliance with the Securities Act.
"Expenses" shall mean all expenses incurred by BioChem in complying
with Sections 2.2 and 2.3 hereof, including, without limitation, all
qualification and filing fees, printing expenses, escrow fees, fees and
disbursements of counsel for BioChem (including those of counsel for the
underwriters(s)), marketing expenses and the expense of any special audits
incident to or required by any such qualification for distribution (but
excluding the compensation of regular employees of BioChem which shall be paid
by BioChem).
"Selling Expenses" shall mean all underwriting discounts, selling
commissions and share transfer taxes applicable to the securities qualified for
distribution by ▇▇▇▇ and all fees and disbursements of counsel for ▇▇▇▇.
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"Securities Acts" shall mean the securities acts of the Provinces of
Quebec and Ontario.
2.2. Requested Qualification For Distribution. (a) Request for
Qualification for Distribution. ▇▇▇▇ shall have a one time right pursuant to
this Section 2.2 to request BioChem to qualify for distribution the offering of
all, but not a portion of the Securities owned by ▇▇▇▇ at the time of such
request. In case BioChem shall receive from ▇▇▇▇ a written request that BioChem
effect any qualification for distribution with respect to the Securities,
BioChem will, as soon as practicable, use its best efforts to effect such
qualification for distribution (including, without limitation, appropriate
compliance with the Securities Acts and any other securities regulatory and
stock exchange requirements or regulations) as may be so requested and as would
permit or facilitate the sale and distribution of all Securities owned by ▇▇▇▇;
provided, however, that BioChem shall not be obligated to take any action to
effect any such qualification for distribution pursuant to this Section 2.2:
(i) in any particular jurisdiction in which BioChem would be required
to execute a general consent to service of process in effecting such
qualification for distribution unless BioChem is already subject to service in
such jurisdiction and except as may be required by the Securities Act;
(ii) prior to the first anniversary of the Closing Date;
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(iii) during the period starting with the date 60 days prior to
BioChem's estimated date of filing of, and ending on the date 90 days
immediately following the date of any preliminary prospectus qualifying the
distribution of securities of BioChem (other than a distribution of securities
under Section 50 of the Securities Act (Quebec) or Sections 71(1)(h) or
71(1)(i) of the Securities Act (Ontario) or with respect to any employee
benefit plan); provided that BioChem is actively employing in good faith all
reasonable efforts to file its final prospectus and obtain receipts in respect
thereof from the Commissions and that BioChem's estimate of the date or filing
of the preliminary prospectus is made in good faith;
(iv) after BioChem has effected one such qualification pursuant to this
subparagraph 2.2(a), and receipts in respect of a final prospectus have been
issued under the Securities Acts in connection therewith and the securities
offered pursuant to such qualification for distribution have been sold;
(v) if BioChem shall furnish to ▇▇▇▇ a certificate signed by the
President of BioChem stating that in the good faith judgment of the Board of
Directors it would be seriously detrimental to BioChem or its shareholders for
a prospectus to be filed in the near future, in which case BioChem's obligation
to use its best efforts to qualify under this Section 2.2 shall be deferred,
not more than once in any 12-month period, for a period not to exceed 90 days;
or
(vi) after the fifth anniversary of the Closing Date.
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Subject to the foregoing clauses (i) through (vi), BioChem shall file a
prospectus qualifying a distribution of Securities so requested to be qualified
for distribution as soon as practicable, after receipt of the request of ▇▇▇▇.
(b) Notice. The right of ▇▇▇▇ to qualification for distribution
pursuant to Section 2.2 shall be conditioned upon BioChem's receipt of written
notice from ▇▇▇▇ which shall include a description of ▇▇▇▇'▇ proposed plan of
distribution and its Securities and the underwriting arrangements, if any.
(c) Offering of Securities in the United States. If at the time of any
offering pursuant to Section 2.2, the common shares of BioChem are registered
under the Securities Act of 1933 and in connection with such offering, ▇▇▇▇
desires to offer for sale its Securities in the United States, the parties
hereto shall negotiate in good faith, terms and conditions for the registration
of such securities in the United States comparable to those set forth in
Section 1.2 hereof.
2.3. Piggyback Rights.
(a) Notice of Qualification for Distribution. If, at any time or from
time to time, BioChem shall determine to qualify for distribution to the public
by prospectus any of its common shares, either for its own account or the
account of a securityholder or holders (other than ▇▇▇▇) exercising their
respective demand qualification for distribution rights, other than (i) a
distribution relating solely to employee benefit plans, or (ii) a distribution
that is
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exempted from the prospectus requirements of the Securities Acts, BioChem will:
(A) promptly give to ▇▇▇▇ written notice thereof; and
(B) include in such qualification for distribution and in any
underwriting involved therein, all the Securities specified in a written
request or requests, made within 30 days after receipt of such written notice
from BioChem by ▇▇▇▇; provided, however, that BioChem shall have no obligation
to include in such qualification for distribution a number of Securities equal
to less than 25% of the Securities owned by ▇▇▇▇ as of the Closing Date.
(b) Underwriting. If the qualification for distribution of which
BioChem gives notice is for a public offering involving an underwriting,
BioChem shall so advise ▇▇▇▇ as a part of the written notice given pursuant to
Section 2.3(a) above. In such event, the rights of ▇▇▇▇ pursuant to Section
2.3(a) shall be conditioned upon ▇▇▇▇'▇ participation in such underwriting and
the inclusion of Securities in the underwriting to the extent provided herein.
▇▇▇▇, if it is proposing to distribute its Securities through such
underwriting, shall (together with BioChem) enter into an underwriting
agreement in customary form with the managing underwriter selected for such
underwriting by BioChem. Notwithstanding any other provision of this Section
2.3, if the managing underwriter determines that marketing factors require a
limitation of the number of Securities to be underwritten, the managing
underwriter may limit the Securities to be included in such distribution or
completely exclude the Securities from such distribution. BioChem shall so
advise ▇▇▇▇ of the number of
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Securities that may be included in the distribution and underwriting. If ▇▇▇▇
disapproves of the terms of any such underwriting, it may elect to withdraw
therefrom, without the loss to ▇▇▇▇ of any rights under this Section 2, by
written notice to BioChem and the managing underwriter. Any securities excluded
or withdrawn from such underwriting shall not be transferred in a public
offering prior to 90 days after the date of the final prospectus relating
thereto. BioChem may include common shares held by shareholders other than ▇▇▇▇
in a distribution pursuant to Section 2.2 and this Section 2.3 only if, and to
the extent, the amount of Securities includable in such distribution would not
thereby be diminished.
(c) Right to Terminate Distribution BioChem shall have the right to
terminate or withdraw from any distribution initiated by it under this Section
2.3 prior to the date of closing of such distribution whether or not ▇▇▇▇ has
elected to include Securities in such distribution.
(d) Termination of Registration Rights. ▇▇▇▇'▇ registration rights
under this Section 2.3 shall terminate on the fifth anniversary of the Closing
Date.
2.4. Expenses All Expenses and Selling Expenses incurred in connection
with a distribution pursuant to Section 2.2 shall be borne by ▇▇▇▇; provided,
however, that in the event one or more holders of BioChem common shares
exercise any piggyback rights with respect to a qualification for distribution
under Section 2.2, ▇▇▇▇ shall have no obligation to pay for that portion of the
Expenses incurred as a result of such holder's or holders' exercise of such
piggyback rights. All Selling Expenses incurred in
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connection with any distribution pursuant to Section 2.3 shall be borne by ▇▇▇▇
and a pro rata share of the Expenses incurred in connection with any
distribution pursuant to Section 2.3 shall be borne by ▇▇▇▇ on the basis of the
number of Securities so qualified for a distribution divided by the aggregate
number of shares qualified for distribution pursuant to such qualification for
distribution.
2.5. Qualification of Distribution Procedures. In the case of a
distribution effected by BioChem pursuant to this Section 2., BioChem will keep
▇▇▇▇ advised in writing as to the initiation of each such distribution and as
to the completion thereof. At the expense of ▇▇▇▇ and/or BioChem as determined
pursuant to Section 2.4, BioChem will:
(a) prepare and file with the Commissions a preliminary prospectus with
respect to such securities and use its best efforts to prepare and file with
the Commissions a final prospectus; provided that no such prospectus shall
constitute a shelf prospectus under Section 24.1 of the Securities Act (Quebec)
or Section 52.2 of the Securities Act (Ontario).
(b) enter into a written underwriting agreement in customary form and
substance reasonably satisfactory to BioChem, ▇▇▇▇ and the managing underwriter
or underwriters of the public offering of such securities, if the distribution
is to be underwritten in whole or in part;
(c) furnish to ▇▇▇▇ if it is participating in such distribution and to
the underwriters of the securities being qualified such reasonable number of
copies of the preliminary prospectus, final prospectus and such other
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documents as such underwriters may reasonably request in order to facilitate
the public offering of such securities;
(e) notify ▇▇▇▇, promptly after it shall receive notice thereof, of the
time when receipts in respect of the preliminary and final prospectuses have
been issued by the Commissions.
(f) notify ▇▇▇▇ promptly of any request by the Commissions for the
amending or supplementing of the preliminary and final prospectuses or for
additional information;
(g) prepare and file with the Commissions promptly upon the request of
▇▇▇▇, any amendments or supplements to the preliminary or final prospectuses
which, in the reasonable opinion of counsel for ▇▇▇▇, is required under the
Securities Act in connection with the distribution of the Securities by ▇▇▇▇;
(h) prepare and promptly file with the Commissions, and promptly notify
▇▇▇▇ of the filing of, such amendment or supplement to the preliminary or final
prospectuses if, since the filing of the preliminary or final prospectus, a
change in a "material fact" (as such expression is defined under the Securities
Acts) has occurred which is or may be of such a nature as to render such
prospectus untrue or misleading or result in a misrepresentation (as defined in
the Securities Acts) therein likely to affect the value or the market price of
the securities to be distributed or which would result in such prospectus not
complying (to the extent such compliance is required) with the Securities Acts.
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(i) in case ▇▇▇▇ or any underwriter for ▇▇▇▇ is required to deliver a
prospectus at a time when the prospectus then in effect may no longer be used
under the Securities Acts, prepare promptly upon request such amendment or
amendments to such prospectuses as may be necessary to permit compliance with
the requirements of the Securities Acts;
(j) advise ▇▇▇▇, promptly after it shall receive notice or obtain
knowledge thereof, of the issuance of any cease trade order by the Commissions
relating to the distribution of the securities or the initiation or threatening
of any proceeding for that purpose and promptly use its best efforts to prevent
the issuance of any cease trade order or to obtain its withdrawal if such cease
trade order should be issued; and
(k) at the request of ▇▇▇▇, furnish on the closing date provided for in
the underwriting agreement, (i) an opinion, dated such date, of the counsel
representing BioChem for the purposes of such qualification for distribution,
addressed to the underwriters, if any, and to ▇▇▇▇, covering such matters with
respect to the prospectus and each amendment or supplement thereto, proceedings
under applicable securities laws, other matters relating to BioChem, the
securities being qualified for distribution and the offer and sale of such
securities as are customarily the subject of opinions of issuer's counsel
provided to underwriters in underwritten public offerings, and (ii) to the
extent BioChem's accounting firm is willing to do so, a letter dated such date,
from the independent auditors of BioChem, addressed to the underwriters, if
any, and to ▇▇▇▇,
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stating that they are independent auditors and that in the opinion of such
auditors, the financial statements and other financial data of BioChem included
in the prospectus or any amendment or supplement thereto comply in all material
respect with the applicable accounting requirements of the Securities Acts, and
additionally covering such other financial matters, including information as to
the period ending not more than five business days prior to the date of such
letter with respect to the prospectus, as the underwriters or ▇▇▇▇ may
reasonably request.
2.6. Indemnification. (a) BioChem will indemnify ▇▇▇▇, each of its
officers and directors and each person controlling ▇▇▇▇ within the meaning of
the Securities Acts, with respect to the qualification for distribution
effected pursuant to this Section 2, and each underwriter, if any, and each
person who controls any underwriter within the meaning of the Securities Acts,
against all expenses, claims, losses, damages or liabilities (or actions in
respect thereof), which may be incurred or arise by reason of the preliminary
or the final prospectus containing any misrepresentation (as defined in the
Securities Acts) or containing any information or statement that is untrue with
respect to a material fact (as defined in the Securities Acts) or by reasons of
the omission to state therein any fact required to be stated therein or
necessary to make the statements therein not misleading in the circumstances
they were made, or any violation by BioChem under the Securities Acts in
connection with any such qualification for distribution, and BioChem will
reimburse ▇▇▇▇, each of its officers and directors and each person controlling
▇▇▇▇, each such underwriter and each person who controls any such underwriter,
for any legal and any other expenses reasonably
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incurred in connection with investigating, preparing or defending any such
claim, loss, damage, liability or action, provided that BioChem will not be
liable in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any untrue statement or
omission or alleged untrue statement or omission, made in reliance upon and in
conformity with written information furnished to BioChem by an instrument duly
executed by ▇▇▇▇ or any such controlling person or underwriter expressly for
use therein.
(b) ▇▇▇▇ will indemnify BioChem, each of its directors and officers,
each underwriter, if any, of BioChem's securities covered by such a
qualification for distribution and each person who controls BioChem or such
underwriter within the meaning of the Securities Acts, against all expenses,
claims, losses, damages or liabilities (or actions in respect thereof), which
may be incurred or arise by reason of the preliminary or the final prospectus
containing any misrepresentation (as defined in the Securities Acts) or
containing any information or statement that is untrue with respect to a
material fact (as defined in the Securities Acts) or by reason of the omission
to state therein any fact required to be stated therein or necessary to make
the statements therein not misleading in the circumstances they were made and
will reimburse BioChem, each such underwriter and each person who controls any
such underwriter, for any legal and any other expenses reasonably incurred in
connection with investigating, preparing or defending any such claim, loss,
damage, liability or action, in each case to the extent, but only the extent,
that such untrue statement (or alleged untrue statement) or omission (or
alleged omission) is made in such prospectus,
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offering circular or other document in reliance upon and in conformity with
written information furnished to BioChem by an instrument duly executed by ▇▇▇▇
expressly for use therein.
(c) Each party entitled to indemnification under this Section 2.6 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be sought,
and shall permit the Indemnifying Party to assume the defense of any such claim
or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 2 unless the failure
to give such notice is materially prejudicial to an Indemnifying Party's
ability to defend such action. No Indemnifying Party, in the defense of any
such claim or litigation, shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
of such claim or litigation.
2.7. Information by ▇▇▇▇. It shall be a condition precedent to the
obligations of BioChem to effect a qualification for distribution pursuant to
this Section 2
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that ▇▇▇▇ shall furnish to BioChem such information regarding ▇▇▇▇, the
Securities and the distribution proposed by ▇▇▇▇ as BioChem may request in
writing and as shall be required in connection with any qualificatior for
distribution referred to in this Section 2.
2.8. No Transfer of Rights. The rights to cause BioChem to qualify for
distribution securities granted to ▇▇▇▇ under Sections 2.2 and 2.3 are not
assignable in connection with any transfer or assignment of Securities by ▇▇▇▇
o: otherwise.
2.9. Limitation on Injunctions. ▇▇▇▇ shall not have any right to obtain
or seek an injunction restraining or otherwise delaying any distribution as the
result of any controversy that might arise with respect to the interpretation
or implementation of the provisions of this Section 2.
