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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT
TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of: August, 2006
Commission File Number: 000-50393
NEUROCHEM INC.
275 Armand-Frappier Boulevard
Laval, Quebec
H7V 4A7
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40 F. Form 20-F [ ] Form 40-F [X]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1):
Yes [ ] No [X]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7):
Yes [ ] No [X]
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g-3 under the Securities Exchange Act of 1934.
Yes [ ] No [X]
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b):
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SIGNATURES:
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
NEUROCHEM INC.
August 18, 2006
By: /s/ David Skinner
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David Skinner, Vice President,
General Counsel and Corporate Secretary
FORM 51-102F3
MATERIAL CHANGE REPORT
ITEM 1 NAME AND ADDRESS OF COMPANY
Neurochem Inc. ("Neurochem")
275 Armand-Frappier Blvd.
Laval, Quebec
H7V 4A7
ITEM 2 DATE OF MATERIAL CHANGE
August 9, 2006
ITEM 3 NEWS RELEASE
A press release was disseminated by Canada NewsWire on August 9, 2006
from Laval, Quebec.
ITEM 4 SUMMARY OF MATERIAL CHANGE
Neurochem announced that it has entered into a securities purchase
agreement in respect of an equity line of credit facility. A copy of
the agreement is filed separately.
ITEM 5 FULL DESCRIPTION OF MATERIAL CHANGE
On August 9, 2006, Neurochem entered into a securities purchase
agreement, in respect of an equity line of credit facility with a 24
month term, that provides Neurochem up to US $60 million of funds in
return for the issuance of common shares at a discount of 3.0% to
market price at the time of draw downs over the term. Rodman & Renshaw
acted as placement agent for this transaction. The agreement provides
for an obligation for Neurochem to drawdown at least US $25 million
over the two-year term of the facility.
The agreement is conditional on the registration of the underlying
securities and approval from the appropriate securities regulators.
ITEM 6 RELIANCE ON SUBSECTION 7.1(2) OR (3) OF NATIONAL INSTRUMENT 51-102
This report is not being filed on a confidential basis.
ITEM 7 OMITTED INFORMATION
N/A
ITEM 8 EXECUTIVE OFFICER
For further information, please contact Lise Hebert, Vice-President,
Corporate Communications, at 450.680.4570.
ITEM 9 DATE OF REPORT
August 17, 2006
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this "Agreement") is dated as of
August 9, 2006 by and between Neurochem Inc., a Canadian corporation (the
"Company") and Cityplatz Limited, a British Virgin Islands corporation (the
"Purchaser"). Capitalized terms used in this Agreement and not otherwise defined
shall have the meanings ascribed to them in Article I.
WHEREAS, the parties desire that, upon the terms and subject to the
conditions contained herein, the Company shall have the right to issue and sell
to Purchaser from time to time as provided herein, and Purchaser shall be
obligated to purchase from the Company up to $60,000,000 worth of shares of
Common Stock on, in the United States, a private placement basis pursuant to an
exemption from registration under Section 4(2) of the Security Act of 1933; and
WHEREAS, it is the intention of the parties that the Purchaser shall be
entitled to resell shares of Common Stock acquired hereunder pursuant to a
resale registration statement to be filed by the Company pursuant to the terms
of the Registration Rights Agreement between the Company and the Purchaser which
shall have been declared effective by the Commission prior to the delivery of
the first Draw Down Notice.
NOW, THEREFORE, in consideration of the foregoing premises, and the
promises and covenants herein contained, the receipt and sufficiency of which
are hereby acknowledged by the parties hereto, the parties, intending to be
legally bound, hereby agree as follows:
ARTICLE I.
DEFINITIONS
1.1. Definitions. In addition to the terms defined elsewhere in
this Agreement, for all purposes of this Agreement, the following have the
meanings indicated in this Section 1.1:
"$" or "Dollars" shall mean and be a reference to United States
dollars;
"Action" shall have the meaning ascribed to such term in Section
3.1(j).
"Affiliate" means any Person that, directly or indirectly through
one or more intermediaries, controls or is controlled by or is under common
control with a Person, as such terms are used in and construed under Rule 144.
With respect to the Purchaser, any investment fund or managed account that is
managed on a discretionary basis by the same investment manager as the Purchaser
will be deemed to be an Affiliate of the Purchaser.
"Aggregate Purchase Price" shall have the meaning ascribed to such
term in Section 6.1(e).
"Business Day" means any day except Saturday, Sunday, any day
which shall be a legal holiday in the United States, Canada or Quebec any day on
which banking institutions in the State of New York, Canada or Quebec are
authorized or required by law or other governmental action to close.
"Change of Control Transaction" means the occurrence after the
date hereof of any of (i) an acquisition by an individual or legal entity or
"group" (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of
effective control (whether through legal or beneficial ownership of capital
stock of the Company, by contract or otherwise) of in excess of 50% of the
voting securities of the Company without objection from the Company, or (ii) the
Company merges into or consolidates with any other Person, or any Person merges
into or consolidates with the Company and, after giving effect to such
transaction, the stockholders of the Company immediately prior to such
transaction own less than 66-2/3% of the aggregate voting power of the Company
or the successor entity of such transaction, or (iii) the Company sells or
transfers all or substantially all of its assets to another Person and the
stockholders of the Company immediately prior to such transaction own less than
66-2/3% of the aggregate voting power of the acquiring entity immediately after
the transaction, or (iv) a replacement within a two-year period from the date
hereof of more than one-half of the members of the Company's board of directors
which is not approved by a majority of those individuals who are members of the
board of directors on the date hereof (or by those individuals who are serving
as members of the board of directors on any date whose nomination to the board
of directors was approved by a majority of the members of the board of directors
who are members on the date hereof), or (v) the execution by the Company of an
agreement to which the Company is a party or by which it is bound, providing for
any of the events set forth in clauses (i) through (iv) above.
"Canadian Commission" means a securities regulatory authority of a
Province of Canada.
"Commissions" means collectively the Securities and Exchange
Commission of the United States and Canadian Commissions.
"Commencement Date" shall mean the Trading Day immediately
following the date on which the applicable Draw Down Notice is delivered to the
Purchaser.
"Commitment Amount" shall have the meaning assigned to such term
in Section 2.1 hereof.
"Commitment Period" shall mean the period of 24 consecutive months
commencing immediately after the Effective Date.
"Common Stock" means the common shares of the Company, no par
value, and any other class of securities into which such securities may
hereafter be reclassified or changed into.
"Common Stock Equivalents" means any securities of the Company or
the Subsidiaries which would entitle the holder thereof to acquire at any time
Common Stock, including, without limitation, any debt, preferred stock, rights,
options, warrants or other instrument that is at any time convertible into or
exercisable or exchangeable for, or otherwise entitles the holder thereof to
receive, Common Stock.
"Company Counsel" means Davies Ward Phillips & Vineberg LLP.
"Disclosure Schedules" means the Disclosure Schedules of the
Company delivered concurrently herewith.
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"Draw Down" shall have the meaning assigned to such term in
Section 6.1(a) hereof.
"Draw Down Notice" shall have the meaning assigned to such term in
Section 6.1(e) hereof.
"Draw Down Pricing Period" shall mean a period of up to [....]
consecutive Trading Days, in multiples of [...] Trading Days, beginning on the
date specified in the Draw Down Notice; provided, however, the Draw Down Pricing
Period shall not begin before the day on which receipt of such notice is
delivered to Purchaser pursuant to Section 8.3 herein.
"Draw Down Shares" shall mean the shares of Common Stock issuable
pursuant to a Draw Down.
"DTC" shall have the meaning assigned to such term in Section
6.1(f).
"DWAC" shall have the meaning assigned to such term in Section
6.1(f).
"Effective Date" means the date that the initial Registration
Statement filed by the Company pursuant to the Registration Rights Agreement
first becomes effective.
"Equity Conditions" shall mean, during the period in question, (i)
in which there is an effective Registration Statement pursuant to which the
Purchaser is permitted to utilize the prospectus included therein to resell in
the United States all of the Draw Down Shares (issued and to be issued pursuant
to the applicable Draw Down) and the Company believes, in good faith, that such
effectiveness will continue uninterrupted for the foreseeable future, (ii) the
Common Stock is trading on the Nasdaq Stock Market and all of the shares
issuable pursuant to the applicable Draw Down Documents are listed or quoted (if
applicable) for trading on the Nasdaq Stock Market (and the Company believes, in
good faith, that trading of the Common Stock on the Nasdaq Stock Market will
continue uninterrupted for the foreseeable future), (iii) there is a sufficient
number of authorized but unissued and otherwise unreserved shares of Common
Stock for the issuance of all of the Draw Down Shares (issued and to be issued
pursuant to the applicable Draw Down), (iv) the issuance of the Draw Down Shares
subject to the applicable Draw Down would not violate the limitations set forth
in Section 4.8 and (v) the Company, directly or indirectly, has not provided the
Purchaser with any material, non-public information that has not been made
publicly available in a widely disseminated release or otherwise in a manner
contemplated by Regulation FD under the Exchange Act.
"Evaluation Date" shall have the meaning ascribed to such term in
Section 3.1(r).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Exempt Issuance" means the issuance of (a) shares of Common Stock
or options to employees, officers or directors of the Company pursuant to any
stock or option plan duly adopted by a majority of the members of the Board of
Directors of the Company or a majority of the members of a committee of
directors established for such purpose, (b) securities upon the exercise or
exchange of or conversion of any Securities issued hereunder and/or other
securities exercisable or exchangeable for or convertible into shares of Common
Stock issued and
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outstanding on the date of this Agreement, provided that such securities have
not been amended since the date of this Agreement to increase the number of such
securities or to decrease the exercise, exchange or conversion price of any such
securities, and (c) securities issued pursuant to acquisitions or strategic
transactions approved by a majority of the directors.
"FWS" means Feldman Weinstein & Smith LLP with offices located at
420 Lexington Avenue, Suite 2620, New York, New York 10170-0002.
"GAAP" shall have the meaning ascribed to such term in Section
3.1(h).
"Intellectual Property Rights" shall have the meaning ascribed to
such term in Section 3.1(o).
"Investment Amount" shall have the meaning assigned to such term
in Section 6.1(e) hereof.
"Liens" means a lien, charge, security interest, encumbrance,
right of first refusal, preemptive right or other restriction.
"Material Adverse Effect" shall have the meaning assigned to such
term in Section 3.1(b).
"Material Permits" shall have the meaning ascribed to such term in
Section 3.1(m).
"Person" means an individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof)
or other entity of any kind.
"Proceeding" means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened.
"Purchase Price" shall mean, with respect to Draw Down Shares
purchased during each applicable Draw Down Pricing Period, 97% of the VWAP on
the date in question during such Draw Down Pricing Period.
"Purchaser Party" shall have the meaning ascribed to such term in
Section 4.7.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated the date hereof, between the Company and the Purchaser, in the
form of Exhibit A attached hereto.
"Registration Statement" means a registration statement meeting
the requirements set forth in the Registration Rights Agreement and covering the
resale by the Purchaser of the Shares.
"Restricted Period" shall have the meaning ascribed to such term
in Section 3.2(g).
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"Required Approvals" shall have the meaning ascribed to such term
in Section 3.1(e).
"Rule 144" means Rule 144 promulgated by the Commission pursuant
to the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"SEC Reports" shall have the meaning ascribed to such term in
Section 3.1(h).
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"Settlement" shall mean the electronic delivery of the Draw Down
Shares through the Company's United States transfer agent.
"Settlement Date" shall have the meaning assigned to such term in
Section 6.1(b).
"Settlement Period" shall have the meaning assigned to such term
in Section 6.1(b).
"Shares" shall mean the Draw Down Shares.
"Short Sales" shall include all "short sales" as defined in Rule
200 of Regulation SHO under the Exchange Act (but shall not be deemed to include
the location and/or reservation of borrowable shares of Common Stock).
"Subsidiary" shall have the meaning ascribed to such term in
Section 3.1(a).
"Threshold Price" shall mean the price per Share designated by the
Company as the lowest VWAP during any Draw Down Pricing Period at which the
Company shall sell its Common Stock in accordance with this Agreement, as set
forth in each specific Draw Down Notice.
"Trading Cushion" shall mean the [...] Trading Days between Draw
Down Pricing Periods.
"Trading Day" means a day on which the Common Stock is traded on
a Trading Market.
"Trading Market" means the following markets or exchanges on which
the Common Stock is listed or quoted for trading on the date in question: any
tier of the Nasdaq Stock Market, the Toronto Stock Exchange, the American Stock
Exchange, the New York Stock Exchange or the OTC Bulletin Board.
"Transaction Documents" means this Agreement and the Registration
Rights Agreement executed in connection with the transactions contemplated
hereunder.
"VWAP" means, for any date, the price determined by the first of
the following clauses that applies: (a) if the Common Stock is then listed or
quoted on the Nasdaq Stock
5
Market, the daily volume weighted average price of the Common Stock for such
date (or the nearest preceding date) on such Trading Market as reported by
Bloomberg Financial L.P. (based on a Trading Day from 9:30 a.m. (New York City
time) to 4:02 p.m. (New York City time); (b) if the Nasdaq Stock Market is not a
Trading Market, the volume weighted average price of the Common Stock for such
date (or the nearest preceding date) on the Toronto Stock Exchange; (c) if the
Toronto Stock Exchange is not a Trading Market, the volume weighted average
price of the Common Stock for such date (or the nearest preceding date) on the
on the OTC Bulletin Board; (d) if prices for the Common Stock are then reported
in the "Pink Sheets" published by Pink Sheets, LLC (or a similar organization or
agency succeeding to its functions of reporting prices), the most recent bid
price per share of the Common Stock so reported; or (e) in all other cases, the
fair market value of a share of Common Stock as determined by an independent
appraiser selected in good faith by the Purchaser and reasonably acceptable to
the Company.
ARTICLE II.
PURCHASE AND SALE
2.1. Purchase and Sale of Draw Down Shares. Upon the terms and
subject to the conditions of this Agreement, the Company may, at its discretion,
sell and issue to the Purchaser and the Purchaser shall be obligated to purchase
from the Company, up to an aggregate of US$60,000,000 worth of shares of newly
issued Common Stock (the "Commitment Amount").
2.2. Closing of Draw Downs. Closing of any Draw Down shall take
place at the offices of FWS, 420 Lexington Avenue, Suite 2620, New York, New
York 10170 (i) at 10:00 a.m. local time, or (ii) at such other time and place as
the Purchaser and the Company may agree upon. Within 5 Trading Days of the
Delivery of a Draw Down Notice, the Company shall deliver or cause to be
delivered to the Purchaser a legal opinion of Company Counsel, reasonably
acceptable as to form and substance to Purchaser's counsel.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1. Representations and Warranties of the Company. Except as set
forth under the corresponding section of the Disclosure Schedules which
Disclosure Schedules shall be deemed a part hereof and to qualify any
representation or warranty otherwise made herein to the extent of such
disclosure, the Company hereby makes the representations and warranties set
forth below to the Purchaser:
(a) Subsidiaries. All of the direct and indirect material
subsidiaries (each, a "Subsidiary") of the Company are set forth on
Schedule 3.1(a). The Company owns, directly or indirectly, all of the
capital stock or other equity interests of each Subsidiary free and clear
of any Liens, and all the issued and outstanding shares of capital stock of
each Subsidiary are validly issued and are fully paid, non-assessable and
free of preemptive and similar rights to subscribe for or purchase
securities.
(b) Organization and Qualification. The Company and each of the
Subsidiaries is an entity duly incorporated or otherwise organized, validly
existing and in good standing
6
under the laws of the jurisdiction of its incorporation or organization (as
applicable), with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently conducted.
Neither the Company nor any Subsidiary is in violation or default of any of
the provisions of its respective certificate or articles of incorporation,
bylaws or other organizational or charter documents; each of the Company
and the Subsidiaries is duly qualified to conduct business and is in good
standing as a foreign corporation or other entity in each jurisdiction in
which the nature of the business conducted or property owned by it makes
such qualification necessary, except where such violation or default or the
failure to be so qualified or in good standing, as the case may be, could
not have or reasonably be expected to result in (i) a material adverse
effect on the legality, validity or enforceability of any Transaction
Document, (ii) a material adverse effect on the results of operations,
assets, business, prospects or condition (financial or otherwise) of the
Company and the Subsidiaries, taken as a whole, or (iii) a material adverse
effect on the Company's ability to perform in any material respect on a
timely basis its obligations under any Transaction Document (any of (i),
(ii) or (iii), a "Material Adverse Effect") and no Proceeding has been
instituted in any such jurisdiction revoking, limiting or curtailing or
seeking to revoke, limit or curtail such power and authority or
qualification. Notwithstanding the foregoing, for the purposes of this
Agreement a Material Adverse Effect shall not include any data, results or
announcement, position or decision by any regulatory agency with respect to
eprodisate (Fibrillex(TM)).
(c) Authorization; Enforcement. The Company has the requisite
corporate power and authority to enter into and to consummate the
transactions contemplated by each of the Transaction Documents and
otherwise to carry out its obligations hereunder and thereunder. The
execution and delivery of each of the Transaction Documents by the Company
and the consummation by it of the transactions contemplated hereby and
thereby have been duly authorized by all necessary action on the part of
the Company and no further action is required by the Company, its board of
directors or its stockholders in connection therewith other than in
connection with the Required Approvals. Each Transaction Document has been
(or upon delivery will have been) duly executed by the Company and, when
delivered in accordance with the terms hereof and thereof, will constitute
the valid and binding obligation of the Company enforceable against the
Company in accordance with its terms except (i) as limited by general
equitable principles and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of
creditors' rights generally, (ii) as limited by laws relating to the
availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions
may be limited by applicable law.
(d) No Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company, the issuance and sale of the Shares
and the consummation by the Company of the other transactions contemplated
hereby and thereby do not and will not (i) conflict with or violate any
provision of the Company's or any Subsidiary's certificate or articles of
incorporation, bylaws or other organizational or charter documents, or (ii)
conflict with, or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, result in the creation
of any Lien upon any of the properties or assets of the Company or any
Subsidiary, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or
both) of,
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any agreement, credit facility, debt or other instrument (evidencing a
Company or Subsidiary debt or otherwise) or other understanding to which
the Company or any Subsidiary is a party or by which any property or asset
of the Company or any Subsidiary is bound or affected, or (iii) subject to
the Required Approvals, conflict with or result in a violation of any law,
rule, regulation, order, judgment, injunction, decree or other restriction
of any court or governmental authority to which the Company or a Subsidiary
is subject (including federal and state securities laws and regulations),
or by which any property or asset of the Company or a Subsidiary is bound
or affected; except in the case of each of clauses (i), (ii) and (iii),
such as could not have or reasonably be expected to result in a Material
Adverse Effect.
(e) Filings, Consents and Approvals. The Company is not required
to obtain any consent, waiver, authorization or order of, give any notice
to, or make any filing or registration with, any court or other federal,
provincial, state, local or other governmental authority or other Person in
connection with the execution, delivery and performance by the Company of
the Transaction Documents, other than (i) filings required pursuant to
Section 4.5 of this Agreement, (ii) the filing with the Commissions of the
Registration Statement, (iii) application(s) to each applicable Trading
Market for the listing of the Shares for trading thereon in the time and
manner required thereby, and (iv) the filing of Form D with the Securities
and Exchange Commission of the United States and such filings as are
required to be made under applicable state securities laws (collectively,
the "Required Approvals").
(f) Issuance of the Shares. The Shares are duly authorized and,
when issued and paid for in full in accordance with this Agreement, will be
duly and validly issued, fully paid and nonassessable, free and clear of
all Liens imposed by the Company other than restrictions on transfer
provided for in the Transaction Documents and applicable U.S. and Canadian
securities laws.
(g) Capitalization. The Company has not issued any capital stock
since its most recently filed periodic report under the Exchange Act, other
than pursuant to the exercise of employee stock options under the Company's
stock option plans, the issuance of shares of Common Stock or other
securities to employees pursuant to an employee stock purchase plan or
other incentive plan or other programs in place or to be put in place from
time to time by the Company and pursuant to the conversion or exercise of
Common Stock Equivalents outstanding as of the date of the most recently
filed periodic report under the Exchange Act or other Exempt Issuances. No
Person has any right of first refusal, preemptive right, right of
participation, or any similar right to participate in the transactions
contemplated by the Transaction Documents. Except as publicly disclosed by
the Company in SEC Reports or as a result of the purchase and sale of the
Shares, there are no outstanding options, other than options granted under
the Company's stock option plan, warrants, script rights to subscribe to,
calls or commitments of any character whatsoever relating to, or
securities, rights or obligations convertible into or exercisable or
exchangeable for, or giving any Person any right to subscribe for or
acquire, any shares of Common Stock, or contracts, commitments,
understandings or arrangements by which the Company or any Subsidiary is or
may become bound to issue additional shares of Common Stock or Common Stock
Equivalents. The issuance and sale of the Shares will not obligate the
Company to issue shares of Common Stock or other securities to any Person
(other than the Purchaser) and
8
will not result in a right of any holder of Company securities to adjust
the exercise, conversion, exchange or reset price under any of such
securities. All of the outstanding shares of capital stock of the Company
are validly issued, fully paid and nonassessable, have been issued in
compliance with all federal, provincial and state securities laws, and none
of such outstanding shares was issued in violation of any preemptive rights
or similar rights to subscribe for or purchase securities. No further
approval or authorization of any stockholder, the Board of Directors of the
Company or others is required for the issuance and sale of the Shares.
There are no stockholders agreements, voting agreements or other similar
agreements with respect to the Company's capital stock to which the Company
is a party or, to the knowledge of the Company, between or among any of the
Company's stockholders.
(h) SEC Reports; Financial Statements. The Company has filed all
reports, schedules, forms, statements and other documents required to be
filed by it as a foreign private issuer under the Securities Act and the
Exchange Act, including pursuant to Section 13(a) or 15(d) thereof (the
"SEC Reports"), for the two years preceding the date hereof (or such
shorter period as the Company was required by law or regulation to file
such material) on a timely basis or has received a valid extension of such
time of filing and has filed any such SEC Reports prior to the expiration
of any such extension. As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the Securities
Act and the Exchange Act, as applicable, and none of the SEC Reports, when
filed, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The financial statements of the
Company included in the SEC Reports comply in all material respects with
applicable accounting requirements and the rules and regulations of the
Commission with respect thereto as in effect at the time of filing. Such
financial statements have been prepared in accordance with Canadian
generally accepted accounting principles applied on a consistent basis
during the periods involved ("GAAP"), except as may be otherwise specified
in such financial statements or the notes thereto and except that unaudited
financial statements may not contain all footnotes required by GAAP, and
fairly present in all material respects the financial position of the
Company and its consolidated subsidiaries as of and for the dates thereof
and the results of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal, immaterial,
year-end audit adjustments.
(i) Material Changes; Undisclosed Events, Liabilities or
Developments. Since the date of the latest audited financial statements
included within the SEC Reports, except as specifically disclosed in a
subsequent SEC Report, (i) there has been no event, occurrence or
development that has had or that could reasonably be expected to result in
a Material Adverse Effect, (ii) the Company has not incurred any
liabilities (contingent or otherwise) other than (A) trade payables and
accrued expenses incurred in the ordinary course of business consistent
with past practice and (B) liabilities not required to be reflected in the
Company's financial statements pursuant to GAAP or disclosed in filings
made with the Commission, (iii) the Company has not altered its method of
accounting, (iv) the Company has not declared or made any dividend or
distribution of cash or other property to its stockholders or purchased,
redeemed or made any agreements to purchase or redeem any shares of its
capital stock and (v) the Company has not issued any equity securities to
any officer, director or Affiliate, except pursuant to existing Company
stock option plans. The
9
Company does not have pending before the Commission any request for
confidential treatment of information. Except for the issuance of the
Shares contemplated by this Agreement or as set forth on Schedule 3.1(i),
no event, liability or development has occurred or exists with respect to
the Company or its Subsidiaries or their respective business, properties,
operations or financial condition, that would be required to be disclosed
by the Company under applicable securities laws at the time this
representation is made that has not been publicly disclosed at least 1
Trading Day prior to the date that this representation is made.
(j) Litigation. Except as disclosed by the Company in SEC Reports,
there is no action, suit, inquiry, notice of violation, proceeding or
investigation pending or, to the knowledge of the Company, threatened
against or affecting the Company, any Subsidiary or any of their respective
properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state, county,
local or foreign) (collectively, an "Action") which (i) adversely affects
or challenges the legality, validity or enforceability of any of the
Transaction Documents or the Shares or (ii) could, if there were an
unfavorable decision, have or reasonably be expected to result in a
Material Adverse Effect. Neither the Company nor any Subsidiary, nor any
director or officer thereof, is or has been the subject of any Action
involving a claim of violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty. There has not been,
and to the knowledge of the Company, there is not pending or contemplated,
any investigation by the Commission involving the Company or any current or
former director or officer of the Company. The Commission has not issued
any stop order or other order suspending the effectiveness of any
registration statement filed by the Company or any Subsidiary under the
Exchange Act or the Securities Act.
(k) Labor Relations. No material labor dispute exists or, to the
knowledge of the Company, is imminent with respect to any of the employees
of the Company which could reasonably be expected to result in a Material
Adverse Effect. None of the Company's or its Subsidiaries' employees is a
member of a union that relates to such employee's relationship with the
Company, and neither the Company or any of its Subsidiaries is a party to a
collective bargaining agreement, and the Company and its Subsidiaries
believe that their relationships with their employees are good. No
executive officer, to the knowledge of the Company, is in violation of any
material term of any employment contract, confidentiality, disclosure or
proprietary information agreement or non-competition agreement, or any
other contract or agreement or any restrictive covenant, and the continued
employment of each such executive officer does not subject the Company or
any of its Subsidiaries to any liability with respect to any of the
foregoing matters.
(l) Compliance. Neither the Company nor any Subsidiary (i) is in
default under or in violation of (and no event has occurred that has not
been waived that, with notice or lapse of time or both, would result in a
default by the Company or any Subsidiary under), nor has the Company or any
Subsidiary received notice of a claim that it is in default under or that
it is in violation of, any indenture, loan or credit agreement or any other
agreement or instrument to which it is a party or by which it or any of its
properties is bound (whether or not such default or violation has been
waived), (ii) is in violation of any order of any court, arbitrator or
governmental body, or (iii) is or has been in violation of any statute,
rule or
10
regulation of any governmental authority, including without limitation all
foreign, federal, state and local laws applicable to its business and all
such laws that affect the environment, except in each case as could not
have or reasonably be expected to result in a Material Adverse Effect.
(m) Regulatory Permits. To the knowledge of the Company, the
Company and the Subsidiaries possess all certificates, authorizations and
permits issued by the appropriate federal, state, local or foreign
regulatory authorities necessary to conduct their respective businesses as
described in the SEC Reports, except where the failure to possess such
permits could not have or reasonably be expected to result in a Material
Adverse Effect ("Material Permits"), and neither the Company nor any
Subsidiary has received any notice of proceedings relating to the
revocation or modification of any Material Permit.
(n) Title to Assets. The Company and the Subsidiaries have good
and marketable title in all personal property owned by them that is
material to the business of the Company and the Subsidiaries, in each case
free and clear of all Liens, except for Liens as do not materially affect
the value of such property and do not materially interfere with the use
made and proposed to be made of such property by the Company and the
Subsidiaries and Liens for the payment of federal, state or other taxes,
the payment of which is neither delinquent nor subject to penalties. Any
real property and facilities held under lease by the Company and the
Subsidiaries are held by them under valid, subsisting and enforceable
leases with which the Company and the Subsidiaries are in compliance.
(o) Patents and Trademarks. To the knowledge of the Company,
except as set forth in SEC Reports, the Company and the Subsidiaries have,
or have rights to use, all patents, patent applications, trademarks,
trademark applications, service marks, trade names, trade secrets,
inventions, copyrights, licenses and other intellectual property rights and
similar rights necessary or material for use in connection with their
respective businesses as described in the SEC Reports and which the failure
to so have could have a Material Adverse Effect (collectively, the
"Intellectual Property Rights") and neither the Company nor any Subsidiary
has received a written notice that the Intellectual Property Rights used by
the Company or any Subsidiary violates or infringes upon the rights of any
Person. To the knowledge of the Company, all such Intellectual Property
Rights are enforceable and there is no existing infringement by another
Person of any of the Intellectual Property Rights. The Company and its
Subsidiaries have taken commercially reasonable security measures to
protect the secrecy and confidentiality of all of their Intellectual
Property Rights, except where failure to do so could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
(p) Insurance. The Company and the Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the businesses in
which the Company and the Subsidiaries are engaged, including, but not
limited to, directors and officers insurance coverage. Neither the Company
nor any Subsidiary has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or
to obtain similar coverage from similar insurers as may be necessary to
continue its business without a significant increase in cost.
11
(q) Transactions With Affiliates and Employees. Except as set
forth in the SEC Reports, none of the officers or directors of the Company
and, to the knowledge of the Company, none of the employees of the Company
is presently a party to any transaction with the Company or any Subsidiary
(other than for services as employees, officers and directors), including
any contract, agreement or other arrangement providing for the furnishing
of services to or by, providing for rental of real or personal property to
or from, or otherwise requiring payments to or from any officer, director
or such employee or, to the knowledge of the Company, any entity in which
any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner, in each case in excess of
$[...] other than (i) for payment of salary or consulting fees for services
rendered, (ii) reimbursement for expenses incurred on behalf of the Company
and (iii) for other employee benefits, including stock option agreements
under any stock option plan of the Company.
(r) Sarbanes-Oxley; Internal Accounting Controls. The Company is
in material compliance with all provisions of the Sarbanes-Oxley Act of
2002 which are applicable to it as of the date hereof. The Company
maintains a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain accountability for assets, (iii)
access to assets is permitted only in accordance with management's general
or specific authorization, and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. The Company
has established disclosure controls and procedures (as defined in Exchange
Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such
disclosure controls and procedures to ensure that information required to
be disclosed by the Company in the reports it files or submits under the
Exchange Act is recorded, processed, summarized and reported, within the
time periods specified in the Commission's rules and forms. The Company's
certifying officers have evaluated the effectiveness of the Company's
disclosure controls and procedures as of the end of the fiscal year covered
by the Company's most recently filed annual report on Form 40-F under the
Exchange Act (such date, the "Evaluation Date"). The Company presented in
its most recently filed annual report on Form 40-F under the Exchange Act
the conclusions of the certifying officers about the effectiveness of the
disclosure controls and procedures based on their evaluations as of the
Evaluation Date. Since the Evaluation Date, there have been no changes in
the Company's internal control over financial reporting (as such term is
defined in the Exchange Act) that has materially affected, or is reasonably
likely to materially affect, the Company's internal control over financial
reporting.
(s) Certain Fees. Other than a fee of [...]% of the Purchase Price
of each Draw Down payable to Rodman & Renshaw, LLC on each Settlement Date,
no brokerage or finder's fees or commissions are or will be payable by the
Company to any broker, financial advisor or consultant, finder, placement
agent, investment banker, bank or other Person with respect to the
transactions contemplated by the Transaction Documents. The Purchaser shall
have no obligation with respect to any fees or with respect to any claims
made by or on behalf of other Persons for fees of a type contemplated in
this Section that may be due in connection with the transactions
contemplated by the Transaction Documents.
12
(t) Private Placement. Assuming the accuracy of the Purchaser
representations and warranties set forth in Section 3.2, no registration in
the United States under the Securities Act is required for the offer and
sale of the Shares by the Company to the Purchaser as contemplated hereby.
The issuance and sale of the Shares hereunder does not contravene the rules
and regulations of the Nasdaq Stock Market.
(u) Investment Company. The Company is not, and is not an
Affiliate of, and immediately after receipt of payment for the Shares, will
not be or be an Affiliate of, an "investment company" within the meaning of
the Investment Company Act of 1940, as amended. The Company shall conduct
its business in a manner so that it will not become subject to the
Investment Company Act during the Commitment Period.
(v) Registration Rights. Other than each of the Purchaser, no
Person has any right to cause the Company to effect the registration under
the Securities Act of any securities of the Company.
(w) Listing and Maintenance Requirements. The Company's Common
Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act,
and the Company has taken no action designed to, or which to its knowledge
is likely to have the effect of, terminating the registration of the Common
Stock under the Exchange Act nor has the Company received any notification
that the Commission is contemplating terminating such registration. The
Company has not, in the 12 months preceding the date hereof, received
notice from any Trading Market on which the Common Stock is or has been
listed or quoted to the effect that the Company is not in compliance with
the listing or maintenance requirements of such Trading Market. The Company
is, and has no reason to believe that it will not in the foreseeable future
continue to be, in compliance with all such listing and maintenance
requirements.
(x) Disclosure. Except with respect to the material terms and
conditions of the transactions contemplated by the Transaction Documents,
as at the date hereof the Company confirms that, neither it nor any other
Person acting on its behalf has provided any of the Purchaser or its agents
or counsel with any information that it believes constitutes or might
constitute material, non-public information and the Purchaser agrees that,
at no time, shall the Company be obligated to provide any such information
to the Purchaser or its agents or counsel, except in connection with
Purchaser's obligations as an underwriter under the Securities Act, and
then only pursuant to a non-disclosure agreement substantially in the form
of Exhibit C hereto. The Company acknowledges and agrees that the Purchaser
does not make and has not made any representations or warranties with
respect to the transactions contemplated hereby other than those
specifically set forth in Section 3.2 hereof.
(y) No Integrated Offering. Assuming the accuracy of the
Purchaser's representations and warranties set forth in Section 3.2,
neither the Company, nor any of its Affiliates, nor any Person acting on
its or their behalf has, directly or indirectly, made any offers or sales
of any security or solicited any offers to buy any security, under
circumstances that would cause the offering of the Shares contemplated
hereby to be integrated with prior offerings by the Company for purposes of
the Securities Act or any
13
applicable shareholder approval provisions of any Trading Market on which
any of the securities of the Company are listed or designated.
(z) Tax Status. Except for matters that would not, individually or
in the aggregate, have or reasonably be expected to result in a Material
Adverse Effect, the Company and each Subsidiary has filed all necessary
federal, state and foreign income and franchise tax returns and has paid or
accrued all taxes shown as due thereon, and the Company has no knowledge of
a tax deficiency which has been asserted or threatened against the Company
or any Subsidiary.
(aa) No General Solicitation. Neither the Company nor any person
acting on behalf of the Company has offered any of the Shares by any form
of general solicitation or general advertising. The Company is offering the
Shares for sale only to the Purchaser, which is an "accredited investor"
within the meaning of Rule 501 under the Securities Act and National
Instrument 45-106 of the Canadian Securities Administrators ("NI-45-106").
(bb) Foreign Corrupt Practices. Neither the Company, nor to the
knowledge of the Company, any agent or other person acting on behalf of the
Company, has (i) directly or indirectly, used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related to
foreign or domestic political activity, (ii) made any unlawful payment to
foreign or domestic government officials or employees or to any foreign or
domestic political parties or campaigns from corporate funds, (iii) failed
to disclose fully any contribution made by the Company (or made by any
person acting on its behalf of which the Company is aware) which is in
violation of law, or (iv) violated in any material respect any provision of
the Foreign Corrupt Practices Act of 1977, as amended.
(cc) Accountants. To the knowledge of the Company, its auditors,
KPMG LLP, is a registered public accounting firm as required by the
Exchange Act.
(dd) Acknowledgment Regarding Purchaser's Purchase of Shares. The
Company acknowledges and agrees that the Purchaser is acting solely in the
capacity of an arm's length purchaser with respect to the Transaction
Documents and the transactions contemplated thereby. The Company further
acknowledges that the Purchaser is not acting as a financial advisor or
fiduciary of the Company (or in any similar capacity) with respect to the
Transaction Documents and the transactions contemplated thereby and any
advice given by any Purchaser or any of their respective representatives or
agents in connection with the Transaction Documents and the transactions
contemplated thereby is merely incidental to the Purchaser's purchase of
the Shares. The Company further represents to the Purchaser that the
Company's decision to enter into this Agreement and the other Transaction
Documents has been based solely on the independent evaluation of the
transactions contemplated hereby by the Company and its representatives.
(ee) Intentionally Omitted.
(ff) Regulation M Compliance. The Company has not, and will not
during the term of this Agreement, and to its knowledge no one acting on
its behalf has, or will during the term of this Agreement, (i) taken,
directly or indirectly, any action designed to cause or
14
to result in the stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of any of the Shares, (ii)
sold, bid for, purchased, or, paid any compensation for soliciting
purchases of, any of the Shares, or (iii) paid or agreed to pay to any
person any compensation for soliciting another to purchase any other
securities of the Company, other than, in the case of clauses (ii) and
(iii), compensation paid to the Company's placement agent in connection
with the placement of the Shares.
(gg) Form F-10 Eligibility. The Company is eligible to register
the resale of the Shares for resale by the Purchaser on Form F-10
promulgated under the Securities Act.
3.2. Representations, Warranties and Certain Agreements of the
Purchaser. Purchaser hereby represents and warrants as of the date hereof and as
of each Closing Date to the Company as follows:
(a) Organization; Authority. Purchaser is an entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with full right, corporate or partnership
power and authority to enter into and to consummate the transactions
contemplated by the Transaction Documents and otherwise to carry out its
obligations hereunder and thereunder. The execution, delivery and
performance by the Purchaser of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate or similar
action on the part of the Purchaser. Each Transaction Document to which it
is a party has been duly executed by the Purchaser, and when delivered by
the Purchaser in accordance with the terms hereof, will constitute the
valid and legally binding obligation of the Purchaser, enforceable against
it in accordance with its terms, except (i) as limited by general equitable
principles and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of
creditors' rights generally, (ii) as limited by laws relating to the
availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions
may be limited by applicable law.
(b) Own Account. Purchaser understands that the Shares are
"restricted securities" and have not been registered under the Securities
Act or any applicable state securities law and is acquiring the Shares as
principal for its own account and not with a view to or for distributing or
reselling such Shares or any part thereof in violation of the Securities
Act or any applicable state securities law, has no present intention of
distributing any of such Shares in violation of the Securities Act or any
applicable state securities law and has no direct or indirect arrangement
or understandings with any other persons to distribute or regarding the
distribution of such Shares (this representation and warranty not limiting
the Purchaser's right to sell the Shares pursuant to the Registration
Statement or otherwise in compliance with applicable federal and state
securities laws) in violation of the Securities Act or any applicable state
securities law. Purchaser is acquiring the Shares hereunder in the ordinary
course of its business.
(c) Purchaser Status. At the time the Purchaser was offered the
Shares, it was, and at the date hereof it is, either: (i) an "accredited
investor" as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8)
under the Securities Act or (ii) a "qualified institutional buyer" as
defined in Rule 144A(a) under the Securities Act and an "accredited
investor" as defined
15
under paragraph (m) of NI 45-106. Purchaser is not required to be
registered as a broker-dealer under Section 15 of the Exchange Act.
(d) Experience of Purchaser. Purchaser, either alone or together
with its representatives, has such knowledge, sophistication and experience
in business and financial matters so as to be capable of evaluating the
merits and risks of the prospective investment in the Shares, and has so
evaluated the merits and risks of such investment. Purchaser is able to
bear the economic risk of an investment in the Shares and, at the present
time, is able to afford a complete loss of such investment.
(e) General Solicitation. Purchaser is not purchasing the Shares
as a result of any advertisement, article, notice or other communication
regarding the Shares published in any newspaper, magazine or similar media
or broadcast over television or radio or presented at any seminar or any
other general solicitation or general advertisement.
(f) Short Sales; Confidentiality. Other than the transaction
contemplated hereunder, the Purchaser has not directly or indirectly, nor
has any Person acting on behalf of or pursuant to any understanding with
the Purchaser, executed any transaction, including Short Sales, in the
securities of the Company during the period commencing from the time that
the Purchaser first received a term sheet (written or oral) from the
Company or any other Person setting forth the material terms of the
transactions contemplated hereunder until the date hereof. Other than to
other Persons party to this Agreement, the Purchaser has maintained the
confidentiality of all disclosures made to it in connection with this
transaction (including the existence and terms of this transaction) and
will continue to do so until such information is publicly disclosed by the
Company.
(g) Selling Restrictions.
(i) The Purchaser covenants that from and after the date
hereof through and including the 90th day next following the termination of
this Agreement (the "Restricted Period"), neither the Purchaser nor any of
its Affiliates shall, directly or indirectly, sell any securities of the
Company, except the Shares that it owns or reasonably expects to have the
obligation to purchase as provided in a particular Draw Down Notice. During
the Restricted Period, neither the Purchaser or any of its Affiliates shall
sell any shares of Common Stock of the Company it does not "own" or have
the unconditional right to receive (within the meaning of Rule 200 of
Regulation SHO under the Exchange Act), including Shares in any account of
the Purchaser or in any account directly or indirectly managed by the
Purchaser or any of its Affiliates. Without limiting the generality of the
foregoing, prior to and during the Restricted Period, neither the Purchaser
nor any of its Affiliates nor any entity managed by the Purchaser or any of
its Affiliates shall enter into a short position with respect to shares of
Common Stock of the Company, including in any account of the Purchaser or
in any account directly or indirectly managed by the Purchaser or any of
its Affiliates or any entity managed by the Purchaser, except that the
Purchaser may sell Shares that it is obligated to purchase under a pending
Draw Down Notice but has not yet taken possession of, so long as the
Purchaser covers any such sales with the Shares purchased pursuant to such
Draw Down Notice; provided, however, that the Purchaser shall not be
required to cover any such sales with the Shares purchased pursuant to such
Draw Down Notice if the
16
Company fails to deliver such Shares to the Purchaser on the applicable
Settlement Date upon the terms and subject to the provisions of this
Agreement. Prior to and during the Restricted Period, the Purchaser shall
not grant any option to purchase or acquire any right to dispose or
otherwise dispose for value of any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for, or warrants to
purchase, any shares of Common Stock, or enter into any swap, hedge or
other agreement that transfers, in whole or in part, the economic risk of
ownership of the Common Stock, except for such sales expressly permitted by
this Section 3.2(g).
(ii) In addition to the foregoing, in connection with any
sale of the Company's securities (including any sale permitted by paragraph
(i) above), the Purchaser shall comply in all respects with all applicable
laws, rules, regulations and orders, including, without limitation, the
requirements of the Securities Act and the Exchange Act.
ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
4.1. Transfer Restrictions.
(a) The Shares may only be disposed of pursuant to a Registration
Statement or in connection with a pledge as contemplated in Section 4.1(c)
or if a Registration Statement is not effective pursuant to an exemption
from registration under state, provincial, and federal securities laws. In
connection with any such exempt transfer, the Company may require the
transferor thereof to provide to the Company an opinion of counsel selected
by the transferor and reasonably acceptable to the Company, the form and
substance of which opinion shall be reasonably satisfactory to the Company,
to the effect that such transfer does not require registration of such
transferred Shares under the Securities Act. As a condition of transfer,
any such transferee shall agree in writing delivered to the Company to be
bound by the terms of this Agreement and shall have the rights of the
Purchaser under this Agreement and the Registration Rights Agreement, as to
issued Shares only.
(b) The Company acknowledges and agrees that the Purchaser may
from time to time pledge pursuant to a bona fide margin agreement with a
registered broker-dealer or grant a security interest in some or all of the
Shares to a financial institution in the United States that is an
"accredited investor" as defined in Rule 501(a) under the Securities Act
and who agrees to be bound by the provisions of this Agreement and the
Registration Rights Agreement and, if required under the terms of such
arrangement, the Purchaser may transfer pledged or secured Shares to the
pledgees or secured parties. Such a pledge or transfer would not be subject
to approval of the Company and no legal opinion of legal counsel of the
pledgee, secured party or pledgor shall be required in connection
therewith. Further, no notice shall be required of such pledge. At the
Purchaser's expense, the Company will execute and deliver such reasonable
documentation as a pledgee or secured party of Shares may reasonably
request in connection with a pledge or transfer of the Shares, including,
if the Shares are subject to registration pursuant to the Registration
Rights Agreement, the preparation and filing of any required prospectus
supplement under applicable Canadian securities legislation.
17
(c) All Draw Down Shares shall be delivered without any
restrictive legends. The Company may not make any notation on its records
or give instructions to any transfer agent of the Company that enlarge the
restrictions on transfer set forth in this Section.
(d) Purchaser agrees that it will sell any Shares in compliance
with the Securities Act, including any applicable prospectus delivery
requirements, and that if Shares are sold pursuant to a Registration
Statement, they will be sold in compliance with the plan of distribution
set forth therein.
4.2. Canadian Securities Law Exemption. The parties agree and
acknowledge that it will be necessary, prior to the filing of a registration
statement, to apply for and obtain an exemption from the applicable Canadian
Securities Administrators from certain requirements in connection with
Purchaser's role in the transactions contemplated by this Agreement including,
without limitation, an exemption from the requirement that the Purchaser sign
the prospectus of which the registration statement will form a part as an
Underwriter.
4.3. Furnishing of Information. As long as Purchaser owns any
Shares during the Commitment Period, the Company covenants to timely file (or
obtain extensions in respect thereof and file within the applicable grace
period) all reports required to be filed by the Company after the date hereof
pursuant to the Exchange Act.
4.4. Other Offerings. Notwithstanding anything set forth herein,
subject to applicable law, the Company may proceed, at its discretion with other
financings from time to time including, without limitation, debt financings from
commercial or other lenders or the distribution of debt or equity securities,
whether by way of public offering or private placement.
4.5. Securities Laws Disclosure; Publicity. The Company shall,
promptly following the execution and delivery hereof, issue a press release,
disclosing the material terms of the transactions contemplated hereby, and shall
include the Transaction Documents as an exhibit to an appropriate filing under
the Canadian securities laws and on Form 6-K under the U.S. securities laws. The
Company and the Purchaser shall consult with each other in issuing any other
press releases with respect to the transactions contemplated hereby, and neither
the Company nor the Purchaser shall issue any such press release or otherwise
make any such public statement without the prior consent of the Company, with
respect to any press release of the Purchaser, or without the prior consent of
the Purchaser, with respect to any press release of the Company, which consent
shall not unreasonably be withheld or delayed, except if such disclosure is
required by law, in which case the disclosing party shall promptly provide the
other party with prior notice of such public statement or communication.
4.6. Non-Public Information. Except with respect to the material
terms and conditions of the transactions contemplated by the Transaction
Documents, the Company covenants and agrees that neither it nor any other Person
acting on its behalf will provide the Purchaser or its agents or counsel with
any information that the Company believes constitutes material non-public
information, unless prior thereto the Purchaser shall have executed a written
agreement regarding the confidentiality and use of such information. The Company
understands and confirms that the Purchaser shall be relying on the foregoing
representations in effecting transactions in securities of the Company.
18
4.7. Listing of Common Stock. The Company hereby agrees to use its
commercially reasonable efforts to maintain the listing of the Common Stock on a
Trading Market, and as soon as reasonably practicable following the date hereof
(but not later than the Effective Date) to list all of the Shares on such
Trading Market. The Company further agrees, if the Company applies to have the
Common Stock traded on any other Trading Market, it will include in such
application all of the Shares, and will take such other action as is necessary
to cause all of the Shares to be listed on such other Trading Market as promptly
as possible. The Company will take all action reasonably necessary to continue
the listing and trading of its Common Stock on a Trading Market and will comply
in all respects with the Company's reporting, filing and other obligations under
the bylaws or rules of the Trading Market.
4.8. The Shares. Anything in this Agreement to the contrary
notwithstanding, (i) the Company may not make a Draw Down to the extent that
such Draw Down exceeds 4.9% of the then outstanding shares of Common Stock (not
including the Shares), and (ii) at no time will the Company request a Draw Down
which would result in the issuance of an aggregate number of shares of Common
Stock pursuant to this Agreement which exceeds 19.9% of the number of shares of
Common Stock issued and outstanding on the date hereof without first obtaining
stockholder approval of such excess issuance, or such other amount as would
require stockholder approval under the rules of applicable Trading Markets or
otherwise without first obtaining stockholder approval of such excess issuance.
4.9. Accuracy of Registration Statement. On each Settlement Date,
the prospectus (including any prospectus supplement) included in the
Registration Statement shall not contain any untrue statement of a material fact
or omit to state 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, the Company makes
no representations or warranties as to the information contained in or omitted
from the prospectus included in the Registration Statement in reliance upon and
in conformity with the information furnished in writing to the Company by the
Purchaser specifically for inclusion in the prospectus included in the
Registration Statement.
4.10. Notice of Certain Events Affecting Registration; Suspension
of Right to Request a Draw Down. The Company will promptly notify the Purchaser
in writing upon the occurrence of any of the events set forth in Section 3(d) of
the Registration Rights Agreement. The Company shall not deliver to the
Purchaser any Draw Down Notice during the continuation of any of the foregoing
events. The Company shall promptly make available to the Purchaser any such
supplements or amendments to the related prospectus, at which time, provided
that the registration statement and any supplements and amendments thereto are
then effective, the Company may recommence the delivery of Draw Down Notices.
ARTICLE V.
CONDITIONS TO DRAW DOWNS
5.1. Conditions Precedent to the Obligation of the Company to Sell
the Shares. The obligation hereunder of the Company to issue and sell the Shares
to the Purchaser is subject to the satisfaction or waiver, at or before each
Settlement Date of each of the conditions set forth
19
below. These conditions are for the Company's sole benefit and may be waived by
the Company in writing at any time in its sole discretion.
(a) Accuracy of the Purchaser's Representations and Warranties.
The representations and warranties of the Purchaser shall be true and
correct in all material respects as of the date when made and as of each
Settlement Date as though made at that time (except for representations and
warranties that speak as of a particular date, which shall be true and
correct in all material respects as of such dates).
(b) Performance by the Purchaser. The Purchaser shall have
performed, satisfied and complied in all material respects with all
covenants, agreements and conditions required by this Agreement to be
performed, satisfied or complied with by the Purchaser at or prior to each
Settlement Date.
(c) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by any court or governmental authority of competent
jurisdiction which prohibits the consummation of any of the transactions
contemplated by this Agreement.
(d) No Proceedings or Litigation. No material Action shall have
been commenced against the Purchaser or any of its Affiliates or
transferees or the Company or any subsidiary, or any of the officers,
directors or affiliates of the Company or any subsidiary, seeking to
restrain, prevent or change the transactions contemplated by this
Agreement, or seeking damages in connection with such transactions.
5.2. Conditions Precedent to the Obligation of the Purchaser to
Accept a Draw Down and Purchase the Shares. The obligation hereunder of the
Purchaser to perform its obligations under this Agreement and to purchase the
Shares is subject to the satisfaction or waiver at or before each Settlement
Date set forth below. These conditions are for the Purchaser's sole benefit and
may be waived by the Purchaser in writing at any time in its sole discretion.
(a) Accuracy of the Company's Representations and Warranties. Each
of the representations and warranties of the Company shall be true and
correct in all material respects as of the date when made and as of each
Settlement Date as though made at that time (except for representations and
warranties that speak as of a particular date, which shall be true and
correct in all material respects as of such date).
(b) Performance by the Company. The Company shall have performed,
satisfied and complied in all material respects with all material
covenants, agreements and conditions required by this Agreement to be
performed, satisfied or complied with by the Company at or prior to each
Settlement Date.
(c) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by any court or governmental authority of competent
jurisdiction which prohibits the consummation of any of the transactions
contemplated by this Agreement.
20
(d) No Proceedings or Litigation. No material Action shall have
been commenced, against the Purchaser or the Company or any subsidiary, or
any of the officers, directors or affiliates of the Company or any
subsidiary seeking to restrain, prevent or change the transactions
contemplated by this Agreement, or seeking damages in connection with such
transactions.
(e) No Suspension. Trading in the Common Stock shall not have been
suspended by the SEC or the Nasdaq Stock Market (except for any suspension
of trading of limited duration agreed to by the Company, which suspension
shall be terminated prior to the delivery of each Draw Down Notice), and,
at any time prior to such Draw Down Notice, trading in securities generally
as reported on the Nasdaq Stock Market shall not have been suspended or
limited, or minimum prices shall not have been established on securities
whose trades are reported on the Nasdaq Stock Market unless the general
suspension or limitation shall have been terminated prior to the delivery
of such Draw Down Notice.
(f) Material Adverse Effect. No Material Adverse Effect shall have
occurred and be continuing.
(g) Opinion of Counsel. The Purchaser shall have received a
"bring-down" letter from the Company's counsel, confirming that there is no
change from the counsel's previously delivered opinion, or else specifying
with particularity the reason for any change.
(h) Equity Conditions. During the Draw Down Pricing Period through
the Settlement Date, all of the Equity Conditions shall have been met.
ARTICLE VI.
DRAW DOWN TERMS
6.1. Draw Down Terms. Subject to the satisfaction of the conditions
set forth in this Agreement, the parties agree as follows:
(a) The Company may, in its sole discretion, issue and exercise
draw downs against the Commitment Amount (each a "Draw Down") during the
Commitment Period, which Draw Downs the Purchaser shall be obligated to
accept, subject to the terms and conditions of this Agreement. Before the
Company shall exercise a Draw Down, the Company shall have caused a
sufficient number of shares of Common Stock to be registered pursuant to a
prospectus filed under Form F-10 to cover the resale in the United States
of the Shares to be issued in connection with such Draw Down, and, on or
before the Trading Day that such request is made, the Company shall have
filed with the Commissions a prospectus supplement pursuant to applicable
Canadian securities legislation setting forth the terms of the Draw Down.
The Company agrees to request Draw Downs of at least an aggregate
$25,000,000 during the Commitment Period, subject to Sections 6.1(c),
6.1(d) and to the termination of this Agreement, including, without
limitation, pursuant to Article VII hereof.
(b) Only one Draw Down shall be allowed in each Draw Down Pricing
Period and the Company may not exercise a Draw Down until the applicable
Trading Cushion has
21
elapsed since the end of the previous Draw Down Pricing Period. The number
of shares of Common Stock purchased by the Purchaser with respect to each
Draw Down shall be determined as set forth in Section 6.1(d) herein and
settled on the first Trading Day immediately after each consecutive [...]
Trading Day period within a Draw Down Pricing Period (each such [...]
Trading Day settlement period and each such settlement date referred to as
a "Settlement Period" and a "Settlement Date", respectively).
(c) The maximum Investment Amount as to each Draw Down shall be
equal to $[...] (based on a [...] Trading Day Pricing Period, and pro-rated
for shorter Pricing Periods).
(d) The number of Shares of Common Stock to be issued on each
Settlement Date shall be a number of shares equal to the sum of the
quotients (for each Trading Day within the Settlement Period) of (x) the
Investment Amount divided by the number of Trading Days in the Draw Down
Pricing Period, and (y) the Purchase Price on each Trading Day within the
Settlement Period, subject to the following adjustments:
(i) if the VWAP on a given Trading Day is less than the
Threshold Price, then that portion of the Investment Amount to be paid on
the immediately pending Settlement Date and the number of Shares to be
issued shall be reduced by an amount equal to the Investment Amount divided
by the number of Trading Days in the Draw Down Pricing Period and such
Trading Day shall be withdrawn from the Draw Down Pricing Period (for
greater certainty, if the VWAP is below the Threshold Price for all of the
days of a Draw Down Pricing Period, the Company shall have no obligation to
sell, nor shall the Purchaser have any obligation to buy, any Shares during
or in respect of such Draw Down Pricing Period); and
(ii) if during any Trading Day during the Draw Down Pricing
Period trading of the Common Stock on the Principal Market is suspended for
more than 3 hours, in the aggregate, or if any Trading Day during the Draw
Down Pricing Period is shortened because of a public holiday, then that
portion of the Investment Amount to be paid on the immediately pending
Settlement Date and the number of Shares to be issued shall be reduced by
an amount equal to the Investment Amount divided by the number of Trading
Days in the Draw Down Pricing Period and such Trading Day shall be
withdrawn from the Draw Down Pricing Period; and
(iii) if during any Trading Day during the Draw Down Pricing
Period sales of Draw Down Shares pursuant to the Registration Statement are
suspended by the Company in accordance with Section 3(d) of the
Registration Rights Agreement for more than three (3) hours, in the
aggregate, then that portion of the Investment Amount to be paid on the
immediately pending Settlement Date and the number of Shares to be issued
shall be reduced by an amount equal to the Investment Amount divided by the
number of Trading Days in the Draw Down Pricing Period and such Trading Day
shall be withdrawn from the Draw Down Pricing Period.
(e) The Company must inform the Purchaser by delivering a draw
down notice, in the form of Exhibit D hereto (the "Draw Down Notice"), via
facsimile transmission in
22
accordance with Section 8.3, as to the amount of the Draw Down (the
"Investment Amount") the Company wishes to exercise. The Draw Down Notice
shall also inform the Purchaser of the number of Trading Days within the
Draw Down Pricing Period, which must be in multiples of [...] up to a
maximum of [...] consecutive Trading Days, and the first day of the Draw
Down Pricing Period (the "Commencement Date"); provided; however, if the
Commencement Date is the date on which the Draw Down Notice is delivered,
the Draw Down Notice must be delivered to the Purchaser at least 1 hour
before trading commences on such Trading Day. At no time shall the
Purchaser be required to purchase more than the maximum Investment Amount
for a given Draw Down Pricing Period.
(f) On the Trading Day immediately following the last day of the
Settlement Period, the Company shall deliver and the Purchaser shall
acknowledge a settlement statement (the "Settlement Statement") setting
forth the number of Draw Down Shares issuable and the aggregate Purchase
Price as to such Settlement Period. Promptly upon execution of the
Settlement Statement (but in no event more than 1 Trading day after the
execution of such Settlement Statement), the Draw Down Shares purchased
pursuant to such Settlement Statement shall be:
(i) delivered to the Purchaser, or its designees by
electronic delivery through the Company's United States transfer agent. The
Purchaser shall provide the Company with the requisite information for such
delivery, including the Purchaser's DTC number and account number,
sufficiently in advance of the Settlement Date to enable the Company to
timely deliver Shares. Concurrently with the Company electronically
delivering such Draw Down Shares to the Purchaser, by 1:00 p.m. ET, the
Purchaser shall wire transfer immediately available funds to the Company's
bank account, as designated by the Company in the Settlement Statement, for
the amount of the aggregate Purchase Price of such Draw Down Shares; or
(ii) with the prior consent of the Purchaser, delivered by
the Company to Purchaser (or its designee) to the address as designated in
the Settlement Statement, the unlegended physical certificate for the
Shares which shall be so delivered in lieu of the electronic delivery via
the Company's United States transfer agent and in accordance with the terms
of this Agreement.
ARTICLE VII.
TERMINATION
7.1. Term. The term of this Agreement shall begin on the date
hereof and shall end 24 months from the Effective Date or as otherwise set forth
in Section 7.2.
7.2. Other Termination.
(a) This Agreement shall terminate if (i) the Common Stock is
de-listed from the Nasdaq Global Market unless the Common Stock is listed
at such time on a Trading Market such de-listing is in connection with a
subsequent listing on another Trading Market, (ii) the Company is subject
to a Change of Control Transaction, (iii) the Company suffers a Material
Adverse Effect which cannot be cured prior to the next Draw Down Notice, or
(iv) the
23
Registration Statement does not become effective by the 12-month
anniversary of the date hereof.
(b) The Company may terminate this Agreement upon [...] Trading
Day's notice if (i) the Purchaser shall fail to fund a properly noticed
Draw Down within [...] Trading Days of the end of the applicable Settlement
Period or (ii) by the Company upon [...] Trading Days' prior written notice
provided it has drawn down at least $25,000,000 under this Agreement.
(c) Either party may terminate this Agreement upon 5 Trading Days'
notice if the VWAP is below $[...] for more than [...] consecutive Trading
Days (adjusted for any stock splits and the like after the date of this
Agreement).
7.3. Effect of Termination. In the event of termination of this
Agreement pursuant to Section 7.2 herein, written notice thereof shall forthwith
be given to the other party and the transactions contemplated by this Agreement
shall be terminated without further action by either party. If this Agreement is
terminated as provided in Section 7.1 or 7.2 herein, this Agreement shall become
void and of no further force and effect, except for Article VIII herein, which
shall survive the termination of this Agreement. Nothing in this Section 7.3
shall be deemed to release the Company or the Purchaser from any liability for
any breach under this Agreement, or to impair the rights of the Company or the
Purchaser to compel specific performance by the other party of its obligations
under this Agreement.
ARTICLE VIII.
MISCELLANEOUS
8.1. Fees and Expenses. The Company agrees to reimburse the
Purchaser for its legal fees and other due diligence expenses up to an aggregate
of $[...]. Except as expressly set forth in the Transaction Documents to the
contrary, each party shall pay the fees and expenses of its advisers, counsel,
accountants and other experts, if any, and all other expenses incurred by such
party incident to the negotiation, preparation, execution, delivery and
performance of this Agreement.
8.2. Entire Agreement. The Transaction Documents, together with the
exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.
8.3. Notices. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of (a) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number set forth on the signature pages attached hereto prior to 5:30
p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the
date of transmission, if such notice or communication is delivered via facsimile
at the facsimile number set forth on the signature pages attached hereto on a
day that is not a Trading Day or later than
24
5:30 p.m. (New York City time) on any Trading Day, (c) the 2nd Trading Day
following the date of mailing, if sent by a recognized overnight courier
service, or (d) upon actual receipt by the party to whom such notice is required
to be given. The address for such notices and communications shall be as set
forth on the signature pages attached hereto.
8.4. Amendments; Waivers. No provision of this Agreement may be
waived or amended except in a written instrument signed, in the case of an
amendment, by the Company and the Purchaser or, in the case of a waiver, by the
party against whom enforcement of any such waived provision is sought. No waiver
of any default with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of
any subsequent default or a waiver of any other provision, condition or
requirement hereof, nor shall any delay or omission of any party to exercise any
right hereunder in any manner impair the exercise of any such right.
8.5. Headings. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.
8.6. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties and their successors. Neither party may
assign this Agreement or any rights or obligations hereunder (other than by
merger).
8.7. No Third-Party Beneficiaries. This Agreement is intended for
the benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, except as otherwise set forth in Section 4.7.
8.8. Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of the Transaction Documents shall be
governed by and construed and enforced in accordance with the internal laws of
the State of New York, without regard to the principles of conflicts of law
thereof. Each party agrees that all legal proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Agreement and any other Transaction Documents (whether brought against a
party hereto or its respective affiliates, directors, officers, shareholders,
employees or agents) shall be commenced exclusively in the state and federal
courts sitting in the City of New York. Each party hereby irrevocably submits to
the exclusive jurisdiction of the state and federal courts sitting in the City
of New York, borough of Manhattan for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or
discussed herein (including with respect to the enforcement of any of the
Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any suit, action or proceeding, any claim that it is not personally subject
to the jurisdiction of any such court, that such suit, action or proceeding is
improper or is an inconvenient venue for such proceeding. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to limit in
any way any right to serve process in any other manner permitted by law. The
parties hereby waive all rights to a trial by jury. If either party
25
shall commence an action or proceeding to enforce any provisions of the
Transaction Documents, then the prevailing party in such action or proceeding
shall be reimbursed by the other party for its reasonable attorneys' fees and
other costs and expenses incurred with the investigation, preparation and
prosecution of such action or proceeding.
8.9. Survival. The representations and warranties contained herein
shall survive for one year from the earlier of the end of the Commitment Period
or the earlier termination of this Agreement, as to direct actions by the
Purchaser and the Company against each other, and for the applicable statute of
limitations in respect of any third party action against Purchaser in its
capacity as underwriter of the Shares.
8.10. Execution. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission or by e-mail delivery of a ".pdf" format
data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile or ".pdf" signature page were an original
thereof.
8.11. Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their commercially reasonable efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.
8.12. Replacement of Securities. If any certificate or instrument
evidencing any Shares is mutilated, lost, stolen or destroyed, the Company shall
issue or cause to be issued in exchange and substitution for and upon
cancellation thereof (in the case of mutilation), or in lieu of and substitution
therefor, a new certificate or instrument, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction. The
applicant for a new certificate or instrument under such circumstances shall
also pay any reasonable third-party costs (including customary indemnity)
associated with the issuance of such replacement Shares.
8.13. Remedies. In addition to being entitled to exercise all
rights provided herein or granted by law, including recovery of damages, each of
the Purchaser and the Company will be entitled to specific performance under the
Transaction Documents. The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations contained in the Transaction Documents and hereby agrees to waive
and not to assert in any action for specific performance of any such obligation
the defense that a remedy at law would be adequate.
26
8.14. Construction. The parties agree that each of them and/or
their respective counsel has reviewed and had an opportunity to revise the
Transaction Documents and, therefore, the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of the Transaction Documents or any
amendments hereto.
(Signature Pages Follow)
27
IN WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
Neurochem Inc. Address for Notice:
-------------------
275 Armand Frappier Blvd.
Laval, Quebec H7V 4A7
Fax: 450-680-4501
By: /s/ Mariano Rodriguez Attn: CFO and General Counsel
Mariano Rodriguez
Vice President, Finance and CFO
By: /s/ David Skinner
David Skinner
Vice President, General Counsel and Corporate Secretary
With a copy to (which shall not constitute notice):
Davies Ward Phillips & Vineberg LLP
1501 McGill College Avenue
Montreal, Quebec H9A 3N9
Fax: 514-841-6499
Attn: Richard Cherney and Neil Kravitz
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]
28
IN WITNESS WHEREOF, the undersigned have caused this Securities
Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
Name of Purchaser: Cityplatz Limited
Signature of Authorized Signatory of Purchaser: /s/ Gordon Mundy
Name of Authorized Signatory: Gordon Mundy
Title of Authorized Signatory: Director
Signature of Authorized Signatory of Purchaser: /s/ Francis Webb
Name of Authorized Signatory: Francis Webb
Title of Authorized Signatory: For and on behalf of
Trident Trust Company (I.O.M.) Limited - Secretary
Email Address of Purchaser: ____________________________________________________
Fax Number of Purchaser: _______________________________________________________
Address for Notice of Purchaser:
Registered Address:
Trident Chambers
PO Box 146
Wickhams Cay
Road Town
Tortola
BVI
Mailing Address:
c/o Trident Trust Company (IoM) Ltd.
P.O. Box 175
12-14 Finch Road
Douglas, Isle of Man
IM99 1TT
Address for Delivery of Securities for Purchaser (if not same as above):
29
FORM 51-102F3
MATERIAL CHANGE REPORT
ITEM 1 NAME AND ADDRESS OF COMPANY
Neurochem Inc. ("Neurochem")
275 Armand-Frappier Blvd.
Laval, Quebec
H7V 4A7
ITEM 2 DATE OF MATERIAL CHANGE
August 11, 2006
ITEM 3 NEWS RELEASE
A press release was disseminated by Canada NewsWire on August 11, 2006
from Laval, Quebec.
ITEM 4 SUMMARY OF MATERIAL CHANGE
Neurochem announced that it has received an approvable letter from the
U.S. Food and Drug Administration (FDA) for eprodisate (Kiacta(TM) -
formerly Fibrillex(TM)) for the treatment of Amyloid A (AA)
amyloidosis.
ITEM 5 FULL DESCRIPTION OF MATERIAL CHANGE
In its action letter, the FDA requested additional efficacy
information, as well as a safety update. The FDA stated that this
efficacy information would probably need to be addressed by one or more
additional clinical trials. As an alternative, the FDA also stated that
significant findings obtained from a complete follow-up of patients in
the existing study could be persuasive. The FDA asked for further
manufacturing and pharmacokinetic information, and acknowledged that a
QT clinical study should be submitted as part of a Phase 4 (post
approval) commitment.
Neurochem is working closely with the agency to secure as soon as
possible the final approval without conducting a new efficacy clinical
trial and is already starting to collect additional information as
suggested by the FDA.
ITEM 6 RELIANCE ON SUBSECTION 7.1(2) OR (3) OF NATIONAL INSTRUMENT 51-102
This report is not being filed on a confidential basis.
ITEM 7 OMITTED INFORMATION
N/A
ITEM 8 EXECUTIVE OFFICER
For further information, please contact Lise Hebert, Vice-President,
Corporate Communications, at 450.680.4570.
ITEM 9 DATE OF REPORT
August 17, 2006
FORM 51-102F3
MATERIAL CHANGE REPORT
ITEM 1 NAME AND ADDRESS OF COMPANY
Neurochem Inc. ("Neurochem")
275 Armand-Frappier Blvd.
Laval, Quebec
H7V 4A7
ITEM 2 DATE OF MATERIAL CHANGE
August 18, 2006
ITEM 3 NEWS RELEASE
A press release was disseminated by Canada NewsWire on August 18, 2006
from Laval, Quebec.
ITEM 4 SUMMARY OF MATERIAL CHANGE
Neurochem announced that Mr. Ronald Nordmann has resigned from the
Board of Directors.
ITEM 5 FULL DESCRIPTION OF MATERIAL CHANGE
Mr. Ronald Nordmann has resigned from the Board of Directors of
Neurochem.
ITEM 6 RELIANCE ON SUBSECTION 7.1(2) OR (3) OF NATIONAL INSTRUMENT 51-102
This report is not being filed on a confidential basis.
ITEM 7 OMITTED INFORMATION
N/A
ITEM 8 EXECUTIVE OFFICER
For further information, please contact Lise Hebert, Vice-President,
Corporate Communications, at 450.680.4570.
ITEM 9 DATE OF REPORT
August 18, 2006
NEUROCHEM INC.
275 Armand-Frappier Blvd.
[NEUROCHEM LOGO] Laval, Quebec, Canada H7V 4A7
- --------------------------------------------------------------------------------
FOR FURTHER INFORMATION, PLEASE CONTACT:
Lise Hebert, Ph.D. Tel: (450) 680-4570
Vice President, Corporate Communications lhebert@neurochem.com
NEUROCHEM ANNOUNCES RESIGNATION OF A DIRECTOR
LAVAL, QUEBEC, AUGUST 18, 2006 -- Neurochem Inc. (NASDAQ: NRMX, TSX: NRM)
announced today that Mr. Ronald Nordmann has resigned from the Company's Board
of Directors. Mr. Nordmann joined the Board in 2002. During his tenure, he
served on various committees and acted as the Lead Director for two years, up to
May 2006.
"Ron has been a valued member of Neurochem's Board of Directors," said Dr.
Francesco Bellini, Chairman, President and CEO of Neurochem. "We are grateful
for his professional advice in addition to the counsel he has generously
provided to Neurochem and we wish Ron the very best in the future."
ABOUT NEUROCHEM
Neurochem is focused on the development and commercialization of innovative
therapeutics to address critical unmet medical needs. Eprodisate (Kiacta(TM)) is
currently being developed for the treatment of AA amyloidosis, for which the
Company received an approvable letter from the FDA in August 2006. Tramiprosate
(Alzhemed(TM)), for the treatment of Alzheimer's disease, is currently in Phase
III clinical trials in both North America and Europe and tramiprosate
(Cerebril(TM)), for the prevention of Hemorrhagic Stroke caused by Cerebral
Amyloid Angiopathy, has completed a Phase IIa clinical trial.
TO CONTACT NEUROCHEM
For additional information on Neurochem and its drug development programs,
please call the North American toll-free number 1 (877) 680-4500 or visit our
Web Site at www.neurochem.com.
Certain statements contained in this news release, other than statements of fact
that are independently verifiable at the date hereof, may constitute
forward-looking statements. Such statements, based as they are on the current
expectations of management, inherently involve numerous risks and uncertainties,
known and unknown, many of which are beyond Neurochem's control. Such risks
include but are not limited to: the impact of general economic conditions,
general conditions in the pharmaceutical industry, changes in the regulatory
environment in the jurisdictions in which Neurochem does business, stock market
volatility, fluctuations in costs, and changes to the competitive environment
due to consolidation, as well as other risks disclosed in public filings of
Neurochem. Consequently, actual future results may differ materially from the
anticipated results expressed in the forward-looking statements. The reader
should not place undue reliance, if any, on the forward-looking statements
included in this news release. These statements speak only as of the date made
and Neurochem is under no obligation and disavows any intention to update or
revise such statements as a result of any event, circumstances or otherwise.
Please see the Annual Information Form for further risk factors that might
affect the Company and its business.