Exhibit 10.77

 
Execution Version

 

2,125,000 Common Shares

TEKMIRA PHARMACEUTICALS CORPORATION

(incorporated under the Business Corporations Act (British Columbia))

UNDERWRITING   AGREEMENT
 

March 12, 2014
 

 
LEERINK PARTNERS LLC
201 Spear Street, Suite 1620
San Francisco, California 94105
 
 
Ladies and Gentlemen:
 
Tekmira Pharmaceuticals Corporation, a company incorporated under the Business Corporations Act (British Columbia) (the "Company'), proposes to sell to Leerink Partners LLC (the 1'Underwriter"), an
aggregate of 2,125,000 common shares (the "FirmShares") of the Company (the "Common Shares"). The Company has also granted to the Underwriter an option to purchase up to an aggregate of 318,750 additional Common Shares, on the terms a11d for the purposes set forth in Section 3 hereof (the "Option Shares"). The Firm Shares and any Option Shares
purchased pursuant to this Underwriting Agreement are herein collectively called the "Securities."
 
The Company hereby confirms its agreement with respect to the sale of the
Securities to the Underwriter.
 
l. Registration Statement and Prospectus. The Company has prepared and filed
with the securities regulatory authorities (the "Qualifying Authorities ") in
each of the provinces of Canada other than the Province of Quebec (the
"Canadian Jurisdictions")  a preliminary short form base shelf prospectus dated
February 21, 2014 (the "Canadian Preliminary Base Prospectus "), and the
Canadian Base Prospectus (as defined below), in respect of an aggregate of up to
US$1 50,000,000 in certain securities of the Company, including Common Shares
(collectively, the "Shelf Securities"). The Company has selected the British
Columbia Securities Commission (the "Reviewing Authority ") as its principal
regulator under the passport
system  procedures  provided  for  under  Multilateral Instrument 11-102 -
Passport System and National Policy 11-202 - Process for Prospectus Reviews in
Multiple Jurisdictions (collectively, the "Passport System") in respect of the
offering of the Shelf Securities. The Reviewing Authority has issued a receipt,
which is deemed to also be a receipt of the other Canadian Securities
Commissions and evidence of the receipt of the Ontario Securities Commission
pursuant to the Passport System (a "Passport Decision Document' ), for each of
the Canadian Preliminary Base Prospectus and the Canadian Base Prospectus. The
term "Canadian Base Prospectus " means the final short form base shelf
prospectus dated February 28, 2014 relating to the Shelf Securities, including
any documents incorporated by reference therein and the documents otherwise
deemed to be incorporated by reference therein pursuant to Canadian Securities
Laws (as defined below), at the time the Reviewing Authority issued a Passport
Decision Document with respect thereto in accordance with Canadian Securities
Laws, including National Instrument 44-10 I -
Short Form Prospectus Distributions and National Instrument 44-102 -
Shelf Distributions (together, the ''Canadian Shelf Procedures"). The Company
has also prepared and filed with the Qualifying Authorities in accordance with
the Canadian Shelf Procedures a preliminary prospectus supplement dated March
10, 2014 relating to the Securities, which excluded certain information
(together with the Canadian Base Prospectus, and including any
 
 
 

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documents incorporated therein by reference and the documents otherwise deemed
to be incorporated by reference therein pursuant to Canadian Securities Laws, the "Canadian Preliminary Prospectus ").

 
The Company has also prepared and filed with the United States Securities and
Exchange Commission (the "Commission") a registration statement on Form F-10
(File No. 333-194068) covering the registration of the Shelf Securities under
the United States Securities Act of 1933, as amended (the "Securities Act" or
"Act' ) and the rules and regulations (the "Rules and Regulations ") of the
Commission thereunder, and such amendments to such registration statement as may
have been permitted or required to the date of this Agreement. Such registration
statement, including the Canadian Base Prospectus (with such deletions therefrom
and additions thereto as are permitted or required by Form F-10 and the Rules
and Regulations) and including exhibits to such registration statement has
become effective in such form pursuant to Rule 467(b) under the Securities Act.
Such registration statement, at any given time, including amendments thereto to
such time, the exhibits and any schedules thereto at such time and the documents
incorporated by reference therein pursuant to Item 4 of Form F-10 under the
Securities Act at such time, is herein called the "Registration Statement." The
Registration Statement at the time it originally became effective is herein
called the "Original Registration Statement." Any registration statement filed
by the Company pursuant to General Instruction Il.E of Form F-10 under the
Securities Act is called the "Upsizing Registration Statement' and, from and
after the date and time of filing of the Upsizing Registration Statement, the
term "Registration Statement' shall include the Upsizing Registration Statement.
The prospectus in the form in which it appeared in the Original Registration
Statement is herein called the "U.S. Base Prospectus." The preliminary
prospectus supplement dated March 10, 2014 relating to the offering of the
Securities, including all documents incorporated therein by reference, filed
with the Commission pursuant to General Instruction 11.L of Form F-10 under the
Securities Act, together with the U.S. Base Prospectus, is hereinafter called a
"U.S. Preliminary Prospectus."
 
In addition, the Company (i) shall prepare and file with the Reviewing Authority
in accordance with Section 4(a) hereof a final prospectus supplement (the
"Canadian Final Prospectus Supplement ') to the Canadian Base Prospectus
relating to the Securities, which includes the information omitted from the
Canadian Preliminary Prospectus and otherwise supersedes the Canadian
Preliminary Prospectus in its entirety (together with the Canadian Base
Prospectus, and including any documents incorporated therein by reference and
the documents otherwise deemed to be a part thereof or included therein pursuant
to Canadian Securities Laws, the "Canadian Final Prospectus "), and (ii) shall
prepare and file with the Commission pursuant  to General Instruction II.L of
Form F -10 and in accordance with Section 4(a) hereof a final prospectus
supplement (the "U.S. Final Prospectus Supplement'') to the U.S. Base Prospectus
relating to the offering of the Securities (including all documents incorporated
therein by reference, together with the U.S. Base Prospectus, the
"U.S. Final Prospectus "). The U.S. Preliminary Prospectus and the Canadian
Preliminary Prospectus are referred to herein as the
"Preliminary Prospectuses," and the U.S. Final Prospectus and the Canadian Final
Prospectus are referred to herein as the "Final Prospectuses." Any amendment to
the Canadian Final Prospectus, any amended or supplemental prospectus, any
management information circular, financial statement, management's discussion
and analysis, annual information form, business acquisition report or material
change report that may be filed by or on behalf of the Company under the
securities laws of the Canadian Jurisdictions prior to the expiry of the period
of distribution of the Securities, where such document is deemed to be
incorporated by reference into the Canadian Final Prospectus, is referred to
herein collectively as the "Supplementary Material." Any reference herein to any
"amendment" or "supplement" to the U.S. Preliminary Prospectus or the U.S. Final
Prospectus shall be deemed to refer to and include (i) the filing of any
document with the Reviewing Authority or the Commission after the date of the
U.S. Preliminary Prospectus or the U.S. Final Prospectus, as the case may be,
and prior to the First Closing Date or the Second Closing Date, as applicable,
which is incorporated therein by reference or is otherwise deemed to
 
 
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be a part thereof or included therein by the Rules and Regulations and (ii) any
such document so filed prior to the First Closing Date or the Second Closing
Date, as applicable.
 
The Underwriter shall offer the Securities for sale to the public directly and
through other investment dealers and brokers in the United States of America
(the "United States") only as permitted by applicable law and upon the terms and
conditions set forth in the Final Prospectuses and this Agreement. It is
acknowledged and agreed that the Canadian Final Prospectus Supplement shall not
contemplate making sales of any Securities to purchasers in Canada and,
accordingly, shall not contain any underwriter's certificate. It is further
acknowledged that neither the Company nor the Underwriter will market the
Securities or provide marketing materials to any prospective purchasers in
Canada. The Underwriter agrees that it will not, directly or indirectly,
distribute the Registration Statement, the Preliminary Prospectuses or the Final
Prospectuses or publish any prospectus, circular, advertisement or other
offering material in any jurisdiction other than such states of the United
States in which the Securities are duly qualified under U.S. federal and
applicable U.S. state securities laws, in such manner as to require registration
of the Securities or the filing of a prospectus or any similar document with
respect to the Securities by the Company therein or subject the Company to
ongoing periodic reporting obligations in such jurisdiction pursuant to the
securities laws of such jurisdiction.
 
The Company has also prepared and filed with the Commission an appointment of agent for
service of process upon the Company on Form F-X in conjunction with the filing of the Registration Statement (the "Form F-X'' ).
 
For purposes of this Agreement, all references to the Registration Statement,
any Upsizing Registration Statement, the U.S. Base Prospectus or the U.S.
Preliminary Prospectus, any Issuer Free Writing Prospectus (as defined below) or
the U.S; Final Prospectus, or any amendment or supplement to any of the
foregoing, shall be deemed to include the copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval System
("EDGAR"). For purposes of this Agreement, all references to the Canadian
Preliminary Base Prospectus, the Canadian Base Prospectus, the Canadian
Preliminary Prospectus or the Canadian Final Prospectus, or any amendment or
supplement to any of the foregoing (including any Supplementary Material), shall
include the copy filed with the Qualifying Authorities pursuant to the System
for Electronic Document Analysis and Retrieval ("SEDAR").
 
All references in this Agreement to financial statements and schedules and other
information which is "contained," "included" or "stated" in the Registration
Statement, any Upsizing Registration Statement, the U.S. Base Prospectus, the
U.S. Preliminary Prospectus or the U.S. Final Prospectus (or other references of
like import) shall be deemed to mean and include all such financial statements
and schedules and other information which is incorporated by reference in or
otherwise deemed by the Rules and Regulations to be a part of or included in the
Registration Statement, any Upsizing Registration Statement1 the U.S. Base
Prospectus, the U.S. Preliminary Prospectus or the U.S. Final Prospectus, as the
case may be; and all references in this Agreement to amendments or supplements
to the Registration Statement, the U.S. Base Prospectus, the U.S. Preliminary
Prospectus or the U.S. Final Prospectus shall be deemed to mean and include the
filing of any document under the United States Securities Exchange Act of 1934,
as amended (the "Exchange Act '), which is incorporated by reference in or
otherwise deemed by Rules and Regulations to be a part of or included in the
Registration Statement, the U.S. Base Prospectus, the U.S. Preliminary
Prospectus or the U.S. Final Prospectus, as the case may be. All references in
this Agreement to financial statements and other information which is
"contained," "included" or "stated" in the Canadian Preliminary Base Prospectus,
the Canadian Base Prospectus, the Canadian Preliminary Prospectus or the
Canadian Final Prospectus (or other references of like import) shall be deemed
to mean and include all such financial statements and other information which is
incorporated by reference in or otherwise deemed by Canadian Securities Laws to
be a part of or included
 
 
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in the Canadian Preliminary Base Prospectus, the Canadian Base Prospectus, the
Canadian Preliminary Prospectus or the Canadian Final Prospectus, as the case
may be.
 
2. Representations and Warranties of the Company. The Company represents and
warrants to, and agrees with, the Underwriter as follows:
 
(a) The Company is a reporting issuer (or equivalent thereof) in each Canadian
Jurisdiction, is not in default under the securities laws of any Canadian
Jurisdiction, and is in compliance in all material respects with its timely
disclosure obligations under the Exchange Act, the Canadian Securities Laws and
the requirements of the Toronto Stock Exchange (the "TSX') and the Nasdaq Global
Market ("NASDAQ"). The Company meets the general eligibility requirements for
use of the Canadian Shelf Procedures and for the use of a short form base shelf
prospectus with respect to a distribution of securities. The Company meets the
general eligibility requirements for use of Form F-10 under the Securities Act.
The Reviewing Authority has issued a Passport Decision Document on behalf of
itself and the other Qualifying Authorities for each of the Canadian Preliminary
Base Prospectus and the Canadian Base Prospectus; subsequent to the issuance of
the Passport Decision Document for the Canadian Base Prospectus, no other
document with respect to the Canadian Base Prospectus has heretofore been filed
or transmitted for filing with the Qualifying Authorities, except for any
document filed with the Qualifying Authorities subsequent to the date of such
Passport Decision Document in the form heretofore delivered to the Underwriter.
 
(b) The Statutory Prospectus (as defined below) at the Time of Sale (as defined
below) complies with the requirements of the Securities Act and the Rules and
Regulations in all material respects and does not contain an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
 
(c) The Original Registration Statement initially became effective under the
Securities Act on February 28, 2014 and any Upsizing Registration Statement has
become effective or will become effective upon filing with the Commission. No
stop order suspending the effectiveness of the Registration Statement is in
effect and no proceedings for such purpose have been instituted or are pending
or, to the best knowledge of the Company, are contemplated or threatened by the
Commission. No order, ruling or determination having the effect of suspending
the sale or ceasing the trading of any securities of the Company (including the
Securities) has been issued or made by any Qualifying Authority, any other
securities commission, stock exchange or other regulatory authority and no
proceedings for that purpose have been instituted or are pending or, to the
Company's knowledge, are contemplated by any such authority. Any request on the
part of the Commission, any Qualifying Authority or any other securities
commission, stock exchange or other regulatory authority for additional
information in connection with the offering contemplated hereby has been
complied with.
 
(d) Each part of the Registration Statement, any Upsizing Registration Statement
and any post-effective amendment thereto, at the time such part became
effective, at all other subsequent times until the expiration of the Prospectus
Delivery Period (as defined below), and at the First Closing Date and the Second
Closing Date (as defined below), as the case may be, and the U.S. Final
Prospectus (or any amendment or supplement to the U.S. Final Prospectus), at the
time it is first filed in accordance with General Instruction ILL of Form F-10
or the time of first use within the meaning of the Rules and Regulations, at all
subsequent times until expiration of the Prospectus Delivery Period, and at the
First Closing Date and the Second Closing Date, as the case may be, complied and
will comply in all material respects with the applicable requirements and
provisions of the Securities Act, the Rules and Regulations and the Exchange Act
and did not and will not contain any untrue statement of a material fact or omit
to state a material  fact required  to be stated therein  or necessary  to make
the statements therein  not
 
 
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misleading. The representations and warranties set forth in the immediately
preceding sentence does not apply to statements in or omissions from the
Registration Statement, any Upsizing Registration Statement, or any
post-effective amendment thereto, or the Prospectus, or any amendments or
supplements thereto, made in reliance upon and in conformity with written
information relating to the Underwriter furnished to the Company by the
Underwriter specifically for use therein; it being understood and agreed that
the only such information furnished by the Underwriter consists of the
information described as such in Section 6(1).
 
At the time of filing thereof with the applicable Qualifying Authorities and at
the First Closing Date and the Second Closing Date: (A) the Canadian Preliminary
Prospectus and the Canadian Final Prospectus (and any further amendments or
supplements thereto, including any Supplementary Material) complied and will
comply in all material respects with the securities laws applicable in the
Canadian Jurisdictions and the respective instruments, rules and regulations
made and forms prescribed under such laws together with applicable published
policy statements (including, without limitation, the Canadian Shelf Procedures)
and applicable notices of the Qualifying Authorities made in connection with the
transactions contemplated by this Agreement (collectively, the
"Canadian Securities Laws"); and (B) the Canadian Preliminary Prospectus and the
Canadian Final Prospectus (and any further amendments or supplements thereto,
including any Supplementary Material) constituted and will constitute full, true
and plain disclosure of all material facts relating to the Securities and the
Company and its Subsidiaries, taken as a whole, and did not and will not contain
a misrepresentation, as defined under Canadian Securities Laws, and did not and
will not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.

The U.S. Preliminary Prospectus conformed and will conform to the Canadian
Preliminary Prospectus and the U.S. Final Prospectus conformed and will conform
to the Canadian Final Prospectus, in each case except for such deletions
therefrom and additions thereto as are permitted or required by Form F-10 and
the applicable rules and regulations of the Commission.
 
(e) Neither (A) any Issuer General Free Writing Prospectus( es) issued at or
prior to the Time of Sale and set forth on Schedule I, the information set forth
on Schedule I and the Statutory Prospectus at the Time of Sale, all considered
together (collectively, the "Time of Sale Disclosure Package"), nor (B) any
individual Issuer Limited-Use Free Writing Prospectus, when considered together
with the Time of Sale Disclosure Package,  includes or included as of the Time
of Sale any untrue statement of a material fact or omit or omitted as of the
Time of Sale to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The preceding sentence does not apply to statements in or
omissions from any Statutory Prospectus or any Issuer Free Writing Prospectus
based upon and in conformity with written information furnished to the Company
by the Underwriter specifically for use therein; it being understood and agreed
that the only such information furnished by the Underwriter consists of the
information described as such in Section 6(t). As used in this paragraph and
elsewhere in this Agreement:
 
(i) "Time of Sale" means 9:45 p.m. (New York time) on the date of this
Agreement, or such other time as agreed to by the Company and the Underwriter.
 
(ii) "Statutory Prospectus" means the Base Prospectus, as amended and
supplemented immediately prior to the Time of Sale, including any document
incorporated by reference therein and any prospectus supplement deemed to be a
part thereof. For purposes of this definition, information contained in a form
of prospectus filed in accordance with General Instruction 11.L of Form F-10
shall be considered to be included in the Statutory Prospectus as of the actual
time that form of prospectus is filed with the Commission under the Securities
Act.
 
 
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(iii) "Issuer Free Writing Prospectus" means any "issuer free writing
prospectus,'' as defined in Rule 433 under the Securities Act, relating to the
Securities that (A) is required to be filed with the Commission by the Company,
or (B) is exempt from filing pursuant to Rule 433(d)(5)(i) under the Securities
Act because it contains a description of the Securities or of the offering that
does not reflect the final terms, or is a "bona fide electronic roadshow," as
defined in Rule 433 of the Rules and Regulations, in each case in the form filed
or required to be filed with the Commission or, if not required to be filed, in
the form retained in the Company's records pursuant to Rule 433(g) under the
Securities Act.
 
(iv) "Issuer General Free Writing Prospectus" means any Issuer Free Writing
Prospectus that is intended for general distribution to prospective investors,
as evidenced by its being specified in Schedule II hereto.
 
(v) "Issuer Limited-Use Free Writing Prospectus" means any Issuer Free Writing
Prospectus that is not an Issuer General Free Writing Prospectus.
 
(t) (A) Each Issuer Free Writing Prospectus, as
of  its  issue  date  and  at  all subsequent times through the Prospectus
Delivery Period or until any earlier date that the Company notified or notifies
the Underwriter as described in Section 4(c)(B), did not, does not and will not
include any information that conflicted, conflicts or will conflict with the
information contained in the Registration Statement, any Statutory Prospectus or
the Prospectus. The foregoing sentence does not apply to statements in or
omissions from any Issuer Free Writing Prospectus based upon and in conformity
with written information furnished in writing to the Company by the Underwriter
specifically for use therein; it being understood and agreed that the only such
information furnished by the Underwriter consists of the information described
as such in Section 6(f).
 
(B)( 1) At the earliest time after the filing of the Registration Statement that
the Company or another offering participant made a bona fide offer (within the
meaning of Rule 164(h)(2) under the Securities Act) of the Securities and (2) at
the date hereof, the Company was not and is not an "ineligible issuer,'' as
defined in Rule 405 under the Securities Act, in the preceding three years not
having been convicted of a felony or misdemeanor  or having been made the
subject of a judicial or administrative decree or order as described in Rule 405
(without taking account of any determination by the Commission pursuant to Rule
405 that it is not necessary that the Company be considered an ineligible
issuer), nor an "excluded issuer" as defined in Rule 164 under the Securities
Act.
 
(C) Each Issuer Free Writing Prospectus satisfied, as of its issue date and at
all subsequent times through the Prospectus Delivery Period, all other
conditions to use thereof as set forth in Rules 164 and 433 under the Securities
Act.
 
(g) The U.S. Preliminary Prospectus and the U.S. Final Prospectus delivered or
to be delivered to the Underwriter for use in connection with this offering was
or will be substantially identical to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T. The Canadian Preliminary Prospectus and the
Canadian Final Prospectus delivered or to be delivered to the Underwriters for
use in connection with this offering was or will be identical to the
electronically transmitted copies thereof filed with the applicable Qualifying
Authorities pursuant to SEDAR.
 
(h) The financial statements of the Company, together with the related notes,
set forth or incorporated by reference in the Registration Statement, the Time
of Sale Disclosure Package and the Final Prospectuses comply in all material
respects with the requirements of the Securities Act and the Exchange Act and
fairly present the financial condition of the Company as of the dates indicated
and the
 
 
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results of operations and changes in cash flows for the periods therein
specified in conformity with generally accepted accounting principles used in
the United States of America ("U.S. GAAP'), consistently applied throughout the
periods involved; and the supporting schedules included in the Registration
Statement, if any, the Time of Sale Disclosure Package and the Final
Prospectuses have been derived from the accounting records of the Company and
present fairly the information required to be stated therein. No other schedules
or financial statements are required to be included in the Registration
Statement, the Time of Sale Disclosure Package or the Final Prospectuses. To the
Company's knowledge, KPMG LLP, which has expressed its opinion with respect to
the financial statements filed as a part of the Registration Statement and
included in the  Registration Statement, the Time of Sale Disclosure Package and
the Final Prospectuses, are independent public accountants as required by the
Securities Act, the Ru les and Regulations and Canadian Securities Laws, are in
good standing with the Canadian Public Accountability Board and are independent
with respect to the Company within the meaning of the Sarbanes-Oxley Act of 2002
(the "Sarbanes-Oxley Act") for the periods required under General Instruction
III.B. of Form F-10, and are also independent with respect to the Company as
required by the Business Corporations Act (British Columbia), applicable
Canadian Securities Laws and applicable Canadian professional standards. There
has not been a "reportable event" (within the meaning of Section 4.11 of
National Instrument 51-102 - Continuous Disclosure Obligations) between KPMG LLP
and the Company. Except as described in the Time of Sale Disclosure Package and
the Final Prospectuses, there are no material off-balance sheet transactions,
arrangements, obligations (including contingent obligations), or any other
relationships with unconsolidated entities or other persons, that may have a
material current or, to the Company's knowledge, future effect on the Company's
financial condition, changes in financial condition or results of operations.
All non-GAAP financial information included in the Registration Statement, the
Time of Sale Disclosure Package and the Final Prospectuses complies in all
material respects with the requirements of Regulation G under the Securities Act
and the published policies of the Canadian securities regulatory authorities
regarding the use of non-GAAP financial information.
 
(i) The Company has been duly incorporated and is validly existing as a company
in good standing under the Business Corporations Act (British Columbia). The
Company has full corporate power and authority to own its properties and conduct
its business as currently being conducted and as described in the Registration
Statement, the Time of Sale Disclosure Package and the Final Prospectuses, and
is duly qualified to do business as a foreign corporation in good standing in
each jurisdiction in which the failure to so qualify might result in a material
adverse change in the general affairs, condition (financial or otherwise),
business, prospects, property, operations or results of operations of the
Company ("Material Adverse Change").
 
(j) Protiva Biotherapeutics Inc. and Protiva Biotherapeutics (USA), Inc. are
wholly- owned subsidiaries of the Company and Protiva Agricultural Development
Company Inc. is a wholly­ owned subsidiary of Protiva Agricultural Development
Company Inc. (collectively, the "Subsidiaries'), have been duly incorporated and
are validly existing as a corporations in good standing under the laws of their
jurisdictions of incorporation, have the corporate power and authority to own,
lease and operate their properties and to conduct their business as described in
the Time of Sale Disclosure Package and the Final Prospectuses and are duly
qualified to transact business and are in good standing in each jurisdiction in
which such qualification is required, whether by reason of the ownership ot
leasing of property or the conduct of business, except where the failure so to
qualify or to be in good standing could not reasonably be expected to result in
a Material Adverse Change. All of the issued and outstanding shares in the
capital of each Subsidiary have been duly authorized and validly issued and are
fully paid and non­ assessable and are owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity, except for any security interests, mortgages,
pledges,  liens, encumbrances,  claims or equities that are described  in the
Time of Sale Disclosure  Package and the Final Prospectuses;  none of the
outstanding shares in the capital of the
 
 
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Subsidiaries was issued in violation of preemptive or other similar rights of
any shareholder of such Subsidiaries. Other than  Protiva Biotherapeutics Inc.
and Protiva Biotherapeutics (USA), Inc., the Company, directly or indirectly,
owns no capital stock or other equity or ownership or proprietary interest in
any corporation, partnership, association, trust or other entity.
 
(k) Except as contemplated in the Time of Sale Disclosure Package and the Final
Prospectuses, subsequent to the respective dates as of which information is
given in the Time of Sale Disclosure Package, (a) the Company has not incurred
any material liabilities or obligations, direct or contingent, or entered into
any material transactions, or declared or paid any dividends or made any
distribution of any kind with respect to its capital stock; and (b) there has
not been any change in the capital stock (other than a change in the number of
outstanding Common Shares due to the issuance of equity compensation awards
under the Company's equity compensation plans or shares upon the exercise of
outstanding options or warrants), or any material change in the short term or
long term debt, or any issuance of options, warrants, convertible securities or
other rights to purchase the capital stock, of the Company (other than issuances
of equity compensation awards under the Company's equity compensation plans), or
any Material Adverse Change or any development that could reasonably be expected
to result in a Material Adverse Change.
 
(l) Except as set forth in the Time of Sale Disclosure Package and the Final
Prospectuses, there is not pending or, to the knowledge of the Company,
threatened or contemplated, any action, suit or proceeding to which the Company
is a party or of which any property or assets of the Company is the subject
before or by any court or governmental agency, authority or body, or any
arbitrator, which, individually or in the aggregate, could reasonably be
expected to result in any Material Adverse Change. There are no current or
pending legal, governmental or regulatory actions, suits or proceedings that are
required to be described in the Registration Statement, the Time of Sale
Disclosure,. Package and the Final Prospectuses that have not been so described.
 
(m)           There are no material  statutes, regulations,  contracts  or
documents that are required to be described in the Registration Statement, the
Time of Sale Disclosure Package and the Final Prospectuses or to be filed as
exhibits to the Registration Statement by the Securities Act or by the Rules and
Regulations that have not been so described or filed.
 
(n) This Agreement has been duly authorized, executed and delivered by the
Company, and constitutes a valid, legal and binding obligation of the Company,
enforceable in accordance with its terms, except as rights to indemnity
hereunder may be limited by federal, state or provincial securities laws and
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting the rights of creditors generally and
subject to general principles of equity. The execution, delivery and performance
of this Agreement and the consummation of the transactions herein contemplated
will not (A) conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or assets of
the Company or the Subsidiaries pursuant to, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
such Subsidiaries is a party or by which the Company or such Subsidiaries is
bound or to which any of the property or assets of the Company or the
Subsidiaries is subject, (B) result in any violation of the provisions of the
charter, articles of incorporation or bylaws of the Company or the Subsidiaries
or (C) result in the violation of any law or statute or any judgment, order,
rule or regulation of any court or arbitrator or governmental agency or
regulatory authority, except, in the case of clause (A), any lien, charge,
encumbrance, indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument that, would not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Change and except in the
case of (C) above, could not, individually or in the aggregate, reasonably  be
expected to result in a Material  Adverse Change.   No consent, approval,
 
 
8

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authorization or order of, or filing with, any court or governmental agency or
body is . required for the execution, delivery and performance of this Agreement
or for the consummation of the transactions contemplated hereby, including the
issuance or sale of the Securities by the Company, except such as may be
required under the Securities Act, the rules of the Financial Industry
Regulatory Authority ("FINRA"), the NASDAQ, the TSX or state or provincial
securities or blue sky laws; and the Company has full power and authority to
enter into this Agreement and to consummate the transactions contemplated hereby
including the authorization, issuance and sale of the Securities as contemplated
by this Agreement.
 
(o) All of the issued and outstanding shares in the capital of the Company,
including the outstanding Common Shares, are duly authorized and validly issued,
fully paid and nonassessable, have been issued in compliance with all Canadian
and, to the extent applicable, U.S. securities laws, were not issued in
violation of or subject to any preemptive rights or other rights to subscribe
for or purchase securities that have not been waived in writing; the Securities
which may be sold hereunder by the Company have been duly authorized and, when
issued, delivered and paid for in accordance with the terms of this Agreement,
will have been validly issued and will be fully paid and nonassessable; and the
authorized share capital of the Company, including the Common Shares, conforms
to the description thereof in the Registration Statement, the Time of Sale
Disclosure Package and the Final Prospectuses. Except as otherwise described in
the Registration Statement, the Time of Sale Disclosure Package and the Final
Prospectuses, there are no preemptive rights or other rights to subscribe for or
to purchase, or any restriction upon the voting or transfer of, any Common
Shares pursuant to the Company's charter, by laws or any agreement or other
instrument to which the Company is a party or by which the Company is bound,
other than options to purchase Common Shares under the Company's existing stock
option plans. Except as described in the Registration Statement, in the Time of
Sale Disclosure Package and in the Final Prospectuses, neither the filing of the
Registration Statement nor the offering or sale of the Securities as
contemplated by this Agreement gives rise to any rights for or relating to the
registration of any Common Shares or other securities of the Company that have
not been fully complied with or previously waived. Except as described in the
Registration Statement, the Time of Sale Disclosure Package and the Final
Prospectuses, there are no options, warrants, agreements, contracts or other
rights in existence to purchase or acquire from the Company any shares in the
capital of the Company. The Company has an authorized and outstanding
capitalization as set forth in the Registration Statement, the Time of Sale
Disclosure Package and the Final Prospectuses. The description of the Company's
stock option, stock bonus and other stock plans or arrangements, and the options
or other rights granted thereunder, set forth in the Time of Sale Disclosure
Package and the Final Prospectuses accurately and fairly presents in all
material respects the information required to be shown with respect to such
plans, arrangements, options and rights. Except as set forth in the Time of Sale
Disclosure Package, the Company is not a participant in any joint venture,
partnership or similar arrangement.
 
(p) The Company holds, and is operating in compliance in all material respects
with, all franchises, grants, authorizations, licenses, permits, easements,
consents, certificates and orders of any Governmental Authority or
self-regulatory body required for the conduct of its business, and all such
franchises, grants, authorizations, licenses, permits, easements, consents,
certifications and orders are valid and in full force and effect; and the
Company has not received notice of any revocation or modification of any such
franchise, grant, authorization, license, permit, easement, consent,
certification or order or has reason to believe that any such franchise, grant,
authorization, license, permit, easement, consent, certification or order will
not be renewed in the ordinary course; and the Company is in compliance in all
material respects with all applicable U.S. and Canadian federal, provincial,
state, local and foreign laws, regulations, orders and decrees.
 
(q) The Company has good and marketable title to all property (whether real or
personal) described in the Registration Statement, the Time of Sale Disclosure
Package and the Final Prospectuses as being owned by them, in each case free and
clear of all liens, claims, security interests, other encumbrances  or defects
except as described in the Registration Statement, the Time of
Sale    Disclosure Package and the Final Prospectuses, and except those that
could not, individually or in the aggregate, reasonably be expected to result in
a Material Adverse Change. The property held under lease by the Company is held
by it under valid, subsisting and enforceable leases with only such exceptions
with respect to any particular lease as do not interfere in any material respect
with the conduct of the business of the Company.
 
(r) The Company owns, possesses, or can acquire on reasonable terms, all
Intellectual Property (as defined below) necessary for the conduct of its
business as now conducted or as described in the Registration Statement, the
Time of Sale Disclosure Package and the Final Prospectuses to be conducted.
Except as set forth in the Registration Statement, the Time of Sale Disclosure
Package and the Final Prospectuses, (A) to the knowledge of the Company, there
is no infringement, misappropriation or violation by third parties of any such
Intellectual Property, except for such infringements, misappropriations or
violations that could not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Change; (B) there is no pending or, to
the knowledge of the Company, threatened action, suit, proceeding or claim by
others challenging the Company's rights in or to any such Intellectual Property,
and the Company is unaware of any facts which would form a reasonable basis for
any such claim; (C) the Intellectual Property owned by the Company, and to the
knowledge of the Company, the Intellectual Property licensed to the Company,
have not been adjudged invalid or unenforceable, in whole or in part, and there
is no pending or threatened action, suit, proceeding or claim by others
challenging the validity or scope of any such Intellectual Property, and the
Company is unaware of any facts which would form a reasonable basis for any such
claim; (D) there is no pending or, to the knowledge of the Company, threatened
action, suit, proceeding or claim by others that the Company infringes,
misappropriates or otherwise violates any Intellectual Property or other
proprietary rights of others, and the Company has not received any written
notice of such claim and the Company is unaware of any other fact which would
form a reasonable basis for any such claim; and (E) to the knowledge of the
Company, no employee of the Company is in or has ever been in violation  of any
term of any employment contract, patent disclosure agreement, invention
assignment agreement, non-competition agreement, non-solicitation agreement,
nondisclosure agreement or any restrictive covenant to or with a former employer
where the basis of such violation relates to such employee's employment with the
Company or actions undertaken by the employee while employed with the Company,
except for such violations that could not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Change.
"Intellectual Property" shall mean all patents, patent applications, trade and
service marks, trade and service mark registrations, trade names, copyrights,
licenses, inventions, trade secrets and other intellectual property.
 
(s)  The Company is not (A) in violation of its articles of incorporation or by
laws; (B) in breach of or otherwise in default, and no event has occurred which,
with notice or lapse of time or both, would constitute such a default in the
performance or observance of any term, covenant, obligation, agreement or
condition contained in any bond, debenture, note, indenture, loan agreement,
mortgage, deed of trust or any other contract, lease or other instrument to
which it is subject or by which it may be bound, or to which any of the material
property or assets of the Company is subject; or (C) in violation of any law or
statute or any judgment, order, rule or regulation of any court or arbitrator or
governmental or regulatory authority, except in the case of (B) and (C) above,
as could not, individually or in the aggregate, reasonably be expected to result
in a Material Adverse Change.
 
(t) The Company has timely filed all United States federal, Canadian federal,
state, provincial, local and foreign income and franchise tax returns required
to be filed and is not in default in the payment of any material taxes which was
payable pursuant to said returns or any assessments with respect thereto, other
than any which the Company is contesting in good faith. There is no pending
dispute with any taxing authority relating to any of such returns and the
Company has no knowledge of
 
 
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any proposed liability for any tax to be imposed upon the properties or assets
of the Company for which there is not an adequate reserve reflected in the
Company's financial statements included in the Registration Statement, the Time
of Sale Disclosure Package and the Final Prospectuses.
 
(u) The Company, directly or indirectly, owns no capital stock or other equity
or ownership or proprietary interest in any corporation, partnership,
association, trust or other entity, other than the Subsidiaries and other than
as disclosed in the Time of Sale Disclosure Package.
 
(v) The Company has not distributed and will not distribute any prospectus or
other offering material in connection with the offering and sale of the
Securities other than the Time of Sale Disclosure Package or the Final
Prospectuses or other materials permitted by the Securities Act to be
distributed by the Company; provided, however, that, except as set forth on
Schedule II, the Company has not made and will not make any offer relating to
the Securities that would constitute a "free writing prospectus" as defined in
Rule 405 under the Securities Act, except in accordance with the provisions of
Section 4(p) of this Agreement.
 
(w) The Common Shares of the Company are registered pursuant to Section 12(b) of
the Exchange Act, are listed on the NASDAQ under the ticker symbol "TKMR," and
are listed on the TSX under the symbol "TKM". The Company has taken no action
designed to, or likely to have the effect of, terminating the registration of
the Common Shares under the Exchange Act or delisting the Common Shares from the
NASDAQ or the TSX nor has the Company received any written notice that it is not
in compliance with the listing or maintenance requirements of the NASDAQ or the
TSX. The Company believes that it is, and has no reason to believe that it will
not in the foreseeable future continue to be, in material compliance with all
such listing and maintenance requirements. Except as described in the
Registration Statement, the Time of Sale Disclosure Package or the Final
Prospectuses, there are no affiliations among the Company's directors and
officers and members of the FINRA other than as disclosed to the FIN RA.
A Registration Statement relating to the Common Shares on Form 8-A or other
applicable form under the Exchange Act has become effective.
 
(x) The Company maintains a system of internal accounting controls sufficient to
provide reasonable assurances that (A) transactions  are executed in accordance
with management's general or specific authorization; (B) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with U.S. GAAP, and to maintain accountability for assets; (C) access
to assets is permitted only in accordance with management's general or specific
authorization; and (D) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences. The Company's internal control over financial
reporting is effective and none of the Company, its board of directors and audit
committee is aware of any "significant deficiencies" or "material weaknesses"
(each as defined by the rules adopted by the Commission) in its internal control
over financial reporting, or any fraud that involves management or other
employees of the Company who have a significant role in the Company's internal
controls; and since the end of the latest audited fiscal year, there has been no
change in the Company's internal control over financial reporting (whether or
not remediated) that has materially affected, or is reasonably likely to
materially affect, the Company's internal control over financial reporting. The
Company's board of directors has, subject to the exceptions, cure periods and
the phase in periods specified in the applicable stock exchange rules
("Exchange Rules"), validly appointed an audit committee to oversee internal
accounting controls whose composition satisfies the applicable independence and
other requirements of the Exchange Rules and Canadian Securities Laws, and the
Company's board of directors and/or the audit committee has adopted a charter
that satisfies the requirements of the Exchange Rules and Canadian Securities
Laws.
 
(y) The Company and its Subsidiaries maintain disclosure controls and procedures
as required by Rule l 3a- l 5 or Rule l 5d-15 under the Exchange Act and as
contemplated by the certifications
 
 
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required under Form 52-109F 1 and Form 52-109F2 under Multilateral Instrument
52-109 - Certification of Disclosures in Issuer's Annual and Interim Filings;
such controls and procedures are effective to ensure that all material
information concerning the Company and any of its Subsidiaries is made known, on
a timely basis, to the individuals responsible for the preparation of the
Company's filings with the Commission and the Qualifying Authorities. The
Company has utilized such controls and procedures in preparing and evaluating
the disclosures in the Registration Statement, in the Time of Sale Disclosure
Package and in the Final Prospectuses. Neither the Company's board of directors
nor the audit committee has been informed, nor is any director of the Company or
the Company aware, of (A) any significant deficiencies in the design or
operation of the Company's internal controls which could adversely affect the
Company's ability to record, process, summarize and report financial data or any
material weakness in the Company's internal controls; or (B) any fraud, whether
or not material, that involves management or other employees of the Company who
have a significant role in the Company's internal controls.
 
(z) No material relationship, direct or indirect, exists between or among the
Company, on the one hand, and the directors, officers, stockholders, customers
or suppliers of the Company, on the other hand, which is required to be
described in the Registration Statement, the Time of Sale Disclosure Package and
the Final Prospectuses which is not so described. The Company has not, directly
or indirectly, extended or maintained credit, or arranged for the extension of
credit, or renewed an extension of credit, in the form of a personal loan to or
for any of its directors or executive officers in violation of applicable laws,
including Section 402 of the Sarbanes-Oxley Act.
 
(aa) Except as described in the Registration Statement, the Time of Sale
Disclosure Package and the Final Prospectuses, the Company: (A) is and at all
times has been in compliance with all applicable U.S., Canadian and foreign
statutes, rules, regulations, or guidances applicable to Company
and  the  ownership,  testing,  development,  manufacture,  packaging,  processing,  use,  distribution,
ii marketing, labeling, promotion, sale, offer for sale, storage, import, export
or disposal of any product manufactured or distributed by the Company, except
where such noncompliance could not, individually
or in the aggregate, reasonably be expected to result in a Material Adverse Change ("Applicable Laws");
(B) has not received any warning letter, untitled letter or other correspondence
or written notice from the U.S. Food and Drug Administration or any other U.S.
or Canadian federal, state, provincial or foreign governmental authority having
authority over the Company ("Governmental Authority") alleging or asserting
noncompliance with any Applicable Laws or any licenses, certificates, approvals,
clearances, authorizations, permits and supplements or amendments thereto
required by any such Applicable Laws ("Authorizations"); (C) possesses all
Authorizations and such Authorizations are valid and in full force and effect
and are not in violation of any term of any such Authorizations, except as could
not, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Change; (D) has not received written notice of any claim,
action, suit, proceeding, hearing, enforcement, investigation, arbitration or
other action from any Governmental Authority or third party alleging that any
product operation or activity is in violation of any Applicable Laws or
Authorizations and have no knowledge that any such Governmental Authority or
third party is considering any such claim, litigation, arbitration, action,
suit, investigation or proceeding;  (E) has not received  written notice that
any Governmental Authority has taken, is taking or intends  to take action to
limit, suspend, modify or revoke any Authorizations and the Company has no
knowledge that any such Governmental Authority is considering such action; and
(F) has filed, obtained, maintained or submitted all material reports,
documents, forms, notices, applications, records, claims, submissions and
supplements or amendments as required by any Applicable Laws or Authorizations
and that all such reports, documents, forms, notices, applications, records,
claims, submissions and supplements or amendments were complete and correct in
all material respects on the date filed (or were corrected or supplemented by a
subsequent submission).
 
(bb)  The studies, tests and preclinical and clinical trials conducted by or on
behalf of the Company were and, if still pending, are, being conducted in
accordance with experimental protocols,
 
 
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procedures and controls pursuant to accepted professional scientific standards
and all Applicable Laws and Authorizations; the descriptions of the results of
such studies, tests and trials contained in the Registration Statement, the Time
of Sale Disclosure Package and the Final Prospectuses are accurate and complete
and fairly present the data derived from such studies, tests and trials; except
to the extent disclosed in the Registration Statement, the Time of Sale
Disclosure Package and the Final Prospectuses, the Company is not aware of any
studies, tests or trials the results of which the Company believes reasonably
call into question the study, .test, or trial results described or referred to
in the Registration Statement, the Time of Sale Disclosure Package and the Final
Prospectuses when viewed in the context in which such results are described and
the clinical state of development; and the Company has not received any notices
or correspondence from any Governmental Authority requiring the termination,
suspension or material modification of any current or active studies, tests or
preclinical or clinical trials conducted by or on behalf of the Company.

(cc) The Company (A) is in compliance with any and all applicable United States
and Canadian federal, state, provincial, local and foreign laws, rules,
regulations, decisions and orders relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes, pollutants
or contaminants (collectively, "Environmental Laws"); (B) has received and are
in material compliance with all permits, licenses or other approvals required of
it under applicable Environmental Laws to conduct .its business; and (C) has not
received notice of any actual or potential liability for the investigation or
remediation of any disposal  or release of hazardous  or toxic substances or
wastes, pollutants or contaminants, except in any such case for any such failure
to comply, or failure to receive required permits, licenses or approvals, or
liability as would not, individually or in the aggregate, result in a Material
Adverse Change.
 
(dd) The documents filed as exhibits to the Registration Statement or otherwise
incorporated by reference in the Time of Sale Disclosure Package and in the
Final Prospectuses, when they became effective or were filed with the Commission
or the applicable Qualifying Authorities, as the case may be, conformed in all
material respects to all applicable requirements of the Securities Act or the
Exchange Act and all applicable requirements of Canadian Securities Laws, as the
case may be, and were filed on a timely basis with the Commission and with the
applicable Qualifying Authorities, as the case may be, and none of such
documents contained an untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; any further documents
so filed and incorporated by reference in the Time of Sale Disclosure Package or
in the Final Prospectuses, when such documents are filed with the Commission or
the applicable Qualifying Authorities, as the case may be, will confirm in all
material respects to all applicable requirements of the Securities Act or the
Exchange Act and all applicable requirements of Canadian Securities Laws, as the
case may be, and will not contain an untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
 
Each document filed or to be filed with the applicable Qualifying Authorities
and incorporated or deemed to be incorporated by reference in the Canadian Base
Prospectus, the Canadian Preliminary Prospectus and the Canadian Final
Prospectus complied or will comply when so filed and at the First Closing Date
and the Second Closing Date, as the case may be, in all material respects with
Canadian Securities Laws, and did not or will not contain a misrepresentation as
defined under Canadian Securities Laws, and none of such documents contained or
will contain at the time of its filing and at the First Closing Date and the
Second Closing Date, as the case may be, any untrue statement of a material fact
or omitted or will omit to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were or are made, not misleading. The Company has not filed any
confidential material change reports which remain confidential as at the date
hereof.
 
 
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(ee) The Company (A) is in compliance, in all material respects, with any and
all applicable United States and Canadian federal, state, provincial, local and
foreign laws, rules, regulations, treaties, statutes and codes promulgated by
any and all governmental authorities (including pursuant to the Occupational
Health and Safety Act, if applicable) relating to the protection of human health
and safety in the workplace ("Occupational Laws"); (B) has received all material
permits, licenses or other approvals required of it under applicable
Occupational Laws to conduct its business as currently conducted; and (C) is in
compliance, in all material respects, with all terms and conditions of such
permit, license or approval. No action, proceeding, revocation proceeding, writ,
injunction or claim is pending or, to the Company's knowledge, threatened
against the Company relating to Occupational Laws, and the Company does not have
knowledge of any facts, circumstances or developments relating to its operations
or cost accounting practices that could reasonably be expected to form the basis
for or give rise to such actions, suits, investigations or proceedings. Each
employee benefit plan, within  the  meaning  of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), that is
maintained, administered or contributed to by the Company, or any of its
affiliates for employees or former employees of the Company and has been
maintained in material compliance with its terms and the requirements of any
applicable statutes, orders, rules and regulations, including but not limited
to, BRISA and the Internal Revenue Code of 1986, as amended (the "Code"). No
prohibited transaction, within the meaning of Section 406 of ERISA or Section
4975 of the Code, has occurred with respect to any such plan excluding
transactions effected pursuant to a statutory or administrative exemption; and
for each such plan that is subject to the funding rules of Section 412 of the
Code or Section 302 of ERISA, no "accumulated funding deficiency" as defined in
Section 412 of the Code has been incurred, whether or not waived, and the fair
market value of the assets of each such plan (excluding for these purposes
accrued but unpaid contributions) exceeds the present value of all benefits
accrued under such plan determined using reasonable actuarial assumptions.
 
(ff) Except as set forth in the Registration Statement, the Time of Sale
Disclosure Package and the Final Prospectuses, the Company has not granted
rights to develop, manufacture, produce, assemble, distribute, license, market
or sell its products to any other person and is not bound by any agreement that
affects the Company's exclusive right to develop, manufacture, produce,
assemble, distribute, license, market or sell its products.
 
(gg)    Nothing has come to the attention of the Company that has caused the.
Company to believe that the statistical and market-related data included in the
Registration Statement, the Time of Sale Disclosure Package and the Final
Prospectuses is not based on or derived from sources that are reliable and
accurate in all material respects.
 
(hh) Other than as contemplated by this Agreement, the Company has not incurred
any liability for any finder's or broker's fee or agent's commission in
connection with the execution and delivery of this Agreement or the consummation
of the transactions contemplated hereby.
 
(ii) To the knowledge of the Company, none of the directors or executive
officers of the Company are now, or have ever been, subject to any penalties or
sanctions imposed by a court relating to securities legislation or by a
securities regulatory authority, or have entered into a settlement agreement
with a securities regulatory authority. Neither the Commission, the Reviewing
Authority, any other securities regulatory authority, any stock exchange nor any
similar regulatory authority has issued any order which is currently outstanding
preventing or suspending trading in any securities of the Company or the use of
the Final Prospectuses and no proceedings for such purposes have been instituted
or are pending or, to the knowledge of the Company, are contemplated.
 
(jj) The Company is not presently doing business with the government of Cuba or
with any person or affiliate located in Cuba.
 
 
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(kk) The Company carries, or is covered by, insurance in such amounts and
covering such risks as is adequate for the conduct of its business and the value
of its properties and as is customary for companies engaged in similar
businesses in similar industries; and the Company has not (A) received written
notice from any insurer or agent of such insurer that capital improvements or
other expenditures are required or necessary to be made in order to continue
such insurance or (B) 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 at reasonable cost from similar insurers as may be necessary to
continue its business. All such insurance is outstanding and duly in force on
the date hereof.
 
(ll)   No labor problem or dispute with the employees of the Company exists nor,
to the best knowledge of the Company, is threatened or imminent except as could
not, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Change.
 
(mm) Neither the Company, nor, to the best knowledge of the Company, any
director, officer, agent, employee, consultant or other person associated with
or acting on behalf of the Company has (A) used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expense relating to
political activity; (B) made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds;
(C) violated or is in violation of any provision of the Canadian Corruption of
Foreign Public Officials Act or the U.S. Foreign Corrupt Practices Act of 1977;
or (D) made any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment.
 
(nn) )'he Company is not and, after giving effect to the offering, the sale of
the Securities and the intended use of proceeds of the offering, will not be
registered or required to register as an "investment company," as such term is
defined in the Investment Company Act of 1940, as amended.
 
(oo) Except as described in the Final Prospectuses or otherwise obtained by the
Company, no approval of the shareholders of the Company is required for the
Company to issue and deliver to the Underwriter the Securities, including such
as may be required pursuant to the rules and regulations of any trading market.
 
(pp) The Company is in compliance in all material respects with all applicable
provisions of the Sarbanes-Oxley Act and the rules and regulations of the
Commission thereunder,
 
(qq) The Company and its board of directors have taken all necessary action, if
any, in order to render inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Company's articles of
incorporation or by-laws, the Business Corporations Act (British Columbia) or
other applicable Canadian laws that is or could reasonably be expected to become
applicable to the Underwriter as a result of the Underwriter and the Company
fulfilling their obligations or exercising their rights under the Agreement,
including, without limitation, the Company's issuance of the Securities and the
Underwriter's ownership of the Securities.
 
(rr) The Company satisfies the eligibility requirements for the use of a
registration statement on Form F-10 set forth in Securities Act Release No. 6902
(June 21, 1991).
 
3.  
Purchase, Sale and Delivery of Securities.

 
(a) On the basis of the representations, warranties and agreements herein
contained, but subject to the terms and conditions herein set forth, the Company
agrees to issue and sell the Firm
 
 
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Shares to the Underwriter, and the Underwriter agrees to purchase from the
Company the Firm Shares. The purchase price for each Firm Share shall be US$26,
79 per share.
 
The Finn Shares will be delivered by the Company to the Underwriter against
payment of the purchase price therefor by wire transfer of same day funds
payable to the order of the Company at the offices of Goodwin Procter LLP, The
New York Times Building, 620 Eighth Avenue, New York, New York, or such other
location as may be mutually acceptable, at 10:00 a.m. Eastern time on the third
(or if the Firm Shares are priced, as contemplated by Rule 15c6-l(c) under the
Exchange Act, after 4:30 p.m. Eastern time, the fourth) full business day
following the date hereof, or at such other time and date as the Underwriter and
the Company determine pursuant to Rule 15c6-l(a) under the Exchange Act, such
time and date of delivery being herein referred to as the
"First Closing Date." If the Underwriter so elects, delivery of the Firm Shares
may be made by credit through full fast transfer to the accounts at The
Depository Trust Company designated by the Underwriter, or through CDS Clearing
and Depository Services Inc.
 
(b) On the basis of the representations, warranties and agreements herein
contained, but subject to the terms and conditions herein set forth, the Company
hereby grants to the Underwriter an option to purchase all or any portion of the
Option Shares to be sold by the Company hereunder, at the same purchase price as
the Firm Shares, for use in covering any over-allotments made by the Underwriter
in the sale and distribution of the Firm Shares and for market stabilization
purposes. The option granted hereunder may be exercised in whole or in part at
any time and from time to time within 30 days after the effective date of this
Agreement upon notice (confirmed in writing) by the Underwriter to the Company
setting forth the aggregate number of Option Shares as to which the Underwriter
is exercising the option, the names and denominations in which the certificates
for the Option Shares are to be registered and the date and time, as determined
by the Underwriter, when the Option Shares are to be delivered, such time and
date being herein referred to as the ''Second Closing" and
"Second Closing Date'', respectively; provided, however, that the Second Closing
Date shall not be earlier than the First Closing Date nor earlier than the
second business day after the date on which the option shall have been
exercised. The number of Option Shares to be purchased by the Underwriter shall
be the same percentage of the total number of Option Shares to be purchased by
the Underwriter as the number of Firm Shares to be purchased by the Underwriter
is of the total number of Firm Shares to be purchased by the Underwriter, as
adjusted by the Underwriter in such manner as the Underwriter deems advisable to
avoid fractional shares. No Option Shares shall be sold and delivered unless the
Firm Shares previously have been, or simultaneously are, sold and delivered.
 
The Option Shares will be delivered by the Company to the Underwriter against
payment of the purchase price therefor by wire transfer of same day funds
payable to the order of the Company at the offices of Goodwin Procter LLP, The
New York Times Building, 620 Eighth Avenue, New York, New York, or such other
location as may be mutually acceptable, at 9:00 a.m. Eastern time, on the Second
Closing Date. If the Underwriter so elects, delivery of the Option Shares may be
made by credit through full fast transfer to the accounts at The Depository
Trust Company designated by the Underwriter, or through CDS Clearing and
Depository Services Inc.
 
(c) The Underwriter shall be permitted to appoint additional investment dealers
or brokers (each, a "Selling Firm") as its agents in the offering of the
Securities and the Underwriter may determine the remuneration  payable to such
Selling Firm. The Underwriter may offer the Securities, directly and through
Selling Finns or any affiliate of the Underwriter, in the United States for sale
to the public or to purchasers otherwise permitted to purchase the Securities in
accordance with the Securities Act, the Rules and Regulations and the Canadian
Securities Laws and upon the terms and conditions set forth in the Final
Prospectuses and in this Agreement. The Underwriter shall require any Selling
Firm appointed by the Underwriter to agree to the foregoing and the Underwriter
shall be severally responsible
 
 
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for the compliance by such Selling Firm with the provisions of this Agreement.
The Underwriter shall promptly notify the Company when, in its opinion, the
distribution of the Securities has ceased.
 
4.  
Covenants. The Company covenants and agrees with the Underwriter as follows:

 
(a) During the period beginning on the date hereof and ending on the later of
the Second Closing Date and such date, as in the opinion of counsel for the
Underwriter, the U.S. Final Prospectus is no longer required by law to be
delivered (assuming the absence of Rule 172 under the Securities Act), in
connection with sales by the Underwriter (the
"Prospectus Delivery Period"), prior to amending or supplementing the
Registration Statement, including any Upsizing Registration Statement, the Time
of Sale Disclosure Package or the U.S. Final Prospectus, the Company shall
furnish to the Underwriter for review a copy of each such proposed amendment or
supplement, and the Company shall not file any such proposed amendment or
supplement to which the Underwriter or counsel to the Underwriter reasonably
object. Subject to this Section 4(a), immediately following execution of this
Agreement, the Company will prepare the Canadian Final Prospectus Supplement in
accordance with the Canadian Shelf Procedures and the U.S. Final Prospectus
Supplement, consisting of the Canadian Final Prospectus Supplement with such
deletions therefrom and additions thereto as are permitted or required by Form
F-10 and the applicable rules and regulations of the Commission, in each case in
a form reasonably approved by the Underwriter, and will file (i) the Canadian
Final Prospectus Supplement with the Reviewing Authority pursuant to the
Canadian Shelf Procedures on March 13, 2014, and (ii) the U.S. Final Prospectus
Supplement with the Commission pursuant to General Instruction TI.L of Form F-10
as soon as possible and in any event within one business day of the filing of
the Canadian Final Prospectus Supplement with the Reviewing Authority.
 
(b) The Company will advise the Underwriter, promptly after it shall receive
written notice of the issuance by the Commission or any of the Qualifying
Authorities of any stop order or cease trade order suspending the effectiveness
of the Registration Statement, or any post-effective amendment thereto, or
preventing or suspending the use of any Preliminary Prospectus, the Time of Sale
Disclosure Package, the Final Prospectuses or any Issuer Free Writing
Prospectus, of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or of the initiation or threatening of any
proceeding for any such purpose; and the Company will promptly use its best
efforts to prevent the issuance of any stop order or cease trade order or to
obtain its withdrawal if such a stop order or cease trade order should be
issued. Additionally, the Company will notify the Underwriter promptly, and
confirm the notice as applicable, (1) when the Canadian Final Prospectus
Supplement shall have been filed with the Reviewing Authority pursuant to the
Canadian Shelf Procedures, (2) when the U.S. Final Prospectus Supplement shall
have been filed with the Commission pursuant to General Instruction 11.L of Form
F-10, (3) prior to the termination of the offering of the Securities, of any
request by the Qualifying Authorities to amend or supplement, as applicable, the
Canadian Base Prospectus, the Canadian Final Prospectus or any document
incorporated by reference therein or for additional information or of any
request by the Commission to amend the Registration Statement or to amend or
supplement, as applicable, the U.S. Base Prospectus, the U.S. Final Prospectus
or any document incorporated by reference therein or for additional information,
(4) of the time when, prior to the termination of the offering of the
Securities, any amendment or supplement, as applicable, to the Canadian Base
Prospectus or any document incorporated by reference therein has been filed with
or receipted by the Reviewing Authority, or of the filing with, or mailing or
the delivery to, the Commission for filing of any amendment of the Registration
Statement or supplement to the U.S. Base Prospectus.
 
(c) (A) During the Prospectus Delivery Period, the Company will comply as far as
it is able with all requirements imposed upon it by the Securities Act, as now
and hereafter amended, and by the Rules and Regulations, as from time to time in
force, by the Exchange Act and by Canadian Securities
Laws  so  far  as  necessary  to  permit  the  continuance  of  sales  of  or  dealings  in  the  Securities  as
 
 
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contemplated by the provisions hereof, the Time of Sale Disclosure Package and
the Final Prospectuses. If during such period any event shall occur or condition
shall exist as a result of which the Final Prospectuses (or if the Final
Prospectuses are not yet available to prospective purchasers, the Time of Sale
Disclosure Package) would include an untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in the light
of the circumstances then existing, not misleading, or if during such period it
is necessary to amend the Registration Statement or supplement the Final
Prospectuses (or, if the Final Prospectuses are not yet available to prospective
purchasers, the Time of Sale Disclosure Package) to comply with the Securities
Act or to file under the Exchange Act or under Canadian Securities Laws any
document which would be deemed to be incorporated by reference in the Final
Prospectuses in order to comply with the Securities Act, the Exchange Act or
Canadian Securities Laws, the Company will promptly notify the Underwriter and
will amend the Registration Statement or supplement the Final Prospectuses (or,
if the Final Prospectuses are not yet available to prospective purchasers, the
Time of Sale Disclosure Package) or file such document (at the expense of the
Company) so as to correct such statement or omission or effect such compliance.
 
(B) If, at any time following issuance of an Issuer Free Writing Prospectus,
there occurred. or occurs an event or development as a result of which such
Issuer Free Writing Prospectus conflicted or would conflict with the information
contained in the Registration Statement, any Statutory Prospectus or the Final
Prospectuses relating to the Securities or included or would include an untrue
statement of a material fact or omitted or would omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances prevailing at that subsequent time, not misleading, the Company
promptly will notify the Underwriter and will promptly amend or supplement, at
its own expense, such Issuer Free Writing Prospectus to eliminate or correct
such conflict, untrue statement or omission.
 

(d) The Company shall take or cause to be taken all necessary action to qualify
the Securities for sale under the securities laws of the applicable Canadian
Jurisdictions and to continue such qualifications in effect so long as required
for the distribution of the Securities, except that the Company shall not be
required in connection therewith to qualify as a foreign corporation or to
execute a general consent to service of process in arty state.
 
(e) The Company will furnish or make available to the Underwriter, at the
Company's expense, copies of the Registration Statement (which will include a
manually signed copy of the Registration Statement and all consents and exhibits
filed therewith upon reasonable request), and to the Underwriter and any dealer
each Preliminary Prospectus, the Time of Sale Disclosure Package, the Final
Prospectuses, the Issuer Free Writing Prospectus, and all amendments and
supplements to such documents, in each case as soon as available and in such
quantities as the Underwriter may from time to time reasonably request.
Notwithstanding the foregoing, the Company shall forthwith cause to be delivered
to the Underwriter in such cities in the United States as they may reasonably
request, without charge, such numbers of commercial copies of the U.S. Final
Prospectuses, excluding any documents incorporated by reference, as the
Underwriter shall reasonably require, which deliveries shall be effected as soon
as possible and, in any event, in New York not later than 12:00 p.m. local time
on March 14, 2014, and in all other cities by 12:00 noon local time on the next
business day, provided that the Underwriter has given the Company written
instructions as to the number of copies required and the places to which such
copies are to be delivered not less than 24 hours prior to the time requested
for delivery. Such delivery shall also confirm that the Corporation consents to
the use by the Underwriter and any dealer of the U.S. Final Prospectus in
connection with the offering of the Securities in compliance with the provisions
of this Agreement.
 

(f) The Company will make generally available to its security holders as soon as
practicable, but in no event later than 15 months after the end of the Company's
current fiscal quarter, an
 
 
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earnings  statement (which need  not  be audited) covering
a  12-month  period  that  shall  satisfy the provisions of Section l l (a) of
the Securities Act and Rule 158 of the Rules and Regulations.

 
(g) The Company, whether or not the transactions contemplated hereunder are
consummated or this Agreement is prevented from becoming effective under
the  provisions  of Section 8(a) hereof or is otherwise terminated, will pay or
cause to be paid (A) all expenses (including transfer taxes allocated to the
respective transferees) incurred in connection with the delivery to the
Underwriter of the Securities, (B) all expenses and fees (including, without
limitation, fees and expenses of the Company's accountants and counsel) in
connection with the preparation, printing, filing, delivery, and shipping of the
Registration Statement (including the financial statements therein and all
amendments, schedules, and exhibits thereto), the Securities, each Preliminary
Prospectus, the Time of Sale Disclosure Package, the Final Prospectuses, any
Issuer Free Writing Prospectus and any amendment thereof or supplement thereto,
and the printing, delivery, and shipping of this Agreement and other
underwriting documents, including Blue Sky Memoranda (covering the states and
other applicable jurisdictions), (C) all reasonable and documented filing fees
and reasonable fees and disbursements of the Underwriter's counsel incurred in
connection with the qualification of the Securities for offering and sale by the
Underwriter or by dealers under the securities or blue sky laws of the states
and other jurisdictions which the Underwriter shall designate, (D) the fees and
expenses of any transfer agent or registrar, (E) the reasonable and documented
filing fees and fees and disbursements of Underwriter's counsel incident to any
required review and approval by FINRA of the terms of the sale of the
Securities, (F) listing fees, if any, (G) the costs and expenses of the Company
relating to investor presentations or any "roadshow" undertaken in connection
with the marketing of the Securities, and (H) all other costs and expenses of
the Company incident to the performance  of its obligations hereunder that are
not otherwise specifically provided for herein. Except as provided in this
Section 4(g), the Underwriter shall pay its own expenses, including the fees and
disbursements of its counsel. If this Agreement  is terminated  pursuant  to
Section S(a) hereof or .if the sale of the Securities provided for herein is not
consummated by reason of action by the Company pursuant to Section 9 hereof
which prevents this Agreement from becoming effective, or by reason of any
failure, refusal or inability on the part of the Company to perform any
agreement on its part to be performed, or because any other condition of the
Underwriter's obligations hereunder required to be fulfilled by the Company is
not fulfilled, the Company will reimburse the Underwriter for all reasonable and
documented out-of-pocket disbursements (including reasonable fees and
disbursements of counsel, printing expenses, travel  expenses, postage,
facsimile and telephone charges) incurred by the Underwriter in connection with
its investigation, preparing to market and marketing the Securities or in
contemplation of performing their obligations hereunder. The Company shall not
in any event be liable to the Underwriter for loss of any anticipated profits
from the transactions contemplated by this Agreement.
 
(h) The Company intends to apply the net proceeds from the sale of the
Securities to be sold by it hereunder for the purposes set forth in the Time of
Sale Disclosure Package and in the Final Prospectuses.
 
(i) The Company will not, without the prior written consent of the Underwriter,
from the date of execution of this Agreement and continuing to and including the
date 90 days after the date of the Final Prospectuses (the
"Lock-Up Period'), (A) offer, pledge, announce the intention to sell, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of, directly or indirectly, any Common Shares or any
securities convertible into or exercisable or exchangeable for Common Shares or
(B) enter into any swap or other agreement that transfers, in whole or in part,
any of the economic consequences of ownership of the Common Shares, whether any
such transaction described in clause (A) or (8) above is to be settled by
delivery of Common  Shares or such other securities, in cash or otherwise,
except for (A) sales of the Securities to the Underwriter pursuant to this
Agreement, (B) grants
 
 
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of options or the issuance of Common Shares by the Company pursuant to equity
incentive plans described in the Time of Sale Disclosure Package, or (C)
issuance of shares upon exercise or conversion  of securities outstanding as of
the date hereof. The Company agrees not to accelerate the vesting of any option
or warrant or the lapse of any repurchase right prior to the expiration of the
Lock-Up Period. If (I)  ) during the last 17 days of the Lock-Up Period, (a) the
Company issues an earnings release, (b) the Company publicly announces material
news or (c) a material event relating to the Company occurs; or (2) prior to the
expiration of the Lock-Up Period, the Company announces that it will release
earnings results during the 16-day period beginning on the last day of the
Lock-Up Period, then the restrictions in this Agreement, unless otherwise waived
by the Underwriter in writing, shall continue to apply until the expiration of
the date that is 18 calendar days after the date on which (a) the Company issues
the earnings release, (b) the Company publicly announces material news or (c) a
material event relating to the Company occurs; provided, however, that this
sentence shall not apply if the research published or distributed on the Company
is compliant under Rule 139 of the Securities Act, and the Company's securities
are actively traded as defined in Rule 101(c)(l ) of Regulation M of the
Exchange Act. The Company will provide the Underwriter and each person subject
to the Lock-Up Agreement (as defined below) with prior notice of any such
announcement that gives rise to the extension of the Lock-Up Period.
 
(j) The Company has caused to be delivered to the Underwriter prior to the date
of this Agreement a letter, in the form of Exhibit A hereto (the
"Lock-Up Agreement' ), from each of the Company's directors  and officers
identified on Schedule III. If requested by the Underwriter, the Company will
issue stop-transfer instructions to the transfer agent for the Common Shares
with respect to any transaction or contemplated transaction that would
constitute a breach of or default under the applicable Lock-Up Agreement.
 
(k) Other than in connection with any road show or other marketing of the
offering of Securities, the Company has not taken and will not take, directly or
indirectly, any action designed to or which might reasonably be expected to
cause or result in, or which has constituted, the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of
the Securities, and has not effected any sales of Common Shares which would be
required to be disclosed in response to Item 701 of Regulation S-K under the
Securities Act if applicable to the Company which have not been so disclosed in
the Registration Statement.
 
(I) Other than as contemplated by this Agreement, the Company will not incur any
liability for any finder's or broker's fee or agent's commission in connection
with the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
 
(m) During the Prospectus Delivery Period, the Company will file with the
Commission such periodic and special reports as required by the Rules and
Regulations and with the Canadian securities regulatory authorities such
continuous disclosure documents as required by Canadian Securities Laws.
 
(n) The Company will maintain such controls and other procedures, including
without limitation those required by Sections 302 and 906 of the Sarbanes-Oxley
Act and the applicable regulations thereunder, that are designed to ensure that
information required to be disclosed by the Company in the reports that it files
or submits under the Exchange Act and under Canadian Securities Laws is
recorded, processed, summarized and reported within the time periods specified
in the Commission's rules and forms and applicable Canadian Securities Laws,
including without limitation, controls and procedures designed to ensure that
information required to be disclosed by the Company in the reports that it files
or submits under the Exchange Act is accumulated and communicated to the
Company's management, including its principal executive officer and its
principal financial officer, or persons  performing  similar  functions,  as
appropriate  to  allow  timely  decisions  regarding  required

 
 
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disclosure, to ensure that material information relating to the Company is made
known to them by others within those entities.
 
(o)  The Company will comply with all applicable provisions of the
Sarbanes-Oxley Act.
 
(p) The Company represents and agrees that, unless it obtains or obtained the
prior written consent of the Underwriter, it has not made and will not make any
offer relating to the Securities that would constitute an "issuer free writing
prospectus," as defined in Rule 433 under the Securities Act, or that would
otherwise constitute a "free writing prospectus," as defined in Rule 405 under
the Securities Act, required to be filed with the Commission; provided that the
prior written consent of the parties hereto shall be deemed to have been given
in respect of the free writing prospectuses included in Schedule II. Any such
free writing prospectus consented to by the Company and the Underwriter is
hereinafter referred to as a "Permitted Free Writing Prospectus." The Company
represents that it has treated or agrees that it will treat each Permitted Free
Writing Prospectus as an "issuer free writing prospectus," as defined in Rule
433, and has complied and will comply with the requirements of Rule 433
applicable to any Permitted Free Writing Prospectus, including timely Commission
filing where required, legending and record keeping. The Underwriter represents
and agrees that, unless it obtains or obtained the prior written consent of the
Company, it has not made and will not make any offer relating to the Securities
that would constitute an "issuer free writing prospectus," as defined in Rule
433 under the Securities Act, or that would otherwise constitute a "free writing
prospectus," as defined in Rule 405 under the Securities Act, required to be
filed with the Commission.
 
(q) Following completion of the Company's fiscal year ending December 31, 2014,
the Company shall make a determination as to whether it was a "passive foreign
investment company" within the meaning of Section 1297(a) of the Code, for the
preceding fiscal year, including any qualifications, and the Company shall
promptly report such determination in the next filing of an annual report with
the SEC. If the Company has determined that it was a "passive foreign investment
company" during such fiscal year, if requested by a shareholder, the Company
shall provide such shareholder with the necessary information to make a
"qualified electing fund" election as defined under the Code; provided, however,
that nothing in this Section 4Cr) shall be interpreted as an undertaking to not
qualify as a "passive foreign investment company."
 
5. Conditions of Underwriter's Obligations. The obligations of the Underwriter
hereunder are subject to the accuracy, as of the date hereof and at each of the
First Closing Date and the Second Closing Date (as if made at such closing
date), of and compliance with all representations, warranties and agreements of
the Company contained herein, to the performance by the Company of its
obligations hereunder and to the following additional conditions:
 
(a) The Company is relying upon the rules and procedures established pursuant to
the Canadian Shelf Procedures. The Canadian Preliminary Base Prospectus and the
Canadian Base Prospectus have been filed with the Qualifying Authorities and a
Passport Decision Document has been issued relating to the Canadian Preliminary
Base Prospectus and the Canadian Base Prospectus, respectively, and has not been
revoked. The Canadian Final Prospectus Supplement shall have been filed with the
Reviewing Authority within the applicable time period prescribed hereby and in
accordance with the Canadian Shelf Procedures; all other steps or proceedings
shall have been taken that may be necessary in order to qualify the Securities
for distribution in accordance with the terms of this Agreement; and no order
suspending the distribution of the Securities shall have been issued by any of
the Qualifying Authorities and no proceedings for that purpose shall have been
instituted or threatened, and any request on the part of any Qualifying
Authority for additional information shall have been complied with to the
reasonable satisfaction of counsel to the Underwriter.
 
 
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(b) The Company shall have filed the U.S. Final Prospectus, or any amendment or
supplement thereto, or any Issuer Free Writing Prospectus required to be filed
under the Securities Act or the Rules and Regulations with the Commission in
accordance with General Instruction 11.L of Form F-10 or as otherwise required
and within the time period so required; the Registration Statement shall remain
effective; no stop order suspending the effectiveness of the Registration
Statement or any part thereof, any Upsizing Registration Statement, or any
amendment thereof, nor suspending or preventing the use of the Time of Sale
Disclosure Package, the U.S. Final Prospectus or any Issuer Free Writing
Prospectus shall have been issued; no proceedings for the issuance of such an
order shall have been initiated or threatened; and any request of the Commission
for additional information (to be included in the Registration Statement, the
Time of Sale Disclosure Package, the U.S. Final Prospectus, any Issuer Free
Writing Prospectus or otherwise) shall have been complied with to the
satisfaction of the Underwriter.
 
(c) The Underwriter shall not have reasonably determined and advised the Company
that (i) the Registration Statement or any amendment thereof or supplement
thereto, or the Canadian Final Prospectus, contains an untrue statement of a
material fact which, in the opinion of counsel to the Underwriter, is material
or omits to  state a material fact which, in the opinion of counsel to the
Underwriter, is required to be stated therein or necessary to make the
statements therein not misleading, or (ii) the Time of Sale Disclosure Package
or the Final Prospectuses, or any amendment thereof or supplement thereto, or
any Issuer Free Writing Prospectus contains an untrue statement of fact which,
in the opinion of counsel to the Underwriter, is material, or omits to state a
fact which, in the opinion of counsel to the Underwriter,  is material and is
required to be stated therein, or necessary to make the statements therein, in
the light of the circumstances under which they are made, not misleading.
 
(d) Except as contemplated in the Time of Sale Disclosure Package and in the
Final Prospectuses, subsequent to the respective dates as of which information
is given in the Time of Sale Disclosure Package, the Company shall not have
incurred any material liabilities or obligations, direct or contingent, or
entered into any material transactions, or declared or paid any dividends or
made any distribution of any kind with respect to its capital stock; and there
shall not have been any change in the capital stock (other than a change in the
number of outstanding Common Shares due to the issuance of shares upon the
exercise of outstanding options or warrants), or any material change in the
short-tenn or long-term debt of the Company, or any issuance of options,
warrants, convertible securities or other rights to purchase the capital stock
of the Company, or any Material Adverse Change or any development reasonably
likely to result in a Material Adverse Change (whether or not arising in the
ordinary course of business), that, in the judgment of the Underwriter, makes it
impractical or inadvisable to offer or deliver the Securities on the terms and
in the manner contemplated in the Time of Sale Disclosure Package and in the
U.S. Final Prospectus.
 
(e) On the First Closing Date and the Second Closing Date, as the case may be,
there shall have been furnished to the Underwriter, the opinion of Farris,
Vaughan, Wills & Murphy LLP, Canadian counsel for the Company, dated such
closing date and addressed to the Underwriter, in form and substance reasonably
satisfactory to the Underwriter.
 
(t) On the First Closing Date and the Second Closing Date, as the case may be,
there shall have been furnished to the Underwriter, the opinion of Dorsey
& Whitney LLP, U.S. counsel for the Company, dated such closing date and
addressed to the Underwriter, in form and substance reasonably satisfactory to
the Underwriter.
 
(g) On the First Closing Date and the Second Closing Date, as the case may be,
there shall have been furnished to the Underwriter, the opinion of Viksnins,
Harris & Padys PLLP, intellectual property counsel for the Company, dated such
closing date and addressed to the Underwriter, in form and substance reasonably
satisfactory to the Underwriter.
 
 
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(h) On the First Closing Date and the Second Closing Date, as the case may be,
there shall have been furnished to the Underwriter, the opinion of Kilpatrick
Townsend & Stockton LLP, intellectual property counsel for the Company, dated
such closing date and addressed to the Underwriter, in form and substance
reasonably satisfactory to the Underwriter.
 
(i) On the First Closing Date and the Second Closing Date, as the case may be,
there shall have been furnished to the Underwriter, the negative assurance
letter of Goodwin Procter LLP, counsel for the Underwriter,  dated such closing
date and addressed to the Underwriter, in form and substance reasonably
satisfactory to the Underwriter.
 
(j) On the date of this Agreement, the First Closing Date and the Second Closing
Date, as the case may be, the Underwriter shall have received a letter of KPMG
LLP, dated such date and addressed to the Underwriter, confirming that they are
independent public accountants within the meaning of the Securities Act, are in
compliance with the applicable requirements relating to the qualifications of
accountants under Rule 2-01 of Regulation S-X of the Commission, are in good
standing with the Canadian Public Accountability Board and stating, as of the
date of such letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given in the Time of Sale Disclosure Package, as of a date not
prior to the date hereof or more than five days prior to the date of such
letter), the conclusions and findings of said firm with respect to the financial
information and other matters covered by its letter delivered to the
Underwriter· concurrently with the execution of this Agreement, and the effect
of the letter so to be delivered on the First Closing Date and the Second
Closing Date, as the case may be, shall be to confirm the conclusions and
findings set forth in such prior letter.
 
(k) On the First Closing Date and the Second Closing Date, as the case may be,
there shall have been furnished to the Underwriter, a certificate, dated such
closing date and addressed to the Underwriter, signed by the chief executive
officer and by the chief financial officer of the Company, to the effect that:
 
(i) The representations and warranties of the Company in this Agreement are true
and correct, as if made at and as of such closing date, and the Company has
complied with all the agreements and satisfied all the conditions on its part to
be performed or satisfied at or prior to such closing date;·
 
(ii) No stop order, cease trade order or other order suspending the
effectiveness of the Registration Statement or any part thereof or any amendment
thereof or the qualification of the Securities for offering or sale under
Canadian Securities Laws, nor suspending or preventing the use of the Time of
Sale Disclosure Package, the Final Prospectuses or any Issuer Free Writing
Prospectus, has been issued, and no proceeding for that purpose has been
instituted or, to their knowledge, is contemplated or threatened by the
Commission, any Qualifying Authority or any state, provincial or regulatory
body; and
 
(iii) The signers of said certificate have carefully examined the Registration
Statement, the Time of Sale Disclosure Package and the Final Prospectuses, and
any amendments thereof or supplements thereto,. and
 
(A) the Registration Statement, or any amendment thereof, does not contain and
did not contain when such part of the Registration Statement, or any amendment
thereof, became effective, any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading, except that such statement shall not apply to
statements in or
 
 
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omissions from the Registration Statement, or any amendment thereof, based upon
and in conformity with written information furnished to the Company by the
Underwriter specifically for use therein, and the Final Prospectuses, as amended
or supplemented, does not include and did not include as of its date or the time
of first use within the meaning of the Rules and Regulations, any untrue
statement of material fact or omit to state and did not omit to state as of its
date or the time of first use within the meaning of the Rules and Regulations a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that such
statement shall not apply to statements in or omissions from the Final
Prospectuses, as amended or supplemented, based upon and in conformity with
written information furnished to the Company by the Underwriter specifically for
use therein,
 
(B) At the time of filing thereof with the applicable Qualifying Authorities and
at the First Closing Date and the Second Closing Date, the Canadian Preliminary
Prospectus and the Canadian Final Prospectus (and any further amendments or
supplements thereto, including any Supplementary Material) constituted and will
constitute full, true and plain disclosure of all material facts relating to the
Securities and the Company and its Subsidiaries, taken as a whole, and did not
and will not contain a misrepresentation, as defined under Canadian Securities
Laws, and did not and will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
 
(C) neither (1) the Time of Sale Disclosure Package nor (2) any individual
Issuer Limited-Use Free Writing Prospectus, when considered together with the
Time of Sale Disclosure Package, include, nor included as of the Time of Sale
any untrue statement of a material fact or omits, or omitted as of the Time of
Sale, to state any material fact necessary in order to make the  statements
therein, in the light of the circumstances under which they were made, not
misleading, except that such statement shall not apply to statements in or
omissions from the Time of Sale Disclosure Package or any Individual Limited-Use
Free Writing Prospectus based upon and in conformity with written information
furnished to the Company by the Underwriter specifically for use therein,
 
(D) since the Time of Sale there has occurred no event required to be set forth
in an amended or supplemented prospectus which has not been so set forth,
 
(E) subsequent to the respective dates as of which information is given in the
Registration Statement, the Time of Sale Disclosure Package and Final
Prospectuses, the Company has not incurred any material liabilities or
obligations, direct or contingent, or entered into any material transactions,
not in the ordinary course of business, or declared or paid any dividends or
made any distribution of any kind with respect to its capital stock, and except
as disclosed in the Time of Sale Disclosure Package and in the Final
Prospectuses, there has not been any change in the share capital (other than a
change in the number of outstanding Common Shares due to the issuance of shares
upon the exercise of outstanding options or warrants), or any material change in
the short term or long term debt, or any issuance of options, warrants,
convertible securities or other rights to purchase the capital stock, of the
Company (other than issuances of options under the Company's existing stock
option plans) or any Material Adverse Change or any development involving a
prospective Material Adverse Change (whether or not arising in the ordinary
course of business), and
 
 
23

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(F) except as stated in the Registration Statement, the Time of Sale Disclosure
Package and in the Final Prospectuses, there is not pending, or, to the
knowledge of the Company, threatened or contemplated, any action, suit or
proceeding to which the Company is a party before or by any court or
governmental agency, authority or body, or any arbitrator, which could
reasonably be expected to result in any Material Adverse Change.
 
(1)  
The Underwriter  shall have received  all the Lock-Up Agreements  referenced in
Section 4(j).

 

 
 
24

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(m) At the First Closing Date, the Securities shall have been duly listed for
quotation or trading on the NASDAQ and the TSX (subject only to customary
post-closing document delivery requirements).
 
(n) On the First Closing Date and the Second Closing Date, as the case may be,
there shall have been furnished to the Underwriter, a certificate, dated such
closing date and addressed to the Underwriter, signed by the chief financial
officer of the Company.
 
(o) The Underwriter shall have received on the First Closing Date a certificate
of the secretary of the Company.
 
(p) The Underwriter shall not have received any unresolved  objection from FINRA
as to the fairness and reasonableness of the amount of compensation allowable or
payable to the Underwriter in connection with the issuance and sale of the
Securities.
 
Prior to the First Closing Date and the Second Closing Date, if applicable, the
Underwriter shall have received such further certificates and documentation from
the Company as may be contemplated herein as the Underwriter or counsel to the
Underwriter may reasonably request; provided, however, that the Underwriter or
counsel to the Underwriter shall request any such certificates or other
documents within a reasonable period prior to the First Closing Date or Second
Closing Date,  as applicable, that is sufficient for the Company to obtain and
deliver such certificates or documents, and in any event, at least two (2)
Business Days prior to the First Closing Date or Second Closing Date, as
applicable. The Company will furnish the Underwriter with such conformed copies
of such opinions, certificates, letters and other documents as the Underwriter
shall reasonably request.
 
6.  
Indemnification  and Contribution.

 
(a) The Company agrees to indemnify and hold harmless the Underwriter, its
affiliates, directors and officers and each person, if any, who controls the
Underwriter within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, from and against any losses, claims, damages or
liabilities, joint or several, to which the Underwriter may become subject,
under the Securities Act, Canadian Securities Laws or otherwise (including in
settlement of any litigation if such settlement is effected with the written
consent of the Company), insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, including any information deemed to be a part of the
Registration Statement at the time of effectiveness and at any subsequent time
pursuant to the Rules and Regulations, if applicable, any Preliminary
Prospectuses, the Time of Sale Disclosure Package, the Final Prospectuses, or
any amendment or supplement thereto, any Issuer Free Writing Prospectus or in
any materials or information provided to investors by, at the instruction of,
the Company in connection with the marketing of the offering of the Common
Shares ("Marketing Materials"), including any roadshow or investor presentations
made to investors by the Company (whether in person or electronically), or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, with respect only to any Preliminary Prospectus, the Time of Sale
Disclosure Package, the Final Prospectuses, or any amendment or supplement
thereto, or any Issuer Free Writing Prospectus or Marketing Materials, in light
of the circumstances under which they were made, not misleading, and will
reimburse the Underwriter for any legal or other expenses reasonably incurred by
them in connection with investigating or defending against such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Company shall not be liable in any such case to the extent that any
such loss, claim,
 
 
25

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damage, liability or action arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in the
Registration Statement, any Preliminary Prospectuses, the Time of Sale
Disclosure Package, the Final Prospectuses, or any such amendment or supplement,
any Issuer Free Writing Prospectus or in any Marketing Materials, in reliance
upon and in conformity with information provided in writing to the Company by
the Underwriter specifically for use therein; it being understood and agreed
that the only such information furnished by the Underwriter consists of the
information described as such in Section 6(f). To the extent that any
reimbursement payment is so held to have been improper, the Underwriter that
received such payment shall promptly return it to the party or parties that made
such payment.
 
(b) The Underwriter will indemnify and hold harmless the Company, its
affiliates, directors and officers and each person, if any, who controls the
Company within the meaning  of Section 15 of the Securities Act and Section 20
of the Exchange Act, from and against any losses, claims, damages or liabilities
to which the Company may become subject, under the Securities Act, Canadian
Securities Laws or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of the Underwriter), insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement, any Preliminary
Prospectuses, the Time of Sale Disclosure Package, the Final Prospectuses, or
any amendment or supplement thereto, or any Issuer Free Writing Prospectus or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in the Registration Statement, any Preliminary
Prospectuses, the Time of Sale Disclosure Package, the Final Prospectuses, or
any such amendment or supplement, or any Issuer Free Writing Prospectus in
reliance upon and in conformity with information provided in writing to the
Company by the Underwriter specifically for use therein; it being understood and
agreed that the only such information furnished by the Underwriter consists of
the information described as  such  in Section 6(f), and will reimburse the
Company for any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending against any such loss, claim, damage,
liability or action as such expenses are incurred.
 
(c) Promptly after receipt by an indemnified party under Section 6(a) or
6(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve the indemnifying party from any liability that it may have to any
indemnified party except to the extent such indemnifying party has been
materially prejudiced by such failure. In case any such action shall be brought
against any indemnified party, and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
in, and, to the extent that it shall wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of the indemnifying party's election so to
assume the defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal or other expenses
subsequently
 
 
26

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incurred by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation; provided, however, that if, in the
judgment of counsel to the Underwriter, it is advisable for the Underwriter to
be represented by separate counsel, the Underwriter shall collectively have the
right to employ a single counsel (in addition to local counsel) to represent the
Underwriter who may be subject to liability arising from any claim in respect of
which indemnity may be sought by the Underwriter under subsection (a) of this
Section 6, in which event the reasonable fees and expenses of such separate
counsel shall be borne by the indemnifying party or parties and reimbursed to
the Underwriter as incurred. An indemnifying party shall not be obligated under
any settlement agreement relating to any action under this Section 6 to which it
has not agreed in writing. In addition, no indemnifying party shall, without the
prior written consent of the indemnified party (which consent shall not be
unreasonably withheld or delayed), effect any settlement of any  pending or
threatened proceeding unless such settlement includes  an unconditional release
of such indemnified party for all liability on claims that are the subject
matter of such proceeding and does not include a statement as to, or an
admission of, fault, culpability or a failure to act by or on behalf of an
indemnified party.
 
(d) If the indemnification provided for in this Section 6 is unavailable or
insufficient to hold harmless an indemnified party under Section 6(a) or
6(b) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in Section 6(a) or 6(b) above, (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriter on the other from the offering of the Securities or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and the Underwriter on the other in connection with
the statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations.  The
relative benefits received by the Company on the one hand and the Underwriter on
the other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the Underwriter, in
each case as set forth in the table on the cover page of the U.S. Final
Prospectus.   The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriter and the parties' relevant
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The Company and the Underwriter agree that it
would not be just and equitable if contributions pursuant to this
Section 6(d) were to be determined by pro rata allocation  or by any other
method  of allocation which  does not take account of the equitable
considerations referred to in the first sentence of this Section 6(d). The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of this Section 6(d) shall
be  deemed  to  include  any legal or other expenses
reasonably  incurred  by  such · indemnified party in connection with
investigating or defending against any action or claim which is the subject of
this Section 6(d). Notwithstanding the provisions of this Section 6(d), the
Underwriter shall not be required to contribute any amount in excess of the
amount by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages that the Underwriter has otherwise been required to pay by reason of
such untrue or alleged
untrue  statement  or  omission   or  alleged   omission.No   person   guilty  of  fraudulent
misrepresentation  (within  the  meaning  of  Section 11(f) of
the  Securities  Act)  shall  be  entitled  to contribution from any person who
was not guilty of such fraudulent misrepresentation.
 
(e) The obligations of the Company under this Section 6 shall be in addition to
any liability which the Company may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls the Underwriter
within the meaning of the Securities Act; and the
obligations  of  the  Underwriter  under  this  Section 6  shall  be  in  addition  to  any  liability  that  the
 
 
27

--------------------------------------------------------------------------------

 
Underwriter may otherwise have and shall extend, upon the same terms and
conditions, to each director of the Company (including any person who, with his
consent, is named in the Registration Statement as about to become a director of
the Company), to each officer of the Company who has signed the Registration
Statement and to each person, if any, who controls the Company within the
meaning of the Securities Act.
 
(f)  The Underwriter confirms and the Company acknowledges that the statements
with respect to the public offering of the Securities by the Underwriter set
forth in the first paragraph under the caption "Underwriting - Commissions and
Discounts", the paragraph under the caption "Underwriting - Passive Market
Making" and the paragraphs under the caption "Underwriting - Short Sales,
Stabilizing Transactions and Penalty Bids" in the Time of Sale Disclosure
Package and in the Final Prospectuses are correct and constitute the only
information concerning the Underwriter furnished in writing to the Company by
the Underwriter specifically for use in the Registration Statement, any
Preliminary Prospectuses, the Time of Sale Disclosure Package, the Final
Prospectuses or any Issuer Free Writing  Prospectus.
 
7. Representations and Agreements to Survive Delivery. All representations,
warranties, and agreements of the Company herein or in certificates delivered
pursuant hereto, including but not limited to the agreements of the Underwriter
and the Company contained in Section 6 hereof, shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
the Underwriter or any controlling person thereof, or the Company or any of its
officers, directors, or controlling persons, or any controlling person thereof,
and shall survive delivery of, and payment for, the Securities to and by the
Underwriter hereunder.
 
8.  
Termination of this Agreement.

 
(a) The Underwriter shall have the right to terminate this Agreement  by giving
notice to the Company as hereinafter specified at any time at or prior to the
First Closing Date, and the option referred to in Section 3(b), if exercised,
may be cancelled at any time prior to the Second Closing Date, if (i) the
Company shall have failed, refused or been unable, at or prior to such closing
date, to perform any agreement on its part to be performed hereunder, (ii) any
other condition of the Underwriter's obligations hereunder is not fulfilled,
(iii) trading on the NASDAQ or TSX, shall have been suspended, (iv) minimum or
maximum prices for trading shall have been fixed, or maximum ranges for prices
for securities shall have been required, on the NASDAQ or TSX, by such Exchange
or by order of the Commission or any other Governmental Authority having
jurisdiction, (v) a banking moratorium shall have been declared by U.S. federal,
Canadian federal or state authorities, or (vi) there shall have occurred any
outbreak or escalation of hostilities, any change in financial markets or any
calamity or crisis that, in the Underwriter's judgment, is material and adverse
and makes it impractical or inadvisable to proceed with the completion of the
sale of and payment for the Securities. Any such termination shall be without
liability of any party to any other party except that the provisions of
Section 4(g) and Section 6 hereof shall at all times be effective and shall
survive such termination.
 
(b) If the Underwriter elects to terminate this Agreement as provided in this
Section 8, the Company shall be notified promptly by the Underwriter by
telephone, confirmed by letter.
 
9. Default by the Company. If the Company shall fail at the First Closing Date
to sell and deliver the number of Securities which it is obligated to sell
hereunder, then this Agreement shall terminate without any liability on the part
of the Underwriter or, except as provided in Section 4(g) and Section 6 hereof,
any non-defaulting party. No action taken pursuant to this Section 9 shall
relieve the Company from liability, if any, in respect of such default.
 
 
28

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10. Notices. Except as otherwise provided herein, all communications hereunder
shall be in writing and, if to the Underwriter, shall be mailed or delivered to
Leerink Partners LLC, One Federal Street, 37th Floor, Boston, Massachusetts 021
10, Attention: Legal Department (facsimile: (714) 755- 8290), with a copy to
Syndicate (facsimile: (617) 918-4900); and if to the Company, shall be mailed or
delivered to the address of the Company set forth in the Registration Statement,
Attention: Secretary. Any such communications shall take effect upon receipt
thereof. Any party to this Agreement may change such address for notices by
sending to the parties to this Agreement written notice of a new address for
such purpose.
 
11. Agent for Service; Submission to Jurisdiction; Waiver of Immunities, By the
execution and delivery of this Agreement, the Company (a) acknowledges that it
has, by separate written instrument, irrevocably designated and appointed
National Registered Agents, Inc. (or any successor) (together with any
successor, the "Agent/or Service"), as its authorized agent upon which process
may be served in any suit or proceeding arising out of or relating to this
Agreement or the Securities, that may be instituted in any U.S. federal or state
court in the State of New York, or brought under federal or state securities
laws, and acknowledges that the Agent for Service has accepted such designation,
(b) submits to the jurisdiction of any New York state or U.S. federal court
located in the Borough of Manhattan, the City of New York, New York, in any suit
or proceeding arising out of or related to this Agreement, and
 
(c) agrees that service of process upon the Agent for Service (or any successor)
and written notice of said service to the Company (mailed or delivered to
National Registered Agents, Inc. at 1780 Barnes Blvd. S.W., Bldg. G, Tumwater,
Washington 98512-0410), shall be deemed in every respect effective service of
process upon the Company in any such suit or proceeding. The Company further
agrees to take any and all action, including the execution and filing of any and
all such documents and instruments, as may be necessary to continue such
designation and appointment of the Agent for Service in full force and effect so
long as any of the Securities shall be outstanding. To the extent that the
Company has or hereafter may acquire any immunity from jurisdiction of any court
or from any legal process (whether through service of notice, attachment prior
to judgment, attachment in aid of execution, execution or otherwise) with
respect to itself or its property, it hereby irrevocably waives such immunity in
respect of its obligations under the above-referenced documents, to the extent
permitted by law.
 
12. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns and the controlling persons, officers and directors
referred to in Section 6. Nothing in this Agreement is intended or shall be
construed to give to any other person, firm or corporation any legal or
equitable remedy or claim under or in respect of this Agreement or any provision
herein contained. The term "successors and assigns" as herein used shall not
include any purchaser, as such purchaser, of any of the Securities from the
Underwriter.
 
13.  Absence of Fiduciary Relationship.  The Company  acknowledges  and agrees
that: (a) the Underwriter has been retained solely to act as underwriter in
connection with the sale of the Securities and that no fiduciary, advisory or
agency relationship between the Company and the Underwriter has been created in
respect of any of the transactions contemplated by this Agreement, irrespective
of whether the Underwriter has advised or is advising the Company on other
matters; (b) the price and other terms of the Securities set forth in this
Agreement were established by the Company following discussions and arms-length
negotiations with the Underwriter and the Company is capable of evaluating and
understanding and understands and accepts the terms, risks and conditions of the
transactions contemplated by this Agreement; (c) it has been advised that the
Underwriter and its affiliates are engaged in a broad range of transactions
which may involve interests that differ from those of the Company and that the
Underwriter has no obligation to disclose such interest and transactions to the
Company by virtue of any fiduciary, advisory or agency relationship; (d) it has
been advised that the Underwriter is acting, in respect of the transactions
contemplated by this Agreement, solely for the benefit
 
 
29

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of the Underwriter and not on behalf of the Company; (e) it waives to the
fullest extent permitted by law, any claims it may have against the Underwriter
for breach of fiduciary duty or alleged breach of fiduciary duty in respect of
any of the transactions contemplated by this Agreement and agrees that the
Underwriter shall have no liability (whether direct or indirect) to the Company
in respect of such a fiduciary duty claim on behalf of or in right of the
Company, including stockholders, employees or creditors of the Company.
 
14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to
principles of conflict of laws.
 
15. Counterparts. This Agreement may be executed in one or more counterparts
and, if executed in more than one counterpart, the executed counterparts shall
each be deemed to be an original and all such counterparts shall together
constitute one and the same instrument.
 
16. General Provisions This Agreement constitutes the entire agreement of the
parties to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof. This Agreement may not be amended or modified unless
in writing by all of the parties hereto, and no condition herein (express or
implied) may be waived unless waived in writing by each party whom the condition
is meant to benefit. The Section headings herein are for the convenience of the
parties only and shall not affect the construction or interpretation of this
Agreement.
 

[Signature Page Follows]
 
 
30

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If the foregoing is in accordance with your understanding, please sign and
return to us, and upon the acceptance hereof by the Underwriter, this Agreement
and such acceptance hereof shall constitute a binding agreement between the
Underwriter and the Company.
 

Very truly yours,
 
TEKMIRA PHARMACEUTICALS CORPORATION

Per: /s/ Mark J. Murray
Mark J. Murray, President and CEO

 

 
 
 

--------------------------------------------------------------------------------

 
 
 
Accepted as of the date hereof at San Francisco, California:
 

LEERINK PARTNERS LLC

By: Per: /s/ Bryan Giraudo
Title: Managing Director

 
 
 

--------------------------------------------------------------------------------

 
Execution Version

SCHEDULE I
 
Pricing Information

 

 
Number of Firm Shares to be Issued:  2,125,000
 
Offering Price:  US$28.50 per share
 
Underwriting Discounts and Commissions: 6.0%
 
Number of Option Shares:  318,750

 

 
 
 

--------------------------------------------------------------------------------

 
SCHEDULE II
 

Issuer General Free Writing Prospectuses

 

None.

 
 
 

--------------------------------------------------------------------------------

 
Execution Version

 

SCHEDULE III
 

Officers and Directors Subject to Lockup

 

 
Bruce Cousins
Mark J. Murray
Mark Kowalski
Michael Abrams
Kenneth Galbraith
Donald Jewell
Frank Karbe
Daniel Kisner
Peggy Phillips
Ian MacLachlan
Hector  MacKay-Dunn

 

 

 

 
 
 

--------------------------------------------------------------------------------

 
EXHIBIT A
 

Form of Lockup Agreement

March _, 2014

 

Leerink Partners LLC
One Federal Street, 37th Floor
Boston, Massachusetts 02110

Re: Offering of Common Shares of Tekmira Phannaceuticals Corporation Ladies and
Gentlemen:
 
The undersigned understands that you, as underwriter (the "Underwriter"), propose to enter into an Underwriting Agreement with Tekmira Pharmaceuticals Corporation, a British
Columbia corporation (the "Company"), providing for an offering of common shares (the "Shares"), without par value, of the Company (the "Common Shares"), pursuant to a Registration Statement on Form F-10 filed with the Securities and Exchange Commission (the "SEC').
 
In consideration of the agreement by the Underwriter to offer and sell the
Shares, and of other good and valuable consideration, the receipt and
sufficiency of which  is hereby acknowledged, the undersigned agrees that,
during the period specified in the following paragraph (the
"Lock-Up Periotf '), the undersigned will not offer, sell, contract to sell,
pledge (except a pledge for the benefit of the Company pursuant to an agreement
entered or to be entered into between the Company and the undersigned), grant
any option to purchase, make any short sale or otherwise transfer or dispose of,
directly or indirectly, atty Common Shares of the Company, or any options or
warrants to purchase any Common Shares of the Company, or any securities
convertible into, exchangeable for or that represent the right to receive Common
Shares of the Company, whether now owned or hereafter acquired, owned directly
by the undersigned (including holding as a custodian) or with respect to which
the undersigned has beneficial ownership within the rules and regulations of the
SEC (collectively the "Undersigned's Shares"); provided, however, that during
the Lock-Up Period, the undersigned shall be permitted to exercise any options
or warrants to purchase common shares of the Company that the undersigned owns
directly (including holding as a custodian) or with respect to which the
undersigned has beneficial ownership within the rules and regulations of the SEC
(the "Convertible Securities"), provided that any such shares issued upon
exercise of such Convertible Securities shall continue to be subject to the
applicable provisions of this Lock-Up Agreement. The foregoing restriction is
expressly agreed to preclude the undersigned from engaging in any hedging or
other transaction which is designed to or which reasonably could be expected to
lead to or result in a sale or disposition of the Undersigned's Shares even if
such Undersigned's Shares would be disposed of by someone other than the
undersigned. Such prohibited hedging or other transactions would include without
limitation any short sale or any purchase, sale or grant of any right (including
without limitation any put or call option) with respect to any of the
Undersigned's Shares or with respect to any security that includes, relates to,
or derives any significant part of its value from such Undersigned's Shares
(regardless of whether any of the transactions described herein is to be settled
by delivery of Common Shares of the Company, or such other securities, in cash
or otherwise). Further, the undersigned agrees not to make any demand for, or
exercise any right with respect to, the registration of any Common Shares of the
Company or securities convertible into or exercisable or exchangeable for Common
Shares of the Company during the Lock-Up Period.
 
 
 

--------------------------------------------------------------------------------

 
The initial Lock-Up Period will commence on the date of this Lock-Up Agreement
and continue for 90 days after the offering date set forth on the final
prospectus used to sell the Shares (the "Offering Date") pursuant to the
Underwriting Agreement; provided, however, that if (1) during the last 17 days
of the initial Lock-Up Period, the Company releases earnings results or
announces material news or a material event or (2) prior to the expiration of
the initial Lock-Up Period, the Company announces that it will release earnings
results during the 15-day period following the last day of the initial Lock-Up
Period, then in each case the Lock-Up Period will be automatically extended
until the expiration of the 18-day period beginning on the date of release of
the earnings results or the announcement of the material news or material event,
as applicable, unless Underwriter waives, in writing, such extension.
 
The undersigned hereby acknowledges that the Company intends to agree in the
Underwriting Agreement to provide written notice of any event that would result
in an extension of the Lock-Up Period pursuant to the previous paragraph to the
undersigned and agrees that any such notice properly delivered will be deemed to
have been given to, and received by, the undersigned. The undersigned hereby
further agrees that, prior to engaging in any transaction or taking any other
action that is subject to the terms of this Lock-Up Agreement during the period
from the date of this Lock-Up Agreement to and including the 34th day following
the expiration of the initial Lock-Up Period, it will give notice thereof to the
Company and will not consummate such transaction or take any such action unless
it has received written confirmation from the Company that the Lock-Up Period
(as such may have been extended pursuant to the previous paragraph) has expired.
 
Notwithstanding the foregoing, the undersigned may transfer the Undersigned's
Shares (i) pursuant to a bonafide take-over bid made to all holders of common
shares of the Company or similar acquisition transaction provided that in the
event that the take-over or acquisition transaction is not completed, any
securities shall remain subject to the restrictions contained in this Lock-Up
Agreement; (ii) as a bonafide gift or gifts, provided that the donee or donees
thereof agree to be bound in writing by the restrictions set forth herein, (iii)
to any trust for the direct or indirect benefit of the undersigned or the
immediate family of the undersigned, provided that the trustee of the trust
agrees to be bound in writing by the restrictions set forth herein, and provided
further that any such transfer shall not involve a disposition for value, or
(iv) with the prior written consent of the Underwriter. For purposes of this
Lock-Up Agreement, "immediate family" shall mean any relationship by blood,
marriage or adoption, not more remote than first cousin. The undersigned now
has, and, except as contemplated by clause (i), (ii), (iii) or (iv) above, for
the duration of this Lock-Up Agreement will have, good and marketable title to
the Undersigned's Shares, free and clear of all liens, encumbrances and claims
whatsoever. The undersigned agrees and consents to the entry of stop transfer
instructions with the Company's transfer agent and registrar against the
transfer of the Undersigned's Shares except in compliance with the foregoing
restrictions.·
 
The undersigned understands that the Company and the Underwriter are relying
upon this Lock-Up Agreement in proceeding toward consummation of the offering.
The undersigned hereby represents and warrants that it has full power and
authority to enter into this Lock-Up Agreement and that upon request, the
undersigned will execute any additional documents reasonably necessary or
desirable in connection with the enforcement hereof. The undersigned further
understands that this Lock-Up Agreement is irrevocable and shall be binding upon
the undersigned's heirs, legal representatives, successors, and assigns.

 
 
 

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This Lock-Up Agreement shall lapse and become null and void upon notice from the
Company to the Underwriter that the Company does not intend to proceed with the
offering or wishes to terminate the engagement of the Underwriter as underwriter
of the offering.
 

Very truly yours,
 
 
___________________________
Exact Name of Shareholder
 
 
___________________________
Authorized  Signature
 
___________________________
Title