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PURCHASE AGREEMENT (the Agreement ), dated as of February 27, 2014, by and between ONCOLYTICS BIOTECH
INC., a company incorporated under the Business Corporations Act (Alberta) (the Company ), and LINCOLN PARK CAPITAL FUND, LLC, an Illinois limited liability company (the Investor ).
terms and conditions set forth in this Agreement, the Company wishes to sell to the Investor, in the Company s sole and absolute discretion, and the Investor wishes to buy from the Company, up to US$26,000,000 of the Company s common
shares, no par value (the Common Shares ); provided that the market value of Common Shares distributed under any single Prospectus Supplement (as defined below) shall not exceed 10% of the aggregate market value of the
outstanding Common Shares as of the date specified in Section 9.1 of National Instrument 44-102 Shelf Distributions ( NI 44-102 ), which shall be calculated in accordance with Section 9.2 of NI 44-102.
Notwithstanding anything to the contrary contained herein, the parties hereto agree that compliance with the limitation set forth in the immediately preceding sentence on the number of Common Shares issued and sold under this Agreement and under any
single Prospectus Supplement shall be the sole responsibility of the Company, and the Investor shall have no obligation in connection with such compliance. The Common Shares to be purchased hereunder (including, without limitation, the Initial
Purchase Shares (as defined herein)) are referred to herein as the Purchase Shares.
The Company has prepared and filed
with the securities regulatory authorities (the Canadian Qualifying Authorities ) in the provinces of British Columbia, Alberta, Manitoba and Ontario (the Canadian Qualifying Jurisdictions ) a preliminary short
form base shelf prospectus dated June 21, 2012, and a final short form base shelf prospectus dated July 3, 2012, in respect of an aggregate of up to Cdn$150,000,000 in certain securities of the Company, including Common Shares
(collectively, the Shelf Securities ), in each case in accordance with the applicable securities laws of each of the Canadian Qualifying Jurisdictions and the respective applicable rules and regulations under such laws, together
with applicable published national, multilateral and local policy statements, instruments, notices and blanket orders of the Canadian Qualifying Authorities in each of the Canadian Qualifying Jurisdictions (collectively, Canadian Securities
Laws ). The Alberta Securities Commission (the Reviewing Authority ) is the principal regulator of the Company 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 in respect of the offering of the Shelf Securities. The Reviewing Authority has issued a receipt evidencing that a receipt has been issued (a
Receipt ) on behalf of itself and the other Canadian Qualifying Authorities in respect of such short-form base shelf prospectus (the final short-form base shelf prospectus dated July 3, 2012 relating to the Shelf Securities,
as most recently amended, if applicable, filed with the Canadian Qualifying Authorities on or before the date of this Agreement for which a Receipt has been obtained, is hereinafter referred to as the Canadian Base Prospectus ). As
used herein, Canadian Prospectus Supplement means the most recent prospectus supplement to the Canadian Base Prospectus relating to the Securities (as defined herein), to be filed by the Company with the Canadian Qualifying
Authorities in accordance with Canadian Securities Laws; and Canadian Prospectuses means the Canadian Prospectus Supplement (and any additional Canadian prospectus supplement prepared in accordance with the provisions of this
Agreement and filed with the Canadian Qualifying Authorities in accordance with Canadian Securities Laws) together with the Canadian Base Prospectus.
The Company has also prepared and filed with the United States Securities and Exchange Commission
(the SEC ), pursuant to the Canada/U.S. Multi-Jurisdictional Disclosure System adopted by the SEC (the MJDS ), a registration statement on Form F-10 (File No. 333-182260) registering the Shelf
Securities under the United States Securities Act of 1933, as amended, and the rules and regulations thereunder (collectively, the Securities Act ), and has filed such amendments to such registration statement on Form F-10, as
amended, 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
Securities Act 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, as amended when it last became effective under the Securities
Act, including all documents filed as a part thereof, 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 Company has also filed with the SEC an appointment of agent for service of process on Form F-X (the Form F-X ) in conjunction with the filing of the Registration Statement.
As used herein, U.S. Base Prospectus means the Canadian Base Prospectus, with such deletions therefrom and additions thereto as are permitted or required by Form F-10 and the Securities Act in the form in which it appeared in the
Registration Statement on the date it last became effective under the Securities Act; U.S. Prospectus Supplement means the Canadian Prospectus Supplement, with such deletions therefrom and additions thereto as are permitted or
required by Form F-10 and the Securities Act, to the U.S. Base Prospectus relating to the offering of the Securities, to be filed by the Company with the SEC pursuant to General Instruction II.L of Form F-10; U.S. Prospectuses
means the U.S. Prospectus Supplement (and any additional U.S. prospectus supplement prepared in accordance with the provisions of this Agreement and filed with the SEC in accordance with General Instruction II.L of Form F-10) together with the U.S.
Base Prospectus and together with any issuer free writing prospectus, as defined in Rule 433 under the Securities Act ( Rule 433 ) relating to the Securities that (i) is required to be filed with the SEC by the
Company or (ii) is exempt from filing pursuant to Rule 433(d)(5)(i), in each case in the form filed or required to be filed with the SEC or, if not required to be filed, in the form retained in the Company s records pursuant to Rule
As used herein, Base Prospectuses means, collectively, the Canadian Base Prospectus and the U.S. Base
Prospectus; Prospectus Supplements means, collectively, the Canadian Prospectus Supplement and the U.S. Prospectus Supplement; and Prospectuses means, collectively, the Canadian Prospectuses and the U.S.
Prospectuses. Any reference herein to the Registration Statement, the Base Prospectuses, the Prospectus Supplements or the Prospectuses or any amendment or supplement thereto shall be deemed to refer to and include the documents incorporated by
reference therein, and any reference herein to the terms amend, amendment or supplement with respect to the Registration Statement, the Base Prospectuses, the Prospectus Supplements or the Prospectuses shall be
deemed to refer to and include the filing or furnishing of any document with or to the SEC or Canadian Qualifying Authorities, as applicable, on or after the effective date of the Registration Statement or the date of the Base Prospectuses, the
Prospectus Supplements or the Prospectuses, as the case may be, and deemed to be incorporated by reference therein. For purposes of this Agreement, all references to the Canadian Base Prospectus, the Canadian Prospectus Supplement and the Canadian
Prospectuses or any amendment or supplement thereto shall be deemed to include any copy filed with any Canadian Qualifying Jurisdiction pursuant to the System for Electronic Document Analysis and Retrieval ( SEDAR ) and all
references to the Registration Statement, the U.S. Base Prospectus, the U.S. Prospectus Supplement and the U.S. Prospectuses or any amendment or supplement thereto shall be deemed to include any copy filed with the SEC pursuant to the Electronic
Data Gathering Analysis and Retrieval System ( EDGAR ).
NOW THEREFORE, in consideration of the mutual covenants contained in this Agreement, and for
other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and the Investor hereby agree as follows:
For purposes of this Agreement, the following terms shall have the
(a) Accelerated Purchase Share Amount means, with respect to any Accelerated Purchase made
pursuant to Section 2(b) hereof, the number of Purchase Shares directed by the Company to be purchased by the Investor on an Accelerated Purchase Notice, which number of Purchase Shares shall not exceed the lesser of (i) 200% of the number
of Purchase Shares directed by the Company to be purchased by the Investor pursuant to the corresponding Regular Purchase Notice for the corresponding Regular Purchase referred to in Section 2(b) hereof (subject to the Purchase Share
limitations contained in Section 2(a) hereof) and (ii) the Accelerated Purchase Share Percentage multiplied by the trading volume of the Common Shares on the Principal Market during normal trading hours on the Accelerated Purchase Date.
(b) Accelerated Purchase Date means, with respect to any Accelerated Purchase made pursuant to Section 2(b)
hereof, the Business Day immediately following the applicable Purchase Date with respect to the corresponding Regular Purchase referred to in Section 2(b) hereof.
(c) Accelerated Purchase Notice means, with respect to any Accelerated Purchase made pursuant to Section 2(b) hereof,
an irrevocable written notice from the Company to the Investor directing the Investor to buy a specified Accelerated Purchase Share Amount on the applicable Accelerated Purchase Date pursuant to Section 2(b) hereof at the applicable Accelerated
(d) Accelerated Purchase Share Percentage means, with respect to any Accelerated Purchase made
pursuant to Section 2(b) hereof, 30%.
(e) Accelerated Purchase Price means, with respect to any particular
Accelerated Purchase made pursuant to Section 2(b) hereof, the lower of (i) ninety-five percent (95%) of the VWAP during (A) the entire trading day on the Accelerated Purchase Date, if the volume of Common Shares traded on the
Principal Market on the Accelerated Purchase Date has not exceeded the Accelerated Purchase Share Volume Maximum, or (B) the portion of the trading day of the Accelerated Purchase Date (calculated starting at the beginning of normal trading
hours) until such time at which the volume of Common Shares traded on the Principal Market has exceeded the Accelerated Purchase Share Volume Maximum or (ii) the Closing Sale Price on the Accelerated Purchase Date (to be appropriately adjusted
for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction).
Accelerated Purchase Share Volume Maximum means the number of Common Shares traded on the Principal Market during normal trading hours on the Accelerated Purchase Date equal to (i) the amount of Common Shares properly
directed by the Company to be purchased on the Accelerated Purchase Notice, divided by (ii) the Accelerated Purchase Share Percentage (to be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split,
reverse stock split or other similar transaction).
(g) Available Amount means, initially, US$26,000,000 in the
aggregate, which amount shall be reduced by the Purchase Amount each time the Investor purchases Common Shares pursuant to Section 2 hereof, including, without limitation, the Initial Purchase pursuant to Section 2(a) hereof.
(h) Average Price means a price per Purchase Share (rounded to the nearest
tenth of a cent) equal to the quotient obtained by dividing (i) the aggregate gross purchase price paid by the Investor for all Purchase Shares purchased pursuant to this Agreement, by (ii) the aggregate number of Purchase Shares issued
pursuant to this Agreement.
(i) Bankruptcy Law means the Bankruptcy and Insolvency Act (R.S.C. 1985, c. B-3), Title
11, U.S. Code, or any similar federal, state, provincial or foreign law for the relief of debtors and the rules and regulations promulgated thereunder.
(j) Base Price means a price per Purchase Share equal to the sum of (i) the Signing Market Price and (ii) $0.0619
(subject to adjustment for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction that occurs on or after the date of this Agreement).
(k) Business Day means any day on which the Principal Market is open for trading, including any day on which the Principal
Market is open for trading for a period of time less than the customary time.
(l) Closing Sale Price means, for any
security as of any date, the last closing sale price for Common Shares on the Principal Market as reported by the Principal Market.
Confidential Information means any information disclosed by either party to the other party, either directly or indirectly, in writing, orally or by inspection of tangible objects (including, without limitation, documents,
prototypes, samples, plant and equipment), which is designated as Confidential, Proprietary or some similar designation. Information communicated orally shall be considered Confidential Information if such information is
confirmed in writing as being Confidential Information within ten (10) Business Days after the initial disclosure. Confidential Information may also include information disclosed to a disclosing party by third parties. Confidential Information
shall not, however, include any information which (i) was publicly known and made generally available in the public domain prior to the time of disclosure by the disclosing party; (ii) becomes publicly known and made generally available
after disclosure by the disclosing party to the receiving party through no action or inaction of the receiving party; (iii) is already in the possession of the receiving party at the time of disclosure by the disclosing party as shown by the
receiving party s files and records immediately prior to the time of disclosure; (iv) is obtained by the receiving party from a third party without a breach of such third party s obligations of confidentiality; (v) is
independently developed by the receiving party without use of or reference to the disclosing party s Confidential Information, as shown by documents and other competent evidence in the receiving party s possession; or (vi) is required
by law to be disclosed by the receiving party, provided that the receiving party gives the disclosing party prompt written notice of such requirement prior to such disclosure and assistance in obtaining an order protecting the information from
(n) Custodian means any receiver, trustee, assignee, liquidator or similar official under any
(o) DTC means The Depository Trust Company, or any successor performing substantially the same
function for the Company.
(p) DWAC Shares means Common Shares that are (i) issued in electronic form,
(ii) within the United States of America, freely tradable and transferable and without restriction on resale and (iii)
credited by the Company to the Investor s or its designee s specified Deposit/Withdrawal at Custodian (DWAC) account with DTC under its Fast Automated Securities Transfer (FAST) Program
or any similar program hereafter adopted by DTC performing substantially the same function.
(q) Exchange Act means the
U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.
(r) Material Adverse
Effect means any material adverse effect on (i) the enforceability of any Transaction Document, (ii) the results of operations, assets, business or financial condition of the Company and its Subsidiaries, taken as a whole, other
than any material adverse effect that resulted principally from (A) any change in the United States or Canadian economies or securities or financial markets in general that does not have a disproportionate effect on the Company and its
Subsidiaries, taken as a whole, (B) any change that generally affects the industry in which the Company and its Subsidiaries operate that does not have a disproportionate effect on the Company and its Subsidiaries, taken as a whole,
(C) any change arising in connection with earthquakes, hostilities, acts of war, sabotage or terrorism or military actions or any escalation or material worsening of any such hostilities, acts of war, sabotage or terrorism or military actions
existing as of the date hereof, (D) any action taken by the Investor, its affiliates or its or their successors and assigns with respect to the transactions contemplated by this Agreement, (E) the effect of any change in applicable laws or
accounting rules that does not have a disproportionate effect on the Company and its Subsidiaries, taken as a whole, or (F) any change resulting from compliance with terms of this Agreement or the consummation of the transactions contemplated