EXECUTION COPY
HEMOSOL INC.
AND
COMPUTERSHARE TRUST COMPANY OF CANADA
WARRANT INDENTURE
PROVIDING FOR THE ISSUE OF
UP TO 4,116,945 COMMON SHARE PURCHASE
WARRANTS
NOVEMBER 28, 2003
DAVIES ▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ & BERLIS LLP
TABLE OF CONTENTS
ARTICLE 1
INTERPRETATION
1.1 Definitions....................................................................... 2
1.2 Number and Gender................................................................. 6
1.3 Interpretation Not Affected by Headings, Etc...................................... 6
1.4 Business Day...................................................................... 6
1.5 Time of the Essence............................................................... 6
1.6 Applicable Law.................................................................... 6
1.7 Severability...................................................................... 6
1.8 Currency.......................................................................... 7
1.9 Schedules......................................................................... 7
ARTICLE 2
ISSUE OF WARRANTS
2.1 Issue of Warrants................................................................. 7
2.2 Form and Terms of Warrants........................................................ 8
2.3 Signing of Warrant Certificates................................................... 9
2.4 Certification by the Trustee...................................................... 9
2.5 Warrantholder Not a Shareholder, Etc.............................................. 9
2.6 Issue in Substitution for Lost Warrant Certificates............................... 10
2.7 Warrants to Rank Pari Passu....................................................... 10
2.8 Registers for Warrants............................................................ 10
2.9 Transferee Entitled to Registration............................................... 11
2.10 Registers Open for Inspection..................................................... 11
2.11 Exchange of Warrants; Notification Date........................................... 11
2.12 Ownership of Warrants............................................................. 12
2.13 Adjustment of Exercise Rights..................................................... 12
2.14 Adjustment Rules.................................................................. 16
2.15 Proceedings Prior to Any Action Requiring Adjustment.............................. 17
2.16 Notice of Adjustment of Exercise Rights........................................... 17
2.17 No Duty to Inquire................................................................ 18
ARTICLE 3
EXERCISE OF WARRANTS
3.1 Method of Exercise of Warrants.................................................... 18
3.2 Expiration of Warrants............................................................ 19
3.3 Effect of Exercise of Warrants.................................................... 19
3.4 Cancellation of Warrant Certificates.............................................. 19
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3.5 No Fractional Shares.............................................................. 20
3.6 Restrictions on Exercise to Ensure Compliance with the U.S. Securities Act........ 20
3.7 U.S. Legend....................................................................... 20
ARTICLE 4
COVENANTS
4.1 General Covenants................................................................. 20
4.2 Notice to Securities Regulatory Authorities....................................... 22
4.3 Trustee's Remuneration and Expenses............................................... 22
4.4 Performance of Covenants by Trustee............................................... 22
ARTICLE 5
ENFORCEMENT
5.1 Suits by Warrantholders........................................................... 22
5.2 Immunity of Shareholders, Etc..................................................... 23
5.3 Limitation of Liability........................................................... 23
ARTICLE 6
MEETINGS OF WARRANTHOLDERS
6.1 Right to Convene Meetings......................................................... 23
6.2 Notice............................................................................ 23
6.3 Chair............................................................................. 24
6.4 Quorum............................................................................ 24
6.5 Power to Adjourn.................................................................. 24
6.6 Show of Hands..................................................................... 24
6.7 Poll and Voting................................................................... 25
6.8 Regulations....................................................................... 25
6.9 Corporation, Trustee and Counsel May Be Represented............................... 26
6.10 Powers Exercisable by Extraordinary Resolution.................................... 26
6.11 Meaning of Extraordinary Resolution............................................... 27
6.12 Powers Cumulative................................................................. 27
6.13 Minutes........................................................................... 28
6.14 Instruments in Writing............................................................ 28
6.15 Binding Effect of Resolutions..................................................... 28
6.16 Holdings by the Corporation or
Subsidiaries of the Corporation Disregarded....................................... 28
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ARTICLE 7
SUPPLEMENTAL INDENTURES
7.1 Supplemental Indentures........................................................... 29
7.2 Successor Corporations............................................................ 30
ARTICLE 8
CONCERNING THE TRUSTEE
8.1 Trust Indenture Legislation....................................................... 30
8.2 Rights and Duties of Trustee...................................................... 30
8.3 Evidence, Experts and Advisers.................................................... 31
8.4 Documents Held by Trustee......................................................... 32
8.5 Actions by Trustee to Protect Interests........................................... 32
8.6 Trustee Not Required to Give Security............................................. 32
8.7 Protection of Trustee............................................................. 33
8.8 Replacement of Trustee............................................................ 34
8.9 Conflict of Interest.............................................................. 35
8.10 Acceptance of Trusts.............................................................. 35
8.11 Trustee Not to Be Appointed Receiver.............................................. 35
8.12 Indemnity of Trustee.............................................................. 35
ARTICLE 9
GENERAL
9.1 Notice............................................................................ 36
9.2 Accidental Failure to Give Notice to Warrantholders............................... 37
9.3 Counterparts and Formal Date...................................................... 37
9.4 Satisfaction and Discharge of Indenture........................................... 37
9.5 Provisions of Indenture and Warrants for
the Sole Benefit of Parties and Warrantholders.................................... 37
SCHEDULE A FORM OF WARRANT CERTIFICATE
Certificate #
SCHEDULE B EXERCISE FORM
SCHEDULE C FORM OF TRANSFER
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THIS WARRANT INDENTURE made as of November 28, 2003.
B E T W E E N:
HEMOSOL INC.,
a corporation existing under the laws of Ontario,
(hereinafter called the "CORPORATION"),
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COMPUTERSHARE TRUST COMPANY OF CANADA,
a trust company organized under the laws of Canada
and authorized to carry on business as a trust
company in all the provinces of Canada,
(hereinafter called the "TRUSTEE").
WHEREAS pursuant to those certain subscription agreements made as of
November 28, 2003 between the Corporation and the purchasers signatory thereto
(the "SUBSCRIPTION AGREEMENTS"), the Corporation has agreed to issue and sell
7,200,000 Series A special warrants (the "SERIES A SPECIAL WARRANTS") and
641,800 Series B special warrants (the "SERIES B SPECIAL WARRANTS" and, together
with the Series A Special Warrants, the "SPECIAL WARRANTS"), which will be
created and issued under a Special Warrant Indenture (as hereinafter defined);
AND WHEREAS each Special Warrant will, subject to the terms and
conditions of the Special Warrant Indenture, entitle the holder thereof to
acquire, upon exercise or deemed exercise thereof, without additional payment,
one common share in the capital of the Corporation and one-half of one common
share purchase warrant; provided that (a) the Series B Special Warrants shall
not be or become exercisable for common shares or common share purchase warrants
unless and until the Corporation's shareholders approve the issue of the
underlying securities on or before the 60th day immediately following the date
hereof and (b) the purchase price paid for the Series B Special Warrants to the
Corporation shall be held in escrow by the special warrant trustee and released
(together with any interest or return actually earned thereon) to the
Corporation only upon such shareholder approval being obtained or,
alternatively, if such shareholder approval is not obtained such purchase price
(together with any interest or return actually earned thereon) shall be paid to
the Series B Special Warrantholder and the Series B Special Warrants immediately
cancelled;
AND WHEREAS each whole common share purchase warrant shall entitle the
holder to purchase, upon exercise thereof, for $0.90 per common share, one
common share in the capital of the Corporation, subject to adjustment as
hereinafter provided;
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AND WHEREAS pursuant to an agency agreement of even date herewith
between the Corporation and Loewen, Ondaatje, ▇▇▇▇▇▇▇▇▇▇ Limited and Vengate
Capital Partners Company, as agents (the "AGENTS"), the Agents are entitled to
receive, as partial compensation for their fees, special broker's warrants
exercisable, without the payment of additional consideration, for compensation
options (the "COMPENSATION OPTIONS") in an amount equal to 5% of the Special
Warrants on which the Corporation realizes proceeds of sale, each of which is
exercisable for one common share in the capital of the Corporation and one-half
of one common share purchase warrant for $0.75;
AND WHEREAS for such purposes the Corporation deems it necessary to
create and issue common share purchase warrants, to be constituted and issued in
the manner hereinafter set forth;
AND WHEREAS the Corporation is duly authorized to create and issue the
common share purchase warrants to be issued as herein provided;
AND WHEREAS all things necessary have been done and performed to make
the common share purchase warrants, when certified by the Trustee and issued as
in this Indenture provided, legal, valid and binding upon the Corporation with
the benefits of and subject to the terms of this indenture;
AND WHEREAS the Trustee has agreed to enter into this indenture and to
hold all rights, interests and benefits contained herein for and on behalf of
those persons who from time to time become holders of common share purchase
warrants issued pursuant to this Indenture;
AND WHEREAS the foregoing recitals are made as representations and
statements of fact by the Corporation and not by the Trustee;
NOW THEREFORE THIS INDENTURE WITNESSES that for good and valuable
consideration mutually given, the receipt and sufficiency of which are hereby
acknowledged, the Corporation hereby appoints the Trustee as warrant trustee for
the holders of common share purchase warrants, to hold all rights, interests and
benefits contained herein for and on behalf of those persons who from time to
time become holders of common share purchase warrants issued pursuant to this
indenture, and it is hereby agreed and declared as follows:
ARTICLE 1
INTERPRETATION
1.1 DEFINITIONS
In this Indenture, unless there is something in the subject matter or
context inconsistent therewith, the following phrases and words shall have the
following meanings:
"AGENTS" has the meaning ascribed thereto in the recitals to this Indenture;
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"APPLICABLE LEGISLATION" has the meaning ascribed thereto in section 8.1(a);
"BUSINESS DAY" means a day other than a Saturday, Sunday or statutory or banking
holiday in Toronto, Ontario or on which the Trustee is not open for business;
"CAPITAL REORGANIZATION" has the meaning ascribed thereto in section 2.13(d);
"COMMON SHARES" means the fully paid and non-assessable common shares without
nominal or par value in the capital of the Corporation, as currently
constituted, and each, a "COMMON SHARE";
"COMPENSATION OPTIONS" has the meaning ascribed thereto in the recitals to this
Indenture;
"CORPORATION" means Hemosol Inc., a corporation existing under the laws of
Ontario, and its successors from time to time;
"CORPORATION'S AUDITORS" means the independent chartered accountant or firm of
chartered accountants duly appointed as auditor or auditors of the Corporation
from time to time;
"COUNSEL" means a barrister or solicitor or a firm of barristers or solicitors
(who may be counsel for the Corporation) acceptable to the Trustee, acting
reasonably;
"CURRENT MARKET PRICE PER COMMON SHARE" has the meaning ascribed thereto in
section 2.14(e);
"DIRECTOR" means a director of the Corporation for the time being and, unless
otherwise specified herein, reference herein to an "ACTION BY THE DIRECTORS"
means an action by the directors of the Corporation as a board or, whenever duly
empowered, an action by a committee of directors;
"EXERCISE DATE", with respect to any Warrant, means the date during the Exercise
Period on which such Warrant is surrendered for exercise in accordance with the
provisions of Article 3;
"EXERCISE PERIOD", with respect to any Warrant, means the period beginning at
the issuance of the Warrants and ending at the Time of Expiry;
"EXERCISE PRICE" means $0.90 per Underlying Security, unless such price shall
have been adjusted in accordance with the provisions of sections 2.13 and 2.14,
in which case it shall mean the adjusted price in effect at such time;
"EXPIRY DATE" means the earlier to occur of: (a) the date that is 36 months
immediately following the Closing Date; and (b) the Notification Date;
"EXTRAORDINARY RESOLUTION" has the meaning ascribed thereto in section 6.11;
"MUTUAL RELIANCE REVIEW SYSTEM" means the mutual reliance review system provided
for under National Policy 43-201 Mutual Reliance Review System for Prospectuses
and Annual Information Forms;
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"NASDAQ" means the NASDAQ Stock Market;
"NOTIFICATION DATE" means the 30th day immediately following the date on which
the Corporation notifies the Warrantholders that the volume-weighted average
price of a Common Share on the TSX for 20 consecutive trading days is greater
than or equal to the Threshold Price;
"PERSON" includes an individual, a corporation, a partnership, a trustee, any
unincorporated organization or any other juridical entity and words importing
persons have a similar meaning;
"QUALIFICATION DATE" means the date on which the decision document issued in
accordance with the Mutual Reliance Review System evidencing that receipts for
each jurisdiction in which a the (final) prospectus of the Corporation will be
filed to qualify the distribution of (a) the Common Shares and Warrants issuable
upon the exercise of the Special Warrants and (b) to the extent permitted by
applicable Securities Laws, the Compensation Options issuable on exercise of the
special broker's warrants issued in connection with the offering of Special
Warrants;
"REGULATION S" means Regulation S under the U.S. Securities Act;
"RIGHTS OFFERING" has the meaning ascribed thereto in section 2.13(b);
"RIGHTS PERIOD" has the meaning ascribed thereto in section 2.13(b);
"SECURITIES COMMISSIONS" means, collectively, the securities commission or
comparable securities regulatory authority in each of the provinces of Canada
and "SECURITIES COMMISSION" means any such authority;
"SECURITIES LAWS" means, collectively, the applicable securities laws of each of
the provinces of Canada and the respective regulations and rules made and forms
prescribed thereunder together with all applicable published policy statements
and blanket orders and rulings of the Securities Commissions;
"SERIES A SPECIAL WARRANTS" has the meaning ascribed thereto in the recitals to
this Indenture;
"SERIES B SPECIAL WARRANTS" has the meaning ascribed thereto in the recitals to
this Indenture;
"SHARE REORGANIZATION" has the meaning ascribed thereto in section 2.13(a);
"SHAREHOLDER" means a holder of record on the books of the Corporation of one or
more Common Shares;
"SPECIAL DISTRIBUTION" has the meaning ascribed thereto in section 2.13(c);
"SPECIAL WARRANTS" has the meaning ascribed thereto in the recitals to this
Indenture;
"SPECIAL WARRANT INDENTURE" means the special warrant indenture governing the
terms and conditions of the Special Warrants to be entered into as of the
Closing Date between the Corporation and Computershare Trust Company of Canada,
as special warrant trustee;
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"SUBSCRIPTION AGREEMENTS" has the meaning ascribed thereto in the recitals to
this Indenture;
"SUCCESSOR" has the meaning ascribed thereto in section 7.2;
"THRESHOLD PRICE" means, as of the date hereof, $2.25, subject to adjustment
from time to time hereafter in accordance with sections 2.13 and 2.14 as if all
references therein to "Exercise Price" were references to "Threshold Price";
"TIME OF EXPIRY" means 5:00 p.m. (Toronto time) on the Expiry Date;
"TSX" means the Toronto Stock Exchange;
"TRUSTEE" means Computershare Trust Company of Canada, a corporation organized
under the laws of Canada, or its successors for the time being in the trusts
hereby created;
"UNDERLYING SECURITIES" means the Common Shares issuable upon the exercise of
the Warrants, including the shares or other securities or property issuable upon
the exercise of the Warrants as a result of any adjustment of exercise rights
pursuant to sections 2.13 and 2.14;
"UNITED STATES" means the United States of America, its territories and
possessions, any state of the United States, and the District of Columbia;
"U.S. PERSON" means a U.S. person as that term is defined in Regulation S;
"U.S. SECURITIES ACT" means the United States Securities Act of 1933, as
amended;
"WARRANT" means each whole Common Share purchase warrant of the Corporation
issued upon exercise of (a) two duly exercisable Special Warrants or (b) two
duly exercisable Compensation Options, in each case such whole Common Share
purchase warrant shall be issued pursuant to this Indenture, entitling the
holder thereof upon exercise thereof during the Exercise Period to purchase one
of the Underlying Securities for the Exercise Price, and, collectively, referred
to herein as the "WARRANTS";
"WARRANT CERTIFICATES" has the meaning ascribed thereto in section 2.2(a);
"WARRANTHOLDER" or "HOLDER" means a person whose name is entered for the time
being in the register maintained pursuant to section 2.8(b)(i) and, for greater
certainty, in respect of any action to be taken by a holder in respect of the
holder's Warrants, means the holder or his or her executors, administrators or
other legal representatives or his, her or their attorney duly appointed by
instrument in writing in form, substance and execution satisfactory to the
Trustee with signatures guaranteed by a Schedule A chartered bank, a Canadian
trust company or a member of the Medallion Guarantee Program;
"WARRANTHOLDERS' REQUEST" means, at any time, an instrument signed in one or
more counterparts by Warrantholders holding in the aggregate not fewer than 10%
of the then outstanding Warrants, requesting the Trustee to take some action or
proceeding specified therein;
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"WARRANT INDENTURE", "INDENTURE", "HEREIN", "HEREBY" and similar expressions
mean and refer to this indenture and any indenture, deed or instrument
supplemental or ancillary hereto; and the expressions "ARTICLE", "SCHEDULE" and
"SECTION" followed by a number and/or letter mean and refer to the specified
Article, Section or Schedule of this Indenture; and
"WRITTEN ORDER OF THE CORPORATION", "WRITTEN REQUEST OF THE CORPORATION",
"WRITTEN CONSENT OF THE CORPORATION", "CERTIFICATE OF THE CORPORATION" and any
other document required to be signed by the Corporation means, respectively, a
written order, request, consent, certificate or other document signed in the
name of the Corporation by any one of the chairman of the board, the
vice-chairman of the board, the chief executive officer, the chief financial
officer, the president or a vice-president of the Corporation, and may consist
of one or more instruments so executed.
1.2 NUMBER AND GENDER
Unless otherwise expressly provided herein or unless the context
otherwise requires, words importing the singular include the plural and vice
versa and words importing the masculine gender include the feminine and neuter
genders.
1.3 INTERPRETATION NOT AFFECTED BY HEADINGS, ETC.
The division of this Indenture into Articles, subsections, sections and
clauses, the provision of a table of contents and the insertion of headings are
for convenience of reference only and shall not affect the construction or
interpretation of this Indenture.
1.4 BUSINESS DAY
In the event that any day on or before which any action is required or
permitted to be taken hereunder is not a Business Day, such action shall be
required or permitted to be taken on or before the requisite time on the next
succeeding day that is a Business Day.
1.5 TIME OF THE ESSENCE
Time shall be of the essence in all respects in this Indenture and the
Warrants.
1.6 APPLICABLE LAW
This Indenture and the Warrants shall be governed by and construed and
enforced in accordance with the laws of Ontario and shall be treated in all
respects as Ontario contracts.
1.7 SEVERABILITY
The invalidity or unenforceability of any particular provision of this
Indenture shall not affect or limit the validity or enforceability of the
remaining provisions of this Indenture.
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1.8 CURRENCY
All references to currency herein are to Canadian dollars unless
otherwise indicated.
1.9 SCHEDULES
The following schedules are attached to and form part of this
Agreement:
Schedule A - Form of Warrant Certificate
Schedule B - Exercise Form
Schedule C - Form of Transfer
ARTICLE 2
ISSUE OF WARRANTS
2.1 ISSUE OF WARRANTS
(a) A maximum of 4,116,945 Warrants entitling Warrantholders to purchase an
aggregate maximum of 4,116,945 Common Shares, or such other kind and amount of
Underlying Securities pursuant to the provisions of sections 2.13 and 2.14, as
the case may be, are hereby created and authorized to be issued from time to
time upon receipt by the Trustee of:
(i) a copy of a notice pursuant to Section 4.4(b) of the Special
Warrant Indenture notifying the Corporation of the due
exercise of Special Warrants; or
(ii) a written order of the Corporation instructing the Trustee to
issue Warrants in satisfaction of the due exercise of
Compensation Options.
Such notice and the written order of the Corporation shall set out the
particulars (including the number and the date of the due exercise) of the
exercised Special Warrants and Compensation Options, respectively, the person in
whose name the Warrants are to be issued, the address of such person and
delivery instructions for the certificate representing the Warrants.
(b) Upon receipt of a notice or written order of the Corporation pursuant
to Section 2.1(a), certificates representing the Warrants to be issued shall be
(i) prepared (reflecting the particulars set out in such notice or order, as the
case may be) and executed by the Corporation, (ii) certified by or on behalf of
the Trustee and (iii) delivered (in accordance with the instructions set out in
the notice or written order of the Corporation, or otherwise by the
Warrantholder) by or on behalf of the Trustee, all in accordance with sections
2.3 and 2.4.
(c) Notwithstanding Section 2.1(a), the Series B Special Warrants shall not
be or become exercisable for Underlying Securities unless and until the
Corporation's shareholders approve the issue of the underlying securities on or
before the 60th day immediately following
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the date hereof, 2003 and, if such approval is not so granted, the purchase
price paid for the Series B Special Warrants shall be held in escrow pursuant to
the Special Warrant Indenture.
2.2 FORM AND TERMS OF WARRANTS
(a) The certificates representing the Warrants (the "Warrant certificates")
shall be substantially in the form set out in Schedule A hereto with, subject to
the provisions of this Indenture, such additions, variations or omissions as may
from time to time be agreed upon between the Corporation and the Trustee, shall
be dated as the date of due exercise of the Special Warrant or Compensation
Option, as the case may be, as provided to the Trustee pursuant to Section
2.1(a), and shall have such distinguishing letters and numbers as the
Corporation may, with the approval of the Trustee, prescribe.
(b) Each Warrant authorized to be issued hereunder shall entitle the
Warrantholder to purchase (subject to section 3.1(b)), for the Exercise Price,
one Common Share, or such other kind and amount of Underlying Securities or
property calculated pursuant to the provisions of sections 2.13 and 2.14, as the
case may be, in accordance with the provisions of this Indenture.
(c) Each Warrant certificate will be issued only in registered form and no
fractional Warrants will be issued or otherwise provided for. Warrant
certificates may be issued in any denomination of whole Warrants. All Warrants
are, save as to denomination, of like tenor and effect.
(d) The certificates evidencing the Warrants and any Underlying Securities
issuable upon the exercise of the Warrants prior to the expiry of the applicable
hold periods, and each certificate issued in transfer thereof, will bear the
following legends:
"UNLESS PERMITTED BY SECURITIES LEGISLATION, THE HOLDER OF THE SECURITIES
SHALL NOT TRADE THE SECURITIES BEFORE MARCH 29, 2004."
(e) The certificates evidencing the Warrants and any Underlying Securities
issuable on the exercise of the Warrants shall, and the Trustee is hereby
directed to, have typed thereon the following legend:
"THIS SECURITY AND ANY SECURITY FOR WHICH THIS SECURITY IS EXERCISABLE HAS
NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED, (THE "1933 ACT") OR ANY APPLICABLE STATE SECURITIES
LAWS. THIS SECURITY MAY NOT BE TRANSFERRED TO OR EXERCISED BY OR ON BEHALF
OF ANY U.S. PERSON (AS DEFINED IN REGULATION S UNDER THE 1933 ACT) OR WITHIN
THE UNITED STATES UNLESS REGISTERED UNDER THE 1933 ACT AND ANY APPLICABLE
STATE SECURITIES LAWS OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE."
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(f) The certificates evidencing the Common Shares and any Common Shares
issuable upon the exercise of the Warrants prior to the expiry of the applicable
hold periods, and each certificate issued in transfer thereof, will bear the
following additional legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE LISTED ON THE TORONTO
STOCK EXCHANGE, HOWEVER, THE SAID SECURITIES CANNOT BE TRADED THROUGH THE
FACILITIES OF SUCH EXCHANGE SINCE THEY ARE NOT FREELY TRANSFERABLE, AND
CONSEQUENTLY ANY CERTIFICATE REPRESENTING SUCH SECURITIES IS NOT "GOOD
DELIVERY" IN SETTLEMENT OF TRANSACTIONS ON THE TORONTO STOCK EXCHANGE.".
2.3 SIGNING OF WARRANT CERTIFICATES
The Warrant certificates shall be signed by either the Chief Executive
Officer or the Chief Financial Officer of the Corporation, and may but need not
be under the corporate seal of the Corporation or a reproduction thereof. The
signature of such officer may be mechanically reproduced in facsimile and
Warrant certificates bearing such facsimile signatures shall be binding upon the
Corporation as if they had been manually signed by such officer. Notwithstanding
that the person whose manual or facsimile signature appears on any Warrant
certificate as such officer may no longer hold office at the date of issue of
such Warrant certificate or at the date of certification or delivery thereof,
any Warrant certificate signed as aforesaid shall, subject to section 2.4, be
valid and binding upon the Corporation and the holder thereof shall be entitled
to the benefits of this Indenture.
2.4 CERTIFICATION BY THE TRUSTEE
(a) No Warrant certificate shall be issued or, if issued, shall be valid
for any purpose or entitle the holder to the benefit hereof or thereof until it
has been certified by manual signature by or on behalf of the Trustee in the
form of the certificate set out in Schedule A and such certification by the
Trustee upon any Warrant certificate shall be conclusive evidence as against the
Corporation that the Warrant certificate so certified has been duly issued
hereunder and the holder is entitled to the benefits hereof.
(b) The certification of the Trustee on Warrant certificates issued
hereunder shall not be construed as a representation or warranty by the Trustee
as to the validity of this Indenture or the Warrants (except the due
certification thereof) and the Trustee shall in no respect be liable or
answerable for the use made of the Warrants or any of them or of the
consideration therefor except as otherwise specified herein.
2.5 WARRANTHOLDER NOT A SHAREHOLDER, ETC.
The holding of a Warrant shall not be construed as conferring upon a
Warrantholder any right or interest whatsoever as a Shareholder nor entitle the
Warrantholder to any right or interest in respect thereof including, but not
limited to, the right to vote at, to receive
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notice of or to attend meetings of Shareholders or any other proceedings of the
Corporation, or the right to receive dividends and other distributions, except
as expressly provided herein.
2.6 ISSUE IN SUBSTITUTION FOR LOST WARRANT CERTIFICATES
(a) In the case where any Warrant certificate shall become mutilated or be
lost, destroyed or stolen, the Corporation, subject to applicable law and
section 2.6(b), shall issue and thereupon the Trustee shall certify and deliver
a new Warrant certificate of like date and tenor as the one mutilated, lost,
destroyed or stolen in exchange for and in place of and upon cancellation of
such mutilated certificate, or in lieu of and in substitution for such lost,
destroyed or stolen certificate, and the substituted certificate shall be in a
form approved by the Trustee and shall be entitled to the benefits hereof and
shall rank equally in accordance with its terms with all other Warrant
certificates issued or to be issued hereunder.
(b) The applicant for the issue of a new certificate pursuant to this
section 2.6 shall bear the cost of the issue thereof and in case of loss,
destruction or theft shall, as a condition precedent to the issue thereof,
furnish to the Corporation and to the Trustee such evidence of ownership and of
the loss, destruction or theft of the certificate so lost, destroyed or stolen
as shall be satisfactory to the Corporation and to the Trustee in their sole
discretion, and such applicant also may be required to furnish an indemnity
and/or surety bond in amount and form satisfactory to the Corporation and the
Trustee in their sole discretion and shall pay the reasonable charges of the
Corporation and the Trustee in connection therewith.
2.7 WARRANTS TO RANK PARI PASSU
All Warrants shall rank pari passu whatever may be the actual date of
issue of same.
2.8 REGISTERS FOR WARRANTS
(a) The Corporation hereby appoints the Trustee as registrar of the
Warrants. The Corporation may hereafter, with the consent of the Trustee,
appoint one or more additional registrars of the Warrants.
(b) The Corporation shall cause to be kept by the Trustee at its principal
office in the City of Toronto: (i) a register of holders of Warrants in which
shall be entered the names and addresses of the holders and of the number of
Warrants held by them; and (ii) a register of transfers of Warrants in which
shall be entered the date and other particulars of each transfer of Warrants.
(c) No transfer of a Warrant shall be valid unless made by:
(i) the Warrantholder or his executors, administrators or other
legal representatives or his or their attorney duly appointed
by an instrument in writing in form and execution satisfactory
to the Trustee with signatures
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guaranteed by a Schedule A chartered bank, a Canadian trust
company or a member of the medallion guarantee program; or
(ii) the liquidator of, or a trustee in bankruptcy for, a
Warrantholder;
upon compliance with such reasonable requirements as the Trustee and the
Corporation may prescribe (including, without limitation, the requirement to
provide: (A) evidence of satisfactory compliance with applicable Securities
Laws), and unless recorded on the register of transfers maintained by the
Trustee pursuant to section 2.8(b), nor until all stamp taxes or governmental or
other charges arising by reason of such transfer have been paid.
(d) The Trustee will process all proffered transfers and exercises in good
faith upon the presumption that such transfer or exercise is permissible
pursuant to all applicable legislation and the terms of this Indenture. The
transferor and transferee are solely responsible for ensuring compliance with
any applicable securities laws, and the Trustee shall have no obligations to
ensure compliance with any laws applicable to the issue, transfer or exercise of
the Warrants.
2.9 TRANSFEREE ENTITLED TO REGISTRATION
The transferee of a Warrant shall, after a transfer form substantially
in the form Schedule C or such other form acceptable to the Trustee is duly
completed and the Warrant is lodged with the Trustee and upon compliance with
all other conditions in that regard required by this Indenture or by law, be
entitled to have his name entered on the register of Warrantholders as the owner
of such Warrant free from all equities or rights of set-off or counterclaim
between the Corporation and the transferor or any previous holder of such
Warrant, save in respect of equities of which the Corporation or the transferee
is required to take notice by statute or by order of a court of competent
jurisdiction.
2.10 REGISTERS OPEN FOR INSPECTION
The registers hereinbefore referred to shall be open at all reasonable
times for inspection by the Corporation, the Trustee or any Warrantholder. The
Trustee shall, from time to time when requested to do so by the Corporation,
furnish the Corporation with a list of the names and addresses of Warrantholders
entered in the register of Warrantholders kept by the Trustee and showing the
number of Underlying Securities that might then be acquired upon the exercise of
the Warrants held by each such Warrantholder.
2.11 EXCHANGE OF WARRANTS; NOTIFICATION DATE
(a) Warrant certificates may, upon compliance with the reasonable
requirements of the Trustee, be exchanged for Warrant certificates in any other
authorized denomination representing in the aggregate the same number of
Warrants. The Corporation shall sign and the Trustee shall certify, in
accordance with sections 2.3 and 2.4, all Warrant certificates necessary to
carry out the exchanges contemplated herein.
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(b) Warrant certificates may be exchanged only at the principal office of
the Trustee in the City of Toronto or at any other place that is designated by
the Corporation with the approval of the Trustee. Any Warrant certificates
tendered for exchange shall be surrendered to the Trustee and cancelled.
(c) No charge will be levied by the Corporation or the Trustee upon a
presenter of a Warrant certificate pursuant to this Indenture for the transfer
of any Warrant or for the exchange of any Warrant certificate but reimbursement
to the Trustee or the Corporation for any and all taxes or governmental or other
charges required to be paid shall be made by the person requesting such exchange
as a condition precedent to such exchange.
(d) The Corporation shall provide advance written notice of the
Notification Date to the Trustee.
2.12 OWNERSHIP OF WARRANTS
The Corporation and the Trustee shall deem and treat the Warrantholder
of any Warrant certificate as the absolute owner of the Warrant represented
thereby for all purposes, and the Corporation and the Trustee shall not be
affected by any notice or knowledge to the contrary except where the Corporation
or the Trustee is required to take notice by statute or by order of a court of
competent jurisdiction. A Warrantholder shall be entitled to the rights
evidenced by such Warrant free from all equities or rights of set-off or
counterclaim between the Corporation and the original or any intermediate
Warrantholder thereof and all persons may act accordingly and the receipt by any
such Warrantholder of Underlying Securities pursuant thereto shall be a good
discharge to the Corporation and the Trustee for the same and neither the
Corporation nor the Trustee shall be bound to inquire into the title of any such
Warrantholder except where the Corporation or the Trustee is required to take
notice by statute or by order of a court of competent jurisdiction.
2.13 ADJUSTMENT OF EXERCISE RIGHTS
The Exercise Price per Common Share and the number of Common Shares
which may be subscribed for upon exercise of a Warrant shall be subject to
adjustment from time to time upon the occurrence of any of the events and in the
manner provided as follows:
(a) If and whenever at any time prior to the Time of Expiry, the
Corporation shall:
(i) declare a dividend or make a distribution on its Common Shares
payable in Common Shares (or securities exchangeable for or
convertible into Common Shares), other than a dividend (other
than a stock dividend) paid in the ordinary course; or
(ii) subdivide or change its outstanding Common Shares into a
greater number of Common Shares; or
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(iii) reduce, combine or consolidate its outstanding Common Shares
into a lesser number,
(any of such events in these sections 2.13(a)(i), (ii) and (iii) being
called a "Share Reorganization"), then effective immediately after the
record date or effective date, as the case may be, at which the holders
of Common Shares are determined for the purposes of the Share
Reorganization the Exercise Price shall be adjusted to a price
determined by multiplying the applicable Exercise Price in effect on
such effective date or record date by a fraction, the numerator of
which shall be the number of Common Shares outstanding on such
effective date or record date before giving effect to such Share
Reorganization and the denominator of which shall be the number of
Common Shares outstanding immediately after giving effect to such Share
Reorganization (including, in the case where securities exchangeable
for or convertible into Common Shares are distributed, the number of
additional Common Shares that would have been outstanding had such
securities been exchanged for or converted into Common Shares
immediately after giving effect to such Share Reorganization).
(b) If and whenever at any time prior to the Time of Expiry the Corporation
shall fix a record date for the issuing of rights, options or warrants
to all or substantially all of the holders of the Common Shares
entitling them for a period expiring not more than 45 days after such
record date (the "Rights Period") to subscribe for or purchase Common
Shares (or securities convertible into or exchangeable for Common
Shares) at a price per share (or having a conversion or exchange price
per share) which is less than 95% of the Current Market Price per
Common Share (as hereinafter defined) on the record date for such issue
(any of such events being called a "Rights Offering"), then effective
immediately after the end of the Rights Period the Exercise Price shall
be adjusted to a price determined by multiplying the applicable
Exercise Price in effect at the end of the Rights Period by a fraction
the numerator of which shall be the sum of:
(i) the number of Common Shares outstanding as of the record date
for the Rights Offering; and
(ii) a number determined by dividing (A) either the product of (i)
the number of Common Shares issued during the Rights Period
upon exercise of the rights, warrants or options under the
Rights Offering and (ii) the price at which such Common Shares
are issued, or, as the case may be, the product of (iii) the
number of Common Shares for or into which the convertible or
exchangeable securities issued during the Rights Period upon
exercise of the rights, warrants or options under the Rights
Offering are exchangeable or convertible and (iv) the exchange
or conversion price of the convertible or exchangeable
securities so issued, by (B) the Current Market Price per
Common Share as of the record date for the Rights Offering,
and
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the denominator of which shall be the number of Common Shares
outstanding (including the number of Common Shares actually issued or
subscribed for during the Rights Period upon exercise of the rights,
warrants or options under the Rights Offering) or which would be
outstanding upon the conversion or exchange of all convertible or
exchangeable securities issued during the Rights Period upon exercise
of the rights, warrants or options under the Rights Offering, as
applicable, in each case after giving effect to the Rights Offering.
Common Shares owned by or held (otherwise than as security) for the
account of the Corporation or any subsidiary of the Corporation shall
be deemed not to be outstanding for the purpose of any such
computation.
(c) If and whenever at any time prior to the Time of Expiry the Corporation
shall fix a record date for the payment, issue or distribution to all
or substantially all of the holders of the Common Shares of (i) a
dividend, (ii) cash or assets (including evidences of the Corporation's
indebtedness), or (iii) rights or other securities (including without
limitation, securities convertible into or exchangeable for Common
Shares), and such payment, issue or distribution does not constitute a
dividend (other than a stock dividend) paid in the ordinary course, a
Share Reorganization or a Rights Offering (any of such non-excluded
events being herein called a "Special Distribution"), the Exercise
Price shall be adjusted effective immediately after such record date to
a price determined by multiplying the applicable Exercise Price in
effect on such record date by a fraction:
(i) the numerator of which shall be:
(A) the product of the number of Common Shares
outstanding on such record date and the
Current Market Price per Common Share on
such record date; less
(B) the fair market value, as determined by
action of the directors (whose determination
shall be conclusive) and subject to the
prior approval of the TSX, to the holders of
the Common Shares of such dividend, cash,
assets, rights or securities so paid, issued
or distributed less the fair market value,
as determined by action of the directors
(whose determination shall be conclusive)
and subject to the prior approval of the
TSX, of the consideration, if any, received
therefor by the Corporation, and
(ii) the denominator of which shall be the number of
Common Shares outstanding on such record date
multiplied by the Current Market Price per Common
Share on such record date.
Any Common Shares owned by or held (otherwise than as security) for the
account of the Corporation or any subsidiary of the Corporation shall
be deemed not to be outstanding for the purpose of any such
computation. Such adjustment
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shall be made successively whenever such a record date is fixed. To the
extent that such payment, issuance or distribution is not so made, the
Exercise Price shall be readjusted effective immediately to the
Exercise Price which would then be in effect based upon such payment,
issuance or distribution actually made.
(d) If and whenever at any time prior to the Time of Expiry there shall be
a reorganization, reclassification or other change of Common Shares
outstanding at such time or change of the Common Shares into other
shares or into other securities (other than a Share Reorganization), or
a consolidation, amalgamation, arrangement or merger of the Corporation
with or into any other corporation or other entity (other than a
consolidation, amalgamation, arrangement or merger which does not
result in any reclassification of the outstanding Common Shares or a
change or exchange of the Common Shares into or for other shares), or a
transfer of the undertaking or assets of the Corporation as an entirety
or substantially as an entirety to another corporation or entity in
which the holders of Common Shares are entitled to receive shares,
other securities or property, including cash, (any of such events being
herein called a "Capital Reorganization"), any holder who exercises his
right to subscribe for and purchase Common Shares pursuant to the
exercise of Warrants after the effective date of such Capital
Reorganization shall be entitled to receive, and shall accept for the
same aggregate consideration in lieu of the number of Common Shares to
which such holder was theretofore entitled upon such exercise, the
aggregate number of shares, other securities or other property,
including cash, which such holder would have received as a result of
such Capital Reorganization had he exercised his right to acquire
Underlying Securities immediately prior to the effective date or record
date, as the case may be, of the Capital Reorganization and had he been
the holder of such Underlying Securities on such effective date or
record date, as the case may be, subject to adjustment thereafter in
accordance with provisions the same, as nearly as may be possible, as
those contained in sections 2.13(b) and 2.13(c). If determined
appropriate by the directors, acting reasonably, subject to the prior
approval of the TSX, appropriate adjustments shall be made as a result
of any such Capital Reorganization in the application of the provisions
set forth in this section 2.13, with respect to the rights and
interests thereafter of the holder of a Warrant to the end that the
provisions set forth in this section 2.13 shall thereafter
correspondingly be made applicable as nearly as may reasonably be in
relation to any shares, other securities or other property, including
cash, thereafter deliverable upon the exercise of the Warrant. Any such
adjustment shall be made by and set forth in an agreement supplemental
hereto approved by action by the directors, acting reasonably, subject
to the prior approval of the TSX, and shall for all purposes be
conclusively deemed to be an appropriate adjustment.
(e) In case the Corporation after the date of issue of the Warrants shall
take any action affecting the Common Shares, other than action
described in this section 2.13, which in the opinion of the directors,
acting reasonably, would materially
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adversely affect the rights of the Warrantholders, the Exercise Price
or the number of Common Shares purchaseable upon exercise shall be
adjusted in such manner, if any, and at such time, by action by the
directors, acting reasonably, as they may determine to be equitable in
the circumstances, but subject in all cases to subject to the prior
approval of the TSX and any other necessary regulatory approval.
2.14 ADJUSTMENT RULES
For the purposes of section 2.13, any adjustment shall be made
successively whenever an event referred to therein shall occur, subject to the
following provisions:
(a) all calculations shall be made to the nearest 1/100th of a Common
Share;
(b) no adjustment to an Exercise Price shall be required unless such
adjustment would result in a change of at least 1% in the prevailing
Exercise Price and no adjustment in the number of Common Shares
purchasable upon exercise of the Warrants will be required to be made
unless the cumulative effect of such adjustment or adjustments would
change the number of Common Shares purchasable upon the exercise of a
Warrant by at least one one-hundredth of a Common Share and, for
greater clarity, any adjustment which, except for the qualification of
this section, would otherwise have been required to be made shall be
carried forward and taken into account in any subsequent adjustment;
provided, however, that in no event shall the Corporation be obligated
to issue fractional Common Shares or fractional interests in Common
Shares upon exercise of a Warrant or pay any amount in cash in lieu of
issuing fractional Common Shares;
(c) if a dispute shall at any time arise with respect to adjustments to the
Exercise Price or the number of Common Shares purchaseable pursuant to
the exercise rights represented by a Warrant, such disputes shall be
conclusively determined by the Corporation's auditors or, if they are
unable or unwilling to act, by such other firm of independent chartered
accountants as may be selected by action by the directors and any such
determination, subject to the prior approval of the TSX, shall be
conclusive evidence of the correctness of any adjustments made;
(d) if the Corporation shall set a record date to determine the holders of
its Common Shares for the purpose of entitling them to receive any
dividend or distribution or any subscription or purchase rights,
options or warrants and shall thereafter and before the distribution to
such Shareholders of any such dividend, distribution or subscription or
purchase rights legally abandon its plan to pay or deliver such
dividend, distribution or subscription or purchase rights, then no
adjustment in the Exercise Price or the number of Common Shares
purchaseable upon exercise of the Warrant shall be required by reason
of the setting of such record date; and
(e) "Current Market Price per Common Share", at any date, means the
weighted average price per Common Share at which the Common Shares have
traded on
- 17 -
the TSX (or, if the Common Shares are not so listed, then on the stock
exchange or NASDAQ on which the Common Shares are listed or quoted on
which the greatest volume of Common Shares were traded during the
period referenced below or, if the Common Shares are not so listed or
quoted on any stock exchange or NASDAQ, then on the over-the-counter
market on which the Common Shares are traded as selected by action of
the directors acting reasonably for such purpose), during the 20 most
recent trading days ending on the fifth trading day before such date on
which there has occurred at least one trade of at least one board lot
of Common Shares prior to such date, such weighted average price to be
determined by dividing the aggregate sale price of all Common Shares
sold in board lots on such exchange or market, as the case may be,
during the said 20 trading days, by the number of Common Shares so
sold.
2.15 PROCEEDINGS PRIOR TO ANY ACTION REQUIRING ADJUSTMENT
As a condition precedent to the taking of any action which would
require an adjustment pursuant to section 2.13, the Corporation shall take any
action that may, in the opinion of counsel, be necessary in order that the
Corporation may validly and legally issue as fully paid and non-assessable all
the Underlying Securities that the Warrantholders are entitled to receive on the
full exercise thereof in accordance with the provisions hereof.
2.16 NOTICE OF ADJUSTMENT OF EXERCISE RIGHTS
(a) At least seven days prior to the effective date or record date, as the
case may be, of any event that requires or that may require an adjustment in any
of the exercise rights pursuant to any of the Warrants, including the number of
Underlying Securities that may be acquired upon the exercise thereof, the
Corporation shall:
(i) file with the Trustee a certificate of the Corporation
specifying the particulars of such event and, if determinable,
the required adjustment and the computation of such
adjustment; and
(ii) give notice to the Warrantholders of the particulars of such
event and, if determinable, the required adjustment.
(b) In case any adjustment for which a notice in section 2.16(a) has been
given is not then determinable, the Corporation shall promptly after such
adjustment is determinable:
(i) file a certificate of the Corporation with the Trustee showing
how such adjustment was computed; and
(ii) give notice to the Warrantholders of the adjustment.
(c) The Trustee may act and rely for all purposes upon any certificates and
any other documents filed by the Corporation pursuant to this section 2.16.
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2.17 NO DUTY TO INQUIRE
Except as provided in section 8.2, the Trustee shall not at any time be
under any duty or responsibility to any Warrantholder to determine whether any
facts exist which may require any adjustment contemplated by sections 2.13 and
2.14, or with respect to the nature or extent of any such adjustment when made,
or with respect to the method employed in making the same, but shall be entitled
to rely absolutely upon any adjustment calculation of the Corporation or the
Corporation's auditors.
ARTICLE 3
EXERCISE OF WARRANTS
3.1 METHOD OF EXERCISE OF WARRANTS
(a) A Warrantholder may during the Exercise Period exercise the right
thereby conferred on such holder to purchase the Underlying Securities to which
such Warrant entitles the holder, by surrendering the certificate representing
such Warrant to the Trustee at any time during the Exercise Period at its
principal stock and bond transfer office in the City of Toronto (or at such
additional place or places as may be decided by the Corporation from time to
time with the approval of the Trustee) with: (i) a duly completed and executed
exercise form substantially in the form set out on Schedule B; and (ii) a
certified cheque, bank draft or money order payable at par to the order of
Hemosol Inc. in the amount of the aggregate exercise price of the Common Shares
issuable on exercise of the holder's Warrants. A certificate representing such
Warrant with the duly completed and executed exercise form shall be deemed to be
surrendered only upon personal delivery thereof to, or if sent by mail or other
means of transmission upon actual receipt thereof by, the Trustee. If the
Warrantholder subscribes for a lesser number of Underlying Securities than the
number of shares referred to in the holder's Warrant certificate, the holder
shall be entitled to receive a new Warrant certificate in respect of the balance
of the Warrants in respect of Underlying Securities referred to in the
surrendered Warrant certificate but not subscribed for.
(b) Any exercise form referred to in section 3.1(a) shall be signed by the
Warrantholder. If any of the Underlying Securities issuable upon the exercise of
Warrants by a holder are to be issued to a person or persons other than the
Warrantholder, the signatures set out in the exercise form referred to in
section 3.1(a) shall be guaranteed by a Schedule A chartered bank, a Canadian
trust company or a member of the Medallion Guarantee Program and the
Warrantholder shall pay to the Corporation or the Trustee all applicable
transfer or similar taxes and the Corporation shall not be required to issue or
deliver certificates evidencing Underlying Securities unless or until such
Warrantholder shall have paid to the Corporation or the Trustee on behalf of the
Corporation the amount of such tax or shall have established to the satisfaction
of the Corporation that such tax has been paid or that no tax is due. The
exercise form shall be completed to specify the person or persons in whose name
or names the Underlying Securities to be issued upon exercise are to be
registered, such person's or persons' address or addresses and the number of
Underlying Securities to be issued to each person if more than one is so
specified.
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3.2 EXPIRATION OF WARRANTS
(a) If at the Time of Expiry the holder of a Warrant certificate has not
exercised his right to purchase Underlying Securities during the Exercise Period
in accordance with the provisions of section 3.1, the Warrants held by such
Warrantholder shall be deemed to have expired. All rights under such expired
Warrant in respect of which the right of exercise and purchase has not been
exercised shall wholly cease and terminate and such Warrant shall be void and of
no effect.
(b) At least 25 days prior to the Time of Expiry, the Corporation shall
give notice to the Warrantholders of the Time of Expiry.
3.3 EFFECT OF EXERCISE OF WARRANTS
(a) Upon compliance by the Warrantholder with the provisions of section
3.1, the Underlying Securities issuable upon the exercise of the Warrants shall
be deemed to have been issued and the person to whom such Underlying Securities
are to be issued shall be deemed to have become the holder of record of such
Underlying Securities on the Exercise Date unless the transfer registers of the
Corporation for the Underlying Securities shall be closed on such date, in which
case the Underlying Securities subscribed for shall be deemed to have been
issued and such person shall be deemed to have become the holder of record of
such Underlying Securities on the date on which such transfer registers are
reopened.
(b) Forthwith following the due exercise by a Warrantholder of Warrants in
accordance with section 3.1, the Trustee shall deliver to the Corporation a
notice setting out the particulars of the Warrants exercised, the person in
whose name the Underlying Securities are to be issued and the address of such
person.
(c) Within three Business Days of receipt of the notice referred to in
section 3.3(b), the Corporation shall cause to be mailed to the person in whose
name the Underlying Securities issuable upon the exercise of the Warrants are to
be issued, as specified in the completed exercise form, at the address specified
therein, or, if not so specified in such exercise form, cause to be held for
pick up by such person at the Trustee's principal stock and bond transfer office
in the City of Toronto (or at such additional place as may be decided by the
Corporation from time to time with the approval of the Trustee), a certificate
or certificates for the Underlying Securities to which the Warrantholder is
entitled.
(d) If at the time of any exercise of the Warrants there exist trading
restrictions on the Underlying Securities pursuant to applicable Securities
Laws, the Corporation may, upon the advice of counsel, endorse any certificates
representing the Underlying Securities to such effect.
3.4 CANCELLATION OF WARRANT CERTIFICATES
All Warrant certificates surrendered to the Trustee pursuant to section
2.6, 2.11 or 3.1 shall be cancelled by the Trustee. The Trustee shall, if
required by the Corporation, furnish the Corporation with a certificate
identifying the Warrant certificates so cancelled and deemed to
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have been cancelled. All Warrants represented by Warrant certificates that
have been cancelled or have been deemed to have been cancelled pursuant to this
section 3.4 shall be without further force or effect whatsoever.
3.5 NO FRACTIONAL SHARES
Notwithstanding anything herein contained, including any adjustment
provided for in Article 2, the Corporation shall not be required, upon the
exercise of any Warrants, to issue fractional Underlying Securities or to
distribute certificates which evidence fractional Underlying Securities. The
Corporation will not pay any amount in cash in lieu of issuing fractional Common
Shares.
3.6 RESTRICTIONS ON EXERCISE TO ENSURE COMPLIANCE WITH THE U.S. SECURITIES
ACT
The Warrants and the Underlying Securities to be issued upon the
exercise of Warrants have not been and will not be registered under the U.S.
Securities Act or the securities laws of any state of the United States and
Warrants may not be exercised by or on behalf of any U.S. Person unless
registered under the U.S. Securities Act and the securities laws of all
applicable states of the United States or an exemption from such registration
requirements is available. Accordingly, neither the Corporation nor the Trustee
shall be obligated to or will accept subscriptions for Underlying Securities
pursuant to the exercise of Warrants from any holder who does not certify that
it is not a U.S. Person and is not exercising such Warrants on behalf of or for
the account of a U.S. Person in the absence of an opinion of United States
counsel to the effect that the issuance of the Underlying Securities upon such
exercise is exempt from registration under the U.S. Securities Act.
3.7 U.S. LEGEND
All certificates representing Underlying Securities delivered upon
exercise of Warrants by any person who is, or who the Corporation or the Trustee
has reasonable grounds to believe is, a U.S. Person or acting on behalf or for
the account of a U.S. Person, will have endorsed thereon the legend set forth in
section 2.2(e) of this Indenture.
ARTICLE 4
COVENANTS
4.1 GENERAL COVENANTS
The Corporation covenants with the Trustee that so long as any Warrants
remain outstanding it will:
(a) at all times maintain its corporate existence and carry on and conduct
its business in accordance with good business practice and will keep or
cause to be kept proper books of account in accordance with generally
accepted accounting practice;
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(b) use its reasonable best efforts to maintain its status as a reporting
issuer (or its equivalent) not in default under, and not be in default
in any material respect of the applicable requirements of, securities
legislation in each of the provinces of Canada, from the date hereof up
to and including the Expiry Date;
(c) if in the opinion of counsel, any instrument is required to be filed
with or any permission, order or ruling is required to be obtained from
any Canadian securities regulatory authority or any other step is
required under any Canadian federal or provincial law before any
securities or property to which a holder is entitled to receive
pursuant to the exercise of a Warrant may properly and legally be
delivered upon the due exercise of a Warrant, use its best efforts to
make such filing, obtain such permission, order or ruling and take all
such action, at its expense, as is required or appropriate in the
circumstances;
(d) file with the Trustee, upon the written request of the Trustee, copies
of all financial statements and other material furnished to the holders
of Common Shares after the date of this Indenture;
(e) reserve and keep available a sufficient number of Underlying Securities
to satisfy the rights of acquisition provided for herein;
(f) cause the Underlying Securities from time to time subscribed and paid
for pursuant to the Warrants in the manner herein provided and the
certificates representing such Underlying Securities to be duly issued
and delivered in accordance with the Warrants and the terms hereof;
(g) ensure that all Common Shares that shall be issued upon exercise of the
right to purchase provided for herein, upon payment of the Exercise
Price, shall be issued as fully paid and non-assessable and the holders
thereof shall not be liable to the Corporation or its creditors in
respect thereof;
(h) use its reasonable efforts to maintain the listing of the Common Shares
on the TSX and to ensure that the Common Shares issuable upon the
exercise of the Warrants will be listed and posted for trading on such
exchange simultaneously with or as soon as practicable following their
issue; and
(i) perform all its covenants and carry out all of the acts or things to be
done by it as provided in this Indenture.
The Corporation and the Trustee acknowledge and agree that (i) none of
the foregoing covenants shall be interpreted or applied so as to prohibit or
restrict or otherwise limit the Corporation's ability, right and authority to
undertake or implement one or more of the actions contemplated by sections 2.13
or 7.2; and (ii) the foregoing covenants shall be interpreted and applied
following each of such actions with reference to any successor to the
Corporation and with reference to any securities into which the Common Shares
and/or the Warrants may be changed or for which they may be exercisable as a
result of such action or actions.
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4.2 NOTICE TO SECURITIES REGULATORY AUTHORITIES
The Corporation will give written notice of the issue of Underlying
Securities pursuant to the exercise of Warrants, in such detail as may be
required, to the TSX and to each Securities Commission requiring the giving of
any such notice.
4.3 TRUSTEE'S REMUNERATION AND EXPENSES
The Corporation covenants that it will pay to the Trustee the fees
agreed to by the Corporation and the Trustee from time to time for its services
hereunder and will pay or reimburse the Trustee upon its request for all
reasonable expenses and disbursements of the Trustee in the administration or
execution of the trusts hereby created (including the reasonable compensation
and the disbursements of its counsel and all other advisers, experts,
accountants and assistants not regularly in its employ) both before any default
hereunder and thereafter until all duties of the Trustee hereunder shall be
finally and fully performed, except any such expense or disbursement in
connection with or related to or required to be made as a result of the gross
negligence, wilful misconduct or bad faith of the Trustee. Any amount due under
this section and unpaid thirty days after request for such payment shall bear
interest from the expiration of such thirty days at a rate per annum equal to
the then current rate charged by the Trustee from time to time, payable on
demand.
4.4 PERFORMANCE OF COVENANTS BY TRUSTEE
If the Corporation shall fail to perform any of its covenants contained
in this Indenture and the Corporation has not rectified such failure within 15
Business Days after receiving written notice from the Trustee of such failure,
the Trustee may notify the Warrantholders of such failure on the part of the
Corporation or may itself perform any of the said covenants capable of being
performed by it, but shall be under no obligation to perform said covenants or
to notify the Warrantholders of such performance by it. All reasonable sums
expended or disbursed by the Trustee in so doing shall be repayable as provided
in section 4.3. No such performance, expenditure or disbursement by the Trustee
shall be deemed to relieve the Corporation of any default hereunder or of its
continuing obligations under the covenants herein contained.
ARTICLE 5
ENFORCEMENT
5.1 SUITS BY WARRANTHOLDERS
All or any of the rights conferred upon a Warrantholder by the terms of
this Indenture may be enforced by such Warrantholder by appropriate legal
proceedings, but subject to the rights that are hereby conferred upon the
Trustee and subject to the provisions of section 6.10.
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5.2 IMMUNITY OF SHAREHOLDERS, ETC.
The Trustee and, by the acceptance of the Warrant certificates and as
part of the consideration for the issue of the Warrants, the Warrantholders
hereby waive and release any right, cause of action or remedy now or hereafter
existing in any jurisdiction against any person in his capacity as an
incorporator or any past, present or future Shareholder or other securityholder,
director, officer, employee or agent of the Corporation for the creation and
issue of the Underlying Securities pursuant to any Warrant or on any covenant,
agreement, representation or warranty by the Corporation herein contained. The
foregoing shall, with respect to the officers and directors of the Corporation,
be subject to rights of action for rescission or damages which Warrantholders
may have pursuant to applicable Securities Laws.
5.3 LIMITATION OF LIABILITY
The obligations hereunder are not personally binding upon, nor shall
resort hereunder be had to, the directors or Shareholders or any of the past,
present or future directors or Shareholders of the Corporation or any of the
past, present or future officers, employees or agents of the Corporation, but
only the property of the Corporation shall be bound in respect hereof.
ARTICLE 6
MEETINGS OF WARRANTHOLDERS
6.1 RIGHT TO CONVENE MEETINGS
The Trustee may at any time and from time to time, and shall on receipt
of a written request of the Corporation or of a Warrantholders' Request, convene
a meeting of the Warrantholders provided that the Trustee is indemnified and
funded to its reasonable satisfaction by the Corporation or by the
Warrantholders signing such Warrantholders' Request against the costs, charges,
expenses and liabilities that may be incurred in connection with the calling and
holding of such meeting. If within five Business Days after the receipt of a
written request of the Corporation or a Warrantholders' Request and funding and
indemnity given as aforesaid the Trustee fails to give the requisite notice
specified in section 6.2 to convene a meeting, the Corporation or such
Warrantholders, as the case may be, may convene such meeting. Every such meeting
shall be held in the City of Toronto or at such other place as may be approved
by the Trustee.
6.2 NOTICE
At least 15 days' prior notice of any meeting of Warrantholders shall
be given to the Warrantholders in the manner provided for in section 9.1 and a
copy of such notice shall be delivered to the Trustee unless the meeting has
been called by it, and to the Corporation unless the meeting has been called by
it. Such notice shall state the time and place of the meeting, the general
nature of the business to be transacted and shall contain such information as is
reasonably necessary to enable the Warrantholders to make a reasoned decision on
the matter,
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but it shall not be necessary for any such notice to set out the terms of any
resolution to be proposed or any of the provisions of this Article 6. The notice
convening any such meeting may be signed by an appropriate officer of the
Trustee or of the Corporation or the person designated by such Warrantholders,
as the case may be.
6.3 CHAIR
The Trustee may nominate in writing an individual to be Chair of the
meeting and if no individual is so nominated, or if the individual so nominated
is not present within 15 minutes after the time fixed for the holding of the
meeting, the Warrantholders present in person or by proxy shall appoint an
individual present to be Chair.
6.4 QUORUM
Subject to the provisions of section 6.11, at any meeting of the
Warrantholders a quorum shall consist of Warrantholders present in person or
represented by proxy and holding or representing at least 10% of the aggregate
number of Warrants then unexercised and outstanding, provided that at least two
persons entitled to vote thereat are personally present. If a quorum of the
Warrantholders shall not be present within one half-hour from the time fixed for
holding any meeting, the meeting, if summoned by the Warrantholders or on a
Warrantholders' Request, shall be dissolved; but in any other case the meeting
shall be adjourned to the same day in the next week at the same time and place
to the extent possible and, subject to the provisions of section 6.11, no notice
of the adjournment need be given. Any business may be brought before or dealt
with at an adjourned meeting which might have been dealt with at the original
meeting in accordance with the notice calling the same. At the adjourned meeting
the Warrantholders present in person or represented by proxy shall form a quorum
and may transact the business for which the meeting was originally convened,
notwithstanding that they may not hold or represent at least 10% of the
aggregate number of Warrants then unexercised and outstanding. No business shall
be transacted at any meeting unless a quorum is present at the commencement of
business.
6.5 POWER TO ADJOURN
The Chair of any meeting at which a quorum of the Warrantholders is
present may, with the consent of the meeting, adjourn any such meeting, and no
notice of such adjournment need be given except such notice, if any, as the
meeting may prescribe.
6.6 SHOW OF HANDS
Every question submitted to a meeting shall be decided in the first
place by a majority of the votes given on a show of hands except that votes on
an extraordinary resolution shall be given in the manner hereinafter provided.
At any such meeting, unless a poll is duly demanded as herein provided, a
declaration by the Chair that a resolution has been carried or carried
unanimously or by a particular majority or lost or not carried by a particular
majority shall be conclusive evidence of the fact.
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6.7 POLL AND VOTING
On every extraordinary resolution, and when demanded by the Chair or by
one or more of the Warrantholders acting in person or by proxy on any other
question submitted to a meeting and after a vote by show of hands, a poll shall
be taken in such manner as the Chair shall direct. Questions other than those
required to be determined by extraordinary resolution shall be decided by 51% of
the votes cast on a poll. On a show of hands, every person who is present and
entitled to vote, whether as a Warrantholder or as proxy for one or more absent
Warrantholders, or both, shall have one vote. On a poll, each Warrantholder
present in person or represented by a proxy duly appointed by instrument in
writing shall be entitled to one vote in respect of each unexercised Warrant
held by him (or held by the Warrantholder appointing him as proxy). A
proxyholder need not be a Warrantholder. The Chair of any meeting shall be
entitled, both on a show of hands and on a poll, to vote in respect of the
Warrants, if any, held or represented by him.
6.8 REGULATIONS
(a) Subject to the provisions of this Indenture, the Trustee or the
Corporation with the approval of the Trustee may from time to time make and from
time to time vary such regulations as it shall consider necessary or
appropriate:
(b) for the deposit of instruments appointing proxies at such place and
time as the Trustee, the Corporation or the Warrantholders convening the
meeting, as the case may be, may in the notice convening the meeting direct;
(c) for the deposit of instruments appointing proxies at some approved
place other than the place at which the meeting is to be held and enabling
particulars of such instruments appointing proxies to be mailed or telecopied
before the meeting to the Corporation or to the Trustee at the place where the
same is to be held and for the voting of proxies so deposited as though the
instruments themselves were produced at the meeting;
(d) for the form of the instrument of proxy; and
(e) generally for the calling of meetings of Warrantholders and the conduct
of business thereat.
Any regulations so made shall be binding and effective and the votes
given in accordance therewith shall be valid and shall be counted. Save as such
regulations may provide, the only persons who shall be recognized at any meeting
as a Warrantholder, or be entitled to vote or be present at the meeting in
respect thereof (subject to section 6.9), shall be Warrantholders or persons
holding proxies of Warrantholders.
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6.9 CORPORATION, TRUSTEE AND COUNSEL MAY BE REPRESENTED
The Corporation and the Trustee, by their respective employees,
directors and officers, and the counsel for each of the Corporation, the
Warrantholders and the Trustee may attend any meeting of the Warrantholders and
speak thereto but shall have no vote as such.
6.10 POWERS EXERCISABLE BY EXTRAORDINARY RESOLUTION
In addition to all other powers conferred upon them by any other
provisions of this Indenture or by law, the Warrantholders at a meeting shall
have the power, exercisable from time to time by extraordinary resolution:
(a) to amend or repeal any extraordinary resolution previously passed or
sanctioned by the Warrantholders;
(b) to direct or authorize the Trustee, subject to receipt of funding and
indemnity, to enforce any of the covenants on the part of the
Corporation contained in this Indenture or to enforce any of the rights
of the Warrantholders in any manner specified in such extraordinary
resolution or to refrain from enforcing any such covenant or right;
(c) to agree to any modification, abrogation, alteration, compromise, or
arrangement of the rights of the Warrantholders whether arising under
this Indenture, or otherwise at law, including the rights of the
Trustee in its capacity as trustee hereunder or on behalf of the
Warrantholders against the Corporation, which has been agreed to by the
Corporation;
(d) to assent to any change in or omission from the provisions contained in
this Indenture or the Warrant certificates or any ancillary or
supplemental instrument which is agreed to by the Corporation, and to
authorize the Trustee to concur in and execute any ancillary or
supplemental indenture embodying the change or omission;
(e) to assent to a compromise or arrangement with a creditor or creditors
or a class or classes of creditors, whether secured or otherwise, and
with holders of any shares or other securities of the Corporation.
(f) to waive and direct the Trustee to waive any default on the part of the
Corporation in complying with any provisions of this Indenture, either
unconditionally or upon any conditions specified in such extraordinary
resolution;
(g) to restrain any Warrantholder from taking or instituting any suit,
action or proceeding against the Corporation for the enforcement of any
of the covenants on the part of the Corporation contained in this
Indenture or to enforce any of the rights of the Warrantholders;
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(h) to direct any Warrantholder who, as such, has brought any suit, action
or proceeding to stay or discontinue or otherwise deal with any such
suit, action or proceeding, upon payment of the costs, charges and
expenses reasonably and properly incurred by such Warrantholder in
connection therewith; and
(i) power from time to time and at any time to remove the Trustee and
appoint a successor trustee.
6.11 MEANING OF EXTRAORDINARY RESOLUTION
(a) The expression "extraordinary resolution" when used in this Indenture
means, subject as hereinafter in this section 6.11 and in section 6.14 provided,
a resolution proposed at a meeting of Warrantholders duly convened for that
purpose and held in accordance with the provisions of this Article 6 at which
there are present in person or represented by proxy Warrantholders holding at
least 25% of the aggregate number of then outstanding unexercised Warrants and
passed by the affirmative votes of Warrantholders holding not less than 66 2/3%
of the aggregate number of outstanding unexercised Warrants represented at the
meeting and voted on a poll upon such resolution.
(b) If, at any meeting called for the purpose of passing an extraordinary
resolution, Warrantholders holding at least 25% of the aggregate number of then
outstanding unexercised Warrants are not present in person or by proxy within
one half-hour after the time appointed for the meeting, then the meeting, if
convened by Warrantholders or on a Warrantholders' Request, shall be dissolved;
but in any other case it shall stand adjourned to such day, being not less than
four or more than 10 Business Days later, and to such place and time as may be
appointed by the Chair. Not less than three Business Days' prior notice shall be
given of the time and place of such adjourned meeting in the manner provided in
section 9.1. Such notice shall state that at the adjourned meeting the
Warrantholders present in person or represented by proxy shall form a quorum but
it shall not be necessary to set forth the purposes for which the meeting was
originally called or any other particulars. At the adjourned meeting the
Warrantholders present in person or represented by proxy shall form a quorum and
may transact the business for which the meeting was originally convened and a
resolution proposed at such adjourned meeting and passed by the requisite vote
as provided in section 6.11(a) shall be an extraordinary resolution within the
meaning of this Indenture notwithstanding that Warrantholders holding at least
25% of the aggregate number of then outstanding unexercised Warrants are not
present in person or represented by proxy at such adjourned meeting.
(c) Votes on an extraordinary resolution shall always be given on a poll
and no demand for a poll on an extraordinary resolution shall be necessary.
6.12 POWERS CUMULATIVE
It is hereby declared and agreed that any one or more of the powers or
any combination of the powers in this Indenture stated to be exercisable by the
Warrantholders by extraordinary resolution or otherwise may be exercised from
time to time and the exercise of any one or more of such powers or any
combination of powers from time to time shall not be deemed
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to exhaust the right of the Warrantholders to exercise such powers or
combination of powers then or thereafter from time to time.
6.13 MINUTES
Minutes of all resolutions and proceedings at every meeting of
Warrantholders shall be made and duly entered in books to be from time to time
provided for that purpose by the Trustee at the reasonable expense of the
Corporation, and any such minutes as aforesaid, if signed by the Chair of the
meeting at which such resolutions were passed or proceedings held, or by the
Chair of the next succeeding meeting of the Warrantholders, shall be prima facie
evidence of the matters therein stated and, until the contrary is proved, every
such meeting in respect of the proceedings of which minutes shall have been made
shall be deemed to have been duly convened and held, and all resolutions passed
thereat or proceedings taken shall be deemed to have been duly passed and taken.
6.14 INSTRUMENTS IN WRITING
All actions that may be taken and all powers that may be exercised by
the Warrantholders at a meeting held as provided in this Article 6 also may be
taken and exercised by Warrantholders holding, in the case of such actions and
powers not requiring an extraordinary resolution, at least 51%, and, in the case
of such actions and powers requiring an extraordinary resolution, at least 66K%,
of the aggregate number of then outstanding unexercised Warrants by an
instrument in writing signed in one or more counterparts by such Warrantholders
in person or by attorney duly appointed in writing, and the expression
"extraordinary resolution" when used in this Indenture shall include an
instrument so signed.
6.15 BINDING EFFECT OF RESOLUTIONS
Every resolution and every extraordinary resolution passed in
accordance with the provisions of this Article 6 at a meeting of Warrantholders
shall be binding upon all the Warrantholders, whether present at or absent from
such meeting, and every instrument in writing signed by Warrantholders in
accordance with section 6.14 shall be binding upon all the Warrantholders,
whether signatories thereto or not, and each and every Warrantholder and the
Trustee (subject to the provisions for indemnity herein contained) shall be
bound to give effect accordingly to every such resolution and instrument in
writing. After becoming aware of an instrument in writing, the Trustee shall
give notice in the manner contemplated in section 9.1 of the effect of the
instrument in writing to all Warrantholders and the Corporation as soon as is
reasonably practicable.
6.16 HOLDINGS BY THE CORPORATION OR
SUBSIDIARIES OF THE CORPORATION DISREGARDED
In determining whether Warrantholders (or their proxies) holding or
representing the required number of Warrants are present at a meeting of
Warrantholders for the purpose of determining a quorum or have concurred in any
consent, waiver, extraordinary resolution, Warrantholders' Request or other
action under this Indenture, Warrants owned legally or
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beneficially by the Corporation or any associate or affiliate (as those terms
are defined in the Securities Act (Ontario)) of the Corporation shall be
disregarded.
ARTICLE 7
SUPPLEMENTAL INDENTURES
7.1 SUPPLEMENTAL INDENTURES
From time to time the Corporation and the Trustee may, subject to the
provisions of this Indenture, and shall, when so directed by this Indenture,
execute and deliver by their proper officers, indentures or instruments
supplemental hereto, which thereafter shall form part hereof, for any one or
more or all of the following purposes:
(a) setting forth adjustments in the application of Article 2;
(b) adding to the provisions hereof such additional covenants and
enforcement provisions as in the opinion of counsel are necessary or
advisable, provided that the same are not in the opinion of the
Trustee, relying on the opinion of counsel, and subject to the prior
approval of the TSX, prejudicial to the interests of the Warrantholders
as a group;
(c) giving effect to any extraordinary resolution passed as provided in
Article 6;
(d) making such provisions not inconsistent with this Indenture as may be
necessary or desirable with respect to matters or questions arising
hereunder, provided that such provisions are not, in the opinion of the
Trustee, relying on the opinion of counsel, and subject to the prior
approval of the TSX, prejudicial to the interests of the Warrantholders
as a group;
(e) adding to or amending the provisions hereof in respect of the transfer
of Warrants, making provision for the exchange of Warrants, and making
any modification in the forms of the certificates for the Warrants that
does not affect the substance thereof;
(f) making any additions to, deletions from or alterations of the
provisions of this Indenture which, in the opinion of the Trustee, and
subject to the prior approval of the TSX, do not materially and
adversely affect the interests of the Warrantholders and are necessary
or advisable in order to incorporate, reflect or comply with any
Applicable Legislation; and
(g) for any other purpose not inconsistent with the terms of this
Indenture, including the correction or rectification of any
ambiguities, defective or inconsistent provisions, errors or omissions
herein, provided that, in the opinion of the Trustee, relying on the
opinion of counsel, and subject to the prior approval of the TSX,
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the rights of the Trustee and of the Warrantholders as a group are not
prejudiced thereby.
7.2 SUCCESSOR CORPORATIONS
In the case of the consolidation, amalgamation, arrangement, merger or
transfer of the undertaking or assets of the Corporation as an entirety or
substantially as an entirety to another person (a "successor"), forthwith
following the occurrence of such event the successor resulting from such
consolidation, amalgamation, arrangement, merger or transfer (if not the
Corporation) shall expressly assume, by supplemental indenture satisfactory in
form to the Trustee and executed and delivered to the Trustee, the due and
punctual performance and observance of each and every covenant and condition of
this Indenture to be performed and observed by the Corporation, and in any
event, shall be bound by the provisions hereof and all obligations for the due
and punctual performance and observance of each and every covenant and
obligation contained in this Indenture to be performed by the Corporation.
ARTICLE 8
CONCERNING THE TRUSTEE
8.1 TRUST INDENTURE LEGISLATION
(a) In this Article, the term "Applicable Legislation" means the
provisions, if any, of the Business Corporations Act (Ontario) and any other
statute of Canada and the regulations under any such named or other statute
relating to trust indentures and/or to the rights, duties and obligations of
trustees and of corporations under trust indentures, to the extent that such
provisions are at the time in force and applicable to this Indenture.
(b) If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with a mandatory requirement of Applicable Legislation,
such mandatory requirement shall prevail.
(c) The Corporation and the Trustee agree that each will at all times in
relation to this Indenture and any action to be taken hereunder observe and
comply with and be entitled to the benefit of Applicable Legislation.
8.2 RIGHTS AND DUTIES OF TRUSTEE
(a) In the exercise of the rights and duties prescribed or conferred by the
terms of this Indenture, the Trustee shall act honestly and in good faith with a
view to the best interests of the Warrantholders and shall exercise the degree
of care, diligence and skill that a reasonably prudent trustee would exercise in
comparable circumstances. No provision of this Indenture shall be construed to
relieve the Trustee from, or require any other person to indemnify the Trustee
against, liability for its own gross negligence, wilful misconduct or bad faith.
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(b) Subject only to section 8.2(a), the Trustee shall not be bound to do or
take any act, action or proceeding for the enforcement of any of the obligations
of the Corporation under this Indenture unless and until it shall have received
a Warrantholders' Request specifying the act, action or proceeding that the
Trustee is requested to take. The obligation of the Trustee to commence or
continue any act, action or proceeding for the purpose of enforcing any rights
of the Trustee or the Warrantholders hereunder shall be conditional upon the
Warrantholders furnishing, when required by notice in writing by the Trustee,
sufficient funds to commence or continue such act, action or proceeding and an
indemnity reasonably satisfactory to the Trustee to protect and hold harmless
the Trustee against the costs, charges, expenses and liabilities to be incurred
thereby and any loss and damage it may suffer by reason thereof. None of the
provisions contained in this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur financial liability in the performance of
any of its duties or in the exercise of any of its rights or powers unless
indemnified as aforesaid.
(c) The Trustee may, before commencing or at any time during the
continuance of any such act, action or proceeding, require the Warrantholders,
at whose instance it is acting, to deposit with the Trustee the Warrants held by
them, for which Warrants the Trustee shall issue receipts.
(d) Every provision of this Indenture that by its terms relieves the
Trustee of liability or entitles it to rely upon any evidence submitted to it is
subject to the provisions of Applicable Legislation, of this section 8.2 and of
section 8.3.
8.3 EVIDENCE, EXPERTS AND ADVISERS
(a) In addition to the reports, certificates, opinions and other evidence
required by this Indenture, the Corporation shall furnish to the Trustee such
additional evidence of compliance with any provision hereof in such form as may
be prescribed by Applicable Legislation, or as the Trustee may reasonably
require by written notice to the Corporation.
(b) In the exercise of its rights and duties hereunder, the Trustee may, if
it is acting in good faith, rely as to the truth of the statements and the
accuracy of the opinions expressed therein, upon statutory declarations,
opinions, reports, written requests, consents or orders of the Corporation,
certificates of the Corporation or other evidence furnished to the Trustee,
provided that such evidence complies with Applicable Legislation and the Trustee
examines the same and determines that such evidence complies with the applicable
requirements of this Indenture.
(c) Whenever Applicable Legislation requires that evidence referred to in
section 8.3(a) be in the form of a statutory declaration, the Trustee may accept
such statutory declaration in lieu of a certificate of the Corporation required
by any provision hereof. Any such statutory declaration may be made by one or
more of the chief executive officer, any vice-president or treasurer of the
Corporation.
(d) Proof of the execution of an instrument in writing, including a
Warrantholders' Request, by any Warrantholder may be made by the certificate of
a notary public, or other officer with similar powers, that the person signing
such instrument acknowledged to him the execution
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thereof, or by an affidavit of a witness to such execution or in any other
manner that the Trustee may consider adequate.
(e) The Trustee may employ or retain such counsel, accountants or other
experts or advisers as it may reasonably require for the purpose of determining
and discharging its duties hereunder, may act on and rely upon the advice or
opinions so obtained and may pay reasonable remuneration for all services so
performed by any of them (any such remuneration paid by the Trustee to be repaid
by the Corporation to the Trustee in accordance with section 4.3), without
taxation of costs of any counsel, and shall not be responsible for any
misconduct on the part of any of them.
8.4 DOCUMENTS HELD BY TRUSTEE
(a) Any securities, documents of title or other instruments that may at any
time be held by the Trustee subject to the trusts hereof may be placed in the
deposit vaults of the Trustee or of any Canadian chartered bank or trust company
or deposited for safekeeping with any such bank or trust company.
(b) Unless herein otherwise expressly provided, any money held pending the
application or withdrawal thereof under any provision of this Indenture may be
deposited in the name of the Trustee in any Schedule 1 Canadian chartered bank
at the rate of interest then current on similar deposits or, with the consent of
the Corporation, may be:
(i) deposited in the deposit department of the Trustee or of any
other loan or trust company authorized to accept deposits
under the laws of Canada or a province thereof; or
(ii) invested in securities issued or guaranteed by the Government
of Canada or a province thereof or in obligations, maturing
not more than one year from the date of investment, of any
Schedule 1 Canadian chartered bank.
(c) Unless the Corporation is in default hereunder, all interest or other
income received by the Trustee in respect of deposits and investments will
belong to the Corporation.
8.5 ACTIONS BY TRUSTEE TO PROTECT INTERESTS
The Trustee shall have the power to institute and to maintain such
actions and proceedings as it may consider necessary or expedient to preserve,
protect or enforce its interests and the interests of the Warrantholders.
8.6 TRUSTEE NOT REQUIRED TO GIVE SECURITY
The Trustee shall not be required to give any bond or security in
respect of the execution of the trusts and powers of this Indenture or
otherwise.
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8.7 PROTECTION OF TRUSTEE
By way of supplement to the provisions of any law for the time being
relating to trustees, it is expressly declared and agreed as follows:
(a) The Trustee shall not be liable for or by reason of any statements of
fact or recitals in this Indenture, in the legends in the Warrant
certificates, or in the Warrant certificates (except the representation
contained in section 8.9) or be required to verify the same, but all
such statements or recitals are and shall be deemed to be made by the
Corporation.
(b) Nothing herein contained shall impose any obligation on the Trustee to
see to or to require evidence of the registration or filing (or renewal
thereof) of this Indenture or any instrument ancillary or supplemental
hereto.
(c) The Trustee shall not be bound to give notice to any person of the
execution hereof.
(d) The Trustee shall not incur any liability or responsibility whatsoever
or be in any way responsible for the consequence of any breach on the
part of the Corporation of any of the covenants herein contained or of
any acts of any directors, officers, employees, agents or servants of
the Corporation.
(e) The Trustee shall have no duties except those which are expressly set
forth herein and the Trustee shall not be bound by any notice of claim
or demand with respect thereto or any waiver, modification, amendment,
termination or rescission of this Indenture unless received by the
Trustee in writing and signed by the other parties hereto.
(f) The Trustee shall retain the right not to act in accordance with any
demand, direction or document given or made under this Indenture where
the demand, direction, or document is not clear and unambiguous or
where the demand, direction or document in the opinion of the Trustee
requires the exercise of discretion or judgement on the part of the
Trustee, provided that if the Trustee decides not to act it will
forthwith provide written notice to the Corporation of its decision not
to act. In the event of the decision of the Trustee not to act, the
Trustee shall have the right to apply to a court of competent
jurisdiction for direction.
(g) The Trustee shall not be accountable with respect to the validity or
value of any Common Shares or other securities or property which may at
any time be issued or delivered upon the exercise of the rights
attaching to any Warrant.
(h) The Trustee shall not be responsible for any failure of the Corporation
to issue or deliver Common Shares or certificates evidencing Common
Shares upon the
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surrender of any Warrant for the purpose of the exercise of such rights
or to comply with any of the covenants in section 2.13.
(i) The Trustee shall not incur any liability or responsibility whatsoever
for the consequence of any breach on the part of the Corporation of any
of the representations, warranties or covenants herein contained or of
any acts of the agents or servants of the Corporation.
(j) The Trustee shall be protected in acting upon any written notice,
request, waiver, consent, certificate, receipt, statutory declaration
or other paper or document furnished to it, not only as to its due
execution and the validity and the effectiveness of its provisions but
also as to the truth and acceptability of any information therein
contained which it in good faith believes to be genuine and what it
purports to be.
8.8 REPLACEMENT OF TRUSTEE
(a) The Trustee may resign its trust and be discharged from all further
duties and liabilities hereunder by giving to the Corporation not less than 45
days' prior notice in writing or such shorter prior notice as the Corporation
may accept as sufficient. The Warrantholders by extraordinary resolution shall
have the power at any time to remove the existing Trustee and to appoint a new
trustee. In the event of the Trustee resigning or being removed as aforesaid or
being dissolved, becoming bankrupt, going into liquidation or otherwise becoming
incapable of acting hereunder, the Corporation shall forthwith appoint a new
trustee unless a new trustee has already been appointed by the Warrantholders;
failing such appointment by the Corporation, within 10 days the retiring Trustee
or any Warrantholder may apply to a justice of the Ontario Superior Court of
Justice at the Corporation's expense, on such notice as such justice may direct,
for the appointment of a new trustee; but any new trustee so appointed by the
Corporation or by the Court shall be subject to removal as aforesaid by the
Warrantholders. Any new trustee appointed under any provision of this section
8.8 shall be a corporation authorized to carry on the business of a trust
company in the Province of Ontario and, if required by Applicable Legislation of
any other province, in such other province. On any such appointment, the new
trustee shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named herein as Trustee without
any further assurance, conveyance, act or deed; but there shall be immediately
executed, at the expense of the Corporation, all such conveyances or other
instruments as may, in the opinion of counsel, be necessary or advisable for the
purpose of assuring the same to the new trustee, provided that any resignation
or removal of the Trustee and appointment of a successor trustee shall not
become effective until the successor trustee shall have executed an appropriate
instrument accepting such appointment and, at the request of the Corporation,
the predecessor Trustee, upon payment of its outstanding remuneration and
expenses, shall execute and deliver to the successor trustee an appropriate
instrument transferring to such successor trustee all rights and powers of the
Trustee hereunder.
(b) Upon the appointment of a successor trustee, the Corporation shall
promptly notify the Warrantholders thereof.
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(c) Any corporation into or with which the Trustee may be merged or
consolidated or amalgamated, or any corporation succeeding to the trust business
of the Trustee, shall be the successor to the Trustee hereunder without any
further act on its part or of any of the parties hereto, provided that such
corporation would be eligible for appointment as a new trustee under section
8.8(a).
(d) Any Warrants certified but not delivered by a predecessor trustee may
be certified by the successor trustee in the name of the predecessor or
successor trustee.
8.9 CONFLICT OF INTEREST
(a) The Trustee represents to the Corporation that at the time of execution
and delivery hereof no material conflict of interest exists in the Trustee's
role as a fiduciary hereunder and agrees that in the event of a material
conflict of interest arising hereafter it will, within 90 days after
ascertaining that it has such a material conflict of interest, either eliminate
the same or resign its trust hereunder to a successor trustee approved by the
Corporation. If any such material conflict of interest exists or hereafter shall
exist, the validity and enforceability of this Indenture and the Warrants shall
not be affected in any manner whatsoever by reason thereof.
(b) Subject to section 8.9(a), the Trustee, in its personal or any other
capacity, may buy, lend upon and deal in securities of the Corporation and
generally may contract and enter into financial transactions with the
Corporation or any subsidiary of the Corporation without being liable to account
for any profit made thereby.
8.10 ACCEPTANCE OF TRUSTS
The Trustee hereby accepts the trusts in this Indenture declared and
provided for and agrees to perform the same upon the terms and conditions herein
set forth, and to hold all rights, interests and benefits contained herein for
and on behalf of those persons who become Warrantholders from time to time.
8.11 TRUSTEE NOT TO BE APPOINTED RECEIVER
The Trustee and any person related to the Trustee shall not be
appointed a receiver or receiver and manager or liquidator of all or any part of
the assets or undertaking of the Corporation.
8.12 INDEMNITY OF TRUSTEE
The Corporation hereby indemnifies and holds harmless the Trustee and
its officers, directors and employees from and against all reasonable costs,
liabilities, expenses and disbursements (including reasonable legal fees and
disbursements) that it might incur or to which it might have become subject in
any action, suit or other similar legal proceeding that might be instituted
against the Trustee arising from or out of any act, omission or error of the
Trustee arising pursuant to this Indenture, provided that the Trustee acted in
accordance with the standards set forth in section 8.2 and that any such act,
omission or error did not constitute
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negligence, wilful misconduct or bad faith on the part of the Trustee. This
section 8.12 shall survive the resignation or removal of the Trustee or the
termination of this Indenture.
ARTICLE 9
GENERAL
9.1 NOTICE
(a) Any notice to the Corporation under the provisions of this Indenture
shall be valid and effective if given by registered letter, postage prepaid, or
by personal delivery addressed to the Corporation at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, Attention: Chief Financial Officer, and shall be
deemed to have been effectively given, if given by registered letter, at the
time at which in the ordinary course of post the said letter should have reached
its destination and, if given by personal delivery, on the day of delivery
provided that such day is a Business Day and delivery occurs prior to 4:00 p.m.
(Toronto time) and, if it is not, on the next following Business Day. The
Corporation may from time to time notify the Trustee in writing of a change of
address which thereafter, until changed by like notice, shall be the address of
the Corporation for all purposes of this Indenture.
(b) All notices to be given hereunder with respect to the Warrants shall be
deemed to be validly given to the holders thereof if sent by mail, postage
prepaid, by letter or circular addressed to such holders at their post office
address appearing in any of the registers hereinbefore mentioned and shall be
deemed to have been given on the second Business Day following the day of
mailing. Accidental error or omission in giving notice or accidental failure to
mail notice to any Warrantholder or the inability of the Corporation to give or
mail any notice due to anything beyond the reasonable control of the Corporation
shall not invalidate any action or proceeding founded thereon.
All notices with respect to any Warrant may be given to whichever one
of the holders thereof (if more than one) is named first in the registers
hereinbefore mentioned, and any notices so given shall be sufficient notice to
all holders of and/or persons interested in such Warrant.
If the Corporation or the Trustee determines that mail service is or is
threatened to be interrupted at the time when it is required or elects to give
any notice hereunder, it shall, notwithstanding the provisions hereof, give such
notice by means of publication once in each of two successive weeks in one
English language daily newspaper of general circulation published in each of the
provinces of Canada and notice so published shall be deemed to have been given
on the date on which the first publication has taken place in the last of the
provinces of Canada.
(c) Any notice to the Trustee under the provisions of this Indenture shall
be valid and effective if given by registered letter, postage prepaid, or by
personal delivery addressed to the Trustee at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, Attention: Manager, Corporate Trust, and shall be
deemed to have been effectively given, if given by registered letter,
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at the time at which in the ordinary course of post the said letter should have
reached its destination and, if given by personal delivery, on the day of
delivery provided that such day is a Business Day and delivery occurs prior to
4:00 p.m. (Toronto time) and, if it is not, on the next following Business Day.
(d) Any party may from time to time by notice in writing delivered in
accordance with the provisions of this Article 9 change its address for purposes
hereof.
9.2 ACCIDENTAL FAILURE TO GIVE NOTICE TO WARRANTHOLDERS
Accidental error or omission in giving notice or accidental failure to
give notice to any Warrantholder shall not invalidate any action or proceeding
founded thereon.
9.3 COUNTERPARTS AND FORMAL DATE
This Indenture may be executed in several counterparts, each of which
when so executed shall be deemed to be an original and such counterparts
together shall constitute one and the same instrument and notwithstanding their
date of execution shall be deemed to be dated as of the date hereof.
9.4 SATISFACTION AND DISCHARGE OF INDENTURE
Upon the date by which all Warrants theretofore certified hereunder
have been cancelled or deemed to be cancelled in accordance with section 3.4,
this Indenture, except to the extent that Common Shares and certificates
therefor have not been issued and delivered hereunder or the Corporation has not
performed any of its obligations hereunder, shall cease to be of further effect
in respect of the Corporation, and the Trustee, on written demand of and at the
cost and expense of the Corporation, and upon delivery to the Trustee of a
certificate of the Corporation stating that all conditions precedent to the
satisfaction and discharge of this Indenture have been complied with and upon
payment to the Trustee of the expenses, fees and other remuneration payable to
the Trustee, shall execute proper instruments acknowledging satisfaction of and
discharging this Indenture; provided that if the Trustee has not then performed
any of its obligations hereunder, any such satisfaction and discharge of the
Corporation's obligations hereunder shall not affect or diminish the rights of
any Warrantholder or the Corporation against the Trustee.
9.5 PROVISIONS OF INDENTURE AND WARRANTS FOR
THE SOLE BENEFIT OF PARTIES AND WARRANTHOLDERS
Except as provided in sections 5.2 and 5.3, nothing in this Indenture,
expressed or implied, shall give or be construed to give to any person other
than the parties hereto and the holders from time to time of the Warrants any
legal or equitable right, remedy or claim under this Indenture, or under any
covenant or provision herein contained, all such covenants and provisions being
for the sole benefit of the parties hereto and the Warrantholders.
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IN WITNESS WHEREOF the parties hereto have executed this Indenture
under the hands of their proper officers in that behalf.
HEMOSOL INC.
by /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------
▇▇▇ ▇▇▇▇▇▇▇▇
Chief Executive Officer and Chief
Financial Officer
COMPUTERSHARE TRUST COMPANY OF CANADA
by /s/ ▇▇▇▇▇▇ ▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇
Title: Professional, Corporate Trust
by /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Professional, Corporate Trust
SCHEDULE A
FORM OF WARRANT CERTIFICATE
Certificate #
UNLESS PERMITTED BY SECURITIES LEGISLATION, THE HOLDER OF THE SECURITIES SHALL
NOT TRADE THE SECURITIES BEFORE MARCH 29, 2004.
THIS SECURITY AND ANY SECURITY FOR WHICH THIS SECURITY IS EXERCISABLE HAS NOT
BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933,
AS AMENDED, (THE "1933 ACT") OR ANY APPLICABLE STATE SECURITIES LAWS. THIS
SECURITY MAY NOT BE TRANSFERRED TO OR EXERCISED BY OR ON BEHALF OF ANY U.S.
PERSON (AS DEFINED IN REGULATION S UNDER THE 1933 ACT) OR WITHIN THE UNITED
STATES UNLESS REGISTERED UNDER THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES
LAWS OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
VOID AFTER 5:00 P.M. (TORONTO TIME) ON NOVEMBER 28, 2006
(or earlier upon the occurrence of certain events)
WARRANTS TO PURCHASE COMMON SHARES
OF
HEMOSOL INC.
(Incorporated under the laws of the Province of Ontario)
[ ] WARRANTS
THIS IS TO CERTIFY that, for value received, the holder hereof
[ ]
(the "holder") is the registered holder of the number of common share
purchase warrants (the "Warrants") stated above and is entitled at any time
after the date hereof and prior to 5:00 p.m. (Toronto time) on the earlier to
occur of (such date referred to herein as, the "Expiry Date") (i) November 28,
2006; and (ii) if the volume-weighted average price of a Common Share on the
Toronto Stock Exchange is greater than or equal to $2.25 for 20 consecutive
trading days, the date that is 30 days after the notification thereof by the
Corporation to the holders of Warrants, to purchase in accordance with the
Warrant Indenture (as defined below) one common share (a "Common Share") of the
Corporation for each such Warrant represented hereby at a price of
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Cdn$0.90 per Common Share (the "Exercise Price") by surrendering to
Computershare Trust Company of Canada (the "Trustee") at its head office in the
City of Toronto this certificate together with an executed exercise form (the
"Exercise Form") in the form of the attached Exercise Form or any other written
notice in a form satisfactory to the Trustee, in either case duly completed and
executed; and a certified cheque, bank draft or money order payable at par to or
to the order of Hemosol Inc. in the amount of the aggregate Exercise Price of
the Common Shares issuable on exercise of the holder's Warrants; PROVIDED THAT
UNLESS THE HOLDER HAS SURRENDERED THE WARRANTS REPRESENTED HEREBY FOR EXERCISE
PURSUANT TO THE PROVISIONS HEREOF AND OF THE WARRANT INDENTURE ON OR PRIOR TO
THE EXPIRY DATE, THE WARRANTS REPRESENTED HEREBY SHALL BE VOID AND OF NO EFFECT.
Upon the exercise of the Warrants evidenced hereby, the Corporation
shall cause to be issued to the person(s) in whose name(s) the Common Shares so
subscribed for are to be issued (provided that if the Common Shares are to be
issued to a person other than a holder of this Warrant certificate, the holder's
signature on the Exercise Form herein shall be guaranteed by a Canadian
chartered bank, by a Canadian trust company or Medallion Signature Guarantee
from a member of a recognized Signature Medallion Guarantee Program) the number
of Common Shares to be issued to such person(s) and such person(s) shall become
a holder in respect of Common Shares with effect from the date of such exercise
and upon due surrender of this Warrant certificate the Corporation will cause a
certificate(s) representing such Common Shares to be made available for pick-up
by such person(s) at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇,
Attention: Service Delivery, or mailed to such person(s) at the address(es)
specified in such Exercise Form, within three Business Days after receipt of
notice from the Trustee of the exercise of such Warrants.
This Warrant Certificate represents Warrants of the Corporation issued
or issuable under the provisions of a warrant indenture (which indenture
together with all other instruments supplemental or ancillary thereto is herein
referred to as the "Warrant Indenture") made as of November 28, 2003, between
the Corporation and the Trustee, to which Warrant Indenture reference is hereby
made for particulars of the rights of the holders and the Corporation and of the
Trustee in respect thereof and the terms and conditions upon which the Warrants
are issued and held, all to the same effect as if the provisions of the Warrant
Indenture were herein set forth, to all of which the holder by acceptance hereof
assents. A copy of the Warrant Indenture will be provided to a holder who makes
a request for such copy to either the Corporation, at its principal office at
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ or to the Trustee at ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, Attention: Corporate
Trust. If any conflict exists between the provisions contained herein and the
provisions of the Warrant Indenture, the provisions of the Warrant Indenture
shall govern.
The Warrant Indenture provides for adjustments to the right of
exercise, including the amount of and class and kind of securities or other
property issuable upon exercise, upon the happening of certain stated events,
including the subdivision or consolidation of the Common Shares, certain
distributions of Common Shares or securities convertible into Common Shares or
of other securities or assets of the Corporation, certain offerings of rights,
warrants or options, and certain capital reorganizations.
- 3 -
No fractional Common Shares are issuable upon the exercise of this
Warrant and the Corporation will not pay any amount in cash in lieu of issuing
fractional Common Shares. Holders of Warrants will not have any rights as
shareholders of the Corporation by virtue of holding such Warrants.
Upon presentation at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇, Attention: Service Delivery, subject to the provisions of the Warrant
Indenture and upon compliance with the reasonable requirements of the Trustee,
this Warrant certificate may be exchanged for Warrant certificates entitling the
holder thereof to purchase an equal aggregate number of Common Shares upon
payment of the aggregate Exercise Price. If the holder subscribes for a lesser
number of Common Shares than the number of shares referred to in this Warrant
certificate, the holder shall be entitled to receive a further Warrant
certificate in respect of Common Shares referred to in this Warrant certificate
but not subscribed for. The Corporation and the Trustee may treat the registered
holder of this Warrant certificate for all purposes as the absolute owner
hereof. The holding of this Warrant certificate shall not constitute the holder
thereof a holder of Common Shares nor entitle him to any right or interest in
respect thereof except as herein and in the Warrant Indenture expressly
provided.
Warrants may only be transferred, upon compliance with the conditions
prescribed in the Warrant Indenture, on the register to be kept at the principal
offices of the Trustee in the City of Toronto, by the registered holder thereof
or his executors or administrators or other legal representatives, or his or
their attorney duly appointed by an instrument in writing in form and execution
satisfactory to the Trustee with signature guaranteed by a Canadian chartered
bank, a Canadian trust corporation or Medallion Signature Guarantee of a member
of a recognized Signature Medallion Guarantee Program and upon compliance with
such reasonable requirements as the Trustee may prescribe (including, without
limitation, the requirement to provide evidence of satisfactory compliance with
applicable securities laws).
The Warrant Indenture contains provisions making binding upon holders
of Warrants outstanding thereunder resolutions passed at meetings of such
holders held in accordance with such provisions and instruments in writing
signed by the holders holding a specified percentage of the then unexercised
Warrants.
This Warrant certificate and the Warrant Indenture shall be governed by
the laws of the Province of Ontario and the federal laws of Canada applicable
therein. Time shall be of the essence hereof and of the Warrant Indenture.
This Warrant certificate shall not be valid for any purpose until it
has been certified by or on behalf of the Trustee for the time being under the
Warrant Indenture.
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IN WITNESS WHEREOF the Corporation has caused this Warrant certificate
to be signed by its duly authorized signatory as of [ ], 200[ ].
HEMOSOL INC.
by ______________________________________
Authorized Signatory
This Warrant Certificate represents Warrants
referred to in the Warrant Indenture within
mentioned.
DATED as of ____________________, 20___.
COMPUTERSHARE TRUST COMPANY
OF CANADA, IN ITS CAPACITY AS TRUSTEE
UNDER THE WARRANT INDENTURE
by ____________________________________
Authorized Signatory
SCHEDULE B
EXERCISE FORM
(To be executed only upon exercise of Warrant)
The undersigned registered holder of this Warrant irrevocably exercises this
Warrant for and purchases_______ Common Shares in the capital of Hemosol Inc.
purchasable with this Warrant, and herewith makes payment therefor (by certified
cheque or bank draft) in the amount of $____________ , all at the price and on
the terms and conditions specified in this Warrant, and requests that
certificates for the Common Shares hereby purchased (and any securities or other
property issuable upon such exercise) be issued in the name of and delivered to
_______________________________________________________, whose address is ______
_______________________________________________________, and, if such Common
Shares shall not include all of the Common Shares issuable as provided in this
Warrant, that a new Warrant of like tenor and date for the balance of the Common
Shares issuable under this Warrant be delivered to the undersigned.
DATED ________________________.
______________________________________
(Signature of Registered Owner)
______________________________________
(Street Address)
______________________________________
(City)(Province)(Postal Code)
Note: If the Underlying Securities are to be issued to a person other than the
registered holder, the signature of such registered holder must be
guaranteed by a Canadian Chartered Bank or a Medallion Signature Guarantee
from a member of a recognized Signature Medallion Guarantee Program.
SCHEDULE C
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto (name) __________________________ (the "Transferee"), of (residential
address) _______________________________________________ the attached Warrant of
Hemosol Inc. (the "Corporation") registered in the name of the undersigned on
the records of the Corporation represented by the within certificate and
irrevocably appoints ___________________________ as the attorney of the
undersigned to transfer the said securities on the books of the Corporation with
full power of substitution.
DATED ________________________.
___________________________ ______________________________________________
Signature Guaranteed Signature of Warrantholder, to be the same
as appears on the face of this Warrant
Certificate)
Note: All transfers of the Warrants must be signature guaranteed by a Canadian
Chartered Bank or Medallion Signature Guarantee from a member of a
recognized Signature Medallion Guarantee Program.