Exhibit 2.1
WARRANT NO. ______
THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY OR ACQUIRABLE UPON EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"). THIS WARRANT AND ANY SECURITIES ACQUIRED BY
THE HOLDER UPON THE EXERCISE HEREOF, MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED EXCEPT (A) TO THE COMPANY; (B) OUTSIDE THE UNITED STATES IN
COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, FOR SO LONG
AS THE COMPANY REMAINS A "FOREIGN ISSUER" AS DEFINED IN SUCH REGULATION S; OR
(C) INSIDE THE UNITED STATES UNDER AN EFFECTIVE REGISTRATION STATEMENT OR IN
COMPLIANCE WITH (1) RULE 144A UNDER THE SECURITIES ACT, (2) RULE 144 UNDER THE
SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAW OR (3) ANY
OTHER EXEMPTION, EVIDENCED BY AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE
COMPANY OR THE TRANSFER AGENT, AS APPLICABLE, AVAILABLE UNDER THE SECURITIES
ACT.
FOR SO LONG AS THE COMPANY REMAINS A "FOREIGN ISSUER" AS DEFINED IN SEC
REGULATION S, A NEW CERTIFICATE BEARING NO LEGEND, DELIVERY OF WHICH WILL
CONSTITUTE "GOOD DELIVERY," MAY BE OBTAINED FROM THE COMPANY OR ITS TRANSFER
AGENT FOR THESE SECURITIES UPON DELIVERY OF THIS CERTIFICATE AND A DULY EXECUTED
DECLARATION, IN A FORM SATISFACTORY TO THE TRANSFER AGENT AND THE COMPANY, TO
THE EFFECT THAT THE SALE OF THE SECURITIES REPRESENTED HEREBY IS BEING MADE IN
COMPLIANCE WITH RULE 904 OF SEC REGULATION S UNDER THE SECURITIES ACT.
COMMON SHARE PURCHASE WARRANT
To Purchase [NUMBER] Common Shares of
YM BIOSCIENCES INC.
THIS IS TO CERTIFY THAT [NAME], or registered assigns (the
"Holder"), is entitled, at any time prior to the Expiration Date (as hereinafter
defined), to purchase from YM BioSciences Inc. a company continued and existing
under the laws of Nova Scotia (the "Company"), the Warrant Shares (as
hereinafter defined and subject to adjustment as provided herein), in whole or
in part, at a purchase price of Cdn.$2.50 per share (subject to adjustment as
provided herein), all on and subject to the terms and conditions hereinafter set
forth.
1. DEFINITIONS. As used in this Warrant, the following terms
have the respective meanings set forth below:
"Affiliate" means any person or entity that, directly or
indirectly through one or more intermediaries, controls or is controlled by or
is under common control with a person or entity, as such terms are used in and
construed under Rule 144 under the Securities Act. With respect to a Holder of
Warrants, any investment fund or managed account that is managed on a
discretionary basis by the same investment manager as such holder will be deemed
to be an Affiliate of such Holder.
"Appraised Value" means, in respect of any Common Share on any
date herein specified, the fair saleable value of such Common Share (determined
without giving effect to the discount for (i) a minority interest or (ii) any
lack of liquidity of the Common Share or to the fact that the Company may have
no class of equity registered under the Exchange Act) as of the last day of the
most recent month ending prior to such date specified, based on the value of the
Company, as determined by a nationally recognized U.S. investment banking firm
selected by the Company's Board of Directors and having no prior relationship
with the Company.
"Automatic Issue Date" has the meaning set forth in Section
3.2(b).
"Business Day" means any day that is not a Saturday or Sunday
or a day on which banks are required or permitted to be closed in the State of
New York or the City of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇.
"Cashless Exercise Shares" has the meaning set forth in
Section 2.1(b).
"Change of Control" means the (i) acquisition by an individual
or legal entity or group (as defined in Section 13(d) of the Exchange Act) of
more than one-half of the voting rights or equity interests in the Company; (ii)
sale, conveyance, or other disposition of all or substantially all of the
assets, property or business of the Company, or (iii) the merger into or
consolidation with any other corporation (other than a wholly owned subsidiary
corporation) or effectuation of any transaction or series of related
transactions where holders of the Company's voting securities prior to such
transaction or series of transactions fail to continue to hold at least 50% of
the voting power of the Company.
"Closing Date" means December 15, 2003.
"Common Shares" means (except where the context otherwise
indicates) the voting common shares in the capital of the Company as constituted
on the Closing Date, and any shares into which such Common Shares may thereafter
be changed or converted, and shall also include (i) shares of the Company of any
other class (regardless of how denominated) issued to the holders of Common
Shares upon any reclassification thereof which is also not preferred as to
dividends or assets on liquidation over any other class of shares of the Company
and which is not subject to redemption and (ii) common shares of any successor
or acquiring corporation received by or distributed to the holders of Common
Shares of the Company in the circumstances contemplated by Section 4.3.
"Current Market Price" means, in respect of any Common Share
on any date herein specified,
(i) if there shall not then be a public market for the
Common Shares, the higher of (a) the book value per
Common Share on such date and (b) the Appraised Value
per Common Share at such date, or
(ii) if there shall then be a public market for the Common
Shares, the higher of (a) the book value per Common
Share on such date, and (b) the average of the daily
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market prices for 20 consecutive Trading Days
immediately preceding such date. The daily market
price for each such Trading Day shall be (A) the last
sale price on such day on the Toronto Stock Exchange
or such other stock exchange as shall then be the
principal stock exchange (including Nasdaq) on which
such Common Shares are then listed or admitted to
trading, (B) if no sale takes place on such day on
any such exchange, the average of the last reported
closing bid and asked prices on such day as
officially quoted on any such exchange (including
Nasdaq), or (C) if the Common Shares are not then
listed or admitted to trading on any stock exchange,
the average of the last reported closing bid and
asked prices on such day in the over-the-counter
market.
"Current Warrant Price" means, in respect of a Common Share at
any date herein specified, the price at which a Common Share may be purchased
pursuant to this Warrant on such date. Until the Current Warrant Price is
adjusted pursuant to the terms herein, the initial Current Warrant Price shall
be Cdn.$2.50 per share.
"Exchange Act" means the United States Securities Exchange Act
of 1934, as amended, or any successor statute, and the rules and regulations of
the SEC thereunder, all as the same shall be in effect from time to time.
"Exchange Rate" on any given date in respect of an amount to
be converted from Canadian Dollars into U.S. Dollars means the amount of U.S.
Dollars that can be purchased with one Canadian Dollar based on the noon buying
rate published by, or displayed on the website of, the Federal Reserve Bank of
New York in respect of such currencies on the Business Day immediately preceding
such date, and in respect of an amount to be converted from U.S. Dollars into
Canadian Dollars means the inverse of such rate.
"Exercise Period" means the period during which this Warrant
is exercisable pursuant to Section 2.1.
"Expiration Date" means December 15, 2008.
"Issue Date" means the date on which this Warrant was issued
upon exercise of special warrants issued by the Company on the Closing Date.
"Other Property" has the meaning set forth in Section 4.3.
"SEC" means the Securities and Exchange Commission or any
other United States federal agency then administering the Securities Act and
other United States federal securities laws.
"Securities Act" means the United States Securities Act of
1933, as amended, or any successor statute, and the rules and regulations of the
SEC thereunder, all as the same shall be in effect at the time.
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"Trading Day" means any day on which the primary market on
which Common Shares are listed is open for trading.
"Warrants" means this Warrant and all warrants issued upon
transfer, division or combination of, or in substitution for, any thereof. All
Warrants shall at all times be identical as to terms and conditions and date,
except as to the number of Common Shares for which they may be exercised.
"Warrant Price" means an amount equal to (i) the number of
Common Shares being purchased upon exercise of this Warrant pursuant to Section
2.1, multiplied by (ii) the Current Warrant Price.
"Warrant Shares" means any one or more of the [NUMBER] Common
Shares to be purchased upon the exercise hereof (including cashless exercise as
contemplated in Section 2.1(b)), subject to adjustment as provided herein.
2. EXERCISE OR CASHLESS EXERCISE OF WARRANT.
2.1. Manner of Exercise or Cashless Exercise of Warrant. (a)
From and after the Issue Date, and until 5:00 P.M., Toronto time, on the
Expiration Date (the "Exercise Period"), the Holder may exercise this Warrant,
on any Business Day, for all or any part of the number of Warrant Shares
purchasable hereunder. Payment of the Warrant Price upon exercise of this
Warrant as aforesaid may be made (in Canadian or U.S. dollars) at the option of
the Holder by: (i) certified or official bank check payable to the order of the
Company or (ii) wire transfer or electronic funds transfer to the account of the
Company. If this Warrant shall have been exercised in part, the Company shall,
at the time of delivery of the certificate or certificates representing Warrant
Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder
to purchase the unpurchased Common Shares called for by this Warrant, which new
Warrant shall in all other respects be identical with this Warrant, or at the
request of the Holder, appropriate notation may be made on this Warrant and the
same returned to the Holder.
(b) (i) The Holder shall have the right to exercise these
Warrants on a cashless basis, in whole or in part, at any time and from time to
time during the Exercise Period to acquire Common Shares ("Cashless Exercise
Shares"). Upon exercise of this cashless exercise right, the Holder shall be
entitled to receive that number of Cashless Exercise Shares equal to the
quotient obtained by dividing [(A - B) (X)] by A, where:
A = the Current Market Price of one Common Share on the date of
exercise of these Warrants (such date being the date set forth
on the notice of exercise provided pursuant to Section
2.1(c));
B = the Current Warrant Price; and
X = the number of Common Shares as to which these Warrants are
being exercised by way of cashless exercise.
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If the above calculation results in a negative number, no Cashless Exercise
Shares shall be issued or issuable upon cashless exercise of these Warrants.
(ii) Upon cashless exercise of these
Warrants in accordance with this paragraph 2.1(b), the Holder shall be entitled
to receive a certificate representing the number of Cashless Exercise Shares
determined in accordance with subparagraph (b)(i), and a new Warrant certificate
in substantially identical form to this Certificate and dated as of such
cashless exercise evidencing the right to purchase that number of Common Shares
equal to the difference, if any, between the number of Common Shares subject
hereto prior to such cashless exercise, and the number of Common Shares as to
which these Warrants were so exercised by way of cashless exercise (such number
being "X", as defined in subparagraph (b)(i), above).
(c) In order to exercise this Warrant, in whole or in
part, the Holder shall deliver to the Company at its principal office or at the
office or agency designated by the Company pursuant to Section 10, (i) a written
notice of Holder's election to exercise (for cash or by way of cashless
exercise) this Warrant, which notice shall specify the number of Warrant Shares
to be purchased or with respect to which this Warrant is being exercised, as
applicable, (ii) payment of the Warrant Price in respect of exercise, as
provided herein, and (iii) this Warrant. Such notice shall be substantially in
the form of the subscription form appearing at the end of this Warrant as
Exhibit A, duly executed by the Holder or its agent or attorney. In addition, if
the Holder is not the original Holder of the Warrant, the Holder shall provide
the Company with an opinion of counsel or other evidence satisfying to the
Company that the issuance of the Warrant Shares or Cashless Exercise Shares (as
applicable) upon exercise of the Warrant or exempt from the registration
requirements of the Securities Act and applicable state securities laws. Upon
receipt thereof, the Company shall, as promptly as reasonably practicable, and
in any event within five Business Days thereafter, execute or cause to be
executed and deliver or cause to be delivered to the Holder a certificate or
certificates representing the aggregate number of Warrant Shares or Cashless
Exercise Shares issuable upon such exercise, together with cash in lieu of any
fraction of a share, as hereinafter provided. The share certificate or
certificates so delivered shall be, to the extent possible, in such denomination
or denominations as the Holder shall request in the notice and shall be
registered in the name of the Holder or such other name as shall be designated
in the notice (subject to paragraph (f), below). This Warrant shall be deemed to
have been exercised, and such certificate or certificates shall be deemed to
have been issued, and the Holder or any other person or entity so designated to
be named therein shall be deemed to have become a Holder of record of such
shares for all purposes, as of the date when the notice, together with the
payment of the Warrant Price upon exercise and this Warrant, is received by the
Company as described above.
(d) All Common Shares issuable upon the exercise of this
Warrant pursuant to the terms hereof shall be validly issued and, upon payment
of the Warrant Price (in the case of exercise pursuant to section 2.1(a)) and
upon cashless exercise (in the case of cashless exercise pursuant to section
2.1(b)), shall be fully paid and non-assessable and not subject to any
preemptive rights. The Company shall pay all expenses in connection with, and
all transfer, stamp or similar taxes and other governmental charges that may be
imposed with respect to, the issue or delivery thereof, provided, however, that
the Company shall not be required to pay any tax which may be payable in respect
of any transfer involved in the issuance of any certificates
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for Warrant Shares or Cashless Exercise Shares or Warrants in a name other than
the name of the Holder.
(e) Prior to the exercise of this Warrant, the Holder
shall not be entitled to any rights as a shareholder of the Company with respect
to the Warrant Shares, including, without limitation, the right to vote such
Warrant Shares, receive dividends or other distributions thereon or to be
notified of shareholder meetings, except as set forth herein.
(f) If a notice of exercise requests that Warrant Shares
be issued in the name of any person other than the Holder, the Holder shall
provide, at the request of the Company, such information as the Company may
reasonably require to establish that a trade of the Warrant Shares to such other
Person is permitted under applicable securities laws, either (i) in the case of
a person in the United States, under an effective registration statement with
respect to the Warrant Shares or an exemption from the registration requirements
with respect thereto, or (ii) in the case of a person in a Canadian province,
under or as a result of a prospectus having been filed and a receipt obtained
with respect to the distribution of the Warrants or the Warrant Shares, under an
exemption from the applicable prospectus and registration rights of such
province, or otherwise.
2.2. Fractional Shares. The Company shall not be required to
issue a fractional Common Share upon exercise of any Warrant. As to any fraction
of a share which the Holder of one or more Warrants, the rights under which are
exercised in the same transaction, would otherwise be entitled to purchase upon
such exercise, the Company shall pay an amount in cash equal to the Current
Market Price per Common Share on the date of exercise, multiplied by such
fraction.
2.3. Currency Conversion. For the purposes of these Warrants,
if the Warrant Price, the Current Market Price or any other amount hereunder is
required to be converted from U.S. Dollars to Canadian Dollars or from Canadian
Dollars to U.S. Dollars, such amount shall be converted based on the applicable
Exchange Rate.
2.4. Restrictions on Exercise Amount. Unless a Holder delivers
to the Company irrevocable written notice prior to the date of issuance hereof
or sixty-one days prior to the effective date of such notice that this Section
2.4 shall not apply to such Holder, the Holder may not acquire a number of
Warrant Shares to the extent that, upon such exercise, the number of Common
Shares then beneficially owned by such holder and its Affiliates and any other
persons or entities whose beneficial ownership of Common Shares would be
aggregated with the Holder's for purposes of Section 13(d) of the Exchange Act
(including shares held by any "group" of which the holder is a member) exceeds
4.95% of the total number of Common Shares of the Company then issued and
outstanding (such limitation being herein referred to as the "Beneficial
Ownership Cap"). For purposes hereof, "group" has the meaning set forth in
Section 13(d) of the Exchange Act and applicable regulations of the Securities
and Exchange Commission, and the percentage held by the Holder shall be
determined in a manner consistent with the provisions of Section 13(d) of the
Exchange Act. The Company shall have no obligation to verify compliance with
this Section 2.4, other than to issue Warrant Shares in accordance with the
exercise notice of each Holder. It shall be the responsibility of each Holder to
determine such Holder's compliance with the Beneficial Ownership Cap, and the
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Holder's exercise notice shall be deemed a representation of the Holder that the
number of Common Shares to be acquired pursuant to such exercise notice shall be
in compliance with the Beneficial Ownership Cap.
3. TRANSFER, DIVISION AND COMBINATION.
3.1. Transfer. The Warrants and the Warrant Shares shall be
freely transferable, subject to compliance with all applicable laws, including,
but not limited to the Securities Act and applicable Canadian provincial
securities laws. Transfer of this Warrant and all rights hereunder, in whole or
in part, shall be registered on the books of the Company to be maintained for
such purpose, upon surrender of this Warrant at the principal office of the
Company referred to in Section 12.2 or the office or agency designated by the
Company pursuant to Section 10, together with a written assignment of this
Warrant substantially in the form of Exhibit B hereto duly executed by the
Holder or its agent or attorney and funds sufficient to pay any transfer taxes
payable upon the making of such transfer. Upon such surrender and, if required,
such payment, the Company shall execute and deliver a new Warrant or Warrants in
the name of the assignee or assignees and in the denomination specified in such
instrument of assignment, and shall issue to the assignor a new Warrant
evidencing the portion of this Warrant not so assigned, and this Warrant shall
promptly be cancelled. The acceptance of the new Warrant or Warrants by the
transferee thereof shall be deemed the acceptance by such transferee of all of
the rights and obligations of a holder of this Warrant. Notwithstanding anything
herein to the contrary, this Warrant may not be transferred or assigned in whole
or in part without compliance with applicable federal and state securities laws
and applicable Canadian provincial securities laws. Following a transfer that
complies with the requirements of this Section 3.1, the Warrant may be exercised
by a new Holder for the purchase of Common Shares regardless of whether the
Company issued or registered a new Warrant on the books of the Company.
3.2. Restrictive Legends. (a) Unless the resale of the Warrant
Shares has been registered under the Securities Act, each certificate for
Warrant Shares initially issued upon the exercise of this Warrant, and each
certificate for Warrant Shares issued to any subsequent transferee of any such
certificate, shall be stamped or otherwise imprinted with a legend in
substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). THESE SECURITIES MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED EXCEPT (A) TO THE
COMPANY; (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE
904 OF REGULATION S UNDER THE SECURITIES ACT, FOR SO LONG AS
THE COMPANY REMAINS A "FOREIGN ISSUER" AS DEFINED IN SUCH
REGULATION S; OR (C) INSIDE THE UNITED STATES UNDER AN
EFFECTIVE REGISTRATION STATEMENT OR IN COMPLIANCE WITH (1)
RULE 144A UNDER THE SECURITIES ACT (2) RULE 144 UNDER THE
SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE STATE
SECURITIES LAW OR (3) ANY OTHER EXEMPTION, EVIDENCED BY AN
OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY OR THE
TRANSFER AGENT, AS APPLICABLE, AVAILABLE UNDER THE SECURITIES
ACT. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE "GOOD
DELIVERY" IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN
CANADA OR ELSEWHERE.
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FOR SO LONG AS THE COMPANY REMAINS A "FOREIGN ISSUER" AS
DEFINED IN SEC REGULATION S, A NEW CERTIFICATE BEARING NO
LEGEND, DELIVERY OF WHICH WILL CONSTITUTE "GOOD DELIVERY," MAY
BE OBTAINED FROM THE COMPANY'S TRANSFER AGENT UPON DELIVERY OF
THIS CERTIFICATE AND A DULY EXECUTED DECLARATION, IN A FORM
SATISFACTORY TO THE TRANSFER AGENT AND THE COMPANY, TO THE
EFFECT THAT THE SALE OF THE SHARES REPRESENTED HEREBY IS BEING
MADE IN COMPLIANCE WITH RULE 904 OF SEC REGULATION S UNDER THE
SECURITIES ACT.
(b) If any Warrant Shares are to be issued prior to the
earlier of the following dates (such date being the "AUTOMATIC ISSUE DATE"): (i)
the fifth Business Day after a receipt is issued by the Ontario Securities
Commission for a final prospectus qualifying the distribution of the Warrants or
the Warrant Shares; and (ii) the date which is four months plus one day after
the Closing Date, each certificate for Warrant Shares so issued upon the
exercise of this Warrant, and until the Automatic Issue Date each certificate
for Warrant Shares issued to any subsequent transferee of any such certificate,
shall be stamped or otherwise imprinted with a legend in substantially the
following form:
"UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF
THESE SECURITIES SHALL NOT TRADE THE SECURITIES BEFORE [THE
DATE THAT IS FOUR MONTHS PLUS ONE DAY AFTER THE CLOSING DATE]"
3.3. Division and Combination; Expenses; Books. This Warrant
may be divided or combined with other Warrants upon presentation hereof at the
aforesaid office or agency of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by the Holder or its agent or attorney. Subject to compliance with
Section 3.1 as to any transfer which may be involved in such division or
combination, the Company shall execute and deliver a new Warrant or Warrants in
exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice. The Company shall prepare, issue and deliver at its own
expense the new Warrant or Warrants under this Section 3. The Company agrees to
maintain, at its aforesaid office or agency, books for the registration and the
registration of transfer of the Warrants.
4. ADJUSTMENTS; LISTING. The number of Common Shares for which
this Warrant is exercisable, and the price at which such shares may be purchased
upon exercise of this Warrant, shall be subject to adjustment from time to time
as set forth in this Section 4. The Company shall give the Holder notice of any
event described below which requires an adjustment pursuant to this Section 4 in
accordance with Sections 5.1 and 5.2.
4.1 Stock Dividends, Subdivisions and Combinations. (a) If at
any time during the period from the Closing Date to the Expiration Date the
Company shall:
i. take a record of the holders of its Common Shares
for the purpose of entitling them to receive a dividend
payable in, or other distribution of, additional Common
Shares,
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ii. subdivide or split its outstanding Common Shares
into a larger number of Common Shares, or
iii. combine or consolidate its outstanding Common
Shares into a smaller number of Common Shares,
then:
(1) the number of Common Shares acquirable upon
exercise of this Warrant immediately after
the occurrence of any such event shall be
adjusted to equal the number of Common
Shares which a record holder of the same
number of Common Shares that would have been
acquirable under this Warrant immediately
prior to the occurrence of such event would
own or be entitled to receive after the
happening of such event, and
(2) the Current Warrant Price shall be adjusted
to equal:
(A) the Current Warrant Price in effect
immediately prior to the occurrence
of such event multiplied by the
number of Common Shares into which
this Warrant is exercisable
immediately prior to the adjustment,
divided by
(B) the number of Common Shares into
which this Warrant is exercisable
immediately after such adjustment.
(b) Any adjustment made pursuant to Section 4.1(a)(i) shall become
effective immediately after the record date for the determination of
shareholders entitled to receive such dividend or distribution, and any
adjustment pursuant to Sections 4.1(a)(ii) or (iii) shall become effective
immediately after the effective date of such subdivision or combination.
4.2 Fractional Interests. In computing adjustments under this
Section 4, all calculations shall be made to the nearest 1/100th of a share.
4.3 Reorganization, Reclassification, Merger, Consolidation or
Disposition of Assets.
a. If, during the period from the Closing Date to the
Expiration Date, there shall occur a Change of Control and, pursuant to the
terms of such Change of Control, common shares of the successor or acquiring
corporation, or any cash, shares or other securities or property of any nature
whatsoever (including warrants or other subscription or purchase rights) in
addition to or in lieu of common shares of the successor or acquiring
corporation ("Other Property"), are to be received by or distributed to the
holders of Common Shares of the Company, then the Holder of this Warrant shall
have the right thereafter to receive, upon the exercise of the Warrant, the
number of common shares of the successor or acquiring corporation or of the
Company, if it is the surviving corporation, and the Other Property receivable
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upon or as a result of such Change of Control by a holder of the number of
Common Shares into which this Warrant is exercisable immediately prior to such
event.
b. In case of any such Change of Control, the
successor or acquiring corporation (if other than the Company) shall expressly
assume the due and punctual observance and performance of each and every
covenant and condition contained in this Warrant to be performed and observed by
the Company and all the obligations and liabilities hereunder, subject to such
modifications as may be deemed appropriate (as determined by resolution of the
Board of Directors of the Company) in order to provide for adjustments of Common
Shares into which this Warrant is exercisable which shall be as nearly
equivalent as practicable to the adjustments provided for in Section 4.
4.4 Listing and Adjustment to Current Warrant Price.
(a) The Seller shall use its best efforts to obtain a listing
for its Common Shares (including the Warrant Shares) on the New York Stock
Exchange, the American Stock Exchange, the NASDAQ National Market or the NASDAQ
SmallCap Market within 12 months of the Closing Date. The Seller shall use its
best efforts to list the Warrant Shares on each securities exchange or quotation
system upon which the Common Shares may be listed from time to time during the
time period that the Common Shares are listed on such securities exchange or
quotation system. The Seller represents and warrants to the Holder that the
Warrant Shares have been approved for listing on the Toronto Stock Exchange as
of the Closing Date.
(b) If the Seller does not obtain a listing for its Common
Shares (including the Warrant Shares) on the New York Stock Exchange, the
American Stock Exchange, the NASDAQ National Market or the NASDAQ SmallCap
Market within 12 months of the Closing Date, the Current Warrant Price shall be
immediately reduced by an amount equal to 14.0% (fourteen percent) of the
then-current Current Warrant Price (being a reduction to the Current Warrant
Price as at the Closing Date from Cdn.$2.50 to Cdn.$2.15).
4.5 Other Action Affecting Common Shares. In case at any time
or from time to time during the period from the Closing Date to the Expiration
Date the Company shall take any action in respect of its Common Shares, then,
unless such action will not have a materially adverse effect upon the rights of
the holder of this Warrant, the number of Common Shares or other shares or Other
Property into which this Warrant is exercisable and/or the purchase price
thereof shall be adjusted in such manner as may be equitable in the
circumstances.
4.6 Share Transfer Taxes. The issue of share certificates upon
exercise of this Warrant shall be made without charge to the holder for any tax
in respect of such issue.
4.7 Adjustment for Events After Closing Date but Prior to
Issue Date. For greater certainty, if at any time during the period from the
Closing Date to the Issue Date, any event or action occurred that, if these
Warrants had been issued at that time, would have required an adjustment to be
made pursuant to this Article 4, such adjustment shall be made immediately upon
issuance of these Warrants as if these Warrants had been issued on the Closing
Date and shall be effective as of the date on which such adjustment would have
been effective if these Warrants had been issued on the Closing Date.
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5. NOTICES TO WARRANT HOLDERS.
5.1. Certificate as to Adjustments. Upon the occurrence of
each adjustment or readjustment of the Current Warrant Price, or the number of
Common Shares and the amount, if any of Other Property which at the time would
be received upon exercise of the Warrants owned by such Holder, the Company, at
its expense, shall promptly compute such adjustment or readjustment in
accordance with the terms hereof and prepare and furnish to the Holder of this
Warrant a certificate setting forth such adjustment or readjustment and showing
in detail the facts upon which such adjustment or readjustment is based. The
Company shall, upon the written request at any time of the Holder of this
Warrant, furnish or cause to be furnished to such Holder a like certificate
setting forth (i) such adjustments and readjustments, (ii) the Current Warrant
Price at the time in effect and (iii) the number of Common Shares and the
amount, if any, of Other Property which at the time would be received upon the
exercise of Warrants owned by such Holder.
5.2. Notice of Corporate Action. If at any time:
(a) the Company shall take a record of the holders of
its Common Shares for the purpose of entitling them to receive a
dividend or other distribution, or any right to subscribe for or
purchase any evidences of its indebtedness, any shares of any class or
any other securities or property, or to receive any other right, or
(b) there shall be any capital reorganization of the
Company, any reclassification or recapitalization of the capital of the
Company or any consolidation or merger of the Company with, or any
sale, transfer or other disposition of all or substantially all the
property, assets or business of the Company to, another corporation, or
(c) there shall be a voluntary or involuntary
dissolution, liquidation or winding up of the Company;
then, in any one or more of such cases, the Company shall give to the
Holder (i) at least 15 days' prior written notice of the record date
selected for such dividend, distribution or right or for determining
rights to vote in respect of any such reorganization, reclassification,
merger, consolidation, sale, transfer, disposition, dissolution,
liquidation or winding up, and (ii) in the case of any such
reorganization, reclassification, merger, consolidation, sale,
transfer, disposition, dissolution, liquidation or winding up, at least
15 days' prior written notice of the date when the same shall take
place. Such notice in accordance with the foregoing clause also shall
specify (i) the date on which any such record is to be taken for the
purpose of such dividend, distribution or right, the date on which the
holders of Common Shares shall be entitled to any such dividend,
distribution or right, and the amount and character thereof, and (ii)
the date on which any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or
winding up is to take place and the time, if any such time is to be
fixed, as of which the holders of Common Shares shall be entitled to
11
exchange their Common Shares for securities or other property
deliverable upon such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or
winding up. Each such written notice shall be sufficiently given if
addressed to the Holder at the last address of the Holder appearing on
the books of the Company and delivered in accordance with Section 12.2.
The failure to give any notice required by this Section 5.2 shall not
invalidate any such corporate action.
5.3. Notice to Shareholders. The Holder shall be entitled to
the same rights to receive notice of Company action as any holder of Common
Shares.
6. NO IMPAIRMENT. The Company shall not by any action,
including, without limitation, amending its articles of continuance or through
any reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of this Warrant, but
will at all times in good faith assist in the carrying out of all such terms and
in the taking of all such actions as may be necessary or appropriate to protect
the rights of the Holder against impairment. Without limiting the generality of
the foregoing, the Company will (a) take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and non-assessable Common Shares upon the exercise of this Warrant, and (b) use
its best efforts to obtain all such authorizations, exemptions or consents from
any public regulatory body having jurisdiction thereof as may be necessary to
enable the Company to perform its obligations under this Warrant. Upon the
request of the Holder, the Company will at any time during the period this
Warrant is outstanding acknowledge in writing, in form reasonably satisfactory
to the Holder, the continuing validity of this Warrant and the obligations of
the Company hereunder.
7. RESERVATION AND AUTHORIZATION OF COMMON SHARES;
REGISTRATION WITH APPROVAL OF ANY GOVERNMENTAL AUTHORITY. From and after the
Closing Date, the Company shall at all times reserve and keep available for
issue upon the exercise of Warrants such number of its authorized but unissued
Common Shares as will be sufficient to permit the exercise in full of all
outstanding Warrants. All Common Shares which shall be so issuable, when issued
upon exercise of any Warrant and payment therefor (including, for greater
certainty, cashless exercise thereof) in accordance with the terms of such
Warrant, shall be duly and validly issued and fully paid and non-assessable, and
not subject to preemptive rights. Before taking any action which would result in
an adjustment in the number of Common Shares for which this Warrant is
exercisable or in the Current Warrant Price, the Company shall obtain all such
authorizations or exemptions thereof, or consents thereto, as may be necessary
from any public regulatory body or bodies or stock exchanges having jurisdiction
thereof. If any Common Shares required to be reserved for issuance upon exercise
of Warrants, or any distribution thereof, require registration or qualification
with any governmental authority under any federal, provincial or state law
(including Canadian provincial securities laws) before such shares may be so
issued (other than as a result of a prior or contemplated distribution by the
Holder of this Warrant or the inability of the Holder to make the
representations contained in the subscription form attached hereto as Exhibit
A), the Company will in good faith and as expeditiously as possible and at its
expense endeavor to cause such shares or such distribution of such shares to be
duly registered or qualified.
12
8. TAKING OF RECORD; SHARE AND WARRANT TRANSFER BOOKS. In the
case of all dividends or other distributions by the Company to the holders of
its Common Shares with respect to which any provision of Section 4 refers to the
taking of a record of such holders, the Company will in each such case take such
a record and will take such record as of the close of business on a Business
Day. The Company will not at any time, except upon dissolution, liquidation or
winding up of the Company, close its share transfer books or Warrant transfer
books so as to result in preventing or delaying the exercise or transfer of any
Warrant.
9. LOSS OR MUTILATION. Upon receipt by the Company from the
Holder of evidence reasonably satisfactory to it of the ownership of and the
loss, theft, destruction or mutilation of this Warrant and indemnity reasonably
satisfactory to it (it being understood that the written agreement of the
original Holder shall be sufficient indemnity) and in case of mutilation upon
surrender and cancellation hereof, the Company will execute and deliver in lieu
hereof a new Warrant of like tenor to the Holder; provided, however, that in the
case of mutilation, no indemnity shall be required if this Warrant in
identifiable form is surrendered to the Company for cancellation. Applicants for
a replacement Warrant under such circumstances shall also comply with such other
reasonable regulations and procedures and pay such other reasonable charges as
the Company may prescribe.
10. OFFICE OF THE COMPANY. As long as any of the Warrants
remain outstanding, the Company shall maintain an office or agency (which may be
the principal executive offices of the Company) where the Warrants may be
presented for exercise, registration of transfer, division or combination as
provided in this Warrant.
11. LIMITATION OF LIABILITY. No provision hereof, in the
absence of affirmative action by the Holder to purchase Common Shares, and no
enumeration herein of the rights or privileges of the Holder hereof, shall give
rise to any liability of the Holder for the purchase price of any Common Shares,
whether such liability is asserted by the Company or by creditors of the
Company.
12. MISCELLANEOUS.
12.1. Nonwaiver and Expenses. No course of dealing or any
delay or failure to exercise any right hereunder on the part of the Holder shall
operate as a waiver of such right or otherwise prejudice Holder's rights, powers
or remedies. If the Company fails to make, when due, any payments provided for
hereunder, or fails to comply with any other provision of this Warrant, the
Company shall pay to the Holder such amounts as shall be sufficient to cover any
costs and expenses including, but not limited to, reasonable attorneys' fees,
including those of appellate proceedings, incurred by the Holder in collecting
any amounts due pursuant hereto or in otherwise enforcing any of its rights,
powers or remedies hereunder.
12.2. Notice Generally. All notices, requests, demands or
other communications provided for herein shall be in writing and shall be deemed
to have been given the next Business Day after being deposited with a nationally
recognized overnight courier such as Federal Express, or when personally
delivered, or successfully sent by facsimile transmission as evidenced by a fax
13
machine confirmation report thereof, addressed, as the case may be, to the
Holder at the address on the books and records of the Company; or to the
Company, YM BioSciences Inc., ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ L4W 4Y4, Att'n: Chief Executive Officer, Fax No.
(▇▇▇) ▇▇▇-▇▇▇▇; with a copy to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ Att'n: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Fax
No. (▇▇▇) ▇▇▇-▇▇▇▇, or to such other person or address as either party shall
designate to the other from time to time in writing forwarded in like manner.
12.3. Successors and Assigns. Subject to compliance with the
provisions of Section 3.1, this Warrant and the rights evidenced hereby shall
inure to the benefit of and be binding upon the successors of the Company and
the successors and assigns of the Holder. The provisions of this Warrant are
intended to be for the benefit of all Holders from time to time of this Warrant,
and shall be enforceable by any such Holder, but nothing in this Warrant shall
be construed to give any person or corporation or other entity, other than the
Company and the Holder and their respective successors and assigns, any legal or
equitable right, remedy or cause under this Warrant.
12.4. Amendment. This Warrant may be modified or amended or
the provisions of this Warrant waived with the written consent of the Company
and the Holder.
12.5. Severability. Wherever possible, each provision of this
Warrant shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by or
invalid under applicable law, such provision shall be modified to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Warrant.
12.6. Headings. The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.
12.7. Governing Law. This Warrant and the transactions
contemplated hereby shall be deemed to be consummated in the Province of Ontario
and shall be governed by and interpreted in accordance with the local laws of
the Province of Ontario without regard to the provisions thereof relating to
conflict of laws. The Company hereby irrevocably consents to the non exclusive
jurisdiction of the Ontario Superior Court of Justice located in Toronto,
Ontario in connection with any action or proceeding arising out of or relating
to this Warrant. In any such litigation the Company waives personal service of
any summons, complaint or other process and agrees that the service thereof may
be made by certified or registered mail directed to the Company at its address
set forth in Section 12.2.
[Signature Page Follows]
14
IN WITNESS WHEREOF, the Company has caused this Common Share
Purchase Warrant to be executed by its duly authorized officer and attested by
its Secretary.
Dated: ___________, 200___
YM BIOSCIENCES INC.
By:______________________________
Name:
Title:
Attest:
By:______________________________
Name:
Title:
EXHIBIT A
SUBSCRIPTION FORM
[To be executed only upon exercise of Warrant]
DATE: ________________________, 20______.
1. EXERCISE
___ The undersigned registered owner of this Warrant hereby exercises this
Warrant for the purchase of ___________ Common Shares of YM BioSciences
Inc., a corporation continued and existing under the laws of Nova
Scotia (the "Company"), 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
__________________ and whose address is
_______________________________________________.
The undersigned hereby makes payment for the above-referenced Common
Shares by tendering herewith payment of the purchase price of such
shares in full.
2. CASHLESS EXERCISE
___ The undersigned hereby elects to exercise the attached Warrant to
acquire Common Shares through "cashless exercise" in the manner
specified in Section 2.1(b) of the Warrant. This method of exercise is
used with respect to _____________________ of the Common Shares covered
by the Warrant, and the relevant calculation pursuant to Section 2.1(b)
is as follows:
[(A - B)(X)] divided by A
A = Current Market Price of one Common Share on the date hereof
= [U.S./Cdn.] $ ________________ (if in U.S.$, please convert
to Cdn.$ at applicable Exchange Rate)
B = Current Warrant Price
= Cdn. $ ________________
X = total number of Warrant Shares as to which this Warrant is
being exercised
= _________________ Common Shares
Net Number of Common Shares issuable: _____________________
If such Common Shares shall not include all of the Common Shares (or other
securities or property) issuable as provided in this Warrant, a new Warrant of
like tenor and date for the balance of the Common Shares (or other securities or
property) issuable hereunder shall be delivered to the undersigned.
As of the date hereof, and assuming the accuracy of all information filed by the
Company with the Securities and Exchange Commission, the undersigned Holder
hereby certifies that the exercise of the referenced Warrant for the number of
Common Shares herein indicated will not put the undersigned Holder out of
compliance with the Beneficial Ownership Cap (as defined in the Warrant).
By signing below, the Holder warrants and represents that the Holder (i) is an
"accredited investor" as that term is defined under Regulation D of the
Securities and Exchange Commission promulgated under the Securities Act of 1933,
as amended and (ii) is acquiring the securities for its own account for
investment and not with a view to, or for sale in connection with, any
distribution thereof, nor with the intention of distributing or reselling the
same, provided, however, that by making the representation herein, the Holder
does not agree to hold any of the securities for any minimum or other specific
term and reserves the right to dispose of the securities at any time in
accordance with or pursuant to a registration statement or an exemption under
the Securities Act. In addition, if the Holder is not the original Holder of
this Warrant, the Holder shall provide the Company with an opinion of counsel or
other evidence satisfactory to the Company that the issuance of the Common
Shares upon exercise of the Warrant is exempt from the registration requirements
of Securities Act of 1933, as amended, and applicable state securities law. In
addition, by signing below, if this exercise is occurring prior to the Automatic
Issue Date (as defined in the certificate evidencing this Warrant) the Holder
warrants and represents that the Holder is an "accredited investor" as that term
is defined in Ontario Securities Commission Rule 45-501 - Exempt Distributions.
--------------------------------------------------------
(Name of Registered Owner)
--------------------------------------------------------
(Signature of Registered Owner)
--------------------------------------------------------
--------------------------------------------------------
(Street Address)
--------------------------------------------------------
--------------------------------------------------------
(State/Province) (Zip/Postal Code)
NOTICE: The signature on this subscription must correspond with the name as
written upon the face of the Warrant.
EXHIBIT B
ASSIGNMENT FORM
FOR VALUE RECEIVED the undersigned registered owner of this Warrant for the
purchase of shares of YM BioSciences Inc., a corporation continued and existing
under the laws of Nova Scotia, hereby sells, assigns and transfers unto the
Assignee named below all of the rights of the undersigned under this Warrant,
with respect to the number of Common Shares set forth below:
Name and Address of Assignee: _____________________________________________
No. of Common Shares: ____________________________________________
and does hereby irrevocably constitute and appoint _______________
attorney-in-fact to register such transfer on the books of the Company,
maintained for the purpose, with full power of substitution in the premises.
Dated: ______________________________________________
Print Name:__________________________________________
Signature:____________________________________________
Witness:_____________________________________________
NOTICE: The signature on this assignment must correspond with the name as
written upon the face of the Warrant in every particular.