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EXHIBIT 4.27    
    


 
 

CARDIOME PHARMA CORP.
  
    Warrant Indenture    
    
    Made as of April 10, 2003    
    





 
 
 

TABLE OF CONTENTS    
    



	1.	 	INTERPRETATION	 	5
	 	 	1.1	 	Definitions	 	5
	 	 	1.2	 	Headings	 	8
	 	 	1.3	 	Gender	 	8
	 	 	1.4	 	Weekends and Holidays	 	8
	 	 	1.5	 	Meaning of "Outstanding"	 	8
	 	 	1.6	 	Time	 	8
	 	 	1.7	 	Applicable Law	 	8
	 	 	1.8	 	Currency	 	8
	 	 	1.9	 	Schedules	 	8
	

2.	
 	

ISSUE AND PURCHASE OF WARRANTS	
 	

9
	 	 	2.1	 	Creation, Form and Terms of Warrants	 	9
	 	 	2.2	 	Transferability and Ownership of Warrants	 	9
	 	 	2.3	 	Warrantholders Not Shareholders	 	10
	 	 	2.4	 	Signing of Warrants	 	10
	 	 	2.5	 	Countersigning	 	10
	 	 	2.6	 	Loss, Mutilation, Destruction or Theft of Warrants	 	10
	 	 	2.7	 	Exchange of Warrants	 	11
	 	 	2.8	 	Ranking	 	11
	 	 	2.9	 	Purchase of Warrants for Cancellation	 	11
	 	 	2.10	 	Recognition of Registered Holder	 	11
	

3.	
 	

COVENANTS OF THE COMPANY	
 	

12
	 	 	3.1	 	To Issue Warrants and Reserve Warrant Shares	 	12
	 	 	3.2	 	To Execute Further Assurances	 	12
	 	 	3.3	 	To Carry On Business	 	12
	 	 	3.4	 	Reporting Issuer	 	12
	 	 	3.5	 	Breach of Constating Documents	 	12
	 	 	3.6	 	Securities Qualification Requirements	 	13
	 	 	3.7	 	Maintain Listing	 	13
	 	 	3.8	 	Satisfy Covenants	 	13
	 	 	3.9	 	Performance of Covenants by Trustee	 	13
	 	 	3.10	 	Trustee's Remuneration and Expenses	 	13
	 	 	3.11	 	Notice to Warrantholders of Certain Events	 	13
	 	 	3.12	 	Closure of Share Transfer Books	 	14
	 	 	3.13	 	Trust for Warrantholder's Benefit	 	14
	

4.	
 	

ADJUSTMENT OF NUMBER OF WARRANT SHARES	
 	

14
	 	 	4.1	 	Adjustment of Number of Warrant Shares	 	14
	 	 	4.2	 	Proceedings Prior to any Action Requiring Adjustment	 	18
	 	 	4.3	 	Certificate of Adjustment	 	18
	 	 	4.4	 	No Action After Notice	 	18
	 	 	4.5	 	Protection of Trustee	 	19
	 	 	4.6	 	Notice of Special Matters	 	19
	

5.	
 	

EXERCISE AND EXPIRATION OF WARRANTS	
 	

19
	 	 	5.1	 	Exercise of Warrants	 	19
	 	 	5.2	 	Effect of Exercise of Warrants	 	20
	 	 	5.3	 	Partial Exercise of Warrants	 	20
	 	 	 	 	 	 	 



2





 

	 	 	5.4	 	Expiration of Warrants	 	20
	 	 	5.5	 	Fractions of Shares	 	20
	 	 	5.6	 	Accounting and Recording	 	21
	 	 	5.7	 	Issuance of Warrant Shares	 	21
	 	 	5.8	 	Securities Restrictions	 	21
	

6.	
 	

MEETINGS OF WARRANTHOLDERS	
 	

22
	 	 	6.1	 	Definitions	 	22
	 	 	6.2	 	Convening Meetings	 	22
	 	 	6.3	 	Place of Meeting	 	22
	 	 	6.4	 	Notice	 	22
	 	 	6.5	 	Persons Entitled to Attend	 	23
	 	 	6.6	 	Quorum	 	23
	 	 	6.7	 	Chairman	 	23
	 	 	6.8	 	Power to Adjourn	 	24
	 	 	6.9	 	Adjourned Meeting	 	24
	 	 	6.10	 	Show of Hands	 	24
	 	 	6.11	 	Poll	 	24
	 	 	6.12	 	Regulations	 	24
	 	 	6.13	 	Powers of Warrantholders	 	25
	 	 	6.14	 	Powers Cumulative	 	26
	 	 	6.15	 	Minutes of Meetings	 	26
	 	 	6.16	 	Written Resolutions	 	26
	 	 	6.17	 	Binding Effect	 	26
	 	 	6.18	 	Holdings by the Company or Subsidiaries of the Company Disregarded	 	26
	

7.	
 	

SUPPLEMENTAL INDENTURES, MERGER, SUCCESSORS	
 	

26
	 	 	7.1	 	Provision for Supplemental Indentures for Certain Purposes	 	26
	 	 	7.2	 	Company May Consolidate, etc. on Certain Terms	 	27
	 	 	7.3	 	Successor Body Corporate Substituted	 	27
	

8.	
 	

CONCERNING THE TRUSTEE	
 	

28
	 	 	8.1	 	Duties of Trustee	 	28
	 	 	8.2	 	Action by Trustee	 	28
	 	 	8.3	 	Certificate of the Company	 	28
	 	 	8.4	 	Trustee May Employ Experts	 	28
	 	 	8.5	 	Resignation and Replacement of Trustee	 	28
	 	 	8.6	 	Indenture Legislation	 	29
	 	 	8.7	 	Notice	 	29
	 	 	8.8	 	Use of Proceeds	 	29
	 	 	8.9	 	No Inquiries	 	29
	 	 	8.10	 	Actions by Trustee to Protect Interest	 	29
	 	 	8.11	 	Trustee Not Required to Give Security	 	29
	 	 	8.12	 	No Conflict of Interest	 	29
	 	 	8.13	 	Trustee Not Ordinarily Bound	 	30
	 	 	8.14	 	Trustee May Deal in Instruments	 	30
	 	 	8.15	 	Recitals or Statements of Fact Made by Company	 	30
	 	 	8.16	 	Trustee's Discretion Absolute	 	30
	 	 	8.17	 	No Representations as to Validity	 	30
	 	 	8.18	 	Acceptance of Trusts	 	30
	 	 	8.19	 	Trustee's Authority to Carry on Business	 	31
	 	 	8.20	 	Indemnification of Trustee	 	31
	 	 	 	 	 	 	 





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	 	 	8.21	 	Performance of Covenants by Trustee	 	31
	

9.	
 	

NOTICES	
 	

31
	 	 	9.1	 	Notice to Company, Trustee and Underwriters	 	31
	 	 	9.2	 	Notice to Warrantholders	 	32
	

10.	
 	

POWER OF BOARD OF DIRECTORS	
 	

33
	 	 	10.1	 	Board of Directors	 	33
	

11.	
 	

MISCELLANEOUS PROVISIONS	
 	

33
	 	 	11.1	 	Further Assurances	 	33
	 	 	11.2	 	Unenforceable Terms	 	33
	 	 	11.3	 	No Waiver	 	33
	 	 	11.4	 	Suits By Warrantholders	 	33
	 	 	11.5	 	Enurement	 	34
	 	 	11.6	 	Formal Date and Effective Date	 	34




4






  



 
 

WARRANT INDENTURE    
    


THIS
WARRANT INDENTURE made as of April 10, 2003, 



	BETWEEN:	 	 
	

 	
 	
CARDIOME PHARMA CORP., a corporation continued under the Canada Business Corporations Act and having an office at 3650 Wesbrook Mall, Vancouver,
 British Columbia V6S 2L2
	

 	
 	

(the "Company")
	

 	
 	

OF THE FIRST PART
	

AND:	
 	

 
	

 	
 	
PACIFIC CORPORATE TRUST COMPANY, a trust company incorporated under the laws of British Columbia and having an office at 10th Floor, 625 Howe Street, Vancouver, British Columbia
V6C 3B8
	

 	
 	

(the "Trustee")
	

 	
 	

OF THE SECOND PART





        WHEREAS the Company is proposing to issue Warrants in the manner herein set forth; 


        AND WHEREAS the Company, under the laws relating thereto, is authorized to issue the Warrants; 


        AND WHEREAS the Company represents to the Trustee that all necessary resolutions of the directors of the Company have been or will be duly
enacted, passed or confirmed and all other proceedings taken and conditions complied with to authorize the execution and delivery of this Indenture and the execution, issue and delivery of the
Warrants and to make the same legal, valid and binding on the Company in accordance with the laws relating to the Company; 


        AND WHEREAS the foregoing recitals are made as representations and statements of fact by the Company and not by the Trustee; 


        AND WHEREAS the Trustee has been appointed and agreed to act as trustee on behalf of the Warrantholders on the terms and conditions set
forth herein. 


        NOW THEREFORE THIS INDENTURE WITNESSES THAT, in consideration of the premises and in further consideration of the mutual covenants herein
set forth, the parties hereto agree as follows: 


1. INTERPRETATION  


1.1    Definitions    



        In
this Indenture (unless there is something in the subject matter or context inconsistent therewith), the following words have the respective meaning indicated below: 



	(a)
	"Applicable
Legislation" means the provisions, if any, for the time being, of any statute of Canada or a province thereof, and of the regulations under such statute, relating to trust
indentures and to the rights, duties and obligations of trustees under trust indentures, and of corporations issuing their securities under trust indentures, to the extent that any such provisions are
in force and applicable to this Indenture; 



5





 



	(b)
	"Business
Day" means a day which is not a Saturday, Sunday or legal holiday in the City of Toronto, Ontario and the city of Vancouver, British Columbia;



	(c)
	"Clearance
Date" means the date on which a receipt for the Prospectus is issued by the last of the Commissions;



	(d)
	"Commissions"
means the British Columbia Securities Commission, the Ontario Securities Commission and the Commission des valeurs mobiliers du Quebec;



	(e)
	"Common
Share" means a fully paid and non-assessable common share in the capital of the Company as such capital is presently constituted;



	(f)
	"Company's
auditors" means the firm of accountants appointed by the shareholders of the Company and serving as the auditors of the Company at the relevant time;



	(g)
	"Current
Market Price" of a Common Share at any date means the price per share equal to the weighted average price at which the Common Shares have traded during any 10 consecutive
Trading Days selected by the Company, commencing not more than 20 Trading Days and ending not less than five days before such date, on the Toronto Stock Exchange, or, if the Common Shares are not
listed thereon, on any stock exchange on which such shares are listed as may be selected for such purpose by the directors or, if such shares are not listed on any stock exchange, then on such
over-the-counter market in Canada as may be selected for such purpose by the directors. The weighted average price per share shall be determined by dividing the aggregate sale
price of all such shares sold on the aforementioned exchange or market, as the case may be, during the aforementioned 10 consecutive Trading Days by the total number of such shares so sold;



	(h)
	"Designated
Provinces" means the Provinces of British Columbia, Ontario and Quebec;



	(i)
	"director"
means a director of the Company for the time being and, unless otherwise specified herein, a reference to an action by the directors means an action by the directors of the
Company as a board or, whenever duly empowered, action by a committee of such board;



	(j)
	"Dividends
paid in the Ordinary Course" means such dividends payable in cash (or in securities, property or assets of equivalent value) declared payable on a Common Share in any
fiscal year of the Company to the extent that such dividends in the aggregate do not exceed in amount or value the greater of:



	(i)
	100%
of the aggregate amount or value of the dividends declared payable by the Company on the Common Shares in the period of 12 consecutive months ended immediately prior to the first
day of such fiscal year; and



	(ii)
	50%
of the consolidated net earnings of the Company, before extraordinary items and after dividends paid on any and all preferred shares of the Company (if any) for the period of 12
consecutive months ended immediately prior to the first day of such fiscal year (such consolidated net earnings to be as shown in the audited consolidated financial statements of the Company for such
12 month period or, if there are no audited financial statements in respect of such period, computed in accordance with generally accepted accounting principles consistent with those applied in
the preparation of the most recent audited consolidated financial statements of the Company); 








and
for such purposes the amount of any dividends paid in other than cash or shares of the Company shall be the fair market value of such dividends as determined by the directors; 



	(k)
	"Exercise
Price" means a price of $2.75 per Warrant Share which is the consideration required from a Warrantholder to the Company upon the Warrantholder exchanging his or her
Warrant(s) for Warrant Share(s); 



6





 



	(l)
	"Expiry
Date" means April 10, 2004;



	(m)
	"Expiry
Time" means 5:00 p.m. (Toronto time) on the Expiry Date;



	(n)
	"Indenture",
"herein", "hereto, "hereunder", "hereof", "hereby" and similar expressions mean or refer to this Indenture and not to any particular Article, Section, Subsection,
paragraph, clause, subdivision or portion hereof and include any indenture, deed or instrument supplemental or ancillary hereto; and the expressions "Article", "Section", "Subsection" and "paragraph"
followed by a number mean and refer to the specified Article, Section, Subsection or paragraph of this Indenture;



	(o)
	"Private
Placement" means the private placement of up to 3,810,000 Special Warrants pursuant to the Underwriting Agreement;



	(p)
	"Prospectus"
means a final prospectus of the Company filed with the Commissions by the Company which qualifies the proposed distribution of the Shares and Warrants comprising the
Units in the Designated Provinces pursuant to the exercise of the Special Warrants;



	(q)
	"Share"
means a previously unissued Common Share which forms part of the Unit to be issued to a Special Warrantholder upon exercise or deemed exercise of a Special Warrant;



	(r)
	"Special
Warrant" means a Special Warrant created by the Company and issued for a purchase price of $2.10 each in respect of 3,762,000 Special Warrants and for a purchase price of
$2.30 each for 48,000 Special Warrants and entitling the holder thereof to acquire a Unit upon exercise, having the terms and conditions described in the Special Warrant Indenture;



	(s)
	"Special
Warrant Indenture" means that certain special warrant indenture made as of April 10, 2003 between the Company and the Trustee pursuant to which the Special Warrants
are or will be issued;



	(t)
	"Special
Warrantholder" means the registered holder of an outstanding Special Warrant;



	(u)
	"Subsidiary
of the Company" means a corporation of which voting securities carrying a majority of the votes attached to all outstanding voting securities are owned, directly or
indirectly, by the Company or by one or more subsidiaries of the Company, or by the Company and one or more subsidiaries of the Company, and, as used in this definition, voting securities means
securities, other than debt securities, carrying a voting right to elect directors either under all circumstances or under some circumstances that may have occurred and are continuing;



	(v)
	"Trading
Day" means any day on which the facilities of the Toronto Stock Exchange, or, if the Common Shares are not listed thereon, the facilities of any stock exchange on which the
Common Shares are listed are open for trading;



	(w)
	"Trustee"
means the Company's registrar and transfer agent, Pacific Corporate Trust Company, having an office at 10th Floor, 625 Howe Street, Vancouver, British Columbia
V6C 3B8;



	(x)
	"Underwriters"
means, collectively, Yorkton Securities Inc., TD Securities Inc., Sprott Securities Limited and First Associates Investments Inc.;



	(y)
	"Underwriting
Agreement" means the underwriting agreement dated April 10, 2003 between the Company and the Underwriters whereby the Underwriters agreed to act as underwriters
of the Company in relation to the Private Placement;



	(z)
	"Unit"
means a unit comprised of one Share and one-half of one Warrant, issued on exercise or deemed exercise of each Special Warrant, subject to adjustment in accordance
with the provisions of the Special Warrant Indenture; 



7





 



	(aa)
	"U.S.
Person" and "United States" have the meanings ascribed thereto in Regulation "S" under the United States Securities Act of 1933, as amended, as set out on Schedule "B" hereto;



	(bb)
	"Warrant"
means a share purchase warrant which entitles the holder to purchase one Warrant Share at a price of $2.75 per Warrant Share at any time on or before the Expiry Time and
having the terms and conditions described in this Indenture;



	(cc)
	"Warrant
Certificate" means a certificate evidencing one or more Warrants issuable on exercise of one or more Special Warrants, substantially in the form attached hereto as Schedule
"A";



	(dd)
	"Warrant
Share" means a previously unissued Common Share issued pursuant to the exercise of a Warrant; and



	(ee)
	"Warrantholder"
means the registered holder of an outstanding Warrant. 




1.2    Headings    



        The
division of this Indenture into Articles, Sections, Subsections or other subdivisions, 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 or the Warrants. 


1.3    Gender    


        Words
importing the singular number also include the plural and vice versa and words importing the masculine gender include the feminine gender. 


1.4    Weekends and Holidays    



        If
the date for the taking of any action under this Indenture expires on a day which is not a Business Day, such action may be taken on the next succeeding business day with the same
force and effect as if taken within the period for the taking of such action. 


1.5    Meaning of "Outstanding"    


        Every
Warrant represented by a Warrant Certificate countersigned by the Trustee and delivered to the holder is deemed to be outstanding until it is cancelled or delivered to the Trustee
for cancellation. Where a new Warrant Certificate has been issued pursuant to Section 2.6 to replace one which has been mutilated, lost, stolen or destroyed, the Warrants represented by only
one of such Warrant Certificates are counted for the purpose of determining the aggregate number of Warrants outstanding. A Warrant Certificate that has been partially exercised will be deemed to be
outstanding only to the extent of the unexercised part of the Warrants. 


1.6    Time    


        Time
is of the essence hereof and of the Warrant Certificate. 


1.7    Applicable Law    



        This
Indenture and the Warrant Certificates are subject to and construed in accordance with the laws of the Province of British Columbia and the laws of Canada. 


1.8    Currency    


        All
references to currency herein are to Canadian dollars unless otherwise indicated. 


1.9    Schedules    


        The
attached Schedules "A" and "B" are incorporated into and form part of this Indenture. 


8





 



2. ISSUE AND PURCHASE OF WARRANTS  


2.1    Creation, Form and Terms of Warrants    



	(a)
	The
Company hereby creates and authorizes for issuance up to 1,905,000 Warrants entitling Warrantholders to acquire, upon payment of the Exercise Price and subject to adjustment, one
Warrant Share for each one whole Warrant.



	(b)
	Subject
to the provisions hereof and to the adjustment provisions contained in the Special Warrant Indenture, the Warrants issued under this Indenture are limited in the aggregate up
to 1,905,000 Warrants and one Warrant entitles the holder thereof to acquire, upon payment of the consideration of the Exercise Price, one Warrant Share, provided that the number of Warrant Shares
receivable on exercise of a Warrant is subject to increase or decrease so as to give effect to the adjustments required by Article 4.



	(c)
	The
Warrants will be issued in registered form and the Warrant Certificates will be substantially in the form set out or referred to 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 Company and the Warrantholders and are numbered in such manner as the Company
may prescribe. All Warrants are, save as to denominations, of like tenor and effect. The Warrant Certificates may be engraved, printed, lithographed, or partly in one form and partly in another, as
the Company may determine. No change in the form of the Warrant Certificates is required by reason of any adjustment made pursuant to Article 4 hereof in the number of Warrant Shares which may
be acquired pursuant to the exercise of the Warrants. 






2.2    Transferability and Ownership of Warrants    



	(a)
	The
Company shall cause the Trustee to keep at its Vancouver office set forth in Section 1.1 a register in which the Trustee shall enter the names and addresses of the
Warrantholders and particulars of the Warrants held by them. The Trustee shall cause the register to be open at all reasonable times for inspection by the Company, the Underwriters and any
Warrantholder.



	(b)
	The
Warrants are not transferable unless the transfer is made in accordance with the terms of this Indenture, the rules of the Toronto Stock Exchange and in accordance with applicable
securities laws. Any permissible transfer shall be conducted in accordance with transfer procedures established by the Company and the Trustee from time to time. To transfer Warrants, the
Warrantholder must complete the Form of Transfer attached as Appendix 1 to the Warrant Certificate.



	(c)
	A
person who furnishes evidence that he is, to the reasonable satisfaction of the Trustee:



	(i)
	the
executor, administrator, heir or legal representative of the heirs of the estate of a deceased Warrantholder;



	(ii)
	a
guardian, committee, trustee, curator or tutor representing a Warrantholder who is an infant, an incompetent person or a missing person;



	(iii)
	a
liquidator or, or a trustee in bankruptcy for, a Warrantholder; 








may,
as hereinafter stated, by surrendering such evidence together with the Warrant Certificate in question to the Trustee (by delivery or mail as set forth in Section 9.1 hereof), and subject
to such reasonable requirements as the Trustee may prescribe and all applicable securities legislation and requirements of regulatory authorities, become noted upon the register of Warrantholders.
After receiving the surrendered Warrant Certificate and upon the person surrendering the Warrant Certificate, meeting the requirements as hereinbefore set forth, the Trustee shall forthwith give
written notice thereof together with confirmation as to 




9





 


the
identity of the person entitled to become the holder to the Company. Forthwith after receiving written notice from the Trustee as aforesaid the Company shall, in accordance with the provisions of
Section 2.6 hereof, cause a new Warrant Certificate to be issued and sent to the new holder and the Trustee shall alter its register of holders accordingly. 



	(d)
	Subject
to the provisions of this Indenture and applicable law, the Warrantholder shall be entitled to the rights and privileges attaching to the Warrants, and the issue of the
Warrant Shares by the Company upon exercise of the Warrants by the Warrantholder in accordance with the terms and conditions herein contained shall discharge all responsibilities of the Company and
the Trustee with respect to such Warrants and neither the Company nor the Trustee shall be bound to inquire into the title of any such Warrantholder. 




2.3    Warrantholders Not Shareholders    



        A
Warrantholder is not deemed or regarded as a shareholder of the Company nor is such Warrantholder entitled to any right or interest except as is expressly provided in this Indenture
and in the Warrant Certificates. 


2.4    Signing of Warrants    


        Any
one director or officer of the Company shall sign the Warrant Certificates either manually or by facsimile signature and need not be under the seal of the Company. A facsimile
signature upon any Warrant Certificate is for all purposes hereof, deemed to be the signature of the person whose signature it purports to be and to have been signed at the time such facsimile
signature is reproduced. If a person whose signature, either manually or in facsimile, appears on a Warrant Certificate is not a director or officer of the Company at the date of this Indenture or at
the date of the countersigning and delivery of such Warrant Certificate, such fact does not affect in any way the validity of the Warrants or the entitlement of the Warrantholder to the benefits of
this Indenture or of the Warrant Certificate. 


2.5    Countersigning    


        No
Warrant Certificate shall be issued, or if issued, is valid or exercisable or entitles the holder thereof to the benefits of this Indenture until the Warrant Certificate has been
countersigned by the Trustee and such certification by the Trustee upon any Warrant Certificate will be conclusive evidence as against the Company that the Warrant Certificate so certified has been
duly issued hereunder and that the holder is entitled to the benefits hereof. The countersignature by or on behalf of the Trustee on any Warrant Certificate is not construed as a representation or
warranty by the Trustee as to the validity of this Indenture or of the Warrants or as to the performance by the Company of its obligations under this Indenture and the Trustee is in no way liable or
answerable for the use made of the Warrants. The countersignature of the Trustee is, however, a representation and warranty of the Trustee that the Warrant Certificate has been duly countersigned by
or on behalf of the Trustee pursuant to the provisions of this Indenture. 


2.6    Loss, Mutilation, Destruction or Theft of Warrants    


        In
case any of the Warrant Certificates issued and countersigned hereunder is mutilated or lost, destroyed or stolen, the Company, in its discretion, may issue and thereupon the Trustee
will countersign and deliver a new Warrant Certificate of like date and tenor in exchange for and in place of the one mutilated, lost, destroyed or stolen and upon surrender and cancellation of such
mutilated Warrant Certificate or in lieu of and in substitution for such lost, destroyed or stolen Warrant Certificate and the substituted Warrant Certificate entitles the holder thereof to the
benefits hereof and ranks equally in accordance with its terms with all other Warrants issued hereunder. 


        The
Warrantholder applying for the issue of a new Warrant Certificate pursuant to this Section shall bear the cost of the issue thereof and in case of loss, destruction or theft shall,
as a condition 


10





 



precedent
to the issue thereof, furnish to the Company and the Trustee such evidence of ownership and of the loss, destruction or theft of the Warrant Certificate so lost, destroyed or stolen as is
satisfactory to the Company in its discretion. The Company and the Trustee may also, as a condition precedent to issuing a new Warrant Certificate, require such applicant to furnish an indemnity and
surety bond in amount and form satisfactory to the Company and the Trustee in their discretion, and the applicant shall pay the reasonable charges of the Company and the Trustee in connection
therewith. 


2.7    Exchange of Warrants    



        A
Warrantholder may at any time prior to the Expiry Time, by written instruction delivered to the Trustee at the office of the Trustee set forth in Section 1.1, exchange his
Warrant Certificates for Warrant Certificates evidencing Warrants in other denominations entitling the Warrantholder to acquire in the aggregate the same number of Warrant Shares as it was entitled
under the Warrant Certificates so surrendered, in which case the Trustee may make a charge sufficient to reimburse it for any government fees or charges required to be paid and an additional
reasonable charge for every Warrant Certificate issued upon exchange. The Warrantholder surrendering such Warrant Certificate shall bear such fee and charge. Payment of the charges is a condition
precedent to the exchange of the Warrant Certificate. The Company shall sign and the Trustee shall countersign all Warrant Certificates necessary to carry out exchanges as aforesaid. 


2.8    Ranking    


        All
Warrants will have the same attributes and rank pari passu regardless of the date of actual issue. 


2.9    Purchase of Warrants for Cancellation    



        Subject
to applicable law, the Company may, at any time or from time to time, purchase all or any of the Warrants in the market, by private contract or otherwise on such terms as the
Company may determine. Any such purchase shall be made at the lowest price or prices at which, in the opinion of the directors, such Warrants are then obtainable plus reasonable costs of purchase. The
Warrant Certificates representing the Warrants purchased hereunder by the Company shall be delivered to and cancelled by the Trustee and no Warrants shall be issued in substitution thereof. 


2.10    Recognition of Registered Holder    



        The
Company and the Trustee may deem and treat the registered holder of any Warrant Certificate as the absolute owner of the Warrants represented thereby for all purposes, and the
Company and the Trustee shall not be affected by any notice or knowledge to the contrary except where the Company 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 Company and the
original or any intermediate holder thereof and all persons may act accordingly and the receipt by any such Warrantholder of Common Shares upon the exercise thereof shall be a good discharge to the
Company and the Trustee for the same and neither the Company nor the Trustee shall be bound to inquire into the title of any such holder except where the Company or the Trustee is required to take
notice by statute or by order of a court of competent jurisdiction. 


11





 



3. COVENANTS OF THE COMPANY  


        The Company represents, warrants, covenants and agrees with the Trustee for the benefit of the Trustee and the Warrantholders as follows: 



3.1    To Issue Warrants and Reserve Warrant Shares    


        That
it is duly authorized to create and issue the Warrants and that the Warrants, when issued and countersigned by the Trustee will be valid and enforceable against the Company and
that, subject to the provisions of this Indenture, the Company shall cause the Warrant Shares from time to time acquired pursuant to the exercise of Warrants to be duly issued, upon payment of the
Exercise Price, to the Warrantholders. At all times while any of the Warrants are outstanding, the Company shall reserve and allot out of its authorized capital a number of Common Shares sufficient to
enable the Company to meet its obligation to issue Warrant Shares in respect of the exercise of all Warrants outstanding from time to time. All Warrant Shares acquired pursuant to the exercise of the
Warrants shall be fully paid and non-assessable. 


3.2    To Execute Further Assurances    


        That
it shall do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered, all other acts, deeds and assurances in law as may reasonably be required
for the better accomplishing and effecting of the intentions and provisions of this Indenture. 


3.3    To Carry On Business    


        That
subject to the express provisions hereof, it shall carry on and conduct and shall cause to be carried on and conducted its business in the same manner as heretofore carried on and
conducted and in accordance with industry standards and good business practice, provided, however, that the Company or any Subsidiary of the Company may cease to operate or may dispose of any
business, premises, property, assets or operation if in the opinion of the directors or officers of the Company or any Subsidiary of the Company, as the case may be, it would be advisable and in the
best interests of the Company or any Subsidiary of the Company as the case may be, to do so, and subject to the express provisions hereof, it shall do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence, provided, however, that (subject to Article 4 hereof) nothing herein contained shall prevent the amalgamation, consolidation,
merger, sale, winding-up or liquidation of the Company or any Subsidiary of the Company or the abandonment of any rights and franchises of the Company or any Subsidiary of the Company if,
in the opinion of the directors or
officers of the Company or any Subsidiary of the Company, as the case may be, it is advisable and in the best interest of the Company or of such Subsidiary of the Company to do so. 



3.4    Reporting Issuer    


        That
the Company is presently a reporting issuer not in default in the Designated Provinces and will use its best efforts to maintain its status as a reporting issuer not in default in
the Designated Provinces and in each other province in which the Company becomes a reporting issuer following the date hereof, until the Expiry Date. The Company will make all requisite filings under
applicable Canadian securities legislation and stock exchange rules to report the exercise of the right to acquire Warrant Shares pursuant to the exercise of Warrants. 



3.5    Breach of Constating Documents    


        That
the issue and sale of the Special Warrants and the issue of the Shares, the Warrants and the Warrant Shares do not and will not result in a breach by the Company of, and so not or
will not create a state of facts which, after notice or lapse of time or both, will result in a breach by the Company of, any applicable laws, and do not or will not conflict with any of the terms,
conditions or provisions of the constating documents of the Company or the bylaws or resolutions of the Company or any trust 


12






 



indenture,
loan agreement or any other agreement or instrument to which the Company or any Subsidiary is contractually bound as of the date of this Indenture. 


3.6    Securities Qualification Requirements    


        If
any instrument is required to be filed with or any permission, order or ruling is required to be obtained from the Commissions or any other step is required under any federal or
provincial law of a Designated Province before any securities or property which a Warrantholder is entitled to receive pursuant to the exercise of a Warrant may properly and legally be delivered upon
the due exercise of a Warrant, the Company shall 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. 


3.7    Maintain Listing    


        That
the Company will use its best efforts to maintain the listing of the Common Shares which are outstanding on the Toronto Stock Exchange and to ensure that the Warrant Shares will be
listed and posted for trading on such exchange simultaneously with or as soon as possible following their issue. 


3.8    Satisfy Covenants    


        That
the Company will comply with all covenants and satisfy all terms and conditions on its part to be performed and satisfied under this indenture and the Underwriting Agreement. 


3.9    Performance of Covenants by Trustee    


        If
the Company shall fail to perform any of its covenants contained in this Indenture and the Company has not rectified such failure within ten (10) Business Days after receiving
notice of such failure by the Trustee, the Trustee may notify the Warrantholders of such failure on the part of the Company or may itself perform any of the covenants capable of being performed by it
but, subject to Article 8, shall be under no obligation to perform said covenants or to notify the Warrantholders of such performance by it. No such performance, expenditure or advance by the
Trustee shall relieve the Company of any default hereunder or of its continuing obligations under the covenants herein contained. 


3.10    Trustee's Remuneration and Expenses    


        The
Company will pay to the Trustee from time to time such reasonable remuneration for its services hereunder as may be agreed upon between the Company and the Trustee and will pay or
reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances properly incurred or made by 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 advisors 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, disbursement or advance as may arise from the gross negligence or wilful misconduct of the Trustee or
of persons for whom the Trustee is responsible. 


3.11    Notice to Warrantholders of Certain Events    



        The
Company covenants with the Trustee for the benefit of the Trustee and the Warrantholders that, so long as any of the Warrants are outstanding, it will not: 



	(a)
	pay
any dividend payable in shares of any class to the holders of its Shares or make any other distribution (other than a cash distribution made as a dividend out of retained earnings
or contributed surplus legally available for the payment of dividends) to the holders of its Shares;



	(b)
	offer
to the holders of its Shares rights to subscribe for or to purchase any Shares or shares of any class or any other securities, rights, warrants or options; 



13





 



	(c)
	make
any repayment of capital on, or distribution of evidences of indebtedness on, any of its assets (excluding cash dividends) to the holders of Shares;



	(d)
	amalgamate,
consolidate or merge with any other person or sell or lease the whole or substantially the whole of its assets or undertaking;



	(e)
	effect
any subdivision, consolidation or reclassification of its Shares; or



	(f)
	liquidate,
dissolve or wind-up, 




unless,
in each such case, the Company will have given notice, in the manner specified in section 9.2, to each Warrantholder and the Underwriters, of the action proposed to be taken and the
date on which (a) the books of the Company will close or a record will be taken for such dividend, repayment, distribution, subscription rights or other rights, warrants or securities, or
(b) such subdivision, consolidation, reclassification, amalgamation, merger, sale or lease, dissolution, liquidation or winding-up will take place, as the case may be, provided that
the Company will only be required to specify in the notice those particulars of the action as will have been fixed and determined at the date on which the notice is given. The notice will also specify
the date as of which the holders of Shares of record will participate in the dividend, repayment, distribution, subscription of rights or other rights, warrants or securities, or will be entitled to
exchange their Shares for securities or other property deliverable upon such reclassification, amalgamation, merger, sale or lease, other disposition, dissolution, liquidation or
winding-up, as the case may be. The notice will be given, with respect to the actions described in subsections (a), (b), (c), (d), (e) and (f) above not less than
10 days
prior to the record date or the date on which the Company's transfer books are to be closed with respect thereto. 


3.12    Closure of Share Transfer Books    


        The
Company further covenants and agrees that it will not during the period of any notice given under section 3.11 close its share transfer books or take any other corporate
action which might deprive the Warrantholders of the opportunity of exercising their Warrants; provided that nothing contained in this section 3.12 will be deemed to affect the right of the
Company to do or take part in any of the things referred to in section 3.11 or to pay cash dividends on the shares of any class or classes in its capital from time to time outstanding. 



3.13    Trust for Warrantholder's Benefit    


        The
covenants of the Company to the Trustee provided for in this Indenture shall be held in trust by the Trustee for the benefit of the Warrantholders. 


4. ADJUSTMENT OF NUMBER OF WARRANT SHARES  


4.1    Adjustment of Number of Warrant Shares    



        The
rights to acquire Warrant Shares in effect at any date attaching to the Warrants are subject to adjustment from time to time as follows: 



	(a)
	if
and whenever at any time from the date hereof and prior to the Expiry Time, the Company:



	(i)
	subdivides,
redivides or changes its outstanding Common Shares into a greater number of shares;



	(ii)
	consolidates,
reduces or combines its outstanding Common Shares into a smaller number of shares; or



	(iii)
	issues
Common Shares or securities exchangeable or convertible to Common Shares ("convertible securities") to the holders of all or substantially all of the outstanding Common
Shares by way of a stock dividend (other than the issue of Common Shares or convertible securities to such holders as Dividends paid in the Ordinary Course), 






14





 




(any
of the above being a "Common Share Reorganization"), the number of Warrant Shares issuable upon the exercise of each Warrant is adjusted immediately after the effective date of the Common Share
Reorganization or on the record date for the issue of Common Shares or convertible securities by way of stock dividend, by multiplying the number of Warrant Shares previously obtainable on the
exercise of a Warrant by the fraction of which: 



	(A)
	the
numerator is the total number of Common Shares outstanding immediately after the effective or record date of the Common Share Reorganization, or, in the case of the issuance of
exchangeable or convertible securities, the total number of Common Shares outstanding immediately after the effective or record date of the Common Share Reorganization plus the total number of Common
Shares issuable upon conversion or exchange of such convertible securities; and



	(B)
	the
denominator is the total number of Common Shares outstanding immediately prior to the applicable effective or record date or such Common Share Reorganization; 







and
the Company and Trustee, upon receipt of notice pursuant to Section 4.3, shall make such adjustment successively whenever any event referred to in this Subsection 4.1(a) occurs and any such
issue of Common Shares or convertible securities by way of a stock dividend is deemed to have occurred on the record date for the stock dividend for the purpose of calculating the number of
outstanding Common Shares under this Subsection 4.1(a). To the extent that any convertible securities are not converted into or exchanged for Common Shares prior to the expiration thereof, the number
of Warrant Shares obtainable under each Warrant shall be readjusted to the number of Warrant Shares that is then obtainable based upon the number of Common Shares actually issued on conversion or
exchange of such convertible securities; 



	(b)
	if
and whenever at any time from the date hereof and prior to the Expiry Time the Company shall fix a record date for the issue of rights, options or warrants to all or substantially
all of the holders of Common Shares under which such holders are entitled, during a period expiring not more than 45 days after the record date for such issue ("Rights Period"), to subscribe
for or acquire Common Shares at a price per share to the holder of less than 95% of the Current Market Price for the Common Shares on such record date (any of such events being called a "Rights
Offering"), then the number of Warrant Share obtainable upon the exercise of each Warrant shall be adjusted effective immediately after the end of the Rights Period to a number determined by
multiplying the number of Warrant Shares obtainable upon the exercise thereof immediately prior to the end of the Rights Period by a fraction:



	(i)
	the
numerator of which shall be the number of Common Shares outstanding after giving effect to the Rights Offering and 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; and



	(ii)
	the
denominator of which shall be the aggregate of:



	(A)
	the
number of Common Shares outstanding as of the record date for the Rights Offering, and



	(B)
	a
number determined by dividing (1) the product of the number of Common Shares issued or subscribed during the Rights Period upon the exercise of the rights, warrants, or
options under the Rights Offering and the price at which such Common Shares are offered by (2) the Current Market Price of the Common Shares as of the record date for the Rights Offering; 









15





 







	(c)
	if
and whenever at any time from the date hereof and prior to the Expiry Time the Company shall issue or distribute to all or to substantially all the holders of the Common Shares:



	(i)
	securities
of the Company including rights, options or warrants to acquire shares of any class or securities exchangeable for or convertible into or exchangeable into any such shares
or property or assets and including evidence of its indebtedness, or



	(ii)
	any
property (including cash) or other assets, 








and
if such issuance or distribution does not constitute Dividends paid in the Ordinary Course, a Common Share Reorganization or a Rights Offering (any of such non-excluded events being
herein called a "Special Distribution"), the number of Warrant Shares obtainable upon the exercise of each Warrant shall be adjusted effective immediately after the record date at which the holders of
affected Common Shares are determined for purposes of the Special Distribution to a number determined by multiplying the number of Warrant Shares obtainable upon the exercise thereof in effect on such
record date by a fraction: 


	(iii)
	the
numerator of which shall be the number of Common Shares outstanding on such record date multiplied by the Current Market Price of the Common Shares on such record date; and



	(iv)
	the
denominator of which shall be:



	(A)
	the
product of the number of Common Shares outstanding on such record date and the Current Market Price of the Common Shares on such record date; less



	(B)
	the
excess, if any, of (1) the fair market value on such record date, as determined by action by the directors (whose determination shall be conclusive), to the holders of the
Common Shares of such securities or property or other assets so issued or distributed in the Special Distribution over (2) the fair market value of the consideration received therefor by the
Company from the holders of the Common Shares, as determined by action by the directors (whose determination shall be conclusive);









	(d)
	if
and whenever at any time from the date hereof and prior to the Expiry Time, there is a reclassification of the Common Shares or a change in the Common Shares into other Shares or
securities or a capital reorganization of the Company other than as described in Subsection 4.1(a) or the triggering of a shareholders' rights plan or a consolidation, amalgamation, arrangement or
merger of the Company with or into any other body corporate, trust, partnership or other entity, or a transfer, a sale or conveyance of the property and assets of the Company as an entirety or
substantially as an entirety to any other body corporate, trust, partnership or other entity, any of such events being referred to as a "Capital Reorganization", every Warrantholder who has not
exercised his or her right of acquisition, as at the effective date of such Capital Reorganization is entitled to receive upon exercise in accordance with the terms and conditions hereof and shall
accept, in lieu of the number of Warrant Shares obtainable under the Warrants to which it was previously entitled, the kind and number of Warrant Shares or other securities or property of the Company
that the Warrantholder would have been entitled to receive on such Capital Reorganization, if, on the record date or the effective date thereof, as the case may be, the Warrantholder had been the
registered holder of the number of Warrant Shares obtainable upon the exercise of Warrants then held, subject to adjustment thereafter in accordance with provisions the same, as nearly as may be
possible, as those contained in this Section 4.1. The Company shall not carry into effect any action requiring an adjustment pursuant to this Subsection 4.1(d) unless all necessary steps have
been taken so that the Warrantholders are thereafter entitled to receive such kind and number of Warrant Shares, other securities or property. The Company will not 



16





 


enter
into a Capital Reorganization unless its successor, or the purchasing body corporate, partnership, trust or other entity, as the case may be, prior to or contemporaneously with any such Capital
Reorganization enters an indenture which provides, to the extent possible, for the application of the provisions set forth in this Indenture with respect to the rights and interests thereafter of the
Warrantholders to the end that the provisions set forth in this Indenture are correspondingly made applicable, as nearly as may reasonably be, with respect to any shares, other securities or property
to which a Warrantholder is entitled on the exercise of his acquisition rights thereafter. An indenture entered into by the Company pursuant to the provisions of this Subsection 4.1(d) is deemed a
supplemental indenture entered into pursuant to the provisions of Article 7. An indenture entered into between the Company, any successor to the Company or any purchasing body corporate,
partnership, trust or other entity and the Trustee must provide for adjustments which are as nearly equivalent as may be practicable to the adjustments provided in this Section 4.1 and which
apply to successive Capital Reorganizations; 



	(e)
	where
this Section 4.1 requires that an adjustment becomes effective immediately after a record date or effective date, as the case may be for an event referred to herein, the
Company may defer, until the occurrence of that event, issuing to the Warrantholder exercising his acquisition rights after the record date or effective date, as the case may be and before the
occurrence of that event the adjusted number of Warrant Shares, other securities or property issuable upon the exercise of the Warrants by reason of the adjustment required by that event. If the
Company relies on this Subsection 4.1(e) to defer issuing an adjusted number of Warrant Shares, other securities or property to a Warrantholder, the Warrantholder has the right to receive any
distributions made on the adjusted number of Warrant Shares, other securities or property declared in favour of holders of record on and after the date of exercise or such later date as the
Warrantholder would but for the provisions of this Subsection 4.1(e), have become the holder of record of the adjusted number of Warrant Shares, other securities or property pursuant to
Section 4.2 or 4.3;



	(f)
	the
adjustments provided for in this Section 4.1 are cumulative. After any adjustment pursuant to this Section 4.1, the term "Warrant Share" where used in this Indenture
is interpreted to mean securities of any class or classes which, as a result of such adjustment and all prior adjustments pursuant to this Section, the Warrantholder is entitled to receive upon the
exercise of his Warrant, and the number of Warrant Shares obtainable in any exercise made pursuant to a Warrant is interpreted to mean the number of Warrant Shares Warrantholder is entitled to
receive, as a result of such adjustment and all prior adjustments pursuant to this Section 4.1, upon the full exercise of a Warrant;



	(g)
	all
shares of any class which a Warrantholder is at the time in question entitled to receive on the full exercise of his Warrant, whether or not as a result of adjustments made
pursuant to this Section 4.1 are, for the purposes of the interpretation of this Indenture, deemed to be securities which that Warrantholder is entitled to acquire pursuant the exercise of a
Warrant;



	(h)
	in
the event of a question arising with respect to the adjustments provided for in this Section 4.1, that question shall be conclusively determined by the Company's auditors
who shall have access to all necessary records of the Company, and a determination by the Company's auditors is binding upon the Company, the Trustee, all Warrantholders and all other persons
interested therein;



	(i)
	no
adjustment in the number of Warrant Shares obtainable upon exercise of Warrants shall be made in respect of any event described in Section 4.1, other than the events
referred to in clauses (i) and (ii) of subsection (1) thereof, if the Warrantholders are entitled to participate 



17





 


in
such event on the same terms, mutatis mutandis, as if the Warrantholders had exercised their Warrants prior to or on the effective date or record
date of such event; 



	(j)
	in
the event that the Company after the date of issue of the Warrants shall take any action affecting the Warrant Shares, other than action described in Section 4.1, which in
the opinion of the directors of the Company would materially affect the rights of Warrantholders, the number of Warrant Shares obtainable upon exercise shall be adjusted in such manner, if any, and at
such time, by action by the directors, in their sole discretion as they may determine to be equitable in the circumstances, but subject in all cases to any necessary regulatory approval. Failure of
the taking of action by the directors so as to provide for an adjustment on or prior to the effective date of any action by the Company affecting the Warrant Shares shall be conclusive evidence that
the board of directors of the Company has determined that it is equitable to make no adjustment in the circumstances;



	(k)
	if
the Company shall set a record date to determine the holders of the Warrants for the purpose of entitling them to receive any dividend or distribution or any subscription or
exercise rights and shall, thereafter and before the distribution to such shareholders of any such dividend, distribution or subscription or exercise rights, legally abandon its plan to pay or deliver
such dividend, distribution or subscription or exercise rights, then no adjustment in the number of Warrant Shares obtainable upon exercise of any Warrant shall be required by reason of the setting of
such record date; and



	(l)
	in
the absence of a resolution of the directors fixing a record date for a Special Distribution or Rights Offering, the Company shall be deemed to have fixed as the record date
therefor the date on which the Special Distribution or Rights Offering is effected. 




4.2    Proceedings Prior to any Action Requiring Adjustment    



        As
a condition precedent to the taking of any action which requires an adjustment in any of the acquisition rights pursuant to the Warrants, including the number of Warrant Shares
obtainable upon the exercise thereof, the Company shall take any corporate action which may in its opinion be necessary in order that the Company or any successor to the Company has unissued and
reserved Common Shares in its authorized capital and may validly and legally issue as fully paid and non-assessable all the Warrant Shares and may validly and legally deliver all other
securities or property which the Warrantholders are entitled to receive on the full exercise of the Warrants in accordance with the provisions hereof. 


4.3    Certificate of Adjustment    



        The
Company shall from time to time immediately after the occurrence of any event which requires an adjustment as provided in Section 4.1, deliver a notice to the Warrantholders
and the Trustee specifying the nature of the event requiring the adjustment, the amount of the adjustment necessitated thereby, and setting forth in reasonable detail the method of calculation and the
facts upon which the calculation is based. 


4.4    No Action After Notice    


        The
Company covenants with the Trustee that it will not close its transfer books or take any other corporate action which might deprive the holder of a Warrant of the opportunity of
exercising rights of acquisition pursuant thereto during the period of 14 days after giving of the notice set forth in Section 4.3 hereof. 


18





 



4.5    Protection of Trustee    


        Subject
to Section 8.2, the Trustee: 



	(a)
	is
not at any time under any duty or responsibility to a Warrantholder to determine whether any facts exist which require any adjustment contemplated by Section 4.1, 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;



	(b)
	is
not accountable with respect to the validity or value (or the kind or amount) of any 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;



	(c)
	is
not responsible for any failure of the Company to make any cash payment or to issue, transfer or deliver Warrant Shares upon the surrender of any Warrants for the purpose of the
exercise of such rights or to comply with any of the covenants contained in this Article 4; and



	(d)
	shall
not incur any liability or responsibility whatever or be in any way responsible for the consequence of any breach on the part of the Company of any of the representations,
warranties or covenants herein contained or of any acts of the agents or servants of the Company. 




4.6    Notice of Special Matters    



        The
Company covenants with the Trustee that so long as any Warrants remain outstanding it will give 14 days prior written notice in the manner provided for in Article 9 to
the Trustee, each Warrantholder and to the Underwriters of any event which requires an adjustment to the subscription rights attaching to any of the Warrants pursuant to this Article 4. The
Company covenants and agrees that such notice shall contain the particulars of such event in reasonable detail and, if determinable, the required adjustment in the manner provided for in
Article 4. The Company further covenants and agrees that it shall promptly, as soon as the adjustment calculations are reasonably determinable, file a certificate of the Company with the
Trustee showing how such adjustment shall be computed. 


5. EXERCISE AND EXPIRATION OF WARRANTS  


5.1    Exercise of Warrants    


        A
Warrantholder may, at any time before the Expiry Time, exercise all or any number of the Warrants which remain outstanding and are then held by the Warrantholder, by surrendering to
the Trustee the Warrant Certificate or certificates representing the number of Warrants to be exercised, together with a duly completed and executed exercise form(s) in the form attached as
Appendix 2 to the Warrant Certificate(s) and subject to compliance with such requirements as the trustee may reasonably impose to permit the tracking of such exercises from time to time and
certified cheque or bank draft in lawful money of Canada payable to or to the order of the Company or the Trustee at par in the City of Vancouver in an amount equal to the Exercise Price in respect of
each Warrant Share subscribed for. Any voluntary exercise is subject to compliance with and may be restricted by the securities laws of the Designated Provinces and is further subject to the
Warrantholders providing such assurances and executing such documents as may, in the reasonable opinion of the Company or the Trustee, be required to ensure compliance with applicable securities
legislation. If, at the time of the voluntary exercise of the Warrants pursuant to this Section 5.1, there remain restrictions on resale under applicable securities legislation on the Warrant
Shares so acquired, the Company, may, if required on the advice of counsel, endorse the certificates representing the Warrant Shares with respect 


19





 



to
those restrictions. Upon the voluntary exercise of Warrants pursuant to this Section 5.1, the Trustee shall promptly thereafter and in any event within three Business Days: 



	(a)
	send
by registered mail certificates for Warrant Shares to the address of the Warrantholder specified in the register of Warrants;



	(b)
	if
so specified, deliver certificates for Warrant Shares to the Warrantholder at the principal office of the Trustee in Vancouver, British Columbia; or



	(c)
	send
by registered mail certificates for the Warrant Shares to the address of the Warrantholder specified in writing by the Warrantholder to the Trustee. 




        The
exercise form attached to the Warrant Certificates shall not be deemed to be duly completed if the name and mailing address of the holder do not appear legibly on such exercise form
and such exercise form is not signed by the holder, his executors, administrators, other legal representatives or such holder's attorney duly appointed. 



        If
any of the Warrant Shares in respect of which the Warrants are exercised are to be issued to a person or persons other than the Warrantholder in accordance with the provisions of
Section 2.2 hereof, the Warrantholder shall pay to the Trustee all requisite stamp or security transfer taxes or other governmental charges eligible in connection with the issue of such Warrant
Shares to such other person or persons or shall establish to the satisfaction of the Trustee that such taxes and charges have been paid. 


5.2    Effect of Exercise of Warrants    



        Upon
the exercise and payment by the holder of the Warrants as provided in either Section 5.1, the Warrant Shares shall be deemed to have been issued and each Warrantholder is, at
that time, deemed to have become the holder or holders of record of the Warrant Shares comprised therein, in respect of which the Warrants are exercised or are deemed to have been exercised. Subject
to Subsection 4.1(c), the Warrant Shares issued upon the valid exercise of Warrants are only entitled to dividends declared in favour of shareholders of record on and after the date of exercise from
which date such Warrant Shares are for all purposes and are deemed to be issued and outstanding as fully paid and non-assessable Common Shares. 



5.3    Partial Exercise of Warrants    


        The
Warrantholder may acquire a number of Warrant Shares less than the number of Warrant Shares which the holder is entitled to acquire pursuant to the Warrant Certificate(s). In the
event of any exercise of a number of Warrants less than the number which the holder is entitled to exercise, the Warrantholder upon such exercise shall, in addition, be entitled to receive, without
charge therefor, a new Warrant Certificate(s) in respect of the balance of the Warrants represented by the surrendered Warrant Certificate(s) and which were not then exercised. 



5.4    Expiration of Warrants    


        After
the Expiry Time, all rights under any Warrants in respect of which the right of exercise herein and therein provided for shall not theretofore have been exercised in accordance
herewith and therewith shall wholly cease and terminate and such Warrant shall be void and have no effect. 


5.5    Fractions of Shares    


	(a)
	Where
a Warrantholder is entitled to receive, as a result of the adjustments provided for in Section 4.1 or otherwise, on the exercise or partial exercise of its Warrants a
fraction of a Warrant Share, such right may only be exercised in respect of such fraction in combination with another Warrant Share(s) which in the aggregate entitle the Warrantholder to receive a
whole number of Warrant Shares; and 


20





 
	(b)
	If
a Warrantholder is not able to, or elects not to, combine Warrants so as to be entitled to acquire a whole number of Warrant Shares, the Warrantholder may not exercise the right to
acquire a fractional Warrant Share, and, as a result, has the right to acquire only that number of Warrant Shares equal to the next lowest whole number of Warrant Shares. 



5.6    Accounting and Recording    


        The
Trustee shall promptly notify the Company with respect to Warrants exercised. The Trustee shall record the particulars of the Warrants exercised which include the name or names and
addresses of the persons who become holders of Warrant Shares on exercise pursuant to this Article 5 and the number of Warrant Shares issued. Within three business days of the exercise of each
Warrant pursuant to Section 5.1, the Trustee shall provide those particulars in writing to the Company. 



        The
Trustee shall promptly account to the Company with respect to the Warrants exercised and shall forward to the Company (or into an account or accounts of the Company with the bank or
trust company designated by the Company for that purpose) all monies received on the purchase of the
Warrant Shares through the exercise of the Warrants. All such monies, and any securities or other instruments from time to time received by the Trustee, shall be received in trust for the Company. 


5.7    Issuance of Warrant Shares    



        All
certificates for Warrant Shares issued to any person who the Trustee has reasonable grounds to believe is in the United States or is a U.S. Person or acting on behalf or for the
account of a U.S. Person or a person in the United States will have the following legend endorsed thereon: 



"THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT") OR THE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES. THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES AGREES FOR THE BENEFIT OF THE COMPANY THAT SUCH SHARES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (a) TO THE
COMPANY, (b) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE 1933 ACT, (c) PURSUANT TO THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE 1933 ACT
PROVIDED BY RULE 144A OR 144 THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, OR (d) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE 1933 ACT OR
ANY APPLICABLE STATE LAWS AND REGULATIONS GOVERNING THE OFFER AND SALE OF SECURITIES, AND THE HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO THE COMPANY AN OPINION OF COUNSEL, OF RECOGNIZED STANDING, OR
OTHER EVIDENCE OF EXEMPTION, REASONABLY SATISFACTORY TO THE COMPANY. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE "GOOD DELIVERY" IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA; A NEW
CERTIFICATE, BEARING NO LEGEND, DELIVERY OF WHICH WILL CONSTITUTE "GOOD DELIVERY" MAY BE OBTAINED FROM THE REGISTRAR AND TRANSFER AGENT OF THE COMPANY UPON DELIVERY OF THIS CERTIFICATE AND A DULY
EXECUTED DECLARATION, IN A FORM SATISFACTORY TO THE COMPANY AND ITS REGISTRAR AND TRANSFER AGENT, TO THE EFFECT THAT THE SALE OF THE SECURITIES REPRESENTED HEREBY IS BEING MADE IN COMPLIANCE WITH RULE
904 OF REGULATION S UNDER THE 1933 ACT." 




5.8    Securities Restrictions    


        Notwithstanding
anything herein contained, in the event that the Special Warrants are exercised pursuant to and in accordance with the provisions of Section 5.1 prior to the
issuance of a receipt for 


21





 



the
Prospectus by the Commissions, the certificates representing the Shares and Warrants thereby issued will bear such legend as may, in the opinion of counsel to the Company, acting reasonably, be
necessary in order to avoid a violation of any applicable securities laws or to comply with the requirements of any stock exchange on which the Common Shares are listed, provided that if, at any time,
in the opinion of counsel to the Company, such legends are no longer necessary in order to avoid violation of any such laws, or the holder of any such legended certificates representing the Shares or
Warrants, as the case may be, at the holder's expense, provides the Company with evidence satisfactory in form and substance to the Company (which may include an opinion of counsel satisfactory to the
Company) to the effect that such holder is entitled to sell or otherwise transfer such Shares and Warrants in a transaction in which such legends are not required, such legended certificates
representing Shares or Warrants may thereafter be surrendered to the Trustee in exchange for a certificate which does not bear such legend. 



6. MEETINGS OF WARRANTHOLDERS  


6.1    Definitions    


        In
this Article 6 or otherwise in this Indenture: 



	(a)
	"Adjourned
Meeting" means a meeting adjourned in accordance with Section 6.9;



	(b)
	"Extraordinary
Resolution" means a resolution proposed to be passed as an extraordinary resolution at a Meeting duly convened for that purpose and held in accordance with the
provisions of this Article 6, and carried by not less than 2/3 of the votes cast on such resolution; and



	(c)
	"Meeting"
means a meeting of the Warrantholders. 






6.2    Convening Meetings    


        The
Trustee or the Company may convene a Meeting at any time at the expense of the Company. Upon receipt of a written requisition signed in one or more counterparts by Warrantholders
holding not less than 25% of the Warrants outstanding, the Trustee or the Company shall convene a Meeting, provided that adequate provision has been made by the Company or the Warrantholders for the
costs of convening and holding a Meeting. If the Trustee or the Company fails to convene the Meeting within 15 Business Days after being duly requisitioned to do so, the Warrantholders holding not
less than 25% of the Warrants outstanding may themselves convene a Meeting the notice for which must be signed by a person that those Warrantholders specify, provided that the Trustee and Company
receive notice of the Meeting in accordance with Section 6.4. A written requisition must state, generally, the reason for the Meeting and business to be transacted at the Meeting. 


6.3    Place of Meeting    



        Every
Meeting must be held in Vancouver, British Columbia or at such other place that the Trustee and Company approve. 


6.4    Notice    


        The
Trustee or the Company, as the case may be, shall give written notice of each Meeting to each Warrantholder, the Trustee (unless the Meeting has been called by the Trustee), the
Underwriters and the Company (unless the Meeting has been called by the Company) in the manner specified in Article 9 at least 25 days before the date of the Meeting. The Trustee shall
give written notice of each Adjourned Meeting to each Warrantholder in the manner specified in Article 9 at least 7 days before the date of the Adjourned Meeting. The notice for a
Meeting must state the time and place of the Meeting and, generally, the reason for the Meeting and the business to be transacted at the Meeting together with such additional information as may be
required to sufficiently inform the Warrantholders 


22





 



regarding
the business to be transacted. The notice for an Adjourned Meeting must state the time and place of the Adjourned Meeting but need not specify the business to be transacted at an Adjourned
Meeting. The accidental omission by the Trustee or the Company, as the case may be, to give notice of a Meeting or an Adjourned Meeting to a Warrantholder does not invalidate a resolution passed at a
Meeting or Adjourned Meeting. 


6.5    Persons Entitled to Attend    


        The
Company and the Underwriters may and the Trustee shall, each by its authorized representatives, attend every Meeting and Adjourned Meeting but neither the Company nor the Trustee has
the right to vote. The legal advisors of the Company, Trustee, and any Warrantholders, respectively, may also attend a Meeting or Adjourned Meeting but do not have the right to vote, unless they have
the right to vote as a Warrantholder. 


6.6    Quorum    



        A
quorum for a Meeting of the Warrantholders shall consist of two or more persons present in person and owning or representing by proxy not less than 25% of the Warrants then
outstanding. 


6.7    Chairman    


        The
Trustee shall nominate a natural person as the chairman of a Meeting or Adjourned Meeting. If the person so nominated is not present within 15 minutes after the time set for holding
the Meeting or Adjourned Meeting, the Warrantholders and proxies for Warrantholders present shall choose one of their number to be chairman. The chairman may vote any Warrants for which he or she is
the registered holder. 


23







   
6.8    Power to Adjourn    


        The
chairman of any Meeting at which a quorum of 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. 


6.9    Adjourned Meeting    


        If
a quorum of the Warrantholders is not present within 30 minutes after the time fixed for holding a Meeting, the Meeting stands adjourned to a date not less than 10 calendar days and
not more than 30 calendar days later, at a place determined in accordance with Section 6.3, and at a time specified by the chairman. The Trustee shall promptly and in accordance with
Section 6.4 send a notice of the Adjourned Meeting to each Warrantholder and the Company. At an Adjourned Meeting, two or more Warrantholders or persons representing Warrantholders by proxy
constitutes a quorum for the transaction of business for which the Meeting was convened. 


6.10    Show of Hands    


        Subject
to a poll and except as otherwise required herein, every question submitted to a Meeting or Adjourned Meeting, except an Extraordinary Resolution, shall be decided, in the first
instance, by the majority of votes in a show of hands. If the vote is tied, the chairman does not have a casting vote and the motion will not be carried. On a show of hands each Warrantholder or
person representing a Warrantholder by proxy is entitled to one vote for every Warrant then outstanding of which such Warrantholder is the registered owner. 


6.11    Poll    


        When
requested by a Warrantholder acting in person or by the proxy representing the Warrantholder and on every Extraordinary Resolution, the chairman of a Meeting or Adjourned Meeting
shall request a poll on a question submitted to the meeting. Except as otherwise required herein, if a question has been put to a poll, that question shall be decided by the affirmative vote of not
less than a majority of
the votes given on the poll. If the vote is tied, the motion is not carried. On a poll, each Warrantholder or person representing a Warrantholder shall be entitled to one vote for every Warrant then
outstanding and of which he is the registered holder. A declaration made by the chairman that a resolution has been carried or lost is conclusive evidence thereof. In the case of joint registered
Warrantholders, any one of them present in person or represented by proxy may vote in the absence of the other or others but when more than one of them is present in person or by proxy, they may only
vote together in respect of the Warrants of which they are joint registered holders. 


6.12    Regulations    


        Subject
to the provisions of this Indenture, the Trustee, or the Company with the approval of the Trustee, may from time to time make and, thereafter, vary regulations not contrary to
the provisions of this Indenture as it deems fit providing for and governing the following: 



	(a)
	setting
a record date for a Meeting for determining Warrantholders entitled to receive notice of and vote at a Meeting;



	(b)
	voting
by proxy, the form of instrument appointing a proxy, the manner in which a proxy instrument must be executed, and the production of the authority of any person signing an
instrument of a proxy on behalf of a Warrantholder;



	(c)
	lodging
and the means of forwarding the instruments appointing proxies, and the time before a Meeting or Adjourned Meeting by which an instrument appointing a proxy must be deposited;
and



	(d)
	any
other matter relating to the conduct of a meeting of Warrantholders. 



24





 





        A
regulation so made is binding and effective and votes given in accordance with such a regulation are valid. The Trustee may permit Warrantholders to make proof of ownership in the
manner the Trustee approves. 


6.13    Powers of Warrantholders    


        By
Extraordinary Resolution passed pursuant to this Article 6, the Warrantholders may: 



	(a)
	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 Company, which has been agreed to by the Company;



	(b)
	direct
and authorize the Trustee to exercise any discretion, power, right, remedy or authority given to it by or under this Indenture in the manner specified in such resolution or to
refrain from exercising any such discretion, power, right, remedy, or authority;



	(c)
	direct
the Trustee to enforce any covenant or obligation on the part of the Company contained in this Indenture or to waive any default by the Company in compliance with any
provisions of this Indenture either unconditionally or upon any conditions specified in such resolution;



	(d)
	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
Company, and to authorize the Trustee to concur in and execute any ancillary or supplemental indenture embodying the change or omission;



	(e)
	without
limiting the generality of Subsections 6.13(a) and (d), assent to an extension of time thereunder;



	(f)
	with
the consent of the Company, remove the Trustee or its successor in office and to appoint a new registrar and trustee to take the place of the Trustee so removed;



	(g)
	upon
the Trustee being furnished with an indemnity that is, in its discretion, sufficient, require the Trustee to enforce any covenant of the Company contained in this Indenture or
the Warrant Certificates, or to enforce any right of the Warrantholders in any manner specified in such Extraordinary Resolution, or to refrain from enforcing any such covenant or right;



	(h)
	restrain
any Warrantholder from instituting or continuing any suit or proceeding against the Company for the enforcement of a covenant on the part of the Company contained in this
Indenture or any of the rights conferred upon the Warrantholders as set out in this Indenture or the Warrant Certificates;



	(i)
	direct
a Warrantholder who, as such, has brought a suit, action or proceeding to stay or discontinue or otherwise deal with the same upon payment of the costs, charges, and expenses
reasonably and properly incurred by such Warrantholder in connection therewith;



	(j)
	waive
and direct the Trustee to waive a default by the Company in complying with any of the provisions of this Indenture or the Warrant Certificate either unconditionally or upon any
conditions specified in such Extraordinary Resolution;



	(k)
	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 Company; and



	(l)
	amend,
alter, or repeal any Extraordinary Resolution previously passed pursuant to this Section 6.13. 



25





 





6.14    Powers Cumulative    



        Any
one or more of the powers or any combination of the powers in this Indenture stated to be exercised 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 to exhaust the right of the Warrantholder to exercise such power or combination of powers then or thereafter from time to time. 


6.15    Minutes of Meetings    


        The
Trustee shall make and maintain minutes and records of all resolutions and proceedings at a Meeting or Adjourned Meeting at the expense of the Company and shall make available those
minutes and records at the office of the Trustee for inspection by a Warrantholder or his authorized representative and the Underwriters at reasonable times. If signed by the chairman of the Meeting
or by the chairman of the next succeeding Meeting of the Warrantholders, such minutes shall be prima facie evidence of the matters therein stated, and until the contrary is proved, every such Meeting
in respect 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. 


6.16    Written Resolutions    



        Notwithstanding
the foregoing, a written resolution or instrument signed in one or more counterparts by the Warrantholders holding not less than a majority of the Warrants outstanding in
the case of a resolution, or not less than 2/3 of the Warrants outstanding in the case of a Extraordinary Resolution, is deemed to be the same as, and to have the same force and effect
as, a resolution or Extraordinary Resolution, as the case may be, duly passed at a Meeting or Adjourned Meeting. 


6.17    Binding Effect    



        A
resolution of the Warrantholders passed pursuant to this Article 6 is binding upon all Warrantholders. Upon the passing of a Warrantholder's resolution at a meeting of the
Warrantholders, or upon the signing of a written resolution or instrument pursuant to Section 6.16 and delivery by the Company to the Trustee of an original, certified or notarial copy, or
copies, of such resolution as executed or passed by the Warrantholders, the Trustee is entitled to and shall give effect thereto. 


6.18    Holdings by the Company or Subsidiaries of the Company Disregarded    



        In
determining whether Warrantholders holding Warrants evidencing the required number of Common Shares which may be acquired pursuant to the exercise of the Warrants are present at a
meeting of Warrantholders for the purpose of determining a quorum or have concurred in any consent, waiver, resolution, Extraordinary Resolution or other action under this Agreement, Warrants owned
legally or beneficially by the Company or any subsidiary of the Company shall be disregarded. 



7. SUPPLEMENTAL INDENTURES, MERGER, SUCCESSORS  


7.1    Provision for Supplemental Indentures for Certain Purposes    


        From
time to time the Company shall, when authorized by the directors of the Company, and the Trustee may, subject to the provisions of this Indenture, execute and deliver by their
proper officers, deeds, indentures or instruments supplemental hereto, which thereafter form part hereof for any one or more or all of the following purposes: 



	(a)
	adding
to the provisions hereof such additional covenants, enforcement provisions, and release provisions (if any) as in the opinion of counsel acceptable to the Company and the
Trustee are necessary or advisable, provided the same are not, in the opinion of counsel to the Trustee prejudicial to the interests of the Warrantholders; 



26





 



	(b)
	adding
to the covenants of the Company in this Indenture for the protection of the Warrantholders;



	(c)
	evidencing
any succession, (or successive successions), of other companies to the Company and the covenants of, and obligations assumed by, such successor (or successors) in
accordance with the provisions of this Indenture;



	(d)
	setting
forth any adjustments resulting from the application of the provisions of Article 4;



	(e)
	making
such provisions not inconsistent with this Indenture as may be deemed necessary or desirable with respect to matters or questions arising hereunder, provided that such
provisions are not, in the opinion of counsel to the Trustee, prejudicial to the interests of the Warrantholders;



	(f)
	giving
effect to an Extraordinary Resolution;



	(g)
	to
rectify any ambiguity, defective provision, clerical omission or mistake or manifest or other error contained herein or in any deed or indenture supplemental or ancillary hereto
provided that, in the opinion of counsel to the Trustee, the rights of the Warrantholder are not prejudiced thereby;



	(h)
	adding
to or altering the provisions hereof in respect of the transfer of Warrants, making provision for the exchange of Warrant Certificates of different denominations, and making
any modification in the form of the Warrant Certificate which does not affect the substance thereof; or



	(i)
	for
any other purpose not inconsistent with the provisions of this Indenture, provided that the rights of the Warrantholders are in no way prejudiced thereby. 




7.2    Company May Consolidate, etc. on Certain Terms    


        Subject
to Subsection 4.1(d), nothing in this Indenture prevents any consolidation, amalgamation, arrangement or merger of the Company with or into any other body corporate or bodies
corporate, or a conveyance or transfer of all or substantially all the properties and assets of the Company as an entirety to any body corporate lawfully entitled to acquire and operate the same,
provided, however, that the body corporate formed by such consolidation, amalgamation, arrangement or into which such merger has been made, or which has acquired by conveyance or transfer all or
substantially all the properties and assets of the Company as an entirety in circumstances resulting in the Warrantholders being entitled to receive property from or securities of such body corporate,
shall execute prior to or contemporaneously with such consolidation, amalgamation, arrangement, merger, conveyance or transfer, an indenture supplemental hereto wherein the due and punctual
performance and observance of all the covenants and conditions of this Indenture to be performed or observed by the Company are assumed by the successor body corporate. The Trustee is entitled to
receive and is fully protected in relying upon an opinion of counsel that any such consolidation, amalgamation, arrangement, merger, conveyance or transfer, and a supplemental indenture executed in
connection therewith, complies with the provisions of this Section. 


7.3    Successor Body Corporate Substituted    


        Where
the Company, pursuant to Section 7.2 hereof, is consolidated, amalgamated, arranged or merged with or into any other body corporate or bodies corporate or conveys or
transfers all or substantially all of the properties and assets of the Company as an entirety to another body corporate, the successor body corporate formed by such consolidation, amalgamation,
arrangement or into which the Company has been merged or which has received a conveyance or transfer as aforesaid succeeds to and is substituted for the Company hereunder with the same effect as
nearly as may be possible as if it 


27





 



had
been named herein. Such changes may be made in the Warrants as may be appropriate in view of such consolidation, amalgamation, arrangement, merger, conveyance or transfer. 



8. CONCERNING THE TRUSTEE  


8.1    Duties of Trustee    


        By
way of supplement to the provisions of any statute for the time being relating to trustees, and notwithstanding any other provision of this Indenture, in the exercise of the rights,
duties and obligations 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 that degree of care, diligence and skill that a reasonably prudent trustee would exercise in comparable circumstances. 


8.2    Action by Trustee    


        The
Trustee is not obligated to do any act or thing except where required to do so by this Indenture and, in the case of a default, only when it has actual notice thereof. 


8.3    Certificate of the Company    


        If
in the administration of the trusts of this Indenture, the Trustee deems it necessary or desirable that any matter be proved or established by the Company, prior to taking or
suffering any action hereunder, the Trustee may accept and rely on a certificate of the Company as conclusive evidence of the truth of any fact relating to the Company or its assets therein stated and
proof of the regularity of any proceedings or actions associated therewith, but the Trustee may in its discretion require further evidence or information before acting or relying on any such
certificate. 


8.4    Trustee May Employ Experts    


        The
Trustee may, at the Company's expense, employ or retain such lawyers, accountants, engineers, appraisers or other experts, advisers or agents as it may reasonably require for the
purpose of discharging its duties hereunder and may pay reasonable remuneration for such services rendered to it but it is not responsible for any misconduct, mistake or error of judgment on the part
of any of them. The Company shall reimburse the Trustee for all disbursements, costs and expenses made or incurred by the Trustee in the discharge of its duties and in the management of the trusts
hereunder. The Trustee may rely upon the and act upon the opinion or advice of, or information obtained from, any such lawyer, accountant, engineer, appraiser or other expert, adviser or agent in
relation to any matter arising in the administration of the trusts hereof. The Trustee shall not incur any liability for the acts or omissions of such lawyers, accountants, engineers, appraisers or
other experts, advisers or agents employed by the Trustee in good faith. 


8.5    Resignation and Replacement of Trustee    



	(a)
	The
Trustee may resign its trust and be discharged from all further obligations hereunder by giving to the Company and the Warrantholders written notice at least 90 days, or
such shorter time period if acceptable to the Trustee, the Company and the Special Warrantholders, before the effective date of the resignation. If the Trustee resigns, or becomes incapable of acting
hereunder, the Company shall forthwith appoint in writing a new trustee. Failing such appointment by the Company or by the Warrantholders by Extraordinary Resolution, the retiring Trustee or any
Warrantholder may apply to a Judge of the Supreme Court of British Columbia on such notice as such Judge may direct, for the appointment of a new trustee. The Warrantholder may, by Extraordinary
Resolution, remove the Trustee (including a trustee appointed by the Company or by a Judge as aforesaid) and appoint a new trustee. On any new appointment, the new trustee is vested with the same
powers, rights, duties and obligations as if it had been originally named as Trustee without any further assurance, conveyance, act or deed. If for any reason it becomes necessary or expedient to
execute any 



28





 


further
deed or assurance, the former Trustee shall execute the same in favour of the new trustee. 



	(b)
	Any
company resulting from a merger, consolidation, arrangement or amalgamation to which the Trustee for the time being is a party shall be the successor Trustee under this Indenture
without any further act. 






8.6    Indenture Legislation    



        The
Company and the Trustee agree that each shall at all times in relating to this Indenture and to any action to be taken hereunder, observe and comply with and be entitled to the
benefits of all Applicable Legislation. If and to the extent that any provision of this Indenture limits, qualifies or conflicts with any mandatory requirement of Applicable Legislation, such
mandatory requirement prevails. 


8.7    Notice    


        The
Trustee is not required to give notice to third parties, including the Warrantholders, of the execution of this Indenture. 


8.8    Use of Proceeds    


        The
Trustee is in no way responsible for the use by the Company of the proceeds of the issue hereunder. 


8.9    No Inquiries    


        Prior
to the countersignature and delivery of any Warrant Certificates under any provisions of this Indenture, the Trustee is not bound to make any inquiry or investigation as to the
correctness of the matters set out in any of the resolutions, opinions, certificates or other documents required by the provisions of this Indenture, but is entitled to accept and act upon the
resolutions, opinions, certificates or other documents, provided that such resolutions, opinions, articles or other documents comply with the Applicable Legislation and that the Trustee complies with
the Applicable Legislation, and that the Trustee examines the same and determines that such resolutions, opinions, acts or other documents comply with the applicable requirements of this Indenture.
The Trustee may nevertheless, in its discretion, require further proof in cases where it deems further proof desirable. The Trustee is not bound to make any inquiry or investigation as to the
performance by the Company of the Company's covenants hereunder. 


8.10    Actions by Trustee to Protect Interest    


        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. 


8.11    Trustee Not Required to Give Security    



        The
Trustee is not required to give any bonds or security with respect to the execution or administration of the trusts and powers of this Indenture. 


8.12    No Conflict of Interest    


        The
Trustee represents to the Company that, at the date of execution and delivery by it of this Indenture, there exists no material conflict of interest in the role of the Trustee as a
fiduciary hereunder but if, notwithstanding the provisions of this Section 8.12, such a material conflict of interest exists, the validity and enforceability of this Indenture and the
instruments issued hereunder is not affected in any manner whatsoever by reason only that such material conflict of interest exists or arises. The Trustee shall, within 30 days after
ascertaining that it has a material conflict of interest, either 


29





 



eliminate
such material conflict of interest or resign in the manner and with the effect specified in Section 8.5. 


8.13    Trustee Not Ordinarily Bound    



        The
Trustee is not obligated to spend its own funds in connection with the commencement or continued exercise of its duties hereunder. The obligation of the Trustee to exercise its
duties hereunder is conditional upon Warrantholders furnishing, when required in writing so to do by the Trustee, an indemnity reasonably satisfactory to the Trustee, and funds sufficient for
commencing or continuing the act, action or proceeding and an indemnity reasonably satisfactory to the Trustee to protect and hold harmless the Trustee against any loss, damage or liability by reason
thereof. 


8.14    Trustee May Deal in Instruments    



        The
Trustee may in its personal or other capacity, buy, sell, lend upon and deal in and hold securities of the Company and generally contract and enter into financial transactions with
the Company or otherwise, without being liable to account for any profits made thereby. 


8.15    Recitals or Statements of Fact Made by Company    


        Subject
to the provisions hereof, the Trustee is not liable for or by reason of any of the statements of fact or recitals contained in this Indenture or in the Warrant Certificates and
is not required to verify the same but all such statements and recitals are and are deemed to have been made by the Company only. 


8.16    Trustee's Discretion Absolute    


        The
Trustee, except as herein otherwise provided, has, as regards all the trusts, powers, authorities and discretions vested in it, absolute and uncontrolled discretion as to the
exercise thereof, whether in relation to the manner or as to the mode and time for the exercise thereof. 



8.17    No Representations as to Validity    


        The
Trustee is not: 



	(a)
	under
any responsibility in respect of the validity of this Indenture or the execution and delivery thereof or (subject to Section 2.5 hereof) in respect of the validity or the
execution of any Warrant;



	(b)
	responsible
for any breach by the Company of any covenant or condition contained in this Indenture or in any such Warrant Certificate; or



	(c)
	by
any act hereunder, deemed to make any representation or warranty as to the authorization or reservation of any Common Shares to be issued as provided in this Indenture or in any
Warrant Certificate or as to whether any shares will when issued be duly authorized or be validly issued and fully paid and non-assessable. The duty and responsibility as to all the
matters and things referred to in this Section 8.17 rests upon the Company and not upon the Trustee and the failure of the Company to discharge any such duty and responsibility does not in any
way render the Trustee liable or place upon it any duty or responsibility for breach of which it would be liable. 




8.18    Acceptance of Trusts    



        The
Trustee hereby accepts the trusts of this Indenture and agrees to perform the same upon the terms and conditions herein set forth or referred to unless and until discharged therefrom
by resignation or in some other lawful way. 


30





 



8.19    Trustee's Authority to Carry on Business    



        The
Trustee represents to the Company that at the date hereof it is authorized to carry on business of a trust company in British Columbia. If, notwithstanding the provisions of this
Section 8.19, it ceases to be authorized to carry on such business in British Columbia, the validity and enforceability of this Indenture and of the Warrants issued hereunder are not affected
in any manner whatsoever by reason only of such event, provided that the Trustee shall, within 30 days after ceasing to be authorized to carry on such business in British Columbia, either
become so authorized or resigns in the manner and with the effects specified in Section 8.5. 


8.20    Indemnification of Trustee    



        Without
limiting any protection or indemnity of the Trustee under any other provision hereof, or otherwise at law, the Company hereby agrees to indemnify and hold harmless the Trustee
from and against any and all liabilities, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements, including reasonable legal or advisor fees and disbursements, of
whatever kind and nature which may at any time be imposed on, incurred by or asserted against the Trustee in connection with the performance of its duties and obligations hereunder, other than such
liabilities, losses, damages, penalties, claims, actions, suits, costs, expenses and other disbursements arising by reason of the gross negligence or fraud of the Trustee. This provision shall survive
the resignation or removal of the Trustee, or the termination of this Indenture. The Trustee shall not be under any obligation to prosecute or to defend any action or suit in respect of the
relationship which, in the opinion of its
counsel, may involve it in expense or liability, unless the Company shall, so often as required, furnish the Trustee with satisfactory indemnity and funding against such expense or liability. 


8.21    Performance of Covenants by Trustee    


        If
the Company fails to perform any of its covenants contained in this Indenture, then the Company will notify the Trustee in writing of such failure and upon receipt by the Trustee of
such notice, the Trustee will notify the Warrantholders of such failure on the part of the Company and 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 sums expended or disbursed by the Trustee in so doing shall be reimbursed as provided in
Section 3.10. No such performance, expenditure or disbursement by the Trustee shall be deemed to relieve the Company of any default hereunder or of its continuing obligations under the
covenants herein contained. 


9. NOTICES  


9.1    Notice to Company, Trustee and Underwriters    


        Any
notice to the Company, Trustee or Underwriters under the provisions of this Indenture is valid and effective if in writing delivered or sent by telecopier: 



	(a)	 	to the Company at:	 	 	 	 
	

 	
 	

Cardiome Pharma Corp.

3650 Wesbrook Mall

Vancouver, BC

V6S 2L2	
 	

Attention:

 

Telecopier:	
 	

Mr. Robert Rieder

 

604-677-6915
	

 	
 	

with a copy to:	
 	

 	
 	

 
	

 	
 	

Catalyst Corporate Finance Lawyers

Suite 1400, 1055 West Hastings Street

Vancouver, BC V6E 2E9	
 	

Attention:

  

Telecopier:	
 	

James Heppell

  

604-443-7000
	 	 	 	 	 	 	 





31





 

	

(b)	
 	

to the Trustee at:	
 	

 	
 	

 
	

 	
 	

Pacific Corporate Trust Company

10th Floor, 625 Howe Street

Vancouver, BC V6C 3B8	
 	

Attention:

  

Telecopier:	
 	

Corporate Trust Department

  

604-689-8144
	

(c)	
 	

to the Underwriters at:	
 	

 	
 	

 
	

 	
 	

Yorkton Securities Inc.

BCE Place,

181 Bay Street

Suite 3100

Toronto, Ontario M5J 2T3	
 	

Attention:

 

Telecopier:	
 	

Steven Winokur

 

416-864-3650
	

 	
 	

TD Securities Inc.

66 Wellington St. W.

Toronto Dominion Bank

Tower Toronto Dominion Centre

8th Floor,

Toronto, Ontario M5K 1A2	
 	

Attention:

 

Telecopier:	
 	

Peter Grosskopf

 

416-983-3176
	

 	
 	

Sprott Securities Inc.

Royal Bank Plaza

Suite 3450, South Tower

Toronto, Ontario M5J 2J2	
 	

Attention:

  

Telecopier:	
 	

Robert Chalmers

 

416-943-6496
	

 	
 	

First Associates Investments Inc.

Suite 2400,

BCE Place

161 Bay Street

Toronto, ON M5J 2S1	
 	

Attention:

  

Telecopier:	
 	

Paul Moase

  

(416) 865-1960
	

 	
 	

with a copy to:	
 	

 	
 	

 
	

 	
 	

Fasken Martineau DuMoulin LLP

66 Wellington St. W.

Toronto Dominion Bank Tower

Toronto Dominion Centre

Suite 4200, PO Box 20

Toronto, Ontario M5K 1N6	
 	

Attention:

  

Telecopier:	
 	

Richard Steinberg

  

416-364-7813





and
is deemed to have been effectively given on the date of delivery if delivered and on the first business day following the date of transmission if sent by telecopier. 


9.2    Notice to Warrantholders    


        Any
notice to the Warrantholders under the provisions of this Indenture is valid and effective if delivered, sent by regular mail or telecopier, to each Warrantholder at its address
appearing on the register of Warrants kept by the Trustee or, in the case of joint holders, to the first such address, and, if delivered, shall be deemed to have been given and received on the day it
was delivered and, if mailed, be deemed to have been received on the fifth Business Day following the date of the postmark on such notice and, if sent by facsimile, be deemed to have been given and
received on the day it was so sent unless it was sent. 



	(a)
	on
a day which is not a Business Day in the place to which it was sent; or



	(b)
	after
4:30 p.m. in the place to which it was sent, 



32






 




in
which cases it will be deemed to have been given and received on the next day which is a business day in the place to which it was sent. 




        A
copy of any notice provided to the Warrantholders shall be concurrently provided to the Underwriters in the manner specified in Section 9.1. 



10. POWER OF BOARD OF DIRECTORS  


10.1    Board of Directors    


        In
this Indenture, where the Company is required or empowered to exercise any acts, all such acts may be exercised by the directors of the Company, by any duly appointed committee of the
directors of the Company or by those officers of the Company authorized to exercise such acts. 


11. MISCELLANEOUS PROVISIONS  


11.1    Further Assurances    



        The
parties covenant and agree from time to time, as may be reasonably required by any party hereto, to execute and deliver such further and other documents and do all matters and things
which are convenient or necessary to carry out the intention of this Indenture more effectively and completely. 


11.2    Unenforceable Terms    


        If
any term, covenant or condition of this Indenture or the application thereof to any party or circumstance is invalid or unenforceable to any extent, the remainder of this Indenture or
application of such term, covenant or condition to a party or circumstance other than those to which it is held invalid or unenforceable is not affected thereby and each remaining term, covenant or
condition of this Indenture is valid and enforceable to the fullest extent permitted by law. 


11.3    No Waiver    


        No
consent or waiver, express or implied, by either party to or of any breach or default by the other party in the performance by the other party of its obligations hereunder is deemed
or construed to be a consent or waiver to or of any other breach or default in the performance of obligations hereunder by such party. Failure on the part of either party to complain of any act or
failure to act of the other party or to declare the other party in default, irrespective of how long such failure continues, does not constitute a waiver by such party of its rights hereunder. 


11.4    Suits By Warrantholders    



	(a)
	No
Warrantholder has any right to institute any action, suit or proceeding at law or in equity for the purpose of enforcing the execution of any trust or power hereunder or for the
appointment of a liquidator or receiver or for a receiving order under the Bankruptcy and Insolvency Act (Canada) or to have the Company wound up or to file or prove a claim in any liquidation or
bankruptcy proceedings or for any other remedy hereunder unless the Warrantholders by Extraordinary Resolution have made a request to the Trustee and the Trustee has been afforded reasonable
opportunity to proceed or complete any action or suit for any such purpose whether or not in its own name and the Warrantholders or any or them have furnished to the Trustee, when so requested by the
Trustee sufficient funds and security and indemnity satisfactory to it against the costs, expenses and liabilities to be incurred therein or thereby and the Trustee has failed to act within a
reasonable time or the Trustee has failed to actively pursue any such act or proceeding.



	(b)
	Subject
to the provisions of this Section and otherwise in this Indenture, all or any of the rights conferred upon a Warrantholder by the terms of a Warrant may be enforced by such 



33





 


Warrantholder
by appropriate legal proceedings without prejudice to the right which is hereby conferred upon the Trustee to proceed in its own name to enforce each and all of the provisions herein
contained for the benefit of the Warrantholders from time to time. 





11.5    Enurement    


        This
Indenture enures to the benefit of and be binding upon the parties hereto and their respective successors and assigns. 


11.6    Formal Date and Effective Date    


        For
the purpose of convenience this Indenture is referred to as bearing the formal date of April 10, 2003 however notwithstanding such formal date, this Indenture becomes
effective as between the Company and any particular Warrantholder upon the date of issuance of a Warrant Certificate to such Warrantholder. 



	
CARDIOME PHARMA CORP.	
 	

 
	

Per:	
 	

 	
 	

 
	

 	
 	
"Bob Rieder"
 Authorized Signatory	
 	

 
	
PACIFIC CORPORATE TRUST COMPANY	
 	

 
	

Per:	
 	

 	
 	

 
	

 	
 	
"Marc Castonguay"
 Authorized Signatory	
 	

 
	

Per:	
 	

 	
 	

 
	

 	
 	
"Heather Plume"
 Authorized Signatory	
 	

 




34







 
 

SCHEDULE "A"
  
    FORM OF WARRANT CERTIFICATE    
    


[IF WARRANT ISSUED PRIOR TO THE CLEARANCE DATE: "UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THE SECURITIES SHALL NOT TRADE THE SECURITIES BEFORE
AUGUST 11, 2003"]  


"THIS WARRANT AND THE SHARES DELIVERABLE UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND THIS WARRANT MAY NOT BE EXERCISED IN THE UNITED STATES OR BY OR ON BEHALF OF A PERSON IN THE UNITED STATES OR A U.S. PERSON UNLESS THE WARRANT
AND THE UNDERLYING SHARES HAVE BEEN REGISTERED UNDER THE 1933 ACT AND THE APPLICABLE SECURITIES LEGISLATION OF ANY SUCH STATE OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS IS AVAILABLE. "UNITED
STATES" AND "U.S. PERSON" ARE AS DEFINED BY REGULATION S UNDER THE 1933 ACT." "THIS WARRANT AND THE SHARES DELIVERABLE UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND THIS WARRANT MAY NOT BE EXERCISED IN THE UNITED STATES OR BY OR ON BEHALF OF A PERSON IN THE
UNITED STATES OR A U.S. PERSON UNLESS THE WARRANT AND THE UNDERLYING SHARES HAVE BEEN REGISTERED UNDER THE 1933 ACT AND THE APPLICABLE SECURITIES LEGISLATION OF ANY SUCH STATE OR AN EXEMPTION FROM
SUCH REGISTRATION REQUIREMENTS IS AVAILABLE. "UNITED STATES" AND "U.S. PERSON" ARE AS DEFINED BY REGULATION S UNDER THE 1933 ACT." 



THE WARRANTS REPRESENTED HEREBY WILL BE VOID AND OF NO VALUE UNLESS EXERCISED WITHIN THE TIME LIMITED HEREIN PROVIDED.  


SHARE PURCHASE WARRANTS  


 CARDIOME PHARMA CORP.
  (Continued under the Canada Business Corporations Act) 



	No. W-•	 	 	 	Warrants representing the Right to Purchase • Shares




WARRANTS FOR PURCHASE OF SHARES  


        THIS IS TO CERTIFY THAT, for value received • (the "holder") of • is entitled to subscribe for and purchase
• fully paid and non-assessable Shares in the capital of CARDIOME PHARMA CORP. (the "Company") at any time prior to
5:00 p.m. (Toronto time) on April 10, 2004 (subject to adjustment pursuant to the terms set out in the Warrant Indenture) at a price of $2.75 per share (the "Exercise Price"), subject,
however, to the provisions and upon the terms and conditions hereinafter set forth. 


        The
Warrants represented by this certificate are issued under and pursuant to a Warrant Indenture (the "Warrant Indenture") made as of April 10, 2003 between the Company and the
Trustee (which expression shall include any successor trustee appointed under the Warrant Indenture), to which Warrant Indenture (and any amendments thereto and instruments supplemental thereto)
reference is hereby made for a full description of the rights of the holders of the Warrants and the terms and conditions upon which such Warrants are or are to be, issued and held, all to the same
effect as if the provisions of the Warrant Indenture and all amendments thereto and instruments supplemental thereto were herein set forth and to all of which provisions the holder of these Warrants
by acceptance hereof 





 



assents.
All capitalized terms not otherwise defined herein shall have the meanings ascribed to thereto in the Warrant Indenture. 


        In
the event of any conflict or inconsistency between the provisions of the Warrant Indenture (and any amendments thereto and instruments supplemental thereto) and the provisions of this
Warrant Certificate ("Warrant Certificate"), except those that are necessary by context, the provisions of the Warrant Indenture (and any amendments thereto and instruments supplemental thereto) shall
prevail. The terms and provisions of the Warrant Indenture (and any amendments thereto and instruments supplemental thereto) are incorporated herein by reference. 


        The
rights to acquire Shares of the Company granted by this Warrant Certificate may be exercised subject to the terms and conditions set out in the Warrant Indenture, in whole or in part
(but not as to a fractional Share), by surrender of this Warrant Certificate and the duly completed and executed Exercise Form attached as Appendix 2 hereto, at the offices of the Company's
registrar and transfer agent, Pacific Corporate Trust Company of Canada, 10th Floor, 625 Howe Street, Vancouver, British Columbia, V6C 3B8 (the "Trustee") accompanied by a certified cheque or
bank draft payable to or to the order of the Company in payment of the purchase price of the number of Shares for which Warrants are then exercised. 


        In
the event of any exercise of the rights represented by this Warrant Certificate, certificates for the Shares so purchased (the "Share Certificates") shall be delivered to the holder
within a reasonable time, not exceeding five days after the rights represented by this Warrant Certificate have been so exercised, and, unless the Warrants have expired, a new Warrant Certificate (the
"New Warrant Certificate") granting the right to acquire that number of Shares, if any, with respect to which the Warrants have not then been exercised shall also be issued to the holder within such
time. 


        The
Company has covenanted and agreed to use its best efforts to promptly finalize and obtain receipts for a preliminary prospectus and a (final) prospectus (collectively, the
"Prospectus") from the Commissions qualifying the issuance of the Common Shares and Warrants upon the due exercise of the Special Warrants under which the Warrants are issued. 


        In
the event that the Company is unable to obtain receipts for the Prospectus from the Commissions, the Warrants and the Shares underlying them may be subject to statutory hold periods
during which these securities may not be resold in such jurisdiction. In addition, any Warrants that are exercised or Shares received on such exercise prior to the date (the "Clearance Date") on which
a receipt is issued for the Prospectus by the Commissions may be subject to statutory restrictions and may also be subject to restrictions on resale imposed by the Toronto Stock Exchange. Holders are
advised to consult their own legal advisers in this regard. All share certificates for Shares issued on the exercise of the rights represented by this Warrant Certificate prior to the Clearance Date
shall bear the following legend: 



"UNLESS
PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THE SECURITIES SHALL NOT TRADE THE SECURITIES BEFORE AUGUST 11, 2003" 




        All
Share Certificates issued to persons who fail to certify to the Company that they are not a U.S. Person and are not exercising this Warrant in the United States or on behalf or for
the account of a U.S. Person or a person in the United States on the exercise of the rights represented by this Warrant Certificate will bear the following legend (the "US Legend"): 



"THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"). THE HOLDER HEREOF, BY PURCHASING SUCH
SECURITIES AGREES FOR THE BENEFIT OF THE COMPANY THAT SUCH SHARES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (a) TO THE COMPANY, (b) OUTSIDE THE UNITED STATES IN
ACCORDANCE WITH RULE 904 OF 



2





 

REGULATION
S UNDER THE 1933 ACT, (c) PURSUANT TO THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE 1933 ACT PROVIDED BY RULE 144A OR 144 THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS, OR (d) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE 1933 ACT OR ANY APPLICABLE STATE LAWS AND REGULATIONS GOVERNING THE OFFER AND SALE OF
SECURITIES, AND THE HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO THE COMPANY AN OPINION OF COUNSEL, OF RECOGNIZED STANDING, OR OTHER EVIDENCE OF EXEMPTION, REASONABLY SATISFACTORY TO THE COMPANY.
DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE "GOOD DELIVERY" IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA; A NEW CERTIFICATE, BEARING NO LEGEND, DELIVERY OF WHICH WILL CONSTITUTE
"GOOD DELIVERY" MAY BE OBTAINED FROM THE REGISTRAR AND TRANSFER AGENT OF THE COMPANY UPON DELIVERY OF THIS CERTIFICATE AND A DULY EXECUTED DECLARATION, IN A FORM SATISFACTORY TO THE COMPANY AND ITS
REGISTRAR AND TRANSFER AGENT, TO THE EFFECT THAT THE SALE OF THE SECURITIES REPRESENTED HEREBY IS BEING MADE IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE 1933 ACT." 




provided
that if the Special Warrants are being sold in a transaction meeting the requirements of Rule 904 of Regulation S under the 1933 Act ("Regulation S"), the U.S. Legend may be
removed by providing a declaration to the Company's transfer agent to the following effect (or as the Company may prescribe from time to time): 


        The
undersigned (A) acknowledges that the sale of the Special Warrants to which this declaration relates is being made in reliance on Rule 904 of Regulation S under
the United States Securities Act of 1933, as amended (the "Securities Act") and (B) certifies that (1) the offer of such securities was not
made to a person in the United States, or the seller and any person acting on its behalf reasonably believes that the buyer was outside the United States or, (2) neither the seller nor any
person acting on its behalf engaged in any directed selling efforts in the United States in connection with the offer and sale of such securities, (3) the sale is bona fide and not for the
purpose of "washing off" the resale restrictions imposed because the securities are "restricted securities" (as such term is defined in Rule 144(a)(3) under the 1933 Act), (4) the seller
does not intend to replace the securities sold in reliance on Rule 904 with fungible unrestricted securities (5) the contemplated sale is not a transaction, or part of a series of
transactions which, although in technical compliance with Regulation S, is part of a plan or scheme to evade the registration provisions of the 1933 Act and (6) the undersigned is not an
"affiliate" (as defined in Rule 405 under the 1933 Act) of the Company. Terms used herein have the meanings given to them by Regulation S. 



        In
order to ensure compliance with applicable United States securities laws, no direct or indirect transfer or sale of Special Warrants bearing the U.S. Legend may be made except in
compliance with the U.S. Legend or unless otherwise determined by the Company to be in accordance with applicable Canadian securities legislation. 


        The
Company covenants and agrees that all Shares issued upon the exercise of the rights represented by this Warrant Certificate shall, upon issuance, be fully paid and
non-assessable and free of all liens, charges and encumbrances. The Company further covenants and agrees that during the period within which the rights represented by this Warrant
Certificate may be exercised, the Company shall at all times have authorized and reserved a sufficient number of Shares to provide for the exercise of the rights represented by this Warrant
Certificate. 


3





 



        The
Warrants evidenced by this Warrant Certificate are not transferable except as set forth in Section 2.2 of the Warrant Indenture which makes reference to the fact that a person
who furnishes evidence that he is, to the reasonable satisfaction of the Trustee: 



	(a)
	the
executor, administrator, heir or legal representative of the heirs of the estate of a deceased Warrantholder;



	(b)
	a
guardian, committee, trustee, curator or tutor representing a Warrantholder who is an infant, an incompetent person or a missing person;



	(c)
	a
liquidator or, or a trustee in bankruptcy for, a Warrantholder; 




may,
as hereinafter stated, by surrendering such evidence together with the Warrant Certificate in question to the Trustee (by delivery or mail as set forth in Section 9.1 of the Warrant
Indenture), and subject to such reasonable requirements as the Trustee may prescribe and all applicable securities legislation and requirements of regulatory authorities, become noted upon the
register of Warrantholders. Any Warrantholder wishing to transfer these Warrants must complete the Form of Transfer attached as Appendix 1 hereto. 


        The
Warrants may only be transferred (i) to the Company or (ii) outside the United States in a transaction meeting the requirements of Rule 904 of
Regulation S under the Securities Act, or any successor rule or regulation of the United States Securities and Exchange Commission as presently in effect pursuant to the Securities Act, or
(iii) made pursuant to the exemption from registration under the Securities Act provided by Rule 144A or 144 thereunder, or (iv) in a transaction that does not require
registration under the Securities Act or any applicable United States state laws, rules and regulations governing the offer and sale of securities, and it has theretofore furnished to the Company an
opinion to that effect of counsel of recognized standing reasonably satisfactory to the Company. 


        The
exercise of the rights represented by this Warrant Certificate by the holder is deemed to constitute the entering into of a subscription agreement between the holder and the Company
on the same terms, mutatis mutandis, as the special warrant subscription agreement between the holder and the Company pursuant to which the Special Warrants were originally acquired by the holder,
which Special Warrants were exercised by the holder to acquire the rights represented by this Warrant Certificate. 



        Time
shall be of the essence hereof. The Warrants and the Warrant Indenture (and any amendments thereto and instruments supplemental thereto) shall be governed by, performed, construed
and enforced in accordance with the laws of the Province of British Columbia and the laws of Canada applicable therein and shall be treated in all respects as British Columbia contracts. 


        This
Warrant Certificate is not valid for any purpose whatever until it has been countersigned by or on behalf of the Trustee. 


4





 



        IN
WITNESS WHEREOF the Company has caused this Warrant Certificate to be executed and the Trustee has caused this Warrant Certificate to be countersigned by its duly authorized officers
as of this            day of                        ,
200            . 



	CARDIOME PHARMA CORP.	 	 
	

Per:	
 	

 	
 	

 
	 	 	
 Authorized Signatory	 	 
	

COUNTERSIGNED BY:	
 	

 
	
PACIFIC CORPORATE TRUST COMPANY	
 	

 
	

Per:	
 	

 	
 	

 
	 	 	
 Authorized Signatory	 	 




5







 
 

APPENDIX 1
  
    FORM OF TRANSFER    
    



FOR
VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto (name)                          (the "Transferee"),
 of (residential address)
                         Warrants of Cardiome Pharma Corp. registered in the name of the undersigned on the records of
Pacific Corporate Trust Company represented by the attached
certificate, and irrevocably appoints as the attorney of the undersigned to transfer the said securities on the books or register of transfer, with full power of substitution. 



DATED
the              day of                         ,
200    . 



	

	

 	
 	

	
 	

	
 	

 
	 	 	Signature Guaranteed

(See instructions to Special Warrantholders in Appendix 3)	 	(Signature of Special Warrantholder, to be the same as appears on the face of this Special Warrant Certificate)	 	 
	

 	
 	

Name of Special Warrantholder:

Address (Please Print):	
 	

	
 	

 
	

 	
 	

 	
 	

	
 	

 
	

 	
 	

 	
 	

	
 	

 
	

 	
 	

 	
 	

	
 	

 
	






Note
to Warrantholders: 


	(1)
	In
order to transfer the Warrants represented by this Warrant Certificate, this transfer form must be delivered to the Trustee, together with this Warrant Certificate.



	(2)
	The
signature of the holder on the transfer form must be guaranteed by a Canadian Schedule 1 chartered bank, a major trust company in Canada, a member of the Securities
Transfer Association Medallion Program (STAMP), a member of the Stock Exchange Medallion Program (SEMP) or a member of the New York Stock Exchange Inc. Medallion Signature Program (MSP). 







 
 

APPENDIX 2
  
    EXERCISE FORM    
    


TO:    CARDIOME PHARMA CORP.


        The
undersigned hereby exercises the right to acquire                          common shares of Cardiome Pharma Corp. as
constituted on April 10, 2003 (or such
number of other securities or property to which such Warrants entitle the undersigned in lieu thereof or in addition thereto.) 


        The
undersigned hereby represents and warrants to the Company as follows (check one): 



	      	 	(i)	 	the undersigned is not a U.S. person and the Warrant is not being exercised within the United States or for the account of a U.S. person; or
	

      	
 	

(ii)	
 	

the undersigned was a U.S. person at the time of acquisition of the Special Warrants and each of the representations and warranties made by the Undersigned in the Subscription Agreement between the undersigned and the Company, pursuant to which the
undersigned acquired the Warrants, are true and correct as of the date hereof; or
	

      	
 	

(iii)	
 	

the undersigned has delivered herewith to the Company a written opinion of counsel to the effect that the exercise of the Warrant by the undersigned is not subject to registration under the Securities Act of 1933, as amended, or the securities laws
of any state of the United States.





        "United
States" and U.S. person" are as defined by Regulation S under the United States Securities Act of 1933. Other defined terms used herein without definition have the meaning
given to such terms in the Indenture. 


        Number
of common shares:              


        DATED
at                         ,
                        , this              day of
                        , 200    . 



	

 	
 	

 	
 	

 	
 	

 
	


	



 	

 	




 Signature Witnessed

(See instructions to Warrantholders)	

 	




 (Signature of Warrantholder, to be the same as appears on the face of this Warrant Certificate)	

 	



 
	



 	

 	



Name of Special Warrantholder:	

 	




	

 	



 
	



 	

 	



Address (Please Print):	

 	




	

 	



 
	



 	

 	



 	

 	




	

 	



 
	



 	

 	



 	

 	




	

 	



 
	











 
 

SCHEDULE "B"
  
    DEFINITION OF "U.S. PERSON" AND "UNITED STATES"    
    


	"(o)
	"U.S. Person"



	(1)
	U.S.
person means:



	(i)
	any
natural person resident in the United States;



	(ii)
	any
partnership or corporation organized or incorporated under the laws of the United States;



	(iii)
	any
estate of which any executor or administrator is a U.S. person;



	(iv)
	any
trust of which any trustee is a U.S. person;



	(v)
	any
agency or branch of a foreign entity located in the United States;



	(vi)
	any
non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a U.S. person;



	(vii)
	any
discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated, or (if an individual) resident in the
United States; and



	(viii)
	any
partnership or corporation if:



	A.
	organized
or incorporated under the laws of any foreign jurisdiction; and



	B.
	formed
by a U.S person principally for the purpose of investing in securities not registered under the 1933 Act, unless it is organized or incorporated, and owned by accredited
investors (as defined in Rule 501(a) under the 1933 Act who are not natural persons, estates or trusts.









	(2)
	Notwithstanding
paragraph (o)(1) of this section, any discretionary account or similar account (other than an estate or trust) held for the benefit of or account of a
non-U.S. person by a dealer or other professional fiduciary organized, incorporated or (if an individual) resident in the United States shall not be deemed to be a U.S. person;



	(3)
	Notwithstanding
paragraph (o)(1) of this section, any estate of which any professional fiduciary acting as executor or administrator is a U.S. person shall not be deemed a U.S.
person if:



	(i)
	an
executor or administrator of the estate who is not a U.S. person has sole or shared investment discretion with respect to the assets of the estate; and



	(ii)
	the
estate is governed by foreign law.






	(4)
	Notwithstanding
paragraph (o)(1) of this section, any trust of which any professional fiduciary acting as trustee is a U.S. person shall not be deemed a U.S. person if a
trustee who is not a U.S. person has sole or shared investment discretion with respect to the trust assets, and no beneficiary of the trust (an no settlor if the trust is revocable) is a U.S. person.



	(5)
	Notwithstanding
paragraph (o)(1) of this section, an employee benefit plan established and administered in accordance with the law of a country other than the United States and
customary practices and documentation of such country shall not be deemed a U.S. person.



	(6)
	Notwithstanding
paragraph (o)(1) of this section, any agency or branch of a U.S. person located outside the United States shall not be deemed a "U.S. person" if:



	(i)
	the
agency or branch operates for valid business reasons; and



	(ii)
	the
agency or branch is engaged in the business of insurance or banking and is subject to substantive insurance or banking regulation, respectively, in the jurisdiction where
located.






	(7)
	The
International Monetary Fund, the International Bank for Reconstruction and Development, the Inter-American Development Bank, the Asian Development Bank, the African Development 





 

Bank,
the United Nations, and their agencies, affiliates and pension plans, and any other similar international organizations, their agencies, affiliates and pension plans shall not be deemed "U.S.
persons." 



	(p)
	United States. "United States" means the United States of America, its territories and possessions, any State of the United States, and
the District of Columbia. 


2









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EXHIBIT 4.27


CARDIOME PHARMA CORP. Warrant Indenture Made as of April 10, 2003

TABLE OF CONTENTS



WARRANT INDENTURE



SCHEDULE "A" FORM OF WARRANT CERTIFICATE


APPENDIX 1 FORM OF TRANSFER


APPENDIX 2 EXERCISE FORM


SCHEDULE "B" DEFINITION OF "U.S. PERSON" AND "UNITED STATES"