Document:

Form of Registrant's Common Share Certificate

 

Exhibit 4.1

INCORPORATED IN THE PROVINCE OF BRITISH COLUMBIA

	 	 	 	 	 
	NUMBER

	 	
	 	SHARES

CUSIP 14159U 10 3

THIS CERTIFICATES THAT

is the registered holder of

FULLY
PAID AND NON-ASSESSABLE COMMON SHARES WITHOUT PAR VALUE

in the Capital of the above named Company subject to the Memorandum and Articles of the Company
transferable on the books of the Company by the registered holder in person or by Attorney duly
authorized in writing upon surrender of this certificate properly endorsed.

This certificate is not valid unless countersigned by the Transfer Agent and Registrar of the
Company.

IN WITNESS WHEREOF the Company has caused this certificate to be signed on its behalf by the
facsimile signatures of its duly authorized officers at Vancouver, British Columbia.

	 	 	 	 	 
	 	 	DATED
	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	

Chairman

	 	     COUNTERSIGNED AND REGISTERED

     PACIFIC CORPORATE SERVICES LTD.

     TRANSFER AGENT AND REGISTRAR

	 	 

VANCOUVER

TORONTO

	 	 	 	 
	

President

	By	SPECIMEN
	 	 	Authorized Officer

The Shares represented by this certificate are transferable at the offices

of Pacific Corporate Services Ltd., Vancouver, B.C. or Toronto, Ont.

 

 

     FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto

PLEASE INSERT SOCIAL INSURANCE NUMBER OF TRANSFEREE

 

(Name and address of transferee)

 

      
                
                
                
                
                
                
                
                
                
       shares
registered in the name of the undersigned on the books of the Company named on the face of this
certificate and represented hereby, and irrevocably constitutes and appoints

      
                
                
                
                
                
                
                
                
                
       the attorney
of the undersigned to transfer the said shares on the register of transfers and books of the
Company with full power of substitution hereunder.

     DATED:

	 	 	 
	 

	 	 
	(Signature of Witness)

	 	(Signature of Shareholder)

	NOTICE: 	 	The signature of this assignment must correspond with the name as written upon the face of the certificate, in every
particular, without alteration or enlargement, or any change whatsoever, and must be guaranteed by a chartered bank or
an eligible guarantor institution with membership in an approved signature guarantee medallion program.
	 
	 	 	Signature Guaranteed By:Form of Special Warrants Subscription Agreement

 

Exhibit 4.2

FORM OF

 

SUBSCRIPTION AGREEMENT FOR SPECIAL WARRANTS

(U.S. Purchaser)

TO:     CARDIOME PHARMA CORP.

The undersigned subscriber (the “Subscriber”) hereby irrevocably subscribes for                 special
warrants (the “Special Warrants”) of Cardiome Pharma Corp. (the “Corporation”) for an aggregate
subscription price of $           (the “Subscription Price”), representing a subscription price of $7.2387
per Special Warrant, on the terms and conditions set forth in this Agreement (the “Subscription
Agreement”). The Subscription Agreement is being entered into pursuant to a letter agreement (the
“Letter Agreement”) dated August 29, 2005 between the Corporation and the Subscriber, among others.

Terms of the Offering

	1.	 	The Subscriber understands that the Special Warrants are being offered for sale only on a
“private placement” basis and that the sale and delivery of the Special Warrants is
conditional upon such sale being exempt under all applicable laws, rules and regulations such
that, in the opinion of counsel to the Corporation, the Corporation may offer and sell the
Special Warrants to the Subscriber without having to file a prospectus, registration statement
or an offering memorandum or the Corporation otherwise having to take any affirmative action
pursuant to such laws, rules and regulations in order to permit it to so offer and sell the
Special Warrants, except for the filing of post-sale reports.
	 
	2.	 	The terms governing the Special Warrants are set out hereto in Schedule A.
	 
	3.	 	The Corporation will use its commercially reasonable best efforts to prepare and file, in
accordance with the requirements of the securities laws, rules and regulations of the Province
of British Columbia (the “Qualifying Province”) (collectively, the “Applicable Canadian
Securities Laws”), with the British Columbia Securities Commission (the “Reviewing Authority”)
in the Qualifying Province a preliminary short form prospectus of the Corporation in the
English language qualifying the distribution of the common shares of the Corporation or such
other securities, if applicable, that will be issued upon the exercise or deemed exercise of
the Special Warrants in accordance with Schedule A hereto (the “Underlying Shares”), including
the documents incorporated therein by reference (the “Canadian Preliminary Prospectus”), and
will use its commercially reasonable efforts, to obtain from the Reviewing Authority a receipt
for the Canadian Preliminary Prospectus as soon as reasonably possible, but in any event
within 90 days of the date of this Subscription Agreement.
	 
	4.	 	The Corporation will use its commercially reasonable best efforts to fulfill all legal
requirements to enable the distribution of the Underlying Shares as soon as reasonably
practicable in the Qualifying Province. Such fulfillment will include, without limiting the
generality of the foregoing, compliance with the Applicable Canadian Securities Laws,
including compliance with all requirements with respect to the preparation and filing of a
final short form prospectus of the Corporation in the English language qualifying the
distribution of the Underlying Shares, including the documents incorporated therein by
reference (the “Canadian Final Prospectus” and, together with the Canadian Preliminary
Prospectus, the “Canadian Prospectuses”), in the Qualifying Province and the obtaining of a
receipt (the “Final Receipt”) as soon as reasonably possible but in any event within 120 days
of the date of this Subscription Agreement.
	 
	5.	 	The Corporation will use its commercially reasonable best efforts to prepare and file with
the United States Securities and Exchange Commission (the “SEC”) a registration statement on
Form F-10 (or such other available form as may be applicable if the Form F-10 is unavailable
to the Corporation) covering the offer and sale of the Underlying Shares under the United
States Securities Act of 1933, as amended (the “1933 Act”), including the Canadian Preliminary
Prospectus (with such deletions therefrom and additions thereto as are permitted or required
by Form F-10 and the applicable rules and regulations of the SEC) (the “U.S. Preliminary
Prospectus”, and together with the Canadian Preliminary Prospectus, the “Preliminary
Prospectuses”) as soon as reasonably possible, but in any event within 90 days of the date of
this Subscription Agreement.

 

 

	6.	 	The Corporation will use its commercially reasonable best efforts to fulfill all legal
requirements to enable the offer and sale of the Underlying Shares to Subscriber as soon as
reasonably practicable in United States. Such fulfillment will include, without limiting the
generality of the foregoing, compliance with the applicable provisions of the 1933 Act and
applicable state “blue sky” securities laws and regulations (collectively, the “Applicable
U.S. Securities Laws” and, together with the Applicable Canadian Securities Laws, the
“Applicable Securities Laws”), including compliance with all requirements relating to the
preparation and filing of an amendment to the registration statement, including the Canadian
Final Prospectus (with such deletions therefrom and additions thereto as are permitted or
required by Form F-10 and the applicable rules and regulations of the SEC) (the “U.S. Final
Prospectus”, and together with the Canadian Final Prospectus, the “Final Prospectuses”), and
the taking of such actions as may be necessary or desirable to cause the registration
statement to become effective under the 1933 Act as soon as reasonably possible but in any
event within 120 days of the date of this Subscription Agreement. Such registration statement
on Form F10 (or such other available form as may be applicable if the Form F-10 is unavailable
to the Corporation), including the exhibits thereto and the documents incorporated by
reference therein, as amended at the time it becomes effective is herein called the
“Registration Statement”. The U.S. Preliminary Prospectus and the U.S. Final Prospectus are
collectively referred to herein as the “U.S. Prospectuses”.
	 
	7.	 	For the avoidance of doubt, in the event that (i) the Final Receipt is not obtained, or (ii)
the Registration Statement is not declared effective, within two years of the date of this
Subscription Agreement, provided that the Corporation shall have used its commercially
reasonable best efforts to prepare and file the Preliminary Prospectuses and Final
Prospectuses as contemplated in sections 3, 4, 5 and 6, the Corporation shall have no further
obligations under sections 3, 4, 5, 6 and 7 from and after the day which is two years after
the date of this Subscription Agreement.

Representations, Warranties and Covenants by Subscriber

	8.	 	By executing this Subscription Agreement, the Subscriber represents and warrants to the
Corporation that:

	 	(a)	 	the Subscriber understands that the Special Warrants have not been registered
or qualified under, and are being sold in reliance on, exemptions provided for in the
Applicable Securities Laws and that the Corporation will thereby be exempt from
certain disclosure obligations otherwise applicable under such Applicable Securities
Laws, and that, as a result: (i) the Corporation is relieved from certain obligations
that would otherwise apply under such Applicable Securities Laws; (ii) the Subscriber
will not receive the benefits associated with a purchase of securities distributed
under a filed prospectus, including the review of material by securities regulatory
authorities and may not receive information that would otherwise be required to be
provided to the Subscriber under such Applicable Securities Laws; and (iii) the
Special Warrants and the Underlying Shares, if not distributed through the Final
Prospectuses, will be subject to resale restrictions under such Applicable Securities
Laws;
	 
	 	(b)	 	the Subscriber acknowledges that (i) no securities commission or similar
regulatory authority has reviewed or passed on the merits of the Special Warrants or
the Underlying Shares; (ii) there is no government or other insurance covering the
securities; (iii) there are risks associated with the purchase of the securities; (iv)
there are restrictions on the Subscriber’s ability to resell the securities and it is
the responsibility of the Subscriber to find out what those restrictions are and to
comply with them before selling the securities, and (v) the Corporation has advised
the Subscriber that the Corporation is relying on an exemption from the requirement to
provide the Subscriber with a prospectus and to sell securities through a person
registered to sell securities under the Securities Act (British Columbia) and, as a
consequence of acquiring securities pursuant to this exemption, certain protections,
rights and remedies provided by the Securities Act (British Columbia), including
statutory rights of rescission or damages, will not be available to the Subscriber.
	 
	 	(c)	 	the Subscriber has been independently advised as to and is aware of the
applicable restrictions on the resale of the Special Warrants and the Underlying
Shares, if not distributed through the Final Prospectuses, imposed by the Securities
Act (British Columbia) and the regulations and rules

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	 	 	 	made thereunder and by the 1933 Act and of the fact that until the Underlying
Shares are registered or qualified under the Applicable Securities Laws, the
Subscriber is not able to resell such securities except in accordance with the
Applicable Securities Laws and that the Subscriber is solely responsible (and the
Corporation and its advisors are not in any way responsible) for compliance with
applicable resale restrictions;
	 
	 	(d)	 	the Subscriber further acknowledges and agrees that, because the Special
Warrants have not been registered under the 1933 Act and the Special Warrants are
being offered and sold in a private offering exempt from registration under the 1933
Act: (i) the Special Warrants and the Underlying Shares, if not subject to an
effective registration statement, are “restricted securities” within the meaning of
Rule 144(a)(3) under the 1933 Act and cannot be reoffered or resold unless they are
subsequently registered under the 1933 Act or an exemption from registration
thereunder is available; and (ii) and that the Subscriber will continue to bear the
economic risk of its investment in the Special Warrants and the Underlying Shares, if
not subject to an effective registration statement, for an indefinite period of time;
	 
	 	(e)	 	the Subscriber agrees to comply with, and not in any manner violate, all
applicable securities laws, rules or regulations upon any permitted sale, transfer or
other disposition of the Special Warrants and any Underlying Shares and the Subscriber
acknowledges that the certificates representing the Special Warrants and any
Underlying Shares, if not distributed through the Final Prospectuses and subject to an
effective registration statement, will bear such legends (if any) as may, in the
opinion of legal counsel to the Corporation, be necessary in order to avoid a
violation of any securities laws of any provinces of Canada or of the United States or
the securities laws of any state of the United States; the failure or omission to
endorse any legend on any certificate will not affect the issue or delivery of the
Special Warrants or any Underlying Shares or the validity or enforceability thereof;
without limiting the generality of the foregoing, the Subscriber acknowledges that it
is aware of the applicable hold period or restrictions imposed in respect of the
Special Warrants and any Underlying Shares by the Applicable Securities Laws if the
Registration Statement is not declared effective or the Final Receipt is not received
and confirms that no representation has been made respecting the applicable hold or
restricted period for the Special Warrants and any Underlying Shares and is aware of
the risks and of the fact that the Subscriber may not be able to resell the Underlying
Shares until expiry of the applicable hold or restricted period and otherwise except
in accordance with applicable securities legislation and regulatory policy;
	 
	 	(f)	 	the Subscriber is an “accredited investor” as such term is defined in Rule
501(a) of Regulation D of the 1933 Act, and the representations and warranties set out
in Schedule C are true and correct and the Subscriber agrees to comply with the
covenants contained therein and the Subscriber acknowledges that the Special Warrants
and the Underlying Shares have not been and with respect to the Special Warrants will
not be registered under the 1933 Act or the securities laws of any state or political
subdivision of the United States and the Subscriber acknowledges that by signing this
Subscription Agreement, it is certifying that the representations and warranties in
Schedule C are true and correct;
	 
	 	(g)	 	the Subscriber acknowledges and agrees that the Special Warrants are
non-transferable; the Subscriber agrees that it will not re-offer, resell, pledge,
hypothecate or otherwise transfer any of the Special Warrants;
	 
	 	(h)	 	the Subscriber agrees that it will not re-offer, resell, pledge, hypothecate
or otherwise transfer any of the Underlying Shares (or securities that may be received
in replacement thereof or in exchange therefor) except: (i) to the Corporation; (ii)
in a transaction outside the United States meeting the requirements of Rule 904 of
Regulation S under the 1933 Act; (iii) in a transaction exempt from registration under
the 1933 Act and any applicable state securities (“blue sky”) laws; (iv) in a
transaction in Canada that occurs on or after the date that is the second business day
after the date the Final Receipt is issued or deemed to be issued by the Reviewing
Authority; or (v) pursuant to a registration statement declared effective under the
1933 Act. The Subscriber agrees that, in connection with any transaction pursuant to
the foregoing clause (iii), it will

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	 	 	 	furnish to the Corporation a written opinion of counsel acceptable to the
Corporation acting reasonably to the effect that such offer, sale, pledge,
hypothecation or other transfer is exempt from the qualification and registration
requirements of all Applicable Securities Laws;
	 
	 	(i)	 	the Subscriber acknowledges and agrees that the certificate representing the
Special Warrants (and any certificate issued in replacement thereof or in exchange
therefor) will bear a restrictive legend in substantially the following form and that
an appropriate stop transfer order implementing the same will be lodged with the
transfer agent of the Corporation:

	 	 	 	“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED AND ARE NON-TRANSFERABLE.
	 
	 	 	 	UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS
SECURITY MUST NOT TRADE THE SECURITY BEFORE FEBRUARY 22, 2006.”

	 	(j)	 	the Subscriber acknowledges and agrees that, in accordance with Section 3.08
of Schedule A, each certificate for the Underlying Shares (and any certificate issued
in replacement thereof or in exchange therefor) will bear a restrictive legend in
substantially the form provided in Section 3.08 of Schedule A and that an appropriate
stop transfer order implementing the same will be lodged with the transfer agent of
the Corporation, but only if the Underlying Shares remain subject to a hold period or
other restrictions of transfer under Applicable Securities Laws. For clarity and
avoidance of doubt, if the Underlying Shares are acquired upon exercise of the Special
Warrants pursuant to Subsection A of the definition of “Automatic Exercise Time” in
Schedule A, then the certificate for the Underlying Shares shall bear no such legend;
	 
	 	(k)	 	the United States restrictive legend described in Section 3.08 of Schedule A
if any, may be removed by providing a declaration to the Corporation’s transfer agent
for the common shares of the Corporation (the “Common Shares”) substantially as
attached hereto as Schedule C (or as the Corporation’s transfer agent may prescribe
from time to time) upon the sale of the Underlying Shares by the Subscriber;
	 
	 	(l)	 	the Subscriber is resident in the Commonwealth of Massachusetts and is not
resident in British Columbia or any other province or territory of Canada and the
purchase by the Subscriber of the Special Warrants, and all acts, solicitation,
conduct or negotiations directly or indirectly in furtherance of such purchase by the
Subscriber has occurred only in Massachusetts;
	 
	 	(m)	 	the Subscriber is purchasing the Special Warrants and the Underlying Shares
as principal for its own account for investment purposes only and not with a view
toward the resale or distribution or other disposition thereof to others or with any
present intention of offering or selling the Warrants or the Underlying Shares or any
interest therein; the Subscriber was not formed for the purpose of purchasing the
Special Warrants or the Underlying Shares;
	 
	 	(n)	 	this subscription has not been solicited in any manner contrary to the 1933
Act;
	 
	 	(o)	 	the Subscriber is not purchasing the Special Warrants and the Underlying
Shares: (i) as a result of any form of general solicitation or general advertising,
and in connection therewith, the Subscriber did not receive any general solicitation
or general advertising including, but not limited to any advertisement, article,
notice or other communication published in any newspaper, magazine or similar medium
or broadcast over television or radio; or (ii) as a result of or subsequent to
attendance at a seminar or meeting called by any of the means set forth in (i); or
(iii) as a result of or attending any seminar meeting or industry investor conference
whose attendees were invited by any general solicitation or general advertising;
	 
	 	(p)	 	the Subscriber, in connection with the offering of the Special Warrants, has
not received, nor has it requested, nor does it have any need to receive, any offering
memorandum or similar document

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	 	 	 	describing the business and affairs of the Corporation which has been or appears or
purports to have been prepared primarily for delivery to, and review by, the
Subscriber in order to assist it in making an investment decision in respect of
securities of the Corporation;
	 
	 	(q)	 	the Subscriber’s decision to tender this subscription and purchase the
Special Warrants has not been made as a result of any verbal or written representation
as to fact or otherwise made by or on behalf of the Corporation or any other person
and is based entirely upon publicly available information concerning the Corporation;
	 
	 	(r)	 	the Subscriber was not created and is not being used solely or primarily to
permit any one or more individuals to purchase Special Warrants without a prospectus;
	 
	 	(s)	 	no person has made any written or oral representations to the Subscriber:

	 	(i)	 	that any person will resell or repurchase the Special Warrants
or the Underlying Shares;
	 
	 	(ii)	 	that any person will refund the purchase price of the Special
Warrants; or
	 
	 	(iii)	 	as to the future price or value of any of the Special Warrants
or the Underlying Shares;

	 	(t)	 	the Subscriber has been advised to and has had the opportunity to consult its
own legal and tax advisors with respect to this Subscription Agreement, the Schedules
attached hereto and the transactions contemplated hereby (including without limitation
any applicable resale restrictions and tax considerations) and has had the opportunity
to acquire an understanding of the meanings of all of the terms contained herein
(including in the Schedules hereto) relevant to the Subscriber for the purpose of
giving representations, warranties and covenants under this Subscription Agreement and
the transactions contemplated hereunder;
	 
	 	(u)	 	the Subscriber acknowledges that an investment in the Special Warrants and
the Underlying Shares are subject to a number of risks and the Subscriber is aware of
the risks and other characteristics of the Special Warrants and the Underlying Shares
and the investment in the securities;
	 
	 	(v)	 	the Subscriber has knowledge and experience in business and financial
matters, prior investment experience, including investment in securities that are
traded on a national securities exchange, is capable of assessing the proposed
investment in the Special Warrants and the Underlying Shares as a result of its
financial and investment experience or as a result of advice received from a
registered advisor or securities dealer who has evaluated the merits and risks of such
investment on its behalf and is able to bear the economic consequences of its
investment and a potential loss thereof;
	 
	 	(w)	 	the Subscriber has no knowledge of a “material fact” or “material change” (as
those terms are defined in the Applicable Securities Laws) in the affairs of the
Corporation that has not been generally disclosed to the public, except for knowledge
of the transactions referred to in the Letter Agreement if not publicly disclosed;
	 
	 	(x)	 	the Subscriber has full right, power and authority to execute and deliver
this Subscription Agreement and to take all actions required pursuant hereto and the
Subscriber is duly incorporated or organized and validly subsisting under the laws of
its jurisdiction of incorporation or organization and all necessary approvals by its
directors, shareholders and others have been given to authorize execution of this
Subscription Agreement on behalf of the Subscriber;
	 
	 	(y)	 	the execution, delivery and performance by the Subscriber of its obligations
under this Subscription Agreement does not and will not constitute a breach of or
default under any law, regulation, order or ruling applicable to the Subscriber or the
constating documents of the Subscriber;

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	 	(z)	 	this Subscription Agreement has been duly executed and delivered by the
Subscriber and has been duly authorized by the Subscriber, and, upon acceptance by the
Corporation, will constitute a legal, valid and binding agreement of the Subscriber
enforceable against the Subscriber in accordance with its terms, subject to the
qualification that enforcement thereof is subject to applicable bankruptcy,
insolvency, reorganization or other laws affecting creditors’ rights generally; none
of the funds the Subscriber is using to purchase the Special Warrants are, to the
knowledge of the Subscriber, proceeds obtained or derived, directly or indirectly, as
a result of illegal activities; and
	 
	 	(aa)	 	the offer and sale of the Special Warrants and the Underlying Shares has not
been reviewed by the SEC nor any state regulatory authority as the offer and sale of
the Special Warrants and the Underlying Shares are intended to be exempt from the
registration requirements of Section 5 of the 1933 Act pursuant to Regulation D and
the registration requirements of applicable state “blue sky” securities laws or
regulations.

	9.	 	The Subscriber agrees that the representations, warranties and covenants of the Subscriber
herein will be true and correct both as of the execution of this Subscription Agreement and as
of the Closing and they will survive the purchase by the Subscriber of the Special Warrants
for a period of two (2) years and will continue in full force and effect notwithstanding any
subsequent exercise of such Special Warrants in exchange for the Underlying Shares or the
disposition by the Subscriber of any such Underlying Shares. The representations, warranties
and covenants of the Subscriber herein are made with the intent that they be relied upon by
the Corporation in determining the Subscriber’s eligibility and suitability as a purchaser of
the Special Warrants, and the Subscriber hereby agrees to indemnify the Corporation and its
directors, officers, employees, agents and representatives against any and all losses, claims,
costs, expenses and damages or liabilities whatsoever which any of them may suffer or incur
arising out of or based upon any representation or warranty of the Subscriber contained herein
or in the Letter Agreement or in any document furnished by the Subscriber to the Corporation
in connection with this Subscription Agreement being untrue or any breach or failure by the
Subscriber to comply with any covenant or agreement made by the Subscriber herein or in any
document furnished by the Subscriber to the Corporation in connection herewith. The
Subscriber undertakes to notify the Corporation as soon as practicable of any change in any
representation, warranty or other information relating to the Subscriber set forth herein
which takes place prior to the Closing, provided however, that the Subscriber will notify the
Corporation of any such change prior to the Closing.

Representations, Warranties and Covenants of the Corporation

	10.	 	The Corporation hereby represents, warrants and covenants to the Subscriber (and acknowledges
that the Subscriber is relying thereon) that:

	 	(a)	 	the Corporation has the full corporate right, power and authority to execute
and deliver this Subscription Agreement and to take all actions required pursuant
hereto, including to issue the Special Warrants and the Underlying Shares to the
Subscriber;
	 
	 	(b)	 	the Corporation is duly incorporated and validly subsisting under the laws of
Canada, and is qualified to carry on business in the Province of British Columbia and
in each other jurisdiction, if any, in respect of which the carrying on of the
activities contemplated hereby make such qualification necessary;
	 
	 	(c)	 	all necessary approvals by the directors of the Corporation have been given
to authorize execution of this Subscription Agreement by the Corporation and the
issuance and delivery of Special Warrants to the Subscriber hereunder pursuant hereto;
and no further consent, approval or action is required by the Corporation, its board
of directors, its stockholders or any court, regulatory body, administrative agency or
other governmental body to permit such issuance and delivery other than (i) filing of
post-closing reports of exempt distributions as may be required under Applicable
Securities Laws (including payment of fees in connection therewith) and (ii) any
post-closing notices and filings required to be given to, or made with, the Toronto
Stock Exchange (the “TSX”) and the Nasdaq Stock Market, Inc. (“Nasdaq”);

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	 	(d)	 	upon acceptance by the Corporation, this Subscription Agreement will be duly
executed and delivered by the Corporation and will constitute a legal, valid and
binding agreement of the Corporation enforceable against the Corporation in accordance
with its terms, subject to the qualification that enforcement thereof is subject to
applicable bankruptcy, insolvency, reorganization or other laws affecting creditors’
rights generally;
	 
	 	(e)	 	the execution, delivery and performance by the Corporation of its obligations
under this Subscription Agreement does not and will not constitute a breach of or
default under any agreement, law, regulation, order or ruling applicable to the
Corporation or the constating documents of the Corporation (nor has the Corporation
received any notice of a claim that it is in default under or that it is in violation
of any provision of its constating documents) and will not result in the creation of
any lien, charge, security interest or encumbrance upon the assets of the Corporation
pursuant to the terms or provisions of any agreement or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice, lapse of
time or both) of any agreement, mortgage, deed of trust, lease franchise, license,
indenture, permit or other instrument to which the Corporation is a party or by which
the Corporation or any of its properties may be bound or affected, except for breaches
of or defaults related to any such agreement, mortgage, deed of trust, lease
franchise, license, indenture, permit or other instrument that would not, individually
or in the aggregate, have a material adverse effect on the business, properties,
financial condition, results of operation or prospects of the Corporation taken as a
whole (a “Material Adverse Effect”);
	 
	 	(f)	 	the Underlying Shares have been duly authorized and, when issued, sold and
delivered in accordance with the terms of this Subscription Agreement for the
consideration expressed herein, will be duly authorized, validly issued, fully paid
and non-assessable and will be free and clear of all encumbrances and restrictions
except for restrictions on transfer imposed by Applicable Securities Laws;
	 
	 	(g)	 	the number of shares and type of all authorized, issued and outstanding
capital stock of the Corporation, and all Common Shares reserved for issuance under
the Corporation’s various option and incentive plans, is specified in the
Corporation’s filings required to be filed by the Corporation by all Applicable
Securities Laws (the “Securities Filings”). Except as specified in the Securities
Filings, no securities of the Corporation are entitled to pre-emptive or similar
rights, and no person has any right of first refusal, pre-emptive right, right of
participation, or any similar right to participate in the transactions contemplated by
this Subscription Agreement. Except as specified in the Securities Filings, there are
no outstanding options, warrants, scrip rights to subscribe to, calls or commitments
of any character whatsoever relating to, or securities, rights or obligations
convertible into or exchangeable for, or giving any person any right to subscribe for
or acquire, any Common Shares, or contracts, commitments, understandings or
arrangements by which the Corporation is or may become bound to issue additional
Common Shares, or securities or rights convertible or exchangeable into Common Shares.
The issue and sale of the Underlying Shares will not, immediately or with the passage
of time, obligate the Corporation to issue Common Shares or other securities to any
person (other than the Subscriber) and will not result in a right of any holder of the
Corporation’s securities to adjust the exercise, conversion, exchange or reset price
under such securities;
	 
	 	(h)	 	except as otherwise disclosed in the Securities Filings, (i) there are no
legal or governmental actions, suits, proceedings pending and (ii) to the
Corporation’s knowledge, there are no legal or governmental actions, suits, or
proceedings threatened, to which the Corporation is or may be a party or subject or of
which property of the Corporation is or may be the subject, or instituted by the SEC,
the Reviewing Authority, any state securities commission or other governmental or
regulatory entity, except any such action, suit or proceeding that would not result in
a judgment, decree or order having, individually or in the aggregate, a Material
Adverse Effect. To the Corporation’s knowledge, no labour disturbance by the
employees of the Corporation exists or is imminent. Except as disclosed in its
Securities Filings, the Corporation is not a party to or subject to the provisions of
any injunction, decree, order or material judgment of any court, regulatory body,
administrative agency or other governmental body, except any such injunction,

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	 	 	 	decree, order or judgment having, individually or in the aggregate, a Material
Adverse Effect. For purposes of this Subscription Agreement, an individual will be
deemed to have “knowledge” of a particular fact or other matter if (A) such
individual is actually aware of such fact or other matter or (B) a prudent
individual would reasonably be expected to discover or otherwise become aware of
such fact or other matter in the ordinary course; and a person (other than an
individual) will be deemed to have “knowledge” of a particular fact or other matter
if any individual who is serving as a director, officer, employee, executor or
trustee of such person has knowledge of such fact or other matter;
	 
	 	(i)	 	since December 31, 2004, except as disclosed in the Securities Filings: (i)
there has been no material adverse change, or any development involving a prospective
material adverse change, in the business, properties, management, financial condition
or results of operations of the Corporation; (ii) the Corporation has not incurred any
material liabilities or obligations, indirect, or contingent not in the ordinary
course of business or which could reasonably be expected to have a Material Adverse
Effect; (iii) the Corporation has not paid or declared any dividends or other
distributions with respect to its capital stock; (iv) the Corporation has not issued
any equity securities other than the sale of the Underlying Shares hereunder and
            shares or options issued pursuant to employee equity incentive plans or purchase plans
approved by the board of directors of the Corporation and repurchases of shares or
options pursuant to repurchase plans already approved by the board of directors of the
Corporation, and there has not been any increase in indebtedness of the Corporation
material to the Corporation and (v) the Corporation has not altered its method of
accounting or the identity of its auditors, except as disclosed in the Securities
Filings;
	 
	 	(j)	 	(i) the Corporation owns, or has obtained valid and enforceable licenses for,
or other rights to use, the inventions, patent applications, patents, trademarks (both
registered and unregistered), tradenames, copyrights, trade secrets and other
proprietary information described in its Securities Filings as being owned or licensed
by it or which are necessary for the conduct of its business, except where the failure
to own, license or have such rights would not, individually or in the aggregate, have
a Material Adverse Effect (collectively, “Intellectual Property”); (ii) the
Corporation has no knowledge that the Corporation lacks or will be unable to obtain
any rights or licenses to use all patents and other material intangible property and
assets necessary for the conduct of its business (including the commercialization of
the Corporation’s product candidates) as described in the Securities Filings; (iii) to
the Corporation’s knowledge, there are no third parties who have or, will be able to
establish rights to any Intellectual Property, except for the ownership rights of the
owners of the Intellectual Property which is licensed to the Corporation and except
where the failure to have or establish such rights would not, individually or in the
aggregate, have a Material Adverse Effect; (iv) to the Corporation’s knowledge there
is no infringement by third parties of any Intellectual Property; (v) to the
Corporation’s knowledge there is no pending or threatened action, suit, proceeding or
claim by others challenging the Corporation’s rights in or to any Intellectual
Property, and the Corporation is unaware of any facts that could form a reasonable
basis for any such claim; (vi) to the Corporation’s knowledge there is no pending or
threatened action, suit, proceeding or claim by others challenging the validity or
scope of any Intellectual Property, and the Corporation is unaware of any facts that
could form a reasonable basis for any such claim; (vii) to the Corporation’s knowledge
there is no pending or threatened action, suit, proceeding or claim by others that the
Corporation infringes or otherwise violates (or would infringe or otherwise violate
upon commercialization of the Corporation’s product candidates as described in the
Securities Filings) any patent, trademark, copyright, trade secret or other
proprietary rights of others, and the Corporation is unaware that any of its
activities could form a reasonable basis for any such claim; and (viii) the
Corporation, when appropriate, has disclosed to the US Patent and Trademark Office
prior art, of which it has knowledge, that may render any patent application owned by
the Corporation of the Intellectual Property unpatentable;
	 
	 	(k)	 	except as disclosed in the Securities Filings, the Corporation has not been
advised, nor has reason to believe, that it is not conducting business in compliance
with all applicable laws, rules and regulations of the jurisdictions in which it is
conducting its business, including, without

8

 

	 	 	 	limitation, all applicable local, state and federal environmental laws and
regulations; in each case, except where failure to be in compliance would not have
a Material Adverse Effect;
	 
	 	(l)	 	the Corporation has filed all necessary federal, state, provincial and
foreign income and franchise tax returns and has paid or accrued all taxes shown as
due thereon, other than those being contested in good faith and for which adequate
reserves have been provided, and the Corporation has no knowledge of a tax deficiency
which has been or might be asserted or threatened against it which is reasonably
likely to have a Material Adverse Effect;
	 
	 	(m)	 	the Corporation is not an “investment company” or an “affiliated person” of,
or “promoter” or “principal underwriter” for an investment company, within the meaning
of the United States Investment Company Act of 1940, as amended;
	 
	 	(n)	 	neither the Corporation nor any person acting on its behalf has in the past
or will hereafter take any action to sell, offer for sale or solicit offers to buy any
securities of the Corporation by means of any form of general solicitation or
advertising, or take any other action, which would subject the offer, issuance or sale
of the Underlying Shares contemplated by this Subscription Agreement to the
registration requirements of Section 5 of the 1933 Act;
	 
	 	(o)	 	the Corporation confirms that neither it nor any person acting on its behalf
has provided the Subscriber or its respective agents or counsel with any information
that the Corporation believes constitutes material, non-public information except
insofar as the existence and terms of the proposed transactions hereunder may
constitute such information. The Corporation understands and confirms that the
Subscriber will rely on the foregoing representations and covenants in effecting the
transaction contemplated by this Subscription Agreement. All disclosure provided to
the Subscriber regarding the Corporation, its business and the transactions
contemplated hereby, furnished by or on behalf of the Corporation (including the
Corporation’s representations and warranties set forth in this Subscription Agreement)
are true and correct and do not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements not
misleading in light of the circumstances in which they were made;
	 
	 	(p)	 	the Corporation will also make on a timely basis such U.S., Canadian,
provincial and state securities law notice filings as may be required to be made in
connection with the offer and sale of the Special Warrants to the Subscriber;
	 
	 	(q)	 	at the Closing, the Corporation will deliver to the Subscriber a certificate
executed by the chief executive officer, or the chief financial or accounting officer
of the Corporation, dated the Closing Date, in form and substance reasonably
satisfactory to the Subscriber, to the effect that the representations and warranties
of the Corporation set forth in this Section 10 are true and correct as of the Closing
Date, and the Corporation has complied in all material respects with all the
agreements and satisfied all the conditions herein on its part to be performed or
satisfied on or prior to such Closing Date;
	 
	 	(r)	 	except as may be required by applicable law, the Corporation will not use,
directly or indirectly, the Subscriber’s name or the name of any of its affiliates in
any advertisement, announcement, press release or other similar communication unless
it has received the prior written consent of the Subscriber for the specific use
contemplated or as otherwise required by applicable law or regulation;
	 
	 	(s)	 	the Corporation maintains in full force and effect insurance coverage that is
customary for comparably situated companies for the business being conducted and
properties owned or leased by the Corporation by insurers of recognized financial
responsibility and the Corporation reasonably believes such insurance coverage to be
adequate against all liabilities, claims and risks against which it is customary for
comparably situated companies to insure. The Corporation has no reason to believe
that it will not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers

9

 

	 	 	 	as may be necessary to continue its business at a cost that would not have a
Material Adverse Effect;
	 
	 	(t)	 	the Corporation will not, and will use its best efforts to ensure that any
person that directly or indirectly through one or more intermediaries, controls or is
controlled by or is under common control with a person, as such terms are construed
under Rule 144 of the 1933 Act, do not sell, offer for sale or solicit offers to buy
or otherwise negotiate in respect of any security (as defined in Section 2 of the 1933
Act) that would be integrated with the offer or sale of the Special Warrants in a
manner that would require the registration under the 1933 Act of the sale of the
Special Warrants to the Subscriber or that would be integrated with the offer or sale
of the Special Warrants for purposes of the rules and regulations of Nasdaq or any
other national securities exchange, market or trading or quotation facility on which
the Common Shares are then listed or quoted;
	 
	 	(u)	 	assuming the accuracy of the representations and warranties of the Subscriber
set forth in Section 9 hereof, the offer and sale of the Special Warrants to the
Subscriber as contemplated hereby is exempt from the registration requirements of the
1933 Act, subject to filings to be made with the SEC and pursuant to “blue sky”
securities laws or regulations and is exempt from the prospectus qualification and
dealer registration requirements of Applicable Canadian Securities Laws, subject to
the filing of exempt trade reports;
	 
	 	(v)	 	except as disclosed in the Securities Filings, none of the officers or
directors of the Corporation and, to the Corporation’s knowledge, none of the
employees of the Corporation is presently a party to any transaction with the
Corporation (other than as holders of stock options and/or warrants, and for services
as employees (including moving allowances and rental housing provided to certain
employees), officers and directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by, providing for rental of
real property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the Corporation’s knowledge, any entity in which any
officer, director, or any such employee has a substantial interest or is an officer,
director, trustee or partner;
	 
	 	(w)	 	the Corporation holds all authorizations, consents, approvals, franchises,
licenses and permits required under applicable law or regulation for the operation of
the business of the Corporation as presently operated (the “Governmental
Authorizations”) other than any Governmental Authorizations as to which the failure to
obtain such authorization would not have, individually or when aggregated with all
other such failures, a Material Adverse Effect. Without limiting the generality of
the foregoing representations and warranties, the Corporation represents and warrants
that it is in compliance with all applicable provisions of the United States Federal
Food, Drug, and Cosmetic Act and any similar state, local or foreign law, except for
any failure to be in compliance which would not have, individually or when aggregated
with all other such failures, a Material Adverse Effect;
	 
	 	(x)	 	the Corporation is a reporting issuer not in default of any requirement of
Applicable Securities Laws, except where such default would not have a Material
Adverse Effect;
	 
	 	(y)	 	each of the TSX and Nasdaq, as applicable, have given all necessary
conditional approvals required for the purchase and sale of the Special Warrants
contemplated herein and the listing of the Underlying Shares; and
	 
	 	(z)	 	the Corporation has filed on SEDAR in each jurisdiction of Canada in which it
is a reporting issuer, true and complete copies of all forms, reports, schedules,
statements and other documents required by applicable securities laws to be filed by
it since January 1, 2004, except where the failure to file such forms, reports,
schedules, statements and other documents would not have a Material Adverse Effect.
Such documents, at the time filed, (i) did not contain any misrepresentation of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under which
they were made, not misleading; and (ii) complied in all material respects with the
requirements of

10

 

	 	 	 	applicable securities laws. The Corporation has not filed any confidential
material change report with any securities authority or regulator, stock exchange
or self regulatory authority which at the date hereof remains confidential.

	11.	 	The Corporation agrees that its representations and warranties herein will be true and
correct both as of the execution of this Subscription Agreement and as of the Closing and will
survive the Closing for a period of two (2) years. The representations, warranties and
covenants of the Corporation herein are made with the intent that they be relied upon by the
Subscriber in determining the suitability of the investment, and the Corporation hereby agrees
to indemnify the Subscriber and its directors, officers, employees, agents and representatives
against any and all losses, claims, costs, expenses and damages or liabilities whatsoever
which any of them may suffer or incur arising out of or based upon any representation or
warranty of the Corporation contained herein or in the Letter Agreement or in any document
furnished by the Corporation to the Subscriber in connection with this Subscription Agreement
being untrue or any breach or failure by the Corporation to comply with any covenant or
agreement made by the Corporation herein or in any document furnished by the Corporation to
the Subscriber in connection herewith. The Corporation undertakes to notify the Subscriber as
soon as practicable of any change in any representation or warranty relating to the
Corporation set forth herein which takes place prior to the Closing, provided however, that
the Corporation will notify the Subscriber of any such change prior to the Closing.

Closing

	12.	 	The closing of the purchase and sale of the Special Warrants contemplated in this
Subscription Agreement (the “Closing”) will take place at the offices of McCarthy Tétrault
LLP, solicitors for the Corporation, Suite 1300, 777 Dunsmuir Street, Vancouver, British
Columbia at 10:00 a.m. (Vancouver time) on October 21, 2005 or at such time or date or other
place that is agreed to in writing between the Corporation and Subscriber.
	 
	13.	 	At the Closing, the Subscription Price will be paid by application of funds released from
escrow to the Corporation pursuant to the terms of that escrow agreement dated September 6,
2005, as amended on October 13, 2005, made among the Corporation, the Subscriber and the
Silicon Valley Bank, Deposit Escrow Services, 3003 Tasman Drive, Santa Clara, California (the
“Escrow Agreement”) and the Subscriber will deliver or cause to be delivered to the
Corporation a duly completed and originally executed copy of this Subscription Agreement
(including all applicable Schedules attached hereto).
	 
	14.	 	The Subscriber will deliver or cause to be delivered a duly completed and originally executed
copy of this Subscription Agreement to the Corporation (including all applicable Schedules
attached hereto). The Corporation will be entitled to rely on delivery of a facsimile copy of
this Subscription Agreement, and accept such facsimile copy, which accepted facsimile copy
will constitute a valid and binding agreement between the Subscriber and the Corporation in
accordance with the terms hereof.
	 
	15.	 	The Subscriber will, promptly upon request by the Corporation, provide the Corporation with
any additional information and execute and deliver to the Corporation additional undertakings,
reports, questionnaires and other documents as may be required by Applicable Securities Laws
or by any securities commission, stock exchange or other regulatory authority or as the
Corporation may otherwise reasonably request in connection with the issue and sale of the
Special Warrants and the qualification and registration of the Underlying Shares and file and
otherwise assist the Corporation in filing such undertakings, reports, questionnaires or other
documents as may be required. The Subscriber acknowledges and agrees that such undertakings,
reports, questionnaires and other documents, when executed and delivered by the Subscriber,
will form part of and will be incorporated into this Subscription Agreement with the same
effect as if each constituted a representation and warranty or covenant of the Subscriber
hereunder in favour of the Corporation. The Subscriber consents to the filing of such
undertakings, reports, questionnaires and other documents as may be required to be filed with
any stock exchange or securities regulatory authority in connection with the transactions
contemplated under this Subscription Agreement.
	 
	16.	 	The Corporation will, at the Closing, deliver to the Subscriber a certificate representing
the Special Warrants, in the form attached hereto as Exhibit I to Schedule A, registered in
the name of the Subscriber

11

 

	 	 	(or in the name of such nominee of the Subscriber as may be directed by the Subscriber) in
accordance with the Subscriber’s registration instructions set out on the execution page of
this Subscription Agreement.

Expenses

	17.	 	The Corporation will pay all expenses of or incidental to the delivery and sale of the
Special Warrants, and the qualification and registration of the Underlying Shares under
Applicable Securities Laws and of or incidental to all other matters in connection with the
transactions herein set out, including, without limitation, (i) expenses payable in connection
with the qualification and registration of the Underlying Shares (except for the fees of
Subscriber’s counsel and other advisors), (ii) the fees and expenses of the Corporation’s
counsel, accountants and other advisors, (iii) all costs incurred in connection with the
preparation, printing and delivery of the Registration Statement, the Preliminary
Prospectuses, the Final Prospectuses and any amendment or supplement thereto and (iv) the
filing fees, including the SEC filing fee for the Registration Statement. Except as provided
herein, the Subscriber will pay its own costs and expenses, including the fees of its counsel
and other advisors.

General

	18.	 	Terms which are used in this Subscription Agreement and not otherwise defined and which are
defined in the Applicable Canadian Securities Laws have the meanings defined in the Applicable
Canadian Securities Laws unless the context otherwise requires.
	 
	19.	 	The term “business day” when used in this Subscription Agreement means a day which is not
Saturday or Sunday or a statutory or civic holiday or a day on which the principal chartered
banks located at Vancouver, British Columbia are not open for business during normal banking
hours.
	 
	20.	 	In the event that any day on or before which any action is required to be taken hereunder is
not a business day as defined herein, then such action will be required to be taken on or
before the requisite time on the next succeeding day that is a business day.
	 
	21.	 	In the event that any provision hereof has been determined to be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the remainder of
such provision and any other provision hereof will not be affected or impaired thereby.
	 
	22.	 	Unless herein otherwise expressly provided, any notice to be given hereunder to the
Corporation and to the Subscriber must be in writing and unless, the party receiving such
notice consents to receive same in another manner, may be given by mail or by facsimile (with
original copy to follow by mail) or by personal delivery and addressed as follows:

	 	 	 	To the Corporation:
 

Cardiome
Pharma Corp.

6190 Agronomy Road

Vancouver, British Columbia V6T 1Z3
 

Attention:
       Doug Janzen

Fax No.:          (604) 677-6915
 

To
the Subscriber:
 

Attention:

Fax
No.:

12

 

	 	 	and will be deemed to have been given, if delivered, on the date of delivery or, if mailed,
on the fifth business day following the date of the postmark on such notice or, if sent by
facsimile, on the business day following facsimile transmission. Any delivery made or sent
by facsimile on a day other than a business day, or after 3:00 p.m. (Vancouver time) on a
business day, will be deemed to be received on the next following business day.
	 
	23.	 	The Corporation or the Subscriber, as the case may be, may from time to time give notice in
the manner provided in Section 22 of a change of address which, from the effective date of
such notice and until changed by like notice, will be the address of the Corporation or the
Subscriber, as the case may be, for all purposes of this Subscription Agreement.
	 
	24.	 	If, by reason of a strike, lockout or other work stoppage, actual or threatened, involving
postal employees, any notice to be given to the Subscriber or to the Corporation hereunder
could reasonably be considered unlikely to reach its destination, such notice will be valid
and effective only if it is delivered to an officer of the party to which it is addressed or
if it is delivered to such party at the appropriate address provided in Section 22 by
facsimile or other means of prepaid, transmitted, recorded communication and any such notice
delivered in accordance with the foregoing will be deemed to have been received on the date of
delivery to such officer or if delivered by facsimile or other means of prepaid, transmitted,
recorded communication, on the first business day following the date of the sending of such
notice by the person giving such notice.
	 
	25.	 	Nothing in this Subscription Agreement or the Warrant Certificates, expressed or implied,
gives or will be construed to give to any person other than the parties hereto any legal or
equitable right, remedy or claim under this Subscription Agreement or the Warrant
Certificates, or under any covenant or provision herein contained, all such covenants and
provisions being for the sole benefit of the parties hereto.
	 
	26.	 	The contract arising out of this Subscription Agreement and all documents relating thereto
will be governed by and construed in accordance with the laws of the Province of British
Columbia and the federal laws of Canada applicable therein, excluding rules of private
international law that lead to the application of the laws of any other jurisdiction. For the
purpose of all legal proceedings, this Subscription Agreement will be deemed to have been
performed in British Columbia and the Courts of British Columbia will have jurisdiction to
entertain any action arising under this Subscription Agreement. The parties hereto each
hereby attorns to the jurisdiction of the Courts of British Columbia.
	 
	27.	 	Time will be of the essence of this Subscription Agreement.
	 
	28.	 	This Subscription Agreement will enure to the benefit of and be binding upon the respective
heirs, executors, administrators, successors and permitted assigns of the parties hereto.
	 
	29.	 	This Subscription Agreement, together with the Letter Agreement and the Escrow Agreement,
represents the entire agreement of the parties hereto relating to the subject matter hereof
and there are no representations, covenants or other agreements relating to the subject matter
hereof except as stated or referred to herein.
	 
	30.	 	No amendment to this Subscription Agreement will be valid or binding unless set forth in
writing and duly executed by the parties hereto. No waiver of any breach of any provision of
this Subscription Agreement will be effective or binding unless made in writing and signed by
the party purporting to give the same and, unless otherwise provided, will be limited to the
specific breach waived.
	 
	31.	 	The covenants, representations and warranties contained herein will survive the closing of
the transactions contemplated hereby and the Subscriber acknowledges that the representations
and warranties will continue in full force and effect notwithstanding any subsequent
disposition by the Subscriber of any of the Underlying Shares.
	 
	32.	 	In this Subscription Agreement, unless otherwise expressly indicated, all dollar amounts and
references to “$” are in or refer to United States dollars.

13

 

	33.	 	Neither this Subscription Agreement nor any interest herein nor any rights arising thereunder
may be assigned or transferred by the Subscriber without the express written consent of the
Corporation.
	 
	34.	 	The division of this Subscription Agreement into paragraphs and the insertion of headings are
for convenience of reference only and will not effect the construction or interpretation of
this Subscription Agreement. The terms “hereof”, “hereunder” and similar expressions refer to
this Subscription Agreement and not to any particular paragraph or any portion hereof and
include any agreement supplemental hereto. Unless something in the subject matter or context
is inconsistent therewith, references here into paragraphs and subparagraphs are to paragraphs
and subparagraphs of this Subscription Agreement.
	 
	35.	 	In this Subscription Agreement words importing the singular number only include the plural
and vice versa, words importing any gender include all genders and words importing persons
include individuals, partnerships, associations, trusts, unincorporated associations and
corporations.
	 
	36.	 	This Subscription Agreement may be executed in two or more counterparts, each of which will
be deemed to be an original and all of which together will constitute one and the same
Subscription Agreement. Counterparts may be executed either in original or faxed form and the
parties adopt any signature received by a receiving fax machine as original signatures of the
parties.
	 
	37.	 	The schedules attached hereto are incorporated by reference and deemed to be part hereof.
	 
	38.	 	Each of the parties hereto will from time to time execute and deliver all such further
documents and instruments and do all acts and things as the other party may, either before or
after the closing of the transactions contemplated hereby, reasonably require to effectively
carry out or better evidence or perfect the full intent and meaning of this Subscription
Agreement.

IN WITNESS WHEREOF on the 21st day of October, 2005 the Subscriber has duly executed this offer and
subscription.

SUBSCRIBER

 

By:                                                             

Registration Instructions:

ACCEPTANCE:

The Corporation hereby accepts the subscription as set forth above on the terms and conditions
contained in this Subscription Agreement as of this 21st day of October, 2005.

CARDIOME PHARMA CORP.

 

By:                                                             

          Authorized Signatory

14

 

SCHEDULE A

 

TERMS GOVERNING SPECIAL WARRANTS

 

ARTICLE 1 INTERPRETATION

1.01     Definitions

                    Unless otherwise noted, all capitalized words and expressions used in this Schedule A
(“Schedule A”) not otherwise defined will have the meanings ascribed to them in the Subscription
Agreement to which this Schedule A is attached.

	 	 	“Automatic Exercise Time” means, in respect of a Special Warrant, the date on which such
Special Warrant will be automatically exercised, being 5:00 p.m. (Vancouver time) on the
earlier of:

	 	A.	 	the second business day after the date on which
both of (i) and (ii) are satisfied: (i) the day on which the Final
Receipt is issued or deemed to be issued by the Reviewing Authority and
(ii) the day on which the Registration Statement is declared effective;
and
	 
	 	B.	 	October 21, 2006, provided however that if on
October 21, 2006 there remain trading restrictions on the Underlying
Shares pursuant to Applicable Securities Laws, then the date on which
such trading restrictions are lifted.

	 	 	(for the avoidance of doubt, “trading restrictions” shall not be deemed to be in place if:
(a) all of the holder’s Underlying Shares may be immediately sold by such holder in Canada
without registration or qualification under Applicable Securities Laws, and (b) all of the
holder’s Underlying Shares may be immediately sold in the United States pursuant to Rule 144
under the 1933 Act during any 90-day period without volume limitations and without
registration or qualification under Applicable Securities Laws.
	 
	 	 	“Common Shares” means the common shares in the capital of the Corporation as such shares
exist on the close of business on the Closing Date and, in the event there occurs a change
referred to in Section 4.02 in respect of or affecting the Common Shares (whether or not
such change results in an adjustment to the number of Common Shares issuable upon the
exercise of the exercise rights of the Special Warrants), the term “Common Shares” will mean
the shares, other securities, cash or other property which the Subscriber is entitled to
receive upon exercise of its Special Warrants resulting from such change;
	 
	 	 	“Corporation’s Auditors” means Ernst & Young LLP, the firm of chartered accountants duly
appointed as auditors of the Corporation for the time being;
	 
	 	 	“Exercise Date” means, with respect to any Special Warrant exercised by the Subscriber, the
date on which the Warrant Certificate representing such Special Warrant together with a
properly completed Exercise Notice is surrendered or, in the case of automatic exercise, the
date on which the Special Warrant is automatically exercised to acquire Common Shares in
accordance with the provisions of Article 3;
	 
	 	 	“Exercise Notice” has the meaning attributed thereto in Section 3.01(1);
	 
	 	 	“Issue Price” means $7.2387 per Special Warrant;
	 
	 	 	“Special Warrants” means the special warrants of the Corporation issued hereunder this
Subscription Agreement which may be exercised for Common Shares on the terms and conditions
set forth herein;
	 
	 	 	“Subsidiary of the Corporation” means a person of which voting securities carrying at least
50% of the votes attached to all voting securities are held, directly or indirectly other
than by way of security only, by or for the benefit of the Corporation, the Corporation and
one or more Subsidiaries, or one or more Subsidiaries of the Corporation; and, as used in
this definition, voting securities means securities of a class

1

 

	 	 	or series of classes or series carrying a voting right to elect directors or equivalent
management or supervisory persons under all circumstances provided that, for the purposes
hereof, securities that only carry the right to vote conditionally on the happening of an
event will not be considered voting securities whether or not such event has happened nor
will any securities be deemed to cease to be voting securities solely by reason of a right
to vote accruing to securities of another class or series of classes or series by reason of
the happening of such event;
	 
	 	 	“Time of Exercise” means, in respect of any Special Warrant, the time of exercise thereof in
accordance herewith;
	 
	 	 	“TSX” means the Toronto Stock Exchange;
	 
	 	 	“Warrant Certificate” means a certificate evidencing Special Warrants substantially in the
form of the certificate set forth in Exhibit I to this Schedule A;
	 
	 	 	“written order of the Corporation”, “written request of the Corporation”, “consent”,
“consent of the Corporation” and “certificate of the Corporation” and any other document
required to be signed by the Corporation mean, respectively, a written order, request,
consent and certificate or other document signed in the name of the Corporation by any
officer or director of the Corporation, and may consist of one or more instruments so
executed.

ARTICLE 2 SPECIAL WARRANTS

2.01     Form and Terms of Special Warrants

          (1)     Subject to Subsection 2.01(2), each Special Warrant will entitle the Subscriber, upon
exercise of such Special Warrant (in accordance with either Subsection 3.01(1) or 3.01(2), as
applicable) to acquire one Common Share without payment of any consideration in addition to the
Issue Price paid upon the issuance of each Special Warrant.

          (2)     The number of Common Shares which are issuable upon the exercise of the Special Warrants
will be adjusted in the events and in the manner specified in Article 4.

          (3)     The Warrant Certificate will be substantially in the form set out in Exhibit I to this
Schedule A, will be dated as of the date hereof and will bear such distinguishing letters, legends
and numbers as the Corporation may prescribe. Subject to Subsection 2.01(4), the Warrant
Certificate will be issuable in any denomination.

          (4)     No Warrant Certificate evidencing any fraction of a Special Warrant will be issued or
otherwise provided for.

2.02     Issue in Substitution for Lost Warrant Certificate

          (1)     In case the Warrant Certificate is mutilated, lost, destroyed or stolen, the Corporation,
subject to applicable law, will issue and deliver a new certificate of like tenor as the one
mutilated, lost, destroyed or stolen in exchange for and in place of and upon cancellation of such
mutilated certificate, or in lieu of and in substitution for such lost, destroyed or stolen
certificate.

          (2)     The Subscriber will bear the cost of the issue of a new certificate pursuant to this
Section 2.02 and in case of loss, destruction or theft will, as a condition precedent to the issue
thereof, furnish to the Corporation such evidence of ownership and of the loss, destruction or
theft of the certificate so lost, destroyed or stolen as is satisfactory to the Corporation, acting
reasonably, and such applicant may also be required to furnish an indemnity in amount and form
satisfactory to the Corporation, acting reasonably, to save it harmless, and will pay the expenses,
charges and any taxes applicable thereto to the Corporation in connection therewith.

2

 

2.03     Warrantholder not a Shareholder

                    Nothing in this Subscription Agreement or in the holding of the Special Warrants evidenced by
the Warrant Certificate or otherwise, will be construed as conferring upon the Subscriber any right
or interest whatsoever as a shareholder of the Corporation, including, but not limited to, the
right to vote at, to receive notice of, or to attend, meetings of shareholders or any other
proceedings of the Corporation, or, except as set out in Section 4.02(4), the right to receive
distributions.

2.04     Recognition of Registered Holder

          (1)     The Corporation will deem and treat the Subscriber as the absolute holder and owner of the
Special Warrants evidenced by the Warrant Certificate for all purposes, and the Corporation will
not be affected by any notice or knowledge to the contrary and, without limiting the foregoing,
will not be bound by notice of any trust or be required to see to the execution thereof. Subject
to the provisions of this Subscription Agreement and applicable law, the Subscriber will be
entitled to the rights evidenced by such Warrant Certificate free from all equities or rights of
set-off or counterclaim between the Corporation and any third party and all persons may act
accordingly and the receipt by the Subscriber of the Common Shares obtainable upon the exercise of
the Special Warrants represented thereby will be a good discharge to the Corporation for the same
and the Corporation will not be bound to inquire into the title of the Subscriber, except where the
Corporation is required to take notice by statute or by order of a court of competent jurisdiction.

          (2)     The Subscriber will for all purposes of this Subscription Agreement be and be deemed to be
the owner of the Special Warrants and will be entitled to the rights, privileges and obligations
contained in the Warrant Certificate and this Subscription Agreement.

2.05     Notice to Subscriber

                    All notices to be given hereunder to the Subscriber will be deemed to be validly given if
given in the manner contemplated in Section 22, or, if applicable, Section 24, of the Subscription
Agreement. Any notice so given will be deemed to have been given at the time specified in such
section.

ARTICLE 3 EXERCISE OF SPECIAL WARRANTS

3.01     Method of Exercise of Special Warrants

          (1)     Subject to Subsection 3.01(2) and to the Subscriber providing such assurances and
executing such documents as may, in the reasonable opinion of the Corporation, be required to
ensure compliance with Applicable Securities Laws, the Subscriber may, at any time prior to the
Automatic Exercise Time, exercise the right thereby conferred on it to acquire, without further
payment, Common Shares by surrendering to the Corporation at its mailing address appearing in
Section 22 of the Subscription Agreement (as such address may from time to time be changed pursuant
to Section 23 of the Subscription Agreement), or at any other place or places that may be agreed to
in writing by the Corporation and the Subscriber, the Warrant Certificate evidencing the Special
Warrants to be exercised, with a duly completed and executed exercise notice in the appropriate
form set out in Exhibit II attached to this Schedule A (the “Exercise Notice”).

                    A Warrant Certificate with the duly completed and executed Exercise Notice will be deemed to
be surrendered only upon actual delivery thereof to the Corporation as set out in this Section
3.01. Any Exercise Notice will be signed by the Subscriber or by the Subscriber’s duly authorized
attorney, executor or other legal representative and will specify the number of Special Warrants
that the Subscriber desires to exercise (being not more than those which he is entitled to exercise
pursuant to the Warrant Certificate surrendered).

          (2)     Any outstanding Special Warrant that is not exercised prior to the Automatic Exercise Time
for such Special Warrant will be automatically exercised at the Automatic Exercise Time. A share
certificate representing the Common Shares issued upon the automatic exercise of Special Warrants
will be issued and delivered by the Corporation to the Subscriber, subject to the Subscriber
providing such assurances and executing such documents as may, in the reasonable opinion of the
Corporation, be required to ensure compliance with Applicable Securities Laws. Within two business
days of the date on which the Automatic Exercise Time occurs, the Corporation will notify the
Subscriber that the Special Warrants have been automatically exercised and will
forthwith, as soon as reasonably practicable thereafter deliver such certificate evidencing
the Common Shares to the Subscriber.

3

 

3.02     Effect of Exercise of Special Warrants

                    Upon exercise of Special Warrants and surrender by the Subscriber of the related Warrant
Certificate in accordance with Subsection 3.01(1) or upon Special Warrants being automatically
exercised in accordance with the provisions of Subsection 3.01(2), the Common Shares will be issued
and the Subscriber will become the holder of record of such Common Shares on the Exercise Date
unless the registers maintained by the Corporation’s transfer agent are closed on such date, in
which case the Common Shares so obtained will be issued, and the Subscriber will become the holder
of record of such Common Shares on the date on which such registers are reopened.

3.03     Exercise of Less than Entitlement

                    The Subscriber may exercise a number of Special Warrants evidenced by the Warrant Certificate
to acquire a number of Common Shares that is less than the number that the Subscriber is entitled
to exercise pursuant to the surrendered Warrant Certificate. In the event that the number of
Common Shares to be issued to the Subscriber on exercise of the Special Warrants is less than the
number that may be obtained upon exercise of the Special Warrants evidenced pursuant to the
surrendered Warrant Certificate, the holder thereof will be entitled to receive, without charge
except as aforesaid, a new Warrant Certificate in respect of the balance of the Special Warrants
which the Subscriber was entitled to exercise pursuant to the surrendered Warrant Certificate and
that were not then exercised.

3.04     No Fractional Shares

                    The Corporation will not be required to issue fractional Common Shares in satisfaction of its
obligations hereunder. If any fractional interest in a Common Share would, except for the
provisions of this Section 3.04, be deliverable upon the exercise of a Special Warrant, the
Corporation may, in lieu of delivering such fractional Common Share satisfy the right to receive
such fractional interest by payment to the holder of such Special Warrant of an amount in cash
equal (computed in the case of a fraction of a cent to the next lower cent) to the value of the
right to acquire such fractional interest on the basis of $7.2387 per Common Share.

3.05     Expiration of Warrant Certificates

                    Immediately following the Automatic Exercise Time, all rights under any Warrant Certificate in
respect of which the right of exercise into Common Shares herein and therein provided for and not
theretofore exercised by the Subscriber will wholly cease and terminate and such Warrant
Certificate will be void and of no effect or value subject to the rights to receive Common Shares
in respect of the exercise of any Special Warrants.

3.06     Cancellation of Surrendered Special Warrants

                    All Warrant Certificates surrendered to the Corporation pursuant to Sections 2.02, or 3.01
will be cancelled by the Corporation.

3.07     Recording

                    The Corporation will record on a register of Special Warrants the particulars of the Warrant
Certificates surrendered, which will include the Exercise Date and the number of Common Shares
obtained upon exercise.

3.08     Transfer Restrictions on Common Shares

                    If at the Time of Exercise of the Special Warrants the Common Shares acquired upon exercise
thereof remain subject to hold periods or other transfer restrictions pursuant to Applicable
Securities Laws, the Corporation may, upon the advice of counsel, endorse any Common Share
certificate to such effect by placing the
following legend on such certificate:

4

 

	 	 	 	“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S.
SECURITIES ACT”). THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY (A) TO THE CORPORATION, (B) IN A
TRANSACTION OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF
REGULATION S UNDER THE U.S. SECURITIES ACT, PURSUANT TO THE
EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED
BY RULE 144 THEREUNDER, OR (D) PURSUANT TO ANOTHER EXEMPTION FROM
REGISTRATION AFTER PROVIDING TO THE CORPORATION A WRITTEN OPINION OF
COUNSEL REASONABLY ACCEPTABLE TO THE CORPORATION TO THE EFFECT THAT
SUCH TRANSFER IS EXEMPT FROM THE REGISTRATION AND QUALIFICATION
REQUIREMENTS OF ALL APPLICABLE UNITED STATES FEDERAL AND STATE
SECURITIES LAWS. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE
“GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN
CANADA AND, IN CONNECTION WITH ANY SALE OF SUCH SECURITIES PURSUANT
TO THE FOREGOING CLAUSE (B) AT A TIME WHEN THE CORPORATION IS A
“FOREIGN ISSUER” AS DEFINED IN RULE 902 UNDER THE U.S. SECURITIES
ACT, THE LEGEND MAY BE REMOVED BY PROVIDING A DECLARATION TO THE
CORPORATION’S TRANSFER AGENT IN SUCH FORM AS THE CORPORATION MAY
REASONABLY PRESCRIBE, TO THE EFFECT THAT THE SALE OF THE SECURITIES
IS BEING MADE IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE
U.S. SECURITIES ACT.	 
	 
	 	 	 	UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS
SECURITY MUST NOT TRADE THE SECURITY BEFORE FEBRUARY 22, 2006.”	 

ARTICLE 4 ADJUSTMENT OF EXERCISE

4.01     Definitions

                    In this Article 4, references to record date refers to the particular time on such relevant
date stipulated for such event and otherwise refers to 5:00 p.m. (Vancouver time) on such date.

4.02     Adjustment of Exercise Rights

                    The exercise rights of the Special Warrants may be subject to adjustment from time to time in
the events and in the manner provided as follows:

          (1)     Common Share Reorganization. If at any time after the date hereof and before the Time of
Exercise the Corporation:

	 	(a)	 	issues to all or substantially all of the holders of the Common Shares by way
of a stock distribution, stock dividend or otherwise, Common Shares or securities
exchangeable for or convertible into Common Shares (the “Convertible Securities”),
	 
	 	(b)	 	subdivides its outstanding Common Shares into a greater number of Common
Shares, or
	 
	 	(c)	 	consolidates its outstanding Common Shares into a lesser number of Common
Shares,

5

 

	 	 	 	or a record date for any of the foregoing events occurs (any of such events in these
clauses (a), (b) and (c) being called a “Common Share Reorganization”), then the
number of Common Shares obtainable upon the exercise of each Special Warrant will be
adjusted as of the record date at which the holders of Common Shares are determined
for the purpose of the Common Share Reorganization by multiplying the number of
Common Shares theretofore obtainable on the exercise thereof immediately prior to
such record date by a fraction, the numerator of which will be the number of Common
Shares outstanding as of such record date after giving effect to such Common Share
Reorganization and the denominator of which will be the number of Common Shares
outstanding on the record date before giving effect to such Common Share
Reorganization. For the purposes of determining the number of Common Shares
outstanding at any particular time for the purposes of this Subsection 4.02(1),
there will be included that number of Common Shares which would have resulted from
the conversion at that time of all Convertible Securities.

          (2)     Capital Reorganization. If at any time after the date hereof and before the Time of
Exercise there is a reclassification of Common Shares at any time outstanding or a change of the
Common Shares into other shares or into other securities (other than a Common Share
Reorganization), or a consolidation, amalgamation, arrangement or merger of the Corporation with or
into any corporation or other entity (other than a consolidation, amalgamation, arrangement or
merger which does not result in any reclassification of the outstanding Common Shares or a change
of the Common Shares into other shares or securities), or a transfer of the undertaking or assets
of the Corporation as an entirety or substantially as an entirety to another entity, or a record
date for any of the foregoing events occurs, (any of such events being herein called a “Capital
Reorganization”), the Subscriber exercises its Special Warrants to acquire Common Shares pursuant
to Special Warrants then held after the record date or effective date of such Capital
Reorganization will be entitled to receive, and will accept in lieu of the number of Common Shares
to which the Subscriber was theretofore entitled upon such exercise, the aggregate number of
shares, warrants, other securities or other property which the Subscriber would have been entitled
to receive as a result of such Capital Reorganization if, on the effective date of such Capital
Reorganization, the Subscriber had been the registered holder of the number of Common Shares to
which such holder was theretofore entitled upon exercise of the Special Warrant subject to
adjustment thereafter in accordance with provisions the same, as nearly as may be possible, as
those contained in Sections 4.02 and 4.03 hereof, provided however, that no such Capital
Reorganization will be carried into effect unless all necessary steps have been taken to so entitle
the Subscriber. If determined appropriate by the Corporation, acting reasonably, appropriate
adjustments will be made as a result of any such Capital Reorganization in the application of the
provisions set forth in this Article 4 with respect to the rights and interests thereafter of the
Subscriber to the end that the provisions set forth in this Article 4 will thereafter
correspondingly be made applicable as nearly as may be reasonable in relation to any shares,
warrants, other securities or other property thereafter deliverable upon the exercise of any
Special Warrant. Any such adjustments will be made by and set forth in terms and conditions
supplemental hereto approved by the Corporation, acting reasonably and absent manifest error, will
for all purposes be conclusively deemed to be the appropriate adjustment.

          (3)     If at any time after the date hereof and prior to the Time of Exercise, the Corporation
issues or distributes to the holders of all or substantially all of the outstanding Common Shares,
cash or securities of the Corporation, including rights, options or warrants to acquire shares of
the Corporation or securities convertible into or exchangeable for shares of the Corporation or
property or assets, including cash or evidences of indebtedness, other than as a result of a Common
Share Reorganization, a Capital Reorganization or a record date for any of the foregoing events
occurs, the Subscriber, if it holds any Special Warrants which will thereafter be exercised will be
entitled to receive, and will receive for the same aggregate consideration payable, if any, in
addition to the number of Common Shares to which the Subscriber was theretofore entitled upon such
exercise, the kind and amount of shares or other securities or property which result from such
issue or distribution as if, on the record date at which holders of Common Shares are determined
for the purpose thereof, the Subscriber had been the registered holder of the number of Common
Shares to which the Subscriber was theretofore entitled upon such exercise.

          (4)     For greater certainty, the Subscriber will be entitled to receive distributions in respect
of the Common Shares underlying such Special Warrants only if such Special Warrants are exercised.

4.03     Rules Regarding Calculation of Adjustment of Number of Common Shares Obtainable Upon Exercise

          (1)     The adjustments provided for in Section 4.02 are cumulative and will, in the case of
adjustments to the number of Common Shares obtainable upon the exercise of Special Warrants, be
computed to the nearest one-tenth of one percent and will be made successively whenever an event
referred to therein occurs, subject to the following Subsections of this Section 4.03.

6

 

          (2)     No adjustment will be made in the number of Common Shares obtainable upon exercise of a
Special Warrant into Common Shares unless it would result in a change of at least 0.025 of a Common
Share; provided, however, that any adjustments that, except for the provisions of this Subsection
4.03(2), would otherwise have been required to be made will be carried forward and taken into
account in any subsequent adjustment.

          (3)     No adjustment will be made to the number of Common Shares obtainable upon exercise of a
Special Warrant in respect of any event described in paragraph 4.02(1)(a) or Subsection 4.02(3) if
the holders of the Special Warrants are entitled to participate in the event on the same terms,
mutatis mutandis, as if they had exercised their Special Warrants immediately prior to the
effective date or record date of the event.

          (4)     No adjustment in the number of Common Shares obtainable upon the exercise of Special
Warrants will be made pursuant to Section 4.02 in respect of the issue from time to time:

	 	(i)	 	of Common Shares otherwise obtainable on exercise of the
Special Warrants;
	 
	 	(ii)	 	of Common Shares pursuant to any share options or share option
plans or share purchase plans or other benefit plans in force at the date
hereof for directors, officers, employees, advisers or consultants of the
Corporation, as such option or plan is amended or superseded from time to time
in accordance with the requirements of the TSX and Applicable Securities Laws,
and such other benefit plans as may be adopted by the Corporation in accordance
with the requirements of the TSX and Applicable Securities Laws; or
	 
	 	(iii)	 	of Common Shares pursuant to the exercise or conversion of
securities outstanding prior to the Effective Time issued by the Corporation or
a Subsidiary of the Corporation and in accordance with the terms thereof,
	 
	 	 	 	and such issue will be deemed not to be a Common Share Reorganization or a
Capital Reorganization.

          (5)     If a dispute arises at any time with respect to adjustments provided for in Section 4.02,
such dispute will be conclusively determined by the Corporation’s Auditors, or if they are unable
or unwilling to act, by such other firm of nationally recognized independent chartered accountants
as may be selected by the Corporation and any such determination will be binding upon the
Corporation and the Subscriber. Such auditors or accountants will be provided access to all
necessary records of the Corporation. In the event that any such determination is made, the
Corporation will deliver a certificate to the Subscriber describing such determination.

          (6)     If the Corporation after the date of issue of the Special Warrants takes any action
affecting the Common Shares other than an action described in Section 4.02, which, in the opinion
of the Corporation, would materially affect the rights of the Subscriber, the number of Common
Shares obtainable upon exercise of Special Warrants will be adjusted in such manner, if any, and at
such time, by the Corporation, in its sole discretion as it 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 Corporation so as to provide for an adjustment on or prior to the effective
date of any action by the Corporation affecting the Common Shares will be conclusive evidence that
the Corporation has determined that it is equitable to make no adjustment in the circumstances. If
any such adjustment is made, the Corporation will deliver a certificate to the Subscriber
describing such adjustment.

          (7)     If the Corporation sets a record date to determine the holders of the Common Shares for
the purpose of entitling them to receive any issue or distribution of any rights, options, warrants
or other securities or
property, including cash, and thereafter and before such distribution or issue to such
shareholders abandons its plan to make such distribution or issue, then no adjustment in the number
of Common Shares which may be acquired upon exercise of any Special Warrant will be required by
reason of the setting of such record date.

7

 

          (8)     The Corporation will not be required to issue fractional shares in satisfaction of its
obligations hereunder. Fractional interests in Common Shares will be dealt with in accordance with
Section 3.04 hereof. Where fractional interests in other shares, warrants, securities or property
to be received as a result of a Capital Reorganization would, except for the provisions of this
Subsection, be deliverable upon the exercise of a Special Warrant, the Corporation will make a cash
payment equal to the fair market value of the fraction of such shares, warrants, securities or
property not so delivered.

          (9)     As a condition precedent to the taking of any action which would require any adjustment in
any of the exercise rights pursuant to any of the Special Warrants, including the number or class
of shares or other securities that are to be received upon the exercise thereof, the Corporation
will take any action which may, in the opinion of counsel to the Corporation, be necessary in order
that the Corporation have unissued and reserved in its authorized capital and may validly and
legally issue as fully paid and non-assessable all the shares or other securities which all the
holders of such Special Warrants are entitled to receive on the full exercise thereof in accordance
with the provisions thereof.

4.04     Postponement of Exercise

                    In any case in which this Article 4 may require that an adjustment will be effective
immediately after a record date for an event referred to herein, the Corporation may defer, until
the occurrence of such event, issuing to the Subscriber of any Special Warrant exercised after such
record date and before the occurrence of such event, the additional Common Shares or other shares,
warrants, securities or other property, including cash, issuable upon such exercise by reason of
the adjustment required by such event provided, however, that the Corporation will deliver to such
holder an appropriate instrument evidencing such holder’s right, upon the occurrence of the event
requiring the adjustment, to an adjustment in the number of Common Shares or other shares,
warrants, securities or other property obtainable on the exercise of any Special Warrant and to
such distributions declared with respect to any additional Common Shares issuable on the exercise
of any Special Warrant.

4.05     Notice of Adjustment of Number of Common Shares Obtainable Upon Exercise

          (1)     At least ten business days prior to the earlier of the effective date or record date of
any event which requires or might require adjustment in any of the exercise rights pursuant to any
of the Special Warrants, including the number of Common Shares which are obtainable upon the
exercise thereof, or such longer period of notice as the Corporation may be required to provide
holders of Common Shares in respect of any such event, the Corporation will give notice to the
Subscriber by way of a certificate of the Corporation specifying the particulars of such event and,
if determinable, the required adjustment and the computation of such adjustment.

          (2)     In case any adjustment for which a notice in Subsection (1) of this Section 4.05 has been
given is not then determinable, the Corporation will promptly after such adjustment is determinable
give notice to the Subscriber, the transfer agent for the Common Shares and the Subscriber of the
adjustment and the computation of such adjustment.

ARTICLE 5 COVENANTS

5.01     Covenants of the Corporation

                    The Corporation covenants with the Subscriber that so long as any Special Warrants remain
outstanding:

	 	(a)	 	it will reserve and keep available a sufficient number of Common Shares for the
purpose of enabling it to satisfy its obligations to issue Common Shares upon the
exercise of the Special Warrants;
	 
	 	(b)	 	it will cause the Common Shares issuable upon exercise of the Special Warrants
to be duly issued in accordance with the Warrant Certificates and the terms hereof;
	 
	 	(c)	 	all Common Shares that are issued upon exercise of Special Warrants will be
fully paid and non-assessable;

8

 

	 	(d)	 	it will not take any other action that might deprive the Subscriber of the
opportunity of exercising its rights pursuant to the Special Warrants held by it during
the period of notice required by Subsection 4.05(1);
	 
	 	(e)	 	it will perform all its covenants and carry out all of the acts or things to be
done by it as provided in this Subscription Agreement;
	 
	 	(f)	 	it will use its commercially reasonable best efforts to obtain the Final
Receipt as soon as possible but in any event within 120 days of the date of this
Subscription Agreement;
	 
	 	(g)	 	it will send a written notice to the Subscriber to (i) notify it of the
issuance of the Final Receipt; and (ii) provide a copy of the Canadian Final Prospectus
and the Registration Statement, as soon as practicable but, in any event, not later
than three business days after the date on which both the Final Receipt is obtained and
the Registration Statement is declared effective;
	 
	 	(h)	 	it will send a written notice to the Subscriber to notify it of the record date
for the determination of holders of Common Shares for the purposes of any issuance,
distribution or rights offering to holders of such securities or any other transaction
referred to in Section 4.01, not later than ten business days prior to such record
date;
	 
	 	(i)	 	it will at all times maintain its existence while any Special Warrants are
outstanding, carry on and conduct its business in a corporate and business-like manner,
keep or cause to be kept proper books of accounts in accordance with generally accepted
accounting practice;
	 
	 	(j)	 	it will make all requisite filings, including filings with appropriate
regulatory authorities, required to be made by the Corporation in connection with the
issue and sale of the Special Warrants and the exercise of the Special Warrants and the
issue of Common Shares upon such exercise;
	 
	 	(k)	 	it will use its commercially reasonable efforts to maintain its status as a
“reporting issuer” or equivalent not in default in the Qualifying Province; and
	 
	 	(l)	 	it will maintain the listing of the Common Shares on TSX and the Nasdaq.

5.02     Securities Qualification Requirements

          (1)     If, in the opinion of counsel of the Corporation, any instrument (other than the Canadian
Final Prospectus and the Registration Statement) is required to be filed with, or any permission,
order or ruling is required to be obtained from, any securities regulatory authority (including the
Reviewing Authority) or any other step is required under any federal or provincial law of Canada
before the Special Warrants may be exercised or the Common Shares may be issued to the Subscriber
(other than as a result of the Subscriber failing to comply with its representations and warranties
contained in this Subscription Agreement in the Qualifying Province, the Corporation covenants that
it will use commercially reasonable best efforts to file such instrument, obtain such permission,
order or ruling or take all such other actions, at its expense, as are reasonably required or
appropriate in the circumstances, other than matters which must be undertaken by applicable law.

          (2)     The Corporation will give written notice of the issue of the Common Shares pursuant to the
exercise of the Special Warrants, in such detail as may be required, to the Reviewing Authority in
accordance with applicable law.

5.03     Successor Entities

                    In the case of the consolidation, amalgamation, merger or transfer of the undertaking or
assets of the Corporation as an entirety or substantially as an entirety to another entity
(“successor entity”), the successor entity resulting from such consolidation, amalgamation, merger
or transfer (if not the Corporation) will expressly assume, the due and punctual performance and
observance of each and every covenant and condition of this Schedule A to be performed and observed
by the Corporation.

9

 

EXHIBIT I

 

FORM OF WARRANT CERTIFICATE

The following together with the Exercise Notice set out in Schedule A is the form of Warrant
Certificate referred to in Subsection 2.01(3)):

CARDIOME PHARMA CORP.

			
	 	 	 
	NO.: 0001
	 	SPECIAL WARRANTS

	 	 	THE SPECIAL WARRANTS (THE “SPECIAL WARRANTS”) REPRESENTED BY THIS WARRANT CERTIFICATE ARE
EXERCISABLE AT THE OPTION OF THE HOLDER AT ANY TIME UP TO 5:00 P.M. (VANCOUVER, BRITISH
COLUMBIA, CANADA TIME) (THE “AUTOMATIC EXERCISE TIME”) ON THE EARLIEST OF (I) THE SECOND
BUSINESS DAY AFTER THE DATE THE FINAL RECEIPT IS ISSUED OR DEEMED TO BE ISSUED BY THE
APPLICABLE SECURITIES REGULATOR; AND (II) OCTOBER 21, 2006, PROVIDED HOWEVER THAT IF ON
OCTOBER 21, 2006 THERE REMAIN TRADING RESTRICTIONS ON THE COMMON SHARES UNDERLYING THE
SPECIAL WARRANTS PURSUANT TO APPLICABLE SECURITIES LAWS, THEN THE DATE ON WHICH SUCH TRADING
RESTRICTIONS ARE LIFTED. AT THE AUTOMATIC EXERCISE TIME, SUCH SPECIAL WARRANTS WILL BE
AUTOMATICALLY EXERCISED AND HOLDERS WILL ACQUIRE COMMON SHARES OF CARDIOME PHARMA CORP.
	 
	 	 	THE SPECIAL WARRANTS REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED AND ARE NON-TRANSFERABLE.
	 
	 	 	UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE
THE SECURITY BEFORE FEBRUARY 22, 2006, UNLESS PERMITTED UNDER APPLICABLE SECURITIES
LEGISLATION, THE HOLDER SHALL NOT TRADE THE COMMON SHARES ISSUABLE UPON DUE EXERCISE OF THE
SPECIAL WARRANTS BEFORE FEBRUARY 22, 2006.

               THIS IS TO CERTIFY THAT for value received,                 is entitled at any time up to the
Automatic Exercise Time, to exercise each Special Warrant represented hereby to acquire one Common
Share of the Corporation, without payment of any consideration in addition to the consideration
paid for such Special Warrant. In the event of any inconsistency between this Warrant Certificate
and the registers referred to in Section 3.07 of Schedule A to the Subscription Agreement dated
October 21, 2005 between the Corporation and                 (the “Subscriber”), in the absence of
evidence to the contrary, this Warrant Certificate will prevail. Initially capitalized terms
defined in the Subscription Agreement and not defined in this Warrant Certificate, have the
meanings ascribed thereto in the Subscription Agreement.

               On the second business day following the date on which the Automatic Exercise Time occurs, the
Corporation will notify the Subscriber if it did not exercise such Special Warrants prior to the
Automatic Exercise Time, that such Special Warrants have been automatically exercised. The
Subscriber will be required to provide the Corporation with such details regarding the account
through which the Subscriber will hold Common Shares as the Corporation may require.

               Upon surrender of this Warrant Certificate and the duly completed and executed Exercise Notice
forming part of this Warrant Certificate to the Corporation, the Corporation will cause to be
issued a share certificate evidencing the number of Common Shares to be issued to the Subscriber
registered in the name of the Subscriber, and the Corporation will cause the register maintained by
the Corporation to reflect the issuance of such Common Shares to the Subscriber within five
business days of the surrender of this Warrant Certificate. The registered holder
of this Warrant Certificate may exercise a number of Special Warrants represented hereby which
is less than the

10

 

total number of Special Warrants represented by this Warrant Certificate and in
such event the registered holder hereof will be entitled to receive a new Warrant Certificate or
Warrant Certificates in respect of the balance of the Special Warrants represented by this Warrant
Certificate not then exercised to acquire Common Shares.

               This Warrant Certificate is issued under and pursuant to the Subscription Agreement.
Reference is hereby made to the Subscription Agreement and any instruments supplemental thereto for
a description of the terms and conditions upon which such Warrant Certificate is issued and is to
be held, all to the same effect as if the provisions of the Subscription Agreement and all
instruments supplemental thereto were herein set forth. By acceptance hereof, the holder of this
Warrant Certificate assents to all of the provisions contained in the Subscription Agreement and
all instruments supplemental thereto. To the extent the terms and conditions set forth in this
Warrant Certificate conflict with the terms and conditions of the Subscription Agreement, the
Subscription Agreement will prevail.

               The Subscription Agreement provides for adjustment in the number of Common Shares to be issued
upon exercise of Special Warrants in certain events therein set forth.

               The registered holder of this Warrant Certificate may at any time up to the Automatic Exercise
Time upon the surrender hereof to the Corporation at its office in the City of Vancouver, British
Columbia and payment of any charges provided for in the Subscription Agreement, exchange this
Warrant Certificate for other Warrant Certificates evidencing in the aggregate the same number of
Special Warrants.

               The Special Warrants represented by this Warrant Certificate are non-transferable.

               The holding of this Warrant Certificate will not, under any circumstances, be construed as
conferring any right or interest whatsoever as a shareholder of the Corporation except as expressly
provided herein and in the Subscription Agreement.

               On the date that is two days after the Automatic Exercise Time this Warrant Certificate and
all rights hereunder will be void and of no value provided that the Common Shares or other stock
has been issued.

               Time is of the essence hereof.

               IN WITNESS WHEREOF this Warrant Certificate has been executed on behalf of Cardiome Pharma
Corp. as of the 21st day of October, 2005.

	 	 	 	 	 
	 	 	CARDIOME PHARMA CORP.

 	 
	 	By:  	 	 
	 	 	Authorized Signatory 	 
	 	 	 	 

11

 

	 	 	 	 	 

EXHIBIT II

 

FORM OF EXERCISE NOTICE

The following is the form of Exercise Notice:

To:     Cardiome Pharma Corp.

EXERCISE NOTICE

                    FOR VALUE RECEIVED, the undersigned hereby exercises                          Special Warrants (the “Special
Warrants”) of Cardiome Pharma Corp. (the “Corporation”) represented by the attached Warrant
Certificate and appoints the Corporation as its attorney to record the said exercise of the Special
Warrants to acquire Common Shares registered in the name of                          .

                    The undersigned acknowledges and agrees to comply with the restrictions on transfer of the
Common Shares issuable upon exercise of the Special Warrants referred to in the subscription
agreement and the schedules appended thereto (the “Subscription Agreement”) entered into by the
Corporation and                           dated as of October 21, 2005. Terms used in this Exercise Notice but
not defined have the meanings specified in the Subscription Agreement.

 

DATED                                         

SUBSCRIBER

 

By:                                             

 

	 	 	 
	NOTICE:

	 	The signature on this notice must correspond with the name as
written upon the face of this Warrant Certificate (or, in the case
of a corporate holder, by a duly authorized representative) in
every particular without alteration or enlargement or any change
whatsoever.

12

 

SCHEDULE C

 

UNITED STATES ACCREDITED INVESTOR CERTIFICATION

TO:     Cardiome Pharma Corp.

In connection with the acquisition by the Subscriber of Special Warrants of Cardiome Pharma Corp.,
the Subscriber represents and warrants as follows:

1.          The Subscriber is an institution or an individual that is an “accredited investor” as defined in
Rule 501(a) of Regulation D under the 1933 Act, because it is:

               PLEASE PLACE AN “X” AGAINST THE APPROPRIATE CATEGORY OR CATEGORIES BELOW:

	 	o	 	A bank (as defined in Section 3(a)(2) of the 1933 Act) or a savings and loan
association or other institution (as defined in Section 3(a)(5)(A) of the 1933 Act),
acting either in its individual capacity or in a fiduciary capacity.
	 
	 	o	 	A broker or dealer registered under Section 15 of the 1934 Act.
	 
	 	o	 	An insurance company (as defined in Section 2(13) of the 1933 Act).
	 
	 	o	 	An investment company registered under the U.S. Investment Company Act of 1940.
	 
	 	o	 	Any Small Business Investment Company licensed by the U.S. Small Business
Administration under section 301(c) or (d) of the Small Business Investment Act of
1958.
	 
	 	o	 	A business development company (as defined in Section 2(a)(48) of the Investment
Company Act).
	 
	 	o	 	A private business development company (as defined in Section 202(a)(22) of the
Investment Advisers Act of 1940).
	 
	 	o	 	A tax-exempt organization described in Section 501(c)(3) of the Internal Revenue Code
of 1986, as amended, not formed for the specific purpose of acquiring the Special
Warrants with total assets of more than U.S. $5 million.
	 
	 	o	 	A corporation, Massachusetts or similar business trust, or partnership, not formed
for the specific purpose of acquiring the Special Warrants, with total assets of more
than U.S. $5 million.
	 
	 	o	 	Any employee benefit plan within the meaning of the Employee Retirement Income
Security Act of 1974 (“ERISA”) if the investment decision is made by a plan
fiduciary, as defined in section 3(21) of such act, which is either a bank, savings
and loan association, insurance company, or registered investment adviser, or if the
employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed
plan, with investment decisions made solely by persons that are accredited investors.
	 
	 	o	 	An employee benefit plan not subject to ERISA, with total assets of more than $5
million, established and maintained by a state of the United States, a political
subdivision of a state, or any agency or instrumentality of a state or its political
subdivisions for the benefit of its employees.
	 
	 	o	 	A trust, with total assets in excess of U.S. $5 million, not formed for the specific
purpose of acquiring the Special Warrants, whose purchase is directed by a
sophisticated person as described in Rule 506(b)(2)(ii) of Regulation D under the
1933 Act.
	 
	 	o	 	A director or executive officer of the Corporation.

1

 

	 	o	 	A natural person with individual net worth, or joint net worth with his or her
spouse, at the time of purchase in excess of $1,000,000.
	 
	 	o	 	A natural person with an individual income in excess of $200,000 in each of the last
two years or joint income with his or her spouse in excess of $300,000 in each of
those years, and who reasonably expects to reach the same income level in the current
year.
	 
	 	o	 	An entity in which all of the equity owners are accredited investors.

(As used herein, the term “net worth” means the excess of total assets over total liabilities. In
computing net worth, the principal residence of the investor must be valued at cost, including cost
of improvements, or at recently appraised value by an institutional lender making a secured loan,
net of encumbrances. In determining income, an investor should add to adjusted gross income any
amount attributable to tax exempt income received, losses claimed as a limited partner in any
limited partnership, deductions claimed for depletion, contributions to an IRA or Keogh retirement
plan, alimony payments, and any amount by which income from long-term capital gains has been
reduced in arriving at adjusted gross income.)

               The Corporation is irrevocably authorized to produce this Certificate or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry with respect to the
matters covered hereby. The Subscriber’s investment decision with respect to the Special Warrants
was made on or prior to the date set forth below.

Dated:     October 21, 2005.

 

SUBSCRIBER

 

By:                                             

2

 

SCHEDULE D

 

FORM OF DECLARATION FOR REMOVAL OF LEGEND

	 	 	 
	TO:

	 	[TRANSFER AGENT]
	 

	 	as registrar and transfer agent for Common Shares of Cardiome Pharma Corp.

The undersigned (a) acknowledges that the sale of the securities of Cardiome Pharma Corp.. (the
“Corporation”) 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 “1933 Act”) and (b)
certifies that (1) the undersigned is not an affiliate of the Corporation as that term is defined
in the 1933 Act, (2) the offer of such securities was not made to a person in the United States and
either (A) at the time the buy order was originated, the buyer was outside the United States, or
the seller and any person acting on its behalf reasonably believed that the buyer was outside the
United States, or (B) the transaction was executed in, on or through the facilities of the Toronto
Stock Exchange or the Toronto Stock Exchange or any other designated offshore securities market as
defined in Regulation S under the 1933 Act and neither the seller nor any person acting on its
behalf knows that the transaction has been prearranged with a buyer in the United States, (3)
neither the seller nor any affiliate of the seller nor any person acting on any of their behalf has
engaged or will engage in any directed selling efforts in the United States in connection with the
offer and sale of such securities, (4) 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), (5) the seller does not intend to replace
the securities sold in reliance on Rule 904 of the 1933 Act with fungible unrestricted securities
and (6) 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. Terms used herein have the meanings given to them by
Regulation S.

Dated:                                         

	 	 	 	 	 
	 	 
	 	Name of Seller

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

1

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