Document:

Exhibit 4.10

 

EXECUTION VERSION

 

WARRANT INDENTURE

 

Providing for the Issue of Common Share Purchase Warrants

 

BETWEEN

 

TRIBUTE PHARMACEUTICALS CANADA INC.

 

- and -

 

EQUITY FINANCIAL TRUST COMPANY

 

Dated as of July 15, 2014

 

 

TABLE OF CONTENTS

 

	
Article 1   INTERPRETATION
    	
1
    
	
1.1
    	
 
    	
Definitions
    	
1
    
	
1.2
    	
 
    	
Number and Gender
    	
5
    
	
1.3
    	
 
    	
Interpretation Not   Affected by Headings, Etc.
    	
5
    
	
1.4
    	
 
    	
Day Not a Business Day
    	
5
    
	
1.5
    	
 
    	
Governing Law
    	
5
    
	
1.6
    	
 
    	
Currency
    	
6
    
	
1.7
    	
 
    	
Meaning of   “Outstanding”
    	
6
    
	
1.8
    	
 
    	
Severability
    	
6
    
	
1.9
    	
 
    	
Statutory References
    	
6
    
	
Article 2 ISSUE OF   WARRANTS
    	
6
    
	
2.1
    	
 
    	
Issue of Warrants
    	
6
    
	
2.2
    	
 
    	
Form and Terms of   Warrants
    	
6
    
	
2.3
    	
 
    	
Issue in Substitution   for Lost Warrant Certificates
    	
7
    
	
2.4
    	
 
    	
Book-Based System   Warrants
    	
7
    
	
2.5
    	
 
    	
Warrantholder not a   Shareholder
    	
9
    
	
2.6
    	
 
    	
Warrants to Rank Pari   Passu
    	
9
    
	
2.7
    	
 
    	
Signing of Warrant   Certificates
    	
9
    
	
2.8
    	
 
    	
Certification by the   Warrant Agent
    	
10
    
	
2.9
    	
 
    	
Legended Warrant   Certificates
    	
10
    
	
2.1
    	
 
    	
Copy of Indenture
    	
12
    
	
Article 3 EXCHANGE   AND OWNERSHIP OF WARRANTS; NOTICES
    	
13
    
	
3.1
    	
 
    	
Exchange of Warrant   Certificates
    	
13
    
	
3.2
    	
 
    	
Registration of   Warrants
    	
13
    
	
3.3
    	
 
    	
Transfer of Warrants
    	
13
    
	
3.4
    	
 
    	
Ownership of   Certificates
    	
14
    
	
3.5
    	
 
    	
Evidence of Ownership
    	
15
    
	
3.6
    	
 
    	
Notices
    	
15
    
	
Article 4 EXERCISE   OF WARRANTS
    	
15
    
	
4.1
    	
 
    	
Method of Exercise of Warrants
    	
15
    
	
4.2
    	
 
    	
Effect of Exercise of   Warrants
    	
17
    
	
4.3
    	
 
    	
Subscription for Less   than Entitlement
    	
18
    
	
4.4
    	
 
    	
No Fractional Common   Shares
    	
18
    
	
4.5
    	
 
    	
Expiration of Warrants
    	
18
    
	
4.6
    	
 
    	
Cancellation of   Surrendered Warrants
    	
18
    
	
4.7
    	
 
    	
Accounting and   Recording
    	
18
    
	
4.8
    	
 
    	
Restriction on Exercise   by U.S. Persons and in the United States; Exception
    	
19
    
	
Article 5   ADJUSTMENT OF SUBSCRIPTION RIGHTS AND EXERCISE PRICE
    	
20
    
	
5.1
    	
 
    	
Adjustment of Exercise   Price and Number of Common Shares Purchasable Upon Exercise
    	
20
    
	
5.2
    	
 
    	
Rules Regarding   Calculation of Adjustment of Exercise Price and Number of Common Shares   Purchasable Upon Exercise
    	
24
    
	
5.3
    	
 
    	
Postponement of   Subscription
    	
26
    
	
5.4
    	
 
    	
Notice of Adjustment of   Exercise Price and Number of Common Shares Purchasable Upon Exercise
    	
26
    
	
Article 6   PURCHASES BY THE COMPANY
    	
27
    
	
6.1
    	
 
    	
Purchases of Warrants   for Cancellation
    	
27
    
	
6.2
    	
 
    	
Optional Purchases by   the Company
    	
27
    

 

 

	
Article 7   COVENANTS OF THE COMPANY
    	
27
    
	
7.1
    	
 
    	
Covenants of the   Company
    	
27
    
	
7.2
    	
 
    	
Warrant Agent’s Remuneration   and Expenses
    	
28
    
	
7.3
    	
 
    	
Performance of   Covenants by Warrant Agent
    	
28
    
	
7.4
    	
 
    	
Securities Filings
    	
28
    
	
7.5
    	
 
    	
Certificates of No   Default
    	
29
    
	
Article 8   ENFORCEMENT
    	
29
    
	
8.1
    	
 
    	
Suits by Warrantholders
    	
29
    
	
8.2
    	
 
    	
Limitation of Liability
    	
29
    
	
Article 9 MEETINGS   OF WARRANTHOLDERS
    	
30
    
	
9.1
    	
 
    	
Right to Convene   Meetings
    	
30
    
	
9.2
    	
 
    	
Notice
    	
30
    
	
9.3
    	
 
    	
Chairman
    	
30
    
	
9.4
    	
 
    	
Quorum
    	
30
    
	
9.5
    	
 
    	
Power to Adjourn
    	
31
    
	
9.6
    	
 
    	
Show of Hands
    	
31
    
	
9.7
    	
 
    	
Poll and Voting
    	
31
    
	
9.8
    	
 
    	
Regulations
    	
31
    
	
9.9
    	
 
    	
Company, Warrant Agent   and Warrantholders May be Represented
    	
32
    
	
9.1
    	
 
    	
Powers Exercisable by   Extraordinary Resolution
    	
32
    
	
9.11
    	
 
    	
Meaning of   Extraordinary Resolution
    	
33
    
	
9.12
    	
 
    	
Powers Cumulative
    	
34
    
	
9.13
    	
 
    	
Minutes
    	
34
    
	
9.14
    	
 
    	
Instruments in Writing
    	
34
    
	
9.15
    	
 
    	
Binding Effect of Resolutions
    	
34
    
	
9.16
    	
 
    	
Holdings by Company   Disregarded
    	
34
    
	
Article 10   SUPPLEMENTAL INDENTURES
    	
35
    
	
10.1
    	
 
    	
Provision for   Supplemental Indentures for Certain Purposes
    	
35
    
	
10.2
    	
 
    	
Successor Companies
    	
36
    
	
Article 11   CONCERNING THE WARRANT AGENT
    	
36
    
	
11.1
    	
 
    	
Indenture Legislation
    	
36
    
	
11.2
    	
 
    	
Rights and Duties of   Warrant Agent
    	
36
    
	
11.3
    	
 
    	
Evidence, Experts and   Advisers
    	
37
    
	
11.4
    	
 
    	
Action by Warrant Agent   to Protect Interest
    	
38
    
	
11.5
    	
 
    	
Warrant Agent not   Required to Give Security
    	
38
    
	
11.6
    	
 
    	
Protection of Warrant Agent
    	
38
    
	
11.7
    	
 
    	
Replacement of Warrant   Agent; Successor by Merger
    	
38
    
	
11.8
    	
 
    	
Conflict of Interest
    	
39
    
	
11.9
    	
 
    	
Warrant Agent Not to be   Appointed Receiver
    	
40
    
	
11.1
    	
 
    	
Payments by Warrant   Agent
    	
40
    
	
11.11
    	
 
    	
Deposit of Securities
    	
40
    
	
11.12
    	
 
    	
Act, Error, Omission   etc.
    	
40
    
	
11.13
    	
 
    	
Indemnification
    	
40
    
	
11.14
    	
 
    	
Notice
    	
41
    
	
11.15
    	
 
    	
Reliance by the Warrant   Agent
    	
41
    
	
11.16
    	
 
    	
Privacy
    	
41
    
	
11.17
    	
 
    	
Anti-Money Laundering
    	
42
    
	
11.18
    	
 
    	
Force Majeure
    	
42
    
	
Article 12   ACCEPTANCE OF APPOINTMENT BY WARRANT AGENT
    	
42
    
	
12.1
    	
 
    	
Appointment and   Acceptance of Functions
    	
42
    

 

 

	
Article 13 GENERAL
    	
43
    
	
13.1
    	
 
    	
Notice to the Company   and the Warrant Agent
    	
43
    
	
13.2
    	
 
    	
Time of the Essence
    	
44
    
	
13.3
    	
 
    	
Counterparts and Formal   Date
    	
44
    
	
13.4
    	
 
    	
Discretion of Directors
    	
44
    
	
13.5
    	
 
    	
Satisfaction and   Discharge of Indenture
    	
44
    
	
13.6
    	
 
    	
Provisions of Indenture   and Warrant Certificates for the Sole Benefit of Parties and Warrantholders
    	
44
    
	
13.7
    	
 
    	
Warrants Owned by the   Company or its Subsidiaries Certificates to be Provided
    	
45
    

 

 

THIS WARRANT INDENTURE dated as of the 15th day of July, 2014.

 

BETWEEN:

 

TRIBUTE PHARMACEUTICALS CANADA INC., a corporation amalgamated under the laws of the Province of Ontario

 

(hereinafter called the “Company”)

 

- and -

 

EQUITY FINANCIAL TRUST COMPANY, a company existing under the laws of Canada

 

(hereinafter called the “Warrant Agent”)

 

WHEREAS the Company proposes to issue and sell up to 23,056,063 Warrants (as hereinafter defined) pursuant to the Prospectus (as hereinafter defined) and this Indenture;

 

AND WHEREAS pursuant to this Indenture, each Warrant shall entitle the registered holder thereof to purchase one Common Share (as hereinafter defined) (subject to adjustment as herein provided) at the price and upon the terms and conditions herein set forth;

 

AND WHEREAS for such purpose the Company deems it necessary to create and issue Warrants constituted and issued in the manner hereinafter appearing;

 

AND WHEREAS all things necessary have been done and performed to make the Warrants and the Warrant Certificates (when certified and or Authenticated (as defined herein) by the Warrant Agent and issued as provided for in this Indenture) legal, valid and binding upon the Company with the benefits of and subject to the terms of this Indenture;

 

AND WHEREAS the representations and statements of fact contained in the above recitals are those of the Company and not of the Warrant Agent;

 

NOW THEREFORE THIS INDENTURE WITNESSES that for good and valuable consideration mutually given and received, the receipt and sufficiency of which is hereby acknowledged, it is hereby agreed and declared as follows:

 

ARTICLE 1

 

INTERPRETATION

 

1.1 Definitions

 

In this Indenture, unless there is something in the subject matter or context inconsistent therewith, the terms defined in this Section or elsewhere herein shall have the respective meanings specified in this Section or elsewhere herein:

 

(a)                                 “1933 Act” means the United States Securities Act of 1933, as amended;

 

(b)                                 “Affiliate” has the meaning ascribed thereto in the Securities Act (Ontario), as amended or replaced from time to time;

 

 

(c)                                  “Agents” means Dundee Securities Limited and Mackie Research Capital Corporation;

 

(d)                                 “Authenticated” means (a) with respect to the issuance of a Warrant Certificate, one which has been duly signed by the Corporation and authenticated by manual signature of an authorized officer of the Warrant Agent, (b) with respect to the issuance of an Uncertificated Warrant, one in respect of which the Warrant Agent has completed all internal procedures such that the particulars of such Uncertificated Warrant are entered in the register of holders of Warrants, and “Authenticate”, “Authenticating” and “Authentication” shall have the appropriate correlative meanings;

 

(e)                                  “Book Entry Only Warrants” means Warrants that are to be held only by or on behalf of CDS;

 

(f)                                   “Business Day” means a day which is not Saturday or Sunday or a statutory holiday in the City of Toronto or a day on which the office of the Warrant Agent is closed;

 

(g)                                  “Capital Reorganization” has the meaning attributed thereto in subsection 5.1(d);

 

(h)                                 “CDS” means CDS Clearing and Depository Services Inc. or its nominee;

 

(i)                                     “CDS Global Warrants” means Warrants representing all or a portion of the aggregate number of Warrants issued in the name of CDS represented by an Uncertificated Warrant, or if requested by the Depository or the Company, by a Warrant Certificate;

 

(j)                                    “CDS Participant” means a broker, dealer, bank or other financial institution or other person for whom, from time to time, CDS effects book entries for the Warrants deposited with CDS;

 

(k)                                 “Certificated Warrant” means a Warrant evidenced by a writing or writings substantially in the form of Schedule “A” attached hereto;

 

(l)                                     “Common Shares” means the common shares in the capital of the Company as such shares exist at the close of business on the date hereof and, in the event that there shall occur a change in respect of or affecting the Common Shares referred to in Section 5.1 (whether or not such change shall result in an adjustment in the Exercise Price), the term “Common Shares” shall mean the shares, other securities or other property which a Warrantholder is entitled to purchase resulting from such change;

 

(m)                             “Common Share Reorganization” has the meaning attributed thereto in subsection 5.1(a);

 

(n)                                 “Company” means Tribute Pharmaceuticals Canada Inc., a corporation amalgamated under the laws of the Province of Ontario, and its lawful successors from time to time;

 

(o)                                 “Company’s Auditors” means the chartered accountant or firm of chartered accountants duly appointed as auditor or auditors of the Company from time to time;

 

(p)                                 “Counsel” means a barrister or solicitor (who may be an employee of the Company) or a firm of barristers and solicitors (who may be counsel to the Company), in both cases acceptable to the Warrant Agent, acting reasonably;

 

(q)                                 “Court” has the meaning attributed thereto in subsection 11.7(1);

 

(r)                                    “Current Market Price” at any date, means the weighted average price per share at which the Common Shares have traded:

 

2

 

(i)                                                                                     on the TSXV;

 

(ii)                                                                                  if the Common Shares are not listed on the TSXV, on any stock exchange upon which the Common Shares are listed as may be selected for this purpose by the directors, acting reasonably; or

 

(iii)                                                                               if the Common Shares are not listed on any stock exchange, on any over-the-counter market;

 

during the thirty (30) consecutive trading days (on each of which at least 500 Common Shares are traded in board lots) ending the second trading day before such date and the weighted average price shall be determined by dividing the aggregate sale price of all Common Shares sold in board lots on the exchange or market, as the case may be, during the twenty (20) consecutive trading days by the number of Common Shares sold, or if not traded on any recognized market or exchange, as determined by the directors of the Company acting reasonably;

 

(s)                                   “Date of Issue” for a particular Warrant means the date on which the Warrant is actually issued by or on behalf of the Company;

 

(t)                                    “Director” means a director of the Company for the time being, and, unless otherwise specified herein, reference to “action by the Directors” means action by the Directors of the Company as a board, or whenever duly empowered, action by any committee of such board;

 

(u)                                 “Dividend Paid in the Ordinary Course” means a dividend paid on the Common Shares in any fiscal year of the Company in cash, provided that the aggregate amount of such dividends does not in such fiscal year exceed 5% of the Exercise Price, and for such purpose the amount of any dividend paid in shares shall be the aggregate stated capital of such shares, and the amount of any dividend paid in other than cash or shares shall be the fair market value of such dividend as determined by a resolution passed by the Board of Directors of the Company, subject, if applicable, to the prior consent of any stock exchange or any other over-the-counter market on which the Common Shares are traded;

 

(v)                                 “Exercise Date” means, in relation to a Warrant, the Business Day on which such Warrant is validly exercised or deemed to be validly exercised in accordance with Article 4 hereof;

 

(w)                               “Exercise Period” means the period commencing on the time of issue on the Date of Issue and ending at the Time of Expiry;

 

(x)                                 “Exercise Price” means a price per Common Share of C$0.90 unless such price shall have been adjusted in accordance with the provisions of Section 5.1, in which case it shall mean the adjusted price in effect at such time;

 

(y)                                 “Extraordinary Resolution” has the meaning attributed thereto in Section 9.11;

 

(z)                                  “Institutional Accredited Investor” means an institution meeting one or more of the criteria set forth in Rule 501(a)(1), (2), (3) or (7) of Regulation D;

 

(aa)                          “Offering” has the meaning ascribed to such term in the Prospectus;

 

(bb)                          “Offshore Transaction” means “offshore transaction” as that term is defined in Regulation S;

 

3

 

(cc)                            “Person” means an individual, a corporation, a partnership, a syndicate, a trustee or any unincorporated organization and words importing persons are intended to have a similarly extended meaning;

 

(dd)                          “Prospectus” means the final short form prospectus of the Company dated July 3, 2014;

 

(ee)                            “Regulation D” means Regulation D adopted by the SEC under the 1933 Act;

 

(ff)                              “Regulation S” means Regulation S adopted by the SEC under the 1933 Act;

 

(gg)                            “Rights Offering” has the meaning attributed thereto in subsection (b)(i)(2)(a);

 

(hh)                          “Rights Period” has the meaning attributed thereto in subsection (b)(i)(2)(a);

 

(ii)                                  “SEC” means the United States Securities and Exchange Commission;

 

(jj)                                “Shareholder” means a holder of record of one or more Common Shares;

 

(kk)                          “Special Distribution” has the meaning attributed thereto in subsection (b);

 

(ll)                                  “Subscription Notice” has the meaning attributed thereto in subsection 4.1(2);

 

(mm)                  “Subsidiary of the Company” means a corporation of which voting securities carrying a majority 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 Company, the Company and one or more subsidiaries thereof, or one or more subsidiaries of the Company; and, as used in this definition, voting securities means securities of a class or series or classes or series carrying a voting right to elect directors under all circumstances provided that, for the purposes hereof; securities which only carry the right to vote conditionally on the happening of an event shall not be considered voting securities whether or not such event shall have happened nor shall 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 or classes or series by reason of the happening of such event;

 

(nn)                          “this Warrant Indenture”, “this Indenture”, “herein”, “hereby”, and similar expressions mean and refer to this Indenture and any indenture, deed or instrument supplemental or ancillary hereto; and the expressions “Article”, “Section”, and “subsection” followed by a number mean and refer to the specified Article, Section or subsection of this Indenture;

 

(oo)                          “Time of Expiry” means 4:00 p.m. (Toronto time) on July 15, 2016;

 

(pp)                          “TSXV” means The TSX Venture Exchange;

 

(qq)                          “Uncertificated Warrant” means any Warrant which is not a Certificated Warrant;

 

(rr)                                “Unit” has the meaning ascribed to such term in the Prospectus;

 

(ss)                              “United States” means the United States of America its territories and possessions, any state of the United States and the District of Columbia;

 

(tt)                                “U.S. Exchange Act” means the United States Securities Exchange Act of 1934, as amended;

 

(uu)                          “U.S. Person” means a “U.S. person” as that term is defined in Regulation S;

 

4

 

(vv)                          “Warrant” means each whole common share purchase warrant of the Company to be issued hereunder entitling the holder thereof to purchase one Common Share for each whole Warrant upon payment of the Exercise Price; provided that in each case the number and/or class of shares or securities receivable on the exercise of the Warrant may be subject to increase or decrease or change in accordance with the terms and provisions hereof, and, where the context so requires, also means the warrants issued and Authenticated hereunder, whether by way of Warrant Certificate or Uncertificated Warrant;

 

(ww)                      “Warrant Agent” means Equity Financial Trust Company, or its successors hereunder;

 

(xx)                          “Warrant Certificate” means a certificate representing one or more Warrants substantially in the form set forth in Schedule “A” hereto or such other form as may be approved by the Company, the Agents and the Warrant Agent;

 

(yy)                          “Warrantholders” or “holders” without reference to Common Shares means the Persons whose names are entered for the time being on the register maintained pursuant to Section 3.2(1);

 

(zz)                            “Warrantholders’ Request” means an instrument signed in one or more counterparts by Warrantholders holding not less than 10% of the aggregate number of Warrants then unexercised and outstanding, which requests the Warrant Agent to take some action or proceeding specified therein; and

 

(aaa)                   “written order of the Company”, “written request of the Company”, “written consent of the Company” and “certificate of the Company” and any other document required to be signed by the Company, means, respectively, a written order, request, consent, certificate or other document signed in the name of the Company by any officer or director and may consist of one or more instruments so executed.

 

1.2 Number and Gender

 

Unless the context otherwise requires, words importing the singular include the plural and vice versa and words importing gender include all genders.

 

1.3 Interpretation Not Affected by Headings, Etc.

 

The division of this Indenture into Articles, Sections and subsections, the provision of a table of contents and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Indenture or the Warrant Certificates.

 

1.4 Day Not a Business Day

 

In the event that any day on or before which any action is required to be taken hereunder is not a Business Day, then such action shall be required to be taken on or before the requisite time on the next succeeding day that is a Business Day.

 

1.5 Governing Law

 

This Indenture and the Warrant Certificates (including the CDS Global Warrants) shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein and shall be treated in all respects as Ontario contracts.

 

5

 

 

1.6 Currency

 

Except as otherwise specified herein, all dollar amounts herein are expressed in lawful money of Canada.

 

1.7 Meaning of “Outstanding”

 

Every Warrant Authenticated in accordance with the terms hereof shall be deemed to be outstanding until it shall be cancelled or exercised pursuant to Article 4, provided that where a new Warrant Certificate has been issued pursuant to Section 2.3 hereof to replace one which has been mutilated, lost, destroyed or stolen, the Warrants represented by only one of such Warrant Certificates shall be counted for the purpose of determining the aggregate number of Warrants outstanding.

 

1.8 Severability

 

In the event that any provision hereof shall be 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 shall not be affected or impaired thereby.

 

1.9 Statutory References

 

In this Indenture, unless something in the subject matter or context is inconsistent therewith or unless otherwise herein provided, a reference to any statute is to that statute as now enacted or as the same may from time to time be amended, re-enacted or replaced and includes any regulation made thereunder.

 

ARTICLE 2

 

ISSUE OF WARRANTS

 

2.1 Issue of Warrants

 

Up to 23,056,063 Warrants are hereby created and authorized to be issued and certificates evidencing such Warrants as have been issued shall be executed by the Company, Authenticated by or on behalf of the Warrant Agent upon the written order of the Company and delivered in accordance with this Article.

 

2.2 Form and Terms of Warrants

 

(1)                                                                                 Subject to subsection 2.2(2), each Warrant authorized to be issued hereunder shall entitle the holder thereof to purchase upon due exercise and upon due execution and endorsement of the subscription form on the Warrant Certificate or other instrument of subscription in such form as the Warrant Agent and/or the Company may from time to time prescribe and upon payment of the Exercise Price in effect on the Exercise Date, one Common Share at any time during the Exercise Period, in accordance with the provisions of this Indenture.

 

(2)                                                                                 The number of Common Shares which may be purchased pursuant to the Warrants and the Exercise Price shall be adjusted in the events and in the manner specified in Section 5.1.

 

6

 

(3)                                                                                 The Warrants may be issued in both certificated and uncertificated form. Each Warrant originally issued to a U.S. warrantholder will be evidenced in certificated form only and bear the applicable legends as set forth in Schedule “A” hereto. All Warrants issued in certificated form shall be evidenced by a Warrant Certificate (including all replacements issued in accordance with this Indenture), substantially in the form set out in Schedule “A” hereto, which shall bear such distinguishing letters and numbers as the Company may, with the approval of the Warrant Agent, prescribe, and shall be issuable in any denomination excluding fractions. All Warrants issued to CDS may be in either a certificated or uncertificated form, such uncertificated form being evidenced by a book position on the register of Warrantholders to be maintained by the Warrant Agent in accordance with this Warrant Indenture

 

(4)                                                                                 Subject to subsection 2.2(5), Warrant Certificates shall be issuable in whole denominations only and holders shall not be entitled to any cash or other consideration in lieu of any interest in or claim to any fraction of a Warrant. If a Warrantholder is entitled to a fraction of a Warrant the number of Warrants issued to that Warrantholder shall be rounded down to the nearest whole Warrant.

 

(5)                                                                                 The Warrant Certificates may be engraved, lithographed or printed (the expression “printed” including for purposes hereof both original typewritten material as well as mimeographed, mechanically, photographically, photostatically or electronically reproduced, typewritten or other written material), or partly in one form and partly in another, as the Company, with the approval of the Warrant Agent, may determine. No change in the form of the Warrant Certificate shall be required by reason of any adjustment made pursuant to Section 5.1 in the number and/or class of securities or type of securities that may be acquired pursuant to the Warrants.

 

2.3 Issue in Substitution for Lost Warrant Certificates

 

(1)                                                                                 In the event that any Warrant Certificates issued and certified under this Indenture shall be mutilated, lost, destroyed or stolen, the Company, subject to applicable law, shall issue and thereupon the Warrant Agent shall certify and deliver, a new certificate of like tenor, and bearing the same legends, as the one mutilated, lost, destroyed or stolen in exchange for and in place of and upon cancellation of such mutilated certificate, or in lieu of and in substitution for such lost, destroyed or stolen certificate, and the substituted certificate shall be in a form approved by the Warrant Agent and shall be entitled to the benefits hereof and shall rank equally in accordance with its terms with all other Warrant Certificates issued or to be issued hereunder.

 

(2)                                                                                 The applicant for the issue of a new certificate pursuant to this Section 2.3 shall bear the reasonable cost of the issue thereof and in case of loss, destruction or theft shall, as a condition precedent to the issue thereof, furnish to the Company and to the Warrant Agent such evidence of ownership and of the loss, destruction or theft of the certificate so lost, destroyed or stolen as shall be satisfactory to the Company and to the Warrant Agent in their sole discretion, acting reasonably, and such applicant shall also be required to furnish an indemnity and surety bond in amount and form satisfactory to the Company and the Warrant Agent to save each of them harmless, and shall pay the reasonable expenses, charges and any taxes applicable thereto to the Company and the Warrant Agent in connection therewith.

 

7

 

2.4 Book-Based System Warrants

 

(1)                                                                                 Registration of interests in and transfers of Warrants, other than those issued to a U.S. Person, a person in the United States or a person for the account or benefit of a U.S. Person or a person in the United States, shall be made through the book-based system operated by CDS.

 

(2)                                                                                 Re-registration of beneficial interests in and transfers of Warrants held by CDS shall be made only through the book entry registration system and no Warrant Certificates shall be issued in respect of such Warrants except where physical certificates evidencing ownership in such securities are required or as set out herein or as may be requested by CDS, as determined by the Company, from time to time. Except as provided in this Section 2.4, owners of beneficial interests in any Book Entry Only Warrants or CDS Global Warrants shall not be entitled to have Warrants registered in their names and shall not receive or be entitled to receive Warrants in definitive form or to have their names appear in the register referred to in Section 3.2 herein. Notwithstanding any terms set out herein, Warrants having any legend set forth in Section 2.9(2) herein and held in the name of CDS may only be held in the form of Uncertificated Warrants with the prior consent of the Warrant Agent and in accordance with the internal procedures of the Warrant Agent.

 

(3)                                                                                 Transfers of beneficial ownership in any Warrant represented by CDS Global Warrants will be effected only (i) with respect to the interest of a CDS Participant, through records maintained by CDS or its nominee for such CDS Global Warrant, and (ii) with respect to the interest of any person other than a CDS Participant, through records maintained by CDS Participants.

 

(4)                                                                                 The rights of beneficial owners of Warrants represented by the CDS Global Warrants shall be limited to those established by applicable law and agreements between CDS and CDS Participants and between such CDS Participants and beneficial owners of Warrants and must be exercised through a CDS Participant in accordance with the rules and procedures of CDS.

 

(5)                                                                                 Notwithstanding anything in this Warrant Indenture in terms of any CDS Global Warrant, neither the Company nor the Warrant Agent nor any agent thereof shall have any responsibility or liability for:

 

(A)                                                                                                                               any aspect of the records maintained by CDS relating to the beneficial ownership interests in the Warrants or the depository system maintained by CDS, or payments made on account of any ownership interest or any other interest of any person in any Warrant represented by the CDS Global Warrants (other than CDS or its nominee);

 

(B)                                                                                                                               maintaining, supervising or reviewing any records of CDS or any CDS Participant relating to any such beneficial ownership interests; or

 

(C)                                                                                                                               any advice or representation made by or given by or with respect to CDS or those contained in this Indenture or made or given with respect to the rules and regulations of CDS or any action taken by CDS on its own direction or at the direction of any CDS Participant.

 

(6)                                                                                 If any Warrant represented by a CDS Global Warrant and any of the following events occur:

 

8

 

(a)                                                                                                                                 CDS or the Company notifies the Warrant Agent that (i) CDS is unwilling or unable to continue as depository, or (ii) CDS ceases to be a clearing agency in good standing under applicable laws and, in either case, the Company is unable to locate a qualified successor depository within 90 days of delivery of such notice;

 

(b)                                                                                                                                 the Company determines, in its sole discretion, with the consent of the Warrant Agent, to terminate the book-based system in respect of such CDS Global Warrants and communicates such determination to the Warrant Agent in writing;

 

(c)                                                                                                                                  the Company or CDS is required by applicable law to take the action contemplated in subsection 2.4(6)(b); or

 

(d)                                                                                                                                 the book-based system administered by CDS ceases to exist;

 

then one or more definitive fully registered Warrant Certificates shall be executed by the Company and certified and delivered by the Warrant Agent to CDS in exchange for the CDS Global Warrants held by CDS.

 

(7)                                                                               Fully registered Warrant Certificates issued and exchanged pursuant to subsection 2.4(6) shall be registered in such names and in such denominations as CDS shall instruct the Warrant Agent, provided that the aggregate number of Warrant represented by such Warrant Certificates shall be equal to the aggregate number of Warrants represented by the CDS Global Warrants so exchanged. Upon exchange of the CDS Global Warrants for one or more Warrant Certificates in definitive form, such CDS Global Warrants shall be cancelled by the Warrant Agent.

 

(8)                                                                               The Company may terminate the application of this Section 2.4 in its sole discretion in which case all Warrants shall be evidenced by Warrant Certificates registered in the name of a Person other than CDS..

 

(9)                                                                               Notwithstanding anything to the contrary in this Warrant Indenture, the Company may use the non-certificated issue system or any other system administered by CDS.

 

2.5 Warrantholder not a Shareholder

 

Nothing in this Indenture or in the holding of a Warrant evidenced by a Warrant Certificate or otherwise, shall be construed as conferring upon a Warrantholder any right or interest whatsoever as a Shareholder of the Company, 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 Company, nor entitle the holder to any right or interest in respect thereof except as herein and in the Warrants expressly provided.

 

2.6 Warrants to Rank Pari Passu

 

All Warrants shall rank pari passu, whatever may be the respective Dates of Issue of the same.

 

2.7 Signing of Warrant Certificates

 

The Warrant Certificates shall be signed by any one of the directors or officers of the Company and may, but need not, be under the corporate seal of the Company or a reproduction thereof. The signature of any such director or officer may be mechanically reproduced and Warrant Certificates bearing such mechanically reproduced signatures shall be binding upon the Company as if they had been manually signed by such director or officer. Notwithstanding that the person whose manual or mechanically reproduced signature appears on any Warrant Certificate as a director or officer may no longer hold office at the date of issue of the Warrant Certificate or at the date of certification or delivery thereof, any Warrant Certificate signed as aforesaid shall, subject to Section 2.8, be valid and binding upon the Company and the registered holder thereof will be entitled to the benefits of this Indenture.

 

9

 

2.8 Certification by the Warrant Agent

 

(1)                                                                                 No Warrant shall be issued or, if issued, shall be valid for any purpose or entitle the registered holder to the benefit hereof or thereof until it has been Authenticated or certified by manual signature by or on behalf of the Warrant Agent, and such Authentication or certification by the Warrant Agent shall be conclusive evidence as against the Company that the Warrant so Authenticated or certified has been duly issued hereunder and that the holder is entitled to the benefit hereof.

 

(2)                                                                                 The Warrant Agent shall Authenticate Uncertificated Warrants (whether upon original issuance, exchange, registration of transfer, partial payment, or otherwise) by completing its internal procedures and the Company shall, and hereby acknowledges that it shall, thereupon be deemed to have duly and validly issued such Uncertificated Warrants under this Indenture. Such Authentication shall be conclusive evidence that such Uncertificated Warrant has been duly issued hereunder and that the holder or holders are entitled to the benefits of this Indenture. The register shall be final and conclusive evidence as to all matters relating to Uncertificated Warrants with respect to which this Indenture requires the Warrant Agent to maintain records or accounts. In case of differences between the register at any time and any other time the register at the later time shall be controlling, absent manifest error and such Uncertificated Warrants are binding on the Company.

 

(3)                                                                                 The Authentication and/or certification of the Warrant Agent on Warrants issued hereunder shall not be construed as a representation or warranty by the Warrant Agent as to the validity of this Indenture or the Warrants (except the due Authentication and certification thereof) and the Warrant Agent shall in no respect be liable or answerable for the use made of the Warrants or any of them or of the consideration therefor nor for any breach by the Company of its covenants herein, except as otherwise specified therein.

 

2.9 Legended Warrant Certificates

 

(1)                                                                                 The Warrant Agent understands and acknowledges that the Warrants and Common Shares issuable upon exercise of the Warrants have not been, and will not be, registered under the 1933 Act or the securities laws of any state of the United States.

 

(2)                                                                                 Each CDS Global Warrant originally issued in Canada and held by CDS, and each CDS Global Warrant issued in exchange therefor or in substitution thereof shall bear or be deemed to bear the following legend or such variations thereof as the Company may prescribe from time to time:

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF CDS CLEARING AND DEPOSITORY SERVICES INC. (“CDS”) TO TRIBUTE PHARMACEUTICALS CANADA INC. (THE “ISSUER”) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IN RESPECT THEREOF IS REGISTERED IN THE NAME OF CDS & CO., OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CDS (AND ANY PAYMENT IS MADE TO CDS & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CDS), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED HOLDER HEREOF, CDS & CO., HAS A PROPERTY INTEREST IN THE SECURITIES REPRESENTED BY THIS CERTIFICATE HEREIN AND IT IS A VIOLATION OF ITS RIGHTS FOR ANOTHER PERSON TO HOLD, TRANSFER OR DEAL WITH THIS CERTIFICATE.

 

10

 

(3)                                                                                 Each Warrant Certificate originally issued to a U.S. Person, a person in the United States or a person for the account or benefit of a U.S. Person or a person in the United States, all certificates representing Common Shares issued upon exercise of such Warrants, as well as all certificates issued in exchange thereof or in substitution thereof, shall, until such time as the same is no longer required under applicable requirements of the 1933 Act and applicable state securities laws, bear a legend substantially to the following effect:

 

THE SECURITIES REPRESENTED HEREBY [for Warrants, the following will be added: AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF] HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF TRIBUTE PHARMACEUTICALS CANADA INC. (THE “CORPORATION”) THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE CORPORATION, (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE LOCAL LAWS AND REGULATIONS, (C) IN COMPLIANCE WITH THE EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY (1) RULE 144 THEREUNDER, IF AVAILABLE, OR (2) RULE 144A THEREUNDER, IF AVAILABLE, AND, IN BOTH CASES, IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS, (D) IN ANOTHER TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS, OR (E) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE U.S. SECURITIES ACT, AND, IN THE CASE OF (C)(1) AND (D) ABOVE, AFTER THE SELLER FURNISHES TO THE CORPORATION AN OPINION OF COUNSEL OF RECOGNIZED STANDING IN FORM AND SUBSTANCE SATISFACTORY TO THE CORPORATION TO SUCH EFFECT. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA.

 

11

 

provided that if, at any time the Company is a “foreign issuer” as defined in Regulation S under the U.S. Securities Act, the securities are being sold in an off-shore transaction and in compliance with the requirements of Rule 904 of Regulation S under the U.S. Securities Act and in compliance with Canadian local laws and regulations, the legend may be removed by providing a declaration to Equity Financial Trust Company as registrar and transfer agent for the securities to the effect substantially as provided in the form attached as Schedule B together with such other evidence as the Company or the registrar and transfer agent for the securities may require, which may include an opinion of counsel in form and substance satisfactory to the Company, to the effect that the transfer may be completed and the legend removed without registration under the U.S. Securities Act and any applicable state securities laws; and provided further, that, if any of the securities are being sold pursuant to clause (C)(I) or (D) in the legend above, under the U.S. Securities Act, the legend may be removed by delivery to Equity Financial Trust Company of an opinion of counsel of recognized standing in form and substance satisfactory to the Company, to the effect that the legend is no longer required under applicable requirements of the U.S. Securities Act or state securities laws

 

(ii)                                                                                  If a Warrant Certificate is tendered for transfer and bears the legend set forth in subsection 2.9(3) hereof and the holder thereof has not obtained the prior written consent of the Company, the Warrant Agent or the registrar and transfer agent, as the case may be, shall not register such transfer unless the holder complies with the requirements of the said subsection 2.9(3) hereof.

 

(3)                                                                                 All Warrant Certificates shall bear a legend to the following effect:

 

THESE WARRANTS AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THESE WARRANTS MAY NOT BE EXERCISED IN THE UNITED STATES OR BY OR ON BEHALF OF, OR FOR THE ACCOUNT OR BENEFIT OF, A PERSON IN THE UNITED STATES OR A U.S. PERSON UNLESS THESE WARRANTS AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE WARRANTS HAVE BEEN REGISTERED UNDER THE U.S. SECURITIES ACT AND THE APPLICABLE SECURITIES LEGISLATION OF ANY SUCH STATE OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS IS AVAILABLE. “UNITED STATES” AND “U.S. PERSON” ARE AS DEFINED BY REGULATION S UNDER THE U.S. SECURITIES ACT.

 

2.10 Copy of Indenture

 

The Company shall, on the written request of the Warrantholder and without charge, provide the Warrantholder with a copy of this Indenture. A copy of this Indenture will also be available on the Company’s profile on www.sedar.com.

 

12

 

ARTICLE 3

 

EXCHANGE AND OWNERSHIP OF WARRANTS; NOTICES

 

3.1 Exchange of Warrant Certificates

 

(1)                                                                                 Warrant Certificates entitling Warrantholders to purchase any specified number of Common Shares may, upon compliance with the reasonable requirements of the Warrant Agent, be exchanged in any other authorized denomination bearing the same legends representing in the aggregate an equal number of Warrants as the number of Warrants represented by the Warrant Certificates being exchanged. The Company shall sign all Warrant Certificates necessary to carry out exchanges as aforesaid and such Warrant Certificates shall be certified by or on behalf of the Warrant Agent.

 

(2)                                                                                 Warrant Certificates may be exchanged only at the principal transfer office of the Warrant Agent in the City of Toronto, Ontario or at any other place that is designated by the Company with the approval of the Warrant Agent. Any Warrant Certificates tendered for exchange shall be surrendered to the Warrant Agent or its agents and cancelled.

 

(3)                                                                                 Except as otherwise herein provided, any Warrant Agent may charge the holder requesting an exchange a reasonable sum for each new Warrant Certificate issued in exchange for Warrant Certificate(s); and payment of such charges and reimbursement of the Warrant Agent or the Company for any and all stamp taxes or governmental or other charges required to be paid shall be made by such holder as a condition precedent to such exchange.

 

3.2 Registration of Warrants

 

(1)                                                                                 The Company shall, at all times while any Warrants are outstanding, cause the Warrant Agent and its agents to maintain a register in which will be entered in alphabetical order the names, latest known addresses of the Warrantholders and particulars of the Warrants held by them, and a register of transfers in which shall be entered the particulars of all transfers of Warrants, such registers to be kept by and at the principal transfer office of the Warrant Agent in the City of Toronto.

 

(2)                                                                                 At the office of the Warrant Agent during normal business hours, the holder of a Warrant may have such Warrant transferred in accordance with such reasonable requirements as the Warrant Agent may prescribe. The costs of any such transfer registration shall be borne by the transferee or presenter.

 

(3)                                                                                 The registers referred to in this Section 3.2 shall at all reasonable times be open for inspection by the Company and by any Warrantholder. The Warrant Agent, when requested in writing so to do by the Company, shall furnish the Company with a list of names and addresses of the Warrantholders showing the number of Warrants held by each Warrantholder.

 

3.3 Transfer of Warrants

 

(1)                                                                                 No transfer of a Warrant will be valid unless entered on the register of transfers referred to in subsection 3.2(1) upon surrender to the Warrant Agent of the Warrant Certificate evidencing such Warrant, and a duly completed and executed transfer form as attached to the Warrant Certificate executed by the registered holder or his executors, administrators or other legal representatives or his or their attorney duly appointed by an instrument in writing in form and execution satisfactory to the Warrant Agent, and, upon compliance with the conditions herein and such reasonable requirements as the Warrant Agent may prescribe, including compliance with all applicable securities legislation, such transfer will be recorded on the register of transfers by the Warrant Agent. Notwithstanding the foregoing, if the Warrants are represented by CDS Global Warrants, the provisions of Section 2.4 shall apply.

 

13

 

(2)                                                                                 The transferee of any Warrant will, after surrender to the Warrant Agent of the Warrant Certificate evidencing such Warrant as required by subsection (1) and upon compliance with all other conditions in respect thereof required by this Indenture or by applicable law, be entitled to be entered on the register of holders referred to in subsection 3.2(1) as the owner of such Warrant free from all equities or rights of set-off or counterclaim between the Company and the transferor or any previous holder of such Warrant, except in respect of equities of which the Company is required to take notice by statute or by order of a court of competent jurisdiction.

 

(3)                                                                                 The Company will be entitled, and may direct the Warrant Agent, to refuse to recognize any transfer, or enter the name of any transferee, of any Warrant on the registers referred to in subsection 3.2(1), if such transfer would constitute a violation of the securities laws of any applicable jurisdiction or the rules, regulations or policies of any regulatory authority having jurisdiction. The Warrant Agent is entitled to assume compliance with all applicable securities legislation unless otherwise notified in writing by the Company. The Warrant Agent shall have no obligation to ensure or verify compliance with any applicable laws or regulatory requirements on the issue, exercise or transfer of any Warrants or any Common Shares issuable upon the exercise thereof provided such issue, exercise or transfer is effected in accordance with the terms of this Warrant Indenture.

 

(4)                                                                                 If a Warrant Certificate tendered for transfer bears the legend set forth in subsection 2.9(3), the Warrant Agent shall not register such transfer unless the transferor has provided the Warrant Agent with the Warrant Certificate and complies with the requirements of the said subsection 2.9(3).

 

(5)                                                                                 If the Warrant Certificate tendered for transfer does not bear the legend set forth in subsection 2.9(3), the Warrant Agent shall not register such transfer unless the transferor has provided the Warrant Agent with the Warrant Certificate and a completed and executed transfer form in the form included in the Warrant Certificate. Notwithstanding the foregoing, the Warrant Agent shall not register such transfer if the Warrant Agent has reason to believe that the transferee is a person in the United States or a U.S. Person or is acquiring the Warrants evidenced thereby for the account or benefit of a person in the United States or a U.S. Person. The Warrant Agent is entitled to rely exclusively on the information provided in the transfer form in making any such determination.

 

3.4 Ownership of Certificates

 

(1)                                                                                 The Company and the Warrant Agent and their respective agents may deem and treat the holder of any Warrant as the absolute holder and owner of the Warrants evidenced thereby for all purposes, and the Company and the Warrant Agent shall not be affected by any notice or knowledge to the contrary and, without limiting the foregoing, shall not be bound by notice of any trust or be required to see to the execution thereof.

 

14

 

(2)                                                                                 Subject to the provisions of this Indenture and applicable law, a Warrantholder shall be entitled to the rights evidenced by such Warrant free from all equities or rights of set-off or counterclaim between the Company and the original or any intermediate holder thereof and all persons may act accordingly and the receipt by any such holder of the Common Shares obtainable pursuant thereto shall be a good discharge to the Company and the Warrant Agent for the same and neither the Company nor the Warrant Agent shall be bound to inquire into the title of any such holder, except where the Company or the Warrant Agent is required to take notice by statute or by order of a court of competent jurisdiction.

 

3.5 Evidence of Ownership

 

(1)                                                                                 Upon receipt of a certificate of any bank, trust company or other depositary satisfactory to the Warrant Agent stating that the Warrants specified therein have been deposited by a named person with such bank, trust company or other depositary and will remain so deposited until the expiry of the period specified therein, the Company and the Warrant Agent may treat the person so named as the owner, and such certificate as sufficient evidence of the ownership by such person of such Warrants during such period, for the purpose of any requisition, direction, consent, instrument or other document to be made, signed or given by the holder of the Warrants so deposited.

 

(2)                                                                                 The Company and the Warrant Agent may accept as sufficient evidence of the fact and date of the signing of any requisition, direction, consent, instrument or other document by any person, the signature, as witness, of any officer of any trust company, bank or depositary satisfactory to the Warrant Agent, the certificate of any notary public or other officer authorized to take acknowledgements of deeds to be recorded at the place where such certificate is made, that the person signing acknowledged to him the execution thereof, or a statutory declaration of a witness of such execution.

 

3.6 Notices

 

Unless herein otherwise expressly provided, any notice to be given hereunder to the Warrantholders shall be deemed to be validly given if such notice is given by personal delivery or first class mail to the attention of the holder at the registered address of the holder recorded in the registers maintained by the Warrant Agent; provided that in the case of notice convening a meeting of the Warrantholders, the Warrant Agent may require such publication of such notice, in such city or cities, as it may deem necessary for the reasonable protection of the Warrantholders or to comply with any applicable requirement of law or any stock exchange. Any notice so given shall be deemed to have been given on the day of delivery or three (3) Business Days after mailing. In determining under any provision hereof the date when notice of any meeting or other event must be given, the date of giving notice shall be included and the date of the meeting or other event shall be excluded. For greater certainty, all costs in connection with the giving of notices contemplated by this Section 3.6 shall be borne by the Company. Accidental error or omission in giving notice or accidental failure to mail notice to any Warrantholder will not invalidate any action or proceeding founded thereon.

 

15

 

ARTICLE 4

 

EXERCISE OF WARRANTS

 

4.1 Method of Exercise of Warrants

 

(1)                                                                                 Subject to Section 4.8, upon and subject to the provisions hereof, the registered holder of any Warrant may exercise the rights thereby conferred on him to purchase all or any part of the Common Shares to which such Warrant entitles the holder, by surrendering the Warrant Certificate representing such Warrants to the Warrant Agent during the Exercise Period at its principal transfer office in Toronto, Ontario (or at any other place or places that may be designated by the Company from time to time with the approval of the Warrant Agent), with a duly completed and executed subscription form of the registered holder or his executors, administrators or other legal representative or his attorney duly appointed by an instrument in writing in the form and manner satisfactory to the Warrant Agent, substantially in the form attached to the Warrant Certificate specifying the number of Common Shares subscribed for together with a certified cheque, money order or bank draft in lawful money of Canada payable to or to the order of the Company at par in Toronto, Ontario in an amount equal to the Exercise Price applicable at the time of such surrender in respect of each Common Share subscribed for. A Warrant Certificate with the duly completed and executed subscription form together with the payment of the Exercise Price shall be deemed to be surrendered only upon personal delivery thereof to or, if sent by mail or other means of transmission, upon actual receipt thereof by the Warrant Agent.

 

(2)                                                                                 Upon and subject to the provisions hereof, any beneficial owner of Warrants represented by the CDS Global Warrants may exercise the rights thereby conferred on him to purchase all or any part of the Common Shares to which such Warrant entitles the holder, by causing a CDS Participant to deliver to CDS, on behalf of the beneficial owner, a written notice or an electronic notice through the CDS system of the owner’s intention to exercise Warrants (the “Subscription Notice”). Forthwith upon receipt by CDS of such notice, as well as payment for the Exercise Price, CDS shall deliver to the Warrant Agent confirmation of its intention to exercise Warrants (the “Confirmation”) in a manner acceptable to the Warrant Agent, including by electronic means through the book-entry only system. CDS will initiate the exercise by way of the Confirmation and forward the aggregate Exercise Price electronically to the Warrant Agent and the Warrant Agent will execute the exercise by issuing to CDS through the book-entry only system the Common Shares to which the exercising beneficial holder is entitled pursuant to the exercise. Any expense associated with the preparation and delivery of Subscription Notice will be for the account of the beneficial owner exercising the Warrants.  By causing a CDS Participant to deliver to CDS a Subscription Notice, a beneficial owner shall be deemed to have irrevocably surrendered his, her or its Warrants so exercised and appointed such CDS Participant to act as his, her or its exclusive settlement agent with respect to the exercise and the receipt of Common Shares in connection with the obligations arising from such exercise. Any Subscription Notice which CDS determines to be incomplete, not in proper form or not duly executed shall for all purposes be void and of no effect and the exercise to which it relates shall be considered for all purposes not to have been exercised thereby. A failure by a CDS Participant to exercise or to give effect to the settlement thereof in accordance with the beneficial owner’s instructions will not give rise to any obligations or liability on the part of the Company or the Warrant Agent to the CDS Participant or the beneficial owner.

 

(3)                                                                                 Notwithstanding any provisions of this Warrant Indenture, a beneficial owner may only exercise his Warrants or take any actions under this Warrant Indenture in accordance with the rules and procedures of CDS.

 

16

 

 

(4)                                                                                 Any subscription referred to in this Section 4.1 shall be signed by the Warrantholder, shall specify the person(s) in whose name such Common Shares are to be issued, the address(es) of such person(s) and the number of Common Shares to be issued to each person, if more than one is so specified. If any of the Common Shares subscribed for are to be issued to (a) person(s) other than the Warrantholder, the signatures set out in the subscription referred to in subsection 4.1(1) shall be guaranteed by a major Canadian chartered bank, or by a medallion signature guaranteed from a member of a recognized Signature Medallion Guarantee Program and the Warrantholder shall pay to the Company all applicable transfer or similar taxes and the Company shall not be required to issue or deliver certificates evidencing Common Shares unless or until such Warrantholder shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid or that no tax is due.

 

(5)                                                                                 If, at the time of exercise of the Warrants, in accordance with the provisions of subsection 3.1(1), there are any trading restrictions on the Common Shares pursuant to applicable securities legislation or stock exchange requirements, the Company shall, on the advice of counsel, endorse any certificates representing the Common Shares to such effect. The Warrant Agent is entitled to assume compliance with all applicable securities legislation unless otherwise notified in writing by the Company.

 

4.2 Effect of Exercise of Warrants

 

(1)                                                                                 Upon compliance by the Warrantholder with the provisions of Section 4.1, the Common Shares so subscribed for shall be deemed to have been issued and the Person or Persons to whom such Common Shares are to be issued shall be deemed to have become the holder or holders of record of such Common Shares on the Exercise Date unless the share registers maintained by the transfer agent for the Common Shares shall be closed on such date, in which case the Common Shares so subscribed for shall be deemed to have been issued, and such Person or Persons shall be deemed to have become the holder or holders of record of such Common Shares on the date on which such registers were reopened and such Common Shares shall be issued at the Exercise Price in effect on the Exercise Date. To the extent the opening of the registers remains within the control of the Warrant Agent, the Company and the Warrant Agent shall cause such registers to be open on Business Days.

 

(2)                                                                                 Within three (3) Business Days following the due exercise of a Warrant pursuant to section 4.1, the Warrant Agent shall deliver to the Company a notice setting forth the particulars of all Warrants exercised, and the persons in whose names the Common Shares are to be issued (as applicable) and the addresses of such holders of the Common Shares.

 

(3)                                                                                 Within five (5) Business Days of the due exercise of a Warrant pursuant to section 4.1, the Company shall cause the transfer agent to issue to CDS the Common Shares to which the exercising Warranholder is entitled pursuant to the exercise or mail to the person in whose name the Common Shares so subscribed for are to be issued, as specified in the subscription completed on the Warrant Certificate, at the address specified in such subscription, a certificate or certificates for the Common Shares to which the Warrantholder is entitled and, if applicable, shall cause the Warrant Agent to mail a Warrant Certificate representing any Warrants not then exercised.

 

17

 

(4)                                                                                 If at the time of exercise of the Warrants there remain trading restrictions on the Common Shares acquired upon such exercise pursuant to applicable securities legislation or policy of any applicable regulatory body, the Company may, upon the advice of Counsel, endorse any Common Share certificates to such effect. Furthermore, the Company shall, or its Counsel shall, notify the Warrant Agent in writing of any trading restrictions on the Common Shares acquired upon such exercise pursuant to applicable securities legislation or policy of any applicable regulatory body. Unless and until advised in writing by the Company or its Counsel that a specific legend and trading restrictions apply to the Common Shares, the Warrant Agent shall be entitled to assume that no specific legend is required and that there are no trading restrictions on the Common Shares.

 

4.3 Subscription for Less than Entitlement

 

The holder of any Warrant Certificate may subscribe for and purchase a whole number of Common Shares that is less than the number that the holder is entitled to purchase pursuant to the surrendered Warrant Certificate. In such event, the holder thereof shall be entitled to receive, without charge except as aforesaid, a new Warrant Certificate in respect of the balance of the Common Shares which such holder was entitled to purchase pursuant to the surrendered Warrant Certificate and which was not then purchased, such new Warrant Certificate to contain the same legend as provided in subsection 2.9(3), if applicable.

 

4.4 No Fractional Common Shares

 

The Company shall 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 4.4, be deliverable upon the exercise of a Warrant, the Company shall in lieu of delivering the fractional Common Shares therefor satisfy the right to receive such fractional interest by payment to the holder of such Warrant of an amount in funds 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 the Current Market Price at the Exercise Date. The minimum amount for payment pursuant to this section shall be $1.00.

 

4.5 Expiration of Warrants

 

After the Time of Expiry, all rights under any Warrant or this Indenture in respect of which the right of subscription and purchase herein and therein provided for shall not theretofore have been exercised shall wholly cease and terminate and such Warrant shall be void and of no effect.

 

4.6 Cancellation of Surrendered Warrants

 

All Warrants surrendered to the Warrant Agent pursuant to the provisions of this Indenture shall be cancelled by the Warrant Agent and the Warrant Agent shall record the cancellation of such Warrants on the register of holders maintained by the Warrant Agent pursuant to subsection 3.2(1). The Warrant Agent shall, if requested in writing by the Company, furnish or cause to be furnished to the Company a certificate identifying the Warrants so cancelled. All Warrants that have been duly cancelled shall be without further force or effect whatsoever.

 

4.7 Accounting and Recording

 

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

 

18

 

(2)                                                                                 The Warrant Agent shall record the particulars of the Warrants exercised which shall include the name or names and addresses of the Persons who become holders of Common Shares on exercise and the Exercise Date and Warrant Certificate number.

 

4.8 Restriction on Exercise by U.S. Persons and in the United States; Exception

 

(1)                                                                                 Warrants may not be exercised by or on behalf of, or for the account or benefit of, any U.S. Person or any person in the United States unless an exemption is available from the registration requirements of the U.S. Securities Act and applicable state securities laws and the holder of the Warrants has furnished an opinion of counsel of recognized standing in form and substance satisfactory to the Company to such effect; provided that an Institutional Accredited Investor that purchased the Warrants in the offering of Units in the United States and to U.S. Persons will not be required to deliver an opinion of counsel in connection with the exercise of such Warrants, provided it provides the certification required in subsection 4.8(2)(b) below.

 

(2)                                                                                 Any holder which exercises any Warrants shall provide/certify to the Company either:

 

(a)                                                                                                                                 the holder: (a) at the time of exercise of the Warrants is not in the United States; (b) is not a U.S. Person and is not exercising the Warrants on behalf of a U.S. Person or a person in the United States; (c) did not execute or deliver the subscription form for the Warrants in the United States; and (d) has in all other aspects complied with the terms of Regulation S under the U.S. Securities Act;

 

(b)                                                                                                                                 the holder: (a) acquired the Warrants directly from the Company pursuant to an executed U.S. QIB letter or U.S. subscription agreement for the purchase of Units; (b) is exercising the Warrants solely for its own account or for the benefit of a U.S. Person or a person in the United States for whose account such holder acquired the Warrants directly from the Company and for whose account such holder exercises sole investment discretion; and (c) was, and any beneficial purchaser for whose account such holder acquired the Warrants and is exercising the Warrants was, an Institutional Accredited Investor, both on the date the Warrants were purchased from the Company and on the date of exercise of the Warrants; or

 

(c)                                                                                                                                  a written opinion of counsel of recognized standing in form and substance satisfactory to the Company to the effect that an exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws is available for the issuance of the Common Shares issuable on exercise of the Warrants.

 

(3)                                                                                 No certificates representing Common Shares will be registered or delivered to an address in the United States unless the holder of the Warrant complies with the requirements of paragraphs (b) or (c) of subsection 4.8(2).

 

19

 

(4)                                                                                 If a Common Share certificate issued with respect to an exercise of Warrants is tendered for transfer and bears the legend set forth in subsection 2.9(3) hereof and the holder thereof has not obtained the prior written consent of the Company, the Warrant Agent or the transfer agent, as the case may be, shall not register such transfer unless the holder complies with the requirements of the said subsection 2.9(3).

 

ARTICLE 5

 

ADJUSTMENT OF SUBSCRIPTION RIGHTS AND EXERCISE PRICE

 

5.1 Adjustment of Exercise Price and Number of Common Shares Purchasable Upon Exercise

 

Subject to Section 5.2, the Exercise Price and the number of Common Shares purchasable upon exercise of Warrants shall be subject to adjustment from time to time in the events and in the manner provided as follows:

 

(a)                                                                                 Common Share Reorganization. If during the Exercise Period the Company shall:

 

(i)                                                                                                                                     issue Common Shares or securities exchangeable for or convertible into Common Shares to holders of all or substantially all of its then outstanding Common Shares by way of stock dividend or other distribution (other than as a Dividend Paid in the Ordinary Course or a distribution of Common Shares upon exercise of the Warrants or pursuant to the exercise of directors, officers or employee stock options granted under stock option plans of the Company), or

 

(ii)                                                                                                                                  subdivide, redivide or change its outstanding Common Shares into a greater number of Common Shares, or

 

(iii)                                                                                                                               consolidate, reduce or combine its outstanding Common Shares into a lesser number of Common Shares,

 

(any of such events in these paragraphs (i), (ii) and (iii) being a “Common Share Reorganization”), then the Exercise Price shall be adjusted as of the effective date or record date, as the case may be, at which the holders of Common Shares are determined for the purpose of the Common Share Reorganization by multiplying the Exercise Price in effect immediately prior to such effective date or record date by a fraction, the numerator of which shall be the number of Common Shares outstanding on such effective date or record date before giving effect to such Common Share Reorganization and the denominator of which shall be the number of Common Shares outstanding as of the effective date or record date, as the case may be, after giving effect to such Common Share Reorganization (including, in the case where securities exchangeable for or convertible into Common Shares are distributed, the number of Common Shares that would have been outstanding had such securities been fully exchanged for or converted into Common Shares on such record date or effective date, as the case may be). From and after any adjustment of the Exercise Price pursuant to this subsection 5.1(a), the number of Common Shares purchasable upon exercise of the Warrants shall be adjusted contemporaneously with the adjustment of the Exercise Price by multiplying the number of Common Shares then otherwise purchasable on the exercise thereof by a fraction, the numerator of which shall be the Exercise Price in effect immediately prior to the adjustment and the denominator of which shall be the Exercise Price resulting from such adjustment.

 

20

 

(b)                                                                                 Rights Offering. If and whenever during the Exercise Period, the Company shall fix a record date for the issue of rights, options or warrants to all or substantially all of the holders of Common Shares under which such holders are entitled, during a period expiring not more than forty-five (45) days after the record date for such issue (“Rights Period”), to subscribe for or purchase Common Shares or securities exchangeable for or convertible into Common Shares at a price per share to the holder (or having a conversion price or exchange price per Share) of less than 95% of the Current Market Price (as defined in Section 1.1 hereof) for the Common Shares on such record date (any of such events being called a “Rights Offering”), then the Exercise Price shall be adjusted effective immediately after the end of the Rights Period to a price determined by multiplying the Exercise Price in effect immediately prior to the end of the Rights Period by a fraction:

 

(i)                                                                                                                                     the numerator of which shall be the aggregate of:

 

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

 

(2)                                                                                                                                                                                 a number determined by dividing either

 

(a)                                                                                                                                                                                                                                 where the event giving rise to the application of this subsection 5.1(b) was the issue of rights, options or warrants to the holders of Common Shares under which such holders are entitled to subscribe for or purchase additional Common Shares, the product of the number of Common Shares issued or subscribed for during the Rights Period and the price at which such Common Shares are offered,

 

or, as the case may be,

 

(b)                                                                                                                                                                                                                                 where the event giving rise to the application of this subsection 5.1(b) was the issue of rights, options or warrants to the holders of Common Shares under which such holders are entitled to subscribe for or purchase securities exchangeable for or convertible into shares, the product of the exchange or conversion price per share of such securities offered and the number of Common Shares for or into which the securities so offered pursuant to the Rights Offering have been exchanged or converted during the Rights Period, by the Current Market Price of the Common Shares as of the record date for the Rights Offering; and

 

(c)                                                                                                                                                                                                                                  the denominator of which shall be the number of Common Shares outstanding after giving effect to the Rights Offering and including the number of Common Shares actually issued or subscribed for during the Rights Period upon exercise of the rights, warrants or options under the Rights Offering or upon the exercise of the exchange or conversion rights contained in such exchangeable or convertible securities under the Rights Offering.

 

21

 

If the holder has exercised any of the Warrants during the period beginning immediately after the record date for a Rights Offering and ending on the last day of the Rights Period, the holder shall, in addition to the Common Shares to which the holder is otherwise entitled upon such exercise in accordance with Article 2 hereof, be entitled to that number of additional Common Shares equal to the result obtained when the difference, if any, resulting from the subtraction of the Exercise Price as adjusted for such Rights Offering pursuant to this subsection 5.1(b) from the Exercise Price in effect immediately prior to the end of such Rights Offering is multiplied by the number of Common Shares purchased upon exercise of the Warrants held by such holder during such period, and the resulting product is divided by the Exercise Price as adjusted for such Rights Offering pursuant to this subsection 5.1(b); provided that the provisions of subsection 5.4(1) shall be applicable to any fractional interest in a Common Share to which such holder might otherwise be entitled under the foregoing provisions of this subsection 5.1(b). Such additional Common Shares shall be deemed to have been issued to the holder immediately following the end of the Rights Period and a certificate for such additional Common Shares shall be delivered to such holder within three (3) Business Days following the end of the Rights Period.

 

If at any time after the date hereof and prior to the Time of Expiry, any of the events set out in subsection 5.1(b) shall occur and the holder has not exercised any of the Warrants during the Rights Period, and the occurrence of such event results in an adjustment of the Exercise Price pursuant to provisions of this Section 5.1, then the number of Common Shares purchasable pursuant to the Warrants shall be adjusted contemporaneously with the adjustment of the Exercise Price by multiplying the number of Common Shares then otherwise purchasable on the exercise thereof by a fraction, the numerator of which shall be the Exercise Price in effect immediately prior to the adjustment and the denominator of which shall be the Exercise Price resulting from such adjustment.

 

(c)                                                                                  Special Distribution. If and whenever during the Exercise Period, the Company shall issue or distribute to all or to substantially all the holders of the Common Shares:

 

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

 

(ii)                                                                                                                                  any cash, property or other assets,

 

and if such issuance or distribution does not constitute Dividends Paid in the Ordinary Course, a Common Share Reorganization or a Rights Offering (any of such non-excluded events being herein called a “Special Distribution”), the Exercise Price will be adjusted immediately after such record date so that it will equal the rate determined by multiplying the Exercise Price in effect on such record date by a fraction, of which the numerator shall be the total number of Common Shares outstanding on such record date multiplied by the Current Market Price on the earlier of such record date and the date on which the Company announces its intention to make such distribution, less the aggregate fair market value (as determined by the directors, acting reasonably, at the time such distribution is authorized) of such shares or rights, options or warrants or evidences of indebtedness or cash, securities or other property or assets so distributed, and of which the denominator shall be the total number of Common Shares outstanding on such record date multiplied by such Current Market Price. If at any time after the date hereof and prior to the Time of Expiry, any of the events set out in subsection 5.1(c) shall occur and the occurrence of such event results in an adjustment of the Exercise Price pursuant to provisions of this Section 5.3, then the number of Common Shares purchasable upon exercise of the Warrants shall be adjusted contemporaneously with the adjustment of the Exercise Price by multiplying the number of Common Shares then otherwise purchasable on the exercise thereof by a fraction, the numerator of which shall be the Exercise Price in effect immediately prior to the adjustment and the denominator of which shall be the Exercise Price resulting from such adjustment.

 

22

 

(d)                                                                                 Capital Reorganization. If and whenever during the Exercise Period there shall be 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 Company with or into any other corporation or other entity (other than a consolidation, amalgamation, arrangement or merger which does not result in any reclassification of the outstanding Common Shares or a change of the Common Shares into other securities), or a transfer of the undertaking or assets of the Company as an entirety or substantially as an entirety to another corporation or other entity (any of such events being herein called a “Capital Reorganization”), the holder, where he has not exercised the right of subscription and purchase prior to the effective date or record date, as the case may be, of such Capital Reorganization, shall be entitled to receive, and shall accept upon the exercise of such right for the same aggregate consideration, in lieu of the number of Common Shares to which such holder was theretofore entitled upon such exercise, the aggregate number of shares, other securities or other property which such holder would have been entitled to receive as a result of such Capital Reorganization if, on the effective date thereof, he had been the registered holder of the number of Common Shares to which such holder was theretofore entitled to subscribe for and purchase; provided however, that no such Capital Reorganization shall be carried into effect unless all necessary steps shall have been taken to so entitle the holder. If determined appropriate by the board of directors of the Company, acting reasonably and in good faith, and subject to the prior written approval of the principal Canadian stock exchange or over-the-counter market on which the Common Shares are then listed or quoted for trading, appropriate adjustments shall be made as a result of any such Capital Reorganization in the application of the provisions of this Indenture with respect the rights and interest thereafter of the Warrantholder to the end that the provisions of this Indenture shall thereafter correspondingly be made applicable as nearly as may reasonably be possible in relation to any shares or other securities or property thereafter deliverable upon the exercise of the Warrants.

 

(e)                                                                                  If and whenever at any time after the date hereof and prior to the Time of Expiry, the Company takes any action affecting its Common Shares to which the foregoing provisions of this Section 5.1, in the opinion of the board of directors of the Company, acting reasonably and in good faith, are not strictly applicable, or if strictly applicable would not fairly adjust the rights of the Holder against dilution in accordance with the intent and purposes thereof, or would otherwise materially affect the rights of the holder hereunder, then the Company shall execute and deliver to the holder an amendment hereto providing for an adjustment in the application of such provisions so as to adjust such rights as aforesaid in such a manner as the board of directors of the Company may determine to be equitable in the circumstances, acting reasonably and in good faith. The failure of the taking of action by the board of directors of the Company to so provide for any adjustment on or prior to the effective date of any action or occurrence giving rise to such state of facts will be conclusive evidence that the board of directors has determined that it is equitable to make no adjustment in the circumstances.

 

23

 

5.2                             Rules Regarding Calculation of Adjustment of Exercise Price and Number of Common Shares Purchasable Upon Exercise

 

For the purposes of Section 5.1:

 

(1)                                                                                 The adjustments provided for in Section 5.1 are cumulative, and shall, in the case of adjustments to the Exercise Price be computed to the nearest one-tenth of one cent and shall be made successively whenever an event referred to therein shall occur, subject to the following paragraphs of this Section 5.2

 

(2)                                                                                 No adjustment in the Exercise Price shall be required unless such adjustment would result in a change of at least 1% in the prevailing Exercise Price and no adjustment shall be made in the number of Common Shares purchasable upon exercise of this Warrant unless it would result in a change of at least one one-hundredth of a Common Share; provided, however, that any adjustments which, except for the provisions of this Section 5.2(1) would otherwise have been required to be made, shall be carried forward and taken into account in any subsequent adjustment.

 

(3)                                                                                 No adjustment in the Exercise Price or in the number of Common Shares purchasable upon exercise of Warrants shall be made in respect of any event described in Section 5.1, other than the events referred to in subsection 5.1(a)(ii) and 5.1(a)(iii), if the holder is entitled to participate in such event on the same terms, mutatis mutandis, as if it had exercised its Warrants prior to or on the effective date or record date of such event. The terms of the participation of the holder in such event shall be subject to any necessary approval of the principal Canadian stock exchange or over-the-counter market on which the Common Shares are then listed or quoted for trading.

 

(4)                                                                                 No adjustment in the Exercise Price shall be made pursuant to Section 5.1 in respect of the issue from time to time:

 

(a)                                                                                                                                 of Common Shares purchasable on exercise of the Warrants;

 

(b)                                                                                                                                 of a Dividend Paid in the Ordinary Course of Common Shares to holders of Common Shares who exercise an option or election to receive substantially equivalent dividends in Common Shares in lieu of receiving a cash dividend pursuant to a dividend reinvestment plan or similar plan adopted by the Company in accordance with the requirements of the principal Canadian stock exchange or over-the-counter market on which the Common Shares are then listed or quoted for trading and applicable securities laws;

 

(c)                                                                                                                                  of Common Shares pursuant to any stock option plan, stock purchase plan or benefit plan in force at the date hereof for directors, officers, employees, advisers or consultants of the Company, as such option or plan is amended or superseded from time to time in accordance with the requirements of the principal Canadian stock exchange or over-the-counter market on which the Common Shares are then listed or quoted for trading and applicable securities laws, and such other stock option plan, stock purchase plan or benefit plan as may be adopted by the Company in accordance with the requirements of the principal Canadian stock exchange or over-the-counter market on which the Common Shares are then listed or quoted for trading and applicable securities laws;

 

24

 

(d)                                                                                                                                 of the payment of interest on any outstanding notes;

 

(e)                                                                                                                                  of the issuance of securities in connection with strategic license agreements and other partnering arrangements of the Company or any subsidiary thereof; or

 

(f)                                                                                                                                   of full or partial consideration in connection with a strategic merger or purchase of substantially all of the securities or assets of a corporation or other entity;

 

and any such issue shall be deemed not to be a Common Share Reorganization or Capital Reorganization.

 

(5)                                                                                 If a dispute shall at any time arise with respect to adjustments provided for in Section 5.1, such dispute shall, absent manifest error, be conclusively determined by the Company’s Auditors, or if they are unable or unwilling to act, by such other firm of independent chartered accountants as may be selected by action by the Directors and any such determination, absent manifest error, shall be binding upon the Company, the Warrant Agent and the Warrantholders. Notwithstanding the foregoing, such determination shall be subject to compliance with all regulatory requirements (including the rules of any stock exchange or over-the-counter market on which the Common Shares are then listed or quoted for trading). Such auditors or accountants shall be provided access to all necessary records of the Company. In the event that any such determination is made, the Company shall deliver a certificate to the Warrant Agent and a notice to the Warrantholders in the manner contemplated in Section 3.6 describing such determination.

 

(6)                                                                                 If the Company shall set a record date to determine the holders of the Common Shares for the purpose of entitling them to receive any dividend or distribution or any subscription or purchase rights and shall, thereafter and before the distribution to such shareholders of any such dividend, distribution or subscription or purchase rights, legally abandon its plan to pay or deliver such dividend, distribution or subscription or purchase rights, then no adjustment in the Exercise Price or the number of Common Shares purchasable upon exercise of any Warrant shall be required by reason of the setting of such record date.

 

(7)                                                                                 In the absence of a resolution of the board of directors of the Company fixing a record date for any dividend or distribution referred to in subsection 5.1(a)(i) or any Rights Offering or Special Distribution, the Company shall be deemed to have fixed as the record date therefor the date on which such dividend or distribution is effected.

 

(8)                                                                                 As a condition precedent to the taking of any action which would require any adjustment in any of the subscription rights pursuant to this Warrant Indenture, including the Exercise Price and the number or class of shares or other securities which are to be received upon the exercise thereof; the Company shall take any corporate action which may, in the opinion of Counsel, be necessary in order that the Company 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 the Holder of such Warrant is entitled to receive on the full exercise thereof in accordance with the provisions hereof.

 

(9)                                                                                 In case the Company, after the date hereof, shall take any action affecting any Common Shares, other than action described in Section 5.1, which in the opinion of the Directors acting reasonably and in good faith would naturally affect the rights of Warrantholders, the Exercise Price and the number or class of shares or other securities which are to be received upon the exercise thereof shall be adjusted in such manner, if any, and at such time, as the Directors, in their sole discretion acting in good faith, may determine to be equitable in the circumstances. Failure of the taking of action by the Directors so as to provide for an adjustment in the Exercise Price and the number or class of shares or other securities which are to be received upon the exercise thereof prior to the effective date of any action by the Company affecting the Common Shares shall be conclusive evidence that the directors have determined that it is equitable to make no adjustment in the circumstances.

 

25

 

(10)                                                                          The Warrant Agent shall be entitled to act and rely on any adjustment calculations by the Company or the Company’s Auditors.

 

(11)                                                                          On the happening of each and every such event set out in Section 5.1, the applicable provisions of the Warrant Certificate and this Warrant Indenture, including the Exercise Price, shall, ipso facto, be deemed to be amended accordingly and the Company shall take all necessary action so as to comply with such provisions as so amended.

 

5.3 Postponement of Subscription

 

In any case in which the application of Section 5.1 shall require that an adjustment shall be effective immediately after a record date for an event referred to herein, the Company may defer, until the occurrence of such an event:

 

(a)                                                                                 issuing to the Warrantholder of any Warrant exercised after such record date and before the occurrence of such event, the additional Common Shares issuable upon such exercise by reason of the adjustment required by such event, and

 

(b)                                                                                 delivering to such Warrantholder any distributions declared with respect to such additional Common Shares after such Exercise Date and before such event;

 

provided, however, that the Company shall deliver or cause to be delivered to such Warrantholder, an appropriate instrument evidencing such Warrantholder’s right, upon the occurrence of the event requiring the adjustment, to an adjustment in the Exercise Price or the number of Common Shares purchasable on the exercise of any Warrant and to such distributions declared with respect to any additional Common Shares issuable on the exercise of any Warrant.

 

5.4 Notice of Adjustment of Exercise Price and Number of Common Shares Purchasable Upon Exercise

 

(1)                                                                                 At least ten (10) Business Days prior to the effective date or record date, as the case may be, of any event which requires or might require adjustment pursuant to Section 5.1, including the Exercise Price and the number of Common Shares which are purchasable upon the exercise thereof, the Company shall be required to (a) file with the Warrant Agent a certificate of the Company specifying the particulars of such event (including the record date or the effective date for such event) and, if determinable, the required adjustment and the computation of such adjustment; and (b) give notice to the Warrantholders of the particulars of such event (including the record date or the effective date for such event) and, if determinable, the required adjustment. Notice to the Warrantholders shall be given in the manner specified in Section 3.6.

 

26

 

 

(2)                                                                                 In case any adjustment for which such notice has been given is not then determinable, the Company shall promptly after such adjustment is determinable (a) file with the Warrant Agent a computation of such adjustment; and (b) give notice to the Warrantholders of the adjustment. Notice to the Warrantholders shall be given in the manner specified in Section 3.6.

 

(3)                                                                                 The Warrant Agent may, absent manifest error, for all purposes of the adjustment act and rely upon the certificate of the Company submitted to it pursuant to subsection 5.4(1) and on the accuracy of such certificate, calculations and formulas contained therein.

 

ARTICLE 6

 

PURCHASES BY THE COMPANY

 

6.1 Purchases of Warrants for Cancellation

 

The Company may, at any time and from time to time, purchase Warrants by invitation for tender, by private contract or otherwise (which shall include a purchase through an investment dealer or firm holding membership on a Canadian stock exchange) on such terms as the Company may determine. All Warrants purchased pursuant to the provisions of this Section 6.1 shall be forthwith delivered to, cancelled and destroyed by the Warrant Agent and shall not be reissued.

 

6.2 Optional Purchases by the Company

 

Subject to applicable law, the Company may from time to time purchase on any stock exchange, in the open market, by private agreement or otherwise any of the Warrants. Any such purchase shall be made at the lowest price or prices at which, in the opinion of the Directors, such Warrants are then obtainable, plus reasonable costs of purchase, and may be made in such manner, from such Persons, and on such other terms as the Company in its sole discretion may determine. The Warrant Certificates representing the Warrants purchased pursuant to this Section 6.2 shall forthwith be delivered to and cancelled by the Warrant Agent.

 

ARTICLE 7

COVENANTS OF THE COMPANY

 

7.1 Covenants of the Company

 

The Company covenants with the Warrant Agent for the benefit of the Warrantholders and the Warrant Agent that so long as any Warrants remain outstanding and may be exercised:

 

(a)                                                                                 the Company will at all times maintain its existence and will carry on and conduct its business in a prudent manner in accordance with industry standards and good business practice, and will keep or cause to be kept proper books of account in accordance with applicable law;

 

(b)                                                                                 the Company will reserve and keep available a sufficient number of Common Shares for issuance upon the exercise of Warrants issued by the Company;

 

(c)                                                                                  the Company will cause the Common Shares from time to time subscribed for pursuant to the Warrants issued by the Company hereunder, in the manner herein provided, to be duly issued in accordance with the Warrants and the terms hereof;

 

27

 

(d)                                                                                 the Company will cause the certificates representing the Common Shares from time to time to be acquired, pursuant to the Warrants in the manner herein provided, to be duly issued and delivered in accordance with the Warrants and the terms hereof;

 

(e)                                                                                  the Company shall use all reasonable efforts to maintain the listing of the Common Shares on the TSXV (or such other recognized stock exchange as may be agreed upon by the Company and the Agents) and to have the Common Shares issued pursuant to the exercise of the Warrants listed and posted for trading on the TSXV (or such other recognized stock exchange as may be agreed upon by the Company and the Agents) as expeditiously as possible;

 

(f)                                                                                   all Common Shares that shall be issued by the Company upon exercise of the rights provided for herein shall be issued as fully paid and non-assessable;

 

(g)                                                                                  the Company will perform and carry out all of the acts or things to be done by it as provided in this Indenture; and

 

(h)                                                                                 the Company will promptly advise the Warrant Agent and the Warrantholders in writing of any default under the terms of this Indenture.

 

7.2 Warrant Agent’s Remuneration and Expenses

 

The Company covenants that it will pay to the Warrant Agent from time to time reasonable remuneration for its services hereunder and will pay or reimburse the Warrant Agent upon its request for all reasonable expenses, disbursements and advances incurred or made by the Warrant Agent in the administration or execution of the duties hereby created, except any such expense, disbursement or advance as may arise out of or result from the gross negligence, wilful misconduct or fraud of the Warrant Agent. This Section 7.2 will survive the resignation or removal of the Warrant Agent or the termination of this Indenture. Any amount owing hereunder and remaining unpaid thirty (30) days from the invoice date will bear interest at the then current rate charged by the Warrant Agent against unpaid invoices and shall be payable upon demand. This Section 7.2 shall survive the termination of this Indenture and the removal or resignation of the Warrant Agent.

 

7.3 Performance of Covenants by Warrant Agent

 

Subject to Section 11.6, if the Company shall fail to perform any of its covenants contained in this Warrant Indenture and the Company has not rectified such failure within twenty-five (25) Business Days after either giving notice of such default pursuant to subsection 7.1(h) or receiving written notice from the Warrant Agent of such failure, the Warrant Agent may notify the Warrantholders in the manner provided in Section 3.6 of such failure on the part of the Company or, subject to Section 11.1, may itself perform any of the covenants capable of being performed by it, but shall be under no obligation to perform such covenants or to notify the Warrantholders of such performance by it. All reasonable sums expended or advanced by the Warrant Agent in so doing shall be repayable as provided in Section 7.2. No such performance, expenditure or advance by the Warrant Agent shall relieve the Company of any default hereunder or of its continuing obligations under the covenants herein contained.

 

7.4 Securities Filings

 

(1)                                                                                 If, in the opinion of Counsel, any filing is required to be made with any governmental or other authority in Canada (including the securities regulatory authorities or any exchange or quotation system upon which any securities of the Company are listed or quoted for trading), or any other step is required before any Common Shares issuable upon the exercise of Warrants by a Warrantholder may properly and legally be issued in Canada, the Company covenants that it will take such action so required at its own expense.

 

28

 

(2)                                                                                 The Company will give written notice of the issue of Common Shares pursuant to the exercise of Warrants, in such detail as may be required, to each securities administrator in each jurisdiction in which there is legislation requiring the giving of such notice.

 

7.5 Certificates of No Default

 

At any time if requested by the Warrant Agent, the Company shall deliver to the Warrant Agent an Officers’ Certificate stating that the Company has complied to the best of its knowledge, in all material respects, with all covenants, conditions or other requirements contained in this Indenture. In the event that the Company has not complied, in all material respects, with all the covenants and conditions contained herein, it will advise the Warrant Agent and the holders of such default as soon as reasonably practicable, specifying the covenant, condition or other requirement which has not been complied with and giving particulars of such non-compliance.

 

ARTICLE 8

ENFORCEMENT

 

8.1 Suits by Warrantholders

 

(1)                                                                                 Warrantholders May Not Sue. Except to the extent that the rights of an individual Warrantholder or group of Warrantholders would be prejudiced thereby, no Warrantholder has the right to institute any action or proceeding or to exercise any other remedy authorized hereunder for the purpose of enforcing any right on behalf of the Warrantholders as a whole or for the execution of any trust or power hereunder or for the appointment of a liquidator or receiver or receiver and manager or for a receiving order under the Bankruptcy and Insolvency Act (Canada) or to have the Company wound up or to file or prove a claim in any liquidation or bankruptcy proceedings, unless the Warrant Agent has received a Warrantholders’ Request directing it to take the requested action and has been provided with sufficient funds or other security and/or such indemnity satisfactory to the Warrant Agent in respect of the costs, expenses and liabilities that may be incurred by it in so proceeding and the Warrant Agent has failed to act within a reasonable time thereafter. If the Warrant Agent has so failed to act, but not otherwise, any Warrantholder acting on behalf of all Warrantholders will be entitled to take any of the proceedings that the Warrant Agent might have taken hereunder. No Warrantholder has any right in any manner whatsoever to effect, disturb or prejudice the rights hereby created by its action or to enforce any right hereunder or under any Warrant, except subject to the conditions and in the manner herein provided. Any money received as a result of a proceeding taken by any Warrantholder on behalf of the Warrantholders hereunder must be forthwith paid to the Warrant Agent.

 

(2)                                                                                 Warrant Agent not Required to Possess Warrants. All rights of action under this Indenture may be enforced by the Warrant Agent without the possession of any of the Warrants or the production thereof on any trial or other proceedings relative thereto.

 

29

 

8.2 Limitation of Liability

 

The obligations hereunder are not personally binding upon nor shall resort hereunder be had to, the private property of any of the past, present or future Directors or Shareholders of the Company or of any successor corporation or of any of the past, present or future officers, employees or agents of the Company or of any successor corporation, but only the property of the Company or of any successor corporation shall be bound in respect hereof.

 

ARTICLE 9

MEETINGS OF WARRANTHOLDERS

 

9.1 Right to Convene Meetings

 

The Warrant Agent may at any time and from time to time, and shall on receipt of a written request of the Company or of a Warrantholders’ Request and upon receiving sufficient funds and being indemnified to its reasonable satisfaction by the Company or by the Warrantholders signing such Warrantholders’ Request against the cost which may be incurred in connection with the calling and holding of such meeting, convene a meeting of the Warrantholders. In the event of the Warrant Agent failing to so convene a meeting within fifteen (15) Business Days after receipt of such written request of the Company or Warrantholders’ Request, funds and indemnity given as aforesaid, the Company or such Warrantholders, as the case may be, may convene such meeting. Every such meeting shall be held in the City of Toronto or at such other place as may be approved or determined by the Warrant Agent unless the meeting was convened by the Company or by Warrantholders as a result of the Warrant Agent’s failure or refusal to convene the meeting, in which case the meeting shall be held at such place as may be determined by the Company or by the Warrantholders convening the meeting, as the case may be.

 

9.2 Notice

 

At least twenty-one (21) Business Days prior notice of any meeting of Warrantholders shall be given to the Warrantholders in the manner provided for in Section 3.6 and a copy of such notice shall be sent by mail to the Warrant Agent (unless the meeting has been called by the Warrant Agent) and to the Company (unless the meeting has been called by the Company). Such notice shall state the time when and the place where the meeting is to be held, shall state briefly the general nature of the business to be transacted thereat and shall contain such information as is reasonably necessary to enable the Warrantholders to make a reasoned decision on the matter, but it shall not be necessary for any such notice to set out the terms of any resolution to be proposed nor any of the provisions of this Article 9. The notice convening any such meeting may be signed by an appropriate officer of the Warrant Agent or by the Company or by the Warrantholder or Warrantholders convening the meeting.

 

9.3 Chairman

 

An individual (who need not be a Warrantholder) nominated in writing by the Warrant Agent shall be chairman of the meeting and if no individual is so nominated, or if the individual so nominated is not present within fifteen minutes from the time fixed for the holding of the meeting, or if such Person is unable or unwilling to act as chairman, the Warrantholders present in person or by proxy shall choose some individual present to be chairman.

 

9.4 Quorum

 

Subject to the provisions of Section 9.11, at any meeting of the Warrantholders a quorum shall consist of Warrantholders present in person or by proxy and holding at least 25% of the aggregate number of all the then outstanding Warrants, provided that at least two Persons entitled to vote thereat are personally present (except in the case where there is only one Warrantholder). If a quorum of the Warrantholders shall not be present within thirty minutes from the time fixed for holding any meeting, the meeting, if summoned by the Warrantholders or on a Warrantholders’ Request, shall be dissolved; but in any other case the meeting shall be adjourned to the same day in the next week (unless such day is not a Business Day in which case it shall be adjourned to the next following Business Day) at the same time and place and subject to Section 9.11 no notice of the adjournment need be given. Any business may be brought before or dealt with at an adjourned meeting which might have been dealt with at the original meeting in accordance with the notice calling the same. No business shall be transacted at any meeting unless a quorum be present at the commencement of business. At the adjourned meeting the Warrantholders present in person or by proxy shall form a quorum and may transact the business for which the meeting was originally convened, notwithstanding that they may not hold at least 25% of all then outstanding Warrants.

 

30

 

9.5 Power to Adjourn

 

The chairman of any meeting at which a quorum of the Warrantholders is present may, with the consent of the meeting, adjourn any such meeting, and no notice of such adjournment need be given except such notice, if any, as the meeting may prescribe.

 

9.6 Show of Hands

 

Every question submitted to a meeting shall be decided in the first place by a majority of the votes given on a show of hands except that votes on an Extraordinary Resolution shall be given in the manner hereinafter provided. At any such meeting, unless a poll is duly demanded as herein provided, a declaration by the chairman that a resolution has been carried or carried unanimously or by a particular majority or lost or not carried by a particular majority shall be conclusive evidence of the fact.

 

9.7 Poll and Voting

 

(1)                                                                                 On every Extraordinary Resolution, and on any other question submitted to a meeting and after a vote by show of hands when demanded by the chairman or by one or more of the Warrantholders acting in Person or by proxy, a poll shall be taken in such manner as the chairman shall direct. Questions other than those required to be determined by Extraordinary Resolution shall be decided by a majority of votes cast on the poll.

 

(2)                                                                                 On a show of hands, every Person who is present and entitled to vote, whether as a Warrantholder or as proxy for one or more absent Warrantholders, or both, shall have one vote. On a poll, each Warrantholder present in person or represented by a proxy duly appointed by instrument in writing shall be entitled to one vote in respect of each Common Share which he is entitled to purchase pursuant to the Warrant or Warrants then held or represented by him. A proxy need not be a Warrantholder. The chairman of any meeting shall be entitled, both on a show of hands and on a poll, to vote in respect of the Warrants, if any, held or represented by him.

 

9.8 Regulations

 

(1)                                                                                 Subject to the provisions of this Indenture, the Warrant Agent or the Company with the approval of the Warrant Agent may from time to time make and from time to time vary such regulations as it shall think fit:

 

(a)                                                                                                                                 for the deposit of voting certificates and instruments appointing proxies at such place and time as the Warrant Agent, the Company or the Warrantholders convening the meeting, as the case may be, may in the notice convening the meeting direct;

 

31

 

(b)                                                                                                                                 for the deposit of voting certificates and instruments appointing proxies at some approved place or places other than the place at which the meeting is to be held and enabling particulars of such instruments appointing proxies to be mailed, delivered or sent by facsimile transmission before the meeting to the Company or to the Warrant Agent at the place where the same is to be held and for the voting of proxies so deposited as though the instruments themselves were produced at the meeting;

 

(c)                                                                                                                                  for the form of the voting certificates and instrument of proxy and the manner in which the form of proxy may be executed; and

 

(d)                                                                                                                                 generally for the calling of meetings of Warrantholders and the conduct of business thereat including setting a record date for Warrantholders entitled to receive notice of or to vote at such meeting.

 

(2)                                                                                 Any regulations so made shall be binding and effective and the votes given in accordance therewith shall be valid and shall be counted. Save as such regulations may provide, or as may be expressly provided for herein the only Persons who shall be recognized at any meeting as a Warrantholder, or be entitled to vote or be present at the meeting in respect thereof (subject to Section 9.9) shall be Warrantholders or Persons holding voting certificates or proxies of Warrantholders.

 

9.9 Company, Warrant Agent and Warrantholders May be Represented

 

The Company and the Warrant Agent, by their respective directors, officers and employees, and the Counsel for the Company, for the Warrant Agent and for any Warrantholder may attend any meeting of the Warrantholders, but shall have no vote as such, except in their capacity as Warrantholders.

 

9.10 Powers Exercisable by Extraordinary Resolution

 

In addition to all other powers conferred upon them by any other provisions of this Indenture or by law, the Warrantholders at a meeting shall have the power, exercisable from time to time by Extraordinary Resolution, subject to applicable law and any regulatory approval:

 

(a)                                                                                 to agree to any modification, abrogation, alteration, compromise or arrangement of the rights of Warrantholders or (with the consent of the Warrant Agent, such consent not to be unreasonably withheld) the Warrant Agent in its capacity as warrant agent hereunder or on behalf of the Warrantholders against the Company whether such rights arise under this Indenture, the Warrant Certificate or otherwise, provided that following such action the rights of the Warrantholders or any individual Warrantholder shall not exceed the rights of the Warrantholders hereunder, or otherwise result in an increase of the obligations and liabilities of the Company hereunder;

 

(b)                                                                                 to amend, alter or repeal any Extraordinary Resolution previously passed or sanctioned by the Warrantholders;

 

32

 

(c)                                                                                  to direct or to authorize the Warrant Agent, subject to its prior indemnification pursuant to subsection 11.1(2), to enforce any of the covenants on the part of the Company contained in this Indenture or the Warrant Certificates or to enforce any of the rights of the Warrantholders in any manner specified in such Extraordinary Resolution or to refrain from enforcing any such covenant or right;

 

(d)                                                                                 to waive, and to direct the Warrant Agent to waive, any default on the part of the Company in complying with any provisions of this Indenture or the Warrant Certificates either unconditionally or upon any conditions specified in such Extraordinary Resolution;

 

(e)                                                                                  to restrain any Warrantholder from taking or instituting any suit, action or proceeding against the Company for the enforcement of any of the covenants on the part of the Company contained in this Indenture or the Warrant Certificates or to enforce any of the rights of the Warrantholders;

 

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

 

(g)                                                                                  to remove the Warrant Agent and appoint a successor warrant agent in the manner specified in section 11.7 hereof.

 

9.11 Meaning of Extraordinary Resolution

 

(1)                                                                                 The expression “Extraordinary Resolution” when used in this Indenture means, subject as hereinafter provided in this Section 9.11 and in Section 9.14, a resolution (i) passed at a meeting of the holders of Warrants duly convened for that purpose and held in accordance with the provisions of this Article 9 at which there are holders of Warrants present in person or represented by proxy representing at least 25% of the aggregate number of all the then outstanding Warrants and passed by the affirmative vote of Warrantholders representing not less than 66 2/3% of the aggregate number of all the then outstanding Warrants represented at the meeting and voted on the poll upon such resolution; or (ii) adopted by an instrument in writing signed by the holders of Warrants representing not less than 66 2/3% percent of the aggregate number of all the then outstanding Warrants.

 

(2)                                                                                 If, at any meeting called for the purpose of passing an Extraordinary Resolution, Warrantholders holding at least 25% of the aggregate number of all the then outstanding Warrants are not present in person or by proxy within thirty (30) minutes after the time appointed for the meeting then the meeting, if convened by Warrantholders or on a Warrantholders’ Request, shall be dissolved; but in any other case it shall stand adjourned to such day, being not less than ten (10) Business Days later, and to such place and time as may be appointed by the chairman. Not less than three (3) days’ prior notice shall be given of the time and place of such adjourned meeting in the manner provided for in such notice shall state that at the adjourned meeting the Warrantholders present in person or by proxy shall form a quorum but it shall not be necessary to set forth the purposes for which the meeting was originally called or any other particulars. At the adjourned meeting the Warrantholders present in person or by proxy shall form a quorum and may transact the business for which the meeting was originally convened and a resolution proposed at such adjourned meeting and passed by the requisite vote as provided in subsection 9.11(1) shall be an Extraordinary Resolution within the meaning of this Indenture notwithstanding that Warrantholders representing at least 25% of all the then outstanding Warrants are not present in person or by proxy at such adjourned meeting.

 

33

 

(3)                                                                                 Votes on an Extraordinary Resolution shall always be given on a poll and no demand for a poll on an Extraordinary Resolution shall be necessary.

 

9.12 Powers Cumulative

 

It is hereby declared and agreed that any one or more of the powers or any combination of the powers in this Indenture stated to be exercisable by the Warrantholders by Extraordinary Resolution or otherwise may be exercised from time to time and the exercise of any one or more of such powers or any combination of powers from time to time shall not be deemed to exhaust the right of the Warrantholders to exercise such power or powers or combination of powers then or thereafter from time to time.

 

9.13 Minutes

 

Minutes of all resolutions and proceedings at every meeting of Warrantholders shall be made and duly entered in books to be provided from time to time for that purpose by the Warrant Agent at the expense of the Company, and any such minutes as aforesaid, if signed by the chairman of the meeting at which such resolutions were passed or proceedings had, shall be prima facie evidence of the matters therein stated and, until the contrary is proved, every such meeting in respect of the proceedings of which minutes shall have been made shall be deemed to have been duly convened and held, and all resolutions passed or proceedings taken thereat shall be deemed to have been duly passed and taken.

 

9.14 Instruments in Writing

 

All actions which may be taken and all powers that may be exercised by the Warrantholders at a meeting held as provided in this Article 9 may also be taken and exercised by Warrantholders representing at least 66 2/3% of the aggregate number of all the then outstanding Warrants by an instrument in writing signed in one or more counterparts by such Warrantholders in person or by attorney duly appointed in writing, and the expression “Extraordinary Resolution” when used in this Indenture shall include an instrument so signed.

 

9.15 Binding Effect of Resolutions

 

Every resolution and every Extraordinary Resolution passed in accordance with the provisions of this Article 9 at a meeting of Warrantholders shall be binding upon all the Warrantholders, whether present at or absent from such meeting, and every instrument in writing signed by Warrantholders in accordance with Section 9.14 shall be binding upon all the Warrantholders, whether signatories thereto or not, and each and every Warrantholder and the Warrant Agent (subject to receiving prior indemnification pursuant to subsection 11.1(2)) shall be bound to give effect accordingly to every such resolution and instrument in writing. In the case of an instrument in writing the Warrant Agent shall give notice in the manner contemplated in Section 3.6 and Section 13.1 of the effect of the instrument in writing to all Warrantholders and the Company as soon as is reasonably practicable.

 

9.16 Holdings by Company Disregarded

 

In determining whether Warrantholders are present at a meeting of Warrantholders for the purpose of determining a quorum or have concurred in any consent, waiver, Extraordinary Resolution, Warrantholders’ Request or other action under this Indenture, Warrants owned legally or beneficially by the Company or any Subsidiary of the Company or any other Affiliate of the Company, as determined in accordance with the provisions of Section 13.7, shall be disregarded. The Company shall provide, upon the written request of the Warrant Indenture, a certificate as to the registration particulars of any Warrants held by the Company.

 

34

 

 

ARTICLE 10

SUPPLEMENTAL INDENTURES

 

10.1 Provision for Supplemental Indentures for Certain Purposes

 

From time to time the Company (when properly authorized by action by the Directors) and the Warrant Agent may, subject to the provisions hereof, and they shall, when so directed in accordance with the provisions hereof and regulatory approval, execute and deliver by their proper officers, indentures, or instruments supplemental hereto, which thereafter shall form part hereof, for any one or more or all of the following purposes:

 

(a)                                                                                 providing for the issue of additional Warrants hereunder and any consequential amendments hereto as may be required by the Warrant Agent, relying on advice of Counsel;

 

(b)                                                                                 setting forth any adjustments resulting from the application of the provisions of Section 5.1 or any modification affecting the rights of Warrantholders hereunder on exercise of the Warrants, provided that any such adjustments or modifications shall be subject to compliance with all regulatory requirements (including the rules of any stock exchange or over-the-counter market on which the Common Shares are then listed or quoted for trading);

 

(c)                                                                                  adding to the provisions hereof such additional covenants and enforcement provisions as, in the opinion of Counsel, are necessary or advisable, provided that the same are not in the opinion of the Warrant Agent, relying on the advice of Counsel, prejudicial to the rights or interests of the Warrantholders as a group;

 

(d)                                                                                 giving effect to all Extraordinary Resolution passed as provided in Article 9;

 

(e)                                                                                  making such provisions not inconsistent with this Indenture as may be necessary or desirable with respect to matters or questions arising hereunder, provided that such provisions are not, in the opinion of the Warrant Agent, relying on the advice of Counsel, prejudicial to the rights or interests of the Warrantholders as a group;

 

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

 

(g)                                                                                  modifying any of the provisions of this Indenture or relieving the Company from any of the obligations, conditions or restrictions herein contained, provided that such modification or relief shall be or become operative or effective only if, in the opinion of the Warrant Agent, relying on the advice of Counsel, such modification or relief in no way prejudices any of the rights or interests of the Warrantholders as a group or of the Warrant Agent, and provided further that the Warrant Agent may in its sole discretion decline to enter into any such supplemental indenture which in its opinion may not afford adequate protection to the Warrant Agent when the same shall become operative; and

 

35

 

(h)                                                                                 for any other purpose not inconsistent with the terms of this Indenture, including the correction or rectification of any ambiguities, defective or inconsistent provisions, errors, mistakes or omissions herein, provided that in the opinion of the Warrant Agent, relying on the advice of Counsel, the rights or interests of the Warrant Agent and of the Warrantholders as a group are in no way prejudiced thereby.

 

10.2 Successor Companies

 

In the case of the consolidation, amalgamation, merger or transfer of the undertaking or assets of the Company as an entirety or substantially as an entirety to another corporation (“successor corporation”), the successor corporation resulting from such consolidation, amalgamation, merger or transfer (if not the Company) shall expressly assume, by supplemental indenture satisfactory in form to the Warrant Agent and executed and delivered to the Warrant Agent, the due and punctual performance and observance of each and every covenant and condition of this Indenture to be performed and observed by the Company.

 

ARTICLE 11

CONCERNING THE WARRANT AGENT

 

11.1 Indenture Legislation

 

(1)                                                                                 If, and to the extent, any provision of this Indenture limits, qualifies or conflicts with a mandatory requirement of applicable statutes of Canada and its provinces and the regulations under those statutes relating to warrant indentures (“Applicable Legislation”), such mandatory requirement shall prevail.

 

36

 

(2)                                                                                 The Company and the Warrant Agent agree that each will at all times in relation to this Indenture and any action to be taken hereunder observe and comply with and be entitled to the benefit of Applicable Legislation.

 

11.2 Rights and Duties of Warrant Agent

 

(1)                                                                                 In the exercise of the rights and duties prescribed or conferred by the terms of this Indenture, the Warrant Agent shall act honestly and in good faith with a view to the best interests of the Warrantholders and shall exercise that degree of care, diligence and skill that a reasonably prudent warrant agent would exercise in comparable circumstances. No provision of this Indenture shall be construed to relieve the Warrant Agent from, or require any Person to indemnify the Warrant Agent against, liability for its own gross negligence, wilful misconduct or fraud. The duties and obligations of the Warrant Agent shall be determined solely by the provisions hereof and, accordingly, the Warrant Agent shall only be responsible for the performance of such duties and obligations as it has undertaken herein. The Warrant Agent shall retain the right not to act and shall not be held liable for refusing to act in circumstances that require the delivery to or receipt by the Warrant Agent of documentation unless it has received clear and reasonable documentation which complies with the terms of this Indenture. Such documentation must not require the exercise of any discretion or independent judgement other than as contemplated by this Indenture. The Warrant Agent shall incur no liability with respect to the delivery or non-delivery of any certificate or certificates whether delivered by hand, mail or any other means, provided that it has complied with the terms of this Indenture in respect of the discharging of its obligations in respect of the delivery of such certificates.

 

(2)                                                                                 The obligation of the Warrant Agent to commence or continue any act, action or proceeding for the purpose of enforcing any rights of the Warrant Agent or the Warrantholders hereunder shall be conditional upon the Warrantholders furnishing, when required by notice in writing by the Warrant Agent, sufficient funds to commence or to continue such act, action or proceeding and an indemnity reasonably satisfactory to the Warrant Agent to protect and to hold harmless the Warrant Agent against the costs, charges and expenses and liabilities to be incurred thereby and any loss and damage it may suffer by reason thereof. None of the provisions contained in this Indenture shall require the Warrant Agent to expend or to risk its own funds or otherwise to incur financial liability in the performance of any of its duties or in the exercise of any of its rights or powers.

 

(3)                                                                                 The Warrant Agent may, before commencing or at any time during the continuance of any such act, action or proceedings, require the Warrantholders, at whose instance it is acting, to deposit with the Warrant Agent the Warrant Certificates held by them, for which the Warrant Agent shall issue receipts.

 

(4)                                                                                 Every provision of this Indenture that by its terms relieves the Warrant Agent of liability or entitles it to rely upon any evidence submitted to it is subject to the provisions of this Section 11.1 and of Section 11.2.

 

11.3 Evidence, Experts and Advisers

 

(1)                                                                                 In addition to the reports, certificates, opinions and evidence required by this Indenture, the Company shall furnish to the Warrant Agent such additional evidence of compliance with any provision hereof, and in such form as may be prescribed by Applicable Legislation or as the Warrant Agent may reasonably require by written notice to the Company.

 

(2)                                                                                 The Warrant Agent shall be protected in acting and relying upon any written notice, request, waiver, consent, certificate, receipt, statutory declaration or other paper or document furnished to it, not only as to its due execution and the validity and effectiveness of its provisions, but also as to the truth of and acceptability of any information therein contained which it in good faith believes to be genuine and what it purports to be.

 

(3)                                                                                 Proof of the execution of an instrument in writing, including a Warrantholders’ Request, by any Warrantholder may be made by the certificate of a notary public, or other officer with similar powers, that the Person signing such instrument acknowledged to him the execution thereof, or by an affidavit of a witness to such execution or in any other manner which the Warrant Agent may consider adequate and in respect of a corporate Warrantholder, shall include a certificate of incumbency of such Warrantholder together with a certified resolution authorizing the person who signs such instrument to sign such instrument.

 

(4)                                                                                 The Warrant Agent may employ or retain such Counsel, accountants, appraisers or other experts or advisers as it may reasonably require for the purpose of determining and discharging its duties hereunder and shall not be responsible for any misconduct or negligence on the part of such experts or advisors who have been appointed and supervised with due care by the Warrant Agent. The fees of such Counsel and other experts shall be part of the Warrant Agent’s fees hereunder. The Warrant Agent shall be fully protected in acting or not acting and relying, in good faith, in accordance with any opinion or instruction of such Counsel. Any remuneration so paid by the Warrant Agent shall be repaid to the Warrant Agent in accordance with Section 7.2.

 

37

 

11.4 Action by Warrant Agent to Protect Interest

 

Subject to the provisions of this Indenture and Applicable Legislation, the Warrant Agent shall have power to institute and to maintain such actions and proceedings as it may consider necessary or expedient to preserve, protect or enforce its interests and the interests of the Warrantholders.

 

11.5 Warrant Agent not Required to Give Security

 

The Warrant Agent shall not be required to give any bond or security in respect of the execution of the duties, obligations and powers of this Indenture or otherwise.

 

11.6 Protection of Warrant Agent

 

By way of supplement to the provisions of any law for the time being relating to warrant agents it is expressly declared and agreed as follows:

 

(a)                                                                                 The Warrant Agent shall not be liable for or by reason of any statement of fact or recitals in this indenture or in the Warrant Certificates (except the representations contained in Section 11.8 or in the certificate of the Warrant Agent on the Warrant Certificates) or be required to verify the same, but all such statements or recitals are and shall be deemed to be made by the Company;

 

(b)                                                                                 Nothing herein contained shall impose any obligation on the Warrant Agent to see to or to require evidence of the registration or filing (or renewal thereof) of this Indenture or any instrument ancillary or supplemental hereto;

 

(c)                                                                                  The Warrant Agent shall not be bound to give notice to any Person or Persons of the execution hereof; and

 

(d)                                                                                 The Warrant Agent shall not incur any liability or responsibility whatever or be in any way responsible for the consequence of any breach on the part of the Company of any of the covenants herein contained or of any acts of any Directors, officers, employees, agents or servants of the Company.

 

11.7 Replacement of Warrant Agent; Successor by Merger

 

(1)                                                                                 The Warrant Agent may resign its duties and be discharged from all further duties and liabilities hereunder, by giving to the Company not less than thirty (30) days prior notice in writing or such shorter prior notice as the Company may accept as sufficient. The Warrantholders by Extraordinary Resolution shall have power at any time to remove the existing Warrant Agent and to appoint a new warrant agent. In the event of the Warrant Agent resigning or being removed as aforesaid or being dissolved, becoming bankrupt, going into liquidation or otherwise becoming incapable of acting hereunder, the Company shall forthwith appoint a new warrant agent unless a new warrant agent has already been appointed by the Warrantholders; failing such appointment by the Company, the retiring Warrant Agent or any Warrantholder may apply to a justice of the Ontario Superior Court of Justice (the “Court”), at the Company’s expense, on such notice as such justice may direct, for the appointment of a new warrant agent; but any new warrant agent so appointed by the Company or by the Court shall be subject to removal as aforesaid by the Warrantholders. Any new warrant agent appointed under any provision of this Section 11.7 shall be a company authorized to carry on the business of a transfer agent in the province of Ontario. On any such appointment the new warrant agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named herein as Warrant Agent without any further assurance, conveyance, act or deed; but there shall be immediately executed, at the expense of the Company, all such conveyances or other instruments as may, in the opinion of Counsel, be necessary or advisable for the purpose of assuring the same to the new warrant agent, provided that, any resignation or removal of the Warrant Agent and appointment of a successor warrant agent shall not become effective until the successor warrant agent shall have executed an appropriate instrument accepting such appointment and, at the request of the Company, the predecessor Warrant Agent, upon payment of its outstanding remuneration and expenses, shall execute and deliver to the successor warrant agent an appropriate instrument transferring to such successor warrant agent all rights and powers of the Warrant Agent hereunder.

 

38

 

(2)                                                                                 Upon the appointment of a successor, warrant agent the Company shall promptly notify the Warrantholders thereof in the manner provided for in Section 3.6.

 

(3)                                                                                 This Indenture shall enure to the benefit of and be binding upon the parties hereto and their respective successors and assigns.

 

(4)                                                                                 Any Warrants certified but not delivered by a predecessor Warrant Agent may be certified by the new or successor warrant agent in the name of the predecessor or the new or successor warrant agent.

 

(5)                                                                                 Any corporation into or with which the Warrant Agent may be merged or consolidated or amalgamated, or to which all or substantially all of its corporate trust business is sold or otherwise transferred, or any corporation resulting there from to which the Warrant Agent shall be a party, or any corporation succeeding to the business of the Warrant Agent shall be the successor to the Warrant Agent hereunder without any further act on its part or any of the parties hereto, provided that such corporation would be eligible for appointment as a successor warrant agent under Subsection 11.7(1) above.

 

(6)                                                                                 In case at any time the name of the Warrant Agent is changed and at such time any of the Warrant Certificates have been countersigned but not delivered, the Warrant Agent may adopt the countersignature under its prior name and deliver Warrant Certificates so countersigned; and in case at that time any of the Warrant Certificates have not been countersigned, the Warrant Agent may countersign such Warrant Certificates either in its prior name or in its changed name; and in all such cases such Warrant Certificates will have the full force provided in the Warrant Certificates and in this Indenture.

 

11.8 Conflict of Interest

 

(1)                                                                                 The Warrant Agent represents to the Company that at the time of execution and delivery hereof no material conflict of interest exists in its role as a warrant agent hereunder and agrees that in the event of a material conflict of interest arising hereafter it will, within ninety (90) days after ascertaining that it has such material conflict of interest, either eliminate the same or resign its duties and obligations hereunder to a successor warrant agent approved by the Company and meeting the requirements set forth in subsection 11.7(1). Notwithstanding the foregoing provisions of this subsection 11.8(1), if any such material conflict of interest exists or hereinafter shall exist, the validity and enforceability of this Indenture and the Warrant Certificates shall not be affected in any manner whatsoever by reason thereof.

 

39

 

(2)                                                                                 Subject to subsection 11.8(1), the Warrant Agent, in its personal or any other capacity, may buy, lend upon and deal in securities of the Company and generally may contract and enter into financial transactions with the Company or any Subsidiary of the Company without being liable to account for any profit made thereby.

 

11.9 Warrant Agent Not to be Appointed Receiver

 

The Warrant Agent and any Person related to the Warrant Agent shall not be appointed a receiver, a receiver and manager or liquidator of all or any part of the assets or undertaking of the Company.

 

11.10 Payments by Warrant Agent

 

The forwarding of a cheque by the Warrant Agent will satisfy and discharge the liability for any amounts due to the extent of the sum or sums represented thereby (plus the amount of any tax deducted or withheld as required by law) unless such cheque is not honoured on presentation; provided that in the event of the non-receipt of such cheque by the payee, or the loss or destruction thereof, the Warrant Agent, upon being furnished with reasonable evidence of such non-receipt, loss or destruction and indemnity reasonably satisfactory to it, will issue to such payee a replacement cheque for the amount of such cheque.

 

11.11 Deposit of Securities

 

The Warrant Agent shall not be responsible or liable in any manner whatsoever for the sufficiency, correctness, genuineness or validity of any security deposited with it.

 

11.12 Act, Error, Omission etc.

 

The Warrant Agent shall not be liable for any error in judgement or for any act done or step taken or omitted by it in good faith, for any mistake, in fact or law, or for anything which it may do or refrain from doing in connection herewith except arising out of its own gross negligence, wilful misconduct or fraud.

 

11.13 Indemnification

 

The Company is liable to, and shall indemnify and save harmless the Warrant Agent and each of its directors, officers, employees, shareholders and agents, and each of their successors and assigns (collectively, the “Indemnified Parties”) in respect of:

 

(a)                                                                                 any liability and all losses, damages, costs, charges and expenses sustained or incurred in respect of any action, suit or proceeding that is proposed or commenced against any Indemnified Party, as the case may be, for or in respect of any act, omission or error in respect of the duties and obligations created hereby and such person’s execution of all duties and responsibilities and exercise of all powers and authorities pertaining thereto;

 

40

 

(b)                                                                                 any liability and all losses, damages, costs, charges and expenses sustained or incurred in respect of any action, suit or proceeding that is proposed or commenced against any Indemnified Party, as the case may be, in respect of their providing or failing to provide service contemplated hereunder; and

 

(c)                                                                                  all other costs, charges, taxes, penalties and interest in respect of unpaid taxes, and all other expenses and liabilities sustained or incurred by any Indemnified Party in respect of the administration or termination of the duties and obligations created hereby,

 

in each case including the aggregate amount paid in reasonable settlement of any actions, suits, proceedings, investigations or claims, the reasonable fees and expenses of counsel to the Indemnified Parties that may be incurred in obtaining advice with respect to and defending any action, suit, proceeding, investigation or claim that may be made or threatened against any Indemnified Party, or that may be incurred in enforcing this indemnity, unless and to the extent any of the foregoing arise principally and directly out of the gross negligence, wilful default, misconduct or fraud of the Warrant Agent or any of its directors, officers, employees, shareholders or agents, in which case the provisions of this Section 11.13 shall not apply. It is understood and agreed that this indemnification shall survive the termination of this Agreement or the resignation or removal of the Warrant Agent.

 

11.14 Notice

 

The Warrant Agent shall not be bound to give any notice or do or take any act, action or proceeding by virtue of the powers conferred on it hereby unless and until it shall have been required to so under the terms hereof; nor shall the Warrant Agent be required to take notice of any default hereunder, unless and until notified in writing of such default, which notice shall distinctly specify the default desired to be brought to the attention of the Warrant Agent and in the absence of any such notice the Warrant Agent may for all purposes of this Indenture conclusively assume that no default has been made in the observance or performance of any of the representations, warranties, covenants, agreements or conditions contained herein. Any such notice shall in no way limit any discretion herein given the Warrant Agent to determine whether or not it shall take action with respect to any default.

 

11.15 Reliance by the Warrant Agent

 

The Warrant Agent may act on the opinion or advice obtained from Counsel to the Warrant Agent and shall, provided it acts in good faith in reliance thereon, not be responsible for any loss occasioned by doing so nor shall it incur any liability or responsibility for determining in good faith not to act upon such opinion or advice. The Warrant Agent may rely, and shall be protected in relying, upon any statement, request, direction or other paper or document believed by it to be genuine and to have been signed, sent or presented by or on behalf of the proper party or parties. The Warrant Agent may assume for the purposes of this Indenture that any address on the register of the Warrantholders is the holder’s actual address and is also determinative as to residency and that the address of any transferee to whom any Warrants are to be registered, as shown on the transfer document is the transferee’s actual address and is also determinative as to residency of the transferee. The Warrant Agent shall have no obligation to ensure that legends appearing on the Warrant Certificates or Common Shares comply with regulatory requirements or securities laws of any applicable jurisdiction.

 

41

 

11.16 Privacy

 

The parties to this Warrant Indenture acknowledge that federal and/or provincial legislation that addresses the protection of individuals’ personal information (collectively, “Privacy Laws”) applies to obligations and activities under this Warrant Indenture. Despite any other provision of this Warrant Indenture, neither party shall take or direct any action that would contravene, or cause the other party to contravene, applicable Privacy Laws. The Company shall, prior to transferring or causing to be transferred personal information to the Warrant Agent, obtain and retain required consents of the relevant individuals to the collection, use and disclosure of their personal information, or shall have determined that such consents either have previously been given upon which the parties can rely or are not required under applicable Privacy Laws. The Warrant Agent shall use commercially best efforts to ensure that its services hereunder comply with applicable Privacy Laws. Specifically, the Warrant Agent agrees: (a) to have a designated chief privacy officer; (b) to maintain policies and procedures to protect personal information and to receive and respond to any privacy complaint or inquiry; (c) to use personal information solely for the purposes of providing its services under or ancillary to this Warrant Indenture and not to use it for any other purpose except with the consent of or direction from the Company or the individual involved; (d) not to sell or otherwise improperly disclose personal information to any third party; and (e) to employ administrative, physical and technological safeguards to reasonably secure and protect personal information against loss, theft or unauthorized access, use or modification.

 

11.17 Anti-Money Laundering

 

The Warrant Agent shall retain the right not to act and shall not be liable for refusing to act if, due to a lack of information or for any other reason whatsoever, the Warrant Agent, in its sole judgment, acting reasonably, determines that such act might cause it to be in non-compliance with any applicable anti-money laundering, anti-terrorist or economic sanction legislation, regulation or guideline. Further, should the Warrant Agent, in its sole judgment, acting reasonably, determine at any time that its acting under this Indenture has resulted in its being in non-compliance with any applicable anti-money laundering, anti-terrorist or economic sanction legislation, regulation or guideline, then it shall have the right to resign on ten (10) Business Days’ prior written notice sent to the Company provided that (i) the Warrant Agent’s written notice shall describe the circumstances of such non-compliance; and (ii) if such circumstances are rectified to the Warrant Agent’s satisfaction within such ten (10) Business Day period, then such resignation shall not be effective.

 

11.18 Force Majeure

 

Neither party to this Indenture shall be personally liable to the other, or held in breach of this Indenture, if prevented, hindered, or delayed in the performance or observance of any provision contained herein by reason of an act of God, riots, terrorism, acts of war, epidemics, governmental action or judicial order, earthquakes, or any other similar causes (including, but not limited to, mechanical, electronic or communication interruptions, disruptions or failures). Performance times under this Indenture shall be extended for a period of time equivalent to the time lost because of any delay that is excusable under this Section 11.18.

 

ARTICLE 12

ACCEPTANCE OF APPOINTMENT BY WARRANT AGENT

 

12.1 Appointment and Acceptance of Functions

 

The Company hereby appoints the Warrant Agent under the terms and conditions set forth in this Indenture. The Warrant Agent hereby accepts the terms of this Indenture declared and provided for and agrees to perform the same upon the terms and conditions set forth herein.

 

42

 

 

ARTICLE 13

GENERAL

 

13.1 Notice to the Company and the Warrant Agent

 

(1)                                                                                 Unless herein otherwise expressly provided, any notice to be given hereunder to the Company and to the Warrant Agent shall be in writing and may be given by mail, or by telecopy (with original copy to follow by mail) or by personal delivery and shall be addressed as follows:

 

(a)                                                                                                                                 if to the Company, to

 

Tribute Pharmaceuticals Canada Inc.

151 Steeles Avenue E.,

Milton, Ontario L9T

 

Attention: Robert Harris

Facsimile: (519) 434-4382

 

with a copy to:

 

Fogler, Rubinoff LLP

Suite 3000, 77 King Street West

TD Centre, North Tower

Toronto, Ontario M5K 1G8

 

Attention: Eric Roblin

Facsimile: (416) 941-8811

 

(b)                                                                                                                                 if to the Warrant Agent, to

 

Equity Financial Trust Company

Suite 300, 200 University Avenue

Toronto, Ontario M5H 4H1

 

Attention: Manager, Toronto - Corporate Trust Services

Facsimile: (416) 361-0470

 

and shall be deemed to have been given, if delivered or sent by courier, on the date of delivery or, if mailed, on the third (3rd) Business Day following the date of the postmark on such notice or, if sent via 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. (Toronto time) on a Business Day, shall be deemed to be received on the next following Business Day.

 

(2)                                                                                 The Company or the Warrant Agent, as the case may be, may from time to time give notice in the manner provided in subsection 13.1(1) of a change of address which, from the effective date of such notice and until changed by like notice, shall be the address of the Company or the Warrant Agent, as the case may be, for all purposes of this Indenture. A copy of any notice of change of address of the Company given pursuant to this subsection 13.1(2) shall be sent to the principal transfer office of the Warrant Agent in the City of Toronto, Ontario and shall be available for inspection by Warrantholders during normal business hours.

 

43

 

(3)                                                                                 If, by reason of a strike, lockout or other work stoppage, actual or threatened, involving postal employees, any notice to be given to the Warrant Agent or to the Company hereunder could reasonably be considered unlikely to reach its destination, such notice shall 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 subsection 13.1(1) by telecopy or other means of prepaid, transmitted, recorded communication and any such notice delivered in accordance with the foregoing shall be deemed to have been received on the date of delivery to such officer or if delivered by telecopy 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.

 

13.2 Time of the Essence

 

Time shall be of the essence in this Indenture.

 

13.3 Counterparts and Formal Date

 

This Indenture may be executed in several counterparts, each of which when so executed shall be deemed to be an original and such counterparts together shall constitute one and the same instrument and notwithstanding their date of execution shall be deemed to be dated as of the date hereof.

 

13.4 Discretion of Directors

 

Any matter provided herein to be determined by the Directors in their sole discretion and determination so made will be conclusive.

 

13.5 Satisfaction and Discharge of Indenture

 

Upon the earlier of (a) the date by which there shall have been delivered to the Warrant Agent for exercise or destruction all Warrant Certificates theretofore certified hereunder or (b) the expiration of the Exercise Period, this Indenture, except to the extent that Common Shares and certificates therefor have not been issued and delivered hereunder or the Warrant Agent or the Company have not performed any of their obligations hereunder, shall cease to be of further effect and the Warrant Agent, on demand of and at the cost and expense of the Company and upon delivery to the Warrant Agent of a certificate of the Company stating that all conditions precedent to the satisfaction and discharge of this Indenture have been complied with and upon payment to the Warrant Agent of the fees and other remuneration payable to the Warrant Agent, shall execute proper instruments acknowledging satisfaction of and discharging of this Indenture.

 

13.6 Provisions of Indenture and Warrant Certificates for the Sole Benefit of Parties and Warrantholders

 

Nothing in this Indenture or the Warrant Certificates, expressed or implied, shall give or be construed to give to any Person other than the parties hereto and the holders of the Warrant Certificates any legal or equitable right, remedy or claim under this Indenture, or under any covenant or provision herein contained, all such covenants and provisions being for the sole benefit of the parties hereto and the Warrantholders.

 

44

 

13.7 Warrants Owned by the Company or its Subsidiaries Certificates to be Provided

 

For the purpose of disregarding any Warrants owned legally or beneficially by the Company or any Subsidiary of the Company or any other Affiliate of the Company in Section 9.16, the Company shall provide to the Warrant Agent, from time to time, a certificate of the Company setting forth as at the date of such certificate the number of Warrants owned legally and beneficially by the Company or any Subsidiary of the Company or any other Affiliate of the Company, and the Warrant Agent in making the determination in Section 9.16 shall be entitled to rely on such certificate.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

45

 

IN WITNESS WHEREOF the parties hereto have executed this Indenture as of the date first written above.

 

 

	
 
    	
 
    	
TRIBUTE   PHARMACEUTICALS CANADA INC.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Robert Harris
    
	
 
    	
Name:
    	
Robert Harris
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
Chief Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
EQUITY   FINANCIAL TRUST COMPANY
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Shelley Martin
    
	
 
    	
Name:
    	
Shelley Martin
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
Authorized Signing   Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Carol Mikos
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
Carol Mikos
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
Authorized Signing   Officer
    

 

 

SCHEDULE “A”

 

FORM OF WARRANT CERTIFICATE

 

[For U.S. Persons, persons in the United States or persons for the account or benefit of a U.S. Person or a person in the United States, the following legend is to be inserted:

 

THE SECURITIES REPRESENTED HEREBY AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF TRIBUTE PHARMACEUTICALS CANADA INC. (THE “CORPORATION”) THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE CORPORATION, (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE LOCAL LAWS AND REGULATIONS, (C) IN COMPLIANCE WITH THE EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY (1) RULE 144 THEREUNDER, IF AVAILABLE, OR (2) RULE 144A THEREUNDER, IF AVAILABLE, AND, IN BOTH CASES, IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS, (D) IN ANOTHER TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS, OR (E) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE U.S. SECURITIES ACT, AND, IN THE CASE OF (C)(1) AND (D) ABOVE, AFTER THE SELLER FURNISHES TO THE CORPORATION AN OPINION OF COUNSEL OF RECOGNIZED STANDING IN FORM AND SUBSTANCE SATISFACTORY TO THE CORPORATION TO SUCH EFFECT. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA.]

 

THESE WARRANTS AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THESE WARRANTS MAY NOT BE EXERCISED IN THE UNITED STATES OR BY OR ON BEHALF OF, OR FOR THE ACCOUNT OR BENEFIT OF, A PERSON IN THE UNITED STATES OR A U.S. PERSON UNLESS THESE WARRANTS AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE WARRANTS HAVE BEEN REGISTERED UNDER THE U.S. SECURITIES ACT AND THE APPLICABLE SECURITIES LEGISLATION OF ANY SUCH STATE OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS IS AVAILABLE. “UNITED STATES” AND “U.S. PERSON” ARE AS DEFINED BY REGULATION S UNDER THE U.S. SECURITIES ACT.

 

For the CDS Global Certificate, if any

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF CDS CLEARING AND DEPOSITORY SERVICES INC. (“CDS”) TO TRIBUTE PHARMACEUTICALS CANADA INC. (THE “ISSUER”) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IN RESPECT THEREOF IS REGISTERED IN THE NAME OF CDS & CO., OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CDS (AND ANY PAYMENT IS MADE TO CDS & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CDS), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED HOLDER HEREOF, CDS & CO., HAS A PROPERTY INTEREST IN THE SECURITIES REPRESENTED BY THIS CERTIFICATE HEREIN AND IT IS A VIOLATION OF ITS RIGHTS FOR ANOTHER PERSON TO HOLD, TRANSFER OR DEAL WITH THIS CERTIFICATE.

 

 

TRIBUTE PHARMACEUTICALS CANADA INC.

 

a corporation amalgamated under the laws of the Province of Ontario and having its principal office at

 

151 Steeles Avenue E., Milton, Ontario, L9T 1Y1

 

CUSIP: 89609J122

 

ISIN: CA 89609J1223

 

NO. ·  · WARRANTS

 

Each whole warrant entitling the holder to purchase one (1) common share of Tribute Pharmaceuticals Canada Inc.

 

COMMON SHARE PURCHASE WARRANTS

 

THIS IS TO CERTIFY THAT for value received · (the “Holder”) is the registered holder of the number of warrants (the “Warrants”) stated above and is entitled, for each whole Warrant represented hereby, to purchase one Common Share in the capital of Tribute Pharmaceuticals Canada Inc. (the “Company”) at any time from the date of issue hereof up to and including 4:00 p.m. (Toronto Time) on July 15, 2016 (the “Expiry Time”) by surrendering to Equity Financial Trust Company (the “Warrant Agent”) at its principal transfer office in Toronto, Ontario this Warrant Certificate with a subscription in the form of the attached Subscription Form duly completed and executed and accompanied by payment of CDN$0.90 per share, subject to adjustment as hereinafter referred to (the “Exercise Price”) by certified cheque, money order or bank draft in lawful money of Canada payable to or to the order of the Company at par in Toronto, Ontario. The Holder may purchase less than the number of Common Shares which the Holder is entitled to purchase on the exercise of the Warrants represented by this Warrant Certificate, in which event a new Warrant Certificate representing the Warrants not then exercised will be issued to the holder.

 

The Warrants represented by this Warrant Certificate shall be deemed to have been surrendered and payment by certified cheque, money order or bank draft shall be deemed to have been made, only upon personal delivery thereof or, if sent by post or other means of transmission, upon actual receipt thereof by the Warrant Agent at the office specified above.

 

This Warrant Certificate represents Warrants issued under the provisions of the Warrant Indenture (which indenture together with all other instruments supplemental or ancillary there is referred to herein as the “Warrant Indenture”) dated as of July 15, 2014 between the Company and the Warrant Agent, which contains particulars of the rights of the holders of the Warrants and the Company and of the Warrant Agent in respect thereof and the terms and conditions upon which the Warrants are issued and held, all to the same effect as if the provisions of the Warrant Indenture were herein set forth, to all of which the holder of this Warrant Certificate by acceptance hereof assents. A copy of the Warrant Indenture is available for inspection on the Company’s profile on www.sedar.com or the Company shall, on the written request of the Holder and without charge, provide the Holder with a copy of the Warrant Indenture. Capitalized terms used in this Warrant Certificate and not otherwise defined shall have the meanings ascribed thereto in the Warrant Indenture. In the event of any inconsistency between the provisions of the Warrant Indenture (and any amendments thereto and instruments supplemental thereto) and the provisions of this Warrant Certificate, the provisions of the Warrant Indenture shall prevail.

 

 

Subject to the Warrant Indenture and to any restriction under applicable law or policy of any applicable regulatory body, the Warrants and Warrant Certificates and the rights thereunder shall only be transferable by the registered holder hereof in compliance with the conditions prescribed in the Warrant Indenture and the due completion, execution and delivery of a Transfer Form (as attached hereto) in accordance with the terms of the Warrant Indenture.

 

Upon due exercise of the Warrants represented by this Warrant Certificate and payment of the Exercise Price, the Company shall cause to be issued, within five (5) Business Days after the exercise of Warrants represented by this Warrant Certificate, to the person(s) in whose name(s) the Common Shares so subscribed for are to be issued, the number of Common Shares, as fully paid and non-assessable and certificate(s) representing such Common Shares and such person(s) shall become a holder in respect of such Common Shares with effect from the date of such exercise and upon the due surrender of this Warrant Certificate.

 

The Warrant Indenture provides for adjustment in the number of Common Shares to be delivered upon exercise of the right of purchase hereby granted and to the Exercise Price in certain events therein set forth.

 

The Warrants represented hereby and the Common Shares issuable upon the exercise hereof have not been registered under the United States Securities Act of 1933, as amended (the “1933 Act”), or applicable state securities laws, and the Warrants evidenced by this Warrant Certificate may not be exercised unless the holder hereof provides the Company with a written certification in the form as set forth on the Subscription Form on the reverse side of this Warrant Certificate. Any certificates representing Common Shares issued to, or for the account or benefit of, persons in the United States or “U.S. persons”, as such term is defined in Regulation S under the 1933 Act, shall bear a legend restricting the transfer of such securities under United States federal and state securities laws.

 

The Warrants and the Warrant Indenture shall be governed by and performed, construed and enforced in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein and shall be treated in all respects as Ontario contracts.

 

Time shall be of the essence hereof and of the Warrant Indenture.

 

This Warrant Certificate shall not be valid for any purpose until it has been certified by or on behalf of the Warrant Agent for the time being under the Warrant Indenture.

 

IN WITNESS WHEREOF this Warrant Certificate has been executed on behalf of Tribute Pharmaceuticals Canada Inc. as of the day of , 2014.

 

	
 
    	
TRIBUTE   PHARMACEUTICALS CANADA INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    

 

2

 

This Warrant Certificate represents Warrants referred to in the Warrant Indenture within mentioned. Countersigned:

 

	
 
    	
 
    	
                   EQUITY   FINANCIAL TRUST COMPANY
    
	
 
    	
 
    	
 
    
	
Dated:
    	
 
    	
 
    	
By:
    	
 
    
					

 

3

 

SUBSCRIPTION FORM

 

TO: Equity Financial Trust Company

Suite 401, 200 University Avenue

Toronto, ON M5H 3C6

 

Attention: Manager, Toronto - Corporate Trust Services

 

The undersigned holder of the within Warrants hereby irrevocably subscribes for Common Shares of Tribute Pharmaceuticals Canada Inc. (the “Company”) at the Exercise Price referred to in the attached Warrant Certificate on the terms and conditions set forth in such certificate and the Warrant Indenture and encloses herewith a certified cheque, bank draft or money order payable at par in Toronto, Ontario to the order of Tribute Pharmaceuticals Canada Inc. in payment in full of the subscription price of the number of Common Shares hereby subscribed for.

 

The undersigned represents, warrants and certifies as follows (one (only) of the following must be checked):

 

	
o
    	
A.
    	
the undersigned holder:   (a) at the time of exercise of the Warrant is not in the United States;   (b) is not a “U.S. person”, as defined in Regulation S under the United   States Securities Act of 1933, as amended (the “U.S. Securities Act”), and is not exercising the Warrants on   behalf of a U.S. person or a person in the United States; (c) did not   execute or deliver this exercise form in the United States; and (d) has   in all other aspects complied with the terms of Regulation S under the U.S.   Securities Act.
    
	
 
    	
 
    	
 
    
	
o
    	
B.
    	
the undersigned holder:   (a) purchased Units directly from the Company for its own account or the   account of another institutional “accredited investor”, that one or more of   the criteria set forth in Rule 501(a)(1), (2), (3) or (7) of   Regulation D under the U.S. Securities Act (an “Institutional Accredited Investor”), pursuant to an executed   U.S. QIB letter or U.S. subscription agreement for the purchase of Units of   the Company; (b) is exercising the Warrants solely for its own account   or the account of such other Institutional Accredited Investor for whose   account such holder exercises sole investment discretion; (c) was an   Institutional Accredited Investor, both on the date the Units were purchased   from the Company and on the date of the exercise of the Warrants; and   (d) if the Warrants are being exercised on behalf of another person, the   undersigned holder represents, warrants and certifies that such person was   the beneficial purchaser for whose account the undersigned holder originally   acquired Units upon the exercise of which the Warrants were acquired and was   an Institutional Accredited Investor, both on the date the Units were   purchased from the Company and on the date of the exercise of the Warrants;   or
    
	
 
    	
 
    	
 
    
	
o
    	
C.
    	
the undersigned holder   has delivered to the Company an opinion of counsel (which will not be   sufficient unless it is from counsel of recognized standing and in form and   substance satisfactory to the Company) to the effect that an exemption from   the registration requirements of the U.S. Securities Act and applicable state   securities laws is available.
    

 

Notes:

 

	
1. 
    	
Certificates will not   be registered or delivered to an address in the United States unless Box B or   C above is checked.
    

 

 

	
2. 
    	
If Box B or C are   checked, the certificate representing the Common Shares will bear a legend   restricting transfer without registration under the United Securities Act of   1933, as amended and applicable state securities laws unless an exemption   from registration is available.
    
	
 
    	
 
    
	
3. 
    	
If Box C above is   checked, holders are encouraged to consult with the Company in advance to   determine that the legal opinion tendered in connection with the exercise   will be satisfactory in form and substance to the Company.
    

 

The undersigned hereby directs that the said Common Shares be issued as follows:

 

	
Name(s) in full
    	
Address(es)

(including Postal Code)
    	
Number(s) of

Common Shares
    

 

(please print)

 

DATED this      day of              , 20  .

 

	
 
    	
 
    
	
Signature Guaranteed   Name of Warrantholder
    	
 
    
	
 
    	
 
    
	
Name of Authorized   Representative Signature of Warrantholder or Authorized
    	
 
    

 

Representative

 

(Print Name of Subscribers)

 

	
 
    	
 
    
	
Title or Capacity of   Authorized Daytime Phone Number of Warrantholder or
    	
 
    

 

	
 
    	
Representative   Authorized Representative
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(Address of Subscriber   in full)
    

 

	
o
    	
Please check this box   if the securities are to be picked up at the office where the Warrant   Certificate is surrendered, failing which the securities will be mailed to   the address indicated above.
    

 

Instructions:

 

The signature of the Warrantholder must be the signature of the registered holder appearing on the face of this Warrant Certificate.

 

If this Subscription Form is signed by a trustee, executor, administrator, curator, guardian, attorney, officer of a corporation or any person acting in a fiduciary or representative capacity, this Subscription Form must be accompanied by evidence of authority to sign satisfactory to the Warrant Agent and the Company, acting reasonably.

 

The signature on this Subscription Form must be guaranteed by a major Canadian chartered bank, medallion guaranteed by a recognized medallion signature guarantee program or in any other manner satisfactory to the Warrant Agent. The guarantor must affix a stamp bearing the actual words “Signature Guaranteed”. Signature guarantees are not accepted from Treasury Branches or credit unions unless they are members of the Stamp Medallion Program. In the United States, signature guarantees must be done by members of the “Medallion Signature Guarantee Program” only.

 

2

 

If securities are to be issued to a person other than the registered holder, the Subscription Form must be completed and the holder must pay or cause to be paid to the Company all applicable transfer or similar taxes, if any, and the Company shall not be required to issue or deliver certificates evidencing the Common Shares and, if applicable, the Warrants, unless and until such holder shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid or that no tax is due.

 

The Warrants will expire at 4:00 p.m. (Toronto Time) on July 15, 2016 and must be exercised before that time, otherwise the same shall expire and be void and of no value.

 

3

 

TRANSFER FORM

 

ANY TRANSFER OF WARRANTS WILL REQUIRE COMPLIANCE WITH APPLICABLE SECURITIES LEGISLATION. TRANSFERORS AND TRANSFEREES ARE URGED TO CONTACT LEGAL COUNSEL BEFORE EFFECTING ANY SUCH TRANSFER.

 

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

 

	
 
    	
 
    	
 
    
	
 
    	
(the “Transferee”),
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
(Residential   Address of Transferee),
    	
 
    

 

Warrants of Tribute Pharmaceuticals Canada Inc. (the “Company”) registered in the name of the undersigned on the records of the Company represented by the within Warrant Certificate, and irrevocably appoints                         as the attorney of the undersigned to transfer the said securities on the books or register of transfer, with full power of substitution.

 

In connection with this transfer, the undersigned transferee hereby represents, warrants and certifies that it (i) is not a “U.S. person” (as defined in Rule 902(k) of Regulation S under the United States Securities Act of 1933, as amended, the “U.S. Securities Act”), (ii) at the time of transfer is not within the United States, and (iii) is not acquiring any of the Warrants represented by this Warrant Certificate by or on behalf of any U.S. Person or person within the United States, unless registered under the U.S. Securities Act and any applicable state securities laws or unless an exemption from such registration is available.

 

DATED the        day of                  , 20  .

 

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

 

	
 
    
	
Name of Authorized   Representative Signature of Holder, to be the same as appears
    
	
 
    	
 
    
	
 
    	
on the face of this   Warrant Certificate
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Print Name
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Address
    

 

 

Instructions:

 

If this Transfer Form is signed by a trustee, executor, administrator, curator, guardian, attorney, officer of a corporation or any person acting in a fiduciary or representative capacity, this Transfer Form must be accompanied by evidence of authority to sign satisfactory to the Warrant Agent and the Company, acting reasonably.

 

The signature on this Transfer Form must be guaranteed by a major Canadian chartered bank, medallion guaranteed by a recognized medallion signature guarantee program or in any other manner satisfactory to the Warrant Agent. The guarantor must affix a stamp bearing the actual words “Signature Guaranteed”. Signature guarantees are not accepted from Treasury Branches or credit unions unless they are members of the Stamp Medallion Program. In the United States, signature guarantees must be done by members of the “Medallion Signature Guarantee Program” only.

 

2

 

SCHEDULE “B”

FORM OF DECLARATION FOR REMOVAL OF U.S. LEGEND

 

FORM OF DECLARATION FOR REMOVAL OF LEGEND

 

TO:    Equity Financial Trust Company

 

        as registrar and transfer agent for Common Shares and Warrants of

 

        Tribute Pharmaceuticals Canada Inc.

 

The undersigned (a) acknowledges that the sale of the securities of TRIBUTE PHARMACEUTICALS CANADA INC. (the “Company”) 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 “U.S. Securities Act”) and (b) certifies that (1) the undersigned is not an “affiliate” (as that term is defined in Rule 405 under the U.S. Securities Act) of the Company, (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 TSX Venture Exchange, the Toronto Stock Exchange or any other designated offshore securities market 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 U.S. Securities Act), (5) the seller does not intend to replace such securities with fungible unrestricted securities of the Company, and (6) the contemplated sale is not a transaction, or part of a series of transactions which, although in technical compliance with Regulation S under the U.S. Securities Act, is part of a plan or scheme to evade the registration provisions of the U.S. Securities Act. Terms used herein have the meanings given to them by Regulation S under the U.S. Securities Act.

 

	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name of Seller
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Title:Exhibit 4.11

 

EXHIBIT B

 

UNSECURED CONVERTIBLE PROMISSORY NOTE

 

	
Cdn. $5,000,000
    	
Due:   June 16, 2016
    

 

ARTICLE 1

PRINCIPAL AND PAYMENT

 

Section 1.1 Principal Sum and Repayment. For value received Tribute Pharmaceuticals Canada Inc. (the “Corporation”), a corporation incorporated under the laws of Ontario, having its head office at the address set out in Section 4.2 hereof, shall pay to the order of Nidhi Nijhawan (the “Holder”) the sum of $5,000,000 (the “Principal Sum”) in lawful money of Canada at the office of the Holder at the address set out in Section 4.2 hereof or such other place as the Holder may designate. The Principal Sum and all accrued interest thereon, unless converted into common shares in the capital of the Corporation (the “Common Shares”) in accordance with ARTICLE 3 hereof, shall be payable on June 16, 2016 (the “Maturity Date”).

 

Section 1.2 Interest. The Principal Sum outstanding from time to time shall bear interest before maturity, default and judgment, from and including the date hereof to the date of repayment, at the rate of 8% per annum with interest on any and all overdue interest after maturity, default and judgment at the same rate, compounded in the same manner.

 

ARTICLE 2

INTERPRETATION

 

Section 2.1 Definitions.

 

As used herein the following expressions shall have the following meanings:

 

“Common Shares” has the meaning ascribed to such term in Section 1.1;

 

“Conversion Notice” has the meaning ascribed to such term in Section 3.3;

 

“Conversion Rate” has the meaning ascribed to such term in Section 3.1;

 

“Corporate Reorganization” means, in respect of a corporation, any transaction whereby all or substantially all of its undertaking, property and assets would become the property of any other person whether by way of arrangement, reorganization, consolidation, amalgamation, merger, continuance under any other jurisdiction of incorporation or otherwise;

 

1

 

“Corporation” has the meaning ascribed to such term in Section 1.1;

 

“Holder” has the meaning ascribed to such term in Section 1.1;

 

“Liquidation Event” means: (i) the sale of all or substantially all of the assets or shares of the Corporation; (ii) a liquidation, dissolution or winding-up of the Corporation; (iii) a merger of the Corporation with another entity in which the shareholders of the Corporation do not retain at least 50% of the voting rights of the merged entity; (iv) an initial public offering by the Corporation; and (v) any transaction which results in an exclusive license of all or a substantial portion of the Corporation’s intellectual property to a third party;

 

“Maturity Date” means June 16, 2016; and

 

“Principal Sum” has the meaning ascribed to such term in Section 1.1.

 

Section 2.2 Interpretation.

 

2.2.1                                                                   “This Promissory Note”, “hereto”, “hereby”, “hereunder”, “herein”, and similar expressions refer to the whole of this Promissory Note and not to any particular Article, Section, Subsection, paragraph, clause, subdivision or other portion hereof.

 

2.2.2                                                                   Words importing the singular number only include the plural and vice versa and words importing gender shall include all genders.

 

2.2.3                                                                   The division of this Promissory Note into Articles and Sections and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Promissory Note.

 

2.2.4                                                                   References to sums of money herein are to Canadian dollars, unless otherwise specified.

 

2.2.5                                                                   Time is of the essence hereof.

 

2.2.6                                                                   Where the word “including” or “includes” is used in this Promissory Note, it means “including (or includes) without limitation”.

 

Section 2.3 Governing Law. This Promissory Note shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.

 

2

 

ARTICLE 3

CONVERSION OF PROMISSORY NOTE

 

Section 3.1 Conversion Rights.

 

(a)                                                                                 The Holder shall have the right, at his option, immediately prior to a Liquidation Event (other than a Liquidation Event itemized in subsection (ii) of the definition thereof), to convert all or some of the outstanding Principal Sum and accrued interest thereon into Common Shares at the Conversion Rate by giving a written notice to the Corporation as provided in ARTICLE 4. The “Conversion Rate” means one Common Share for each $1.777 of such amount converted, subject to adjustment, from time to time, in accordance with this ARTICLE 3.

 

(b)                                                                                 Holder shall have the right, at his option, to be exercised prior to May 16, 2016, to convert all or some of the outstanding Principal Sum and accrued interest thereon into Common Shares at the Conversion Rate by giving a written notice to the Corporation as provided in ARTICLE 4. In the event that Holder does not exercise his conversion rights as aforesaid, the Corporation shall repay the Obligations on the Maturity Date.

 

Section 3.2 Reclassification of Common Shares. In the case of any reclassification of the Common Shares at any time outstanding (other than any subdivision or consolidation of Common Shares into a greater or lesser number of Common Shares) or change of the Common Shares into some other shares, in case of a Corporate Reorganization of the Corporation (other than a Corporate Reorganization which does not result in a reclassification of the outstanding Common Shares or a change of the Common Shares into some other shares), all only as permitted hereunder, the Holder shall be entitled to receive upon conversion, and shall accept, in lieu of the number of Common Shares to which he was theretofore entitled upon such conversion, the kind and amount of shares and other securities or property which such Holder would have been entitled to receive as a result of such Corporate Reorganization if, on the effective date thereof, he had been the registered holder of the number of Common Shares to which he was theretofore entitled upon conversion. If necessary, appropriate adjustments shall be made in the application of the provisions set forth in this ARTICLE 3 with respect to the rights and interests thereafter of the Holder to the end that the provisions set forth in this ARTICLE 3 shall thereafter correspondingly be made applicable as nearly as may be possible in relation to any shares or other securities or property thereafter deliverable upon the conversion of this Promissory Note. Any such adjustments shall be made by and set forth in a supplemental agreement hereto approved by the board of directors of the Corporation and shall for all purposes be conclusively deemed to be an appropriate adjustment.

 

Section 3.3 Manner of Exercise of Right to Convert. The Holder may exercise his right to convert in accordance with the provisions of Section 3.1 by sending to the Corporation at its principal address a notice (the “Conversion Notice”) exercising his right to convert in accordance with the provisions of this ARTICLE 3. The Holder shall be entitled to be entered in the books of the Corporation as at the date of the Conversion Notice as the holder of the number of Common Shares or other shares, as the case may be, into which the Promissory Note is convertible in accordance with the provisions of this ARTICLE 3 and within 10 business days of the conversion, the Corporation shall deliver to the Holder a certificate or certificates for such Common Shares or other shares, as the case may be.

 

3

 

Section 3.4 Adjustment of Conversion Rate.

 

3.4.1                                                                     The Conversion Rate in effect at any date shall be subject to adjustment from time to time as provided in this Section 3.4, with the proviso that the events giving rise to an adjustment be only as permitted hereunder.

 

3.4.2                                                                     If and whenever the Corporation shall (i) subdivide or redivide the outstanding Common Shares into a greater number of shares; (ii) reduce, combine or consolidate the outstanding Common Shares into a smaller number of shares; or (iii) issue any Common Shares of the Corporation to the holders of all or substantially all of the outstanding Common Shares by way of a stock dividend (other than any stock dividends constituting dividends paid in the ordinary course), the number of Common Shares which may be acquired pursuant to Section 3.1 in effect on the effective date of such subdivision, redivision, reduction, combination or consolidation or on the record date for such issue of Common Shares by way of a stock dividend, as the case may be, shall be increased, in the case of the events referred to in (i) and (iii) above, in the proportion which the number of Common Shares outstanding before such subdivision, redivision or dividend bears to the number of Common Shares outstanding after such subdivision, redivision or dividend, or shall be decreased, in the case of the events referred to in (ii) above, in the proportion which the number of Common Shares outstanding before such reduction, combination, or consolidation bears to the number of Common Shares outstanding after such reduction, combination or consolidation, and the Conversion Rate shall be adjusted accordingly. Any such issue of Common Shares by way of a stock dividend shall be deemed to have been made on the record date fixed for such stock dividend for the purpose of calculating the number of outstanding Common Shares under this Subsection 3.4.2 or Subsection 3.4.4.

 

3.4.3                                                                     In the case of any reclassification (other than a reclassification referred to in Section 3.4.2) of, or other change in, the outstanding Common Shares into which this Promissory Note is convertible other than a subdivision, redivision, reduction, combination or consolidation, the number of Common Shares which may be acquired pursuant to Section 3.1 and the Conversion Rate shall be adjusted in such manner as the board of directors of the Corporation, acting reasonably, determine to be appropriate on a basis consistent with this Section 3.4.

 

3.4.4                                                                     The Corporation shall from time to time immediately after the occurrence of any event which requires an adjustment or re-adjustment as provided in this Section 3.4, deliver a certificate of the Corporation to the Holder specifying the nature of the event requiring the same and the amount of the adjustment necessitated thereby and setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based, which certificate and the amount of the adjustment specified therein shall be verified by the Corporation’s Chief Executive Officer.

 

4

 

3.4.5                                                                     If any question arises with respect to the adjustments provided in this Section 3.4, such question shall be conclusively determined by a firm of chartered accountants (who may not be the Corporation’s auditors) appointed by the Corporation. Such chartered accountants shall have for such purposes access to all necessary records of the Corporation and such determination shall be binding upon the Corporation and the Holder. All costs in this regard shall be borne by the Corporation in the event the certificate provided pursuant to Section 3.4.4 is determined in accordance with this Section to be materially incorrect but otherwise by the Holder.

 

3.4.6                                                                     In the event that one or more adjustments in the conversion feature of the Common Shares as contemplated in the share attributes of the Common Shares occurs prior to the date of conversion of this Promissory Note, the Holder shall be entitled to the full benefit of any such adjustments following the date hereof upon conversion of this Promissory Note as if the Holder were a holder of Common Shares received upon exercise immediately prior to the time of the first to occur of such adjustments and thereafter, and the number and kind of securities issuable upon conversion of this Promissory Note shall be adjusted accordingly.

 

Section 3.5 No Requirement to Issue Fractional Shares. The Corporation shall not issue fractional shares upon conversion but shall issue the next highest whole number of shares otherwise to be issued after all necessary calculations in this ARTICLE 3 have been completed.

 

Section 3.6 Notice of Special Matters. The Corporation shall give notice to the Holder, in the manner provided in ARTICLE 4, of its intention to fix a record date for any event mentioned in Section 3.4 which may give rise to an adjustment in the number of Common Shares which may be acquired pursuant to Section 3.1, and, in each case, such notice shall specify the particulars of such event and the record date and the effective date for such event; provided that the Corporation shall only be required to specify in such notice such particulars of such event as shall have been fixed and determined on the date on which such notice is given. Such notice shall be given not less than 14 days prior to such applicable record date.

 

Section 3.7 Share Certificate Legend. The following legend shall be imprinted on the face of the certificate(s) (or if the face of the certificate has insufficient space, on the back of the certificate(s) with a reference on the face of the certificate to the legend) to be issued to the Holder upon the exercise of the Holder’s conversion rights set out above:

 

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE OCTOBER 17, 2015.

 

5

 

ARTICLE 4

GENERAL

 

Section 4.1 Waiver. No act or omission by the Holder in any manner whatever shall extend to or be taken to affect any provision hereof or any subsequent breach or default or the rights resulting therefrom save only express waiver in writing. A waiver of default shall not extend to, or be taken in any manner whatsoever to affect the rights of the Holder with respect to, any subsequent default, whether similar or not. The Corporation waives every defence based upon any or all indulgences that may be granted by the Holder.

 

Section 4.2 Notices. Any demand, notice or other communication to be given pursuant to or in connection with this Promissory Note shall be in writing and given by delivering, or sending it by telecopier or other similar form of telecommunication, addressed to the recipient as follows:

 

if to the Holder:

 

[**](1)

 

Email: [**](2)

 

and if to the Corporation:

 

Tribute Pharmaceuticals Canada Inc.

151 Steeles Avenue East

Milton, ON L9T 1Y1

 

Attention: [**](3)

E-mail: [**](4)

 

with a copy to:

 

DLA Piper (Canada) LLP

100 King Street West, Suite 6000

1 First Canadian Place

Toronto, ON M5X 1E2

 

(1) [**] - Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

 

(2) [**] - Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

 

(3) [**] - Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

 

(4) [**] - Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

 

6

 

Attention: [**](5)

 

E-mail: [**](6)

 

or such other address most recently specified by such party by notice given in accordance with this Section 4.2 to the party hereto giving the notice or written communication. Any notice, demand or communication pursuant to or relating to this Promissory Note shall be conclusively deemed to be given and received, if delivered, on the day on which it is delivered to the address of the party to be notified or, if given by telecopier or other similar form of telecommunication, on the next business day following such transmission.

 

Section 4.3 Invalidity of any Provisions. Any provision of this Promissory Note which is prohibited by the applicable law of any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition without invalidating the remaining terms and provisions hereof.

 

Section 4.4 Successors and Assigns, etc. This Promissory Note may not be assigned by the Holder without the prior written consent of the Corporation. This Promissory Note and all its provisions shall enure to the benefit of the Holder, his legal and personal representatives and shall be binding upon the Corporation, its successors and permitted assigns.

 

Section 4.5 Amendments. This Promissory Note may only be amended by a written agreement signed by the Corporation and the Holder.

 

Section 4.6 [**](7)

 

[Balance of page left blank intentionally]

 

(5) [**] - Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

(6) [**] - Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

(7) [**] - Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portion.

 

7

 

IN WITNESS WHEREOF this Promissory Note has been executed by the Corporation this 16th day of June, 2015.

 

	
 
    	
TRIBUTE   PHARMACEUTICALS CANADA INC.
    
	
 
    	
 
    	
 
    
	
 
    	
Per:
    	
/s/   Robert Harris
    
	
 
    	
 
    	
Name: Robert Harris
    
	
 
    	
 
    	
Title: President
    

 

8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00253-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00253-of-00352.parquet"}]]