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EXHIBIT 4.2(e) 

	 	AMENDMENT NO. 5 dated as of June 30, 2006
      
(this “Amendment”) to the LOAN AND
      
SECURITY AGREEMENT dated as of July 15,
      
2003, as amended by Amendment No. 1 dated as of
      
November 4, 2003, Amendment No. 2 dated as of
      
August 3, 2004, Amendment No. 3 dated as of
      
October 14, 2005 and Amendment No. 4 dated as of
      
December 15, 2005 (as the same may be further
      
amended, supplemented or otherwise modified,
      
renewed or replaced from time to time, the
      “Credit
      
Agreement”), by and
      among BELROSE CAPITAL 
FUND LLC, a Delaware
      limited liability company 
(the “Borrower”), the Lenders referred to
      therein, 
Merrill Lynch Mortgage Capital, Inc., a
      Delaware 
corporation, as agent (the
      “Agent”) and Merrill
      
Lynch Capital Services, Inc., a Delaware
      
corporation (the “Swap
      Provider”).

WHEREAS, on July 15, 2003, the Borrower, the
Lenders, the Agent and the Swap Provider entered into the Credit Agreement
pursuant to which the Lenders made available to the Borrower a revolving credit
facility in the aggregate principal amount of $57,000,000, which was
subsequently increased to $182,000,000; 

WHEREAS, the Borrower has requested the Required
Lenders to increase the amount of the revolving credit facility by $60,000,000
to an aggregate principal amount of $242,000,000; 

WHEREAS, the Borrower has requested and the Required
Lenders have agreed, subject to the terms and conditions of this Amendment, to
amend certain provisions of the Credit Agreement, as set forth
herein;

NOW, THEREFORE, in consideration of the premises and
of the mutual agreements herein contained, the parties hereto agree as follows:

SECTION 1. Amendments. Subject to the satisfaction of the
conditions precedent set forth in Section 3 hereof, the Credit Agreement is
hereby amended as of the Effective Date (as defined in Section 3 hereof) as
follows: 

(A) Article 1 of the Credit Agreement is hereby amended by amending and
restating the following definition in its entirety to read as follows:

“‘Maximum Loan
Amount’ shall mean $242,000,000.” 

(B) Schedule 1.1 of the Credit Agreement is hereby amended by deleting the
figure “$182,000,000” and inserting the figure “$242,000,000” in lieu thereof.

SECTION 2. Representations
and Warranties. The Borrower hereby represents and
warrants that: 

(A) after
giving effect to this Amendment, the representations and warranties contained in
the Credit Agreement are true and correct in all material respects on and as of
the date hereof as if such representations and warranties had been made on and
as of the date hereof (except to the extent that any such representations and
warranties specifically relate to an earlier date); and 

(B) after
giving effect to this Amendment, no Event of Default or Default will have
occurred and be continuing on and as of the date hereof. 

SECTION 3. Conditions
Precedent. The effectiveness of this Amendment is
subject to the satisfaction in full of each of the conditions precedent set
forth in this Section 3 (the date on which all such conditions have been
satisfied being herein called the “Effective Date”): 

(A) the
Agent shall have received executed counterparts of this Amendment which, when
taken together, bear the signatures of the Required Lenders and the Borrower;

(B) the
Agent shall have received a new Note executed by the Borrower in an aggregate
principal amount of $242,000,000 to be exchanged for and replace the prior Note
delivered by the Borrower in an aggregate principal amount of $182,000,000;

(C) the
Borrower shall have received from the Agent the prior Note in an aggregate
principal amount of $182,000,000 for cancellation; 

(D) the
Agent shall have received the written opinion of counsel to the Borrower, dated
the date hereof and addressed to the Agent, in form and substance satisfactory
to counsel to the Agent; 

(E) the
Agent shall have received such other documents as the Agent may reasonably
request; and 

(F) all
legal matters incident to this Amendment shall be satisfactory to counsel to the
Agent. 

(G) Miscellaneous.

(H) Capitalized terms used herein and not otherwise defined herein shall
have the meanings as defined in the Credit Agreement. 

2

(I) Except
as expressly amended hereby, the Credit Agreement shall remain in full force and
effect in accordance with the original terms thereof. 

(J) The
amendments herein contained are limited specifically to the matters set forth
above and do not constitute directly or by implication an amendment or waiver of
any other provision of the Credit Agreement or any default which may occur or
may have occurred under the Credit Agreement. 

(K) This
Amendment may be executed in any number of counterparts, each of which shall
constitute an original, but all of which when taken together shall constitute
one and the same instrument. 

(L) This
Amendment shall constitute a Fundamental Document. 

(M) This
Amendment shall be governed by, and construed in accordance with, the laws of
the State of New York. 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

3

     IN WITNESS WHEREOF,
the undersigned have caused this Amendment to be duly executed as of the date
first written above. 

	Borrower:  	  	 
	  	 
    
	  
	BELROSE CAPITAL FUND LLC, as
      Borrower  
	  
	By:  	  	EATON VANCE MANAGEMENT, as 
  
	 
	  	Manager  	  	 
    
	  
	  
	By:                                                
      /s/ Andrew Frenette 
  
	Name:  	  	Andrew Frenette  
	Title:  	  	Vice President  
	Address:  	  	The Eaton Vance Building 

	 
	  	 
	  	255 State Street  
	 
	  	 
	  	Boston, Massachusetts 02109 
  
	Telephone No.:  	  	(617) 482-8260  
	Telecopier No.:  	  	(617) 482 3836  

	Lenders:  	  	 
	  	 
    
	  
	MERRILL LYNCH MORTGAGE
      CAPITAL,  
	INC., individually and as
      Agent  
	  
	By:                                                      
      /s/ Joshua A. Green 
  
	Name:  	  	Joshua A. Green  
	Title:  	  	Vice President  
	Address:  	  	4 World Financial Center 

	 
    	  	10th Floor  
	 
    	  	New York, New York 10080 

	Telephone No.:  	  	(212) 449-7330  
	Telecopier No.:  	  	(212) 449-6673  

	Swap Provider:  	  	 
    
	  
	MERRILL LYNCH CAPITAL SERVICES,
      INC.,  
	as Swap Provider  
	  
	By:                                                
      /s/ Joshua A. Green 
  
	Name:  	  	Joshua A. Green  
	Title:  	  	Vice President  
	Address:  	  	4 World Financial Center 

	 
    	  	12th Floor  
	 
    	  	New York, New York 10080 

	Telephone No.:  	  	(212) 449-8169  
	Telecopier No.:  	  	(212) 449-6993exv10w43

 

	 	 	 	 	 	 	 
	 
	 	 
	 	 	 	 

			
	 	 	 
	<Date>
	 	EXHIBIT 10.43

To:
«FIRST_NAME» «LAST_NAME»

Personal and Confidential

Re: Notification of Stock Option Grant

I am pleased to inform you that the Board of Directors has approved the granting to you of an
option (the “Option”) to purchase «AMOUNT» common shares of the Company’s common stock (the “Optioned
Shares”) at an exercise price of <price> (the “Exercise Price”), effective <grant date>
(the “Grant Date”), in recognition of your contribution to the Company. The Option will expire five
years from the Grant Date, on <grant date + 5 yrs> (the “Expiry Date”).

The terms and conditions which govern this Option are set out in three places: in this letter (the
“Notification Letter”), in the attached schedule which sets out general terms and conditions
relating to option grants to Company employees (the “General Terms”), and in the 2000 QLT
Incentive Stock Option Plan (the “Plan”) from which your Option has been granted.

By signing this letter where indicated, you and the Company agree that the Option is granted under
and governed by the terms and conditions of this Notification Letter, the General Terms and the
Plan, all of which together constitute the agreement (the “Agreement”), between you and the Company
relating to the Option.

Please confirm receipt of this Notification Letter by signing both copies, and returning one copy
to the Human Resources department, attention Vivian Jung, as soon as possible. You may keep the
second copy for your personal records.

In the event that you do not return this Notification Letter signed, you will be deemed to have
accepted the Agreement upon the exercise by you of the Option in respect of any Optioned Share(s).

Yours truly,

QLT Inc.

Per:

Senior Vice-President, Human Resources and Organizational Development

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Accepted and agreed to:

	 	 	 	Date:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 	 	 

 

 

GENERAL TERMS AND CONDITIONS

STOCK OPTION GRANTS TO SENIOR EMPLOYEES AND EXECUTIVES

	1.	 	Defined Terms. All capitalized terms which are not defined in the Notification Letter or
below have the meaning given to them in the Plan.
	 
	2.	 	Term. Subject to the terms and conditions of the Agreement and the terms of the Plan, the
Option will terminate on the earlier of:

	 	(a)	 	The date on which the Option is exercised with respect to all of the Optioned
Shares; and
	 
	 	(b)	 	5:00 p.m. (Vancouver time) on the Expiry Date.

	3.	 	Vesting. Subject to the terms and conditions of the Agreement, the Optioned Shares will vest
and become exercisable in 36 equal monthly instalments on the monthly anniversary of the Grant
Date (the “Vesting Date”), provided that, if the number of Optioned Shares is not equally
divisible by 36, at each Vesting Date the cumulative number of Optioned Shares vested will be
rounded to the nearest whole number.
	 
	4.	 	Exercise of Options.

	 	(a)	 	Exercise Notice. The employee to whom the Option has been granted may
exercise the Option in respect of vested Optioned Shares by giving three days’ (or
less, in the sole discretion of the Company) written notice of exercise (the “Exercise
Notice”) signed and dated by the Optionee (and not postdated), stating that the
Optionee elects to exercise his or her rights to purchase Optioned Shares under the
Option and specifying the number of Optioned Shares in respect of which the Option is
being exercised.
	 
	 	(b)	 	Delivery and Payment. The Optionee shall deliver the Exercise Notice
to the Company at its principal office at 887 Great Northern Way, Vancouver, British
Columbia, Canada, V5T 4T5 (or at such other address as the principal office of the
Company may be located at the time of exercise) addressed to the attention of the
secretary or assistant secretary of the Company (or a designee notified in writing
from time to time by the Company) and be accompanied by full payment (payable at par
in Vancouver, British Columbia) in any combination of the following:

	 	(i)	 	cash, bank draft or certified cheque; or
	 
	 	(ii)	 	irrevocable instructions to:

	 	(A)	 	a brokerage firm designated by the Company to deliver
promptly to the Company the aggregate amount of sale or loan proceeds to pay
the Option exercise price and any withholding tax obligations (if applicable)
that may arise in connection with the exercise, and
	 
	 	(B)	 	the Company to deliver the certificates for such purchased shares directly to the brokerage firm,

 

 

	 	 	 	all in accordance with the regulations of any relevant regulatory authorities.
	 
	 	(c)	 	Certificate. As soon as practicable after any exercise of the Option,
the Company will deliver or cause to be delivered to the Optionee or the Optionee’s
designated brokerage firm, as applicable, a certificate or certificates representing
the Common Shares in respect of which the Option is exercised.

	5.	 	Rules Upon Retirement, Death, Disability or Termination. The Option will terminate on the
earlier of the 90th day after the date on which the Optionee ceases to be an employee of the
Company or its Affiliates or the expiry of the Option, provided that:

	 	(a)	 	Retirement. If the Optionee ceases to be an employee of the Company
or any Affiliate by reason of retirement (the date of retirement or cessation herein
being called the “retirement date”) and:

	 	(i)	 	the Optionee:

	 	(A)	 	has worked on behalf of the Company or any Affiliate for at
least 20 years, or
	 
	 	(B)	 	is at least 60 years of age and has worked continuously on
behalf of the Company or any Affiliate for at least five years,

	 	 	 	then all Optioned Shares of the Optionee will become immediately vested and will be
exerciseable on and after the retirement date until the expiry of the Option; or
	 
	 	(ii)	 	the Optionee has received the consent of the Committee at or after an
earlier age and upon completion of that number of years of service as the
Committee may specify, then all Optioned Shares of the Optionee will become
immediately vested and will be exerciseable on and after the retirement date,
during a period of the earlier of:

	 	(A)	 	90 days following the retirement date, or
	 
	 	(B)	 	the expiry of the Option,

	 	 	 	unless otherwise determined by the Committee and approved by the Exchange (if
applicable).
	 
	 	(b)	 	Death. If the Optionee dies while the Option is otherwise
exerciseable, unless otherwise determined by the Committee and approved by the
Exchange (if applicable), all Optioned Shares of the Optionee will become immediately
vested and will be exerciseable by the legal personal representatives of the estate of
the Optionee during a period of the earlier of:

	 	(i)	 	12 months following the date of death, or
	 
	 	(ii)	 	the expiry of the Option.

 

 

	 	(c)	 	Disability. If the Optionee has his or her Continuous Status as an
employee of the Company or any Affiliate terminated as a result of the Optionee’s
complete disability, as determined by the Committee in its sole discretion, unless
otherwise determined by the Committee and approved by the Exchange (if applicable),
the Optioned Shares will become immediately vested and will be exerciseable by the
Optionee (or in the case of an Optionee who is legally incapacitated, by his or her
guardians or legal representatives) during the period ending on the earlier of:

	 	(i)	 	12 months following the date of such termination, or
	 
	 	(ii)	 	the expiry of the Option.

	 	(d)	 	Termination.

	 	(i)	 	If the Optionee is terminated by the Company (which, for greater
certainty, excludes a resignation of the Optionee) as an employee of the Company
or any Affiliate other than for cause (the date of termination herein being called
the “termination date”), unless otherwise determined by the Committee and approved
by the Exchange (if applicable), one-half of the previously unvested Optioned
Shares of the Optionee will become immediately vested and all of the Optioned
Shares which have vested will be exercisable on and after the termination date,
for the period ending on the earlier of:

	 	(A)	 	90 days following the termination date, or
	 
	 	(B)	 	the expiry of the Option.

	 	(ii)	 	If the Optionee is terminated by the Company as an employee of the
Company or any Affiliate for cause, unless otherwise determined by the Committee
and approved by the Exchange (if applicable), the Option will expire automatically
on the date that the Optionee ceases to be an employee of the Company or any
Affiliate.

	 	 	The Optioned Shares will cease to vest (on a monthly basis or at all) after the date on
which the Optionee ceases to be an employee of the Company.
	 
	6.	 	Change in Control.

	 	(a)	 	Definitions. For the purposes of this Section, “Change in Control”
means any of the following events:
	 
	 	(i)	 	Merger. A merger, consolidation, reorganization or arrangement involving the
Company other than a merger, consolidation, reorganization or arrangement in which
stockholders of the Company immediately prior to such merger, consolidation,
reorganization or arrangement own, directly or indirectly, securities possessing at
least 65% of the total combined voting power of the outstanding voting securities of
the corporation resulting from such merger, consolidation, reorganization or
arrangement in substantially the same proportion as their ownership of such voting
securities immediately prior to such merger, consolidation, reorganization or
arrangement;

 

 

	 	(ii)	 	Tender Offer. The acquisition, directly or indirectly, by any person or group
of persons acting jointly or in concert (other than the Company or a person that
directly or indirectly controls, is controlled by, or is under common control with,
the Company) of beneficial ownership of securities possessing more than 35% of the
total combined voting power of the Company’s outstanding securities pursuant to a
tender offer (which for greater certainty, includes a takeover bid) made directly to
the Company’s stockholders;

	 	(iii)	 	Sale. The sale, transfer or other disposition of all or substantially all of
the assets of the Company other than a sale, transfer or other disposition to an
Affiliate of the Company or to an entity in which stockholders of the Company
immediately prior to such sale, transfer or other disposition own, directly or
indirectly, securities possessing at least 65% of the total combined voting power of
the outstanding voting securities of the purchasing entity in substantially the same
proportion as their ownership of such voting securities immediately prior to sale,
transfer or other disposition; or
	 
	 	(iv)	 	Board Change. A change in the composition of the Board over a period of 24
consecutive months or less such that a majority of the Board members ceases to be
comprised of individuals who either have been:

	 	(A)	 	Board members continuously since the beginning of such period, or
	 
	 	(B)	 	appointed or nominated for election as Board members during
such period by at least a majority of the Board members described in
subsection (A) above who were still in office at the time the Board approved
such appointment or nomination.

	 	(b)	 	Acceleration. Immediately upon the occurrence of a Change in Control,
all Optioned Shares of the Optionee will become immediately vested and will be
exercisable on and after the date of the Change of Control until the expiry of the
Option.

	7.	 	Conditions to Exercise. Notwithstanding any of the provisions of the Agreement, the Company’s
obligation to issue Common Shares to the Optionee upon exercise of the Option is subject to
the following:

	 	(a)	 	Qualification. Completion of registration or other qualification of
the Common Shares or obtaining approval of such governmental authority as the Company
determines is necessary or advisable in connection with the authorization, issuance or
sale of the Common Shares;
	 
	 	(b)	 	Listing. The admission of the Common Shares to listing or quotation
on the Exchange; and
	 
	 	(c)	 	Undertakings. The receipt by the Company from the Optionee of such
representations, agreements and undertakings, including as to future dealings in the
Common Shares, as the Company determines are necessary or advisable in order to
safeguard against the violation of securities laws of any jurisdiction.

	8.	 	Adjustments. In the event that there is any material change in the Common Shares resulting
from subdivisions, consolidations, substitutions or reclassifications of the

 

 

	 	 	Common Shares,
the payment of stock dividends by the Company (other than dividends in the ordinary course) or
other relevant changes in the capital of the Company or from a proposed merger, amalgamation
or other corporate arrangement or reorganization involving the exchange or replacement of
Common Shares for those in another corporation, appropriate adjustments in the number of
Optioned Shares and the exercise price thereof will be conclusively determined by the
Committee.
	 
	9.	 	Further Adjustments. Subject to Sections 6 and 8, if, because of a proposed merger,
amalgamation or other corporate arrangement or reorganization, the exchange or replacement of
Common Shares for those in another corporation is imminent, the Committee may, in a fair and
equitable manner, determine the manner in which all unexercised option rights granted under
this Option will be treated including, without limitation, requiring the acceleration of the
time for the exercise of the option rights by the Optionee and of the time for the fulfilment
of any conditions or restrictions on exercise. All determinations of the Committee under this
Section will be final, binding and conclusive for all purposes subject to the approval of the
Exchange, if applicable.
	 
	10.	 	Tax. The Optionee is solely responsible for the payment of any applicable taxes arising from
the grant, vesting or exercise of the Option. Notwithstanding the foregoing, the Company will
have the right to withhold from any Optioned Shares or from any cash amounts otherwise due to
the Optionee an amount equal to the applicable taxes.
	 
	11.	 	Lock Out Periods. The Optionee acknowledges and agrees that the Agreement and the grant of
the Option to the Optionee is subject to the Optionee’s agreement to at all times comply with
the Company’s policies with respect to Lock Out Periods, as more particularly set out in the
Company’s Policy and Procedures Manual, as amended from time to time.
	 
	12.	 	No Rights as Shareholder. The Optionee will not have any rights as a shareholder of the
Company in respect of any of the Common Shares covered by the Option until the Optionee has
exercised the Option and the Company has issued Common Shares to the Optionee, both in
accordance with the terms of the Plan and the Agreement.
	 
	13.	 	No Effect on Employment. Nothing in the Agreement will:

	 	(a)	 	Continue Employment. Confer upon the Optionee any right to continue
in the employ of or under contract with the Company or any Affiliate or affect in any
way the right of the Company or any Affiliate to terminate his or her employment at
any time.
	 
	 	(b)	 	Extend Employment. Be construed to constitute an agreement, or an
expression of intent, on the part of the Company or any Affiliate to extend the
employment of the Optionee beyond the time that he or she would normally be retired
pursuant to the provisions of any present or future retirement plan or policy of the
Company or any Affiliate, or beyond the time at which he or she would otherwise be
retired pursuant to the provisions of any contract of employment with the Company or
any Affiliate.

	14.	 	Enurement. The Agreement shall enure to the benefit of and be binding upon the parties to the
Agreement and upon the successors or assigns of the Company and upon the executors,
administrators and legal personal representatives of the Optionee.

 

 

	15.	 	Further Assurances. Each of the parties to the Agreement will do such further acts and
execute such further documents as may required to give effect to and carry out the intent of
the Agreement.
	 
	16.	 	Non-Assignable. The Option is personal to the Optionee and may not be assigned or transferred
in whole or in part, except by will or by the operation of the laws of devolution or
distribution and descent.
	 
	17.	 	Amendments. Any amendments to the Agreement must be in writing duly executed by the parties
and will be subject to the approval of the applicable regulatory authorities.
	 
	18.	 	Time of the Essence. Time will be of the essence of the Agreement.
	 
	19.	 	Governing Law. The Agreement shall be governed, construed and enforced according to the laws
of the Province of British Columbia and is subject to the exclusive jurisdiction of the courts
of the Province of British Columbia.
	 
	20.	 	Interpretation of the Agreement and the Plan. If any question or dispute arises as to the
interpretation of the Agreement, the question or dispute will be determined by the Committee
and such determination will be final, conclusive and binding on both the Company and the
Optionee. If there is any conflict between these General Terms and the Plan, the Plan, as
amended from time to time, will govern.

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