EXHIBIT 4.2
SUPPLEMENTAL AGREEMENT
THIS AGREEMENT dated as of the 22nd day of November, 2002.
B E T W E E N:
HEMOSOL INC., a corporation constated pursuant to the laws
of the Province of Ontario (the "Borrower")
- and -
THE BANK OF NOVA SCOTIA (the "Lender")
WHEREAS the Lender issued to the Borrower a commitment letter (the "Commitment
Letter") dated October 25, 2002 respecting certain credit facilities to be made
available by the Lender to the Borrower;
AND WHEREAS the parties hereto wish to enter into this agreement to amend and
further clarify certain matters referred to in the Commitment Letter;
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the premises,
the sum of $1.00 now paid by each of the parties hereto to the other and other
good and valuable consideration (the receipt and adequacy whereof are hereby
acknowledged), the parties hereto covenant and agree as follows:
1. The security (the "General Security") listed under the heading
"General Security" on page 7 of the Commitment Letter shall secure
Credit no.: 01 under the Commitment Letter (being the non-revolving
credit (the "Non-Revolving Credit") in the principal amount of
$20,000,000) and not Credit nos.: 02 and 03 (being the standby
letters of credit facilities and herein referred to as the "Letter of
Credit Facilities"). The Letter of Credit Facilities shall be secured
only by the Specific Security (the "L/C Specific Security") referred
to on pages 5 and 6 of the Commitment Letter, respectively, and the
General Security shall not attach to the cash collateral which forms
part of the L/C Specific Security.
2. The provisions set forth in Schedule "I" hereto shall apply to all
Bankers' Acceptances accepted under the Commitment Letter.
3. The drawdown certificate referred to on page 8 of the Commitment
Letter to be provided in connection with each advance under the
Non-Revolving Credit shall be in the form set forth in Schedule "II"
hereto.
4. The Commitment Letter, as amended and supplemented hereby, remains in
full force and effect and is hereby confirmed.
5. This agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns.
IN WITNESS whereof the parties hereto have duly executed these presents as of
the day first above written.
HEMOSOL INC.
Per: /s/ Xxx Xxxxxxxx
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Name: Xxx Xxxxxxxx
Title: VP Corporate Development and CFO
THE BANK OF NOVA SCOTIA
Per: /s/ Xxxx Xxxxxxxxxx
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Name: Xxxx Xxxxxxxxxx
Title: VP and Manager, Scotia Plaza Branch
AGREED TO AND ACCEPTED this 22nd day of November, 2002.
MDS INC.
Per: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Senior VP and General Counsel
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SCHEDULE "I"
(i) "Bankers' Acceptance" herein means a xxxx of exchange under the Bills
of Exchange Act (Canada) and a depository xxxx under the Depository
Bills and Notes Act (Canada) denominated in Canadian Dollars which
has been drawn by the Borrower and accepted by the Lender in
accordance with the provisions of the Commitment Letter, as
supplemented hereby, and this Schedule "A".
(ii) Each draft tendered by the Borrower for acceptance by the Lender as a
Bankers' Acceptance shall be payable in Canada and shall have a term
of not less than 30 days and not more than 180 days.
(iii) Each draft to be accepted by the Lender shall be tendered on the
applicable drawdown day by the Borrower to the Lender and the amount
advanced thereby shall be the face amount of such draft and shall be
deemed to be a drawdown under Credit Number: 01 (the "Non-Revolving
Loan") pursuant to the Commitment Letter. No draft shall be tendered
by the Borrower for acceptance by the Lender if such draft, together
with all other outstanding amounts pursuant to the Non-Revolving
Loan, exceeds the maximum authorized principal amount of the
Non-Revolving Loan.
(iv) To facilitate the issuance of Bankers' Acceptances, the Borrower
hereby appoints the Lender as its attorney to sign and endorse on its
behalf (in accordance with a drawdown request relating to the
issuance of Bankers' Acceptances), in handwriting or by facsimile or
mechanical signature as and when deemed necessary by the Lender,
blank forms of Bankers' Acceptances in the form requested by the
Lender. All Bankers' Acceptances signed and/or endorsed by the Lender
on behalf of the Borrower shall bind the Borrower as fully and
effectually as if signed in the handwriting of and duly issued by the
proper signing officers of the Borrower. The Lender is hereby
authorized (in accordance with a drawdown request relating to the
issuance of Bankers' Acceptances) to issue such Bankers' Acceptances
endorsed in blank in such face amounts as may be determined by the
Lender; provided that the aggregate amount thereof is equal to the
aggregate amount of Bankers' Acceptances required to be accepted and
purchased by the Lender. The Lender shall not be liable for any
damage, loss or other claim arising by reason of any loss or improper
use of any such instrument except to the extent such damage, loss or
other claim is determined by a court of competent jurisdiction by
final and nonappealable judgment to have resulted from the fraud,
gross negligence or wilful misconduct of the Lender or any person
controlling, controlled by or under common control with the Lender.
The Lender shall maintain a record with respect to Bankers'
Acceptances (i) received by it in blank hereunder, (ii) voided by it
for any reason, (iii) accepted and purchased by it hereunder, and
(iv) cancelled at their respective maturities. On request by or on
behalf of the Borrower, the Lender shall cancel all forms of Bankers'
Acceptances which have been pre-signed or pre-endorsed on behalf of
the Borrower and which are held by the Lender and are not required to
be issued in accordance with the Borrower's irrevocable notice.
(v) Upon tender of a draft by the Borrower for acceptance by a Lender in
accordance with the terms hereof, the Borrower, on the applicable
drawdown day, shall pay to such Lender a fee in Canadian Dollars
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equal to 2.00% multiplied by the face amount of such draft. The
Lender shall have the right to purchase any Banker's Acceptance at
the BA Discount Rate and to dispose of each Banker's Acceptance
stamped by such Lender hereunder in any manner. The Lender shall
deposit the BA Discount Proceeds less the aforesaid 2.00% stamping
fee, if not already paid, into the Borrower's account with the
Lender. "BA Discount Rate" herein means, with respect to any Bankers'
Acceptance, the rate quoted by the Lender at or about 10:00 a.m. on
the date of acceptance of such Bankers' Acceptance as the discount
rate applicable to bankers' acceptances accepted and purchased by the
Lender on such date, based upon a year of 365 days and having a
comparable face amount and an identical maturity date to the face
amount and maturity date of such Bankers' Acceptance. "BA Discount
Proceeds" herein means, with respect to any Bankers' Acceptance, an
amount (rounded to the nearest full cent), calculated on the
applicable drawdown day which is equal to the face (or principal)
amount of such Bankers' Acceptance divided by the sum of one plus the
product of (i) the BA Discount Rate applicable to such Bankers'
Acceptance multiplied by (ii) a fraction, the numerator of which is
the term of such Bankers' Acceptance and the denominator of which is
365.
(vi) On the date of maturity of each Bankers' Acceptance, the Borrower
shall provide to the Lender through payment to the Lender in
accordance with the terms hereof the necessary Canadian Dollars to
discharge its obligations under such Bankers' Acceptance and, if the
Borrower fails to do so, the Lender may in its discretion decline to
stamp additional Bankers' Acceptances and the Lender shall make an
advance to the Borrower pursuant to the Non-Revolving Loan for such
purpose in the principal amount of the necessary Canadian Dollars
required to discharge the Borrower's obligations pursuant to such
Bankers' Acceptance. The Lender shall promptly give notice to the
Borrower of any such advance, and the Borrower shall accept and use,
and hereby irrevocably directs the Lender to apply, the proceeds of
any such advance made from time to time to discharge the Borrower's
obligations pursuant to such Bankers' Acceptance.
(vii) To facilitate the acceptance of Bankers' Acceptances pursuant to this
Agreement, the Borrower shall from time to time provide the Lender
upon request with drafts, drawn in blank by the Borrower upon the
Lender in quantities sufficient for the Lender to fulfil its
obligations hereunder, and such drafts shall be kept by the Lender
with the same care as if such drafts were the property of the Lender.
(viii) If any Bankers' Acceptance is outstanding at any time that payment of
the indebtedness under the Non-Revolving Loan is demanded or
accelerated in accordance with the instruments respecting same, the
Borrower shall immediately upon such demand or acceleration, pay to
the Lender an amount of Canadian Dollars equal to the principal face
amount of such Banker's Acceptance. Such amount of Canadian Dollars
(together with interest thereon) shall be held by the Lender for
set-off against the liability of the Borrower to the Lender in
respect of such Bankers' Acceptance, shall be invested from time to
time by the Lender in deposits in the name of the Borrower for such
terms as the Lender may determine and shall bear interest at the rate
per annum payable by the Lender on deposits of similar currency,
amount and maturity.
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SCHEDULE "II"
TO: THE BANK OF NOVA SCOTIA (THE "LENDER")
DATE: o
1. This Drawdown Notice is delivered to you pursuant to a commitment
letter (the "Credit Agreement") dated October 25, 2002, as amended
and supplemented, issued by the Lender to Hemosol Inc. (the
"Borrower"). All Capitalized terms set forth in this drawdown notice
and not defined herein shall have the respective meanings set forth
in a General Security Agreement (the "GSA") issued by the Borrower to
the Lender dated November 22, 2002.
2. We certify to you the matters referred to in paragraphs 4 and 5
herein.
3. We hereby request an advance under Credit Number: 01 provided for in
the Credit Agreement as follows:
(a) Type of Accommodation:
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(b) Date of Advance:
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(c) Amount of Advance:
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(d) B.A. term, if applicable:
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or
(a) Type of Accommodation:
--------------------------------
(b) Date of rollover drawdown:
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(c) Amount of rollover drawdown:
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(d) B.A. term, if applicable:
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(e) Type of Accommodation being rolled over:
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(f) Maturity Date of Accommodation being rolled over:
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4. All of the representations and warranties of the Borrower contained
in the Credit Agreement, the GSA and all instruments issued pursuant
to the Credit Agreement are true and correct on and as of the date
hereof as though made on and as of the date hereof except where such
representations and warranties are made as of a specified date, in
which case such representations and warranties are true and correct
as of the date such representations and warranties were made.
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5. No Event of Default has occurred and is continuing nor will any Event
of Default occur as a result of the advance requested hereunder.
DATED at Toronto this o day of o, 200o.
HEMOSOL INC.
Per:
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Name:
Title:
Per:
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Name:
Title:
I/We have authority to bind the Corporation
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