Exhibit 4.28
REGISTRATION AND SALE PARTICIPATION RIGHTS AGREEMENT
THIS AGREEMENT is made as of the 7th day of April, 2005.
BETWEEN:
HEMOSOL CORP., a corporation governed by the laws of Ontario
(the "Corporation")
- and -
MDS INC., a corporation governed by the laws of Canada
("MDS")
(each a "Party" and collectively, the "Parties")
RECITALS:
A. MDS holds 6,549,897 issued and outstanding common shares in the
capital of the Corporation and holds warrants to purchase additional
common shares in the capital of the Corporation.
B. The Corporation is the general partner of Hemosol LP, a limited
partnership governed by the laws of Ontario (the "Partnership"), and
holds a limited partnership interest in Hemosol LP.
C. The Parties, together with the Partnership, have entered into a
memorandum of understanding dated March 30, 2005 (the "MOU") pursuant
to which MDS has agreed to extend the term of a guarantee in respect
of certain indebtedness of the Partnership in return for, among other
things, the Corporation (i) issuing to MDS warrants of the Corporation
to purchase up to two million, seven hundred and fifty thousand
(2,750,000) common shares in the capital of the Corporation at an
exercise price equal to the lesser of the "market price" (as defined
in Part VI of the Toronto Stock Exchange Corporation Manual) per
Common Share at March 30, 2005 and the exercise price of any warrant
to be issued by the Corporation as part of the Offering (as defined
below), in each case subject to adjustment in accordance with the
terms and conditions of the warrants (the "Extension Warrants"), (ii)
granting to MDS certain registration and sale participation rights
with respect to the sale by MDS of common shares and warrants to
purchase common shares in the capital of the Corporation held by MDS,
and (iii) agreeing to a debt reduction covenant in respect of the
proceeds of future financings and certain other ongoing covenants and
obligations (the "Additional Covenants").
D. The Parties, together with the Partnership, shall, concurrently with
the execution and delivery of this Agreement, enter into a
subscription agreement on the date hereof to govern the issue of the
Extension Warrants and the Additional Covenants (the "Subscription
Agreement").
E. The Parties desire to enter into this Agreement to govern the
provision of the registration and sale participation rights referred
to in paragraph C above.
NOW THEREFORE in consideration of the mutual covenants and agreements
contained in this Agreement and other good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged by each of the
Parties), the Parties hereto agree as follows:
ARTICLE 1
INTERPRETATION
1.1 Definitions
In this Agreement,
(a) "1933 Act" means the United States Securities Act of 1933, as amended,
or any successor federal statute and the rules and regulations of the
SEC thereunder, all as the same are in effect at the time, and
includes, unless inconsistent with the context, applicable Canadian
Securities Laws.
(b) "1934 Act" means the United States Securities Exchange Act of 1934, as
amended, or any successor federal statute and the rules and
regulations of the SEC thereunder, all as the same are in effect at
the time.
(c) "Act" means the Business Corporations Act (Ontario), as amended from
time to time, and any statute substituted therefor.
(d) "Agreement" means this agreement and all schedules, if any, attached
to this agreement, in each case as they may be supplemented or amended
from time to time, and the expressions "hereof, "herein", "hereto",
"hereunder", "hereby" and similar expressions refer to this Agreement,
and unless otherwise indicated, references to Articles and sections
are to the specified Articles and sections in this Agreement.
(e) "Board of Directors" means the board of directors of the Corporation
as duly elected or appointed from time to time.
(f) "Business Day" means any day except a (i) Saturday, (ii) Sunday, and
(iii) any other day on which commercial banks in Toronto, Ontario are
authorized or obligated by law or executive order to close.
(g) "Canadian Prospectus" means a prospectus (including a preliminary
prospectus, a short form prospectus, and a prospectus in either the
English or French language) prepared in accordance with applicable
Canadian Securities Laws for the purposes of qualifying securities for
distribution to the public in any province or territory of Canada.
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(h) "Canadian Securities Commission" has the meaning set out in Subsection
3.1(a).
(i) "Canadian Securities Laws" means statutes and regulations applicable
to the distribution and trading of securities in any province or
territory of Canada, including applicable instruments, rules,
published policy statements and blanket rulings and orders promulgated
by any Canadian Securities Commission.
(j) "Common Shares" means the common shares in the capital of the
Corporation or such other shares or other securities of the
Corporation into which such common shares are converted, exchanged,
reclassified or otherwise changed from time to time.
(k) "Convertible Securities" means securities that include the right or
option to purchase, convert or exchange for or otherwise acquire
Equity Securities.
(l) "Corporation" means Hemosol Corp., a corporation governed by the laws
of Ontario.
(m) "Debt Reduction Covenant" has the meaning provided in paragraph C of
the recitals to this Agreement.
(n) "Equity Securities" means securities of the Corporation that carry a
residual right to participate in the earnings of the Corporation and,
upon the liquidation or winding up of the Corporation, in its assets
and includes, for greater certainty, Common Shares.
(o) "Extension Warrants" has the meaning provided in paragraph C of the
recitals to this Agreement.
(p) "includes" and "including" shall each be deemed to be followed by the
phrase "without limitation", unless the context indicates otherwise,
and the terms "includes" and "including" shall not be construed to
limit any general statement which it follows to the specific or
similar items or matters immediately following it.
(q) "MDS" means MDS Inc., a corporation governed by the laws of Canada.
(r) "MDS Held Securities" has the meaning provided in Subsection 2.1(a).
(s) "MOU" has the meaning provided in paragraph C of the recitals to this
Agreement.
(t) "Notice" has the meaning set out on Subsection 2.1(a).
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(u) "Offering" means the offering by the Corporation of 10,945,746 special
warrants of the Corporation pursuant to an agency agreement dated
March 30, 2005 between the Corporation and Loewen, Ondaatje,
XxXxxxxxxx Limited and Life Science Group, Inc.
(v) "Partnership" has the meaning provided in B of the recitals to this
Agreement.
(w) "Parties" means, collectively, the Corporation and MDS and "Party"
means either one of them.
(x) "Person" shall be broadly interpreted and includes any individual,
corporation, partnership, joint venture, limited liability company,
association or other business entity and any trust, unincorporated
organization or government or any agency or political subdivision
thereof.
(y) "Private Placement" has the meaning provided in Subsection 2.1(a).
(z) "Prospectus Offering" has the meaning provided in Subsection 2.1(a).
(aa) "register," "registered," "registration" or similar expressions refer
to a registration effected by preparing and filing a registration
statement, and the declaration or ordering of effectiveness of such
registration statement, or any similar or analogous process, including
appropriate qualification under applicable blue sky or other state
securities laws and in addition, unless inconsistent with the context:
(i) the terms "register", registered" and "registration" and any
references to the act of registering include the filing under Canadian
Securities Laws of a Canadian Prospectus in respect of a distribution
to the public; and (ii) any references to a registration statement
having become effective, or similar references, shall include a
Canadian Prospectus for which a final receipt has been obtained from
the relevant Canadian Securities Commission.
(bb) "registration statement" means a registration statement or similar
document in compliance with the 1933 Act and, as the context requires,
a Canadian Prospectus.
(cc) "SEC" or "Commission" means the United States Securities and Exchange
Commission or any other federal agency at the time administering the
1933 Act.
(dd) "Securities" means Convertible Securities and/or Equity Securities.
(ee) "Subscription Agreement" has the meaning provided in paragraph D of
the recitals to this Agreement.
(ff) "Underwriter" includes a dealer acting either as underwriter or agent
in an offering.
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(gg) "underwritten offering" includes an offering of Securities, whether a
Prospectus Offering or a Private Placement, in which one or more
dealers participate(s) as an Underwriter.
(hh) "Violation" has the meaning set out in Subsection 4.1(a).
(ii) Words and expressions used but not defined in this Agreement and which
are defined in the Act, have the meaning given by the Act. 1.2
Headings
The inclusion of headings in this Agreement are for convenience of
reference only and shall not affect the construction or interpretation hereof.
1.3 Gender and Number
In this Agreement, unless the context otherwise requires, words
importing the singular include the plural and vice versa and words importing
gender include all genders. 1.4 Currency
Except as otherwise expressly provided in this Agreement, all amounts
in this Agreement are stated and shall be paid in Canadian currency.
1.5 Invalidity of Provisions
Each of the provisions contained in this Agreement is distinct and
severable and a declaration of invalidity or unenforceability of any such
provision by a court of competent jurisdiction shall not affect the validity or
enforceability of any other provision hereof.
1.6 Entire Agreement
This Agreement constitutes the entire agreement between the Parties
hereto pertaining to the subject matter hereof. There are no other agreements
between the Parties in connection with the subject matter hereof except as
specifically set forth or referred to herein.
1.7 Waiver and Amendment
Except as expressly provided in this Agreement, no waiver of any
provision of this Agreement shall be binding unless executed in writing by the
party to be bound thereby. No waiver of any provision of this Agreement shall
constitute a waiver of any other provision nor shall any such waiver constitute
a continuing waiver unless otherwise expressly provided. This Agreement may not
be amended except by an instrument in writing signed by all of the Parties.
1.8 Governing Law
This Agreement shall be governed by and construed in accordance with
the laws of the Province of Ontario and the laws of Canada applicable therein
and each of the Parties hereby submits to the exclusive jurisdiction of the
courts of Ontario.
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ARTICLE 2
PIGGYBACK REGISTRATION AND SALE PARTICIPATION RIGHTS
2.1 General Provisions
(a) Notification of Registration. If at any time or from time to time
after the Corporation raises net proceeds from any one or more
Prospectus Offering(s) and/or Private Placement(s) after the date
hereof in excess of US$35 million cumulatively in the aggregate, the
Corporation proposes to (a) register any of its Securities for
purposes of effecting a public offering of Securities from treasury
for cash consideration (but excluding any registration relating solely
to any employee stock option plan or any other employee benefit plan
or a corporate reorganization where no Securities are being offered to
the public) (a "Prospectus Offering"), or (b) issue Securities from
treasury for cash consideration (but excluding any exempt distribution
of Securities relating solely to any employee stock option plan or any
other employee benefit plan or pursuant to the conversion or exchange
of previously issued Securities) under one or more exemptions from the
prospectus requirements in Canada and/or similar requirements,
including registration requirements, elsewhere (a "Private
Placement"), the Corporation shall notify MDS in writing (a "Notice"):
(i) in the case of a Prospectus Offering, at least thirty (30) days
prior to filing any registration statement in connection
therewith, and shall, on and subject to the terms and conditions
of this Article 2, afford MDS an opportunity to include in such
registration statement all or any part of the Securities held,
directly or indirectly, by MDS at the relevant time
(collectively, "MDS Held Securities"); and
(ii) in the case of a Private Placement, at least thirty (30) days
prior to the proposed closing date of any Private Placement, and
shall on and subject to the terms and conditions of this Article
2, afford MDS an opportunity to sell as part of such Private
Placement, all or any part of the MDS Held Securities.
The Notice shall include the price or expected offering price per security,
the number and type of Securities to be offered, the intended method of
distribution (including whether a Prospectus Offering or Private Placement
will be an underwritten offering) and the jurisdictions in which the
Prospectus Offering or Private Placement is to be made. MDS shall, within
ten (10) Business Days after receipt of a Notice, notify the Corporation in
writing: (i) if it intends to participate in such Prospectus Offering or
Private Placement, as applicable, and (ii) if it intends to so participate,
the number of MDS Held Securities that MDS requests to be included in such
Prospectus Offering or Private Placement. If MDS fails to so notify the
Corporation within the ten (10) Business Day period set out above, it shall
be deemed to have declined the opportunity to participate in the Prospectus
Offering or Private Placement. If MDS decides not to include all of the MDS
Held Securities in any Prospectus Offering or Private Placement, or if,
pursuant to this Article 2 MDS is not permitted to include all of the MDS
Held Securities in such Prospectus Offering or Private Placement, MDS shall
nevertheless continue to have the right to include any MDS Held Securities
in any subsequent Prospectus Offering or Private Placement, all upon the
terms and conditions set forth herein.
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(b) Underwriting. If a Prospectus Offering or a Private Placement under
which the Corporation gives Notice is for an underwritten offering,
the right of MDS to include some or all of the MDS Held Securities in
the Prospectus Offering or the Private Placement pursuant to this
Section 2.1 shall be conditional upon MDS entering into and performing
its obligations under an underwriting or agency agreement with the
Underwriter(s) selected for such underwriting by the Corporation,
acting reasonably, in customary form and in a form satisfactory to the
Corporation and the Underwriter(s), acting reasonably (including a
market stand-off agreement of up to 180 days if required by such
Underwriter(s)). MDS may, at its option, require that any or all of
the representations and warranties by, and the other agreements on the
part of, the Corporation to and for the benefit of such Underwriters,
also be made to and for the benefit of MDS. The Corporation may, at
its option, require that any or all of the representations and
warranties by, and the other agreements on the part of, MDS to and for
the benefit of such Underwriters shall also be made to and for the
benefit of the Corporation; provided that such representations and
warranties and such other agreements made to and for the benefit of
the Corporation and the Underwriter(s) shall be limited to customary
representations, warranties or agreements regarding MDS, title to and
liens affecting the securities to be sold by MDS, MDS' intended method
of distribution, the disclosure concerning MDS in the registration
statement, if any, and any other representation required by law.
(c) Limitation on Participation.
(i) Subject to Subsection 2.1(c)(ii), MDS shall be entitled in
respect of any Prospectus Offering or Private Placement to
include therein that number of MDS Held Securities having an
aggregate offering price of no greater than twenty percent (20%)
(or such higher percentage consented to by the Corporation in
writing) of the aggregate offering price of all Securities to be
issued from treasury and sold by the Corporation in connection
with such Prospectus Offering or Private Placement.
(ii) Notwithstanding any other provision of this Section 2.1, if the
managing Underwriter(s) selected for a Prospectus Offering or
Private Placement determine(s) in good faith that marketing
factors require a limitation on the number of Securities to be
qualified under the relevant registration statement or sold in
such Private Placement, then the Corporation may exclude all or
any of the MDS Held Securities proposed to be sold by MDS as part
of such Prospectus Offering or Private Placement; provided that
the number of MDS Held Securities to be included by MDS in such
Prospectus Offering or Private Placement shall be reduced only by
such number as the managing Underwriter(s) determines in good
faith.
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(d) Withdrawal. Subject to the terms of any agreement with the
Underwriters concerning the Prospectus Offering or Private Placement,
if MDS disapproves of the terms of such Prospectus Offering or Private
Placement, including the price at which Securities are to be offered,
MDS may withdraw from such Prospectus Offering or Private Placement
without consent of, and without liability to (other than as provided
in Article 4), the Corporation, by written notice to the Corporation
and the managing Underwriter(s) at least five Business Days prior to
the proposed closing date. The MDS Held Securities to be included by
MDS so withdrawn shall also be withdrawn from registration, if
applicable, and those withdrawn shall continue to be subject to the
terms of this Agreement. Subject to the terms of any agreement with
the Underwriters concerning the Prospectus Offering or Private
Placement, the Corporation may at any time prior to closing, in its
sole discretion and without consent of, and without liability to
(other than as provided in Section 3.4 and Article 4), MDS, abandon
the proposed Prospectus Offering or Private Placement in which MDS has
requested to participate.
ARTICLE 3
OBLIGATIONS OF THE PARTIES ON REGISTRATION OR SALE PARTICIPATION
3.1 Obligations of the Corporation in Prospectus Offering
Whenever MDS exercises its right to participate in any Prospectus
Offering as contemplated by this Agreement, the Corporation shall as
expeditiously as reasonably possible:
(a) Registration Statement. Prepare and file with the SEC or other
securities regulatory commission or authority under Canadian
Securities Laws (herein a "Canadian Securities Commission"), as
determined by the Corporation, a registration statement (in English
and French, as applicable) with respect to the Securities to be sold
and use all commercially reasonable efforts to cause such registration
statement to become effective or to have a receipt issued therefor,
provided that (i) MDS shall have first reviewed and approved the
contents of the registration statement, and (ii) the Corporation shall
not be required to keep any such registration statement effective for
more than sixty (60) days or until the distribution described in the
registration statement has been completed, whichever occurs first,
provided that such period of time shall be extended by a period of
time equal to any period during which MDS refrains at the request of
the Corporation or an Underwriter from selling any Securities included
in such registration.
(b) Amendments and Supplements. Prepare and file with the SEC and/or the
Canadian Securities Commissions, as applicable, such amendments and
supplements to such registration statement used in connection with
such registration as may be necessary to comply with the provisions of
the 1933 Act and/or Canadian Securities Laws, as applicable, with
respect to the distribution of all Securities covered by such
registration statement for the period described in Subsection 3.1(a).
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(c) Prospectuses. Furnish to MDS such number of copies of the registration
statement, in conformity with the requirements of the 1933 Act and/or
Canadian Securities Laws, as applicable, and such other documents as
MDS may reasonably request in order to facilitate the public offering
by MDS Held Securities included in such registration.
(d) Effectiveness. Notify MDS promptly after the Corporation receives
notice of the time when such registration statement has become
effective or a supplement to any prospectus forming part of such
registration statement has been filed.
(e) Blue Sky. Use all commercially reasonable efforts to register and
qualify the Securities covered by such registration statement under
such other securities or Blue Sky laws of such jurisdictions
(including all applicable state laws) as required by applicable law,
provided that the Corporation shall not be required in connection
therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions.
(f) Additional Information. Notify MDS promptly of any request by any
securities regulatory authority to the Corporation to amend or
supplement the registration statement or to supply additional
information.
(g) Underwriting. In the event of any underwritten Prospectus Offering,
enter into and perform its obligations under an underwriting agreement
in usual and customary form, with the managing Underwriter(s) of such
offering.
(h) Notification. Notify MDS of the happening of any event as a result of
which the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the
circumstances then existing and use all commercially reasonable
efforts to promptly prepare a supplement or amendment correcting such
untrue statement or omission.
(i) Listing. Cause all Common Shares registered pursuant to this Agreement
to be listed on each securities exchange or national market system on
which similar securities issued by the Corporation are then listed.
(j) Transfer Agent. Provide a transfer agent, registrar and CUSIP numbers
for all Common Shares registered pursuant to this Agreement, in each
case not later than the effective date of registration.
(k) Due Diligence. Provide MDS with access to all materials reasonably
requested by MDS and/or provided to any Underwriter in connection with
any registration in order that MDS may conduct complete due diligence
with respect to the disclosure in the registration statement and any
other applicable offering document and allow MDS to participate fully
in the due diligence process in respect of such registration.
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(l) Opinion and Comfort Letter. Furnish, at the request of any MDS, on the
date that the MDS Held Securities are delivered to the Underwriters
for sale, if such Securities are being sold through Underwriters, or,
if such Securities are not being sold through Underwriters, on the
date that the registration statement with respect to such Securities
becomes effective,
(i) an opinion, dated as of such date, of the securities counsel
representing the Corporation for the purposes of such
registration, in form and substance as is customarily given to
underwriters in an underwritten public offering and reasonably
satisfactory to MDS, addressed to the Underwriters, if any, and
to MDS; and
(ii) a "comfort" letter dated as of such date, from the auditor of the
Corporation, in form and substance as is customarily given by an
auditor to underwriters in an underwritten public offering and
reasonably satisfactory to MDS, addressed to the Underwriters, if
any, and to MDS which complies with applicable securities laws
and states that the financial information and other financial
data included in the registration statement and any other
applicable offering documents comply in all material respects
with the applicable accounting requirements of applicable
securities laws; and
(iii) if a Canadian Prospectus is filed in the Province of Quebec,
opinions of Quebec Counsel and of the auditors of the Corporation
for the purposes of such registration relating to translation
into the French language of the applicable registration
statement, in form and substance as is customarily given to
underwriters in an underwritten public offering and reasonably
satisfactory to MDS, addressed to the Underwriters and MDS.
(m) Stop Orders, etc. Use commercially reasonable efforts to prevent the
issuance of any stop order, cease trade order or other suspension of
effectiveness of a registration statement, and, if such an order or
suspension is issued or made, obtain the withdrawal of the order or
suspension at the earliest possible moment and provide notice to MDS
(and, in the event of an underwritten offering, the managing
Underwriters) of the issuance of the order or suspension and how the
order or suspension was resolved.
(n) Confidentiality. Hold in confidence and not make any disclosure of
information about MDS unless:
(i) disclosure of the information is necessary to comply with
federal, state or provincial laws, including without limitation
as required in a registration statement and by applicable
securities laws;
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(ii) the disclosure of the information is necessary to avoid or
correct a misstatement or omission in any registration statement
or any amendment or supplement to the registration statement;
(iii) the release of such information is ordered under a subpoena or
other order from a court or governmental body of competent
jurisdiction; or
(iv) the information has been made generally available to the public
other than by disclosure in violation of this Agreement or any
other agreement;
and the Corporation shall, upon learning that disclosure of information
about MDS is sought in or by a court or governmental body of competent
jurisdiction or through other similar means (except where such disclosure
is contemplated to be included in a registration statement or otherwise
required to be disclosed by applicable securities laws), give prompt notice
to MDS before making the disclosure and allow MDS at the expense of MDS, to
undertake appropriate action to prevent disclosure of, or to obtain a
protective order for, the information.
3.2 Obligations of the Corporation on Private Placement
Whenever MDS exercises its right to participate in any Private
Placement as contemplated by this Agreement, the Corporation shall:
(a) No Prospectus or Other Disclosure Document. Offer, and cause the
Underwriters to offer, the Securities in the Private Placement in
compliance with all applicable securities laws (including Canadian
Securities Laws) and only to such purchasers and in such manner to
reasonably ensure that, pursuant to the provisions of such applicable
securities laws, no registration statement, offering memorandum or
other similar document need be filed or delivered in connection
therewith.
(b) Underwriting. In the event of any underwritten Private Placement,
enter into and perform its obligations under an underwriting agreement
in usual and customary form, with the managing Underwriter(s) of such
offering.
(c) Listing. Cause all Common Shares sold pursuant to the Private
Placement to be listed on each securities exchange or national market
system on which similar securities issued by the Corporation are then
listed.
(d) Transfer Agent. Provide a transfer agent, registrar and CUSIP numbers
for all Common Shares sold pursuant to the Private Placement.
(e) Stop Orders, etc. Use commercially reasonable efforts to prevent the
issuance of any stop order, cease trade order, and, if such an order
or suspension is issued or made, obtain the withdrawal of the order or
suspension at the earliest possible moment and provide notice to MDS
(and, in the event of an underwritten offering, the managing
Underwriters) of the issuance of the order or suspension and how the
order or suspension was resolved.
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(f) Confidentiality. Hold in confidence and not make any disclosure of
information about MDS unless:
(i) disclosure of the information is necessary to comply with
federal, state or provincial laws;
(ii) the release of such information is ordered under a subpoena or
other order from a court or governmental body of competent
jurisdiction; or
(iii) the information has been made generally available to the public
other than by disclosure in violation of this Agreement or any
other agreement;
and the Corporation shall, upon learning that disclosure of information
about MDS is sought in or by a court or governmental body of competent
jurisdiction or through other similar means (except where such disclosure
is otherwise required to be disclosed by applicable securities laws), give
prompt notice to MDS before making the disclosure and allow MDS at the
expense of MDS, to undertake appropriate action to prevent disclosure of,
or to obtain a protective order for, the information.
3.3 Obligation of MDS to Furnish Information
It shall be a condition precedent to the obligations of the
Corporation to take any action pursuant to this Agreement with respect to a
Prospectus Offering that MDS shall furnish to the Corporation such information
regarding MDS, the MDS Held Securities, the intended method of disposition of
such Securities and all other information required pursuant to applicable
securities laws to be included in the registration statement as shall be
required to timely effect the registration of the MDS Held Securities to be
offered pursuant to the Prospectus Offering.
3.4 Expenses
Subject to applicable law, all expenses incurred in connection with a
Prospectus Offering or Private Placement pursuant to Article 2 (excluding
underwriters', brokers' and dealers' discounts and commissions relating to MDS
Held Securities sold by MDS), including, without limitation all United States or
Canadian federal, provincial and "blue sky" registration, filing and
qualification fees, printers', translators' and accounting fees, and fees and
disbursements of counsel for the Corporation and reasonable out-of-pocket fees
and expenses for one counsel for MDS shall be borne by the Corporation.
ARTICLE 4
INDEMNIFICATION
4.1 Obligation to Indemnify
If any MDS Held Securities are included in a Prospectus Offering or a
Private Placement under this Agreement:
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(a) Indemnity of the Corporation. To the extent permitted by applicable
law, the Corporation shall indemnify and hold harmless MDS and its
officers and directors, any Underwriter (as determined in the 0000
Xxx) for MDS and each Person, if any, who controls MDS or any
Underwriter within the meaning of the 1933 Act or the 1934 Act (each
an "MDS Indemnified Party"), against any losses, claims, damages,
liabilities and expenses, including those incurred to settle any
litigation, commenced or threatened (joint or several), to which they
may become subject under the 1933 Act, the 1934 Act or other United
States laws or Canadian Securities Laws or state law or any other
applicable securities laws, insofar as such losses, claims, damages,
or liabilities (or actions in respect thereof) arise out of or are
based upon any of the following statements, omissions or breaches
(collectively a "Violation") made by the Corporation:
(i) in the case of a Prospectus Offering only, any untrue statement
or alleged untrue statement of a material fact contained in such
registration statement, including any amendments or supplements
thereto;
(ii) in the case of a Prospectus Offering only, the omission or
alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not
misleading; or
(iii) any breach or alleged breach of the 1933 Act, the 1934 Act, any
other United States laws or Canadian Securities Laws or any other
applicable securities laws or any rule or regulation promulgated
under the 1933 Act, the 1934 Act or any United States federal or
state securities law or Canadian Securities Laws or other
applicable securities laws by the Corporation in connection with
the Prospectus Offering or Private Placement, as applicable,
and the Corporation shall reimburse MDS and each of its officers,
directors, Underwriters and controlling Persons for any reasonable legal or
other expenses reasonably incurred by them, as incurred, in connection with
investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the indemnity agreement contained in this
Subsection 4.1(a) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected
without the consent of the Corporation (which consent shall not be
unreasonably withheld or delayed), nor shall the Corporation be liable in
any such case for any such loss, claim, damage, liability or action to the
extent that it arises out of or is based upon a Violation made by the
Corporation which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with a registration
by MDS.
(b) Indemnity of MDS. To the extent permitted by applicable law and to the
extent that MDS Held Securities are included in a registration
statement pursuant to Article 2 of this Agreement, MDS shall indemnify
and hold harmless the Corporation, each of its directors, each of its
officers, each Person, if any, who controls the Corporation within the
meaning of the 1933 Act, any Underwriter, against any losses, claims,
damages, liabilities and expenses, including those incurred to settle
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any litigation, commenced or threatened (joint or several) to which
the Corporation or any such director, officer, controlling Person,
Underwriter may become subject under the 1933 Act, the 1934 Act or
other United States laws or Canadian Securities Laws or any other
applicable securities laws, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon any Violation made by MDS to the extent (and only to the extent)
that such Violation occurs in reliance upon and in conformity with
written information furnished by MDS expressly for use in connection
with such registration statement; and MDS shall reimburse the
Corporation or any such director, officer, controlling Person and
Underwriter for any reasonable legal or other expenses reasonably
incurred by them, as incurred, in connection with investigating or
defending any such loss, claim, damage, liability or action; provided,
however, that the indemnity agreement contained in this Subsection
4.1(b) shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected
without the consent of MDS (which consent shall not be unreasonably
withheld or delayed); provided further that, except in the case of
fraud or wilful misconduct by MDS, in no event shall any indemnity
payable by a MDS under this Subsection 4.1(b) exceed the net proceeds
from the offering received or to be received by MDS.
4.2 Notice
Promptly after receipt by an indemnified party under this Article 4
of notice of the commencement of any action (including any governmental action),
such indemnified party shall, if a claim in respect thereof is to be made
against any indemnifying party under this Article 4, deliver to the indemnifying
party a written notice of the commencement thereof and the indemnifying party
shall have the right to participate in, and, to the extent the indemnifying
party so desires, jointly with any other indemnifying party to whom notice has
been given, to assume the defence thereof with counsel mutually satisfactory to
the indemnifying and the indemnified parties; provided, however, that an
indemnified party shall have the right to retain its own counsel, with the
reasonable fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential conflict of
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within thirty (30) days of the commencement of any such
action shall relieve such indemnifying party of liability to the indemnified
party under this Article 4 to the extent the indemnifying party is prejudiced as
a result thereof.
4.3 Contribution
(a) In order to provide for a just and equitable contribution in
circumstances in which the indemnity provided in this Article 4 would
otherwise be available in accordance with its terms but is, for any
reason, held to be unavailable to or unenforceable by an indemnified
party or enforceable otherwise than in accordance with its terms, the
relevant parties shall contribute to the aggregate of all claims,
expenses, costs and liabilities and all losses (other than loss of
profits) of a nature contemplated in this Article 4 and suffered or
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incurred by the relevant parties in such proportions as is appropriate
to reflect the relative benefits received by the Corporation on the
one hand and MDS and the MDS Indemnified Parties on the other hand
from the distribution of the Securities comprising the applicable
registration as well as the relative fault of the parties and any
other equitable considerations determined by a court of competent
jurisdiction; provided that MDS and the MDS Indemnified Parties shall
not in any event be liable to contribute, in the aggregate, any
amounts in excess of the aggregate proceeds actually received by MDS
in any registration contemplated by this Agreement. However, no party
who has engaged in any fraud or wilful misconduct shall be entitled to
claim contribution from any person who has not engaged in such fraud,
fraudulent misrepresentation or negligence.
(b) In the event that MDS is held to be entitled to contribution from the
MDS Indemnified Parties under the provisions of any statute or at law,
the Corporation shall be limited to contribution in an amount not
exceeding the lesser of:
(i) the portion of the full amount of the loss or liability giving
rise to such contribution for which MDS is responsible, as
determined above; and
(ii) the amount of the aggregate proceeds actually received by MDS in
any registration contemplated by this Agreement.
(c) If MDS has reason to believe that a claim for contribution may arise,
MDS shall give the Corporation notice thereof in writing, but failure
to notify the Corporation shall not relieve the Corporation of any
obligation which it may have to MDS under this Article 4. 4.4 Rights
in Addition
The rights of contribution and indemnity provided in this Article 4
shall be in addition to and not in derogation of any other right to contribution
and indemnity which MDS may have by statute or otherwise at law.
4.5 Rights Held in Trust
With respect to this Article 4, the Corporation acknowledges and
agrees that MDS is contracting on its own behalf and as agents for the other MDS
Indemnified Parties and accordingly the Corporation hereby constitutes MDS as
trustee for each person who is entitled to the covenants of the Corporation
contained in this Article 4 and is not a party hereto and MDS agrees to accept
such trust and to hold in trust for and to enforce such covenants on behalf of
such persons.
4.6 Limitation
Notwithstanding any other provision of this Agreement, in no event
shall a Party be liable to another Party under this Article 4 for any
consequential, indirect or incidental damages including without limitation,
losses, claims, damages or liabilities relating to loss of future profits or
loss of future revenue.
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ARTICLE 5
MISCELLANEOUS
5.1 Assignment
(a) The rights of MDS herein may be assigned by MDS to a transferee of all
or any number of the MDS Held Securities who is an affiliate (as
defined in the Canada Business Corporations Act) of MDS, provided
that:
(i) MDS gives written notice to the Corporation at the time of such
assignment stating the name and address of the assignee and
identifying the Securities of the Corporation as to which the
rights in question are being assigned;
(ii) such assignee shall receive such assigned rights subject to all
the terms and conditions of this Agreement (and shall sign an
acknowledgement agreeing to be bound by the terms and conditions
of this Agreement) and applicable requirements of the 1933 Act,
applicable state securities requirements and applicable Canadian
Securities Laws; and
(iii) MDS shall retain its rights under this Agreement with respect to
any MDS Held Securities which MDS does not transfer.
(b) This Agreement may be not be assigned by the Corporation.
5.2 Notice
All notices, demands, requests, consents and approvals (in this
Section 5.2, a "notice") which may or are required to be given or made pursuant
to any provisions of this Agreement shall be given or made in writing and shall
be (i) served personally or (ii) mailed by pre-paid and registered mail or (iii)
sent by facsimile transmission, in each case, to the addresses or fax number, as
applicable, set out below or to such other addresses or fax number as any Party
may from time to time advise the other Parties by notice in writing.
(a) if to the Corporation:
0000 Xxxxxxxxxx Xxxx.
Xxxxxxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxx Xxxxxxxx
Facsimile No.: 000 000 0000
with a copy to:
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Davies Xxxx Xxxxxxxx & Xxxxxxxx LLP (which shall not constitute notice)
X.X. Xxx 00
Xxxxx 0000
0 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxxx Xxxxx and Xxxxx Xxxx
Facsimile No.: 000 000 0000
(b) if to MDS:
000 Xxxxxxxxxxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxx X.X. Xxxxxx
Facsimile No.: 416 213 4222
with a copy to:
Fasken Xxxxxxxxx DuMoulin LLP (which shall not constitute notice)
Suite 4200
TD Bank Tower
Toronto Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxxxx X. Xxxxxxxxx
Facsimile No.: 000 000 0000
Any notice shall be deemed to have been received when served
personally, or, if mailed by pre-paid and registered mail, on the third Business
Day after the date of mailing, or, if sent by facsimile transmission, on the
first Business Day after confirmed transmission. If a notice is delivered by
pre-paid and registered mail, and regular mail service is interrupted by strikes
or other irregularities on or before the third Business Day after the mailing
thereof, such notice shall be deemed to have been received only if served
personally or sent by facsimile transmission.
5.3 Execution
This Agreement may be executed in as many counterparts as are deemed
necessary and, when so executed in counterpart, shall have the same effect as if
each Party had joined in executing one and the same document and delivery of a
facsimile version of an executed signature page of this Agreement by one Party
to the other Parties shall, upon receipt thereof by the other Parties,
constitute satisfactory evidence of execution of this Agreement by such Party.
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5.4 Binding Nature
This Agreement shall enure to the benefit of and be binding on the
Parties and their respective successors and permitted assigns.
5.5 Time of Essence
Time shall be in every respect of the essence in this Agreement.
5.6 Public Announcements
None of the Parties shall make any public statement or issue any
press release concerning the transactions contemplated by this Agreement expect
as may be necessary, in the opinion of counsel to the Party making such
disclosure, to comply with the requirements of all applicable law. If any such
public statement or release is so required, the Party making such disclosure
shall consult with the other Party prior to making such statement or release,
and the Parties shall use all reasonable efforts, acting in good faith, to agree
upon a text for such statement or release which is satisfactory to both Parties.
5.7 Further Assurances
The Parties shall do all acts and things, execute all documents and
give such further assurances as may be reasonably necessary or advantageous to
enforce this Agreement according to its tenor and intent.
[THE REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY. THE NEXT PAGE IS THE
EXECUTION PAGE]
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IN WITNESS WHEREOF the Parties hereto have executed this Agreement as
of the day and year first above written.
HEMOSOL CORP.
Per: /s/ Xxxxxxxx Xxxxx
-------------------------------------------------
Name: Xxxxxxxx Xxxxx
Title: Assistant Secretary
I have authority to bind the Corporation
MDS INC.
Per: /s/ Xxxxx Xxxxx
-------------------------------------------------
Name: Xxxxx Xxxxx
Title: Senior Vice-President and General Counsel
I have authority to bind the Corporation
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