6-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934

For the month of June 2016

Commission File No. 000-30082

MERUS LABS INTERNATIONAL INC.
(Translation of registrant's name into English)

100 Wellington St. West, Suite 2110 P.O. Box 151
Toronto, ON M5K 1H1
(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F
Form 20-F [  ]      Form 40-F [X]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1) [   ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7) [   ]

SUBMITTED HEREWITH

Exhibits
99.1	Material Change Report dated March 9, 2016
99.2	Underwriting Agreement dated March 1, 2016
99.3	Subscription Receipt Agreement dated March 1, 2016
99.4	Special Warrant Indenture dated March 1, 2016
99.5	Material Change Report dated May 27, 2016

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: June 3, 2016

MERUS LABS INTERNATIONAL INC.

/s/ Andrew Patient
_________________________________________
Andrew Patient
Chief Financial Officer

EX-99.1

Exhibit 99.1

FORM 51-102F3

MATERIAL CHANGE REPORT

Item 1 Name and Address of Company

Merus Labs International Inc. (the “Company” or “Merus”)
100 Wellington Street West
Suite 2110, PO Box 151
Toronto, Ontario, M5K 1H1

Item 2 Date of Material Change

March 1, 2016 and March 7, 2016

Item 3 News Release

The news release announcing the closing of the bought deal financing of Subscription Receipts was issued by the Company on March 1, 2016 and distributed through CNW Group and filed on SEDAR.

The news release announcing the closing of the acquisition of the Sanofi Products was issued by the Company on March 7, 2016 and distributed through CNW Group and filed on SEDAR.

Item 4 Summary of Material Change

On March 1, 2016, the Company completed the sale of 14,250,000 subscription receipts of the Company (the “Subscription Receipts”) at a price of $1.90 per Subscription Receipt, for aggregate gross proceeds of $27,075,000 (the “Offering”).

On March 7, 2016, the Company and certain of its subsidiaries completed the acquisition from Sanofi S.A. of the rights to the Surgestone®, Provames®, Speciafoldine®, and Tredemine® pharmaceutical products (the “Sanofi Products”) in France and select other markets for a purchase price of €22.5 million.

Item 5 Full Description of Material Change

5.1 Full Description of Material Change

Subscription Receipt Financing

On March 1, 2016, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with a syndicate of underwriters co-led by Canaccord Genuity Corp. and Clarus Securities Inc. and including Cormark Securities Inc., Laurentian Bank Securities Inc., CIBC World Markets Inc., Dundee Securities Ltd., GMP Securities L.P., Scotia Capital Inc. and TD Securities Inc. (collectively, the "Underwriters") pursuant to which the Company sold, on a bought deal private placement basis, an aggregate of 14,250,000 Subscription Receipts of the Company at a price of $1.90 per Subscription Receipt, for aggregate gross proceeds of $27,075,000.  The Company completed the sale of the 14,250,000 Subscription Receipts on March 1, 2016.

The proceeds of the Subscription Receipts were delivered into closing upon issuance of the Subscription Receipts and released to the Company to fund the acquisition of the Sanofi Products.  Each Subscription Receipt has converted into one special warrant of the Company upon completion of the escrow release (the “Special Warrants”). Each Special Warrant is convertible into one common share of the Company (the “Underlying Shares”).

The Company will use its best efforts to file a prospectus supplement further to its base shelf prospectus dated October 30, 2015 in order to qualify the issuance of the Underlying Shares upon conversion of the Special Warrants in Canada. The prospectus supplement will be filed following the filing of a business acquisition report by the Company in connection with the acquisition of products from UCB Pharma on February 4, 2016. The Special Warrants will automatically convert into common shares upon the earlier of (i) the third business day following the filing of the prospectus supplement, and (ii) the date that is four months and one day from the date of the closing of the Offering.

The Company has used the proceeds of the Offering, together with an advance under the Company’s amended and restated credit facility announced on February 1, 2016, to fund the acquisition of the Sanofi Products. 

Purchase of the Sanofi Products

On March 7, 2016, the Company and certain of its subsidiaries acquired from Sanofi S.A. the rights to the Sanofi Products in France and select other markets for a purchase price of €22.5 million. Surgestone® and Provames®, are used in a variety of women's health indications, Speciafoldine® is used to treat macrocytic anemia, while Tredemine® is a World Health Organization recognized essential medicine to treat tapeworm.

5.2 Disclosure for Restructuring Transactions

Not applicable.

Item 6 Reliance on subsection 7.1(2) of National Instrument 51-102

Not applicable

Item 7 Omitted Information

Not applicable

Item 8 Executive Officer

Andrew Patient

Chief Financial Officer

Telephone: (416) 593-3725

Item 9 Date of Report

March 9, 2016

EX-99.2

Exhibit 99.2

UNDERWRITING AGREEMENT

March 1, 2016

Merus Labs International Inc.

100 Wellington St. West

Suite 2110, P.O. Box 151

Toronto, ON M5K 1H1

Attention: Barry Fishman, Chief Executive Officer & Director

Dear Sirs/Mesdames:

Canaccord Genuity Corp. (“Canaccord”) and Clarus Securities Inc. (“Clarus” and collectively with Canaccord, the “Co-Lead Underwriters”), together with Cormark Securities Inc., Laurentian Bank Securities Inc., CIBC World Markets Inc., Dundee Securities Ltd., GMP Securities L.P., Scotia Capital Inc. and TD Securities Inc. (collectively with the Co-Lead Underwriters, the “Underwriters”, and each individually, an “Underwriter”) hereby severally, and not jointly, nor jointly and severally, in their respective percentages set out in Section 16 below, offer to purchase from Merus Labs International Inc. (the “Corporation”) and the Corporation hereby agrees to issue and sell to the Underwriters, 14,250,000 subscription receipts of the Corporation (the “Subscription Receipts”), on a “bought deal” private placement basis, at the purchase price of $1.90 per Subscription Receipt (the “Offering Price”), for aggregate gross proceeds of $27,075,000. The offering of the Subscription Receipts by the Corporation is hereinafter referred to as the “Offering”.

Subscription Receipts

The gross proceeds from the sale of the Subscription Receipts (the “Escrowed Funds”), less one-half of the Commission (as defined below) for the Subscription Receipts and the amount payable to the Underwriters on account of their expenses payable pursuant to this Agreement, will be held by Computershare Trust Company of Canada (or such other escrow agent determined by the Corporation), as escrow agent for the Corporation (the “Subscription Receipt Agent”)in accordance with the Subscription Receipt Agreement (as defined below).

Upon the satisfaction of the Escrow Release Conditions (as defined below), the Escrowed Funds shall be released to the Corporation (less the remaining 50% of the Commission, which shall be paid to Canaccord (on behalf of the Underwriters) and the Dividend Equivalent Payment (as defined below), less applicable withholding taxes, which shall be paid to holders of Subscription Receipts in accordance with the terms of the Subscription Receipt Agreement), and each Subscription Receipt will entitle the holder thereof to receive, at the Release Time (as defined below) on the Release Date (as defined below) and without payment of additional consideration or further action on the part of the holder, one (1) special warrant (each, a “Special Warrant’). The description of the Subscription Receipts herein is a summary only and is subject to the specific attributes and detailed provisions of the Subscription Receipts to be set forth in the Subscription Receipt Agreement. In the case of any inconsistency between the description of the Subscription Agreements in this Agreement and their terms and conditions as set forth in the Subscription Receipt Agreement, the provisions of the Subscription Receipt Agreement will govern.

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In the event that: (a) the Release Time fails to occur by 5:00 p.m. (Toronto time) on April 30, 2016 (which date may be extended up to an additional 30 days by Canaccord (on behalf of the Underwriters), in its sole discretion, by delivery of notice in writing to the Corporation); or (b) the Corporation has advised the Underwriters or announced to the public that it does not intend to proceed with the Acquisition (any such event being a “Termination Event”, and the date upon which such event occurs being the “Termination Date”), the Subscription Receipt Agent and the Corporation will return to the holders of Subscription Receipts, commencing on the fifth Business Day (as defined below) following the Termination Date, an amount equal to the Offering Price and the Subscription Receipts will be cancelled.

Special Warrants

The Special Warrants will be duly and validly created and issued pursuant to, and governed by, a special warrant indenture (the “Special Warrant Indenture”) to be entered into effective on the Closing Date between the Corporation and Computershare Trust Company of Canada (or such other agent determined by the Corporation), as special warrant agent for the Corporation (the “Special Warrant Agent”). The description of the Special Warrants herein is a summary only and is subject to the specific attributes and detailed provisions of the Special Warrants to be set forth in the Special Warrant Indenture. In the case of any inconsistency between the description of the Special Warrants in this Agreement and their terms and conditions as set forth in the Special Warrant Indenture, the provisions of the Special Warrant Indenture will govern.

Each Special Warrant will entitle its holder to receive one (1) common share in the capital of the Corporation (each, an “Underlying Share”), subject to adjustment in certain circumstances in accordance with the Special Warrant Indenture, for no additional consideration upon the exercise or deemed exercise of the Special Warrants at any time after the issuance of the Special Warrants.

The Special Warrants will be exercisable by the holders thereof at any time after the issuance of the Special Warrants without payment of additional consideration, and all unexercised Special Warrants will be automatically exercised on the date (the “Deemed Exercise Date”) that is the earlier of: (i) the date that is the third Business Day after the date that the Qualification Prospectus (as defined below) is filed in each of the Qualifying Jurisdictions qualifying the distribution of the Underlying Shares; and (ii) 5:00 p.m. (Toronto time) on the date that is four months and one day following the Closing Date.

Commission

In consideration of the Underwriters’ agreement to purchase the Subscription Receipts (which agreement will result from the acceptance of this offer by the Corporation), and in consideration of the services rendered and to be rendered by the Underwriters in connection therewith, the Corporation agrees to pay or cause to be paid to Canaccord (on behalf of the Underwriters) a fee equal to (a) $0.095 (5.0%) per Subscription Receipt issued and sold by the Corporation (the “Commission”). The Commission for the Subscription Receipts shall be payable to the Underwriters: (i) as to 50% at the Time of Closing; and (ii) the remaining 50% upon release of the Escrowed Funds to the Corporation upon satisfaction of the Escrow Release Conditions. For greater certainty, in the event that the Acquisition is not completed by the Corporation in the manner contemplated by the Subscription Receipt Agreement and the Escrowed Funds are returned by the Subscription Receipt Agent to the purchasers of the Subscription Receipts, the Commission for the Subscription Receipts shall be reduced to the amount payable at the Time of Closing.

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TERMS AND CONDITIONS

The following are additional terms and conditions of this Agreement between the Corporation and the Underwriters:

Section 1 Definitions and Interpretation

(1) Where used in this Agreement or in any amendment hereto, the following terms shall have the following meanings, respectively:

“Acquisition” means the acquisition by Merus Luxco II and Merus Labs Netherlands BV of the rights to the Sanofi Products in France and related assets from Sanofi;

“Acquisition Agreement” means the asset purchase agreement dated February 23, 2016 among Merus Luxco II, Merus Labs Netherlands BV and Sanofi whereby Merus Luxco II and Merus Labs Netherlands BV have agreed to purchase the Sanofi Products and related assets from Sanofi for cash consideration of #eu#22.5 million;

“Acquisition Closing” means the closing of the Acquisition;

“affiliate” and “person” have the respective meanings given to them in the Ontario Act;

“Agreement” means this underwriting agreement, as it may be amended from time to time;

“Base Prospectus” has the meaning ascribed thereto in Section 3(1);

“Business Assets” means all tangible and intangible property and assets owned (either directly or indirectly), leased, licensed, loaned, operated or used, including all real property, fixed assets, warehouse facilities, equipment, inventories and accounts receivable, in respect of the Corporation’s and the Subsidiaries’ businesses in the biopharmaceutical industry;

“Business Day” means a day, other than a Saturday, a Sunday or statutory or civic holiday in the city of Toronto, Ontario;

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“Canadian Securities Laws” means, collectively, all applicable securities laws of each of the Qualifying Jurisdictions and the respective rules and regulations under such laws together with applicable published instruments, notices, orders, blanket rulings, and policies of the securities regulatory authorities in the Qualifying Jurisdictions, including the rules and policies of the TSX;

“Canadian Shelf Procedures” has the meaning ascribed thereto in Section 3(1);

“Closing” means the completion of the sale of the Subscription Receipts and the purchase by the Purchasers of the Subscription Receipts pursuant to this Agreement;

“Closing Date” means March 1, 2016 or such earlier or later date as may be agreed to in writing by the Corporation and the Underwriters, each acting reasonably;

“Co-Lead Underwriters” has the meaning ascribed thereto in the first paragraph of this Agreement;

“Commission” has the meaning ascribed thereto in the eighth paragraph of this Agreement;

“Common Shares” means the common shares in the capital of the Corporation;

“Debt Instrument” means any loans, notes, bonds, debentures, indentures, promissory notes, mortgages, guarantees or other instruments evidencing indebtedness (demand or otherwise) for borrowed money or other liability to which the Corporation or the Subsidiaries are a party or to which their property or assets are otherwise bound;

“Decision Document” has the meaning ascribed thereto in Section 3(1);

“Deemed Exercise Date” has the meaning ascribed thereto in the seventh paragraph of this Agreement;

“distribution” means distribution for the purposes of Canadian Securities Laws;

“Dividend Equivalent Payment” means an amount per Subscription Receipt equal to the aggregate amount per Common Share of cash dividends declared by the Corporation, if any, for which record dates have occurred during the period from the Closing Date to but excluding the date of the Acquisition Closing;

“Documents Incorporated by Reference” means all financial statements, related management’s discussion and analysis, management information circulars, joint information circulars, annual information forms, material change reports or other documents filed by the Corporation, whether before or after the date of this Agreement, that are required to be incorporated by reference into the Base Prospectus or the Qualification Prospectus;

“Employee Plans” has the meaning ascribed thereto in Section 7(ggg);

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“Environmental Laws” has the meaning ascribed thereto in Section 7(kk)(i);

“Escrow Release Conditions” means the occurrence of each of the following events: (i) satisfaction or waiver of all conditions precedent to closing of the Acquisition pursuant to the Acquisition Agreement other than the final condition precedent of payment of the purchase price for the Acquisition to Sanofi thereunder, to the satisfaction of the Co-Lead Underwriters (on behalf of the Underwriters), acting reasonably; and (ii) the Corporation and Canaccord (on behalf of the Underwriters) having delivered an escrow release to the Subscription receipt Agent notice confirming that the Escrow Release Conditions in subparagraph (i) above have been satisfied in accordance with the Subscription Receipt Agreement;

“Escrowed Funds” has the meaning ascribed thereto in the second paragraph of this Agreement;

“Financial Statements” means, collectively, (i) the unaudited condensed consolidated interim financial statements for the three months ended December 31, 2015 and 2014 and (ii) the audited consolidated financial statements for the years ended September 30, 2015 and 2014 of the Corporation, and any other financial statements of the Corporation included in the Documents Incorporated by Reference, including the notes to such statements, and the related auditors’ report on such statements, where applicable;

“Governmental Authority” means and includes, without limitation, any national, federal government, province, state, municipality or other political subdivision of any of the foregoing, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any corporation or other entity owned or controlled (through stock or capital ownership or otherwise) by any of the foregoing;

“Hazardous Materials” has the meaning ascribed thereto in Section 7(kk)(i);

“IFRS” means International Financial Reporting Standards;

“including” means including but not limited to;

“Leased Premises” means all premises which the Corporation and/or any of the Subsidiaries occupies as a tenant that are material to the business of the Corporation;

“Liens” means any encumbrance or title defect of whatever kind or nature, regardless of form, whether or not registered or registrable and whether or not consensual or arising by law (statutory or otherwise), including any mortgage, lien, charge, pledge or security interest, whether fixed or floating, or any assignment, lease, option, right of pre-emption, privilege, encumbrance, easement, servitude, right of way, restrictive covenant, right of use or any other right or claim of any kind or nature whatever which affects ownership or possession of, or title to, any interest in, or right to use or occupy such property or assets;

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“Material Adverse Effect” means any event, change, fact, or state of being which could reasonably be expected to have a significant and materially adverse effect on the business, affairs, capital, operation, prospects, properties, permits, assets, liabilities (absolute, accrued, contingent or otherwise) or condition (financial or otherwise) of the Corporation and the Subsidiaries considered on a consolidated basis;

“Material Agreement” means any and all contracts, commitments, agreements (written or oral), instruments, leases or other documents, including without limitation joint venture agreements, licences, sub-licenses, finance leases, supply agreements, distribution agreements, transportation agreements, sales agreements or any other similar type agreements, to which the Corporation or the Subsidiaries are a party or to which their Business Assets are otherwise bound, and which is material to the Corporation and the Subsidiaries on a consolidated basis;

“material change”, “material fact” and “misrepresentation” have the respective meanings ascribed thereto in the Ontario Act;

“Merus Luxco II” means Merus Labs Luxco II S.a R.L., a company organized under the laws of Luxembourg and an indirect, wholly-owned subsidiary of the Company

“MI 11-102” means Multilateral Instrument 11-102 - Passport System;

“Money Laundering Laws” has the meaning ascribed therefore in Section 7(yy);

“NASDAQ” means the NASDAQ Capital Market;

“NI 41-101” means National Instrument 41-101 - General Prospectus Requirements;

“NI 44-101” means National Instrument 44-101 - Short Form Prospectus Distributions;

“NI 44-102” means National Instrument 44-102 - Shelf Distributions;

“NI 51-102” means National Instrument 51-102 - Continuous Disclosure Obligations;

“NI 52-109” means National Instrument 52-109 - Certification of Disclosure in Issuers’ Annual and Interim Filings;

“NI 52-110” means National Instrument 52-110 - Audit Committees;

“Offering” means the offering of the Subscription Receipts pursuant to this Agreement;

“Offering Price” has the meaning ascribed thereto in the first paragraph of this Agreement;

“Ontario Act” means the Securities Act (Ontario);

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“Permit” means any licence, permit, approval, consent, certificates, registration or other authorization of or issued by any Governmental Authority, including for certainty any required under Environmental Laws;

“person” shall be broadly interpreted and shall include any individual, corporation, partnership, joint venture, association, trust or other legal entity;

“Preliminary Base Prospectus” has the meaning ascribed thereto in Section 3(1);

“Principal Regulator” means the Ontario Securities Commission;

“Public Disclosure Documents” means, collectively, all of the documents which have been filed on SEDAR by or on behalf of the Corporation since January 1, 2014 to the Time of Closing with the relevant Securities Regulators pursuant to the requirements of Securities Laws, including, without limitation, any prospectus, annual and quarterly reports, management proxy circulars, material change reports, press releases and any other documents or reports filed by the Corporation with the Securities Commissions applicable to the Corporation (other than any document that is required or permitted to be filed on a confidential basis pursuant to applicable Canadian Securities Laws);

“Purchasers” means, collectively, each of the purchasers of Subscription Receipts arranged by the Underwriters in connection with the Offering, including Substituted Purchasers and, if applicable, the Underwriters;

“Qualifying Jurisdictions” means British Columbia, Alberta, Saskatchewan, Manitoba and Ontario;

“Qualification Prospectus” has the meaning ascribed thereto in Section 3(2).

“Release Date” means the “Release Date” as defined in the Subscription Receipt Agreement on which date the Subscription Receipts will be converted into Special Warrants;

“Release Time” means the “Release Time” as defined in the Subscription Receipt Agreement at which time the Subscription Receipts will be converted into Special Warrants;

“Repayment Event” has the meaning ascribed thereto in Section 7(ss);

“Reviewing Authority” has the meaning ascribed thereto in Section 3(1);

“Sanofi” means Sanofi S.A.;

“Sanofi Products” means the Surgestone®, Provames®, Speciafoldine® and Tredemine® pharmaceutical products;

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

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“Securities Commissions” means the securities regulatory authorities in British Columbia, Alberta, Saskatchewan, Manitoba and Ontario;

“Securities Laws” means collectively, Canadian Securities Laws, U.S. Securities Laws and all applicable securities laws, rules, regulations, policies and other instruments promulgated by the Securities Regulators in any of the other Selling Jurisdictions;

“Securities Regulators” means collectively, the securities regulators or other securities regulatory authorities in the Selling Jurisdictions;

“SEDAR” means the System for Electronic Document Analysis and Retrieval of the Canadian Securities Administrators;

“Selling Jurisdictions” means, collectively, each of the Qualifying Jurisdictions, the United States, and any other jurisdictions other than the Qualifying Jurisdictions and the United States as mutually agreed to by the Corporation and the Underwriters;

“Shelf Securities” has the meaning ascribed thereto in Section 3(1);

“Special Warrant” has the meaning ascribed thereto in the third paragraph of this Agreement;

“Special Warrant Agent” has the meaning ascribed thereto in the fifth paragraph of this Agreement;

“Special Warrant Indenture” has the meaning ascribed thereto in the fifth paragraph of this Agreement;

“Subscription Agreements” means, the subscription agreements for the Subscription Receipts in the form agreed upon by the Underwriters and the Corporation pursuant to which Substituted Purchasers agree to subscribe for and purchase Subscription Receipts pursuant to the Offering as herein contemplated and shall include, for greater certainty, all schedules thereto; and “Subscription Agreement” means any one of them, as the context requires;

“Subscription Receipt” has the meaning ascribed thereto in the first paragraph of this Agreement;

“Subscription Receipt Agent” has the meaning ascribed thereto in the second paragraph of this Agreement;

“Subscription Receipt Agreement” means the agreement to be dated the Closing Date among the Corporation, Canaccord and the Subscription Receipt Agent governing the terms of the Subscription Receipts;

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“Subsidiaries” means the entities set out in Schedule “B” to this Agreement in which the Corporation directly or indirectly holds the type and percentage of securities or other ownership interests therein set forth;

“subsidiary” means a subsidiary for purposes of the Ontario Act, as constituted at the date of this Underwriting Agreement;

“Substituted Purchasers” has the meaning ascribed thereto in Section 2(1);

“Supplementary Material” means any amendment to the Base Prospectus or any management information circular, financial statement, management’s discussion and analysis, annual information form, material change report, auxiliary material, information, evidence, return, report, application, statement or document that may be filed by or on behalf of the Corporation under the applicable Canadian Securities Laws prior to the filing of the Qualification Prospectus, where such document is deemed to be incorporated by reference into the Qualification Prospectus;

“Termination Date” has the meaning ascribed thereto in the fourth paragraph of this Agreement;

“Termination Event” has the meaning ascribed thereto in the fourth paragraph of this Agreement;

“Time of Closing” means 8:00 a.m. (Toronto time) on the Closing Date, or such other time on the Closing Date as may be agreed to by the Corporation and the Co-Lead Underwriters;

“Transaction Documents” means, collectively, this Agreement, the Subscription Agreements, the Subscription Receipt Agreement and the Special Warrant Indenture, and the certificates, if any, representing the Subscription Receipts, the Special Warrants and/or the Underlying Shares;

“TSX” means the Toronto Stock Exchange;

“UCB Acquisition” means the acquisition on February 4, 2016 by the Corporation of certain UCB pharmaceutical products, as more fully described in the Public Disclosure Documents;

“Underlying Share” has the meaning ascribed thereto in the sixth paragraph of this Agreement;

“Underwriters” has the meaning ascribed thereto in the first paragraph of this Agreement;

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

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

“U.S. Securities Act” means the United States Securities Act of 1933, as amended; and

“U.S. Securities Laws” means all applicable securities legislation in the United States, including without limitation, the U.S. Securities Act, the U.S. Exchange Act and the rules and regulations promulgated thereunder, the rules and policies of the SEC and any applicable state securities laws, and the rules, regulations and policies of NASDAQ.

(2) Any reference in this Agreement to a section or subsection shall refer to a section or subsection of this Agreement.

(3) All words and personal pronouns relating thereto shall be read and construed as the number and gender of the party or parties referred to in each case required and the verb shall be construed as agreeing with the required word and/or pronoun.

(4) Any reference in this Agreement to $ or to “dollars” shall refer to the lawful currency of Canada, unless otherwise specified.

(5) The following is the schedule to this Agreement, which schedule is deemed to be a part hereof and is hereby incorporated by reference herein:

Schedule “A” U.S. Offers and Sales

Schedule “B” Subsidiaries

Section 2 Offering.

(1) The Corporation understands that, although the offer to act as Underwriters with respect to the Subscription Receipts is made hereunder by the Underwriters to the Corporation as purchasers, the Underwriters have the right to arrange for the Subscription Receipts to be purchased by substituted purchasers (“Substituted Purchasers”):

(a) in the Qualifying Jurisdictions on a private placement basis in compliance with Canadian Securities Laws such that the offer and sale of the Subscription Receipts does not obligate the Corporation to file a prospectus (other than the Qualification Prospectus relating to the distribution of the Underlying Shares as contemplated in the Special Warrant Indenture);

(b) in the United States pursuant to the representations, warranties, acknowledgments, agreements and covenants of the Corporation and the Underwriters contained in Schedule “A” hereto; and

(c) in such other jurisdictions on a private placement basis in compliance with all applicable securities laws of such other jurisdictions provided that no prospectus, registration statement, offering memorandum or similar document is required to be filed in such jurisdiction, no registration or similar requirement would apply with respect to the Corporation in such other jurisdictions and the Corporation does not thereafter become subject to on-going or continuous disclosure obligations in such other jurisdictions.

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For greater certainty, to the extent that the Substituted Purchasers purchase Subscription Receipts at the Closing, the Underwriters shall not be obligated to purchase such Subscription Receipts and, to the extent that the Substituted Purchasers do not purchase such Subscription Receipts, the Underwriters will remain obligated to purchase such Subscription Receipts.

(2) The Underwriters will notify the Corporation with respect to the identity of any Purchaser as soon as practicable and with a view to leaving sufficient time to allow the Corporation to secure compliance with all relevant regulatory requirements of the Selling Jurisdictions and in such other jurisdictions as the Underwriters and the Corporation shall determine relating to the sale of the Subscription Receipts. The Corporation undertakes to file, or cause to be filed, all forms or undertakings required to be filed by the Corporation and to pay all filing fees in connection with the issue and sale of the Subscription Receipts so that the distribution of such securities may lawfully occur without the necessity of filing a prospectus or an offering memorandum in Canada or a comparable document elsewhere. If requested by the Corporation, the Underwriters undertake to use commercially reasonable efforts to cause Purchasers to complete any forms required by the Corporation in order to confirm the availability of a private placement exemption and by applicable Securities Laws.

(3) The certificates (or electronic or book entry evidence thereof) representing the Subscription Receipts delivered at Closing shall contain such restrictive legends regarding resale of such securities as are set forth in the Subscription Agreements.

Section 3 Filing of Qualification Prospectus.

(1) The Corporation has prepared and filed with the Securities Commissions a preliminary short form base shelf prospectus dated July 9, 2015 (the “Preliminary Base Prospectus”), and a final short form base shelf prospectus dated October 30, 2015 in respect of up to $250,000,000 aggregate principal amount of common shares, warrants, subscription receipts, preferred shares and units of the Corporation (collectively, the “Shelf Securities”) pursuant to applicable Canadian Securities Laws. The Corporation selected the Ontario Securities Commission (the “Reviewing Authority”) as its principal regulator in respect of the offering of the Shelf Securities, and the Reviewing Authority has issued a decision document (a “Decision Document”) under MI 11-102 on behalf of itself and the other Securities Commissions for each of the Preliminary Base Prospectus and the Base Prospectus. The term “Base Prospectus” means the final short form base shelf prospectus relating to the Shelf Securities, including any documents incorporated therein by reference and the documents otherwise deemed to be a part thereof or included therein pursuant to Canadian Securities Laws, at the time the Reviewing Authority issued a Decision Document with respect thereto in accordance with Canadian Securities Laws, including NI 44-101 and NI 44-102 (together, the “Canadian Shelf Procedures”).

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(2) Immediately following the issuance of the Special Warrants, the Corporation covenants and agrees to use commercially reasonable best efforts to prepare and file with the Securities Commissions a prospectus supplement qualifying the distribution of the Underlying Shares in the Qualifying Jurisdictions (together with the Base Prospectus, and including any Documents Incorporated by Reference and the documents otherwise deemed to be a part thereof or included therein pursuant to Canadian Securities Laws, the “Qualification Prospectus”) as early as possible (and in any event, by no later than April 22, 2016) following the filing of a business acquisition report in respect of the UCB Acquisition, and to promptly take, or cause to be taken, all commercially reasonable steps and proceedings that may from time to time be required under applicable Canadian Securities Laws to qualify the distribution of the Underlying Shares in the Qualifying Jurisdictions.

(3) All references in this Agreement to financial statements and other information which is “contained,” “included” or “stated” in the Preliminary Base Prospectus, the Base Prospectus or the Qualification Prospectus (or other references of like import) shall be deemed to mean and include all such financial statements and other information which is incorporated by reference in or otherwise deemed by Canadian Securities Laws to be a part of or included in the Preliminary Base Prospectus, the Base Prospectus, or the Qualification Prospectus, as the case may be.

(4) For purposes of this Agreement, all references to the Preliminary Base Prospectus, the Base Prospectus and the Qualification Prospectus, or any amendment or supplement to any of the foregoing (including any Supplementary Material), shall be deemed to include the copy filed with the Securities Commissions on SEDAR.

(5) Prior to the filing of the Qualification Prospectus, the Corporation shall have allowed the Underwriters to participate fully in the preparation of, and, acting reasonably, to approve the form and content of, such documents and shall have allowed the Underwriters to conduct all due diligence investigations (which shall include the attendance of management of the Corporation, the auditors and any other consultants requested by the Underwriters at one or more due diligence sessions to be held) which they may reasonably require in order to fulfill their obligations as Underwriters and in order to enable them to responsibly execute the certificate required to be executed by them at the end of the Qualification Prospectus, if applicable.

Section 4 Deliveries on Filing and Related Matters.

(1) The Corporation shall deliver to each of the Underwriters:

(a) prior to the time of each filing thereof, a copy of the Qualification Prospectus manually signed on behalf of the Corporation, by the persons and in the form signed and certified as required by Canadian Securities Laws;

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(b) prior to the time of filing thereof, a copy of any Supplementary Material, or other document required to be filed with or delivered to, the Securities Commissions by the Corporation under Canadian Securities Laws in connection with the Offering, including any document to be incorporated by reference in the Base Prospectus or the Qualification Prospectus (other than documents already filed publicly with a Securities Commission);

(c) concurrently with the filing of the Qualification Prospectus with the Securities Commissions, a “long-form” comfort letter of MNP LLP dated the date of the Qualification Prospectus (with the requisite procedures to be completed by such auditor within two (2) Business Days of the date of such letter), in form and substance satisfactory to the Underwriters, acting reasonably, addressed to the Underwriters and the directors and officers of the Corporation, with respect to certain financial and accounting information relating to the Corporation in the Qualification Prospectus, including all Documents Incorporated by Reference, which letter shall be in addition to the auditor’s report incorporated by reference in the Qualification Prospectus; and

(d) prior to the time of filing of the Qualification Prospectus with the Securities Commissions, favourable legal opinions from legal counsel to the Corporation acceptable to the Co-Lead Underwriters, regarding certain material Subsidiaries in a form acceptable to the Co-Lead Underwriters and their legal counsel, acting reasonably, to the effect set out below:

(i) the Subsidiaries having been incorporated and existing under their jurisdiction of incorporation;

(ii) the Subsidiaries having the corporate power and capacity to own and lease their properties and assets and to conduct their businesses as described in the Qualification Prospectus; and

(iii) as to the authorized and issued share capital of the Subsidiaries, all of which are owned by the Corporation.

(2) The Corporation represents and warrants to the Underwriters with respect to the Preliminary Base Prospectus and the Base Prospectus that as at their respective dates of delivery:

(a) all information and statements in such documents (including information and statements incorporated by reference) (except information and statements relating solely to the Underwriters and furnished by them in writing specifically for use in the Qualification Prospectus) are true and correct, in all material respects, and contain no misrepresentation and constitute full, true and plain disclosure of all material facts relating to the Corporation, the Offering and the Underlying Shares, as required by Canadian Securities Laws;

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(b) no material fact or information in such documents (including information and statements incorporated by reference) (except information and statements relating solely to the Underwriters and furnished by them in writing specifically for use in the Qualification Prospectus) has been omitted therefrom which is required to be stated in such disclosure or is necessary to make the statements or information contained in such disclosure not misleading in light of the circumstances under which they were made; and

(c) the Preliminary Base Prospectus and the Base Prospectus comply fully with the requirements of the Canadian Securities Laws.

(3) The Corporation shall cause commercial copies of the Qualification Prospectus to be delivered to the Underwriters without charge, in such quantities and in such cities as the Underwriters may reasonably request by written instructions to the printer of such documents as soon as possible after the filing of the Qualification Prospectus with the Securities Commissions, but, in any event on or before noon (Toronto time) on the next Business Day after the filing of the Qualification Prospectus. The Corporation shall cause to be provided to the Underwriters, without cost, such number of copies of any Documents Incorporated by Reference as the Underwriters may reasonably request for use in connection with the filing of the Qualification Prospectus.

(4) Subject to compliance with Canadian Securities Laws, during the period commencing on the date hereof and until completion of the distribution of the Underlying Shares, the Corporation will promptly provide to the Co-Lead Underwriters drafts of any press releases of the Corporation relating to the distribution of the Underlying Shares for review by the Co-Lead Underwriters prior to issuance and shall obtain the prior approval of the Co-Lead Underwriters as to the content and form of any press release relating to the Offering prior to issuance, such approval not to be unreasonably withheld or delayed. If required by Securities Laws, any press release announcing or otherwise referring to the Offering disseminated in the United States shall comply with the requirements of Rule 135c under the U.S. Securities Act and any press release announcing or otherwise referring to the Offering disseminated outside the United States shall include an appropriate notation on each page as follows: “Not for distribution to the U.S. news wire services, or dissemination in the United States”.

(5) The Corporation will not have any obligation to register any of the Subscription Receipts, the Special Warrants or the Underlying Shares under the U.S. Securities Act.

Section 5 Material Change.

(1) During the period from the date of this Agreement to the filing of the Qualification Prospectus, the Corporation covenants and agrees with the Underwriters that it shall promptly notify the Underwriters in writing with full particulars of:

(a) any material change (actual, anticipated, contemplated or threatened) in respect of the Corporation considered on a consolidated basis;

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(b) any material fact in respect of the Corporation which has arisen or has been discovered following the Closing Date and is required to be stated in the Preliminary Base Prospectus, the Base Prospectus or the Qualification Prospectus or which would have been required to have been stated in the Preliminary Base Prospectus or the Base Prospectus had the fact arisen or been discovered on, or prior to, the date of such document; and

(c) any change in any material fact (which for the purposes of this Agreement shall be deemed to include the disclosure of any previously undisclosed material fact) contained in the Public Disclosure Documents, Preliminary Base Prospectus or the Base Prospectus which fact or change is, or may be, of such a nature as to render any statement in such Public Disclosure Documents, Preliminary Base Prospectus or the Base Prospectus misleading or untrue in any material respect or which would result in a misrepresentation in the Public Disclosure Documents, Preliminary Base Prospectus or the Base Prospectus or which would result in any of the Public Disclosure Documents, Preliminary Base Prospectus or the Base Prospectus not complying (to the extent that such compliance is required) with Securities Laws.

The Corporation shall promptly, and in any event within any applicable time limitation, comply, to the satisfaction of the Co-Lead Underwriters, acting reasonably, with all applicable filings and other requirements under Canadian Securities Laws as a result of such fact or change; provided that the Corporation shall not file any Supplementary Material or other document without first providing the Co-Lead Underwriters with a copy of such Supplementary Material or other document and consulting with the Co-Lead Underwriters with respect to the form and content thereof, and the Co-Lead Underwriters shall provide their input on same in a timely manner. The Corporation shall in good faith discuss with the Co-Lead Underwriters any fact or change in circumstances (actual, anticipated, contemplated or threatened, financial or otherwise) which is of such a nature that there is or could be reasonable doubt whether written notice need be given under this Section 5(1).

(2) If prior to the filing of the Qualification Prospectus there shall be any change in Canadian Securities Laws which, in the opinion of the Co-Lead Underwriters and their legal counsel, acting reasonably, requires the filing of any Supplementary Material, upon written notice from the Co-Lead Underwriters, the Corporation covenants and agrees with the Co-Lead Underwriters that it shall, to the satisfaction of the Co-Lead Underwriters, acting reasonably, promptly prepare and file such Supplementary Material with the appropriate Securities Commissions where such filing is required.

(3) During the period from the date of this Agreement to the filing of the Qualification Prospectus, the Corporation will notify the Co-Lead Underwriters promptly:

(a) when any supplement to the Base Prospectus or any Supplementary Material shall have been filed;

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(b) of any request by any Securities Commission to amend or supplement the Base Prospectus or for additional information;

(c) of any order suspending or preventing the use of the Base Prospectus (or any Supplementary Material) or of the institution or, to the knowledge of the Corporation, threatening of any proceedings for any such purpose; and

(d) of the issuance by any Securities Commission or any stock exchange of any order having the effect of ceasing or suspending the distribution of the Subscription Receipts, Special Warrants and/or Underlying Shares or the trading in any securities of the Corporation, or of the institution or, to the knowledge of the Corporation, threatening of any proceeding for any such purpose. The Corporation will use its reasonable best efforts to prevent the issuance of any such stop order or of any order preventing or suspending such use or such order ceasing or suspending the distribution of the Subscription Receipts, Special Warrants and/or Underlying Shares or the trading in the shares of the Corporation and, if any such order is issued, to obtain the lifting thereof at the earliest possible time.

Section 6 Regulatory Approvals.

The Corporation will make all necessary filings, obtain all necessary consents and approvals (if any) and pay all filing fees required to be paid in connection with the transactions contemplated by this Agreement. The Corporation will cooperate with the Underwriters in connection with the qualification of the Underlying Shares for offer and sale under the Canadian Securities Laws and in maintaining such qualifications in effect until the Deemed Exercise Date.

Section 7 Representations and Warranties of the Corporation.

The Corporation represents and warrants to each of the Underwriters and to each of the Substituted Purchasers, and acknowledges that each of them is relying upon such representations and warranties in connection with the purchase of the Subscription Receipts, that:

(a) Good Standing of the Corporation. The Corporation: (i) is a corporation existing under the laws of British Columbia and is and will at the Time of Closing be current and up-to-date with all material filings required to be made and in good standing under the Business Corporations Act (British Columbia); (ii) has all requisite corporate power and capacity to own, lease and operate its properties and assets, including its Business Assets, and to conduct its business as now carried on by it as described in the Public Disclosure Documents; and (iii) has all requisite corporate power and authority to issue and sell the Subscription Receipts and to execute, deliver and perform its obligations under this Agreement;

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(b) Good Standing of Subsidiaries. The Corporation’s only subsidiaries are the Subsidiaries listed in Schedule “B” hereto, which schedule is true, complete and accurate in all respects. Each of the Subsidiaries is a corporation incorporated, organized and existing under the laws of the jurisdiction of incorporation set out in Schedule “B”, is current and up-to-date with all material filings required to be made and has all requisite corporate power and capacity to own, lease and operate its properties and assets, including its Business Assets, and to conduct its business as is now carried on by it or proposed to be carried on by it, and is duly qualified to transact business and is in good standing in each jurisdiction in which such qualification is required. Except as set forth in Schedule “B” and as disclosed in the Public Disclosure Documents, all of the issued and outstanding shares in the capital of the Subsidiaries have been duly authorized and validly issued, are fully paid and are directly or indirectly beneficially owned by the Corporation, free and clear of any Liens; and none of the outstanding securities of the Subsidiaries were issued in violation of the pre-emptive or similar rights of any security holder of such subsidiary. There exist no options, warrants, purchase rights, or other contracts or commitments that could require the Corporation to sell, transfer or otherwise dispose of any securities of the Subsidiaries;

(c) No Proceedings for Dissolution. No act or proceeding has been taken by or against the Corporation or the Subsidiaries in connection with their liquidation, winding-up or bankruptcy, or to their knowledge are pending;

(d) Capitalization. The authorized and issued share capital of the Corporation consists of an unlimited number of Common Shares, of which 102,599,906 were issued and outstanding as at the close of business on February 29, 2016, and an unlimited number of preferred shares, of which 10,000 Series A Preferred Shares are issued and outstanding as at the close of business on February 29, 2016. As of the date hereof and 5,573,500 options to acquire Common Shares were issued and outstanding. Neither the Corporation nor its Subsidiaries are party to any agreement, nor is the Corporation aware of any agreement, which in any manner affects the voting control of any securities of the Corporation or its Subsidiaries;

(e) Share Capital of Subsidiaries. The authorized and issued share capital of the Subsidiaries as set forth in Schedule “B” hereto is true and correct;

(f) Form of Share Certificates. The form of certificate respecting the Common Shares has been approved and adopted by the board of directors of the Corporation and does not conflict with any applicable laws and complies with the rules and regulations of the TSX and NASDAQ;

(g) Common Shares are Listed. The Common Shares are listed and posted for trading on the TSX and NASDAQ, and the Corporation has applied to list the Underlying Shares on the TSX and NASDAQ and neither the Corporation nor its Subsidiaries has taken any action which would be reasonably expected to result in the delisting or suspension of the Common Shares on or from the TSX or NASDAQ;

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(h) Stock Exchange Compliance. The Corporation is, and will at the Time of Closing be, in compliance in all material respects with the by-laws, rules and regulations of the TSX and NASDAQ, as applicable;

(i) No Cease Trade Orders. No order ceasing or suspending trading in securities of the Corporation or prohibiting the sale of securities by the Corporation has been issued by an exchange or securities regulatory authority, and no proceedings for this purpose have been instituted, or are, to the Corporation’s knowledge, pending, contemplated or threatened;

(j) Reporting Issuer Status. As at the date hereof, the Corporation is a “reporting issuer” within the meaning of Canadian Securities Laws in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick and Prince Edward Island, and is not currently in default of any requirement of the Canadian Securities Laws of such jurisdictions and the Corporation is not included on a list of defaulting reporting issuers maintained by any of the Securities Commissions of such jurisdictions;

(k) Foreign Private Issuer. The Corporation is a “foreign private issuer” (as defined in Rule 405 under the U.S. Securities Act);

(l) U.S. Reporting Issuer. The common shares of the Corporation are registered under Section 12(b) of the U.S. Exchange Act and the Corporation has timely filed all required reports under the Exchange Act with the United States Securities and Exchange Commission and such filings are accurate and complete in all material respects;

(m) Subscription Receipts Valid. The Subscription Receipts have been duly and validly authorized for issuance and sale pursuant to this Agreement; when issued and delivered by the Corporation pursuant to the terms of the Special Warrants, the Underlying Shares will be validly issued as fully paid and non-assessable Common Shares. The Subscription Receipts, Special Warrants and Underlying Shares, upon issuance, will not be issued in violation of or subject to any pre-emptive rights or contractual rights to purchase securities issued by the Corporation;

(n) Qualified Investments. The Subscription Receipts, the Special Warrants (upon the due conversion of the Subscription Receipts) and Underlying Shares (upon the due conversion of the Special Warrants) would if issued on the date hereof be qualified investments under the Income Tax Act (Canada) (the ‘‘Tax Act’’) for trusts governed by registered retirement savings plans, registered retirement income funds, registered disability savings plans, deferred profit sharing plans, registered education savings plans and tax-free savings accounts, each as defined in the Tax Act, if and provided that at all material times (i) the Underlying Shares are listed on a ‘‘designated stock exchange’’ for purposes of the Tax Act (which currently includes the TSX), and (ii) in the case of the Subscription Receipts and the Special Warrants, the Corporation is not a “connected person” (as defined in the Tax Act) under the governing plan of the Trust;

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(o) Transfer Agent. Computershare Investor Services Inc. at its offices in Vancouver, British Columbia has been duly appointed as the transfer agent and registrar for the Common Shares;

(p) Subscription Receipt Agent. Computershare Trust Company of Canada at its offices in Vancouver, British Columbia has been duly appointed as the subscription receipt agent and registrar for the Subscription Receipts;

(q) Special Warrant Agent. Computershare Trust Company of Canada at its offices in Vancouver, British Columbia has been duly appointed as the special warrant agent and registrar for the Special Warrants;

(r) Absence of Rights. Except as disclosed in the Public Disclosure Documents, no person has any right, agreement or option, present or future, contingent or absolute, or any right capable of becoming a right, agreement or option, for the issue or allotment of any unissued shares of the Corporation or any other agreement or option, for the issue or allotment of any unissued shares of the Corporation or any other security convertible into or exchangeable for any such shares or to require the Corporation to purchase, redeem or otherwise acquire any of the issued and outstanding shares of the Corporation;

(s) Corporate Actions. The Corporation has taken, or will have taken prior to the Time of Closing, all necessary corporate action, (i) to authorize the execution, delivery and performance of the Transaction Documents and (ii) to validly issue and sell the Subscription Receipts.

(t) Valid and Binding Documents. The Transaction Documents have been duly authorized, executed and delivered by the Corporation and each constitutes a legal, valid and binding obligation of, and is enforceable against, the Corporation in accordance with its terms, provided that enforcement thereof may be limited by laws affecting creditors’ rights generally, that specific performance and other equitable remedies may only be granted in the discretion of a court of competent jurisdiction, and that the provisions relating to indemnity, contribution and waiver of contribution may be unenforceable and that enforceability is subject to the provisions of the Limitations Act (Ontario);

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(u) No Consents, Approvals etc. The execution and delivery of the Transaction Documents and the fulfilment of the terms thereof by the Corporation and the issuance, sale and delivery of the Subscription Receipts, Special Warrants and Underlying Shares to be issued and sold by the Corporation, as applicable, does not and will not require the consent, approval, authorization, registration or qualification of or with any Governmental Authority, stock exchange or other third party, except: (i) those which have been obtained or those which may be required and shall be obtained prior to the Time of Closing under the Securities Laws or the rules of the TSX or NASDAQ, including in compliance with the Securities Laws regarding the distribution of the Subscription Receipts in the Qualifying Jurisdictions; and (ii) such customary post-closing notices or filings required to be submitted within the applicable time frame pursuant to Securities Laws and any “blue sky laws” in the United States, as may be required in connection with the Offering;

(v) Continuous Disclosure. The Corporation is in compliance in all material respects with its timely disclosure obligations under Canadian Securities Laws and, without limiting the generality of the foregoing, there has not occurred an adverse material change, financial or otherwise, in the assets, liabilities (contingent or otherwise), business, financial condition or capital of the Corporation and its Subsidiaries (taken as a whole) which has not been publicly disclosed and the information and statements in the Public Disclosure Documents were true and correct as of the respective dates of such information and statements and at the time such documents were filed on SEDAR, do not contain any misrepresentations and no material facts have been omitted therefrom which would make such information materially misleading, and the Corporation has not filed any confidential material change reports which remain confidential as at the date hereof. The Corporation is not aware of any circumstances presently existing under which liability is or would reasonably be expected to be incurred under Part XXIII.1 - Civil Liability for Secondary Market Disclosure of the Ontario Act and analogous provisions under Securities Laws in the other Selling Jurisdictions;

(w) Forward-Looking Information. With respect to forward-looking information (including any future oriented financial information) contained in the Public Disclosure Documents, including for certainty the Documents Incorporated by Reference:

(i) the Corporation has a reasonable basis for the forward-looking information; and

(ii) all material forward-looking information is identified as such, and all such documents cautions users of forward-looking information that actual results may vary from the forward-looking information and identifies material risk factors that could cause actual results to differ materially from the forward-looking information, and accurately states the material factors or assumptions used to develop forward-looking information;

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(x) Financial Statements. The Financial Statements:

(i) present fairly, in all material respects, the financial position of the Corporation on a consolidated basis and the statements of operations, retained earnings, cash flow from operations and changes in financial information of the Corporation on a consolidated basis for the periods specified in such Financial Statements;

(ii) have been prepared in conformity with generally accepted accounting principles in Canada and/or IFRS, applied on a consistent basis throughout the periods involved; and

(iii) do not contain any misrepresentations, with respect to the period covered by the Financial Statements;

(y) Off-Balance Sheet Transactions. There are no material off-balance sheet transactions, arrangements, obligations or liabilities of the Corporation or its Subsidiaries whether direct, indirect, absolute, contingent or otherwise which are required to be disclosed and are not disclosed or reflected in the Financial Statements;

(z) Accounting Policies. Except as disclosed in the Public Disclosure Documents, there has been no change in accounting policies or practices of the Corporation or its subsidiaries since September 30, 2015, other than the adoption of certain additional IFRS measures as disclosed in the Financial Statements;

(aa) Liabilities. Neither the Corporation, nor any of the Subsidiaries has any liabilities, obligations, indebtedness or commitments, whether accrued, absolute, contingent or otherwise, which are not disclosed or referred to in the Financial Statements or referred to or disclosed herein or in the Public Disclosure Documents, other than liabilities, obligations, or indebtedness or commitments: (i) incurred in the normal course of business; or (ii) which would not have a Material Adverse Effect;

(bb) Independent Auditors. The auditors who reported on and certified the Financial Statements for the fiscal year ended September 30, 2015 are independent with respect to the Corporation within the meaning of Canadian Securities Laws and other than as publicly disclosed by the Corporation on SEDAR, there has never been a “reportable event” (within the meaning of National Instrument 51-102) with any past or present auditors of the Corporation during the last three years;

(cc) Accounting Controls. The Corporation and the Subsidiaries maintain, and will maintain, a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles in Canada and/or IFRS and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Each of the Corporation and the Subsidiaries maintain disclosure controls and procedures and internal control over financial reporting as those terms are defined in NI 52-109 and as at September 30, 2015 and December 31, 2015, such controls were effective. Since the end of the Corporation’s most recent audited fiscal year, the Corporation is not aware of any material weakness in the Corporation’s internal control over financial reporting (whether or not remediated) or change in the Corporation’s internal control over financial reporting that has materially affected or is reasonably likely to materially affect the Corporation’s internal control over financial reporting;

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(dd) Audit Committee. The Corporation’s board of directors has validly appointed an audit committee whose composition satisfies the requirements of NI 52-110, and the audit committee of the Corporation operates in accordance with all material requirements of NI 52-110;

(ee) Purchases and Sales. Neither the Corporation nor the Subsidiaries has approved, has entered into any agreement in respect of:

(i) the purchase of any Business Assets or any interest therein other than as disclosed in the Public Disclosure Documents, or the sale, transfer or other disposition of any Business Assets or any interest therein currently owned, directly or indirectly, by the Corporation or the Subsidiaries whether by asset sale, transfer of shares, or otherwise, other than as disclosed in the Public Disclosure Documents;

(ii) the change of control (by sale or transfer of Common Shares or sale of all or substantially all of the assets of the Corporation or the Subsidiaries or otherwise) of the Corporation or the Subsidiaries; or

(iii) a proposed or planned disposition of Common Shares by any shareholder who owns, directly or indirectly, 10% or more of the outstanding Common Shares or common shares of the Subsidiaries;

(ff) Title to Business Assets. The Corporation and the Subsidiaries have good, valid and marketable title to and have all necessary rights in respect of all of their Business Assets as owned, leased, licensed, loaned, operated or used by them or over which they have rights, free and clear of Liens, other than as disclosed in the Public Disclosure Documents, and no other rights or Business Assets are necessary for the conduct of the business of the Corporation or the Subsidiaries as currently conducted or as proposed to be conducted. Other than as disclosed in the Public Disclosure Documents, the Corporation knows of no claim or basis for any claim that might or could have a Material Adverse Effect on the rights of the Corporation or the Subsidiaries to use, transfer, lease, license, operate, sell or otherwise exploit such Business Assets, neither the Corporation nor the Subsidiaries have any obligation to pay any ongoing commission, license fee or similar payment to any person in respect thereof and there are no outstanding rights of first refusal or other pre-emptive rights of purchase which entitle any person to acquire any of the rights, title or interests in the Business Assets of the Corporation or any of the Subsidiaries;

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(gg) Compliance with Laws and Regulatory Approvals and Authorizations. All operations of the Corporation and each of its Subsidiaries in respect of or in connection with the Business Assets have been and continue to be conducted in accordance with best industry practices and in material compliance with all applicable laws; the Corporation and the Subsidiaries have obtained and are in material compliance with all regulatory approvals, licenses, consents, permits, certificates, registrations, filings and authorizations under all applicable laws, including import and trade laws, in the jurisdictions in which they carry on business, to permit them to conduct their business as currently conducted or proposed to be conducted, except where failure to achieve material compliance would not reasonably be expected, on an individual or aggregate basis, to have a Material Adverse Effect;

(hh) Business Operations. All agreements with third parties (including all suppliers, vendors, distributors and customers) for the provision/supply or sale of supplies, products or services in connection with the business of the Corporation and the Subsidiaries, as such business is currently being conducted, have been entered into and are being performed in material compliance with their terms;

(ii) Business Relationships. There exists no actual or, to the knowledge of the Corporation, threatened termination, cancellation or limitation of, or any material adverse modification or material change in, the material business relationships of the Corporation or the Subsidiaries, with any supplier, vendor, distributor or customer, or any group of suppliers, vendors, distributors or customers who have a contractual relationship with the Corporation and whose business with or whose inventories or purchases provided to the business of the Corporation or the Subsidiaries are individually or in the aggregate material to the assets, business, properties, operations or financial condition of the Corporation or the Subsidiaries which could have a Material Adverse Effect on the business of the Corporation and its Subsidiaries. All such material business relationships are intact and mutually cooperative, and there exists no condition or state of fact or circumstances that would prevent the Corporation or the Subsidiaries from conducting such business with any such supplier, vendor, distributor or customer, or group of suppliers, vendors, distributors or customers in the same manner in all material respects as currently conducted or proposed to be conducted.

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(jj) Leased Premises. With respect to any Leased Premises, the Corporation or the Subsidiaries who occupies the Leased Premises has the exclusive right to occupy and use the Leased Premises, the use by the Corporation and the Subsidiaries of each of their Leased Premises is permitted by the terms of the real property lease relating to such Leased Premises, and each of the leases pursuant to which the Corporation or the Subsidiaries occupies the Leased Premises is in good standing and in full force and effect. Neither the Corporation nor any of the Subsidiaries is in breach or default of any material term or provision of any real property lease, or has received any notice or other communication from the owner or manager of any of the Leased Premises that the Corporation or the Subsidiaries is not in compliance with any material term or condition of any such real property lease, and to the best knowledge of the Corporation no notice or other communication is pending or has been threatened. The performance of obligations pursuant to and in compliance with the terms of this Agreement, and the completion of the transactions described herein by the Corporation, will not afford any of the parties to such leases or any other person the right to terminate such lease or result in any additional or more onerous obligations under such leases;

(kk) Environmental Laws.

(i) Each of the Corporation and the Subsidiaries is in compliance with any and all applicable federal, provincial, state, local, municipal or foreign statute, law, rule, regulation, ordinance, code, policy or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment, relating to pollution or protection of human health and safety, the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including, without limitation, laws and regulations relating to the release or threatened release of chemicals, fluids, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products (collectively, “Hazardous Materials”) or to the manufacture, processing, blending, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials (collectively, “Environmental Laws”), except where the violation would not reasonably be expected, on an individual or aggregate basis, to have a Material Adverse Effect;

(ii) the Corporation and the Subsidiaries have all Permits necessary for the ownership and use of the Business Assets and the operation of the business carried on or proposed to be carried on by them, and all such Permits are valid, subsisting, in good standing and in full force and effect, and each of the Corporation and the Subsidiaries is in compliance with the requirements thereof, except where such failure would not reasonably be expected, on an individual or aggregate basis, to have a Material Adverse Effect. The Corporation has not received any notification pursuant to any Environmental Laws that any work, repairs, or capital expenditures are required to be made by it or any of the Subsidiaries as a condition of continued compliance with any Environmental Laws or Permits, or that any such Permits are about to be reviewed, made subject to limitation or condition, revoked, withdrawn or terminated, and to the knowledge of the Corporation, no such procedures or proceedings are pending or threatened;

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(iii) there are no outstanding, pending or, to the knowledge of the Corporation, any threatened, administrative, regulatory or judicial actions, suits, demands, claims, liens, order, directions or notices of non-compliance or violation, investigation or proceedings relating to any Environmental Laws or reclamation or closure obligations against the Corporation or any of the Subsidiaries, which if determined adversely, would reasonably be expected to have a Material Adverse Effect and the Corporation knows of no basis for any such aforementioned liabilities to arise in the future as a result of any activity conducted by the Corporation or any of the Subsidiaries (including any predecessor companies thereof), on any properties currently or formerly owned, leased, used or otherwise controlled by them. Neither the Corporation or any of its Subsidiaries (including any predecessor companies thereof) has received any notice of, or been prosecuted for an offence alleging, material non-compliance with any Environmental Laws, and neither the Corporation nor any of its Subsidiaries (including any predecessor companies thereof) has settled any allegation of material non-compliance short of prosecution; and

(ll) Intellectual Property. The Corporation and the Subsidiaries own or possess the right to use all material patents, trademarks, trademark registrations, service marks, service mark registrations, trade names, copyrights, licenses, inventions, trade secrets and rights necessary for the conduct of their respective businesses, and, other than as disclosed in the Public Disclosure Documents, the Corporation is not aware of any claim to the contrary or any challenge by any other person to the rights of the Corporation and the Subsidiaries with respect to the foregoing. To the knowledge of the Corporation, the Corporation’s business, including that of the Subsidiaries, as now conducted does not, and as currently proposed to be conducted will not, infringe or conflict with in any material respect patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses or other intellectual property or franchise right of any person. There are no current outstanding claims against the Corporation or the Subsidiaries alleging the infringement by the Corporation or the Subsidiaries of any patent, trademark, service mark, trade name, copyright, trade secret, license in or other intellectual property right or franchise right of any person;

(mm) Insurance. The Corporation and the Subsidiaries maintain insurance by insurers of recognized financial responsibility, against such losses, risks and damages to their Business Assets in such amounts that are customary for the business in which they are engaged and on a basis consistent with reasonably prudent persons in comparable businesses, and all of the policies in respect of such insurance coverage, fidelity or surety bonds insuring the Corporation, the Subsidiaries, and their respective directors, officers and employees, and the Business Assets, are in good standing and in full force and effect in all respects, and not in default. Each of the Corporation and the Subsidiaries is in compliance with the terms of such policies and instruments in all material respects and there are no material claims by the Corporation or the Subsidiaries under any such policy or instrument as to which any insurance company is denying liability or defending under a reservation of rights clause; the Corporation has no reason to believe that it will not be able to renew such existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business and the business of the Subsidiaries at a cost that would not have a Material Adverse Effect, and neither the Corporation nor any of the Subsidiaries has failed to promptly give any notice of any material claim thereunder;

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(nn) Material Agreements and Debt Instruments. All of the Material Agreements and Debt Instruments of the Corporation and of the Subsidiaries have been disclosed in the Public Disclosure Documents and each is valid, subsisting, in good standing and in full force and effect, enforceable in accordance with the terms thereof. The Corporation and the Subsidiaries have performed all material obligations (including payment obligations) in a timely manner under, and are in compliance with all material terms and conditions (including all financial covenants) contained in each Material Agreement and Debt Instrument. Except as disclosed in the Public Disclosure Documents neither the Corporation nor the Subsidiaries is in violation, breach or default nor has it received any notification from any party claiming that the Corporation or the Subsidiaries is in breach, violation or default under any Material Agreement or Debt Instrument and no other party, to the knowledge of the Corporation, is in breach, violation or default of any material term under any Material Agreement or Debt Instrument;

(oo) No Material Changes. Since September 30, 2015, except as disclosed in the Public Disclosure Documents: (i) there has been no material change in the assets, liabilities, obligations (absolute, accrued, contingent or otherwise) business, condition (financial or otherwise), properties, capital or results of operations of the Corporation and the Subsidiaries considered as one enterprise; and (ii) there have been no transactions entered into by the Corporation or the Subsidiaries, other than those in the ordinary course of business, which are material with respect to the Corporation and the Subsidiaries considered as one enterprise;

(pp) Absence of Proceedings. Other than as disclosed in the Public Disclosure Documents, there is no action, suit, proceeding, inquiry or investigation before or brought by any court or governmental agency, governmental instrumentality or body, domestic or foreign, now pending or, to the knowledge of the Corporation, threatened against or affecting the Corporation, any of the Subsidiaries or the Business Assets (including in respect of any product liability claims, drug products, material patents, patent applications, copyrighted material, technologies, licenses or proprietary or other data or confidential information currently licensed or employed by the Corporation and its Subsidiaries) which is required to be disclosed in the Public Disclosure Documents, and which if not so disclosed, or which if determined adversely, would have a Material Adverse Effect, or would materially and adversely affect the consummation of the transactions contemplated in this Agreement or the performance by the Corporation of its obligations hereunder. The aggregate of all pending legal or governmental proceedings to which the Corporation or any of the Subsidiaries is a party or of which any of their respective property or assets is subject, which are not described in the Public Disclosure Documents include only ordinary routine litigation incidental to the business, properties and assets of the Corporation and the Subsidiaries and would not reasonably be expected to result in a Material Adverse Effect;

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(qq) Regulatory. The Corporation represents and warrants that, except where a failure to comply would not reasonably be expected, on an individual or aggregate basis, to have a Material Adverse Effect: (i) the Corporation and each of its Subsidiaries is in compliance in all material respects with all applicable provisions of the Food and Drugs Act (Canada) and the regulations thereunder relating to its products, product candidates and activities and the United States Federal Food, Drug and Cosmetic Act and related legislation and regulations in the United States and the European Union; (ii) the Corporation and each of its Subsidiaries is in material compliance with the following specific requirements relating to its products, product candidates and activities in Canada and to applicable foreign jurisdictions, including the United States: (A) all of the products used by the Corporation and its Subsidiaries comply in all material respects with any conditions of approval and the terms of the applications, if any, submitted by or on behalf of the Corporation to Health Canada, the United States Food and Drug Administration, and to applicable foreign regulatory bodies; (B) all adverse events that were required to be reported by Corporation or its Subsidiaries to Health Canada, the United States Food and Drug Administration, and to corresponding foreign regulatory bodies have been reported to Health Canada, the United States Food and Drug Administration and said corresponding foreign regulatory body in a timely manner; and (C) all stability studies required to be performed by or on behalf of the Corporation for products used by the Corporation or any of its Subsidiaries have been completed or are ongoing in accordance with the applicable Health Canada requirements and to the requirements of the applicable foreign jurisdictions, including in the United States;

(rr) Manufacturing. The Corporation represents and warrants that all good manufacturing practices requirements that are applicable to the Corporation and the Subsidiaries have been and continue to be complied with in the relevant jurisdictions where it or its licensees are conducting activities and there have been no product recalls or facts that would require product recalls of its products or notifications to the applicable regulatory body or that would affect any of its registrations or licenses or applications therefore;

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(ss) Absence of Defaults and Conflicts. Except as disclosed in the Public Disclosure Documents, neither the Corporation nor the Subsidiaries is in material violation, default or breach of, and the execution, delivery and performance of the Transaction Documents and the consummation of the transactions and compliance by the Corporation with its obligations hereunder, the sale of the Subscription Receipts does not and will not, whether with or without the giving of notice or passage of time or both, result in a material violation, default or breach of, or conflict with, or result in a Repayment Event or the creation or imposition of any Lien upon any property or assets of the Corporation, or the Subsidiaries under the terms or provisions of: (i) any Material Agreements or Debt Instruments; (ii) the articles or by-laws or other constating documents or resolutions of the directors or shareholders of the Corporation or the Subsidiaries; (iii) any existing applicable law, statute, rule, regulation including applicable Securities Laws; or (iv) any judgment, order, writ or decree of any government, government instrumentality or court, domestic or foreign, having jurisdiction over the Corporation, or the Subsidiaries or any of their assets, properties or operations. As used herein, a “Repayment Event” means any event or condition which gives the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a material portion of such indebtedness by the Corporation or the Subsidiaries;

(tt) Labour. No material labour dispute with the employees of the Corporation or the Subsidiaries currently exists or, to the knowledge of the Corporation, is imminent. Neither the Corporation nor the Subsidiaries is a party to any collective bargaining agreement and, to the knowledge of the Corporation, no other action has been taken or is contemplated to organize any employees of the Corporation or the Subsidiaries;

(uu) Taxes. All tax returns, reports, elections, remittances and payments of the Corporation and the Subsidiaries required by applicable law to have been filed or made in any applicable jurisdiction, have been filed or made (as the case may be) and are true, complete and correct except where the failure to make such filing, election, or remittance and payment would not constitute a Material Adverse Effect, and all taxes of the Corporation and of the Subsidiaries have been paid or accrued in the Financial Statements (except as any extension may have been requested or granted and in any case in which the failure to file, pay or accrue such taxes would not result in a Material Adverse Effect). To the best of the knowledge of the Corporation, after due enquiry, no examination of any tax return of the Corporation or the Subsidiaries is currently in progress and there are no issues or disputes outstanding with any governmental authority respecting any taxes that have been paid, or may be payable, by the Corporation or the Subsidiaries;

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(vv) Statistical and Market-Related Data. The statistical, demographic and market-related data included in the Public Disclosure Documents is based on or derived from sources that the Corporation believes to be reliable and accurate or represent the Corporation’s good faith estimates that are made on the basis of data derived from such sources.

(ww) Unlawful Payment. Neither the Corporation nor the Subsidiaries nor to the knowledge of the Corporation, any employee or agent of the Corporation or the Subsidiaries, has made any unlawful contribution or other payment to any official of, or candidate for, any Canadian or United States federal, state, provincial or municipal office or any similar office of any other country, or failed to disclose fully any contribution, in violation of any law, or made any payment to any federal, provincial, state or municipal governmental officer or official, or other person charged with similar public or quasi-public duties, other than payments required or permitted by applicable laws;

(xx) Foreign Corrupt Practices Act. None of the Corporation, any of its Subsidiaries or, to the knowledge of the Corporation, any director, officer, agent, employee, affiliate or other person acting on behalf of the Corporation or any of its Subsidiaries is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”) or the Corruption of Foreign Public Officials Act (Canada), as amended (the “CFPOA”), including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any “foreign official” (as such term is defined in the FCPA), or any “foreign public official” (as such term is defined in the CFPOA), or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA and the CFPOA, and the Corporation and, to the knowledge of the Corporation , its affiliates have conducted their businesses in compliance with the FCPA and the CFPOA;

(yy) Money Laundering Laws. The operations of the Corporation and its Subsidiaries are, and have been conducted at all times, in compliance with all material applicable financial recordkeeping and reporting requirements of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada), the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar applicable rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Corporation or any of its Subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Corporation, threatened;

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(zz) Significant Acquisitions. Other than as previously disclosed in the Public Disclosure Documents, the Corporation has not entered into any agreement to complete any “significant acquisition” nor is it proposing any “probable acquisitions” (as such terms are defined in NI 51-102) that would require the filing of a Business Acquisition Report pursuant to Canadian Securities Laws;

(aaa) Previous Acquisitions. The Corporation or the Subsidiaries, as the case may be, conducted all due diligence procedures, in connection with the Acquisition and all previous acquisitions completed by the Corporation or any of the Subsidiaries of any securities, business or assets of any other entity since September 30, 2012, as are standard and customary for transactions of such nature;

(bbb) Corporation Short Form Eligible. The Corporation is eligible to file a short form prospectus in each of the Qualifying Jurisdictions pursuant to applicable Canadian Securities Laws and on the date of and upon filing of the Qualification Prospectus there will be no documents required to be filed under the Canadian Securities Laws in connection with the distribution of the Underlying Shares that will not have been filed as required;

(ccc) Compliance with Laws. The Corporation has complied, or will have complied, in all material respects with all relevant statutory and regulatory requirements required to be complied with prior to the Time of Closing in connection with the Offering. Neither the Corporation nor the Subsidiaries are aware of any legislation or proposed legislation, which they anticipate will have a Material Adverse Effect;

(ddd) No Loans. Neither the Corporation nor the Subsidiaries have made any material loans to or guaranteed the material obligations of any person, other than loans and guarantees between the Corporation and the Subsidiaries;

(eee) Directors and Officers. To the best of its knowledge, none of the directors or officers of the Corporation are now, or have ever been, subject to an order or ruling of any securities regulatory authority or stock exchange prohibiting such individual from acting as a director or officer of a public company or of a company listed on a particular stock exchange;

(fff) Minute Books and Records. The minute books and records of the Corporation and the Subsidiaries made available to legal counsel for the Underwriters in connection with their due diligence investigation of the Corporation for the period from the respective dates of incorporation to the date hereof are all of the minute books and records of the Corporation and the Subsidiaries and contain copies of all material proceedings (or certified copies thereof or drafts thereof pending approval) of the shareholders, the directors and all committees of directors of the Corporation and the Subsidiaries, as the case may be, to the date of review of such corporate records and minute books and there have been no other meetings, resolutions or proceedings of the shareholders, directors or any committees of the directors of the Corporation and the Subsidiaries to the date hereof not reflected in such minute books and other records, other than those which have been disclosed to the Underwriters or which are not material in the context of the Corporation and the Subsidiaries;

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(ggg) Employee Plans. The Documents Incorporated by Reference disclose, to the extent required by applicable Canadian Securities Laws, each material plan for retirement, bonus, stock purchase, profit sharing, stock option, deferred compensation, severance or termination pay, insurance, medical, hospital, dental, vision care, drug, sick leave, disability, salary continuation, legal benefits, unemployment benefits, vacation, incentive or otherwise contributed to, or required to be contributed to, by the Corporation for the benefit of any current or former director, officer, employee or consultant of the Corporation (the “Employee Plans”), each of which has been maintained in all material respects with its terms and with the requirements prescribed by any and all statutes, orders, rules and regulations that are applicable to such Employee Plans;

(hhh) Dividends. Except as disclosed in the Public Disclosure Documents, there are no restrictions upon or impediment to, the declaration or payment of dividends by the directors of the Corporation or the payment of dividends by the Corporation in the constating documents or in any Material Agreements or Debt Instruments;

(iii) Fees and Commissions. Other than the Underwriters pursuant to this Agreement, there is no other person acting at the request of the Corporation, or to the knowledge of the Corporation, purporting to act who is entitled to any brokerage, agency or other fiscal advisory or similar fee in connection with the Offering or transactions contemplated herein;

(jjj) Entitlement to Proceeds: Other than the Corporation, there is no person that is or will be entitled to demand the proceeds of the Offering;

(kkk) Related Parties. Except as disclosed in the Public Disclosure Documents, none of the directors, officers or employees of the Corporation, any known holder of more than 10% of any class of securities of the Corporation or securities of any person exchangeable for more than 10% of any class of securities of the Corporation, or any known associate or affiliate of any of the foregoing persons or companies (as such terms are defined in the Ontario Act), has had any material interest, direct or indirect, in any material transaction within the previous two years or any proposed material transaction which, as the case may be, materially affected or is reasonably expected to materially affect the Corporation and the Subsidiaries, on a consolidated basis. Neither the Corporation nor the Subsidiaries has any material loans or other indebtedness outstanding which has been made to any of its shareholders, officers, directors or employees, past or present, or any person not dealing at “arm’s length” (as such term is defined in the Income Tax Act (Canada)) with them;

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(lll) Acquisition Agreement Reps. The representations and warranties of Merus Labs Luxco II S.a R.L. and Merus Labs Netherlands BV in the Acquisition Agreement, a true copy of which has been provided to the Underwriters, were true and correct in all material respects, subject to any qualifications set out therein, as of the date thereof, and to the knowledge of the Corporation, the representations and warranties of Sanofi S.A. contained in the Acquisition Agreement are true and correct in all respects, subject to any qualifications set out therein, as of the date hereof;

(mmm) Acquisition Agreement Covenants. To the knowledge of the Corporation, there has been no (i) actual or alleged breach or default by any party of any provisions of the Acquisition Agreement and no event, condition, or occurrence exists which after the notice or lapse of time (or both) would constitute a breach or default by any party to the Acquisition Agreement; or (ii) dispute, termination, cancellation, amendment or renegotiation of the Acquisition Agreement, and, to the knowledge of the Corporation, no state of facts giving rise to any of the foregoing exists; and

(nnn) Full Disclosure. The Corporation has not withheld and will not withhold from the Underwriters prior to the Time of Closing, any material facts relating to the Corporation, its subsidiaries, the Acquisition or the Offering.

Section 8 Covenants of the Corporation

The Corporation covenants and agrees with the Underwriters, and acknowledges that each of them is relying on such covenants in connection with the purchase of the Subscription Receipts, that:

(1) Subscription Agreements. The Corporation shall duly execute and deliver the Subscription Agreements and any other material documents in connection with the Offering at the Time of Closing, and comply with and satisfy all terms, conditions and covenants herein or therein contained to be complied with or satisfied by the Corporation;

(2) Acquisition Closing. The Corporation will use its commercially reasonable efforts to satisfy all of the Escrow Release Conditions related to the Acquisition Closing as contemplated under the Acquisition Agreement as soon as possible after the date hereof, and shall keep the Underwriters reasonably informed, from time to time, of the status of the Acquisition and the satisfaction of the conditions thereof; provided that the Corporation shall not be obligated to waive any conditions to closing for its benefit under the Acquisition Agreement, or otherwise perform or cause to be performed any of the obligations of the other parties to the Acquisition Agreement set forth therein or in any of the agreements contemplated by the Acquisition Agreement;

(3) Legal Requirements. The Corporation shall fulfil all legal requirements to permit at the Time of Closing, the creation and issuance of the Subscription Receipts, the creation and the issuance of the Special Warrants and the issuance of the Underlying Securities, all as contemplated in the Transaction Documents and file or cause to be filed all documents, applications, forms or undertakings required to be filed by the Corporation and take or cause to be taken all action required to be taken by the Corporation in connection with the issuance of the Subscription Receipts and the Special Warrants so that the distribution of such securities may lawfully occur without the necessity of filing a prospectus in Canada or a registration statement in the United States or similar document in any other jurisdiction;

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(4) Notification of Adverse Matters. The Corporation will advise the Underwriters, promptly after receiving notice or obtaining knowledge thereof, of:

(a) the issuance by any Securities Commission of any order suspending or preventing the use of the Qualification Prospectus; or

(b) the institution, threatening or contemplation of any proceeding for any such purposes; or any requests made by any Securities Commission for amending or supplementing the Qualification Prospectus in any material way, or for additional material information, and will use its commercially reasonable efforts to prevent the issuance of any order referred to in (a) above and, if any such order is issued, to obtain the withdrawal thereof as quickly as possible;

(5) Standstill. From the date hereof until 90 days from the Closing Date, the Corporation agrees not to, without the prior written consent of the Co-Lead Underwriters, on behalf of the Underwriters, such consent not to be unreasonably withheld or delayed, authorize, sell or issue or announce its intention to authorize, sell or issue, or negotiate or enter into an agreement to sell or issue, any securities of the Corporation (including those that are convertible or exchangeable into securities of the Corporation) other than: (i) pursuant to the Offering; (ii) the issuance of non-convertible debt securities; (iii) upon the exercise of convertible securities, options or warrants of the Corporation outstanding as of the date hereof; (iv) pursuant to the Corporation’s stock option plan or restricted share unit plan; or (v) pursuant to a bona fide acquisition of shares or assets of arm’s length persons;

(6) Lock-Up Agreements. The Corporation will cause each of the directors and senior officers of the Corporation to enter into lock-up agreements in a form satisfactory to the Corporation and the Underwriters, which shall be negotiated in good faith and contain customary provisions, pursuant to which each such person agrees, for a period of 90 days after the Closing Date, not to directly or indirectly, offer, sell, contract to sell, grant any option to purchase, make any short sale, transfer, or otherwise dispose of or monetize the economic value of (or announce any intention to do any of the foregoing) any securities of the Corporation, whether now owned directly or indirectly, or under their control or direction, or with respect to which each has beneficial ownership, subject to the following exceptions: (i) if the Corporation receives an offer, which has not been withdrawn, to enter into a transaction or arrangement, or proposed transaction or arrangement, pursuant to which, if entered into or completed substantially in accordance with its terms, a party could, directly or indirectly acquire an interest (including an economic interest) in, or become the holder of, 100% of the total number of common shares in the Corporation, whether by way of takeover offer, scheme of arrangement, shareholder approved acquisition, capital reduction, share buyback, securities issue, reverse takeover, dual-listed company structure or other synthetic merger, transaction or arrangement; (ii) in respect of sales to affiliates of such shareholder; (iii) as a result of the death of any individual shareholder; or (iv) with the written consent of the Co-Lead Underwriters, such consent not to be unreasonably withheld or delayed;

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(7) Maintain Reporting Issuer Status. The Corporation will use its reasonable best efforts to maintain its status as a “reporting issuer” (or the equivalent thereof) not in default of the requirements of the Canadian Securities Laws in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick and Prince Edward Island, and following the filing of the Qualification Prospectus in each of the Qualifying Jurisdictions, to the date that is at least 24 months following the Closing Date, provided that the foregoing requirement is subject to the obligations of the directors to comply with their fiduciary duties to the Corporation;

(8) Maintain Stock Exchange Listing. The Corporation will use its reasonable best efforts to maintain the listing of the Common Shares on the TSX, NASDAQ or any other recognized stock exchange or quotation system, for a period of at least 24 months following the Closing Date, provided that the foregoing requirement is subject to the obligations of the directors to comply with their fiduciary duties to the Corporation;

(9) Validly Issued Securities. The Corporation shall ensure that: (i) at all times prior to the Deemed Exercise Date, a sufficient number of Underlying Shares are duly and validly allotted and reserved for issuance upon the due exercise of the Special Warrants; and (ii) upon the due exercise of the Special Warrants, the Underlying Shares will be duly issued as fully paid and non-assessable shares in the capital of the Corporation;

(10) Use of Proceeds. The Corporation will use the proceeds of the Offering in the manner specified in the Subscription Receipt Agreement;

(11) Consents and Approvals. The Corporation will have made or obtained, as applicable, at or prior to the Time of Closing, all consents, approval, permits, authorizations or filings as may be required by the Corporation under Securities Laws necessary for the consummation of the transactions contemplated herein, other than customary post-closing filings required to be submitted within the applicable time frame pursuant to Securities Laws, “blue sky laws” in the United States and the rules of the TSX and NASDAQ; and

(12) Closing Conditions. The Corporation will have, at or prior to the Time of Closing, fulfilled or caused to be fulfilled, each of the conditions set out in Section 10 hereof.

(13) Filings. The Corporation shall execute and file with the Securities Regulators and the TSX and the NASDAQ all forms, notices and certificates required to be filed by the Corporation pursuant to the Securities Laws and the policies of the Exchanges in the time required by the applicable Securities Laws and the policies of the Exchanges, including, for greater certainty, Form 45-106F1 and Form 45-106F6 of NI 45-106 and any other forms, notices and certificates set forth in the opinions delivered to the Underwriters pursuant to the closing conditions set forth in Section 6.2 hereof, as are required to be filed by the Corporation.

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 Section 9 Representations, Warranties and Covenants of the Underwriters

(1) The Underwriter hereby severally, and not jointly, nor jointly and severally, represent and warrant to the Corporation, the following, which representations and warranties will be true and correct at the Time of Closing and the filing of the Qualification Prospectus:

(a) Registration. The Underwriters are, and will remain so, until the completion of the Offering, appropriately registered under applicable Canadian Securities Laws so as to permit it to lawfully fulfill its obligations hereunder.

(b) Authority. The Underwriters have good and sufficient right and authority to enter into this Agreement and complete the transactions contemplated under this Agreement on the terms and conditions set forth herein.

(2) The Underwriters hereby severally, and not jointly, nor jointly and severally, covenant and agree with the Corporation, the following:

(c) Jurisdictions and Offering Price. The Underwriters will: (i) offer and sell Subscription Receipts on a private placement basis in the Selling Jurisdictions or where they may lawfully be offered for sale upon the terms and conditions set forth in this Agreement and in compliance with Securities Laws either directly or through other registered investment dealers and brokers; (ii) not offer, sell, trade or otherwise do any act in furtherance of a trade of the Subscription Receipts so as to require registration thereof or the filing of a prospectus, offering memorandum or similar document with respect thereto under the laws of any of the Selling Jurisdictions; (iii) obtain from each Purchaser an executed Subscription Agreement and shall deliver copies of such agreements to the Corporation at least two (2) Business Days prior to the date schedule for Closing, together with all documentation (as supplied to the Underwriters by the Corporation) as may be necessary under applicable Securities Laws in connection with the distribution of the Subscription Receipts and as may be reasonably required by the Corporation in order to confirm the availability of a private placement exemption (including any documentation prescribed by the TSX or NASDAQ), in form acceptable to the Corporation and the Underwriters, each acting reasonably; (iv) not make available to prospective Purchasers of Underlying Shares any documents which would constitute an offering memorandum as defined under Canadian Securities Laws and will not advertise the proposed sale of such securities in printed public media, radio, television or telecommunications, including electronic display, and (iv) not make any representations or warranties with respect to the Corporation or the Subscription Receipts without the approval of the Corporation; and provided that they are satisfied, in their sole discretion, acting reasonably.

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(d) Compliance with Securities Laws. The Underwriters will comply with applicable Securities Laws in connection with the offer and sale and distribution of the Subscription Receipts and will use its commercially reasonable best efforts to ensure that all members of any selling dealer group will likewise comply with applicable Securities Laws.

(e) Qualification Prospectus. The Underwriters will: (i) fulfil all material legal requirements (including, without limitation, compliance with Applicable Securities Laws) to be fulfilled by an underwriter in connection with the filing of the Qualification Prospectus in the Qualifying Jurisdictions; (ii) upon being satisfied, acting reasonably, that the Qualification Prospectus and any amendments thereto is in a form satisfactory for filing with the Commissions, execute the prospectus supplement forming part of the Qualification Prospectus and any amendments thereto, as the case may be, presented to the Underwriters for execution; and (iii) execute all such other documents and materials as may reasonably be required and as are customary in connection with the filing of the Qualification Prospectus.

(f) Liability on Default. No Underwriter shall be liable to the Corporation under this Section with respect to a breach or default by any of the other Underwriters (or any member of the selling dealer group appointed by another Underwriter).

Section 10 Conditions of Closing

The Underwriters’ obligation to purchase the Subscription Receipts pursuant to this Agreement shall be subject to the following conditions:

(1) the Underwriters receiving at the Time of Closing, favourable legal opinions from McMillan LLP, legal counsel to the Corporation (who may rely, to the extent appropriate in the circumstances, on the opinions of local legal counsel acceptable to legal counsel to the Underwriters as to other matters governed by the laws of jurisdictions in Canada other than the provinces in which they are qualified to practice and may rely, to the extent appropriate in the circumstances, as to matters of fact on certificates of officers, public and exchange officials or of the auditor or transfer agent of the Corporation), to the effect set forth below subject to customary assumptions, qualifications and limitations:

(a) the Corporation is a corporation validly existing under the Business Corporations Act (British Columbia) and has all requisite corporate power and capacity to carry on business, to own and lease its properties and assets;

(b) the Corporation has all necessary corporate power and authority to execute, deliver and perform its obligations under the Transaction Documents and to issue and sell the Subscription Receipts, the Special Warrants and the Underlying Shares, as applicable;

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(c) the authorized and issued capital of the Corporation;

(d) all necessary corporate action has been taken by the Corporation to authorize the execution and delivery of the Transaction Documents and the performance of its obligations hereunder and the Transaction Documents have been duly executed and delivered by the Corporation and each constitute a legal, valid and binding obligation of the Corporation enforceable against it in accordance with its terms, subject to bankruptcy, insolvency and other laws affecting the rights of creditors generally and subject to such other standard assumptions, limitations and qualifications including the qualifications that equitable remedies may be granted in the discretion of a court of competent jurisdiction and a limitation that no opinion is expressed as to the enforceability of the rights of indemnity, contribution or waiver of contribution set forth in this Agreement;

(e) the execution and delivery of the Transaction Documents and the fulfilment of the terms hereof and thereof by the Corporation and the issuance, sale and delivery of the Subscription Receipts, Special Warrants and Underlying Shares does not and will not result in a breach of or default under, and do not and will not create a state of facts which, after notice or lapse of time or both, will result in a breach of or default under, and do not and will not conflict with the notice of articles or articles of the Corporation, any resolutions of the shareholders or directors of the Corporation, or the British Columbia Business Corporations Act or Canadian Securities Laws;

(f) that the Subscription Receipts have been validly created, executed and issued by the Corporation and constitute valid and binding obligations of the Corporation enforceable against it in accordance with their terms;

(g) that the Special Warrants will, upon issuance pursuant to the conversion of the Subscription Receipts, be validly created, executed and issued by the Corporation and constitute valid and binding obligations of the Corporation enforceable against it in accordance with their terms;

(h) that the Underlying Shares have been duly authorized and validly allotted for issuance by the Corporation and, when issued in accordance with the terms of the Special Warrants, will be outstanding as fully paid and non-assessable shares in the capital of the Corporation;

(i) assuming that each of the Purchasers residing in the Qualifying Jurisdictions is an “accredited investor” as such term is defined in NI 45-106 and is purchasing as principal, that the issuance and sale by the Company of the Subscription Receipts to such Purchasers are exempt from the prospectus requirements of applicable Canadian Securities Laws and no documents are required to be filed (other than specified forms accompanied by requisite filing fees), proceedings taken or approvals, permits, consents or authorizations obtained under the applicable Canadian Securities Laws to permit such issuance and sale; and that the issuance of the Special Warrants upon the conversion of the Subscription Receipts and the issuance of the Underlying Shares upon the exercise or deemed exercise of the Special Warrants will be exempt from the prospectus requirements of applicable Canadian Securities Laws, and no documents are required to be filed, proceedings taken or approvals, permits, consents or authorizations obtained under the applicable Canadian Securities Laws to permit such issuances;

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(j) that no other documents will be required to be filed, proceedings taken or approvals, permits, consents or authorizations obtained under the applicable Canadian Securities Laws in connection with the first trade of the Special Warrants or the Underlying Shares provided that four months have lapsed since the Closing Date and subject to the standard assumptions and qualifications;

(k) that if a Qualification Prospectus qualifying the distribution of the Underlying Shares is filed before the Deemed Exercise Date: (A) such Underlying Shares would not be subject to any statutory hold period or restricted period under the applicable Canadian Securities Laws, and (B) no documents would be required to be filed, proceedings taken or approvals, permits, consents or authorizations obtained under the applicable Canadian Securities Laws in order to permit the first trade of such Underlying Shares in the Qualifying Jurisdictions, subject to the standard assumptions and qualifications;

(l) The Subscription Receipts, the Special Warrants (upon the due conversion of the Subscription Receipts) and Underlying Shares (upon the due conversion of the Special Warrants) would if issued on the date hereof be qualified investments under the Tax Act for trusts governed by registered retirement savings plans, registered retirement income funds, registered disability savings plans, deferred profit sharing plans, registered education savings plans and tax-free savings accounts, each as defined in the Tax Act, if and provided that at all material times (i) the Underlying Shares are listed on a ‘‘designated stock exchange’’ for purposes of the Tax Act (which currently includes the TSX), and (ii) in the case of the Subscription Receipts and the Special Warrants, the Corporation is not a “connected person” (as defined in the Tax Act) under the governing plan of the Trust;

(m) subject only to the standard listing conditions and the requirements set forth in the conditional approval letters of the TSX and NASDAQ, the Underlying Shares have been conditionally listed or approved for listing on the TSX and NASDAQ; and

(n) to such other matters as may reasonably be requested by the Underwriters no less than 48 hours prior to the Time of Closing, in a form acceptable to the Co-Lead Underwriters and their legal counsel, acting reasonably.

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(2) if any Subscription Agreements are sold to Purchasers in the United States, the Co-Lead Underwriters receiving at the Time of Closing a favourable legal opinion addressed to the Co-Lead Underwriters, in form and substance satisfactory to the Co-Lead Underwriters, acting reasonably, dated as of the Closing Date, from McMillan LLP, to the effect that registration of (i) the Subscription Receipts upon offer and sale pursuant to this Agreement, including Schedule “A” hereto, (ii) the issuance of the Special Warrants upon conversion of the Subscription Receipts; and (iii) the issuance of the Underlying Shares upon exercise or deemed exercise of the Special Warrants will not be required under the U.S. Securities Act;

(3) the Underwriters having received certificates dated the Closing Date and signed by two senior officers of the Corporation as may be acceptable to the Co-Lead Underwriters, acting reasonably, in form and content satisfactory to the Co-Lead Underwriters, acting reasonably, with respect to:

(a) the constating documents of the Corporation;

(b) the resolutions of the directors of the Corporation relevant to the Qualification Prospectus, the sale of the Subscription Receipts and, as applicable, the authorization of the Transaction Documents and the transactions contemplated therein; and

(c) the incumbency and signatures of signing officers for the Corporation;

(4) the Underwriters receiving certificates of status and/or compliance, where issuable under applicable law, for the Corporation and the Subsidiaries, each dated within one (1) Business Day prior to the Closing Date;

(5) the Underwriters receiving from the Corporation at the Time of Closing, a certificate dated the Closing Date and signed by the Chief Executive Officer and the Chief Financial Officer or such other senior officer(s) of the Corporation as may be acceptable to the Co-Lead Underwriters, certifying for and on behalf of the Corporation and without personal liability, after having made due enquiries, that:

(a) no order, ruling or determination having the effect of suspending the sale or ceasing the trading or prohibiting the sale of the Subscription Receipts or any other securities of the Corporation (including the Common Shares) has been issued by any regulatory authority and is continuing in effect and no proceedings for that purpose have been instituted or are pending or, to the knowledge of such officers, contemplated or threatened by any regulatory authority;

(b) (A) there has been no material change (actual, anticipated, contemplated or threatened, whether financial or otherwise) in the business, affairs, operations, assets, liabilities (contingent or otherwise), prospects or capital of the Corporation on a consolidated basis, and (B) no transaction has been entered into by either the Corporation or the Subsidiaries which is material to the Corporation on a consolidated basis, other than as disclosed in the Public Disclosure Documents;

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(c) there has been no change in any material fact (which includes the disclosure of any previously undisclosed material fact) contained in the Public Disclosure Documents which fact or change is, or may be, of such a nature as to render any statement in the Public Disclosure Documents misleading or untrue in any material respect or which would result in a misrepresentation in the Public Disclosure Documents or which would result in the Public Disclosure Documents not complying with applicable Securities Laws;

(d) the Corporation has complied in all material respects with all the covenants and satisfied in all material respects all the terms and conditions of the Transaction Documents on its part to be complied with and satisfied at or prior to the Time of Closing; and

(e) the representations and warranties of the Corporation contained in this Agreement, and in any certificates of the Corporation delivered pursuant to or in connection with this Agreement, are true and correct in all material respects as of the Time of Closing as if such representations and warranties were made as at the Time of Closing, after giving effect to the transactions contemplated hereby;

(6) the Underwriters receiving the executed lock-up agreements from each director and officer of the Corporation in favour of the Underwriters in a form satisfactory to the Underwriters as required pursuant to Section 8(6) of this Agreement;

(7) the Underwriters receiving, at the Time of Closing, a certificate from Computershare Investor Services Inc. as to the number of Common Shares issued and outstanding as at the end of business day on the date prior to the Closing Date;

(8) at the Time of Closing, no order, ruling or determination having the effect of ceasing or suspending trading in any securities of the Corporation or prohibiting the sale of the Subscription Receipts or any of the Corporation’s issued securities being issued and no proceeding for such purpose being pending or, to the knowledge of the Corporation, threatened by any securities regulatory authority or the TSX or NASDAQ;

(9) the Corporation having delivered to the Underwriters evidence of the approval (or conditional approval) of the listing and posting for trading of the Underlying Shares on the TSX and NASDAQ, subject only to satisfaction by the Corporation of standard listing conditions and matters set forth in the conditional listing approval letters of the TSX and NASDAQ, as applicable;

(10) the Corporation complying with all of its covenants and obligations under this Agreement required to be satisfied at or prior to the Time of Closing;

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(11) the Underwriters not having exercised any rights of termination set forth herein; and

(12) the Underwriters having received at the Time of Closing such further certificates, opinions of legal counsel and other documentation from the Corporation contemplated herein, provided, however, that the Underwriters or their legal counsel shall request any such certificate or document within a reasonable period prior to the Time of Closing that is sufficient for the Corporation to obtain and deliver such certificate, opinion or document.

Section 11 Closing

(1) Location of Closing. The Offering will be completed at the offices of McMillan LLP in Vancouver, British Columbia at the Time of Closing.

(2) Securities. At the Time of Closing, subject to the terms and conditions contained in this Agreement, the Corporation shall deliver to the Underwriters in Toronto, Ontario, the Subscription Receipts, in electronic or certificated form, registered as directed by the Co-Lead Underwriters, on behalf of the Underwriters, in writing not less than 24 hours prior to the Time of Closing, against payment to the Corporation by the Co-Lead Underwriters, on behalf of the Underwriters, of the aggregate Offering Price for the Subscription Receipts being issued and sold hereunder by wire transfer or certified cheque, net of the Commission and any expenses of the Underwriters payable by the Corporation as set out in this Agreement.

Section 12 Indemnification and Contribution

(1) The Corporation together with its subsidiaries or affiliated companies, as the case may be (collectively, the “Indemnitor”) hereby agrees to indemnify and hold each of the Underwriters, and/or any of their respective subsidiaries and affiliates and each of their respective directors, officers, employees, unitholders and agents (collectively, the “Indemnified Parties” and individually an “Indemnified Party”) harmless from and against any and all expenses, losses (other than loss of profits), fees, claims, actions (including shareholder actions, derivative actions or otherwise), suits, proceedings, damages, liabilities or expenses of whatever nature or kind, whether joint or several, including the aggregate amount paid in reasonable settlement of any actions, suits, proceedings, investigations or claims, and the reasonable fees and expenses of their legal counsel (collectively, the “Losses”) that may be incurred in investigating or advising with respect to and/or defending or settling any actual or threatened claims, actions, suits, proceedings or investigation (collectively, the “Claims”) that may be made against the Indemnified Parties or to which the Indemnified Parties may become subject or otherwise involved in any capacity under any statute or common law or otherwise insofar as such Losses and/or Claims arise out of or are based, directly or indirectly, upon the performance of professional services rendered to the Corporation by the Indemnified Parties hereunder or otherwise in connection with the matters referred to in this Agreement. Without limiting the generality of the foregoing, this indemnity shall apply to all Losses that the Indemnified Parties may incur as a result of any Claim that may be threatened or brought against the Indemnified Parties. This indemnity shall cease to apply to an Indemnified Party to the extent that a court of competent jurisdiction in a final judgment that has become non-appealable shall determine that such Losses were solely caused by the gross negligence, willful misconduct, bad faith or fraud of such Indemnified Party. For greater certainty, the Corporation and the Underwriters agree that they do not intend that any failure by the Underwriters to conduct such reasonable investigation as necessary to provide the Underwriters with reasonable grounds for believing the Qualification Prospectus contained no misrepresentation shall constitute “gross negligence”, “willful misconduct”, “bad faith” or “fraud” for purposes of this Section 12(1) or otherwise disentitle the Underwriters from indemnification hereunder.

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(2) If for any reason (other than a determination as to any of the events referred to above) the foregoing indemnity is unavailable to an Indemnified Party, or is insufficient to hold them harmless, then the Indemnitor shall contribute to the Losses paid or payable by such Indemnified Party as a result of such Claim in such proportion as is appropriate to reflect not only the relative benefits received by the Indemnitor on the one hand and the Indemnified Party on the other hand but also the relative fault of the Indemnitor and the Indemnified Party as well as any relevant equitable considerations, provided that the Indemnitor shall in any event contribute to the Losses paid or payable by the Indemnified Party as a result of such Claim, in such amount that is in excess of the amount of the Commission actually received by the Underwriters pursuant to this Agreement. In the case of liability arising out of the Qualification Prospectus, the relative fault of the Corporation, on the one hand, and of the Underwriters, on the other hand, shall be determined by reference, among other things, to whether the misrepresentation or alleged misrepresentation, order, inquiry, investigation or other matter or thing referred to in Section 12 relates to information supplied or which ought to have been supplied by, or steps or actions taken or done on behalf of or which ought to have been taken or done on behalf of the Corporation or the Underwriters and the parties’ relative intent knowledge, access to information and opportunity to correct or prevent such misrepresentation or alleged misrepresentation, order, inquiry, investigation or other matter or thing referred to in Section 12. In no event, shall the Indemnified Parties be responsible to pay any amount in excess of the amount of the Commission actually received by it and the Indemnitor agrees not to seek or claim any such excess amounts pursuant to this Section 12(2). In the event that the Indemnitor may be entitled to contribution from the Indemnified Parties pursuant to this Section 12(2), the Indemnitor shall be limited to contribution in any amount not exceeding the lesser of the portion of the Losses giving rise to such contribution for which the Underwriters are responsible and the amount of the Commission received by the Underwriters.

(3) Promptly after receipt of notice of the commencement of any legal proceeding against an Indemnified Party or after receipt of notice of the commencement of any investigation, which is based, directly or indirectly, upon any matter in respect of which indemnification may be sought from the Indemnitor, the Underwriters will notify the Corporation in writing of the commencement thereof and, throughout the course thereof, will provide copies of all relevant documentation to the Indemnitor, will keep the Indemnitor advised of the progress thereof and will discuss with the Indemnitor all significant actions proposed. The omission to so notify the Indemnitor shall not relieve the Indemnitor of its obligations to indemnify the Indemnified Parties, except to the extent that the failure to so notify materially prejudicially affects the Indemnitor. The Indemnitor shall on behalf of itself and the Indemnified Party, as applicable, be entitled to (but not required to), at its own expense, participate in and assume the defence of any Claim, provided such defence is conducted by legal counsel of good standing acceptable to the Indemnified Party, acting reasonably, and the Indemnitor shall throughout the course thereof provide copies of all relevant documentation to the Indemnified Party, will keep the Indemnified Party advised of all discussions and significant actions proposed in respect thereof. The Indemnified Parties shall also have the right to appoint its or their own separate legal counsel at the Indemnitor’s cost provided the Indemnified Parties act reasonably in selecting such legal counsel.

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(4) The Indemnitor agrees that in case any legal proceeding shall be brought against the Indemnitor and/or any Indemnified Party by any governmental commission or regulatory authority or any stock exchange or other entity having regulatory authority, either domestic or foreign, or any such authority shall investigate the Indemnitor and/or any Indemnified Party and any Indemnified Parties or their personnel shall be required to testify in connection therewith or shall be required to participate or respond to procedures designed to discover information regarding, in connection with, or by reason of the performance of professional services rendered to the Corporation by the Indemnified Parties, the Indemnified Party shall have the right to employ its own legal counsel in connection therewith, provided they act reasonably in selecting such legal counsel, and the reasonable fees and expenses of such legal counsel as well as the reasonable costs (including an amount to reimburse the Indemnified Parties for time spent by them or their personnel in connection therewith at their normal per diem rates together with such disbursements and reasonable out-of-pocket expenses incurred by the Indemnified Parties or their personnel in connection therewith) shall be paid by the Indemnitor as they occur.

(5) A party hereunder shall not, without the other party’s prior written consent, such consent not to be unreasonably withheld or delayed, settle, compromise or consent to the entry of any judgment or make an admission of liability with respect to any Claims or seek to terminate any Claims in respect of which indemnification may be sought hereunder. Neither party hereunder shall be liable for any such settlement of any Claim unless it has consented in writing to such settlement, such consent not to be unreasonably withheld.

(6) The rights accorded to the Indemnified Parties hereunder shall be in addition to any rights an Indemnified Party may have at common law or otherwise.

(7) The Indemnitor agrees to waive any right the Indemnitor may have of first requiring the Indemnified Party to proceed against or enforce any right, power, remedy, security or claim payment from any other person before claiming under this indemnity. The Indemnitor hereby acknowledges that the Underwriters are acting as trustees for each of the other Indemnified Parties of the Indemnitor’s covenants under this indemnity and the Underwriters agree to accept such trust and to hold and enforce such covenants on behalf of such persons.

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(8) The indemnity and contribution obligations of the Indemnitor shall be in addition to any liability which the Indemnitor may otherwise have, shall extend upon the same terms and conditions to the Indemnified Parties who are not signatories hereto and shall be binding upon and enure to the benefit of any successors, assigns, heirs and personal representatives of the Corporation and the Indemnified Parties.

Section 13 Expenses

Whether or not the purchase and sale of the Subscription Receipts shall be completed, all costs and expenses of or incidental to the sale and delivery of the Subscription Receipts and of or incidental to all matters in connection with the transactions herein shall be borne by the Corporation and payable by the Corporation immediately upon receiving an invoice from the Underwriters, including, without limitation, all expenses of or incidental to the issue, sale or distribution of the Subscription Receipts, the fees and expenses of the Corporation’s legal counsel, auditors and independent experts, all costs incurred in connection with the preparation of documents relating to the Offering, and the reasonable expenses and fees incurred by the Underwriters which shall include the reasonable fees (to a maximum of $150,000 exclusive of disbursements and taxes) and disbursements of the Underwriters’ legal counsel and applicable taxes thereon. At the option of the Underwriters, such fees and expenses may be netted out of the gross proceeds of the Offering otherwise payable to the Corporation on the Closing Date.

Section 14 All Terms to be Conditions

The Corporation agrees that the conditions contained in this Agreement will be complied with insofar as the same relate to acts to be performed or caused to be performed by the Corporation and each of the Corporation and the Underwriters will use its respective reasonable best efforts to cause all such conditions to be complied with. Any material breach or failure to comply with any of the conditions set out in this Agreement that are in the control of the Corporation shall entitle any of the Underwriters to terminate their obligation to purchase the Subscription Receipts, by written notice to that effect given to the Corporation at or prior to the Time of Closing. It is understood that the Underwriters may waive, in whole or in part, or extend the time for compliance with, any of such terms and conditions without prejudice to the rights of the Underwriters in respect of any such terms and conditions or any other or subsequent breach or non-compliance, provided that to be binding on an Underwriter any such waiver or extension must be in writing and signed by such Underwriter.

Section 15 Termination by Underwriters in Certain Events

(1) Each Underwriter shall also be entitled to terminate its obligation to purchase the Subscription Receipts by written notice to that effect given to the Corporation at or prior to the Time of Closing if:

(a) any inquiry, action, suit, investigation or other proceeding whether formal or informal (including matters of regulatory transgression or unlawful conduct) is instituted, announced, threatened, or any order or ruling is made or threatened by any federal, provincial, state, municipal or other governmental department, commission, board, bureau, court, tribunal, agency, regulatory authority or other instrumentality, including without limitation, the TSX, NASDAQ or any securities regulatory authority involving the Corporation or any of its officers or directors (including those of its Subsidiaries), which, in each case, in the sole reasonable opinion of any Underwriter, operates to prevent, suspend or restrict materially the trading or distribution of the Common Shares of the Corporation or the Subscription Receipts, except for such inquiry, investigation, proceeding or order based solely on the activities of the Underwriters and not the Corporation;

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(b) there should develop, occur or come into effect or existence any occurrence, event or incident of any nature, including without limitation, accident, natural disaster, act or terrorism, public protest, governmental law or regulation, or major financial occurrence of national or international consequence, which in the reasonable opinion of any Underwriter seriously adversely affects or involves, or may materially adversely affect or involve, the national or international financial markets or the properties, operations, business, affairs, financial condition or assets of the Corporation or any of the Subsidiaries, in aggregate taken as a whole, or the market price or value of the securities of the Corporation;

(c) there is, in the reasonable opinion of any Underwriter, any material change in relation to the Corporation and its Subsidiaries, in aggregate taken as a whole, or any change in any material fact or a new material fact shall arise, or if there should, whether as a result of the Underwriters’ continuing due diligence or otherwise, be discovered any previously undisclosed material fact (including in respect of any of the Subsidiaries), required to be disclosed in the Base Prospectus or the Qualification Prospectus which, in any case, in the sole reasonable opinion of the Underwriters, has or could be expected to have a material adverse effect on the market price or value of the Corporation’s Common Shares;

(d) the Corporation is in material breach of a term, condition or covenant of this Underwriting Agreement, or any material representation or warranty given by the Corporation in this Underwriting Agreement or any ancillary document is false or untrue or has become false or untrue; or

(e) an order to cease trading in the securities of the Corporation is made or threatened by any Securities Commission.

(2) If this Agreement is terminated by any of the Underwriters pursuant to Section 15(1), there shall be no further liability on the part of such Underwriter or of the Corporation to such Underwriter, except in respect of any liability which may have arisen or may thereafter arise under Section 12 and Section 13.

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(3) The right of the Underwriters or any of them to terminate their respective obligations under this Agreement is in addition to such other remedies as they may have in respect of any default, act or failure to act of the Corporation in respect of any of the matters contemplated by this Agreement. A notice of termination given by one Underwriter under this Section 15 shall not be binding upon the other Underwriters.

Section 16 Obligations of the Underwriters to be Several

(1) Subject to the terms and conditions hereof, the obligation of the Underwriters to purchase the Subscription Receipts shall be several and not joint nor joint and several. The percentage of the Subscription Receipts to be severally purchased and paid for by each of the Underwriters shall be as follows:

Canaccord Genuity Corp.	22.5%
Clarus Securities Inc.	22.5%
Cormark Securities Inc.	12.5%
Laurentian Bank Securities Inc.	12.5%
Dundee Securities Inc.	6.0%
GMP Securities L.P.	6.0%
TD Securities Inc.	6.0%
CIBC World Markets Inc.	6.0%
Scotia Capital Inc.	6.0%

(2) If any of the Underwriters shall not complete the purchase and sale of its applicable percentage of the aggregate amount of the Subscription Receipts at the Time of Closing for any reason whatsoever, including by reason of Section 15 hereof, and the number of Offered Securities with respect to which such default relates is less than 10% of the aggregate number of Subscription Receipts, the other Underwriters shall have the right, but shall not be obligated, to purchase the Subscription Receipts which would otherwise have been purchased by the Underwriter which fails to purchase but if no such arrangements are made by the Closing Date, the other Underwriters shall be obligated, severally and not jointly, in the proportions that the number of Offered Securities set forth above opposite their respective names bears to the aggregate number of Offered Securities set forth opposite the names of all such non-defaulting Underwriters, or in such other proportions as may be specified by the Underwriters with the consent of the non-defaulting Underwriters to purchase the Offered Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase on such date. If any of the Underwriters shall not complete the purchase and sale of its applicable percentage of the aggregate amount of the Subscription Receipts at the Time of Closing for any reason whatsoever, including by reason of Section 15 hereof, and the number of Offered Securities with respect to which such default relates exceeds 10% of the aggregate number of Subscription Receipts, the other Underwriters shall have the right, but shall not be obligated, to purchase the Subscription Receipts which would otherwise have been purchased by the Underwriter which fails to purchase. If, with respect to the Subscription Receipts, the non-defaulting Underwriters elect not to exercise such rights to assume the entire obligations of the defaulting Underwriter, then the Corporation shall have the right to either: (i) proceed with the sale of the Subscription Receipts (less the defaulted shares) to the non-defaulting Underwriters; or (ii) terminate its obligations hereunder without liability except pursuant to the provisions of Section 12 and Section 13 in respect of the non-defaulting Underwriters. For greater certainty, nothing in this Section 16(2) will relieve any defaulting Underwriter from any liability under this Agreement for failure to purchase its proportionate share of Offered Securities otherwise from its default.

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(3) Additionally, nothing in this Section 16 shall oblige the Corporation to sell to the Underwriters less than all of the Subscription Receipts or shall relieve an Underwriter in default hereunder from liability to the Corporation.

Section 17 TMX Group

The Corporation hereby acknowledges that each of CIBC World Markets Inc., Scotia Capital Inc. and TD Securities Inc., or an affiliate thereof, owns or controls an equity interest in TMX Group Limited (“TMX Group”) and has a nominee director serving on the TMX Group’s board of directors. As such, each such investment dealer may be considered to have an economic interest in the listing of securities on any exchange owned or operated by TMX Group, including the TSX, the TSX Venture Exchange and the Alpha Exchange. No person or company is required to obtain products or services from TMX Group or its affiliates as a condition of any such dealer supplying or continuing to supply a product or service.

Section 18 Notices

Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be delivered,

(a)	in the case of the Corporation, to:
	Merus Labs International Inc. 100 Wellington St. West Suite 2110, P.O. Box 151 Toronto, ON M5K 1H1
	Attention: Barry Fishman Fax: (416) 593-4434
	with a copy (which shall not constitute notice) to:
	McMillan LLP Royal Centre, 1055 W. Georgia Street, Suite 1500 PO Box 11117 Vancouver, BC V6E 4N7
	Attention: Michael Taylor Fax: (604) 685-7084

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(b)	in the case of the Underwriters to:
	Canaccord Genuity Corp. 161 Bay Street, Suite 3100 Toronto, Ontario M5J 2S1
	Attention: Steven Winokur Fax: (416) 869-3876
	Clarus Securities Inc. 130 King St. W., Suite 3640 Toronto, Ontario M5X 1A9
	Attention: Robert Orviss Fax: (416) 343-2798
	Cormark Securities Inc. Royal Bank Plaza, South Tower 200 Bay Street, Suite 2800 Toronto, Ontario M5J 2J2
	Attention: Chris Shaw Fax: (416) 943-6459
	Laurentian Bank Securities Inc. 1981 Avenue McGill College, Suite 1900 Montreal, Quebec H3A 3K3
	Attention: Nicolas Rimbert Fax: (514) 284-9797
	CIBC World Markets Inc. 161 Bay Street, 6th Floor Toronto, Ontario M5J 2S8
	Attention: Ryan Voegeli Fax: (416) 594-7226
	Dundee Securities Ltd. 1 Adelaide Street East, Suite 2000 Toronto, Ontario M5C 2V9
	Attention: Donato Sferra Fax: (416) 350-3312

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GMP Securities L.P.

145 King Street West, Suite 300

Toronto, Ontario

M5H 1J8

Attention: Steve Ottaway

Fax: (416) 943-6160

Scotia Capital Inc.

40 King Street West, 66^th Floor

Toronto, Ontario M5W 2X6

Attention: Chad Graves

Fax: (416) 863-7117

TD Securities Inc.

TD Tower 8^th Floor

66 Wellington Street

Toronto, Ontario M5K 1A2

Attention: Ryan Quirt

Fax: (416) 983-3176

with a copy (which shall not constitute notice) to:

Stikeman Elliott LLP

5300 Commerce Court

199 Bay Street

Toronto, Ontario M5L 1B9

Attention: Martin Langlois

Fax: (416) 947-0866

The Corporation and the Underwriters may change their respective addresses for notices by notice given in the manner aforesaid. Any such notice or other communication shall be in writing, and unless delivered personally to the addressee or to a responsible officer of the addressee, as applicable, shall be given by telecopy and shall be deemed to have been given when: (i) in the case of a notice delivered personally to a responsible officer of the addressee, when so delivered; and (ii) in the case of a notice delivered or given by telecopy on the first business day following the day on which it is sent.

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Section 19 Relationship between the Corporation and the Underwriters.

In connection with the services described herein, the Underwriters shall each act as an independent contractor, and any duties of the Underwriters arising out of this Agreement shall be owed solely to the Corporation. The Corporation acknowledges that the Underwriters are securities firms engaged in securities trading and brokerage activities, as well as providing investment banking and financial advisory services, which may involve services provided to other companies engaged in businesses similar or competitive to the Business of the Corporation. The Corporation acknowledges and agrees that in connection with all aspects of the engagement contemplated hereby, and any communications in connection therewith, the Corporation, on the one hand, and each of the Underwriters and any of their respective affiliates through which the Underwriters may be acting, on the other hand, will have a business relationship that does not create, by implication or otherwise, any fiduciary duty on the part of the Underwriters or such affiliates, and each party hereto agrees that no such duty will be deemed to have arisen in connection with any such transactions or communications. Information which is held elsewhere within the Underwriters, but of which none of the individuals in the investment banking department or division of the Underwriters involved in providing the services contemplated by this agreement actually has knowledge (or without breach of internal procedures can properly obtain) will not for any purpose be taken into account in determining any of the responsibilities of the Underwriters to the Corporation under this Agreement.

Section 20 Miscellaneous

(a) Action of Co-Lead Underwriters. Except with respect to Section 12, Section 15 and Section 16, all transactions and notices on behalf of the Underwriters hereunder or contemplated hereby may be carried out or given on behalf of the Underwriters by a Co-Lead Underwriter, who shall in good faith discuss with the other Co-Lead Underwriters the nature of any such transactions and notices prior to giving effect thereto or the delivery thereof, as the case may be. Notwithstanding the foregoing, the Corporation shall be entitled to and shall act on any notice, waiver, extension or communication given by or on behalf of the Underwriters by the Co-Lead Underwriters, who shall represent the Underwriters, and who shall have the authority to bind the Underwriters in respect of all matters hereunder, except in respect of any settlement under Section 12, any matter referred to in Section 15 or any agreement under Section 16.

(b) Successors and Assigns. This Agreement shall enure to the benefit of, and shall be binding upon, the Underwriters and the Corporation and their respective successors and legal representatives.

(c) Governing Law. This Agreement shall be governed by and interpreted in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.

(d) Time of the Essence. Time shall be of the essence hereof and, following any waiver or indulgence by any party, time shall again be of the essence hereof.

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(e) Interpretation. The words, “hereunder”, “hereof” and similar phrases mean and refer to the Agreement formed as a result of the acceptance by the Corporation of this offer by the Underwriters to purchase the Subscription Receipts.

(f) Survival. All representations, warranties, covenants and agreements of the Corporation and/or the Underwriters herein contained or contained in documents submitted pursuant to this Agreement and in connection with the transaction of purchase and sale herein contemplated shall survive for a period ending on the date that is three years following the Closing Date. Notwithstanding the preceding sentence, Section 13 shall survive the purchase and sale of the Subscription Receipts and the termination of this Agreement and shall continue in full force and effect for the benefit of the Underwriters or the Corporation, as the case may be, regardless of any subsequent disposition of the Subscription Receipts or any investigation by or on behalf of the Underwriters with respect thereto without limitation other than any limitation requirements of applicable law. The Underwriters and the Corporation shall be entitled to rely on the representations and warranties of the Corporation or the Underwriters, as the case may be, contained herein or delivered pursuant hereto notwithstanding any investigation which the Underwriters or the Corporation may undertake or which may be undertaken on their behalf.

(g) Electronic Copies. Each of the parties hereto shall be entitled to rely on delivery of a facsimile or PDF copy of this Agreement and acceptance by each such party of any such facsimile or PDF copy shall be legally effective to create a valid and binding agreement between the parties hereto in accordance with the terms hereof.

(h) Severability. If one or more of the provisions contained herein shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement, but this Agreement shall be construed as if such invalid, illegal or unenforceable provision or provisions had never been contained herein.

(i) Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.

(j) Several and Joint. In performing their respective obligations under this Agreement, the Underwriters shall be acting severally and not jointly and severally. Nothing in this Agreement is intended to create any relationship in the nature of a partnership, or joint venture between the Underwriters.

(k) Entire Agreement. This Agreement constitutes the only agreement between the parties with respect to the subject matter hereof and shall supersede any and all prior negotiations and understandings in respect of the Offering, including the engagement letter made as of February 19, 2016. This Agreement may be amended or modified in any respect by written instrument only.

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(l) Further Assurances. Each of the parties hereto shall do or cause to be done all such acts and things and shall execute or cause to be executed all such documents, agreements and other instruments as may reasonably be necessary or desirable for the purpose of carrying out the provisions and intent of this Agreement.

[Remainder of page left intentionally blank. Signature page follows.]

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If this Agreement accurately reflects the terms of the transactions which we are to enter into and are agreed to by you, please communicate your acceptance by executing the enclosed copies of this Agreement where indicated and returning them to us.

Yours very truly,

CANACCORD GENUITY CORP.
By:
	Name: Title:
CLARUS SECURITIES INC.
By:
	Name: Title:
CORMARK SECURITIES INC.
By:
	Name: Title:
LAURENTIAN BANK SECURITIES INC.
By:
	Name: Title:
DUNDEE SECURITIES LTD.
By:
	Name: Title:

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GMP SECURITIES L.P.
By:
	Name: Title:
TD SECURITIES INC.
By:
	Name: Title:
CIBC WORLD MARKETS INC.
By:
	Name: Title:
SCOTIA CAPITAL INC.
By:
	Name: Title:

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The foregoing is hereby accepted and agreed to by the undersigned as of the date first written above.

merus labs international inc.
By:
	Name:
	Title:

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SCHEDULE “A”
U.S. OFFERS AND SALES

This is Schedule “A” to the underwriting agreement (the “Underwriting Agreement”) dated March 1, 2016 among Merus Labs International Inc., Canaccord Genuity Corp., Clarus Securities Inc., Cormark Securities Inc., Laurentian Bank Securities Inc., CIBC World Markets Inc., Dundee Securities Ltd., GMP Securities L.P., Scotia Capital Inc. and TD Securities Inc. Unless otherwise defined herein, terms used in this Schedule that are defined in the Underwriting Agreement shall have the same meaning herein as in the Underwriting Agreement.

As used in this Schedule, the following terms shall have the meanings indicated:

Accredited Investor	means an institutional “accredited investor” that satisfies one or more of the criteria set forth in Rule 501(a)(1), (2), (3) or (7) of Regulation D;
Directed Selling Efforts	means “directed selling efforts” as that term is defined in Rule 902(c) of Regulation S. Without limiting the foregoing, but for greater clarity in this Schedule, it means, subject to the exclusions from the definition of directed selling efforts contained in Regulation S, any activity undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for any of the Shares, and includes the placement of any advertisement in a publication with a general circulation in the United States that refers to the offering of any of the Shares;
Disqualification Event	means any of the “Bad Actor” disqualifications described in clauses (d)(1)(i) to (viii) of Rule 506 of Regulation D;
Foreign Issuer	means a “foreign issuer” as that term is defined in Rule 902(e) of Regulation S. Without limiting the foregoing, but for greater clarity in this Schedule, it includes any issuer which is a corporation or other organization incorporated or organized under the laws of any country other than the United States, except an issuer meeting the following conditions as of the last business day of its most recently completed second fiscal quarter: (a) more than 50 percent of the outstanding voting securities of such issuer are directly or indirectly owned of record by residents of the United States; and (b) any of the following; (i) the majority of the executive officers or directors are United States citizens or residents, (ii) more than 50 percent of the assets of the issuer are located in the United States, or (iii) the business of the issuer is administered principally in the United States;

A-2

General Solicitation or General Advertising	means “general solicitation or general advertising”, as used under Rule 502(c) of Regulation D, including any advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or broadcast over radio, television or the Internet, or any seminar or meeting whose attendees had been invited by general solicitation or general advertising;
Offshore Transaction	means “offshore transaction” as that term is defined in Rule 902(h) of Regulations S;
Regulation D	means Regulation D promulgated under the U.S. Securities Act;
Regulation S	means Regulation S promulgated under the U.S. Securities Act;
Substantial US Market Interest	means “substantial U.S. market interest” as that term is defined in Rule 902(i) of Regulation S; and
U.S. Placement Agent	means the United States broker-dealer affiliate of an Underwriter, as applicable.

Representations, Warranties and Covenants of the Underwriters

Each Underwriter acknowledges that the Subscription Receipts, Special Warrants and Underlying Shares have not been and will not be registered under the U.S. Securities Act or any applicable securities laws of the states of the United States, and may not be offered or sold to or for the account or benefit of any U.S. Person or any person within the United States except pursuant to an exemption from the registration requirements of the U.S. Securities Act. Accordingly, each Underwriter severally represents, warrants and covenants to the Corporation that:

1. It has offered and sold, and will offer and sell the Subscription Receipts only in an Offshore Transaction in accordance with Rule 903 of Regulation S or as provided in paragraphs 2 through 13 below. Accordingly, neither the Underwriter, its affiliates nor any persons acting on its behalf, has made or will make: (a) (except as permitted in paragraphs 2 through 13 below) any offer to sell or any solicitation of an offer to buy, any of the Subscription Receipts in the United States or to or from a U.S. Person or a person acting for the account or benefit of a person within the United States or a U.S. Person, (b) (except as permitted in paragraphs 2 through 13 below) any sale of Subscription Receipts to any purchaser unless, at the time the buy order was or will have been originated, the purchaser was outside the United States, or the Underwriter, its affiliates or persons acting on their behalf reasonably believed that such purchaser was outside the United States, or (c) any Directed Selling Efforts.

A-3

2. It will not offer or sell Subscription Receipts in the United States except that it may offer Subscription Receipts to purchasers who are Accredited Investors with which the Underwriter or the U.S. Placement Agent has a pre-existing relationship and who will purchase the Subscription Receipts as Substituted Purchasers in compliance with Rule 506(b) of Regulation D, in each case in the manner contemplated in this Schedule “A”.

3. It has not entered and will not enter into any contractual arrangement with respect to the distribution of the Subscription Receipts, except with its affiliates, any selling group members or with the prior written consent of the Corporation. It shall require each selling group member to agree in writing, for the benefit of the Corporation, to comply with, and shall use its commercially reasonable efforts to ensure that each selling group member complies with, the same provisions of this Schedule “A” as apply to the Underwriter as if such provisions applied to such selling group member.

4. All of the Underwriter’s offers of Subscription Receipts in the United States have been and will be made through the U.S. Placement Agent pursuant to Rule 506(b) of Regulation D.

5. It and its affiliates have not, either directly or through a person acting on its or their behalf, solicited and will not solicit offers for, and have not offered to sell and will not offer to sell, Subscription Receipts in the United States by any form of General Solicitation or General Advertising.

6. Any offer, sale or solicitation of an offer to buy Subscription Receipts that has been made or will be made in the United States by the Underwriter through the U.S. Placement Agent, was or will be made only to Accredited Investors in transactions that are exempt from registration under the U.S. Securities Act and any applicable state securities laws and in accordance with any applicable U.S. federal or state laws or regulations governing the registration or conduct of securities brokers or dealers.

7. Immediately prior to soliciting such offerees, the Underwriter, its affiliates, and any person acting on its or their behalf had reasonable grounds to believe and did believe that each offeree was an Accredited Investor, and at the time of completion of each sale to a person in the United States, the Underwriter, its affiliates, and any person acting on its or their behalf (including the U.S. Placement Agent) will have reasonable grounds to believe and will believe, that each such offeree purchasing Subscription Receipts is an Accredited Investor.

8. The Underwriter represents that neither it, its U.S. Placement Agent, nor any of their respective directors, executive officers, other officers participating in the Offering of Subscription Receipts pursuant to Rule 506(b) of Regulation D, their respective general partners or managing members, or any such general partner’s or managing member’s directors, executive officers or other officers participating in such Offering (each, a “Dealer Covered Person” and, together, “Dealer Covered Persons”), is subject to any Disqualification Event except for a Disqualification Event, if any, (a) contemplated by Rule 506(d)(2) of Regulation D, and (b) a description of which has been furnished in writing to the Corporation prior to the date hereof. In the case of any Disqualification Event occurring after the date hereof, the Underwriter covenants to furnish a description thereof in writing to the Corporation prior to the Closing Date.

A-4

9. It represents that it is not aware of any person (other than any Dealer Covered Person) that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the Offering of Subscription Receipts pursuant to Rule 506(b) of Regulation D. It will notify the Corporation, prior to the Closing Date of any agreement entered into between it and such person in connection with such sale.

10. It will notify the Corporation in writing, prior to the Closing Date of (a) any Disqualification Event relating to any Dealer Covered Person not previously disclosed to the Corporation hereunder, and (b) any event that would, with the passage of time, become a Disqualification Event relating to any Dealer Covered Person.

11. At least one business day prior to the time of delivery, the Corporation and its transfer agent will be provided with a list of all purchasers of Subscription Receipts in the United States.

12. At the Closing Time, the Underwriter (together with its U.S. Placement Agent) will provide a certificate, substantially in the form of Exhibit I to this Schedule “B”, relating to the manner of the offer and sale of the Subscription Receipts in the United States. Failure to deliver such a certificate shall constitute a representation by the Underwriter and its U.S. Placement Agent that neither it nor anyone acting on its behalf has offered or sold Subscription Receipts in the United States.

13. Neither the Underwriter, its affiliates or any person acting on its behalf (including the U.S. Placement Agent) has taken or will take, directly or indirectly, any action in violation of Regulation M under the U.S. Exchange Act.

Representations, Warranties and Covenants of the Corporation

The Corporation represents, warrants, covenants and agrees that:

1. The Corporation is a Foreign Issuer with no Substantial U.S. Market Interest in its common shares.

2. Except with respect to sales in accordance with this Schedule “A” to Accredited Investors in reliance upon an exemption from registration available under Rule 506(b) of Regulation D, neither the Corporation nor any of its affiliates, nor any person acting on its or their behalf (other than the Underwriters, the U.S. Placement Agent, their respective affiliates or any person acting on their behalf, in respect of which no representation is made), has made or will make: (a) any offer to sell, or any solicitation of an offer to buy, any Subscription Receipts to a person in the United States; or (b) any sale of Subscription Receipts unless, at the time the buy order was or will have been originated, the purchaser is (i) outside the United States or (ii) the Corporation, its affiliates, and any person acting on their behalf reasonably believe that the purchaser is outside the United States.

A-5

3. During the period in which the Subscription Receipts are offered for sale, neither it nor any of its affiliates, nor any person acting on its or their behalf (other than the Underwriters, the U.S. Placement Agent, and their respective affiliates or any person acting on their behalf, in respect of which no representation is made) has engaged in or will engage in any Directed Selling Efforts, or has taken or will take any action in violation of Regulation M under the U.S. Exchange Act or that would cause the exemptions afforded by Rule 506(b) of Regulation D to be unavailable for offers and sales of Subscription Receipts in the United States in accordance with this Schedule “B”, or the exclusion from registration afforded by Rule 903 of Regulation S to be unavailable for offers and sales of the Subscription Receipts outside the United States in accordance with the Underwriting Agreement.

4. None of the Corporation, any of its affiliates or any person acting on its or their behalf (other than the Underwriters, the U.S. Placement Agent, their respective affiliates or any person acting on their behalf, in respect of which no representation is made) has offered or will offer to sell, or has solicited or will solicit offers to buy, the Subscription Receipts in the United States by means of any form of General Solicitation or General Advertising or in any manner involving a public offering within the meaning of Section 4(a)(2) of the U.S. Securities Act.

5. With respect to any Subscription Receipts to be offered and sold hereunder pursuant to Rule 506(b) of Regulation D, none of the Corporation, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of the Corporation participating in the Offering, any beneficial owner of 20% or more of the Corporation's outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the U.S. Securities Act) connected with the Corporation in any capacity at the time of sale (each, a “Company Covered Person” and, together, “Company Covered Persons”) is subject to any Disqualification Event, except for a Disqualification Event covered by subparagraph (d)(2) or (d)(3) of Rule 506 of Regulation D. The Corporation has exercised reasonable care to determine whether any Company Covered Person is subject to a Disqualification Event. The Corporation has complied, to the extent applicable, with its disclosure obligations under Rule 506(e) of Regulation D, and has furnished to the Underwriters a copy of any disclosures provided thereunder.

6. The Corporation is not aware of any person (other than any Dealer Covered Person (as defined above)) that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of any Subscription Receipts.

7. The Corporation will notify the Underwriters in writing, prior to the Closing Date of (a) any Disqualification Event relating to any Company Covered Person and (b) any event that would, with the passage of time, become a Disqualification Event relating to any Company Covered Person.

8. Except with respect to the offer and sale of the Subscription Receipts offered hereby, the Corporation has not, for a period of six months prior to the commencement of the offering of the Subscription Receipts, sold, offered for sale or solicited any offer to buy any of its securities in the United States in a manner that would be integrated with the offer and sale of the Subscription Receipts and would cause the exemptions from registration set forth in Section 4(a)(2) of the U.S. Securities Act or Rule 506(b) of Regulation D to become unavailable with respect to the offer and sale of the Subscription Receipts.

9. The Corporation shall duly prepare and file with the SEC a Form D within 15 days after the first sale of Subscription Receipts in reliance on Rule 506(b) of Regulation D, and will file such notices and other documents as are required to be filed under the state securities or “blue sky” laws of the states in which Subscription Receipts are sold to satisfy the requirements of applicable exemptions from registration or qualification of the Subscription Receipts under such laws.

6

Exhibit I to Schedule “A”

UNDERWRITERS’ CERTIFICATE

In connection with the private placement in the United States of Subscription Receipts of Merus Labs International Inc. (the “Corporation”) pursuant to the underwriting agreement dated March 1, 2016 among the Corporation, Canaccord Genuity Corp., Clarus Securities Inc., Cormark Securities Inc., Laurentian Bank Securities Inc., CIBC World Markets Inc., Dundee Securities Ltd., GMP Securities L.P., Scotia Capital Inc. and TD Securities Inc (the “Underwriting Agreement”), the undersigned do hereby certify on a several basis and in respect of themselves only and only to the extent applicable that:

(i) the Subscription Receipts have been offered and sold in the United States only by the U.S. Placement Agent which was on the dates of such offers and sales, and is on the date hereof, a duly registered broker or dealer pursuant to section 15(b) of the U.S. Exchange Act and under the securities laws of each state in which such offers and sales were made (unless exempted from the respective state’s broker-dealer registration requirements) and was and is a member in good standing with the Financial Industry Regulatory Authority, Inc.;

(ii) all offers and sales of Subscription Receipts in the United States or to, or for the account or benefit of, U.S. Persons have been effected in accordance with all applicable federal and state laws and regulations governing the registration and conduct of securities brokers and dealers;

(iii) we had reasonable grounds to believe and did believe that each such offeree was an Accredited Investor, and each person in the United States that we have arranged to purchase Subscription Receipts from the Corporation is an Accredited Investor;

(iv) the Offering of the Subscription Receipts has been conducted in accordance with the terms of the Underwriting Agreement, including Schedule “A” thereto; and

(v) prior to any sale of Subscription Receipts in the United States we caused the purchaser to execute a subscription agreement in the form agreed to by the Corporation and the Underwriters.

Unless otherwise defined herein, terms used in this certificate that are defined in the Underwriting Agreement shall have the same meaning herein as in the Underwriting Agreement (including Schedule “A” thereto).

Dated this ____ day of March, 2016.

[Agent] [U.S. Placement Agent]

 B-1

SCHEDULE “B”

SUBSIDIARIES

Name	Jurisdiction of Incorporation	Percentage of Issued and Outstanding Shares/Interests Owned	Holder of Issued and Outstanding Shares/Interests
Merus Labs Luxco S.a r.l.	Luxembourg	100%	Merus Labs International Inc.
Merus Labs Netherlands BV	Netherlands	100%	Merus Labs Luxco S.a r.l.
ECG Holdings Inc.	Delaware	100%	Merus Labs International Inc.
Orbis Pharma Inc.	Ontario	100%	Merus Labs International Inc.
Merus Pharma Inc.	British Columbia	100%	Merus Labs International Inc.
Merus Labs Luxco II S.à r.l.	Luxembourg	100%	Merus Pharma Inc.

Issued Share Capital of Subsidiaries

Grantor	Holder	Type	Number of Shares	Percentage Owned
Orbis Pharma Inc.	Merus Labs International Inc.	Common Shares	1,000	100%
ECG Holdings Inc.	Merus Labs International Inc.	Common Shares	3,000	100%
Merus Labs Luxco S.à r.l.	Merus Labs International Inc.	Ordinary Shares	57,533	100%
Merus Labs Luxco S.à r.l.	Merus Labs International Inc.	Preferred Shares	309,604	100%
Merus Pharma Inc.	Merus Labs International Inc.	Common Shares	16,083,781	100%
Merus Labs Luxco II S.à r.l.	Merus Pharma Inc.	Ordinary Shares	11,473,200	100%
Merus Labs Netherlands B.V.	Merus Labs Luxco S.à r.l	Common Shares	18,000	100%

Please note that that the number of shares for Merus Labs Luxco II S.à r.l. is to be increased by (i) approximately 9.2 million Euros effective upon completion of the UCB Purchase, and (ii) approximately 2.4 million Euros upon completion of the Sanofi Purchase.

 B-2

EX-99.4

Exhibit 99.4

MERUS LABS INTERNATIONAL INC.

SPECIAL WARRANT INDENTURE

March 1, 2016

TABLE OF CONTENTS

Article 1 INTERPRETATION		2
1.1	Definitions	2
1.2	Headings	7
1.3	Gender	7
1.4	Weekends and Holidays	7
1.5	Meaning of “Outstanding”	7
1.6	Time	7
1.7	Applicable Law	8
1.8	Severability	8
1.9	Currency	8
1.10	Conflicts	8
1.11	Schedules	8
Article 2 ISSUE AND PURCHASE OF SPECIAL WARRANTS		8
2.1	Creation, Form and Terms of Special Warrants	8
2.2	Form of Warrants, Certificated Warrants	9
2.3	Book Entry Only Warrants	9
2.4	Special Warrant Certificate	11
2.5	Transferability and Ownership of Special Warrants	13
2.6	Special Warrantholders Not Shareholders	17
2.7	Signing of Special Warrants	17
2.8	Countersigning	18
2.9	Loss, Mutilation, Destruction or Theft of Special Warrants	18
2.10	Exchange of Special Warrants	19
2.11	Ranking	19
2.12	Purchase of Special Warrants for Cancellation	19
2.13	Cancellation of Surrendered Special Warrants	19
Article 3 COVENANTS OF THE CORPORATION		20
3.1	To Issue Special Warrants and Reserve Common Shares	20
3.2	To Execute Further Assurances	20
3.3	To Carry On Business	20
3.4	Reporting Issuer	21
3.5	No Breach of Constating Documents	21
3.6	Filing Prospectus Supplement and Related Matters	21
3.7	Notices to Special Warrant Agent	21
3.8	Securities Qualification Requirements	22
3.9	Maintain Listing	22
3.10	Satisfy Covenants	22
3.11	Performance of Covenants by Special Warrant Agent	22
3.12	Special Warrant Agent’s Remuneration and Expenses	22
3.13	Trust for Special Warrantholders’ Benefit	23
3.14	Notice to Special Warrantholders of Certain Events	23
3.15	Closure of Share Transfer Books	24
3.16	Payment of Commissions	24
3.17	Contractual Right of Rescission	24

Article 4 ADJUSTMENT OF NUMBER OF Underlying Securities		25
4.1	Adjustment of Number of Underlying Securities	25
4.2	Proceedings Prior to any Action Requiring Adjustment	30
4.3	Action Requring Adjustment	30
4.4	Certificate of Adjustment	31
4.5	No Action After Notice	31
4.6	Protection of Special Warrant Agent	31
4.7	Notice of Special Matters	31
Article 5 EXERCISE AND CANCELLATION OF SPECIAL WARRANTS		32
5.1	Notice of Deemed Exercise to Special Warrantholders	32
5.2	Voluntary Exercise of Special Warrants	32
5.3	Deemed Exercise of Special Warrants	36
5.4	Effect of Exercise of Special Warrants	37
5.5	Partial Exercise	37
5.6	Special Warrants Void After Exercise Time	38
5.7	Fractions of Underlying Securities	38
5.8	Accounting and Recording	38
5.9	Legending of Special Warrants and Underlying Securities	38
5.10	Securities Restrictions	42
Article 6 MEETINGS OF SPECIAL WARRANTHOLDERS		43
6.1	Definitions	43
6.2	Convening Meetings	43
6.3	Place of Meeting	43
6.4	Notice	43
6.5	Persons Entitled to Attend	44
6.6	Quorum	44
6.7	Chairman	44
6.8	Power to Adjourn	44
6.9	Adjourned Meeting	44
6.10	Show of Hands	45
6.11	Poll	45
6.12	Regulations	45
6.13	Powers of Special Warrantholders	46
6.14	Powers Cumulative	47
6.15	Minutes of Meetings	47
6.16	Written Resolutions	48
6.17	Binding Effect	48
6.18	Holdings by the Corporation or Subsidiaries of the Corporation Disregarded	48
6.19	Corporation, Special Warrant Agent and Underwriters May be Represented	48
Article 7 SUPPLEMENTAL INDENTURES, MERGER, SUCCESSORS		49
7.1	Provision for Supplemental Indentures for Certain Purposes	49
7.2	Corporation May Consolidate, etc. on Certain Terms	50
7.3	Successor Body Corporate Substituted	50

Article 8 CONCERNING THE SPECIAL WARRANT AGENT		51
8.1	Duties of Special Warrant Agent	51
8.2	Action by Special Warrant Agent	51
8.3	Certificate of the Corporation	51
8.4	Special Warrant Agent May Employ Experts	51
8.5	Resignation and Replacement of Special Warrant Agent	52
8.6	Indenture Legislation	53
8.7	Notice	53
8.8	Use of Proceeds	53
8.9	No Inquiries	54
8.10	Actions by Special Warrant Agent to Protect Interest	54
8.11	Special Warrant Agent Not Required to Give Security	54
8.12	No Conflict of Interest	54
8.13	Special Warrant Agent Not Ordinarily Bound	54
8.14	Special Warrant Agent May Deal in Instruments	55
8.15	Recitals or Statements of Fact Made by Corporation	55
8.16	Special Warrant Agent’s Discretion Absolute	55
8.17	No Representations as to Validity	55
8.18	Acceptance of Trusts	56
8.19	Special Warrant Agent’s Authority to Carry on Business	56
8.20	Indemnification of Special Warrant Agent	56
8.21	Performance of Covenants by Special Warrant Agent	57
8.22	Third Party Interests	57
8.23	Not Bound to Act	57
8.24	Not Appointed Receiver	58
Article 9 NOTICES		58
9.1	Notice to Corporation, Special Warrant Agent and Underwriters	58
9.2	Notice to Special Warrantholders	60
Article 10 POWER OF BOARD OF DIRECTORS		60
10.1	Board of Directors	60
Article 11 MISCELLANEOUS PROVISIONS		60
11.1	Further Assurances	60
11.2	Unenforceable Terms	61
11.3	No Waiver	61
11.4	Waiver of Default	61
11.5	Immunity of Shareholders	61
11.6	Limitation of Liability	62
11.7	Suits by Special Warrantholders	62
11.8	Force Majeure	62
11.9	U.S. Securities and Exchange Commission Certification	63
11.10	Privacy Matters	63
11.11	Enurement	64
11.12	Counterparts and Formal Date	64

11.13	Satisfaction and Discharge of Indenture	64
11.14	Provisions of Indenture and Special Warrants for the Sole Benefit of Parties and Special Warrantholders	64
11.15	Further Assurances	65
11.16	Formal Date and Effective Date	65
Schedule "A" FORM OF SPECIAL WARRANT CERTIFICATE
Schedule "B" NOTICE
Schedule "C" FORM OF DECLARATION FOR REMOVAL OF LEGEND

SPECIAL WARRANT INDENTURE

THIS SPECIAL WARRANT INDENTURE made as of March 1, 2016.

BETWEEN:

MERUS LABS INTERNATIONAL INC., a corporation existing under the laws of British Columbia and having an office in the City of Toronto, Ontario

(the “Corporation”)

OF THE FIRST PART

AND:

COMPUTERSHARE TRUST COMPANY OF CANADA, a trust company existing under the laws of Canada and having an office in the City of Vancouver, British Columbia

(the “Special Warrant Agent”)

OF THE SECOND PART

WHEREAS pursuant to the terms of the Underwriting Agreement, the Corporation sold an aggregate of 14,250,000 Subscription Receipts at the purchase price of $1.90 per Subscription Receipt;

AND WHEREAS the Subscription Receipts were duly and validly created and issued pursuant to the terms of a subscription receipt agreement (the “Subscription Receipt Agreement”) entered into between the Corporation, Canaccord Genuity Corp. and the Special Warrant Agent, as agent for the Subscription Receipts;

AND WHEREAS each Subscription Receipt is convertible into a Special Warrant, on a “one-for-one” basis upon satisfaction of the Escrow Release Conditions on or before the Terminate Date;

AND WHEREAS each Special Warrant shall entitle the holder thereof to acquire, upon exercise or deemed exercise thereof, one Common Share without the payment of additional consideration and subject to adjustment in accordance with Article 4 hereof;

AND WHEREAS the Corporation is authorized to create and issue the Special Warrants;

AND WHEREAS the Corporation represents to the Special Warrant Agent that all necessary resolutions of the directors of the Corporation have been or will be duly enacted, passed or confirmed and all other proceedings taken and conditions complied with to authorize the execution and delivery of this Indenture and the execution and issue of the Special Warrants and to make the same legal, valid and binding on the Corporation in accordance with the laws relating to the Corporation;

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AND WHEREAS the foregoing recitals are made as representations and statements of fact by the Corporation and not by the Special Warrant Agent; and

AND WHEREAS the Special Warrant Agent has been appointed by the Corporation and has agreed to act as agent on behalf of the Special Warrantholders on the terms and conditions set forth herein.

NOW THEREFORE THIS INDENTURE WITNESSETH THAT, in consideration of the premises and in further consideration of the mutual covenants herein set forth, the parties hereto agree as follows:

Article 1
INTERPRETATION

1.1 Definitions

In this Indenture, unless there is something in the subject matter or context inconsistent therewith, the following words have the respective meaning indicated below:

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

(b) “1934 Act” means the United States Securities Exchange Act of 1934, as amended;

(c) “Applicable Legislation” means the provisions, if any, for the time being, of any statute of Canada or a province thereof, and of the regulations under such statute, relating to trust indentures and to the rights, duties and obligations of trustees under trust indentures, and of corporations issuing their securities under trust indentures, to the extent that any such provisions are in force and applicable to this Indenture;

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

(e) “Book Entry Only Participants” means institutions that participate directly or indirectly in the Depository’s book entry registration system for the Special Warrants;

(f) “Book Entry Only Warrants” means Special Warrants that are to be held only by or on behalf of the Depository;

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(g) “Business Day” means a day (other than a Saturday, Sunday, civic or statutory holiday) on which Canadian chartered banks are open for the transaction of regular business in the City of Toronto, Ontario and/or in the City of Vancouver, British Columbia;

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

(i) “Closing” means the closing on the Closing Date of the transaction of purchase and sale in respect of the Subscription Receipts as contemplated in the Underwriting Agreement and the subscription agreements;

(j) “Closing Date” means March 1, 2016 or such other date as the Underwriters and the Corporation agree for the Closing of the Private Placement;

(k) “Common Share” means a fully paid and non-assessable common share in the capital of the Corporation as such capital is presently constituted;

(l) “Common Share Reorganization” has the meaning ascribed thereto in Subsection 4.1(a);

(m) “Convertible Securities” has the meaning ascribed thereto in Subsection 4.1(a);

(n) “Corporation” means Merus Labs International Inc. a corporation existing under the laws of British Columbia and having an office in the City of Toronto, Ontario;

(o) “Corporation’s auditors” means the firm of accountants appointed by the shareholders of the Corporation and serving as the auditors of the Corporation at the relevant time;

(p) “Counsel” means a barrister or solicitor or firm of barristers and solicitors retained by the Special Warrant Agent, Corporation (who may be counsel to the Corporation), or Special Warrantholders;

(q) “Current Market Price” of a Common Share at any date means the price per share equal to the weighted average price at which the Common Shares have traded during the 20 consecutive Trading Days ending on the third Trading Day immediately prior to such date, on any stock exchange on which such shares are listed as may be selected for such purpose by the directors or, if such shares are not listed on any stock exchange, then on such over-the-counter market in Canada as may be selected for such purpose by the directors, provided further that if the Common Shares are not then listed on any Canadian stock exchange or traded in the over-the counter market, then the Current Market Price shall be determined by such firm of independent chartered accountants as may be selected by the directors of the Corporation;

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(r) “Deemed Exercise Date” means the earlier of:

(i) the date that is provided for in the Exercise Notice provided that such date shall be no later than the third Business Day after the Qualification Date; and

(ii) July 2, 2016, being the date that is four months and one day following the Closing Date;

(s) “Deemed Exercise Time” means 4:00 p.m. (Toronto time) on the Deemed Exercise Date;

(t) “Depository” means CDS Clearing and Depository Services Inc. or such other person as is designated in writing by the Corporation to act as depository in respect of the Special Warrants;

(u) “Designated Provinces” means the provinces of British Columbia, Alberta, Saskatchewan, Manitoba and Ontario;

(v) “director” means a director of the Corporation for the time being and, unless otherwise specified herein, a reference to an action by the directors means an action by the directors of the Corporation as a board or, whenever duly empowered, action by a committee of such board;

(w) “Dividends Paid in the Ordinary Course” means a dividend paid on the Common Shares in any fiscal year of the Corporation in cash (or in securities, properties or assets of equivalent value) 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 Corporation, 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;

(x) “Escrow Release Conditions” has the meaning set out in the Subscription Rights Agreement;

(y) “Exercise Notice” has the meaning ascribed thereto in subsection 3.7(a);

(z) “Indenture”, “herein”, “hereto”, “hereunder”, “hereof”, “hereby” and similar expressions mean or refer to this Indenture and not to any particular Article, Section, paragraph, clause, subdivision or portion hereof and include any indenture, deed or instrument supplemental or ancillary hereto; and the expressions “Article”, “Section” and “paragraph” followed by a number mean and refer to the specified Article, Section or paragraph of this Indenture;

(aa) “Internal Procedures” means in respect of the making of any one or more entries to, changes in or deletions of any one or more entries in the register at any time (including without limitation, original issuance or registration of transfer of ownership) the minimum number of the Special Warrant Agent’s internal procedures customary at such time for the entry, change or deletion made to be complete under the operating procedures followed at the time by the Special Warrant Agent, it being understood that neither preparation and issuance shall constitute part of such procedures for any purpose of this definition;

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(bb) “Officer’s Certificate” means a certificate signed by a senior officer of the Corporation;

(cc) “Private Placement” means the private placement of up to 14,250,000 Subscription Receipts pursuant to the Underwriting Agreement and the subscription agreements entered into on the Closing Date between the Corporation and the purchasers of Subscription Receipts;

(dd) “Prospectus Supplement” means a prospectus supplement to the Corporation’s base shelf prospectus dated October 30, 2015;

(ee) “Qualification Date” means the date on which the Corporation files the Prospectus Supplement;

(ff) “Qualification Deadline” means 4:00 p.m. (Toronto time) on April 22, 2016;

(gg) “Regulation S” means Regulation S under the 1933 Act;

(hh) “Release Date” has the meaning ascribed to it in the Subscription Receipt Agreement;

(ii) “Release Time” has the meaning ascribed to it in the Subscription Receipt Agreement;

(jj) “Rights Offering” has the meaning ascribed thereto in subsection 4.1(b);

(kk) “Securities Regulators” means, collectively, the securities commissions or other applicable securities regulatory authorities of each of the Designated Provinces;

(ll) “Special Distribution” has the meaning ascribed thereto in subsection 4.1(c);

(mm) “Special Warrant” means a special warrant of the Corporation created by the Corporation and issued and Authenticated hereunder entitling the holder thereof to acquire one Common Share upon exercise or deemed exercise thereof, in accordance with this Indenture, without payment of additional consideration or further action on the part of the holder of Special Warrants, subject to adjustment as set out herein;

(nn) “Special Warrant Agent” means the special warrant agent under this Indenture, initially being Computershare Trust Company of Canada, in its capacity as special warrant agent hereunder, having an office in Toronto, Ontario, or Vancouver, British Columbia or such other address as it shall inform the Corporation and Special Warrantholders from time to time;

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(oo) “Special Warrant Certificate” means a certificate evidencing one or more Special Warrants issuable hereunder, substantially in the form attached hereto as Schedule “A”;

(pp) “Special Warrantholder” means the registered holder from time to time of an outstanding Special Warrant;

(qq) “Subscription Receipts” means the subscription receipts of the Corporation issued and certified under the Subscription Receipt Agreement;

(rr) “Subscription Receipt Agreement” has the meaning set out in the recitals hereto;

(ss) “Subsidiary of the Corporation” means a corporation of which voting securities carrying a majority of the votes attached to all outstanding voting securities of the Corporation are owned, directly or indirectly, by the Corporation or by one or more subsidiaries of the Corporation, or by the Corporation and one or more subsidiaries of the Corporation, and, as used in this definition, voting securities means securities, other than debt securities, carrying a voting right to elect directors either under all circumstances or under some circumstances that may have occurred and are continuing;

(tt) “Trading Day” means any day on which the facilities of the Toronto Stock Exchange, or, if the Common Shares are not listed thereon, the facilities of any stock exchange on which the Common Shares are listed, is open for trading;

(uu) “Transaction Instruction” means a written order signed by the Depository entitled to request that one or more actions be taken, or such other form as may be reasonably acceptable to the Special Warrant Agent, requesting one or more such actions to be taken in respect of an Uncertificated Special Warrant;

(vv) “Uncertificated Special Warrant” means any Special Warrant which is not represented by a Special Warrant Certificate;

(ww) “Underlying Securities” means the Common Shares issuable pursuant to the exercise of the Special Warrants;

(xx) “Underwriters” means, collectively, Canaccord Genuity Corp., Clarus Securities Inc., Cormark Securities Inc., Laurentian Bank Securities Inc., Dundee Securities Ltd., GMP Securities L.P., TD Securities Inc., CIBC World Markets Inc. and Scotia Capital Inc.;

(yy) “Underwriting Agreement” means the underwriting agreement dated March 1, 2016 between the Corporation and the Underwriters in respect of the Private Placement;

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(zz) “U.S. Affiliate” means a U.S. registered broker-dealer of an Underwriter;

(aaa) “U.S. Person” and “United States” have the meanings ascribed thereto in Regulation S under the 1933 Act; and

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

1.2 Headings

The division of this Indenture into Articles, Sections or other subdivisions, 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 Special Warrants.

1.3 Gender

Words importing the singular number also include the plural and vice versa and words importing the masculine gender include the feminine gender.

1.4 Weekends and Holidays

Except with respect to the Qualification Deadline, if the date for the taking of any action under this Indenture expires on a day which is not a Business Day, such action may be taken on the next succeeding Business Day with the same force and effect as if taken within the period for the taking of such action. For greater certainty, all actions required to be taken pursuant to this Indenture on the Qualification Deadline shall be taken on or prior to that day.

1.5 Meaning of “Outstanding”

Every Special Warrant represented by a Special Warrant Certificate countersigned by the Special Warrant Agent or Uncertificated Special Warrant that has been Authenticated and delivered to the holder thereof is deemed to be outstanding until it is cancelled or delivered to the Special Warrant Agent for cancellation or until the Deemed Exercise Time. Where a new Special Warrant Certificate has been issued pursuant to Section 2.9 to replace one which has been mutilated, lost, stolen or destroyed, the Special Warrants represented by only one of such Special Warrant Certificates are counted for the purpose of determining the aggregate number of Special Warrants outstanding. A Special Warrant Certificate representing a number of Special Warrants which has been partially exercised will be deemed to be outstanding only to the extent of the unexercised portion of the Special Warrants.

1.6 Time

Time is of the essence hereof and of each Special Warrant Certificate.

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1.7 Applicable Law

This Indenture and each Special Warrant Certificate are subject to and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.

1.8 Severability

Wherever possible, each provision hereof shall be interpreted in such manner as to be effective and valid under Applicable Legislation. In the event that any provision hereof shall be determined to be invalid, illegal or unenforceable in any respect under Applicable Legislation 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 Currency

All references to currency herein are to Canadian dollars unless otherwise indicated.

1.10 Conflicts

In the event of any conflict or inconsistency between the provisions of this Indenture and the Special Warrant Certificates, the provisions of this Indenture will govern.

1.11 Schedules

The attached Schedule “A”, Schedule “B” and Schedule “C” are incorporated into and form part of this Indenture.

Article 2
ISSUE AND PURCHASE OF SPECIAL WARRANTS

2.1 Creation, Form and Terms of Special Warrants

(a) Subject to adjustment in accordance with the provisions hereof, the Corporation hereby creates and authorizes for issuance up to 14,250,000 Special Warrants.

(b) The Special Warrants will be issued at the Release Time on the Release Date concurrently with the conversion of the Subscription Receipts in accordance with the Subscription Receipt Agreement to the holders of the Subscription Receipts on a “one-for-one” basis, subject to any adjustment effected pursuant to the Subscription Receipt Agreement.

(c) The Special Warrants shall be executed by the Corporation and certified by, or on behalf of, the Special Warrant Agent upon the written order of the Corporation and delivered by the Special Warrant Agent to the Corporation in accordance with the written direction of the Corporation.

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(d) Each Special Warrant shall entitle the holder thereof to acquire, upon exercise or deemed exercise thereof, one Common Share without the payment of additional consideration and subject to adjustment in accordance with Article 4 hereof;

(e) Subject to the provisions hereof, the Special Warrants issued under this Indenture are limited in the aggregate to 14,250,000 Special Warrants, provided that the number of Common Shares to be issued upon exercise or deemed exercise of the Special Warrants is subject to increase or decrease so as to give effect to the adjustments required by Article 4.

(f) No fractional Special Warrants shall be issued or otherwise provided for hereunder.

2.2 Form of Warrants, Certificated Warrants

The Special Warrants may be issued in both certificated and uncertificated form. All Special Warrants issued in certificated form shall be evidenced by a Special Warrant Certificate (including all replacements issued in accordance with this Indenture), substantially in the form set out in Schedule “A” hereto, which shall be dated as of the Release Date, shall bear such distinguishing letters and numbers as the Corporation may, with the approval of the Special Warrant Agent, prescribe, and shall be issuable in any denomination excluding fractions. All Special Warrants issued to the Depository may be in either a certificated or uncertificated form, such uncertificated form being evidenced by a book position on the register of Special Warrantholders to be maintained by the Special Warrant Agent.

2.3 Book Entry Only Warrants

(a) Registration of beneficial interests in and transfers of Special Warrants held by the Depository shall be made only through the book entry registration system and no Special Warrant Certificates shall be issued in respect of such Special Warrants except where physical certificates evidencing ownership in such securities are required or as set out herein or as may be requested by the Depository, as determined by the Corporation, from time to time. Except as provided herein, owners of beneficial interests in any CDS Global Warrants shall not be entitled to have Special Warrants registered in their names and shall not receive or be entitled to receive Special Warrants in definitive form or to have their names appear in the register. Notwithstanding any terms set out herein, Special Warrants having any legend set forth in Section 2.4(g) herein and held in the name of the Depository may only be held in the form of Uncertificated Special Warrants with the prior consent of the Special Warrant Agent and in accordance with the Internal Procedures of the Special Warrant Agent.

(b) Notwithstanding any other provision in this Indenture, no CDS Global Warrants may be exchanged for Special Warrants registered, and no transfer of any CDS Global Warrants may be registered in the name of any person other than the Depository for such CDS Global Warrants or a nominee thereof unless:

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(i) the Depository notifies the Corporation that it is unwilling or unable to continue to act as depository in connection with the Book Entry Only Warrants and the Corporation is unable to locate a qualified successor;

(ii) the Corporation determines that the Depository is no longer willing, able or qualified to discharge properly its responsibilities as holder of the CDS Global Warrants and the Corporation is unable to locate a qualified successor;

(iii) the Depository ceases to be a clearing agency or otherwise ceases to be eligible to be a depository and the Corporation is unable to locate a qualified successor;

(iv) the Corporation determines that the Special Warrants shall no longer be held as Book Entry Only Warrants through the Depository;

(v) such right is required by Applicable Legislation, as determined by the Corporation and the Corporation’s counsel;

(vi) the Special Warrant is to be Authenticated to or for the account or benefit of a person in the United States or a U.S. Person (in which case, the Special Warrant Certificate shall contain the legend set forth in Section 5.9(c), if applicable); or

(vii) such registration is effected in accordance with the internal procedures of the Depository and the Special Warrant Agent;

following which, Special Warrants for those holders requesting the same shall be registered and issued to the beneficial owners of such Special Warrants or their nominees as directed by the holder. The Corporation shall provide an Officer’s Certificate giving notice to the Special Warrant Agent of the occurrence of any event outlined in this Section.

(c) Every Special Warrant that is Authenticated upon registration or transfer of a CDS Global Warrant, or in exchange for or in lieu of a CDS Global Warrant or any portion thereof, shall be Authenticated in the form of, and shall be, a CDS Global Warrant, unless such Special Warrant is registered in the name of a person other than the Depository for such CDS Global Warrant or a nominee thereof.

(d) Notwithstanding anything to the contrary in this Indenture, a CDS Global Warrant will be issued as an Uncertificated Special Warrant, unless otherwise requested in writing by the Depository or the Corporation.

(e) The rights of beneficial owners of Special Warrants who hold securities entitlements in respect of the Special Warrants through the book entry registration system shall be limited to those established by Applicable Legislation and agreements between the Depository and the Book Entry Only Participants and between such Book Entry Only Participants and the beneficial owners of Special Warrants who hold securities entitlements in respect of the Special Warrants through the book entry registration system, and such rights must be exercised through a Book Entry Only Participant in accordance with the rules and procedures of the Depository.

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(f) Notwithstanding anything herein to the contrary, neither the Corporation nor the Special Warrant Agent nor any agent thereof shall have any responsibility or liability for:

(i) the electronic records maintained by the Depository relating to any ownership interests or any other interests in the Special Warrants or the depository system maintained by the Depository, or payments made on account of any ownership interest or any other interest of any person in any Special Warrant represented by an electronic position in the book entry registration system (other than the Depository or its nominee);

(ii) maintaining, supervising or reviewing any records of the Depository or any Book Entry Only Participant relating to any such interest; or

(iii) any advice or representation made or given by the Depository or those contained herein that relate to the rules and regulations of the Depository or any action to be taken by the Depository on its own direction or at the direction of any Book Entry Only Participant.

(g) The Corporation may terminate the application of this Section in its sole discretion in which case all Special Warrants shall be evidenced by Special Warrant Certificates registered in the name of a person other than the Depository.

2.4 Special Warrant Certificate

(a) For Special Warrants issued in certificated form, the form of certificate representing Special Warrants shall be substantially as set out in Schedule “A” hereto or such other form as is authorized from time to time by the Special Warrant Agent. Each Special Warrant Certificate shall be Authenticated manually on behalf of the Special Warrant Agent. Each Special Warrant Certificate shall be signed by at least one duly authorized signatory of the Corporation, whose signature shall appear on the Special Warrant Certificate and may be printed, lithographed or otherwise mechanically reproduced thereon and, in such event, certificates so signed are as valid and binding upon the Corporation as if it had been signed manually. Any Special Warrant Certificate which has two signatures as hereinbefore provided shall be valid, and the Special Warrantholder entitled to the benefits, notwithstanding that one or more of the persons whose signature is printed, lithographed or mechanically reproduced no longer holds office at the date of issuance of such certificate. The Special Warrant Certificates may be engraved, printed or lithographed, or partly in one form and partly in another, as the Corporation, with the approval of the Special Warrant Agent, may determine.

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(b) The Special Warrant Agent shall Authenticate Uncertificated Special Warrants (whether upon original issuance, exchange, registration of transfer, partial payment or otherwise) by completing its Internal Procedures and the Corporation shall, and hereby acknowledges that it shall, thereupon be deemed to have duly and validly issued such Uncertificated Special Warrants under this Indenture. Such Authentication shall be conclusive evidence that such Uncertificated Special 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 Special Warrants with respect to which this Indenture requires the Special 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 Special Warrants are binding on the Corporation.

(c) No Special Warrant shall be considered issued and shall be valid or obligatory or shall entitle the holder thereof to the benefits of this Indenture until it has been Authenticated by the Special Warrant Agent.

(d) No Special Warrant Certificate shall be considered issued and Authenticated or, if Authenticated, shall be obligatory or shall entitle the holder thereof to the benefits of this Indenture, until it has been Authenticated by manual signature by or on behalf of the Special Warrant Agent. Such Authentication on any such Special Warrant Certificate shall be conclusive evidence that such Special Warrant Certificate is duly Authenticated and is valid and a binding obligation of the Corporation and that the holder is entitled to the benefits of this Indenture.

(e) No Uncertificated Special Warrant shall be considered issued and shall be obligatory or shall entitle the holder thereof to the benefits of this Indenture, until it has been Authenticated by entry on the register of the particulars of the Uncertificated Special Warrant. Such entry on the register of the particulars of an Uncertificated Special Warrant shall be conclusive evidence that such Uncertificated Special Warrant is a valid and binding obligation of the Corporation and that the holder is entitled to the benefits of this Indenture.

(f) The Authentication by the Special Warrant Agent of any Special Warrants whether by way of entry on the register or otherwise shall not be construed as a representation or warranty by the Special Warrant Agent as to the validity of the Indenture or such Special Warrants (except the due Authentication thereof) or as to the performance by the Corporation of its obligations under this Indenture and the Special Warrant Agent shall in no respect be liable or answerable for the use made of the Special Warrants or any of them or the proceeds thereof. Authentication by the Special Warrant Agent shall be conclusive evidence as against the Corporation that the Special Warrants so Authenticated have been duly issued hereunder and that the holder thereof is entitled to the benefits of this Indenture.

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(g) Each CDS Global Warrant originally issued in Canada and held by the Depository, 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 Corporation may prescribe from time to time:

“UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF CDS CLEARING AND DEPOSITORY SERVICES INC. (“CDS”) TO MERUS LABS INTERNATIONAL 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, OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CDS (AND ANY PAYMENT IS MADE TO CDS 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, 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.”

2.5 Transferability and Ownership of Special Warrants

(a) The Corporation hereby appoints the Special Warrant Agent as registrar of the Special Warrants and shall cause the Special Warrant Agent to keep at its Toronto and Vancouver office set forth in Section 9.1(b) a register in which the Special Warrant Agent shall enter the names and addresses of the Special Warrantholders, and the number of Special Warrants, and other particulars, prescribed by law, of the Special Warrants held by them, together with a record of transfers in which particulars of all transfers of Special Warrants will be recorded. The Special Warrant Agent shall cause the register to be open at all reasonable times for inspection by the Corporation, the Underwriters and any Special Warrantholder and upon payment to the Special Warrant Agent of its reasonable fees. Any Special Warrantholder exercising such right of inspection shall first provide an affidavit in form satisfactory to the Corporation and the Special Warrant Agent stating the name and address of the Special Warrantholder and agreeing not to use the information therein except in connection with (i) an effort to call a meeting of Special Warrantholders or to influence the voting of Special Warrantholders at any meeting of Special Warrantholders; (ii) an offer to acquire securities of the Corporation or (iii) any other matter relating to the affairs of the Corporation.

(b) Once an Uncertificated Special Warrant has been Authenticated, the information set forth in the register with respect thereto at the time of Authentication may be altered, modified, amended, supplemented or otherwise changed only to reflect exercise or proper instructions to the Special Warrant Agent from the holder as provided herein, except that the Special Warrant Agent may act unilaterally to make purely administrative changes internal to the Special Warrant Agent and changes to correct errors. Each person who becomes a holder of an Uncertificated Special Warrant, by his, her or its acquisition thereof shall be deemed to have irrevocably (i) consented to the foregoing authority of the Special Warrant Agent to make such minor error corrections and (ii) agreed to pay to the Special Warrant Agent, promptly upon written demand, the full amount of all loss and expense (including without limitation reasonable legal fees of the Corporation and the Special Warrant Agent plus interest, at an appropriate then prevailing rate of interest to the Special Warrant Agent), sustained by the Corporation or the Special Warrant Agent as a proximate result of such error if but only if and only to the extent that such present or former holder realized any benefit as a result of such error and could reasonably have prevented, forestalled or minimized such loss and expense by prompt reporting of the error or avoidance of accepting benefits thereof whether or not such error is or should have been timely detected and corrected by the Special Warrant Agent; provided, that no person who is a bona fide purchaser shall have any such obligation to the Corporation or to the Special Warrant Agent.

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(c) The Special Warrant Certificates may only be transferred by the Special Warrantholder (or its legal representatives or its attorney duly appointed), in accordance with Applicable Legislation and upon compliance with the conditions herein, on the register kept at the office of the Special Warrant Agent pursuant to Section 2.5(a) by delivering to the Special Warrant Agent’s Toronto or Vancouver office a duly executed Form of Transfer attached as Appendix “2” to the Special Warrant Certificate and complying with such other reasonable requirements as the Corporation and the Special Warrant Agent may prescribe and such transfer shall be duly noted on the register by the Special Warrant Agent. In the case of Uncertificated Special Warrants the Special Warrants may only be transferred, in accordance with the procedures of the Depositary under its book entry registration system. All other transfers and exchanges of beneficial interests in CDS Global Warrants to another CDS Global Warrant, the transferor of such beneficial interest must deliver to the Special Warrant Agent either (A) (1) a written order and Appendix “2” from a Participant or a beneficial holder, in each case, given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another CDS Global Warrant in an amount equal to the beneficial interest to be transferred or exchanged, and (2) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase. If any beneficial interest in a CDS Global Warrant is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another CDS Global Warrant, the principal amount of Special Warrants represented by such CDS Global Warrant shall be reduced accordingly by the Special Warrant Agent or by the Depositary under its book entry registration system pursuant to Applicable Procedures to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another CDS Global Warrant such other CDS Global Warrant shall be increased accordingly in accordance with Applicable Procedures by the Trustee or by the Depositary under its book entry registration system to reflect such increase at the direction of the Corporation upon satisfaction of all requirements for transfer or exchange in beneficial interest in CDS Global Warrants contained in this Indenture or otherwise applicable under the 1933 Act.

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(d) Notwithstanding anything contained in this Indenture, in the Special Warrant Certificate or in any subscription agreements under which Special Warrants were issued and sold, the Special Warrant Agent, relying solely on the Form of Transfer or such other reasonable requirements as the Corporation and Special Warrant Agent may prescribe pursuant to Section 2.5(b) or this Section shall not register any transfer of a Special Warrant unless the transfer is made in compliance with this Section.

(e) The Special Warrant Agent acknowledges and understands that the Special Warrants have not been registered under the 1933 Act or under the securities or “blue sky” laws of any state of the United States. A holder of Special Warrants bearing the legend set forth in section 5.9(c) may only offer, sell, or otherwise transfer such securities (A) to the Corporation, or (B) outside the United States in accordance with Rule 904 of Regulation S under the 1933 Act, and in each case in compliance with applicable local laws and regulations, pursuant to Rule 144 or Rule 144A thereunder, if available, and in accordance with Applicable State Securities Laws of the United States, or in another transaction that does not require registration under the U.S. Securities Act or any Applicable State Securities Laws of the United States. If a Special Warrant certificate not bearing the legend stated in section 5.9(c) is tendered for transfer to a U.S. Person or a person in the United States, the Special Warrant Agent shall not register such transfer, unless (i) a legal opinion is provided confirming that the transfer is exempt from the registration requirements of the 1933 Act, and (ii) the certificate representing the Special Warrants issued to the transferee is endorsed with the U.S. restrictive legend stated in Section 5.9(c).

(f) The Corporation shall direct the Special Warrant Agent as to matters related to the applicable hold periods and applicable securities legislation. The Special Warrant Agent shall have no obligation to ensure or verify compliance with any Applicable Legislation or regulatory requirements on the issue, exercise or transfer of any Special Warrants or any Underlying Securities or other securities issuable upon the exercise of any Special Warrants. The Special Warrant Agent shall be entitled to process all proffered transfers and exercises of Special Warrants upon the presumption that such transfers or exercises are permissible pursuant to all Applicable Legislation and regulatory requirements and the terms of this Indenture. The Special Warrant Agent may assume for the purposes of this Indenture that the address on the register of Special Warrantholders of any Special Warrantholder is the Special Warrantholder’s actual address and is also determinative of the Special Warrantholder’s residency and that the address of any transferee to whom any Special Warrants or any Underlying Securities are to be registered, as shown on the transfer document, is the transferee’s actual address and is also determinative of the transferee’s residency.

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(g) Upon any transfer of Special Warrants in accordance with the provisions of this Indenture, the Corporation shall covenant and agree with the Special Warrant Agent, on behalf of the transferee holder and with the transferee holder, that the transferee holder is a permitted assignee of the transferring holder and is entitled to the benefits of the covenant of the Corporation set forth in Section 3.17 herein and to be set forth under the heading “Contractual Right of Rescission” in the Prospectus Supplement subject, in each case, to the restrictions and limitations described thereunder. Should a holder of Special Warrants exercise any legal, statutory, contractual or other right of withdrawal or rescission that may be available to it, the Special Warrant Agent shall not be responsible for ensuring the Special Warrants or the exercise of Special Warrants is cancelled and a refund of the holder’s funds is paid back to the holder. In such cases, the holder shall seek a refund directly from the Corporation and subsequently, the Corporation shall instruct the Special Warrant Agent in writing, to cancel the Special Warrants or exercise transaction and any Underlying Securities on the register, which may have already been issued upon the Special Warrant exercise.

(h) A person who furnishes evidence that he is, to the reasonable satisfaction of the Special Warrant Agent:

(i) the executor, administrator, heir or legal representative of the heirs of the estate of a deceased Special Warrantholder;

(ii) a guardian, committee, trustee, curator or tutor representing a Special Warrantholder who is an infant, an incompetent person or a missing person; or

(iii) a liquidator or a trustee in bankruptcy for a Special Warrantholder,

may, as hereinafter stated, by surrendering such evidence together with the Special Warrant Certificate in question to the Special Warrant Agent (by delivery or mail as set forth in Section 9.1 hereof), and subject to such reasonable requirements as the Special Warrant Agent may prescribe and all applicable securities legislation and requirements of regulatory authorities, become noted upon the register of Special Warrantholders. After receiving the surrendered Special Warrant Certificate and upon the person surrendering the Special Warrant Certificate meeting the requirements as hereinbefore set forth, the Special Warrant Agent shall forthwith give written notice thereof together with confirmation as to the identity of the person entitled to become the holder to the Corporation. Forthwith after receiving written notice from the Special Warrant Agent as aforesaid, the Corporation shall cause a new Special Warrant Certificate to be issued and sent to the new holder and the Special Warrant Agent shall alter the register of holders accordingly.

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(i) The Corporation and the Special Warrant Agent shall deem and treat the registered holder of any Special Warrant as the absolute legal and beneficial owner thereof for all purposes, free from all equities or rights of set off or counterclaim between the Corporation and any previous holder of such Special Warrant, save in respect of equities of which the Corporation is required to take notice by statute or by order of a court of competent jurisdiction, and neither the Corporation nor the Special Warrant Agent is affected by any notice to the contrary.

(j) Subject to the provisions of this Indenture and Applicable Legislation, each Special Warrantholder is entitled to the rights and privileges attaching to the Special Warrants, and the issue of the Underlying Securities by the Corporation on exercise of Special Warrants by any Special Warrantholder in accordance with the terms and conditions herein contained discharges all responsibilities of the Corporation and the Special Warrant Agent with respect to such Special Warrants and neither the Corporation nor the Special Warrant Agent is bound to inquire into the title of any such registered holder.

(k) A reasonable charge will be levied on a presenter of a Special Warrant Certificate pursuant to this Indenture for the transfer of any Special Warrant. Either the Special Warrantholder or the Corporation will assume this charge.

(l) Notwithstanding any other provision of this Section 2.5, in connection with any transfer of Special Warrants, the transferor and transferee shall comply with all reasonable requirements of the Special Warrant Agent as the Special Warrant Agent may deem necessary to secure the obligations of the transferee of such Special Warrants with respect to such transfer.

2.6 Special Warrantholders Not Shareholders

A Special Warrantholder is not deemed or regarded as a shareholder of the Corporation nor is such Special Warrantholder entitled to any right or interest except as is expressly provided in this Indenture and on the Special Warrant Certificates.

2.7 Signing of Special Warrants

Any one director or officer of the Corporation shall sign a Special Warrant Certificate either manually or by facsimile signature. A facsimile signature upon any Special Warrant Certificate is, for all purposes hereof, deemed to be the signature of the person whose signature it purports to be and to have been signed at the time such facsimile signature is reproduced. If a person whose signature, either manually or in facsimile, appears on a Special Warrant Certificate is not a director or officer of the Corporation at the date of this Indenture or at the date of the countersigning and delivery of such Special Warrant Certificate, such fact does not affect in any way the validity of the Special Warrants or the entitlement of the Special Warrantholder to the benefits of this Indenture or of the Special Warrant Certificate.

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2.8 Countersigning

The Special Warrant Agent shall countersign Special Warrant Certificates and Authenticate Uncertificated Special Warrants upon the written direction of the Corporation. No Special Warrant Certificate shall be issued, or if issued, is valid or exercisable or entitles the holder thereof to the benefits of this Indenture until the Special Warrant Certificate has been manually countersigned by the Special Warrant Agent or the Uncertificated Special Warrant has been Authenticated by the Special Warrant Agent, as the case may be. The countersignature or Authentication by or on behalf of the Special Warrant Agent will be conclusive evidence as against the Corporation that the Special Warrant Certificate so countersigned or Uncertificated Special Warrant so Authenticated has been duly issued hereunder and that the holder is entitled to the benefit hereof. The countersignature by or on behalf of the Special Warrant Agent on any Special Warrant Certificate or the Authentication of any Uncertificated Special Warrant by or on behalf of the Special Warrant Agent is not to be construed as a representation or warranty by the Special Warrant Agent as to the validity of this Indenture or of the Special Warrants or as to the performance by the Corporation of its obligations under this Indenture and the Special Warrant Agent is in no way liable or answerable for the use made of the Special Warrants or the proceeds from the issuance thereof, except as specified by this Indenture. The countersignature or Authentication, as the case may be, by or on behalf of the Special Warrant Agent is only a representation and warranty of the Special Warrant Agent that the Special Warrant Certificate has been duly countersigned by or on behalf of the Special Warrant Agent or the Uncertificated Special Warrant has been duly Authenticated by or on behalf of the Special Warrant Agent pursuant to the provisions of this Indenture.

2.9 Loss, Mutilation, Destruction or Theft of Special Warrants

In case any of the Special Warrant Certificates issued and countersigned hereunder is mutilated or lost, destroyed or stolen, the Corporation, in its discretion, may issue and thereupon the Special Warrant Agent will countersign and deliver a new Special Warrant Certificate of like date and tenor in exchange for and in place of the one mutilated, lost, destroyed or stolen and upon surrender and cancellation of such mutilated Special Warrant Certificate or in lieu of and in substitution for such lost, destroyed or stolen Special Warrant Certificate and the substituted Special Warrant Certificate entitles the holder thereof to the benefits hereof and ranks equally in accordance with its terms with all other Special Warrants issued hereunder.

The Special Warrantholder applying for the issue of a new Special Warrant Certificate pursuant to this Section shall bear the 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 Corporation and the Special Warrant Agent such evidence of ownership and of the loss, destruction or theft of the Special Warrant Certificate so lost, destroyed or stolen as is satisfactory to the Corporation and the Special Warrant Agent in their discretion. The Corporation and the Special Warrant Agent may also, as a condition precedent to issuing a new Special Warrant Certificate, require such applicant to furnish an indemnity and surety bond in amount and form satisfactory to the Corporation and Special Warrant Agent in their discretion, and the applicant shall pay the reasonable charges of the Corporation and the Special Warrant Agent in connection therewith.

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2.10 Exchange of Special Warrants

A Special Warrantholder may at any time prior to the Deemed Exercise Time, by written instruction delivered to the Special Warrant Agent at the office of the Special Warrant Agent set forth in Section 9.1, exchange his Special Warrant Certificates for Special Warrant Certificates evidencing Special Warrants in other denominations entitling the Special Warrantholder to acquire in the aggregate the same number of Underlying Securities to which it was entitled to acquire under the Special Warrant Certificates so surrendered, in which case the Special Warrant Agent may make a charge sufficient to reimburse it for any government fees or charges required to be paid and such reasonable fees as the Special Warrant Agent may determine for every Special Warrant Certificate issued upon exchange. The Special Warrantholder surrendering such Special Warrant Certificate shall bear such fee and charge. Payment of the charges is a condition precedent to the exchange of the Special Warrant Certificate. The Corporation shall sign and the Special Warrant Agent shall countersign all Special Warrant Certificates necessary to carry out exchanges as aforesaid.

Special Warrant Certificates exchanged for Special Warrant Certificates that bear the legends set forth in section 5.9 shall bear the same legend.

2.11 Ranking

All Special Warrants will have the same attributes and rank pari passu regardless of the date of actual issue.

2.12 Purchase of Special Warrants for Cancellation

Subject to Applicable Legislation, the Corporation may, at any time or from time to time, purchase all or any of the Special Warrants in the market, by private contract or otherwise, on such terms as the Corporation may determine. Any such purchase shall be made at the lowest price or prices at which, in the opinion of the directors, such Special Warrants are then obtainable plus reasonable costs of purchase. The Special Warrant Certificates representing the Special Warrants purchased hereunder by the Corporation shall, immediately following purchase, be delivered to and cancelled by the Special Warrant Agent and no Special Warrants shall be issued in substitution therefor. In the case of Uncertificated Warrants, the Special Warrants purchased pursuant to this Section 2.12 shall be reflected accordingly on the register of the Special Warrants and in accordance with procedures prescribed by the Depository under the book entry registration system. No Special Warrants shall be issued in replacement thereof.

2.13 Cancellation of Surrendered Special Warrants

All Special Warrants Certificates surrendered pursuant to Article 5 shall be cancelled by the Special Warrant Agent and upon such circumstances all such Uncertificated Warrants shall be deemed cancelled and so noted on the register by the Special Warrant Agent.

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Article 3
COVENANTS OF THE CORPORATION

So long as any Special Warrants remain outstanding, the Corporation represents, warrants, covenants and agrees with the Special Warrant Agent for the benefit of the Special Warrant Agent and Special Warrantholders as follows:

3.1 To Issue Special Warrants and Reserve Common Shares

(a) That it is duly authorized to create, issue and sell the Special Warrants and that the Special Warrant Certificates, when issued and countersigned by the Special Warrant Agent, and each Uncertificated Special Warrant that has been Authenticated by the Special Warrant Agent will be valid and enforceable against the Corporation in accordance with their terms and the terms of this Indenture and that the Corporation has reserved, allotted and set aside for issuance up to 14,250,000 Underlying Securities, being that number of Common Shares issuable upon the deemed exercise of Special Warrants in accordance with the terms of this Indenture and such Underlying Securities, when issued upon the exercise or deemed exercise of Special Warrants pursuant to and in accordance with the terms of this Indenture, are authorized to be issued as fully paid and non-assessable shares of the Corporation.

(b) Computershare Trust Company of Canada, is the transfer agent of the Underlying Securities, and is duly authorized to countersign, register and issue certificates representing, or document such other evidence of ownership of, such Underlying Securities, in each case in accordance with and pursuant to the terms of this Indenture.

3.2 To Execute Further Assurances

That it shall do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered, all other acts, deeds and assurances in law as may reasonably be required for the better accomplishing and effecting of the intentions and provisions of this Indenture.

3.3 To Carry On Business

That subject to the express provisions hereof the Corporation or any Subsidiary of the Corporation may cease to operate or may dispose of any business, premises, property, assets or operation if in the opinion of the directors or officers of the Corporation or any Subsidiary of the Corporation, as the case may be, it would be advisable and in the best interests of the Corporation or any Subsidiary of the Corporation, as the case may be, to do so, and, subject to the express provisions hereof, it shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence, provided, however, that (subject to Article 4 hereof) nothing herein contained shall prevent any winding-up or liquidation of the Corporation or any Subsidiary of the Corporation or the abandonment of any rights and franchises of the Corporation or any Subsidiary of the Corporation or any corporate reorganization, amalgamation, consolidation, merger, sale, or take-over bid or other business combination from being completed by the Corporation or any Subsidiary of the Corporation in accordance with applicable corporate and securities laws (and none of which are presently contemplated by the Corporation at the date hereof) if, in the opinion of the directors or officers of the Corporation or any Subsidiary of the Corporation, as the case may be, it is advisable and in the best interest of the Corporation or of such Subsidiary of the Corporation to do so.

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3.4 Reporting Issuer

That the Corporation is presently a reporting issuer in the Provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick and Prince Edward Island, and will use its best efforts to maintain its status in such jurisdictions and make all requisite filings under applicable Canadian securities legislation and stock exchange rules to report the exercise of the right to acquire Underlying Securities pursuant to the exercise of the Special Warrants.

3.5 No Breach of Constating Documents

That the issue and sale of the Special Warrants and the issue of the Underlying Securities do not or will not conflict with any of the terms, conditions or provisions of the constating documents of the Corporation or the articles or resolutions of the Corporation or any trust indenture, loan agreement or any other agreement or instrument to which the Corporation or any Subsidiary of the Corporation is contractually bound as of the date of this Indenture.

3.6 Filing Prospectus Supplement and Related Matters

Following the Release Date, the Corporation shall, in accordance with the terms of the Underwriting Agreement:

(a) use its commercially reasonable best efforts to file the Prospectus Supplement qualifying the distribution of the Underlying Securities to be issued on exercise of the Special Warrants in each of the Designated Provinces before the Qualification Deadline;

(b) if the Prospectus Supplement has not been filed by the Qualification Deadline, continue to use its commercially reasonable best efforts to file the Prospectus Supplement as soon as possible thereafter.

3.7 Notices to Special Warrant Agent

That upon completion of the filing of the Prospectus Supplement as contemplated in Section 3.6, the Corporation shall forthwith, and in any event not later than the first Business Days thereafter:

(a) give written notice to the Special Warrant Agent and the Underwriters of the filing of the Prospectus Supplement and the date upon which the Special Warrants will be deemed to be exercised (the “Exercise Notice”); and

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(b) provide written confirmation to the Special Warrant Agent and the Underwriters of any adjustment that has been made pursuant to Article 4.

3.8 Securities Qualification Requirements

That, if any instrument is required to be filed with or any permission, order or ruling is required to be obtained from the Securities Regulators or any other step is required under any federal or provincial law of the Designated Provinces before any securities or property which a Special Warrantholder is entitled to receive pursuant to the exercise or deemed exercise of a Special Warrant may properly and legally be delivered upon the due exercise or deemed exercise of a Special Warrant, the Corporation covenants that it shall use its commercially reasonable best efforts to make such filing, obtain such permission, order or ruling and take all such action, at its expense, as is required or appropriate in the circumstances.

3.9 Maintain Listing

That the Corporation will use its commercially reasonable best efforts to both maintain the listing of the Common Shares which are outstanding on the Toronto Stock Exchange and the NASDAQ Stock Market and ensure that the Common Shares will be approved for listing and trading on such exchanges on the Qualification Date.

3.10 Satisfy Covenants

That the Corporation will comply with all covenants and satisfy all terms and conditions on its part to be performed and satisfied under this Indenture and advise the Special Warrant Agent promptly in writing of any default under the terms of this Indenture.

3.11 Performance of Covenants by Special Warrant Agent

If the Corporation shall fail to perform any of its covenants contained in this Indenture and the Corporation has not rectified such failure within 10 Business Days after receiving notice of such failure by the Special Warrant Agent, the Special Warrant Agent may notify the Special Warrantholders of such failure on the part of the Corporation or may itself perform any of the covenants capable of being performed by it, but shall be under no obligation to perform said covenants or to notify the Special Warrantholders of such performance by it. No such performance, expenditure or advance by the Special Warrant Agent shall relieve the Corporation of any default hereunder or of its continuing obligations under the covenants herein contained.

3.12 Special Warrant Agent’s Remuneration and Expenses

The Corporation will pay the Special Warrant Agent from time to time such reasonable remuneration for its services hereunder as may be agreed upon between the Corporation and the Special Warrant Agent and will pay or reimburse the Special Warrant Agent upon its request for all reasonable expenses and disbursements and advances properly incurred or made by the Special Warrant Agent in the administration or execution of the trusts hereby created (including the reasonable compensation and disbursements of its Counsel and all other advisers and assistants not regularly in its employ), both before any default hereunder and thereafter until all duties of the Special Warrant Agent hereunder shall be finally and fully performed, except any such expense, disbursement, or advance as may arise from the gross negligence, wilful misconduct or fraud of the Special Warrant Agent. Any amount owing hereunder and remaining unpaid after 30 Business Days from the invoice date will bear interest at the then current rate charged by the Special Warrant Agent against unpaid invoices and shall be payable upon demand. This Section shall survive the resignation of the Special Warrant Agent and/or the termination of this Indenture.

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3.13 Trust for Special Warrantholders’ Benefit

The covenants of the Corporation to the Special Warrant Agent provided for in this Indenture shall be held in trust by the Special Warrant Agent for the benefit of the Special Warrantholders.

3.14 Notice to Special Warrantholders of Certain Events

The Corporation covenants with the Special Warrant Agent for the benefit of the Special Warrant Agent and the Special Warrantholders that, so long as any of the Special Warrants are outstanding, it will not:

(a) pay any dividend payable in shares of any class to the holders of its Common Shares or make any other distribution (other than a cash distribution made as a dividend out of retained earnings or contributed surplus legally available for the payment of dividends) to the holders of its Common Shares;

(b) offer to the holders of its Common Shares rights to subscribe for or to purchase any Common Shares or shares of any class or any other securities, rights, warrants or options;

(c) make any repayment of capital on, or distribution of evidences of indebtedness on, any of its assets (excluding cash dividends) to the holders of Common Shares;

(d) amalgamate, consolidate or merge with any other person or sell or lease the whole or substantially the whole of its assets or undertaking;

(e) effect any subdivision, consolidation or reclassification of its Common Shares; or

(f) liquidate, dissolve or wind-up,

unless, in each such case, the Corporation will have given notice, in the manner specified in Section 9.2, to each Special Warrantholder, of the action proposed to be taken and the date on which (a) the books of the Corporation will close or a record will be taken for such dividend, repayment, distribution, subscription rights or other rights, warrants or securities, or (b) such subdivision, consolidation, reclassification, amalgamation, merger, sale or lease, dissolution, liquidation or winding-up will take place, as the case may be, provided that the Corporation will only be required to specify in the notice those particulars of the action as will have been fixed and determined at the date on which the notice is given. The notice will also specify the date as of which the holders of Common Shares of record will participate in the dividend, repayment, distribution, subscription of rights or other rights, warrants or securities, or will be entitled to exchange their Common Shares for securities or other property deliverable upon such reclassification, amalgamation, merger, sale or lease, other disposition, dissolution, liquidation or winding-up, as the case may be. The notice will be given, with respect to the actions described in Sections (a), (b), (c), (d), (e) and (f) above not less than two Business Days prior to the record date or the date on which the Corporation’s transfer books are to be closed with respect thereto.

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3.15 Closure of Share Transfer Books

The Corporation further covenants and agrees that it will not during the period of any notice given under Section 9.1 close its share transfer books or take any other corporate action which might deprive the Special Warrantholders of the opportunity of exercising their Special Warrants; provided that nothing contained in this Section 3.15 will be deemed to affect the right of the Corporation to do or take part in any of the things referred to in Section 3.14 or to pay cash dividends on the shares of any class or classes in its capital from time to time outstanding.

3.16 Payment of Commissions

The Corporation will not pay or give any commission or other remuneration within the meaning of Section 3(a)(9) of the 1933 Act to any person, directly or indirectly, for soliciting the exercise of the Special Warrants.

3.17 Contractual Right of Rescission

The Corporation covenants with the Special Warrant Agent to provide a right of rescission to each Special Warrantholder as hereinafter set forth, which right shall be exercisable by a Special Warrantholder directly.

The Corporation has agreed that in the event that a holder of a Special Warrant who acquires Underlying Securities upon exercise of the Special Warrants is or becomes entitled under applicable Securities Laws to the remedy of rescission by reason of a misrepresentation in the Prospectus Supplement filed by the Corporation in connection herewith or any amendment, qualifying the distribution of the Underlying Securities to be issued on exercise of the Special Warrants in the Designated Provinces, such holder shall be entitled, subject to available defences and any limitation period under applicable Securities Laws, to rescission not only of the holder’s exercise of its Special Warrants but also of the private placement transaction pursuant to which the Special Warrants were initially acquired (i.e. the Private Placement), and shall be entitled in connection with such rescission to a full refund of all consideration paid to the Corporation on the acquisition of the Special Warrants. In the event that such holder is a permitted assignee of the interest of the original purchaser of the Special Warrants, such permitted assignee shall be permitted to exercise the rights of rescission and refund granted hereunder as if such permitted assignee was such original purchaser. The foregoing right, which is extended by the Corporation in respect of the Special Warrants issued by the Corporation pursuant to accepted subscriptions at the Closing Time, is in addition to any other right or remedy available to a holder of Special Warrants under applicable Securities Laws, or otherwise at law, and is subject to the defences and limitations described under such Securities Laws.

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Should a holder of Special Warrants exercise any legal, statutory, contractual or other right of withdrawal or rescission that may be available to it, and the holder’s funds which were paid on exercise have already been released to the Corporation by the Special Warrant Agent, the Special Warrant Agent shall not be responsible for ensuring the exercise is cancelled and a refund is paid back to the holder. In such cases, the holder shall seek a refund directly from the Corporation and subsequently, the Corporation, upon surrender to the Corporation or the Special Warrant Agent of any underlying shares that may have been issued, or such other procedure as agreed to by the parties hereto, shall instruct the Special Warrant Agent in writing, to cancel the exercise transaction and any such underlying shares on the register, which may have already been issued upon the Special Warrant exercise. The Special Warrant Agent shall not be under any duty or obligation to take any steps to ensure or enforce that the funds are returned pursuant to this section, nor shall the Special Warrant Agent be in any other way responsible in the event that any payment is not delivered or received pursuant to this section. Notwithstanding the foregoing, in the event that the Corporation provides the refund to the Special Warrant Agent for distribution to the holder, the Special Warrant Agent shall return such funds to the holder as soon as reasonably practicable, and in so doing, the Special Warrant Agent shall incur no liability with respect to the delivery or non-delivery of any such funds.

Article 4
ADJUSTMENT OF NUMBER OF Underlying Securities

4.1 Adjustment of Number of Underlying Securities

The rights to acquire Underlying Securities in effect at any date attaching to the Special Warrants are subject to adjustment from time to time as follows:

(a) if and whenever at any time from the date hereof and prior to the Deemed Exercise Time, the Corporation:

(i) subdivides, re-divides or changes its outstanding Common Shares into a greater number of shares;

(ii) consolidates, reduces or combines its outstanding Common Shares into a smaller number of shares; or

(iii) issues Common Shares or securities exchangeable for or convertible to Common Shares (“Convertible Securities”) to the holders of all or substantially all of the outstanding Common Shares by way of a stock dividend (other than the issue of Common Shares or Convertible Securities to such holders as Dividends Paid in the Ordinary Course);

(any of the above being a “Common Share Reorganization”), the number of Underlying Securities issuable upon the exercise of each Special Warrant is adjusted immediately after the effective date of the Common Share Reorganization or on the record date for the issue of Common Shares or Convertible Securities by way of stock dividend, by multiplying the number of Underlying Securities previously obtainable on the exercise of a Special Warrant by the fraction of which:

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(A) the numerator is the total number of Common Shares outstanding immediately after the effective or record date of the Common Share Reorganization, or, in the case of the issuance of exchangeable or Convertible Securities, the total number of Common Shares outstanding immediately after the effective or record date of the Common Share Reorganization plus the total number of Common Shares issuable upon conversion or exchange of such Convertible Securities; and

(B) the denominator is the total number of Common Shares outstanding immediately prior to the applicable effective or record date of such Common Share Reorganization;

and the Corporation and Special Warrant Agent, upon receipt of notice pursuant to Section 4.3, shall make such adjustment successively whenever any event referred to in this Section 4.1(a) occurs and any such issue of Common Shares or Convertible Securities by way of a stock dividend is deemed to have occurred on the record date for the stock dividend for the purpose of calculating the number of outstanding Common Shares under this Section 4.1(a). To the extent that any Convertible Securities are not converted into or exchanged for Common Shares, prior to the expiration thereof, the number of Underlying Securities obtainable under each Special Warrant shall be readjusted to the number of Underlying Securities that is then obtainable based upon the number of Common Shares actually issued on conversion or exchange of such Convertible Securities;

(b) if and whenever at any time from the date hereof and prior to the Deemed Exercise Time the Corporation 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 45 calendar days after the record date for such issue (“Rights Period”), to subscribe for or acquire Common Shares at a price per share to the holder of less than 95% of the Current Market Price for the Common Shares on such record date (any such issuance being herein called a “Rights Offering), then the number of Underlying Securities obtainable upon the exercise of each Special Warrant shall be adjusted effective immediately after the end of the Rights Period to a number determined by multiplying the number of Underlying Securities obtainable upon the exercise thereof immediately prior to the end of the Rights Period by a fraction:

(i) the numerator 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; and

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(ii) the denominator of which shall be the aggregate of:

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

(B) a number determined by dividing (1) the product of the number of Common Shares issued or subscribed during the Rights Period upon the exercise of the rights, warrants, or options under the Rights Offering and the price at which such Common Shares are offered by (2) the Current Market Price of the Common Shares as of the record date for the Rights Offering;

Any offered securities owned by or held for the account of the Corporation shall be deemed not to be outstanding for the purpose of any computation. If all the rights, options or warrants are not so issued or if all rights, options or warrants are not exercised prior to the expiration thereof, the number of Underlying Securities obtainable under each Special Warrant Exchange shall be readjusted to the number of Underlying Securities obtainable in effect immediately prior to the record date and such number shall be further adjusted based upon the number of offered securities (or rights, options or warrants into Common Shares) actually delivered upon the exercise of the rights, options or warrants, as the case may be, but subject to any other adjustment required hereunder by reason of any event arising after that record date;

(c) if and whenever at any time from the date hereof and prior to the Deemed Exercise Time the Corporation shall issue or distribute to all or to substantially all of the holders of the Common Shares:

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

(ii) any property (including cash) 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 number of Underlying Securities obtainable upon the exercise of each Special Warrant shall be adjusted effective immediately after the record date at which the holders of affected Common Shares are determined for purposes of the Special Distribution to a number determined by multiplying the number of Underlying Securities obtainable upon the exercise thereof in effect on such record date by a fraction:

(A) the numerator of which shall be the number of Common Shares outstanding on such record date multiplied by the Current Market Price of the Common Shares on such record date; and

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(B) the denominator of which shall be:

(1) the product of the number of Common Shares outstanding on such record date and the Current Market Price of the Common Shares on such record date, less

(2) the fair market value on such record date, as determined by action by the directors (whose determination shall be conclusive), subject to TSX acceptance, to the holders of the Common Shares of such securities or property or other assets so issued or distributed in the Special Distribution;

Any Common Shares owned by or held for the account of the Corporation shall be deemed not to be outstanding for the purpose of any computation. If the distribution of shares, rights, options, warrants, evidences of indebtedness or assets is not so made or to the extent that any rights, options or warrants so distributed are not exercised, the number of Underlying Securities obtainable under each Special Warrant Exchange shall be readjusted to the number of Underlying Securities obtainable in effect immediately prior to the record date and such number shall be further adjusted based upon the number of shares, rights, options, warrants, evidences of indebtedness or assets actually distributed or based upon the number of Common Shares or Convertible Securities actually delivered upon the exercise of the rights, options or warrants, as the case may be, but subject to any other adjustment required hereunder by reason of any event arising after that record date;

(d) if and whenever at any time from the date hereof and prior to the Deemed Exercise Time there is a reclassification of the Common Shares or a change in the Common Shares into other shares or securities, or a capital reorganization of the Corporation other than as described in Section 4.1(a) or the triggering of a shareholders’ rights plan or a consolidation, amalgamation, arrangement or merger of the Corporation with or into any other body corporate, trust, partnership or other entity, or a transfer, sale or conveyance of the property and assets of the Corporation as an entirety or substantially as an entirety to any other body corporate, trust, partnership or other entity, any of such events being referred to as a “Capital Reorganization”, every Special Warrantholder who has not exercised its right of acquisition, as at the effective date of such Capital Reorganization is entitled to receive upon exercise in accordance with the terms and conditions hereof and shall accept, in lieu of the number of Underlying Securities obtainable under the Special Warrants to which it was previously entitled, the kind and number of Underlying Securities or other securities or property of the Corporation that the Special Warrantholder would have been entitled to receive on such Capital Reorganization if, on the record date or the effective date thereof, as the case may be, the Special Warrantholder had been the registered holder of the number of Underlying Securities obtainable upon the exercise of Special Warrants then held, subject to adjustment thereafter in accordance with provisions of the same, as nearly as may be possible, as those contained in this Section 4.1. The Corporation shall not carry into effect any action requiring an adjustment pursuant to this Section 4.1(d) unless all necessary steps have been taken so that the Special Warrantholders are thereafter entitled to receive such kind and number of Underlying Securities, other securities or property. The Corporation will not enter into a Capital Reorganization unless its successor, or the purchasing body corporate, partnership, trust or other entity, as the case may be, prior to or contemporaneously with any such Capital Reorganization, enters into an indenture which provides, to the extent possible, for the application of the provisions set forth in this Indenture with respect to the rights and interests thereafter of the Special Warrantholders to the end that the provisions set forth in this Indenture are correspondingly made applicable, as nearly as may reasonably be, with respect to any shares, other securities or property to which a Special Warrantholder is entitled on the exercise of his acquisition rights thereafter. An indenture entered into by the Corporation pursuant to the provisions of this Section 4.1(d) is deemed a supplemental indenture entered into pursuant to the provisions of Article 7. An indenture entered into between the Corporation, any successor to the Corporation or any purchasing body corporate, partnership, trust or other entity and the Special Warrant Agent must provide for adjustments which are as nearly equivalent as may be practicable to the adjustments provided in this Section 4.1 and which apply to successive Capital Reorganizations;

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(e) where this Section 4.1 requires that an adjustment becomes effective immediately after a record date or effective date, as the case may be, for an event referred to herein, the Corporation may defer, until the occurrence of that event, issuing to the Special Warrantholder exercising his acquisition rights after the record date or effective date, as the case may be and before the occurrence of that event the adjusted number of Underlying Securities, other securities or property issuable upon the exercise or deemed exercise of the Special Warrants by reason of the adjustment required by that event. If the Corporation relies on this Section 4.1(e) to defer issuing an adjusted number of Underlying Securities, other securities or property to a Special Warrantholder, the Special Warrantholder has the right to receive any distributions made on the adjusted number of Underlying Securities, other securities or property declared in favour of holders of record on and after the date of exercise or such later date as the Special Warrantholder would but for the provisions of this Section 4.1(e), have become the holder of record of the adjusted number of Underlying Securities, other securities or property;

(f) the adjustments provided for in this Section 4.1 are cumulative. After any adjustment pursuant to this Section 4.1, the term “Underlying Securities” where used in this Indenture is interpreted to mean securities of any class or classes which, as a result of such adjustment and all prior adjustments pursuant to this Section, the Special Warrantholder is entitled to receive upon the exercise of his Special Warrant, and the number of Underlying Securities obtainable in any exercise made pursuant to a Special Warrant is interpreted to mean the number of Underlying Securities or other property or securities a Special Warrantholder is entitled to receive, as a result of such adjustment and all prior adjustments pursuant to this Section 4.1, upon the full exercise of a Special Warrant;

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(g) notwithstanding anything in this Article 4, no adjustment shall be made in the acquisition rights attached to the Special Warrants if the issue of Common Shares is being made pursuant to any stock option or stock purchase plan in force from time to time for directors, officers, employees or consultants of the Corporation;

(h) in the event of a question arising with respect to the adjustments provided for in this Section 4.1, that question shall be conclusively determined by the Corporation’s auditors or if they are unwilling or unable to act, such independent naturally recognized chartered accountants as may be selected by the directors of the Corporation, acting reasonably, who shall have access to all necessary records of the Corporation, and a determination by the Corporation’s auditors is binding upon the Corporation, the Special Warrant Agent, all Special Warrantholders and all other persons interested therein; and

(i) no adjustment in the number of Underlying Securities obtainable upon exercise of Special Warrants shall be made in respect of any event described in this Section 4.1, other than the events referred in clauses (i) and (ii) of Section (b) thereof, if the Special Warrantholders are entitled to participate in such event on the same terms, mutatis mutandis, as if the Special Warrantholders had exercised their Special Warrants prior to or on the effective date or record date of such event.

4.2 Proceedings Prior to any Action Requiring Adjustment

As a condition precedent to the taking of any action which requires an adjustment in any of the acquisition rights pursuant to the Special Warrants, including the number of Underlying Securities obtainable upon the exercise or deemed exercise thereof, the Corporation shall take any corporate action which may in its opinion be necessary in order that the Corporation or any successor to the Corporation has reserved, allotted and set aside for issuance Common Shares in its authorized capital and may validly and legally issue as fully paid and non-assessable all the Underlying Securities and may validly and legally deliver all other securities or property which the Special Warrantholders are entitled to receive on the full exercise of the Special Warrants in accordance with the provisions hereof.

4.3 Action Requring Adjustment

Subject to TSX approval, in case the Corporation, after the date hereof, shall take any action affecting the Common Shares, other than the actions described in this Article 4, which, in the opinion of the directors of the Corporation would materially adversely affect the rights of the Special Warrantholders, then the number of Common Shares which are to be received upon the conversion of the Special Warrants shall be adjusted in such manner, if any, and at such time as the directors of the Corporation may, in their discretion, reasonably determine to be equitable to the Special Warrantholders in such circumstances.

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4.4 Certificate of Adjustment

The Corporation shall from time to time immediately, but in any event within three Business Days after the occurrence of any event which requires an adjustment as provided in Section 4.1, deliver a written notice to the Special Warrantholders and the Special Warrant Agent specifying the nature of the event requiring the adjustment, the amount of the adjustment necessitated thereby, and setting forth in reasonable detail the method of calculation and the facts upon which the calculation is based.

4.5 No Action After Notice

The Corporation covenants with the Special Warrant Agent that it will not close its transfer books or take any other corporate action which might deprive the holder of a Special Warrant of the opportunity of exercising the Special Warrant during the period of 14 calendar days after giving of the notice set forth in Section 4.3 hereof and 4.7 hereof.

4.6 Protection of Special Warrant Agent

The Special Warrant Agent:

(a) is entitled to act and rely, and shall be protected in so doing, on any adjustment calculation of the Corporation or the Corporation auditors and any other documents filed by the Corporation pursuant to this Article 4 for all purposes;

(b) is not at any time under any duty or responsibility to a Special Warrantholder to determine whether any facts exist which require any adjustment contemplated by Section 4.1, or with respect to the nature or extent of any such adjustment when made, or with respect to the method employed in making the same;

(c) is not accountable with respect to the validity or value (or the kind or amount) of any shares or other securities or property which may at any time be issued or delivered upon the exercise of the rights attaching to any Special Warrant;

(d) is not responsible for any failure of the Corporation to make any cash payment or to issue, transfer or deliver certificates for the Underlying Securities upon the surrender of any Special Warrants for the purpose of the exercise of such rights or to comply with any of the covenants contained in this Article 4; and

(e) shall not incur any liability or responsibility whatsoever or be in any way responsible for the consequence of any breach on the part of the Corporation of any of the representations, warranties or covenants herein contained or of any acts of the agents or servants of the Corporation.

4.7 Notice of Special Matters

The Corporation covenants with the Special Warrant Agent that so long as any Special Warrants remain outstanding it will give seven calendar days’ prior written notice in the manner provided for in Article 9 to the Special Warrant Agent, each Special Warrantholder and to the Underwriters of any event which requires an adjustment to the subscription rights attaching to any of the Special Warrants pursuant to this Article 4. The Corporation covenants and agrees that such notice shall contain the particulars of such event in reasonable detail and, if determinable, the required adjustment in the manner provided for in Article 9. The Corporation further covenants and agrees that it shall promptly, as soon as the adjustment calculations are reasonably determinable, file a certificate of the Corporation with the Special Warrant Agent, on which the Special Warrant Agent may act and rely, showing how such adjustment shall be computed.

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Article 5
EXERCISE AND CANCELLATION OF SPECIAL WARRANTS

5.1 Notice of Deemed Exercise to Special Warrantholders

Upon receipt of written notice from the Corporation in accordance with Section 3.7, the Special Warrant Agent shall give written notice, in the form to be provided by the Corporation to the Special Warrant Agent, to each holder of a Special Warrant (in the form to be provided by the Corporation to the Special Warrant Agent) concurrently with delivery of the certificates or other evidence of ownership representing the Underlying Securities in accordance with Section 5.3, which notice will include a statement that any Special Warrants not exercised prior to the Deemed Exercise Time will be deemed to be exercised pursuant to Section 5.3 and will include confirmation that no adjustment has occurred pursuant to Section 4.1, or if an adjustment has occurred, provide a certificate as set forth in Section 4.3 herein.

5.2 Voluntary Exercise of Special Warrants

(a) Each Special Warrant may be exercised by the holder thereof at any time on or after the Release Date, but not after the Deemed Exercise Time, upon the terms and subject to the conditions set forth herein.

(b) Subject to and upon compliance with the provisions of this Section 5.2, the holder of any Special Warrant Certificate may exercise the right therein provided for, prior to the Deemed Exercise Time, by surrendering the Special Warrant Certificate to the Special Warrant Agent at its principal transfer office in the City of Toronto or Vancouver or at such additional place or places as may be designated by the Corporation from time to time with the approval of the Special Warrant Agent during normal business hours on a Business Day at that place before the Deemed Exercise Date, together with the exercise form(s) in the form attached as Appendix “1” to the Special Warrant Certificate(s) in accordance with the instructions attached as Appendix “3” to the Special Warrant Certificate duly completed and executed by the holder for the number of Underlying Securities which the holder desires to acquire, and subject to compliance with such requirements as the Special Warrant Agent may reasonably impose to permit the tracking of such exercises from time to time. Surrender of a Special Warrant Certificate with the exercise form(s) duly completed will be deemed to have been effected, and Special Warrants shall be deemed to have been exercised, only on personal delivery thereof to, or if sent by mail or other means of transmission on actual receipt thereof by, the Special Warrant Agent at one of the offices specified in this Subsection 5.2(b).

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(c) Voluntary exercise, at a time when the Corporation has not filed the Prospectus Supplement or the Corporation has filed the Prospectus Supplement but the Prospectus Supplement has not been delivered to the Special Warrantholder, is subject to compliance with and may be restricted by the securities laws of the Designated Provinces and the United States and applicable states thereof and is further subject to the Special Warrantholders providing such assurances and executing such documents as may, in the reasonable opinion of the Corporation or the Warrant Underwriter, be required to ensure compliance with applicable securities legislation. If, at the time of the voluntary exercise of the Special Warrants pursuant to this Section, there remain restrictions on resale under applicable securities legislation on the Common Shares so acquired, the Corporation, may, if required on the advice of counsel, endorse the certificates representing the Common Shares with respect to those restrictions.

(d) Every exercise form delivered prior to the Deemed Exercise Date shall be signed by the holder of a Special Warrant Certificate who desires to exercise in whole or in part the right of acquisition therein provided for; shall specify the number of Underlying Securities that such holder wishes to acquire (being not more than the holder is entitled to acquire under the applicable Special Warrant Certificate), the person or persons in whose name or names the Underlying Securities which such holder desires to acquire are to be issued and his or their address or addresses, on which the Special Warrant Agent is entitled to act and rely for determining residency of the subscribing Special Warrantholder, and the number of Underlying Securities to be issued to each such person, and if more than one is so specified, the form shall have one of the boxes in the exercise form checked; and shall be substantially in the form set out in the Special Warrant Certificate.

(e) Subject to and upon compliance with the terms of this Section 5.2, a beneficial holder of Uncertificated Special Warrants evidenced by a security entitlement in respect of Special Warrants in the book entry registration system may exercise the right of acquisition by causing a Book Entry Only Participant to deliver to the Depository on behalf of the entitlement holder, notice of the owner’s intention to exercise the Special Warrants in a manner acceptable to the Depository. Forthwith upon receipt by the Depository of such notice, the Depository shall deliver to the Special Warrant Agent a Transaction Instruction confirming its intention to exercise Special Warrants in a manner acceptable to the Special Warrant Agent, including by electronic means through the book entry registration system. An electronic exercise of the Uncertificated Special Warrants initiated by the Book Entry Only Participant through a book based registration system, including CDSX, shall constitute a representation to both the Corporation and the Special Warrant Agent that the beneficial owner at the time of exercise of such Uncertificated Special Warrants is either: i) (a) is not in the United States; (b) is not a U.S. Person and is not exercising such Special Warrants on behalf of a U.S. Person or a person in the United States; and (c) did not execute or deliver the notice of the owner’s intention to exercise such Special Warrants in the United States , or ii) is original holder of Special Warrants issued from conversion of Subscription Receipts originally issued pursuant to Section 4(a)(2) of the 1933 Act and/or Regulation D thereunder and no exercise form need to be completed or, if the beneficial owner is a subsequent holder of the Special Warrants who is a U.S. Person, a person in the United States or otherwise subject to the 1933 Act, no person has paid or given any commission or other remuneration within the meaning of Section 3(a)(9) of the 1933 Act to any person, directly or indirectly, for soliciting the exercise of the Special Warrants. If the CDS Participant is not able to make or deliver the foregoing representation by initiating the electronic exercise of the Uncertificated Special Warrants, then such Special Warrants shall be withdrawn from the book based registration system, including CDSX by the CDS Participant and an individually registered Special Warrant Certificate shall be issued by the Special Warrant Agent to such beneficial owner or CDS Participant and the exercise procedures set forth in Section 5.2(b) shall be followed.

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(f) A notice in form acceptable to the Book Entry Only Participant from such beneficial holder should be provided to the Book Entry Only Participant sufficiently in advance so as to permit the Book Entry Only Participant to deliver notice to the Depository and for the Depository in turn to deliver written notice to the Special Warrant Agent prior to the Deemed Exercise Date. The Depository will initiate the exercise by way of the Transaction Instruction and the Special Warrant Agent will execute the exercise by issuing to the Depository through the book entry registration system the Underlying Securities to which the exercising Special Warrantholder is entitled pursuant to the exercise. Any expense associated with the exercise process will be for the account of the entitlement holder exercising the Special Warrants and/or the Book Entry Only Participant exercising the Special Warrants on its behalf.

(g) By causing a Book Entry Only Participant to deliver notice to the Depository, a Special Warrantholder shall be deemed to have irrevocably surrendered his or her Special Warrants so exercised and appointed such Book Entry Only Participant to act as his or her exclusive settlement agent with respect to the exercise and the receipt of Underlying Securities in connection with the obligations arising from such exercise.

(h) Any notice which the Depository 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 Book Entry Only Participant to exercise or to give effect to the settlement thereof in accordance with the Special Warrantholder’s instructions will not give rise to any obligations or liability on the part of the Corporation or Special Warrant Agent to the Book Entry Only Participant or the Special Warrantholder.

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(i) Any exercise form referred to in this Section 5.2 shall be signed by the registered Special Warrantholder, or its executors or administrators or other legal representatives or an attorney of the registered Special Warrantholder, duly appointed by an instrument in writing satisfactory to the Special Warrant Agent but such exercise form need not be executed by the Depository.

(j) Any exercise referred to in this Section 5.2 shall require that the original exercise form or other Transaction Instruction executed by the registered Special Warrantholder or the Depository as the case may be must be received by the Special Warrant Agent prior to the Deemed Exercise Date, as applicable.

(k) If the form of exercise notice set forth in the Special Warrant Certificate shall have been amended, the Corporation shall cause the amended exercise notice to be forwarded to all registered Special Warrantholders.

(l) Exercise notices and Transaction Instructions must be delivered to the Special Warrant Agent at any time during the Special Warrant Agent’s actual business hours on any Business Day prior to the Deemed Exercise Date. Any exercise notice or Transaction Instruction received by the Special Warrant Agent after business hours on any Business Day other than the Deemed Exercise Date will be deemed to have been received by the Special Warrant Agent on the next following Business Day.

(m) Any Special Warrant with respect to which an exercise form or a Transaction Instruction, as applicable is not received by the Special Warrant Agent before the Deemed Exercise Time on the Deemed Exercise Date shall be deemed to have expired and become void and all rights with respect to such Special Warrants shall terminate and be cancelled except for the right to receive an Underlying Security in accordance with Section 5.3 of this Indenture.

(n) Within three Business Days after the date of due exercise of a Special Warrant, the Special Warrant Agent shall cause to be delivered or mailed to the person or persons in whose name or names the Special Warrant is registered or to such address as the Corporation or Special Warrantholder may specify in writing to the Special Warrant Agent prior to the exercise of a Special Warrant or, if so specified in writing by the holder, cause to be delivered to such person or persons a certificate or certificates for the appropriate number of Common Shares subscribed for, or any other appropriate evidence of the issuance of Common Shares to such person or persons in respect of Common Shares issued under the book entry registration system.

(o) If any Underlying Securities subscribed for are to be issued to a person or persons other than the Special Warrantholder, the Special Warrantholder must pay to the Corporation or to the Special Warrant Agent on his behalf an amount equal to all applicable transfer taxes or other government charges, and the Corporation will not be required to issue or deliver any certificates evidencing any Underlying Securities unless or until that amount has been so paid or the Special Warrantholder has established to the satisfaction of the Corporation that the taxes and charges have been paid or that no taxes or charges are owing.

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(p) Voluntary exercise, at a time when the Corporation has not filed the Prospectus Supplement or the Corporation has filed the Prospectus Supplement but the Prospectus Supplement has not been delivered to the Special Warrantholder, is subject to compliance with and may be restricted by the securities laws of the Designated Provinces and the United States and is further subject to the Special Warrantholders providing such assurances and executing such documents as may, in the reasonable opinion of the Corporation or the Special Warrant Agent, be required to ensure compliance with applicable securities legislation. If, at the time of the voluntary exercise of the Special Warrants pursuant to this Section 5.2, there remain restrictions on resale under applicable securities legislation on the Underlying Securities so acquired, the Corporation may, if required on the advice of counsel, endorse the certificates representing the Underlying Securities or make such other notation with respect to those restrictions.

The exercise form attached to the Special Warrant Certificate shall not be deemed to be duly completed if the name and mailing address of the holder do not appear legibly on such exercise form and such exercise form is not signed by the Special Warrantholder, his executor, administrator or other legal representative of such holder’s attorney duly appointed.

Exercise forms must be delivered to the Special Warrant Agent at any time during the Special Warrant Agent's actual business hours on any Business Day prior to the Deemed Exercise Time. Any exercise notice received by the Special Warrant Agent after business hours on any Business Day other than the Deemed Exercise Time will be deemed to have been received by the Special Warrant Agent on the next following Business Day.

5.3 Deemed Exercise of Special Warrants

All Special Warrants not exercised by the Special Warrantholders pursuant to Section 5.2 prior to the Deemed Exercise Time will be deemed to have been exercised immediately prior to the Deemed Exercise Time and surrendered by the Special Warrantholders without any further action on the part of the Special Warrantholders. In that event, the Special Warrant Agent shall, (i) in respect of the CDS Global Warrants, immediately deliver in uncertificated form to the Depository through the book entry registration system, the Underlying Securities issued upon deemed exercise of the Special Warrants and the Corporation will direct the Depository to receive the Underlying Securities through the book entry only system; and (ii) in respect of the Special Warrant Certificates, mail within three Business Days, one or more certificates representing the Underlying Securities issued upon deemed exercise of the Special Warrants, registered in the name of the Special Warrantholders, to the addresses of the Special Warrantholders as specified in the register for the Special Warrants or to such address as the Corporation or Special Warrantholder may specify in writing to the Special Warrant Agent prior to the Deemed Exercise Time.

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5.4 Effect of Exercise of Special Warrants

(a) Subject to subsection (b), on exercise or deemed exercise of a Special Warrant, the Corporation shall cause to be issued to (i) in respect of Special Warrants that are not CDS Global Warrants, the person or persons in whose name or names the Underlying Securities so subscribed for are to be issued as specified in the exercise form, in the case of voluntary exercise, or Subscription Agreement, in the case of deemed exercise or (ii) in respect of CDS Global Warrants, the Depository, the number of Underlying Securities to be issued to such person or persons and such person or persons shall become a shareholder or shareholders of the Corporation in respect of the Underlying Securities with effect from the date on which the Special Warrant is exercised and shall be entitled to delivery of certificates evidencing the Underlying Securities, and the Corporation shall cause the certificates, or in the case of Underlying Securities issued under the book entry registration system, any other appropriate evidence of the issuance of Underlying Securities to be mailed by insured mail or delivered as specified to such person or persons (or, if applicable, the trustee under the registered retirement savings plan which holds the Underlying Securities) at the address or addresses specified in the exercise form or Subscription Agreement, as the case may be, within three Business Days of the date on which the Special Warrant is exercised or deemed to be exercised.

(b) Notwithstanding any provision herein contained to the contrary, the Corporation shall not be required to deliver certificates for Underlying Securities in any period while the share transfer registers of the Corporation are closed and, in the event of the exercise of any Special Warrant during any such period, the Underlying Securities subscribed for shall be issued and such person shall be deemed to have become the holder of record of such Underlying Securities on the date on which such transfer registers are next reopened.

(c) Upon any exercise or deemed exercise of the Special Warrants and issuance of Underlying Securities, the registered holder of the Underlying Securities so issued is deemed to have received the notice provided in Schedule “B” hereof.

5.5 Partial Exercise

Any Special Warrantholder may acquire a number of Underlying Securities less than the number of Underlying Securities which the holder is entitled to acquire pursuant to the surrendered Special Warrant Certificate(s). In the event of any exercise of a number of Special Warrants less than the number which the holder is entitled to exercise pursuant to the surrendered Special Warrant Certificates, the Special Warrantholder upon such exercise shall, in addition to the number of Underlying Securities acquired pursuant to the Special Warrants exercised, be entitled to receive, without charge therefor, a new Special Warrant Certificate(s) in respect of the balance of the Special Warrants represented by the surrendered Special Warrant Certificate(s) and which were not then exercised.

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5.6 Special Warrants Void After Exercise Time

After the exercise or deemed exercise of a Special Warrant as provided in this Article 5, the holder of a Special Warrant Certificate representing the Special Warrant so exercised no longer has any rights either under this Indenture or the Special Warrant Certificate, other than, the right to receive certificates or other evidence of ownership as provided herein representing the Underlying Securities and the Special Warrant is void and of no value or effect.

5.7 Fractions of Underlying Securities

(a) Where a Special Warrantholder is entitled to receive, as a result of the adjustments provided for in Section 4.1 or otherwise, on the exercise or partial exercise of its Special Warrants a fraction of an Underlying Security, such right may only be exercised in respect of such fraction in combination with another Special Warrant or other Special Warrants which in the aggregate entitle the Special Warrantholder to receive a whole number of Underlying Securities; and

(b) If a Special Warrantholder is not able to, or elects not to, combine Special Warrants so as to be entitled to acquire a whole number of Underlying Securities, the Special Warrantholder may not exercise the right to acquire a fractional Underlying Security, and, as a result, has the right to acquire only that number of Underlying Securities equal to the next lowest whole number of Underlying Securities and no cash will be paid in lieu of any fractional Underlying Securities.

5.8 Accounting and Recording

The Special Warrant Agent shall promptly notify the Corporation with respect to Special Warrants exercised. The Special Warrant Agent shall record the particulars of the Special Warrants exercised which include the name or names and addresses of the persons who become holders of Underlying Securities on exercise pursuant to this Article 5 and the number of Underlying Securities issued. Within three Business Days of the exercise of each Special Warrant pursuant to Section 5.2, the Special Warrant Agent shall provide those particulars in writing to the Corporation.

5.9 Legending of Special Warrants and Underlying Securities

(a) All Special Warrants and all securities issued in exchange therefor or in substitution thereof prior to the earlier of the Qualification Date and the date which is four months and one day following the Closing Date (and all certificates issued in exchange therefor or in substitution thereof, as applicable) will have the following legends endorsed thereon:

“UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE JULY 2, 2016.”

and, if applicable in accordance with the policies of the Toronto Stock Exchange:

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“WITHOUT PRIOR WRITTEN APPROVAL OF THE TORONTO STOCK EXCHANGE AND COMPLIANCE WITH ALL APPLICABLE SECURITIES LEGISLATION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE TRADED ON OR THROUGH THE FACILITIES OF THE TORONTO STOCK EXCHANGE OR OTHERWISE IN CANADA OR TO OR FOR THE BENEFIT OF A CANADIAN RESIDENT UNTIL JULY 2, 2016.”

(b) The Underlying Securities (and all securities issued in exchange therefor or in substitution thereof, as applicable), if issued before the date that is four months and one day from the Closing Date and prior to the Qualification Date, shall in addition to the legend above in (a), bear the following legend:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE LISTED ON THE TORONTO STOCK EXCHANGE (“TSX”); HOWEVER, THE SAID SECURITIES CANNOT BE TRADED THROUGH THE FACILITIES OF THE TSX SINCE THEY ARE NOT FREELY TRANSFERABLE, AND CONSEQUENTLY ANY CERTIFICATE REPRESENTING SUCH SECURITIES IS NOT “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON THE TSX.”

provided that if, at any time, in the opinion of the Corporation’s counsel, such legends are no longer necessary or advisable under any applicable securities laws, or the holder of any such legended certificate, at the holder’s expense, provides the Corporation and Special Warrant Agent with evidence satisfactory in form and substance to the Corporation and Special Warrant Agent (which may include an opinion of counsel satisfactory to the Corporation) to the effect that such legends are not required, such legended security may thereafter be surrendered to the Corporation in exchange for a security which does not bear such legend.

(c) In addition to the legend set forth in subsection 5.9(a), certificates representing Special Warrants issued pursuant to conversion of any Subscription Receipts originally issued pursuant to Section 4(a)(2) of the 1933 Act and/or Regulation D thereunder, as well as all certificates issued in exchange for or in substitution of such certificates representing Special Warrants, shall bear the following additional legend:

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“THE SECURITIES REPRESENTED HEREBY AND THE SECURITIES DELIVERABLE UPON CONVERSION THEREOF HAVE NOT AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”) OR ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING OR OTHERWISE HOLDING SUCH SECURITIES, AGREES FOR THE BENEFIT OF MERUS LABS INTERNATIONAL 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 ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE CANADIAN LOCAL LAWS AND REGULATIONS, (C) PURSUANT TO RULE 144 OR RULE 144A THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OF THE UNITED STATES, OR (D) IN ANOTHER TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS OF THE UNITED STATES, AFTER THE HOLDER HAS, IN THE CASE OF (C) OR (D) ABOVE, FURNISHED TO THE CORPORATION AN OPINION OF COUNSEL OF RECOGNIZED STANDING OR OTHER EVIDENCE OF EXEMPTION, IN EITHER CASE REASONABLY SATISFACTORY TO THE CORPORATION.

THE SECURITIES REPRESENTED HEREBY MAY NOT BE EXERCISED BY OR ON BEHALF OF A "U.S. PERSON" OR A PERSON IN THE UNITED STATES UNLESS THE UNDERLYING SECURITIES 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.”

provided that, if any Special Warrants are being sold outside the United States in compliance with the requirements of Rule 904 of Regulation S at a time when the Corporation is not subject to Rule 905 of Regulation S, the legends set forth above may be removed by providing an executed declaration to the Corporation, and to the Corporation’s registrar and transfer agent for Special Warrants, as the case may be, in substantially the form set forth as Schedule "C" with such changes as are appropriate to reflect the nature of the securities being sold (or as the Corporation may prescribe from time to time) and, with respect to Special Warrants, a broker’s affirmation in customary form, and, if requested by the Corporation or the transfer agent, an opinion of counsel of recognized standing in form and substance satisfactory to the Corporation and the transfer agent to the effect that such sale is being made in compliance with Rule 904 of Regulation S; and provided, further, that, if any Special Warrants are being sold otherwise than in accordance with Regulation S and other than to the Corporation, the legend may be removed by delivery to the Corporation and transfer agent an opinion of counsel of recognized standing in form and substance satisfactory to the Corporation and the transfer agent that such legend is no longer required under applicable requirements of the 1933 Act.

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(d) In addition to the legends set forth in subsections 5.9(a) and (b), certificates representing the Underlying Securities issued upon exercise of any Special Warrants bearing the legend set forth in section 5.9(c) issued pursuant to conversion of any Subscription Receipts originally issued pursuant to Section 4(a)(2) of the 1933 Act and/or Regulation D thereunder, as well as all certificates issued in exchange for or in substitution of such certificates representing Underlying Securities, shall bear the following additional legend:

“THE SECURITIES REPRESENTED HEREBY HAVE NOT AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”) OR ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING OR OTHERWISE HOLDING SUCH SECURITIES, AGREES FOR THE BENEFIT OF MERUS LABS INTERNATIONAL 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 ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE CANADIAN LOCAL LAWS AND REGULATIONS, (C) PURSUANT TO RULE 144 OR RULE 144A THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OF THE UNITED STATES, OR (D) IN ANOTHER TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS OF THE UNITED STATES, AFTER THE HOLDER HAS, IN THE CASE OF (C) OR (D) ABOVE, FURNISHED TO THE CORPORATION AN OPINION OF COUNSEL OF RECOGNIZED STANDING OR OTHER EVIDENCE OF EXEMPTION, IN EITHER CASE REASONABLY SATISFACTORY TO THE CORPORATION.

THE PRESENCE OF THIS LEGEND MAY IMPAIR THE ABILITY OF THE HOLDER HEREOF TO EFFECT "GOOD DELIVERY" OF THE SECURITIES REPRESENTED HEREBY ON A CANADIAN STOCK EXCHANGE. A CERTIFICATE WITHOUT A LEGEND MAY BE OBTAINED FROM THE REGISTRAR AND TRANSFER AGENT OF THE CORPORATION IN CONNECTION WITH A SALE OF THE SECURITIES REPRESENTED HEREBY UPON DELIVERY OF THIS CERTIFICATE, AN EXECUTED DECLARATION AND, IF REQUESTED BY THE CORPORATION OR THE TRANSFER AGENT, AN OPINION OF COUNSEL OF RECOGNIZED STANDING, EACH IN FORM SATISFACTORY TO THE TRANSFER AGENT OF THE CORPORATION AND THE CORPORATION, TO THE EFFECT THAT SUCH SALE OF THE SECURITIES REPRESENTED HEREBY IS BEING MADE IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT.”

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provided that, if any Underlying Securities are being sold outside the United States in compliance with the requirements of Rule 904 of Regulation S at a time when the Corporation is not subject to Rule 905 of Regulation S, the legends set forth above may be removed by providing an executed declaration to the Corporation, and to the Corporation’s registrar and transfer agent for Underlying Securities, as the case may be, in substantially the form set forth as Schedule "C" with such changes as are appropriate to reflect the nature of the securities being sold (or as the Corporation may prescribe from time to time) and, with respect to Underlying Securities, a broker’s affirmation in customary form, and, if requested by the Corporation or the transfer agent, an opinion of counsel of recognized standing in form and substance satisfactory to the Corporation and the transfer agent to the effect that such sale is being made in compliance with Rule 904 of Regulation S; and provided, further, that, if any Underlying Securities are being sold otherwise than in accordance with Regulation S and other than to the Corporation, the legend may be removed by delivery to the Corporation and transfer agent an opinion of counsel of recognized standing in form and substance satisfactory to the Corporation and the transfer agent that such legend is no longer required under applicable requirements of the 1933 Act.

The Special Warrant Agent shall be entitled to request any other documents that it may require in accordance with its internal policies of the removal of the legend set forth above

Notwithstanding any other provisions of this Agreement, in processing and registering transfers of Special Warrants, no duty or responsibility whatsoever shall rest upon the Special Warrant Agent to determine the compliance by any transferor or transferee with the terms of the legend contained in this subsection 5.9, or with the relevant securities laws or regulations, including, without limitation, Regulation S, and the Special Warrant Agent shall be entitled to assume that all transfers are legal and proper.

5.10 Securities Restrictions

Notwithstanding anything herein contained, in the event that the Special Warrants are exercised pursuant to and in accordance with the provisions of Section 5.2 prior to the filing of the Prospectus Supplement, the certificates representing the Underlying Securities thereby issued will bear such legends as may, in the opinion of counsel to the Corporation, acting reasonably, be necessary in order to avoid a violation of any applicable securities laws or to comply with the requirements of any stock exchange on which the Common Shares are listed, provided that if, at any time, in the opinion of counsel to the Corporation, such legends are no longer necessary in order to avoid violation of such laws, or the holder of any such legended certificates representing the Underlying Securities at the holder’s expense, provides the Corporation and the registrar and transfer agent of the Common Shares with evidence satisfactory in form and substance to the Corporation and the registrar and transfer agent of the Common Shares (which may include an opinion of counsel satisfactory to the Corporation and the registrar and transfer agent of the Common Shares) to the effect that such holder is entitled to sell or otherwise transfer such Underlying Securities in a transaction in which such legends are not required, such legended certificates representing Underlying Securities may thereafter be surrendered to the Special Warrant Agent in exchange for certificates which do not bear such legend.

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Article 6
MEETINGS OF SPECIAL WARRANTHOLDERS

6.1 Definitions

In this Article 6 or otherwise in this Indenture:

(a) “Adjourned Meeting” means a meeting adjourned in accordance with Section 6.8;

(b) “Extraordinary Resolution” means a resolution proposed to be passed as an extraordinary resolution at a Meeting duly convened for that purpose and held in accordance with the provisions of this Article 6, and carried by not less than 66 2/3% of the votes cast on such resolution; and

(c) “Meeting” means a meeting of the Special Warrantholders in respect of any resolution including an Extraordinary Resolution.

6.2 Convening Meetings

The Special Warrant Agent or the Corporation may convene a Meeting at any time at the expense of the Corporation. Upon receipt of a written requisition signed in one or more counterparts by Special Warrantholders holding not less than 25% of the aggregate number of the then outstanding Special Warrants, the Special Warrant Agent or the Corporation shall convene a Meeting, provided that, in the case of the Special Warrant Agent, it has been indemnified and funded to its reasonable satisfaction by the Corporation or the Special Warrantholders for the costs of convening and holding a Meeting. If the Special Warrant Agent or the Corporation fails to convene the Meeting within 15 Business Days after being duly requisitioned to do so and indemnified and funded as aforesaid, the Special Warrantholders holding not less than 25% of the aggregate number of the then outstanding Special Warrants may themselves convene a Meeting, the notice for which must be signed by a person that those Special Warrantholders specify, provided that the Special Warrant Agent and Corporation receive notice of the Meeting in accordance with Section 6.4. A written requisition must state, generally, the reason for the Meeting and business to be transacted at the Meeting.

6.3 Place of Meeting

Every Meeting must be held in Vancouver, British Columbia or at such other place that the Special Warrant Agent and Corporation approve, at a location specified by the Corporation. 

6.4 Notice

The Special Warrant Agent or the Corporation, as the case may be, shall give written notice of each Meeting to each Special Warrantholder, the Special Warrant Agent (unless the Meeting has been called by the Special Warrant Agent) and the Corporation (unless the Meeting has been called by the Corporation) in the manner specified in Article 9 at least 10 calendar days before the date of the Meeting. The Special Warrant Agent shall give written notice of each Adjourned Meeting to each Special Warrantholder in the manner specified in Article 9 at least seven calendar days before the date of the Adjourned Meeting. The notice for a Meeting must state the time and place of the Meeting and, generally, the reason for the Meeting and the business to be transacted at the Meeting, together with such additional information as may be required to sufficiently inform the Special Warrantholders regarding the business to be transacted at the Meeting. The notice for an Adjourned Meeting must state the time and place of the Adjourned Meeting but need not specify the business to be transacted at an Adjourned Meeting. The accidental omission by the Special Warrant Agent or the Corporation, as the case may be, to give notice of a Meeting or an Adjourned Meeting to a Special Warrantholder does not invalidate a resolution passed at a Meeting or Adjourned Meeting.

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6.5 Persons Entitled to Attend

The Corporation may and the Special Warrant Agent shall, each by its authorized representatives including directors, officers, employees, and agents, attend every Meeting and Adjourned Meeting but neither the Corporation nor the Special Warrant Agent has the right to vote unless they are acting in their capacity as a Special Warrantholder or a proxy for a Special Warrantholder. The legal advisors of the Corporation, the Special Warrant Agent, and any Special Warrantholders, respectively, may also attend a Meeting or Adjourned Meeting but do not have the right to vote, unless they have the right to vote as a Special Warrantholder.

6.6 Quorum

Subject to the provisions of Section 6.18, a quorum for a Meeting shall consist of two or more persons present in person and owning or representing by proxy, not less than 25% of the aggregate number of the then outstanding Special Warrants.

6.7 Chairman

The Special Warrant Agent shall nominate a natural person as the chairman of a Meeting or Adjourned Meeting. If the person so nominated is not present within 15 minutes after the time set for holding the Meeting or Adjourned Meeting, the Special Warrantholders present in person or represented by proxy shall choose one of their number to be chairman. The chairman may vote any Special Warrants for which he or she is the registered holder.

6.8 Power to Adjourn

The chairman of any Meeting at which a quorum of the Special Warrantholders is present may, with the consent of the Meeting, adjourn any such meeting. Notice of such adjournment will be given in accordance with Section 6.4 with such other requirements, if any, as the Meeting may prescribe.

6.9 Adjourned Meeting

If a quorum of the Special Warrantholders shall not be present within 30 minutes from the time fixed for holding any Meeting, the Meeting, if summoned by the Special Warrantholders or on a Special 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 a place determined in accordance with Section 6.3, and at a time specified by the chairman and 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 is present at the commencement of the Meeting. At the Adjourned Meeting the Special Warrantholders present in person or represented 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 the aggregate number of the then outstanding Special Warrants.

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6.10 Show of Hands

Subject to a poll and except as otherwise required herein, every question submitted to a Meeting or Adjourned Meeting, except an Extraordinary Resolution, shall be decided, in the first instance, by the majority of votes in a show of hands. If the vote is tied, the chairman does not have a casting vote and the motion will not be carried. On a show of hands, each Special Warrantholder present in person or represented by proxy and entitled to vote is entitled to one vote for every Special Warrant then outstanding of which such Special Warrantholder is the registered owner.

6.11 Poll

When requested by a Special Warrantholder acting in person or by the proxy representing the Special Warrantholder and holding in the aggregate at least 5% of the aggregate number of the then outstanding Special Warrants, and on every Extraordinary Resolution, the chairman of a Meeting or Adjourned Meeting shall request a poll on a question submitted to the Meeting. Except as otherwise required herein, if a question has been put to a poll, that question shall be decided by the affirmative vote of not less than a majority of the votes given on the poll. If the vote is tied, the motion shall not be carried. On a poll, each Special Warrantholder or person representing a Special Warrantholder by proxy shall be entitled to one vote for every Special Warrant of which he is the registered holder or of which the person being represented by proxy is the registered holder, as the case may be. A declaration made by the chairman that a resolution has been carried or lost is conclusive evidence thereof. In the case of joint registered Special Warrantholders, any one of them present in person or represented by proxy may vote in the absence of the other or others but when more than one of them is present in person or by proxy, they may only vote together in respect of the Special Warrants of which they are joint registered holders.

6.12 Regulations

Subject to the provisions of this Indenture, the Special Warrant Agent, or the Corporation with the approval of the Special Warrant Agent, may from time to time make and, thereafter, vary regulations not contrary to the provisions of this Indenture as it deems fit providing for and governing the following:

(a) setting a record date for a Meeting for determining Special Warrantholders entitled to receive notice of and vote at a Meeting;

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(b) voting by proxy, the manner in which a proxy instrument must be executed, and the production of the authority of any person signing an instrument of a proxy on behalf of a Special Warrantholder;

(c) lodging and the means of forwarding the instruments appointing proxies, and the time before a Meeting or Adjourned Meeting by which an instrument appointing a proxy must be deposited;

(d) the form of the instrument of proxy; and

(e) any other matter relating to the conduct of a Meeting.

A regulation so made is binding and effective and votes given in accordance with such a regulation shall be valid and counted. The Special Warrant Agent may permit Special Warrantholders to make proof of ownership in the manner the Special Warrant Agent approves.

6.13 Powers of Special Warrantholders

By Extraordinary Resolution passed pursuant to this Article 6, the Special Warrantholders may:

(a) agree to any modification, abrogation, alteration, compromise, or arrangement of the rights of the Special Warrantholders whether arising under this Indenture, or otherwise at law, including the rights of the Special Warrant Agent in its capacity as agent hereunder, subject to the consent of the Special Warrant Agent, or on behalf of the Special Warrantholders against the Corporation, which has been agreed to by the Corporation;

(b) direct and authorize the Special Warrant Agent to exercise any power, right, remedy or authority given to it by or under this Indenture in the manner specified in such resolution or to refrain from exercising any such power, right, remedy, or authority;

(c) direct the Special Warrant Agent to enforce any covenant or obligation on the part of the Corporation contained in this Indenture or to waive any default by the Corporation in compliance with any provision of this Indenture either unconditionally or upon any conditions specified in such resolution;

(d) assent to any change in or omission from the provisions contained in this Indenture or the Special Warrant Certificates or any ancillary or supplemental instrument which is agreed to by the Corporation, and to authorize the Special Warrant Agent to concur in and execute any ancillary or supplemental indenture embodying the change or omission;

(e) without limiting the generality of Sections 6.13(a) and (c), assent to an extension of time thereunder;

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(f) with the consent of the Corporation, remove the Special Warrant Agent or its successor in office and to appoint a new registrar and agent to take the place of the Special Warrant Agent so removed;

(g) upon the Special Warrant Agent being furnished with funding and an indemnity that is, in its discretion, sufficient, require the Special Warrant Agent to enforce any covenant of the Corporation contained in this Indenture or the Special Warrant Certificates, or to enforce any right of the Special Warrantholders in any manner specified in such Extraordinary Resolution, or to refrain from enforcing any such covenant or right;

(h) restrain any Special Warrantholder from instituting or continuing any suit or proceeding against the Corporation for the enforcement of a covenant on the part of the Corporation contained in this Indenture or any of the rights conferred upon the Special Warrantholders as set out in this Indenture or the Special Warrant Certificates;

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

(j) subject to subsection 11.4 of this Indenture, waive and direct the Special Warrant Agent to waive a default by the Corporation in complying with any of the provisions of this Indenture or the Special Warrant Certificate either unconditionally or upon any conditions specified in such Extraordinary Resolution;

(k) assent to a compromise or arrangement with a creditor or creditors or a class or classes of creditors, whether secured or otherwise, and with holders of any shares or other securities of the Corporation; or

(l) amend, alter, or repeal any Extraordinary Resolution previously passed pursuant to this Section 6.13.

6.14 Powers Cumulative

Any one or more of the powers or any combination of the powers in this Indenture stated to be exercised by the Special 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 Special Warrantholder to exercise such power or combination of powers then or thereafter from time to time.

6.15 Minutes of Meetings

The Special Warrant Agent shall make and maintain minutes and records of all resolutions and proceedings at a Meeting or Adjourned Meeting at the expense of the Corporation and shall make available those minutes and records at the office of the Special Warrant Agent for inspection by a Special Warrantholder or his authorized representative and the Underwriters at reasonable times. If signed by the chairman of the Meeting or by the chairman of the next succeeding Meeting, such minutes shall be prima facie evidence of the matters therein stated and, until the contrary is proved, every such Meeting in respect of which minutes shall have been made shall be deemed to have been duly convened and held, and all the resolutions passed thereat or proceedings taken shall be deemed to have been duly passed and taken.

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6.16 Written Resolutions

Notwithstanding the foregoing, a written resolution or instrument signed in one or more counterparts by the Special Warrantholders holding not less than a majority of the Special Warrants outstanding in the case of an ordinary resolution, or not less than 66⅔% of the Special Warrants outstanding in the case of an Extraordinary Resolution, is deemed to be the same as, and to have the same force and effect as, an ordinary resolution or Extraordinary Resolution, as the case may be, duly passed at a Meeting or Adjourned Meeting.

6.17 Binding Effect

A resolution of the Special Warrantholders passed pursuant to this Article 6 is binding upon all Special Warrantholders. Upon the passing of a Special Warrantholders’ resolution at a meeting of the Special Warrantholders, or upon the signing of a written resolution or instrument pursuant to Section 6.16 and delivery by the Corporation to the Special Warrant Agent of an original, certified or notarial copy, or copies, of such resolution as executed or passed by the Special Warrantholders, the Special Warrant Agent is entitled to and shall give effect thereto.

6.18 Holdings by the Corporation or Subsidiaries of the Corporation Disregarded

In determining whether Special Warrantholders are present at a Meeting for the purpose of determining a quorum or have concurred in any consent, waiver, resolution, Extraordinary Resolution or other action under this Indenture, Special Warrants owned legally or beneficially by the Corporation or any Subsidiary of the Corporation shall be disregarded. The Corporation will provide the Special Warrant Agent with, upon request, a certificate of the Corporation detailing their holdings and those of their subsidiaries and the various registrations.

6.19 Corporation, Special Warrant Agent and Underwriters May be Represented

The Corporation, the Special Warrant Agent and the Underwriters, by their respective directors, officers and employees and counsel to the Corporation, the Special Warrant Agent and the Underwriters, may attend any Meeting, but shall have no vote as such unless they are acting in their capacity as a Special Warrantholder or a proxy for a Special Warrantholder.

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Article 7
SUPPLEMENTAL INDENTURES, MERGER, SUCCESSORS

7.1 Provision for Supplemental Indentures for Certain Purposes

From time to time the Corporation shall, when authorized by the directors of the Corporation, and the Special Warrant Agent may, subject to the provisions of this Indenture, execute and deliver by their proper officers, deeds, indentures or instruments supplemental hereto, which thereafter form part hereof for any one or more or all of the following purposes:

(a) adding to the provisions hereof such additional covenants, enforcement provisions, and release provisions (if any) as in the opinion of counsel acceptable to the Corporation and the Special Warrant Agent are necessary or advisable, provided the same are not, in the opinion of the Special Warrant Agent, relying on the opinion of Counsel, prejudicial to the interests of the Special Warrantholders;

(b) adding to the covenants of the Corporation in this Indenture for the protection of the Special Warrantholders;

(c) evidencing any succession (or successive successions) of other companies to the Corporation and the covenants of, and obligations assumed by, such successor (or successors) in accordance with the provisions of this Indenture;

(d) setting forth any adjustments resulting from the application of the provisions of Article 4;

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

(f) giving effect to an Extraordinary Resolution;

(g) rectifying any ambiguity, defective provision, clerical omission or mistake or manifest or other error contained herein or in any deed or indenture supplemental or ancillary hereto provided that, in the opinion of the Special Warrant Agent, relying on the opinion of Counsel, the rights of the Special Warrantholders are not prejudiced thereby and provided that the Special Warrant Agent may in its discretion decline to enter into any such supplemental indenture which in its opinion, relying on the opinion of Counsel, may not afford adequate protection to the Special Warrant Agent when the same will become operative;

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

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(i) for any other purpose not inconsistent with the provisions of this Indenture, provided that, in the opinion the Special Warrant Agent, relying on the opinion of Counsel, the rights of the Special Warrant Agent, acting on the advice of Counsel, and the Special Warrantholders are in no way prejudiced thereby; or

(j) providing for the issuance of additional Special Warrants hereunder and any consequential amendments hereto as may be required by the Special Warrant Agent, provided the same are not prejudicial to the interests of the Special Warrantholders, based on the opinion of Counsel.

7.2 Corporation May Consolidate, etc. on Certain Terms

Subject to Sections 3.14 and 4.1(d), nothing in this Indenture prevents any consolidation, amalgamation, arrangement or merger of the Corporation with or into any other body corporate or bodies corporate, or a conveyance or transfer of all or substantially all the properties and assets of the Corporation as an entirety to any body corporate lawfully entitled to acquire and operate the same, provided, however, that the body corporate formed by such consolidation, amalgamation, arrangement or into which such merger has been made, or which has acquired by conveyance or transfer all or substantially all the properties and assets of the Corporation as an entirety in circumstances resulting in the Special Warrantholders being entitled to receive property from or securities of such body corporate, shall execute prior to or contemporaneously with such consolidation, amalgamation, arrangement, merger, conveyance or transfer, an indenture supplemental hereto wherein the due and punctual performance and observance of all the covenants and conditions of this Indenture to be performed or observed by the Corporation are assumed by the successor body corporate. The Special Warrant Agent is entitled to receive and is fully protected in relying upon an opinion of Counsel that any such consolidation, amalgamation, arrangement, merger, conveyance or transfer, and a supplemental indenture executed in connection therewith, complies with the provisions of this Section.

7.3 Successor Body Corporate Substituted

Where the Corporation, pursuant to Section 7.2 hereof, is consolidated, amalgamated, arranged or merged with or into any other body corporate or bodies corporate or conveys or transfers all of substantially all of the properties and assets of the Corporation as an entirety to another body corporate, the successor body corporate formed by such consolidation, amalgamation, arrangement or into which the Corporation has been merged or which has received a conveyance or transfer as aforesaid succeeds to and is substituted for the Corporation hereunder with the same effect as nearly as may be possible as if it had been named herein. Such changes may be made in the Special Warrants as may be appropriate in view of such consolidation, amalgamation, arrangement, merger, conveyance or transfer.

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Article 8
CONCERNING THE SPECIAL WARRANT AGENT

8.1 Duties of Special Warrant Agent

By way of supplement to the provisions of any statute for the time being relating to trustees, and notwithstanding any other provision of this Indenture, in the exercise of the rights, duties and obligations prescribed or conferred by the terms of this Indenture, the Special Warrant Agent shall act honestly and in good faith with a view to the best interests of the Special Warrantholders and shall exercise that degree of care, diligence and skill that a reasonably prudent trustee would exercise in comparable circumstances. No provision of this Indenture shall be construed to relieve the Special Warrant Agent from, or require any other person to indemnify the Special Warrant Agent against, any liability for its own gross negligence, wilful misconduct or fraud.

8.2 Action by Special Warrant Agent

The Special Warrant Agent is not obligated to do any act or thing except where required to do so by this Indenture and, in the case of a default, only when it has actual notice thereof.

8.3 Certificate of the Corporation

If, in the administration of the trusts of this Indenture, the Special Warrant Agent deems it necessary or desirable that any matter be proved or established by the Corporation, prior to taking or suffering any action hereunder, the Special Warrant Agent may accept, act, and rely upon, and shall be protected in accepting, acting, and relying upon, a certificate of the Corporation as conclusive evidence of the truth of any fact relating to the Corporation or its assets therein stated and proof of the regularity of any proceedings or actions associated therewith, but the Special Warrant Agent may in its discretion require further evidence or information before acting or relying on any such certificate. In addition to the reports, certificates, opinions, and other evidence required by this Indenture, the Corporation shall furnish to the Special Warrant Agent such additional evidence of compliance with any provision hereof, and in such form as may be prescribed by Applicable Legislation, under Section 8.6, or as the Special Warrant Agent may reasonably require by written notice to the Corporation. Whenever Applicable Legislation requires that evidence referred to in this Section 8.3 be in the form of a statutory declaration, the Special Warrant Agent may accept such statutory declaration in lieu of a certificate of the Corporation required by any provision hereof. Any such statutory declaration may be made by any one or more of the Chairman of the Board and Chief Executive Officer, President or Chief Financial Officer of the Corporation or by any other officer or director of the Corporation to whom such authority is delegated by the directors from time to time.

8.4 Special Warrant Agent May Employ Experts

The Special Warrant Agent may, at the Corporation’s expense, employ or retain such lawyers, accountants, engineers, appraisers or other experts, advisers or agents as it may reasonably require for the purpose of determining and discharging its duties hereunder and may pay reasonable remuneration for such services rendered to it but it is not responsible for any misconduct, mistake or error of judgment on the part of any of them. The Corporation shall reimburse the Special Warrant Agent for all disbursements, costs and expenses made or incurred by the Special Warrant Agent in the discharge of its duties and in the management of the trusts hereunder. The Special Warrant Agent may rely upon and act upon, and shall be protected from relying and acting upon, the opinion or advice of, or information obtained from, any such lawyer, accountant, engineer, appraiser or other expert, adviser or agent in relation to any matter arising in the administration of the trusts hereof. The Special Warrant Agent shall not incur any liability for the acts or omissions of such lawyers, accountants, engineers, appraisers or other experts, advisers or agents employed by the Special Warrant Agent in good faith.

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8.5 Resignation and Replacement of Special Warrant Agent

(a) The Special Warrant Agent may resign its trust and be discharged from all further obligations hereunder by giving to the Corporation and the Special Warrantholders written notice at least 60 calendar days, or such shorter time period if acceptable to the Special Warrant Agent, the Corporation and the Special Warrantholders, before the effective date of the resignation. If the Special Warrant Agent resigns, or becomes incapable of acting hereunder, the Corporation shall forthwith appoint in writing a new trustee, unless a new Special Warrant Agent has already been appointed by the Special Warrantholders.

(b) Failing such appointment by the Corporation or by the Special Warrantholders by Extraordinary Resolution, the retiring Special Warrant Agent, at the expense of the Corporation, or any Special Warrantholder may apply to a Judge of the Supreme Court of British Columbia on such notice as such Judge may direct, for the appointment of a new trustee. The Special Warrantholders may, by Extraordinary Resolution, remove the Special Warrant Agent (including a trustee appointed by the Corporation or by a Judge as aforesaid) and appoint a new trustee.

(c) Any new Special Warrant Agent appointed under the provisions of this Section 8.5 shall be a corporation authorized to carry on the business of a trust company in the Province of British Columbia and, if required by Applicable Legislation of any other province, in such other province.

(d) On any new appointment, the new Special Warrant Agent is vested with the same powers, rights, duties and obligations as if it had been originally named as Special Warrant Agent without any further assurance, conveyance, act or deed; but there will be immediately executed, at the expense of the Corporation, all such conveyances or other instruments as may, in the opinion of Counsel, be necessary or advisable for the purpose of assuring such powers, rights, duties, and responsibilities of the new Special Warrant Agent, provided that, any resignation or removal of the Special Warrant Agent and appointment of the successor Special Warrant Agent shall have executed an appropriate instrument accepting such appointment and, at the request of the Corporation, the predecessor Special Warrant Agent, upon payment of its outstanding remuneration and expenses, shall execute and deliver to the successor Special Warrant Agent an appropriate instrument transferring to such successor Special Warrant Agent all rights and powers of the Special Warrant Agent hereunder.

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(e) On the appointment of a new Special Warrant Agent, the Corporation will promptly give notice thereof to the Special Warrantholders.

(f) Any Special Warrant Certificates certified but not delivered by a predecessor Special Warrant Agent may be certified by the successor Special Warrant Agent in the name of the predecessor or successor Special Warrant Agent.

(g) Any corporation into which the Special Warrant Agent may be merged or consolidated or amalgamated, or any corporation resulting therefrom to which the Special Warrant Agent shall be a party, or any corporation succeeding to substantially the corporate trust business of the Special Warrant Agent shall be the successor to the Special 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 successor Special Warrant Agent.

8.6 Indenture Legislation

The Corporation and the Special Warrant Agent agree that each shall at all times in relation to this Indenture and to any action to be taken hereunder, observe and comply with and be entitled to the benefits of all Applicable Legislation. If and to the extent that any provision of this Indenture limits, qualifies or conflicts with any mandatory requirement of Applicable Legislation, such mandatory requirement prevails.

8.7 Notice

The Special 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 required so to do under the terms hereof; nor shall the Special 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 Special Warrant Agent and in the absence of any such notice the Special 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 will in no way limit any discretion herein given the Special Warrant Agent to determine whether or not the Special Warrant Agent will take action with respect to any default. The Special Warrant Agent shall not be bound to give notice to any person of execution hereof.

8.8 Use of Proceeds

The Special Warrant Agent is in no way responsible for the use by the Corporation of the proceeds of the issue hereunder.

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8.9 No Inquiries

In the exercise of any right or duty hereunder the Special Warrant Agent, if it is acting in good faith, may act and rely, as to the truth of any statement or the accuracy of any opinion expressed therein, on any statutory declaration, opinion, report, certificate or other evidence furnished to the Special Warrant Agent pursuant to a provision hereof or of Applicable Legislation or pursuant to a request of the Special Warrant Agent, if such evidence complies with Applicable Legislation and the Special Warrant Agent examines such evidence and determines that it complies with the applicable requirements of this Indenture. The Special Warrant Agent may nevertheless, in its discretion, require further proof in cases where it deems further proof desirable. Proof of execution of any document or instrument in writing by a holder 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 the Special Warrant Agent considers adequate. The Special Warrant Agent is not bound to make any inquiry or investigation as to the performance by the Corporation of the Corporation’s covenants hereunder.

8.10 Actions by Special Warrant Agent to Protect Interest

The Special Warrant Agent shall have the 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 Special Warrantholders.

8.11 Special Warrant Agent Not Required to Give Security

The Special Warrant Agent is not required to give any bonds or security with respect to the execution or administration of the trusts and powers of this Indenture.

8.12 No Conflict of Interest

The Special Warrant Agent represents to the Corporation that, to the best of its knowledge, at the time of the execution and delivery by it of this Indenture, there exists no material conflict of interest in the role of the Special Warrant Agent as a fiduciary hereunder but if, notwithstanding the provisions of this Section 8.12, such a material conflict of interest exists, the validity and enforceability of this Indenture and the instruments issued hereunder is not affected in any manner whatsoever by reason only that such material conflict of interest exists or arises. The Special Warrant Agent shall, within 30 calendar days after ascertaining that it has a material conflict of interest, either eliminate such material conflict of interest or resign in the manner and with the effect specified in Section 8.5.

8.13 Special Warrant Agent Not Ordinarily Bound

No provision of this Indenture shall require the Special Warrant Agent (and its officers, directors, employees and agents) to expend or risk its (or their) own funds or otherwise incur financial liability in the performance of any of its (or their) duties or in the exercise of any of its (or their) rights or powers unless it is (or they are) so indemnified and funded. The obligation of the Special Warrant Agent to commence or continue any act, action or proceeding for the purpose of enforcing any rights of the Special Warrantholders hereunder, is conditional upon Special Warrantholders furnishing, when required in writing so to do by the Special Warrant Agent, an indemnity reasonably satisfactory to the Special Warrant Agent and funds sufficient for commencing or continuing the act, action or proceeding and an indemnity reasonably satisfactory to the Special Warrant Agent to protect and hold harmless the Special Warrant Agent against any costs, charges, expenses, loss, damage or liability by reason thereof. The Special Warrant Agent may, before commencing or at any time during the continuance of any such act, action, or proceeding, require the Special Warrantholders at whose instance it is acting to deposit with the Special Warrant Agent the Special Warrants held by them, for which Special Warrants the Special Warrant Agent shall issue receipts.

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8.14 Special Warrant Agent May Deal in Instruments

The Special Warrant Agent may in its personal or other capacity, buy, sell, lend upon and deal in and hold securities of the Corporation and in the Special Warrants and generally contract and enter into financial transactions with the Corporation or otherwise, without being liable to account for any profits made thereby.

8.15 Recitals or Statements of Fact Made by Corporation

Except for the representations contained in Sections 8.12 and 8.19 subject to the provisions hereof, the Special Warrant Agent is not liable for or by reason of any of the statements of fact or recitals contained in this Indenture or in the Special Warrant Certificates and is not required to verify the same, but all such statements and recitals are and are deemed to have been made by the Corporation only.

8.16 Special Warrant Agent’s Discretion Absolute

The Special Warrant Agent, except as herein otherwise provided, has, as regards all the trusts, powers, authorities and discretions vested in it, absolute discretion as to the exercise thereof, whether in relation to the manner or as to the mode and time for the exercise thereof.

8.17 No Representations as to Validity

The Special Warrant Agent is not:

(a) under any responsibility in respect of the validity of this Indenture or the execution and delivery thereof or (subject to Section 2.4(a) and Section 2.8 hereof) in respect of the validity or the execution of any Special Warrant Certificate;

(b) under any obligation 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) responsible for any breach by the Corporation of any covenant or condition contained in this Indenture or in any Special Warrant Certificate and will not incur any liability or responsibility whatever or be in any way responsible for the consequences of any breach by the Corporation of any obligation herein contained or of any act of any director, officer, employee, or agent of the Corporation; or

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(d) by any act hereunder, deemed to make any representation or warranty as to the authorization or reservation of any securities to be issued as provided in this Indenture or in any Special Warrant Certificate or as to whether any shares will when issued be duly authorized or be validly issued and fully paid and non-assessable. The duty and responsibility as to all the matters and things referred to in this Section 8.17 rests upon the Corporation and not upon the Special Warrant Agent and the failure of the Corporation to discharge any such duty and responsibility does not in any way render the Special Warrant Agent liable or place upon it any duty or responsibility for breach of which it would be liable.

8.18 Acceptance of Trusts

The Special Warrant Agent hereby accepts the trusts of this Indenture and agrees to perform the same upon the terms and conditions herein set forth or referred to unless and until discharged therefrom by resignation or in some other lawful way.

8.19 Special Warrant Agent’s Authority to Carry on Business

The Special Warrant Agent represents to the Corporation that at the date hereof it is authorized to carry on the business of a trust company in British Columbia. If, notwithstanding the provisions of this Section 8.19, it ceases to be authorized to carry on such business in British Columbia, the validity and enforceability of this Indenture and of the Special Warrants issued hereunder are not affected in any manner whatsoever by reason only of such event, provided that the Special Warrant Agent shall, within 30 calendar days after ceasing to be authorized to carry on such business in British Columbia, either become so authorized or resign in the manner and with the effect specified in Section 8.5.

8.20 Indemnification of Special Warrant Agent

Without limiting any protection or indemnity of the Special Warrant Agent under any other provision hereof, or otherwise at law, the Corporation hereby agrees to indemnify and hold harmless the Special Warrant Agent and its affiliates, their successors, assigns, and each of their directors, officers, employees and agents (the “Indemnified Parties”) and save them harmless from and against any and all liabilities, losses, damages, penalties, claims, actions, suits, costs, charges, payments, expenses and disbursements, including reasonable legal or advisor fees and disbursements, of whatever kind and nature which may at any time be imposed on, incurred by or asserted against the Indemnified Parties in connection with the performance of its duties and obligations hereunder, other than such liabilities, losses, damages, penalties, claims, actions, suits, costs, charges, payments, expenses and other disbursements arising by reason of the gross negligence, wilful misconduct or fraud of the Special Warrant Agent. This provision shall survive the resignation or removal of the Special Warrant Agent, or the termination of this Indenture. In the absence of gross negligence, wilful misconduct, or fraud on its part, the Special Warrant Agent will not be liable for any action taken, suffered, or omitted by it or for any error of judgment made by it in performance of its duties under this Indenture. Notwithstanding any other provision of this Agreement, and whether such losses or damages are foreseeable or unforeseeable, the Special Warrant Agent shall not be liable under any circumstances whatsoever for any (a) breach by any other party of securities law or other rule of any securities regulatory authority, (b) lost profits or (c) special, indirect, incidental, consequential, exemplary, aggravated or punitive losses or damages. The Special Warrant Agent shall not be under any obligation to prosecute or to defend any action or suit in respect of the relationship which, in the opinion of its Counsel, may involve it in expense or liability, unless the Corporation shall, so often as required, furnish the Special Warrant Agent with satisfactory indemnity and funding against such expense or liability.

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8.21 Performance of Covenants by Special Warrant Agent

If the Corporation fails to perform any of its covenants contained in this Indenture, then the Corporation will notify the Special Warrant Agent in writing of such failure and, upon receipt by the Special Warrant Agent of such notice, the Special Warrant Agent will notify the Special Warrantholders of such failure on the part of the Corporation and may itself perform any of the said covenants capable of being performed by it, but shall be under no obligation to perform said covenants or to notify the Special Warrantholders of such performance by it. All sums expended or disbursed by the Special Warrant Agent in so doing shall be reimbursed as provided in Section 3.12. No such performance, expenditure or disbursement by the Special Warrant Agent shall be deemed to relieve the Corporation of any default hereunder or of its continuing obligations under the covenants herein contained.

8.22 Third Party Interests

Each party to this Indenture hereby represents to the Special Warrant Agent that any account to be opened by, or interest to held by the Special Warrant Agent in connection with this Indenture, for or to the credit of such party, either (i) is not intended to be used by or on behalf of any third party; or (ii) is intended to be used by or on behalf of a third party, in which case such party hereto agrees to complete and execute forthwith a declaration in the Special Warrant Agent’s prescribed form as to the particulars of such third party.

8.23 Not Bound to Act

The Special 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 Special Warrant Agent, in its sole judgment, determines that such act might cause it to be in non-compliance with any applicable anti-money laundering, anti-terrorist legislation, or economic sanctions legislation, regulation or guideline. Further, should the Special Warrant Agent, in its sole judgment, 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 legislation, or economic sanctions legislation, regulation or guideline, then it shall have the right to resign on 10 calendar days’ written notice to the Corporation, provided (i) that the Special Warrant Agent’s written notice shall describe the circumstances of such non-compliance; and (ii) that if such circumstances are rectified to the Special Warrant Agent’s satisfaction within such 10-day period, then such resignation shall not be effective.

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8.24 Not Appointed Receiver

The Special Warrant Agent and any person related to the Special Warrant Agent will not be appointed a receiver or receiver and manager or liquidator of all or any part of the assets or undertaking of the Corporation.

Article 9
NOTICES

9.1 Notice to Corporation, Special Warrant Agent and Underwriters

Any notice to the Corporation, Special Warrant Agent or Underwriters under the provisions of this Indenture is valid and effective if in writing delivered, sent by registered letter, postage prepaid or sent by facsimile:

(a) to the Corporation at:

Merus Labs International Inc.
100 Wellington St. West
Suite 2110, P.O. Box 151
Toronto, ON M5K 1H1

Attention: Barry Fishman
Fax: (416) 593-4434

with a copy to (which shall not constitute notice):

McMillan LLP
Royal Centre, 1055 W. Georgia Street, Suite 1500
PO Box 11117
Vancouver, BC V6E 4N7

Attention: Michael Taylor
Fax: (604) 685-7084

(b) to the Special Warrant Agent at:

Computershare Trust Company of Canada
3^rd Floor, 510 Burrard Street
Vancouver, BC V6C 3B9
Canada

Attention: General Manager, Corporate Trust
Email: corporatetrust.vancouver@computershare.com

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(c) to the Underwriters at (which shall not constitute notice):

Canaccord Genuity Corp.
161 Bay Street, Suite 3000
Toronto, Ontario M5J 2S1

Facsimile: (416) 869-3876
Attention: Steve Winokur

with a copy to (which shall not constitute notice):

Stikeman Elliott LLP
5300 Commerce Court West
199 Bay Street
Toronto, ON M5L 1B9
Canada

Attention: Martin Langlois
Facsimile: (416) 947-0866

Any notice, direction or other instrument aforesaid will, if delivered, be deemed to have been given and received on the day it was delivered and, if mailed, be deemed to have been received on the third Business Day following the date of the postmark on such notice and, if sent by facsimile, be deemed to have been given and received on the day it was so sent unless it was sent:

(d) on a day which is not a business day in the place to which it was sent; or

(e) after 4:30 p.m. in the place to which it was sent,

in which cases it will be deemed to have been given and received on the next day which is a business day in the place to which it was sent.

The Corporation or the Special Warrant Agent, as the case may be, may from time to time notify the other in the manner provided in this Section 9.1 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 Corporation or the Special Warrant Agent, as the case may be, for all purposes of this Indenture.

If, by reason of a strike, lockout or other work stoppage, actual or threatened, involving postal employees, any notice to be given to the Special Warrant Agent or to the Corporation hereunder could reasonably be considered unlikely to reach its destination, such notice shall be valid and effective only if it is delivered to the named officer of the party to which it is addressed or, if it is delivered to such party at the appropriate address provided in this Section 9.1, by facsimile or electronic transmission or other means of prepaid, transmitted and recorded communication.

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9.2 Notice to Special Warrantholders

Any notice to the Special Warrantholders under the provisions of this Indenture is valid and effective if delivered, sent by regular mail or sent by courier, to each Special Warrantholder at its address appearing on the register of Special Warrants kept by the Special Warrant Agent or, in the case of joint holders, to the first such address, and, if delivered or couriered, shall be deemed to have been given and received on the day it was delivered and, if mailed, be deemed to have been received on the third Business Day following the date of the postmark on such notice. Accidental error or omission in giving notice or accidental failure to mail notice to any holder will not invalidate any action or proceeding founded thereon. All notices may be given to whichever one of the Special Warrantholders (if more than one) is named first in the appropriate register hereinbefore mentioned, and any notice so given shall be sufficient notice to all Special Warrantholders of and any other persons (if any) interested in such Special Warrants.

If, by reason of any interruption of mail service, actual or threatened, any notice to be given to the Special Warrantholders by the Special Warrant Agent or the Corporation would be unlikely to reach its destination in the ordinary course of mail, such notice shall be valid and effective only if published once (i) in the national edition of The Globe & Mail newspaper; and (ii) in such other place or places and manner, if any, as the Special Warrant Agent may require. Any notice given to Special Warrantholders by publication shall be deemed to have been given on the last day on which publication shall have been effected.

A copy of any notice provided to the Special Warrantholders shall be concurrently provided to the Underwriters in the manner specified in Section 9.1.

Article 10
POWER OF BOARD OF DIRECTORS

10.1 Board of Directors

In this Indenture, where the Corporation is required or empowered to exercise any acts, all such acts may be exercised by the directors of the Corporation, by any duly appointed committee of the directors of the Corporation or by those officers of the Corporation authorized to exercise such acts.

Article 11
MISCELLANEOUS PROVISIONS

11.1 Further Assurances

The parties covenant and agree from time to time, as may be reasonably required by any party hereto, to execute and deliver such further and other documents and do all matters and things which are convenient or necessary to carry out the intention of this Indenture more effectively and completely.

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11.2 Unenforceable Terms

If any term, covenant or condition of this Indenture or the application thereof to any party or circumstance is invalid or unenforceable to any extent, the remainder of this Indenture or application of such term, covenant or condition to a party or circumstance other than those to which it is held invalid or unenforceable is not affected thereby and each remaining term, covenant or condition of this Indenture is valid and enforceable to the fullest extent permitted by law.

11.3 No Waiver

No consent or waiver, express or implied, by either party to or of any breach or default by the other party in the performance by the other party of its obligations hereunder is deemed or construed to be a consent or waiver to or of any other breach or default in the performance of obligations hereunder by such party. Failure on the part of either party to complain of any act or failure to act by the other party or to declare the other party in default, irrespective of how long such failure continues, does not constitute a waiver by such party of its rights hereunder.

11.4 Waiver of Default

Notwithstanding Section 11.3 above, upon the happening of any default hereunder:

(a) the holders of not less than 50% of the Special Warrants plus one Special Warrant then outstanding shall have power (in addition to the powers exercisable by Extraordinary Resolution created under Article 6) by requisition in writing to instruct the Special Warrant Agent to waive any default hereunder and the Special Warrant Agent shall thereupon waive the default upon such terms and conditions as shall be prescribed in such requisition; or

(b) the Special Warrant Agent shall have power to waive any default hereunder upon such terms and conditions as the Special Warrant Agent may deem advisable, if, in the Special Warrant Agent’s opinion, relying on the opinion of legal counsel, the same shall have been cured or adequate provision made therefor;

provided that no delay or omission of the Special Warrant Agent or of the Special Warrantholders to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or acquiescence therein and provided further that no act or omission either of the Special Warrant Agent or of the Special Warrantholders shall extend to or be taken in any manner whatsoever to affect any subsequent default hereunder of the rights resulting therefrom.

11.5 Immunity of Shareholders

Subject to the contractual right of action given by the Corporation to the Special Warrantholders in the subscription agreements between the Corporation and the purchasers of the Special Warrants, given in Section 3.7 herein and to be contained in the Prospectus Supplement, and subject to any other rights or remedies available to the Special Warrantholders under applicable securities legislation or otherwise, the Special Warrant Agent and, by the acceptance of the Special Warrant Certificate or other evidence of ownership in the case of Uncertificated Special Warrants and as part of the consideration for the issue of the Special Warrants, the Special Warrantholders hereby waive and release any right, cause of action or remedy now or hereafter existing in any jurisdiction against any incorporator or any past, present or future shareholder, director, officer, employee or agent of the Corporation or of any successor corporation on any covenant, agreement, representation or warranty by the Corporation contained herein or in the Special Warrant Certificates.

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11.6 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 Corporation or of any successor corporation or any of the past, present or future officers, employees or agents of the Corporation or of any successor corporation, but only the property of the Corporation or of any successor corporation shall be bound in respect hereof.

11.7 Suits by Special Warrantholders

(a) No Special Warrantholder has any right to institute any action, suit or proceeding at law or in equity for the purpose of enforcing the execution of any trust or power hereunder or for the appointment of a liquidator or receiver or for a receiving order under the Bankruptcy and Insolvency Act (Canada) or to have the Corporation wound up or to file or prove a claim in any liquidation or bankruptcy proceedings or for any other remedy hereunder unless the Special Warrantholders by Extraordinary Resolution have made a request to the Special Warrant Agent and the Special Warrant Agent has been afforded reasonable opportunity to proceed or complete any action or suit for any such purpose whether or not in its own name and the Special Warrantholders or any of them have furnished to the Special Warrant Agent, when so requested by the Special Warrant Agent, sufficient funds and security and indemnity satisfactory to it against the costs, expenses and liabilities to be incurred therein or thereby and the Special Warrant Agent has failed to act within a reasonable time or the Special Warrant Agent has failed to actively pursue any such act or proceeding.

(b) Subject to the provisions of this Section and otherwise in this Indenture, all or any of the rights conferred upon a Special Warrantholder by the terms of a Special Warrant may be enforced by such Special Warrantholder by appropriate legal proceedings without prejudice to the right which is hereby conferred upon the Special Warrant Agent to proceed in its own name to enforce each and all of the provisions herein contained for the benefit of the Special Warrantholders from time to time.

11.8 Force Majeure

Except for the payment obligations of the Corporation contained herein, neither party shall be 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 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.

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11.9 U.S. Securities and Exchange Commission Certification

The Corporation confirms that it has either (i) a class of securities registered pursuant to Section 12 of the US Securities Exchange Act of 1934, as amended (the "Act”); or (ii) a reporting obligation pursuant to Section 15(d) of the Act, and has provided the Subscription Receipt Agent with an Officers’ Certificate (in a form provided by the Subscription Receipt Agent certifying such reporting obligation and other information as requested by the Subscription Receipt Agent. The Corporation covenants that in the event that any such registration or reporting obligation shall be terminated by the Corporation in accordance with the Act, the Corporation shall promptly notify the Subscription Receipt Agent of such termination and such other information as the Subscription Receipt Agent may require at the time. The Corporation acknowledges that Computershare is relying upon the foregoing representation and covenants in order to meet certain United States Securities and Exchange Commission (“SEC”) obligations with respect to those clients who are filing with the SEC.

11.10 Privacy Matters

The parties acknowledge that the Subscription Receipt Agent may, in the course of providing services hereunder, collect or receive financial and other personal information about such parties and/or their representatives, as individuals, or about other individuals related to the subject matter hereof, and use such information for the following purposes:

(a) to provide the services required under this Agreement and other services that may be requested from time to time;

(b) to help the Subscription Receipt Agent manage its servicing relationships with such individuals;

(c) to meet the Subscription Receipt Agent’s legal and regulatory requirements; and

(d) if Social Insurance Numbers are collected by the Subscription Receipt Agent, to perform tax reporting and to assist in verification of an individual’s identity for security purposes.

Each party acknowledges and agrees that the Subscription Receipt Agent may receive, collect, use and disclose personal information provided to it or acquired by it in the course of this Agreement for the purposes described above and, generally, in the manner and on the terms described in its Privacy Code, which the Subscription Receipt Agent shall make available on its website, www.computershare.com, or upon request, including revisions thereto. The Subscription Receipt Agent may transfer personal information to other companies in or outside of Canada that provide data processing and storage or other support in order to facilitate the services it provides.

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Further, each party agrees that it shall not provide or cause to be provided to the Subscription Receipt Agent any personal information relating to an individual who is not a party to this Agreement unless that party has assured itself that such individual understands and has consented to the aforementioned uses and disclosures.

11.11 Enurement

This Indenture enures to the benefit of and is binding upon the parties hereto and their respective successors and assigns and may not be assigned by either party hereto without the consent in writing of the other party, such consent not to be unreasonably withheld.

11.12 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 Closing Date.

11.13 Satisfaction and Discharge of Indenture

Upon the earlier of:

(a) the date by which there shall have been delivered to the Special Warrant Agent for exercise, cancellation or destruction all Special Warrants certified hereunder; or

(b) the Deemed Exercise Date;

and if all certificates required to be issued in compliance with the provisions hereof have been issued and delivered hereunder, this Indenture (except for any indemnities given to the Special Warrant Agent) shall cease to be of further effect and the Special Warrant Agent, on demand of and at the cost and expense of the Corporation and upon delivery to the Special Warrant Agent of a certificate of the Corporation stating that all conditions precedent to the satisfaction and discharge of this Indenture have been complied with, and upon payment to the Special Warrant Agent of the fees and other remuneration payable to the Special Warrant Agent, the Special Warrant Agent shall execute proper instruments acknowledging satisfaction of and discharging this Indenture. Notwithstanding the foregoing, the indemnities provided to the Special Warrant Agent by the Corporation hereunder shall remain in full force and effect and survive the termination of this Indenture.

11.14 Provisions of Indenture and Special Warrants for the Sole Benefit of Parties and Special Warrantholders

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

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11.15 Further Assurances

Each of the parties hereto, including the Corporation, subject to Applicable Legislation, shall do or cause to be done all such acts and things and execute such further documents, agreements and assurances as may reasonably be necessary or advisable from time to time to carry out the provisions of this Indenture in accordance with their true intent.

11.16 Formal Date and Effective Date

For the purpose of convenience, this Indenture is referred to as bearing the formal date of March 1, 2016; however, notwithstanding such formal date, this Indenture becomes effective as between the Corporation and any particular Special Warrantholder upon the date of issuance of a Special Warrant Certificate to such Special Warrantholder.

[Remainder of page intentionally left blank. Signature page follows.]

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MERUS LABS INTERNATIONAL INC.
Per:	(Signed) “Andrew Patient”
	Authorized Signatory

COMPUTERSHARE TRUST COMPANY OF CANADA
Per:	(Signed) “Alice Kollen” Corporate Trust Officer
	Authorized Signatory
Per:	(Signed) “Nicole Clement” General Manager
	Authorized Signatory

(Signature Page - Special Warrant Indenture)

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Schedule "A"

FORM OF SPECIAL WARRANT CERTIFICATE

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE JULY 2, 2016.

[IF APPLICABLE] WITHOUT PRIOR WRITTEN APPROVAL OF THE TORONTO STOCK EXCHANGE AND COMPLIANCE WITH ALL APPLICABLE SECURITIES LEGISLATION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE TRADED ON OR THROUGH THE FACILITIES OF THE TORONTO STOCK EXCHANGE OR OTHERWISE IN CANADA OR TO OR FOR THE BENEFIT OF A CANADIAN RESIDENT UNTIL JULY 2, 2016.

[Note: Each CDS Global Warrant originally issued in Canada and held by the Depository, 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 MERUS LABS INTERNATIONAL 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, OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CDS (AND ANY PAYMENT IS MADE TO CDS 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, 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.]

[Note: The legend below need only be endorsed on the special warrant certificate or deemed to be endorsed on each CDS Global Warrant issued to or for the account or benefit of a U.S. Person or person in the United States:

THE SECURITIES REPRESENTED HEREBY AND THE SECURITIES DELIVERABLE UPON CONVERSION THEREOF HAVE NOT AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”) OR ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING OR OTHERWISE HOLDING SUCH SECURITIES, AGREES FOR THE BENEFIT OF MERUS LABS INTERNATIONAL 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 ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE CANADIAN LOCAL LAWS AND REGULATIONS, (C) PURSUANT TO RULE 144 OR RULE 144A THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS OF THE UNITED STATES, OR (D) IN ANOTHER TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS OF THE UNITED STATES, AFTER THE HOLDER HAS, IN THE CASE OF (C) OR (D) ABOVE, FURNISHED TO THE CORPORATION AN OPINION OF COUNSEL OF RECOGNIZED STANDING OR OTHER EVIDENCE OF EXEMPTION, IN EITHER CASE REASONABLY SATISFACTORY TO THE CORPORATION.

A-1

THE SECURITIES REPRESENTED HEREBY MAY NOT BE EXERCISED BY OR ON BEHALF OF A "U.S. PERSON" OR A PERSON IN THE UNITED STATES UNLESS THE UNDERLYING SECURITIES 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.

A-2

SPECIAL WARRANT CERTIFICATE

MERUS LABS INTERNATIONAL INC.
(a corporation existing under the laws of British Columbia)

No. CUSIP NO: «Number» SPECIAL WARRANTS entitling the holder to acquire one Common Share for each Special Warrant, subject to adjustment as set out below

THIS IS TO CERTIFY that, for value received, «Name» (the “Special Warrantholder”) is the registered holder of the number of special warrants (the “Special Warrants”) stated above and is entitled to acquire in the manner and at the time, and subject to the restrictions contained in the Indenture (as defined below) the number of common shares (the “Underlying Securities”) of Merus Labs International Inc. (the “Corporation”) as is equal to the number of Special Warrants represented hereby (subject to adjustment as set out below and in the Indenture), all without payment of any consideration.

The Special Warrants represented by this certificate are issued under and pursuant to a certain indenture (the “Indenture”) made as of March 1, 2016 between the Corporation and Computershare Trust Company of Canada (the “Special Warrant Agent”) (which expression includes any successor trustee appointed under the Indenture), to which Indenture and any instruments supplemental thereto reference is hereby made for a full description of the rights of the holders of the Special Warrants and the terms and conditions upon which such Special Warrants are, or are to be, issued and held, all to the same effect as if the provisions of the Indenture and all instruments supplemental thereto were herein set forth, to all of which provisions the holder of these Special Warrants by acceptance hereof assents. All terms defined in the Indenture are used herein as so defined. In the event of any conflict or inconsistency between the provisions of the Indenture and the provisions of this Special Warrant Certificate, except those that are necessary by context, the provisions of the Indenture shall prevail. The Corporation will furnish to the holder of this Special Warrant Certificate, upon request and without charge, a copy of the Indenture.

Unless earlier converted pursuant to a voluntary exercise by the holder thereof, the Special Warrants represented by this Special Warrant Certificate will be deemed to be automatically exercised at 4:00 p.m. (Toronto time) on the earlier of:

(i) the deemed exercise date provided for in an exercise notice to be provided by the Corporation to the Special Warrant Agent following the date on which the Corporation has filed a prospectus supplement (the “Prospectus Supplement”) to the Corporation’s base shelf prospectus dated October 30, 2015 qualifying the distribution of the Underlying Securities issuable upon exercise or deemed exercise of the Special Warrants in each of the provinces of British Columbia, Alberta, Saskatchewan, Manitoba and Ontario (the “Designated Provinces”), provided that such date shall be no later than the third Business Day after the filing of the Prospectus Supplement; and

A-3

(ii) July 2, 2016,

(the “Deemed Exercise Time”).

If any Special Warrants have not been voluntarily exercised by the holders thereof prior to the Deemed Exercise Time, then such Special Warrants will be deemed to have been exercised, delivered and surrendered by the holder thereof immediately prior to the Deemed Exercise Time without any further action on the part of the holder.

The Corporation will use its commercially reasonable best efforts to file the Prospectus Supplement on or before 4:00 p.m. (Toronto time) on April 22, 2016.

The holder of this Special Warrant Certificate may, at any time before the Deemed Exercise Time, exercise all or any number of the Special Warrants represented hereby, by surrendering to the Special Warrant Agent a Special Warrant Certificate or Special Warrant Certificates representing the number of Special Warrants to be exercised, together with the duly completed and executed exercise form attached as Appendix “1” hereto in accordance with the instructions contained in Appendix “3” attached hereto. Any such exercise, at a time when the Corporation has not filed the Prospectus Supplement or the Prospectus Supplement has not been delivered to the Special Warrantholder, is subject to compliance with, and may be restricted by, Applicable Legislation. If, at the time of the exercise of the Special Warrants, there remain restrictions on resale under Applicable Legislation on the Underlying Securities acquired, the Corporation may endorse the certificates representing the Underlying Securities acquired with respect to such resale restrictions.

The Underlying Securities in respect of which the Special Warrants are exercised will be deemed to have been issued on the date of such exercise, at which time each Special Warrantholder will be deemed to have become the holder of record of such Underlying Securities.

After the exercise or deemed exercise of Special Warrants, the Special Warrant Agent shall within three Business Days of such exercise or deemed exercise cause to be mailed or delivered to each Special Warrantholder at its address specified in the register for the Special Warrants maintained by the Special Warrant Agent or to such address as the Corporation or Special Warrantholder may specify in writing to the Special Warrant Agent prior to the exercise or deemed exercise of such Special Warrants, certificates for the appropriate number of Underlying Securities issuable in respect of such Special Warrants, not exceeding those which such Special Warrantholder is entitled to acquire pursuant to the Special Warrants so exercised. If the holder of this Special Warrant Certificate exercises some but not all of the Special Warrants represented hereby, he or she will be entitled to receive, without charge, a new Special Warrant Certificate representing the unexercised number of the Special Warrants represented hereby.

The holder of this Special Warrant Certificate may at any time up to the Deemed Exercise Time, upon written instruction delivered to the Special Warrant Agent and payment of the charges provided for in the Indenture and otherwise in accordance with the provisions of the Indenture, exchange this Special Warrant Certificate for other Special Warrant Certificates evidencing Special Warrants entitling the holder to acquire in the aggregate the same number of Underlying Securities as may be acquired under this Special Warrant Certificate.

A-4

The number of Underlying Securities which may be acquired by a Special Warrantholder upon exercise of Special Warrants is also subject to and governed by Article 4 of the Indenture with respect to anti-dilution provisions, including provisions for the appropriate adjustment of the class, number and price of the securities issuable hereunder upon the occurrence of certain events including any subdivision, consolidation, or reclassification of the shares, payment of stock dividends, or amalgamation of the Corporation.

The holding of the Special Warrants evidenced by this Special Warrant Certificate does not constitute the Special Warrantholder a shareholder of the Corporation or entitle such holder to any right or interest in respect thereof except as expressly provided herein and in the Indenture.

The Special Warrants may only be transferred by the Special Warrantholder (or its legal representatives or its attorney duly appointed), on the register kept at the office of the Special Warrant Agent, in accordance with applicable laws and upon compliance with the conditions set out in the Indenture, by delivering to the Special Warrant Agent’s Vancouver office a duly executed Form of Transfer attached as Appendix “2” hereto and complying with such other reasonable requirements as the Corporation and the Special Warrant Agent may prescribe and such transfer shall be duly noted on the register by the Special Warrant Agent.

The holder understands and acknowledges that the Special Warrants and Underlying Securities issuable hereunder upon exercise of the Special Warrants (together, the “Securities”) have not been and will not be registered under the United States Securities Act of 1933, as amended (the “1933 Act”), or under the securities laws of any state of the United States, and that Special Warrants originally issued in the United States or to, or for the account or benefit of, a person in the United States or a U.S. Person are, and any Securities issued upon exercise of such Special Warrants will be, “restricted securities” within the meaning of Rule 144(a)(3) of the 1933 Act. “United States” and “U.S. person” have the respective meanings assigned in Regulation S (“Regulation S”) under the 1933 Act.

The holder understands that the Special Warrants represented hereby may not be exercised within the United States or by or for the account or benefit of a U.S. Person or a person in the United States, and the Securities issuable upon exercise of such Special Warrants may not be delivered within the United States, unless such Securities are registered under the 1933 Act and the securities laws of any state in which the holder is resident, or unless an exemption from such registration requirements is available.

This Special Warrant Certificate shall be construed in accordance with the laws of the Province of British Columbia and the laws of Canada applicable therein and shall be treated in all respects as a British Columbia contract.

After the exercise or deemed exercise of any of the Special Warrants represented by this Special Warrant Certificate, the Special Warrantholder shall no longer have any rights under either the Indenture or this Special Warrant Certificate with respect to such Special Warrants, other than the right to receive certificates representing the Underlying Securities issuable on the exercise of those Special Warrants, and those Special Warrants shall be void and of no further value or effect.

A-5

The Indenture contains provisions making binding upon all Special Warrantholders resolutions passed at meetings of such holders in accordance with such provisions or by instruments in writing signed by the Special Warrantholders holding a specified percentage of the Special Warrants.

Time shall be of the essence hereof.

IN WITNESS WHEREOF the Corporation has caused this Special Warrant Certificate to be executed and the Special Warrant Agent has caused this Special Warrant Certificate to be countersigned by its duly authorized officers as of this _____ day of ________________, 2016.

MERUS LABS INTERNATIONAL INC.
Per:
	Authorized Signatory

COUNTERSIGNED BY:

COMPUTERSHARE TRUST COMPANY OF CANADA
Per:
	Authorized Signatory
Per:
	Authorized Signatory

A-6

APPENDIX “1”
SPECIAL WARRANT CERTIFICATE - EXERCISE FORM

TO: MERUS LABS INTERNATIONAL INC. (the “Corporation”)

AND TO: COMPUTERSHARE TRUST COMPANY OF CANADA

The undersigned hereby represents, warrants and certifies that (one of the following must be checked):

A. □ that the beneficial owner at the time of exercise of such Special Warrants (a) is not in the United States; (b) is not a U.S. Person and is not exercising such Special Warrants on behalf of a U.S. Person or a person in the United States; and (c) did not execute or deliver the notice of the owner’s intention to exercise such Special Warrants in the United States;

B. □ the beneficial owner is original holder of Special Warrants issued from conversion of Subscription Receipts originally issued pursuant to Section 4(a)(2) of the 1933 Act and/or Regulation D thereunder or, if the beneficial owner is a subsequent holder of the Special Warrants who is a U.S. Person, a person in the United States or otherwise subject to the 1933 Act, no person has paid or given any commission or other remuneration within the meaning of Section 3(a)(9) of the 1933 Act to any person, directly or indirectly, for soliciting the exercise of the Special Warrants.

1. The undersigned hereby irrevocably subscribes for and exercises the right to acquire:

_______________ Common Shares of the Corporation (or such number of other securities or property to which such Special Warrants entitle the undersigned in lieu thereof or in addition thereto under the provisions of the accompanying Special Warrant Certificate) according to the provisions of the Indenture referenced in the accompanying Special Warrant Certificate.

2. The Common Shares (or other securities or property) are to be registered as follows:

Name:
	(Print clearly)

Address in full:

Number of Common Shares:

3. Such securities should be sent by courier to:

Name:
	(Print clearly)

Address in full:

A-7

If the number of Special Warrants exercised is less than the number of Special Warrants represented hereby, the undersigned requests that the new Special Warrant Certificate representing the balance of the Special Warrants be registered in the name of the undersigned and should be sent by courier to:

Name:
	(Print clearly)

Address in full:

The undersigned understands that upon the exercise of Special Warrants issued in the United States or to, or for the account or benefit of, a “U.S. person” or a person in the United States, which bear the legend in section 5.9 (c ) of the Special Warrant Indenture, the Underlying Securities will bear a legend as stated in section 5.9(d) of the Special Warrant Indenture and continue to be “restricted securities” within the meaning of 144(a)(3) of Rule 144 under the 1933 Act and may be offered, sold or otherwise transferred only (i) to the Corporation, or (ii) outside of the United States in accordance with Rule 904 of Regulation S under the 1933 Act, and in each case in compliance with applicable state or foreign laws.

DATED at ______________________, _______________________, this _____ day of __________________, 20___.

Signature Witnessed or Guaranteed (See instructions to Special Warrantholders in Appendix “3”)	(Signature of Special Warrantholder, to be the same as appears on the face of this Special Warrant Certificate)
Name of Special Warrantholder:
Address (Please print):

Notes to Special Warrantholders:

(1) In order to voluntarily exercise the Special Warrants represented by this certificate, prior to the Deemed Exercise Time pursuant to section 5.2 of the Indenture, this exercise form must be delivered to the Special Warrant Agent, together with this Special Warrant Certificate. Refer to the instructions to Special Warrantholders attached as Appendix “3” to this Special Warrant Certificate.

A-8

(2) The signature(s) must be guaranteed by a Medallion Signature Guarantee obtained from a member of an acceptable Medallion Signature Guarantee Program (STAMP, SEMP, NYSE MSP). Many commercial banks, savings banks, credit unions, and all broker dealers participate in a Medallion Signature Guarantee Program. The Guarantor must affix a stamp bearing the actual words “Medallion Guaranteed”, with the correct prefix covering the face value of the certificate.

(3) The Common Shares issued on exercise prior to the Deemed Exercise Time will be subject to restrictions on resale under applicable securities legislation and will be endorsed with legends that effect.

A-9

APPENDIX “2”
SPECIAL WARRANT CERTIFICATE - FORM OF TRANSFER

TO: MERUS LABS INTERNATIONAL INC. (the “Corporation”)

AND TO: COMPUTERSHARE TRUST COMPANY OF CANADA

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto (name) _________________ (the “Transferee”), of ___________________________________ (residential address) _____________ Special Warrants of Merus Labs International Inc. registered in the name of the undersigned on the records of Computershare Trust Company of Canada represented by the attached 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 the case of a Special Warrant Certificate that contains a U.S. restrictive legend, the undersigned hereby represents, warrants and certifies that (one (only) of the following must be checked):

☐ (A) the transfer is being made only to the Corporation; or

☐ (B) the transfer is being made outside the United States in accordance with Rule 94 of Regulation S under the U.S. Securities Act, and in compliance with any applicable local securities laws and regulations and the holder has provided herewith the Declaration for Removal of Legend attached as Schedule “C” to the Special Warrant Indenture, and if required, an opinion of counsel of recognized standing in form and substance reasonably satisfactory to the Corporation and the Special Warrant Agent Agent to such effect; or

☐ (C) the transfer is being made in accordance with Rule 144 under the U.S. Securities Act and in compliance with any applicable state securities laws, and the holder has provided herewith an opinion of counsel of recognized standing, reasonably satisfactory in form and substance to the Corporation and the Special Warrant Agent to the effect that such transfer is being made in compliance with Rule 144.

In the case of a Special Warrant Certificate that does not contain a U.S. restrictive legend, if the proposed transfer is to, or for the account or benefit of a U.S. Person or to a person in the United States, the undersigned hereby represents, warrants and certifies that the transfer of the Special Warrants is being completed pursuant to an exemption from the registration requirements of the U.S. Securities Act and any applicable state securities laws, in which case the undersigned has furnished to the Corporation and the Special Warrant Agent an opinion of counsel of recognized standing in form and substance reasonably satisfactory to the Corporation and the Special Warrant Agent to such effect and acknowledges that a U.S. restrictive legend will be endorsed on the certificate issued to the transferee in the manner provided for in the Special Warrant Indenture.

A-10

☐ If transfer is to a U.S. Person, check this box.

Signature Guaranteed (See instructions to Special Warrantholders in Appendix “3”)	(Signature of Special Warrantholder, to be the same as appears on the face of this Special Warrant Certificate)
Name of Special Warrantholder:
Address (Please print):

REASON FOR TRANSFER - For US Residents only (where the individual(s) or corporation receiving the securities is a US resident). Please select only one (see instructions below).

Note to Special Warrantholders:

(1) In order to transfer the Special Warrants represented by this Special Warrant Certificate, this transfer form must be delivered to the Special Warrant Agent, together with this Special Warrant Certificate.

(2) The signature(s) must be guaranteed by a Medallion Signature Guarantee obtained from a member of an acceptable Medallion Signature Guarantee Program (STAMP, SEMP, NYSE MSP). Many commercial banks, savings banks, credit unions, and all broker dealers participate in a Medallion Signature Guarantee Program. The Guarantor must affix a stamp bearing the actual words “Medallion Guaranteed”, with the correct prefix covering the face value of the certificate.

(3) The Common Shares issued on exercise prior to the Deemed Exercise Time will be subject to restrictions on resale under applicable securities legislation and will be endorsed with legends that effect.

(4) The transfer of Special Warrants bearing the legend stated in section 5.9 ( c ) of the Special Warrant Indenture may be made only as provided above.

A-11

REASON FOR TRANSFER - FOR US RESIDENTS ONLY

Consistent with US IRS regulations, Computershare is required to request cost basis information from US security holders. Please indicate the reason for requesting the transfer as well as the date of event relating to the reason. The event date is not the day in which the transfer is finalized, but rather the date of the event which led to the transfer request (i.e. date of gift, date of death of the securityholder, or the date the private sale took place).

A-12

APPENDIX “3”
SPECIAL WARRANT CERTIFICATE - INSTRUCTIONS TO SPECIAL WARRANTHOLDERS

TO EXERCISE:

If the Special Warrantholder voluntarily exercises Special Warrants prior to the Deemed Exercise Time pursuant to section 5.2 of the Indenture, it must complete, sign and deliver:

(a) the Exercise Form, attached as Appendix “1”; and

(b) the Special Warrant Certificates,

to the Special Warrant Agent indicating the number of Underlying Securities to be acquired. In such case, the signature of such registered holder on the Exercise Form must be witnessed.

TO TRANSFER:

If the Special Warrantholder wishes to transfer Special Warrants, then the Special Warrantholder must complete, sign and deliver (as appropriate):

(a) the Transfer Form attached as Appendix “2”; and

(b) the Special Warrant Certificates;

to the Special Warrant Agent indicating the number of Special Warrants to be transferred.

If the Special Warrant Certificate is transferred, the Special Warrantholder’s signature on the Transfer Form must be guaranteed by an authorized officer of a chartered bank, trust company or an investment dealer who is a member of a recognized stock exchange.

For the protection of the holder, it would be prudent to use registered mail if forwarding by mail.

GENERAL:

If the Transfer Form or Exercise 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, the Special Warrant Certificate must also be accompanied by evidence of authority to sign satisfactory to the Special Warrant Agent.

The name and address of the Special Warrant Agent is:

Computershare Trust Company of Canada
3^rd Floor, 510 Burrard Street,
Vancouver, BC V6C 3B9
Canada 

Attention: General Manager, Corporate Trust
Facsimile: •
Email: corporatetrust.vancouver@computershare.com

A-13

Schedule "B"

NOTICE

Reference is made to the Special Warrant Indenture (the “Indenture”) dated March 1, 2016 between Merus Labs International Inc. (the “Corporation”) and Computershare Trust Company of Canada, as Special Warrant Agent. All capitalized terms not used but not defined herein shall have the meaning ascribed thereto in the Indenture. The Corporation, a corporation existing under the laws of the Province of British Columbia, hereby gives notice to the registered holder of the Underlying Securities issued upon exercise or deemed exercise of Special Warrants in accordance with the terms of the Indenture of the following:

(a) the Underlying Securities so issued upon the exercise or deemed exercise of the Special Warrants have been issued to (i) in respect of Special Warrants that are not CDS Global Warrants, the person or persons in whose name or names the Underlying Securities so subscribed for are to be issued as specified in the exercise form, in the case of voluntary exercise, or Subscription Agreement, in the case of deemed exercise or (ii) in respect of CDS Global Warrants, the Depository;

(b) the number of Underlying Securities issued is equal to the number of Common Shares issuable, in accordance with the terms of the Indenture, per Special Warrant exercised or deemed exercised; and

(c) the Corporation will furnish to the registered holder of such Underlying Security, on demand and without charge, a full copy of the text of:

(1) the rights, privileges, restrictions and conditions attached to the Common Shares; and

(2) the authority of the directors to fix the rights, privileges, restrictions and conditions of subsequent series, if applicable.

B-1

Schedule "C"

FORM OF DECLARATION FOR REMOVAL OF LEGEND

TO: MERUS LABS INTERNATIONAL INC.

AND TO: Computershare Trust Company of Canada

The undersigned (A) acknowledges that the sale of the securities ___________________________ (the “Securities”) of the Corporation, represented by certificate number __________________________, 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 (a) an "affiliate" of the Corporation (as that term is defined in Rule 405 under the U.S. Securities Act) (b) a "distributor" as defined in Regulation S or (c) an affiliate of a distributor; (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 on or through the facilities of the Toronto Stock Exchange 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 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 that 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; and (6) the contemplated sale is not a transaction, or part of a series of transactions, which, although in technical compliance with Regulation S, is part of a plan or scheme to evade the registration provisions of the U. S. Securities Act. Terms used herein have the meanings given to them by Regulation S under the U.S. Securities Act.

Dated _______________ 20__. X _____________________________________
Signature

_______________________________________
Name of Purchaser (please print)


_______________________________________

Name of authorized signatory (please print)

_______________________________________

Official capacity of authorized signatory (if applicable)

C-1

Affirmation by Seller’s Broker-Dealer
(Required for sales pursuant to Section (B)(2)(b) above)

We have read the foregoing representations of our customer, _________________________ (the "Seller") dated _______________________, with regard to the sale, for such Seller’s account, of the _________________ (the “Securities”) represented by certificate number ______________ of the Corporation described therein. We have executed sales of the Securities pursuant to Rule 904 of Regulation S under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), on behalf of the Seller. In that connection, we hereby represent to you as follows:

(1) no offer to sell Securities was made to a person in the United States;

(2) the sale of the Securities was executed in, on or through the facilities of the Toronto Stock Exchange or another designated offshore securities market (as defined in Rule 902(b) of Regulation S under the U.S. Securities Act), and, to the best of our knowledge, the sale was not pre-arranged with a buyer in the United States;

(3) no “directed selling efforts” were made in the United States by the undersigned, any affiliate of the undersigned, or any person acting on behalf of the undersigned; and

(4) we have done no more than execute the order or orders to sell the Securities as agent for the Seller and will receive no more than the usual and customary broker’s commission that would be received by a person executing such transaction as agent.

For purposes of these representations: “affiliate” means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the undersigned; “directed selling efforts” means any activity undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for the Shares (including, but not be limited to, the solicitation of offers to purchase the Shares from persons in the United States); and “United States” means the United States of America, its territories or possessions, any State of the United States, and the District of Columbia.

Legal counsel to the Corporation shall be entitled to rely upon the representations, warranties and covenants contained herein to the same extent as if this affirmation had been addressed to them.

Name of Firm:
	Name of Firm
By:
	Authorized Officer
Dated:	________________201______

C-2

EX-99.5

Exhibit 99.5

FORM 51-102F3

MATERIAL CHANGE REPORT

Item 1 Name and Address of Company

Merus Labs International Inc. (the “Company” or “Merus”)
100 Wellington Street West
Suite 2110, PO Box 151
Toronto, Ontario, M5K 1H1

Item 2 Date of Material Change

May 18, 2016

Item 3 News Release

The news release was issued by the Company on May 18, 2016 and distributed through CNW Group and filed on SEDAR.

Item 4 Summary of Material Change

On May 18, 2016, the Company issued an aggregate 14,250,000 common shares (the “Common Shares”) upon the conversion of the 14,250,000 outstanding special warrants. The Common Shares were qualified by the Company's prospectus supplement dated May 18, 2016 to the Company's existing Canadian short form base shelf prospectus dated October 30, 2015.

Item 5 Full Description of Material Change

5.1 Full Description of Material Change

Subscription Receipt Financing

On May 18, 2016, the Company completed the deemed exercise of the Company's 14,250,000 outstanding special warrants (the "Special Warrants") into 14,250,000 common shares (the "Common Shares"). The Special Warrants were issued in connection with the bought deal financing of subscription receipts (the "Offering") with a syndicate of investment dealers co-led by Canaccord Genuity Corp. and Clarus Securities Inc. and including Cormark Securities Inc., Laurentian Bank Securities Inc., CIBC World Markets Inc., Dundee Securities Ltd., GMP Securities L.P., Scotia Capital Inc. and TD Securities Inc. The Offering was completed on March 1, 2016 and the proceeds used by the Company to fund the acquisition of the rights to the Surgestone®, Provames®, Speciafoldine®, and Tredemine® pharmaceutical products in France from Sanofi S.A. The Special Warrants were cancelled upon deemed exercise and no Special Warrants remain outstanding.

The Common Shares issued upon the deemed exercise of the Special Warrants were qualified by the Company's prospectus supplement dated May 18, 2016 (the "Prospectus Supplement") to the Company's existing Canadian short form base shelf prospectus dated October 30, 2015. The Prospectus Supplement has been filed with the securities commissions in each of the provinces of British Columbia, Alberta, Saskatchewan, Manitoba and Ontario.

5.2 Disclosure for Restructuring Transactions

Not applicable.

Item 6 Reliance on subsection 7.1(2) of National Instrument 51-102

Not applicable

Item 7 Omitted Information

Not applicable

Item 8 Executive Officer

Andrew Patient

Chief Financial Officer

Telephone: (416) 593-3725

Item 9 Date of Report

May 27, 2016