Does not look good to meHemosol Plan Sponsorship Agreement Amended
Friday June 23, 2:36 pm ET
TORONTO, June 23 /CNW/ - Hemosol Corp. (TSX: HML - News) announced today that PricewaterhouseCoopers Inc., in its capacity as interim receiver (the "Receiver") of the assets, property and undertaking of Hemosol, and the Plan Sponsor have entered into an amendment to the conditional agreement to fund payments to unaffected and affected creditors of Hemosol that was approved by the Superior Court of Justice of Ontario (the "Court") on June 8, 2006 (the "Sponsorship Agreement"). The amendment provides the Plan Sponsor with additional time to meet certain conditions detailed below under the Sponsorship Agreement. In connection with this amendment, the Plan Sponsor and the Receiver also entered into a revised financing term sheet pursuant to which the Plan Sponsor agreed to continue funding Hemosol through the Companies' Creditors Arrangement Act (Canada) ("CCAA") proceedings involving Hemosol, up to a consensually agreed on amount.
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It was also announced that the Sponsorship Agreement is no longer conditional upon obtaining a new license agreement with ProMetic Life Sciences Inc. as a condition precedent to concluding a successful restructuring of Hemosol under the CCAA and Business Corporations Act (Ontario) ("OBCA").
The Sponsorship Agreement continues to be conditional upon obtaining the approval of Hemosol's creditors and the Court on a proposed CCAA plan of compromise, and, unless waived by the Plan Sponsor, a plan of arrangement under the OBCA, which, if implemented, will result in a substantial dilution of the equity of Hemosol held by the shareholders existing at the time of implementation.