Resverlogix, a clinical stage cardiovascular company based in Canada, and China-based Shenzhen Hepalink Pharmaceutical have formed a combination licensing and equity arrangement for RVX-208 in China, Hong Kong, Taiwan and Macau. The completion of the transaction remains subject to execution of a definitive stock purchase agreement and license agreement.

Hepalink will subscribe for approximately 13 million Resverlogix common shares and one million common share purchase warrants, for aggregate proceeds of approximately $29.2 million. Each warrant is exercisable into one common share at $2.27 per share for a period of five years. Hepalink will hold approximately 12.69% of Resverlogix's common shares. The common shares and warrants issued to Hepalink will be subject to a three year lock-up period. Hepalink also will be entitled to nominate one mutually agreed representative for election to the board of directors of the company.

In addition, subject to completion of the Hepalink transaction, Eastern Capital will purchase 5.6 million common shares and 422,005 common share purchase warrants for aggregate consideration of approximately $12.5 million, or $2.2 per unit. Therefore, total equity investment by Hepalink and Eastern exceeds $41.7 million.

Eastern holds nearly 15 million shares of Resverlogix, which represents 17.46% of the 85.7 million common shares outstanding before giving effect to any outstanding warrants. After the transaction, assuming all warrants held by Eastern are exercised, Eastern would hold 28.6 million common shares of Resverlogix, representing 25.38% of Resverlogix's issued and outstanding common shares based on shares outstanding.

Should RVX-208 reach certain annual sales milestones, Resverlogix is eligible to receive sales-based milestone payments from Hepalink, each ranging from $5 million to $90 million. In addition, Hepalink shall pay royalties based on net sales. Total sales based milestones and royalty payments are estimated in excess of $400 million. The license shall expire on a region-by-region basis on the later of the 15^th anniversary of the first commercial sale in such region or the expiry date of the last-to-expire of any licensed patent.

Hepalink will be responsible for all clinical and development costs in the Territories, including a patient population that will be included in Resverlogix's planned phase III BETonMACE trial.

Resverlogix intends to use the net proceeds to fund its R&D activities (alone or through strategic collaboration) including clinical development (including clinical trials and the clinical development of our product candidates), non-clinical development, research, discovery, chemistry and regulatory costs; repayment of outstanding indebtedness and/or payment of interest thereon; and general and administrative expenses, capital expenditures, working capital needs and other general corporate purposes.

Hepalink's price shall be the manufacturing cost plus 10%. Resverlogix also granted Hepalink an option to manufacture and supply products comprising RVX-208 outside the territories. Resverlogix's price will be the manufacturing cost plus 10%. Resverlogix has the right to select a qualified third party to manufacture RVX-208 outside the territories if Hepalink fails to meet the industry standards required.

The closing of the transaction will also be subject to, among other things, execution of definitive agreements, customary closing conditions for a transaction of this nature, shareholder approval of the majority of the votes cast by the shareholders of Resverlogix (excluding Eastern in certain circumstances) at a special meeting of the shareholders of Resverlogix, approval of the Toronto Stock Exchange and other regulatory approvals. The framework agreement requires that definitive agreements be executed by July 26, failing which the framework agreement will automatically terminate.

The transaction is anticipated to close in June 2015. Resverlogix has agreed not to enter into negotiations with third parties with regards to the grant of license of RVX-208 in the territories for three months.