EXHIBIT 10.9
FINANCING AGREEMENT
THIS FINANCING AGREEMENT ("Financing Agreement") is dated as of May 24,
2002 by and between MED-EMERG INTERNATIONAL, INC., an Ontario corporation, with
headquarters located at 0000 Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0 ("Company"), and BRECKENRIDGE FUND LLC, a New York limited
liability company located at 00 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx (who,
together with permitted assigns, will be collectively referred to herein as the
"Lender").
W I T N E S S E T H
WHEREAS, the Company wishes to induce the Lender to loan to the
Company, and the Lender is willing to loan to the Company, subject to the terms
and conditions set forth herein, Six Hundred Thousand and 00/100 ($600,000.00).
NOW, THEREFORE, for and in consideration of the premises and the mutual
agreement contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. LOAN. (a) Subject to the terms and conditions set forth herein, the
Lender shall loan to the Company Six Hundred Thousand and 00/100 ($600,000.00)
Dollars (the "Loan"), by the
delivery of $600,000.00 to the Company in same day U.S. funds by wire transfer
to an account designated by the Company.
(b) In consideration of the Loan and to collateralize the Company's
obligations hereunder and under the Related Agreements (as defined below in
Paragraph 3(b)), the Company shall issue:
(i) a promissory note (the "Note") for the amount of
Seven Hundred Twenty Thousand Dollars ($720,000.00),
substantially in the form of Exhibit A, payable to
the order of the Lender;
(ii) 216,000 legended shares of Common Stock of the
Company, with the Registration Rights set forth in
the annexed Registration Right Agreement (the
"Shares");
2. Reserved.
3. MUTUAL DELIVERIES.
(a) Upon the delivery by the Lender of the Loan as provided in
Section 1 above, the Company shall deliver to the Lender the Note.
(b) The Company shall also deliver, or cause to be delivered,
the original or execution copies of the following instruments and agreements
duly executed by all parties thereto other than the Lender (together with the
Note - the "Related Agreements"):
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(i) this Financing Agreement
(ii) the Shares in the form attached as Exhibit B;
and
(iii) Pledge Agreement of X.X. Xxxxxxxx & Sons Co.,
Inc and X.X. Xxxxxxxx and Exhibits thereto (in the form attached as Exhibit C);
(iv) the opinions of counsel in the form attached
as Exhibit D, and
(v) The Registration Rights Agreement in the form
attached as Exhibit E.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the Lender that except as described in the Company's
reports filed pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 (the "Reports"):
(a) The Company has the corporate power and authority to enter
into this Financing Agreement and the Related Agreements and to perform its
obligations hereunder and thereunder. The execution and delivery by the Company
of this Financing Agreement and the Related Agreements and the consummation by
the Company of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action on the part of the Company. This
Financing Agreement and the Related Agreements have been duly executed and
delivered by the Company and constitute valid and binding obligations of the
Company enforceable against it in accordance with their respective terms,
subject to the effects of any applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and to
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the application of equitable principles in any proceeding (legal or equitable).
(b) The execution, delivery and performance by the Company of
this Financing Agreement and the Related Agreements and the consummation of the
transactions contemplated hereby and thereby do not and will not breach or
constitute a default under any applicable law or regulation or of any agreement,
judgment, order, decree or other instrument binding on the Company which breach
or default could reasonably by expected to have a material and adverse effect on
the Company.
(c) Except as set forth in Schedule 4(c) hereto, the Company is
in material compliance with all applicable laws, regulations, judgments, decrees
and orders material to the conduct of its business.
(d) Except as set forth in Schedule 4(d) hereto, there is no
pending, or to the knowledge of the Company, threatened, judicial,
administrative or arbitral action, claim, suit, proceeding or investigation
which might affect the validity or enforceability of this Financing Agreement or
the Related Agreements or which involves the Company and which if adversely
determined, could reasonably be expected to have a material adverse effect on
the Company.
(e) Except for filings that may be required under federal or
state securities laws, no consent or approval of, or exemption by, or filing
with, any party or governmental or public body or authority is required in
connection with the execution, delivery and performance under this
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Financing Agreement or the Related Agreements or the taking of any action
contemplated hereunder or thereunder.
(f) The Company has been duly organized and is validly existing
as a corporation in good standing under the laws of the Province of Ontario. The
Company is duly qualified and licensed and in good standing as a foreign
corporation in each jurisdiction in which its current ownership or leasing of
any properties or its ownership or leasing of any properties or the character of
its operations as currently conducted requires such qualification or licensing,
except where the failure to be so qualified would not have a material adverse
effect on the Company. The Company has all corporate power and authority, and
has obtained all necessary authorizations, approvals, orders, licenses,
certificates, franchises and permits of and from all governmental or regulatory
officials and bodies necessary to own or lease its properties and conduct its
business as currently conducted other than those authorizations, approvals and
such other documents the lack of which could not reasonably be expected to have
a material and adverse effect on the Company.
(g) The execution, delivery and performance of this Financing
Agreement by the Company and the Related Agreements to be delivered hereunder
and the consummation of the transactions contemplated hereby and thereby will
not: (i) violate any provision of the Company's articles of incorporation or
bylaws, (ii) violate, conflict with or result in the breach of any of the terms
of, result in a material modification of the effect of, otherwise, give any
other contracting party
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the right to terminate, or constitute (or with notice or lapse of time or both
constitute) a default under, any contract or other agreement to which the
Company is a party or by or to which the Company or any of the Company's assets
or properties may be bound or subject, (iii) violate any order, judgment,
injunction, award or decree of any court, arbitrator or governmental or
regulatory body by which the Company, or the assets or properties of the Company
are bound, (iv) to the Company's knowledge, violate any statute, law or
regulation.
(h) Except as set forth in Schedule 4(h) hereto, there has been
no material adverse change in the capitalization, assets, liabilities or income
of the Company since the issuance of the financial statements, for the period
ending December 31, 2001, delivered to Lender.
(i) The Company is not in possession of, nor has the Company or
its agents disclosed to Lender, any material non-public information (not
including the information relating to the negotiations for, and the transaction
contemplated by, this Financing Agreement and also not including the information
contained in Schedule 7(j), both of which could be considered "material" and
which have not yet been publicly announced) that (a) if disclosed, would
reasonably be expected to have a materially adverse effect on the price of the
Common Stock, or (b) according to applicable law, rule or regulation, should
have been disclosed publicly by the Company prior to the date hereof but which
has not been so disclosed.
(j) To the Company's knowledge, none of the following has
occurred during the
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past ten (10) years with respect to the Company (or any subsidiary or
predecessor entity) or control person of the Company (a "Person"):
(1) A petition under the federal bankruptcy laws or any state insolvency
law was filed by or against, or a receiver, fiscal agent or similar
officer was appointed by a court for the business or property of such
Person, or any partnership in which he was a general partner at or
within two years before the time of such filing, or any corporation or
business association of which he was an executive officer at or within
two years before the time of such filing;
(2) Such Person was convicted in a criminal proceeding or is a named
subject of a pending criminal proceeding (excluding traffic violations
and other minor offenses);
(3) Such Person was the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining him from, or
otherwise limiting, the following activities:
(i) Acting, as an investment advisor, underwriter, broker or
dealer in securities, or as an affiliated person, director or employee
of any investment company, bank, savings and loan association or
insurance company, as a futures commission merchant, introducing broker,
commodity trading advisor, commodity pool operator, floor broker, any
other person regulated by the Commodity Futures Trading Commission
("CFTC") or engaging in or continuing any conduct or practice in
connection with such activity;
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(ii) Engaging in any type of business practice; or
(iii) Engaging in any activity in connection with the purchase
or sale of any security or commodity or in connection with any
violation of federal or state securities laws or federal commodities
laws;
(4) Such person was the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any federal or state
authority barring, suspending or otherwise limiting for more than 60
days the right of such person to engage in any activity described in
paragraph (3) of this item, or to be associated with persons engaged in
any such activity;
(5) Such person was found by a court of competent jurisdiction in a
civil action or by the CFTC or SEC to have violated any federal or state
securities law, and the judgment in such civil action or finding by the
CFTC or SEC has not been subsequently reversed, suspended, or vacated.
(k) Except for Waterford Capital Partners, Inc., the Company
represents that it has had no dealings in connection with this transaction
with any finder or broker who will demand payment of any fee or commission
from the Lender. The Company agrees to indemnify the Lender against and hold
the Lender harmless from any and all liabilities to any persons claiming
brokerage commissions or finder's fees on account of services purported to
have been rendered in connection
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with this Financing Agreement or the transactions contemplated hereby.
(l) The Company intends to use the proceeds from the Loan for
the purpose of working capital, and the Company anticipates that it will be able
to repay all borrowings from its future cash flow or from further investment. In
addition, the Company believes that it will be able to, and intends to, comply
with all of its obligations and covenants as set forth in the Related
Agreements. Consequently, the Company does not believe, and does not intend,
that the pledge of shares pursuant to the Related Agreements, will be called.
Consequently, and without limiting the generality of the foregoing, the Company
warrants that the pledge of the shares is for security only and not in
contemplation of a sale of such shares by the Lender. The Company has not
arranged for the pledge of the shares as a part of any plan for the further
distribution of the pledged securities.
(m) This agreement is being entered into as a commercial
transaction. The execution and delivery of this Agreement and the Note will not
be in violation of the provisions of Article 5, Title 5 of the General
Obligations Law of the State of New York, or any provisions of similar import,
in any relevant jurisdiction, with regard to usurious transactions, and if
necessary, the Company will secure any necessary regulatory approval.
5. REPRESENTATIONS AND WARRANTIES OF THE LENDER. The Lender hereby
represents and warrants to the Company that:
(a) If the Lender is a corporation, the Lender has the corporate
power and authority
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to enter into this Financing Agreement and the Related Agreements and to perform
its obligations hereunder and thereunder. The execution and delivery by the
Lender of this Financing Agreement and the Related Agreements and the
consummation by the Lender of the transactions contemplated hereby and thereby
have been duly authorized by all necessary action on the part of the Lender.
This Financing Agreement and the Related Agreements have been duly executed and
delivered by the Lender and constitute valid and binding obligations of the
Lender, enforceable against it in accordance with their respective terms,
subject to the effects of any applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and to the
application of equitable principles in any proceeding (legal or equitable).
(b) The execution, delivery and performance by the Lender of
this Financing Agreement and the Related Agreements and the consummation of the
transactions contemplated hereby and thereby do not and will not breach or
constitute a default under any applicable law or regulation or of any agreement,
judgment, order, decree or other instrument binding on the Lender.
(c) There is no pending, or to the knowledge of the Lender,
threatened, judicial, administrative or arbitral action, claim, suit, proceeding
or investigation which might affect the validity or enforceability of this
Financing Agreement or the Related Agreements.
(d) No consent or approval of, or exemption by, or filing with,
any party of governmental or public body or authority is required in connection
with the execution, delivery and
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performance under this Financing Agreement or the Related Agreements or the
taking of any action contemplated hereunder or thereunder.
(e) The Lender qualifies as an accredited investor for purposes
of Regulation D promulgated under the Securities Act of 1933, as amended (the
"Act") and Rules 501(a) and 215 thereunder. The Lender acknowledges that it has
made an independent due diligence investigation of the Company and has reviewed
each of the Reports and that the Company has made available to the Lender at a
reasonable time prior to the execution of this Financing Agreement. The Lender
has had the opportunity to ask questions and receive answers concerning the
business and affairs of the Company and the terms and conditions of the sale of
securities contemplated by this Financing Agreement and to obtain any additional
information (which the Company possesses or can acquire without unreasonable
effort or expense) as may be necessary to verify the accuracy of information
furnished to the Lender.
(f) The Lender understands that the Note, and certain of the
Shares are characterized as "restricted securities" under the federal securities
laws inasmuch as they are being or will be acquired from the Company in a
transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the Securities Act of 1933 and applicable state law only in certain limited
circumstances. In this regard, the Lender represents that it is familiar with
Rule 144 under the Act, as presently in effect, and
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understands the resale limitations imposed thereby and by the Act. The Lender
understands that it is accepting the Note and the restricted Shares, the Lender
will accept such securities for investment purposes only and without the view
toward the further distribution of such securities except pursuant to a
registration statement that may be effective permitting the public offer or sale
of such securities, or pursuant to an exemption from registration under federal
and applicable state laws. In the event the Lender does attempt to offer or sell
the Note, or the restricted Shares in the circumstances contemplated by the
preceding sentence, the Lender will do so only in accordance with the
requirements of federal and applicable state laws and interpretations thereof.
(g) The Lender has no intention or right to obtain the shares
of the Company's common stock pledged by certain affiliates of the Company to
collateralize the repayment of the Note and the Company's performance of its
covenants in this Financing Agreement and the Related Documents except as
permitted in the Related Documents following a default by the Company and the
guarantors, not cured in accordance with the terms of the Related Documents. The
Lender has no intention to sell the pledged shares except after a foreclosure
accomplished pursuant to the preceding sentence. The Lender has not sought the
pledge of the shares pursuant to the Related Documents as a part of any plan or
scheme to distribute any securities in a manner not in compliance with the
requirements of federal and all applicable state laws.
(h) The Lender is a legal resident of the state set forth
beneath his, her, or its
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signature to this Financing Agreement, and there is no basis that the Lender can
claim residence in any state other than such state.
(i) The Lender is not, and has never been, an "affiliate" of
the Company as the term "affiliate" is defined in Rule 405 of Regulation C
adopted under the Securities Act of 1933, as amended. If the Lender becomes an
affiliate of the Company at any time during the period the Note is outstanding,
the Lender will notify the Company in writing.
6. RIGHT OF FIRST REFUSAL, SPECIAL DILUTION PROTECTION.
(a) The Company covenants and agrees that if during the period
from the date hereof through and including the date which is one (1) year
payment in full of the Note, , the Company offers to enter into any transaction
(a "New Transaction") for the sale of Common Stock, or securities convertible
into Common Stock (other than in connection with an acquisition, merger or other
business combination), the Company shall notify the Lender in writing of all of
the terms of such offer (a "New Transaction Offer"). The Lender shall have the
right (the "Right of First Refusal"), exercisable by written notice given to the
Company by the close of business on the tenth business day after the Lender's
receipt of the New Transaction Offer (the "Right of First Refusal Expiration
Date"), to participate in all or any part of the New Transaction Offer on the
terms so specified.
(b) If, and only if, the Lender does not exercise the Right of
First Refusal in full, the Company may consummate the remaining portion of the
New Transaction with any New Lender on the terms specified in the New
Transaction Offer within sixty (60) days of the Right of First
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Refusal Expiration Date.
(c) If the terms of the New Transaction to be consummated with
such other party differ from the terms specified in the New Transaction Offer so
that the terms are more beneficial in any respect to the New Lender, the Company
shall give the Lender a New Transaction Offer relating to the terms of the New
Transaction, as so changed, and the Lender"s Right of First Refusal and the
preceding terms of this paragraph shall apply with respect to such changed
terms.
7. COVENANTS OF THE COMPANY. The Company covenants and agrees that, so
long as the Note shall be outstanding, except as otherwise required under the
Related Agreements, the Company shall:
(a) Promptly pay and discharge all lawful taxes, assessments
and governmental charges or levies imposed upon it or upon its income and
profits, or upon any of its property, before the same shall become in default as
well as all lawful material claims for labor, materials and supplies which, if
unpaid, might become a lien or charge upon such properties or any part thereof;
provided, however, that it shall not be required to pay and discharge any such
tax, assessment, charge, levy or claim so long as the validity thereof shall be
contested in good faith by appropriate proceedings, and the Company shall set
aside on its books adequate reserves with respect to any such tax, assessment,
charge, levy or claim so contested.
(b) Pay, or cause to be paid, all material financing
obligations and perform, or cause to be performed, all material obligations
promptly and in accordance with the respective terms thereof.
(c) Implement and maintain a standard system of accounting in
accordance with
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generally accepted accounting principles ("GAAP").
(d) Provide or otherwise make available to the Lender as soon
as available after the end of each fiscal year of the Company, its annual report
on Form 10-KSB or similar reports.
(e) Do, or cause to be done, all things that may be necessary
to (i) maintain its due organization, valid existence and good standing under
the laws of its state of incorporation; (ii) preserve and keep in full force and
effect all qualifications, registrations and licenses in those jurisdictions in
which the failure to do so could or would have a material adverse effect; (iii)
maintain its power or authority to carry on its business as now conducted; and
(iv) use its best efforts to keep available the services of its key present
employees and agents and maintain its current relations with suppliers,
customers, distributors and joint venture partners (subject to the business
judgment of executive management).
(f) At all times maintain, preserve, protect and keep material
property used and useful in the conduct of its business in a manner not
substantially different from the manner in which the Company maintained,
preserved, protected, and kept its material property prior to the date of this
Financing Agreement.
(g) Keep insurance on its property in a manner not
substantially different from the manner in which the Company maintained
insurance prior to the date of this Financing Agreement.
(h) Not assume, guaranty or otherwise, directly or indirectly,
become liable or responsible for the obligations of the any other person or
entity, except for 75% or greater owned subsidiaries, for the purpose of paying
or discharging the obligations of such person or entity unless such guarantees
relate to the business of the Company, are incurred in the ordinary course of
its business and do not exceed in the aggregate $50,000.
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(i) Not declare or pay any cash dividends or authorize or make
any other distribution on any class of equity securities of the Company.
(j) Except as set forth in Schedule 7(j) hereto, not
consolidate with or merge with or into any entity or sell, lease, transfer,
exchange or otherwise dispose of any material part of its properties and assets
except in the ordinary course of business, however, the Company may engage in
any of the foregoing transactions with a parent or subsidiary of the Company so
long as such parent or subsidiary assumes the obligations of the Company
hereunder.
(k) Not enter into any agreement or understanding which may,
directly or indirectly, cause or effect a change in "control" as defined in Rule
405 under the Securities Act of 1933, without the prior written consent of the
Lender.
(8) REGISTRATION RIGHTS. (a). In addition to the rights provided under
the Registration Rights Agreement, the Lender shall have piggy-back registration
rights with respect to the Shares then held by the Lender subject to the
conditions set forth below. If the Company participates (whether voluntarily or
by reason of an obligation to a third party) in the registration of any shares
of the Company's stock (other than a registration on Form X-0, X-0 or successor
form), the Company shall give written notice thereof to the Lender and the
Lender shall have the right, exercisable within ten (10) business days after
receipt of such notice, to demand inclusion of all or a portion of the Lender's
Shares in such registration statement subject, in the event of an underwritten
offering, to customary cutbacks and lock-ups requested by the managing
underwriter of all selling stockholders thereunder, on a pro-rata basis with
such other selling stockholders. In the event of an underwritten offering, the
right of any Lender to registration pursuant to the piggyback registration
rights granted to the Lender pursuant to this Section shall be conditioned upon
such Lender's participation in such
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underwriting and the inclusion of such Lender's Shares in the underwriting.
Lender proposing to distribute their Shares through such underwriting shall
(together with the Company and the other holders of securities of the Company
with registration rights to participate therein distributing their securities
through such underwriting) enter into an underwriting agreement in customary
form with the representative of the underwriter or underwriters selected by the
Company. If the Lender exercises such election, the Shares so designated shall
be included in the registration statement at no cost or expense to the Lender.
The Company shall not be obliged to effect registration under the Securities Act
pursuant to this Section (a) on more than one occasion; PROVIDED, HOWEVER, that
this limitation shall not apply if the number of shares requested to be
registered by the Holder shall have been reduced pursuant to the first sentence
of this Section (a) unless and until the occurrence of an occasion on which the
shares requested by the Holder to be registered have not been so reduced.
(b) GENERAL CONDITIONS. In connection with each registration effected pursuant
to Section (a), the Company and the Lender agree as follows:
(i) INDEMNIFICATION OF LENDER. The Company shall indemnify and hold harmless the
Lender against any and all losses, claims, damages, or liabilities to which the
Lender may become subject under the Securities Act, or any other statute or
common law, including any amount paid in settlement of any litigation, commenced
or threatened, if such settlement is effected with the written consent of the
Company, and to reimburse them for any legal or other expenses incurred by them
in connection with investigating any claims and defending any action insofar as
any such losses, claim, damages, liabilities or actions arise out of or are
based upon 1) any untrue statement or alleged untrue statement of a material
fact, contained in the registration statement relating to the sale of the
Shares, or any post-effective amendment thereof, or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, 2) any untrue statement
or alleged untrue statement of a material fact, contained in a preliminary
prospectus, if used prior to the effective date of such registration statement,
or contained in the prospectus (as amended or supplemented, if the Company shall
have filed with the SEC any amendment thereof or supplement thereto), if used
within the period during which the Company is required to keep the registration
statement to which the prospectus relates current pursuant to the
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terms hereof, or the omission or alleged omission to state therein (if so used)
the material fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The
indemnification agreement contained in this agreement, however, shall not: 1)
apply to such losses, claims, damages, liabilities, or actions arising out of,
or based upon, any such untrue statement or alleged omission, if such statement
or omission was in reliance upon and in conformity with the information
furnished in writing to the Company by the Lender for use in the registration
statement or any preliminary prospectus or prospectus contained in the
registration statement or any amendment thereof or supplement thereto, or 2)
inure to the benefit of any underwriter from whom the person asserting any such
losses, claims, damages, expenses or liabilities purchased the securities which
are the subject thereof (or to the benefit of any person controlling such
underwriter), if such underwriter failed to send or give a copy of the
prospectus to such person at or prior to the written confirmation of the sale of
such securities to such person.
(ii) INDEMNIFICATION OF THE COMPANY. The Lender and each underwriter of the
Shares to be registered (such party and such underwriters being referred to
severally in this subparagraph as the "Indemnifying Party") shall agree, in the
same manner and to the same extent as set forth in the preceding paragraph, to
indemnify and hold harmless the Company and each person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act, its
directors and those officers of the Company who shall have signed such
registration statement, with respect to any statement in or omission from such
registration statement or any post-effective amendment thereof or any
preliminary prospectus (as amended or supplemented, if amended or supplemented
as aforesaid) contained in such registration statement, if such statement or
omission was made in reliance upon and in conformity with information furnished
in writing to the Company by such Indemnifying Party for use in such
registration statement or any preliminary prospectus or prospectus contained in
such registration statement or any amendment thereof or supplement thereto.
(iii) NOTICE OF INDEMNIFIABLE ACTION. Each indemnified party will, promptly
after the receipt of notice of the commencement of any action against such
indemnified party in respect of which indemnity may be sought from a party
hereto on account of an indemnity agreement contained in this Section, notify
the indemnifying party in writing of the commencement thereof. The omission of
any indemnified party so to notify an indemnifying party of any such action
shall relieve the indemnifying party from any liability in respect of such
action which it may have to such indemnified party on account of the indemnity
agreement contained in this Section, but shall not relieve the indemnifying
party from any other liability which it may have to such indemnified party.
(iv) The Lender's rights under this Section 8 shall expire at such time as the
Lender can sell all of the Shares under Rule 144 (k) without volume or other
restrictions or limit.
(9) INDEMNIFICATION. (a) If
(i) the Lender becomes involved in any capacity in any action,
proceeding or investigation brought by any stockholder of the Company,
in connection with or as a result of the consummation of the
transactions contemplated by the Related Agreements, or if such Lender
is impleaded in any such action, proceeding or investigation by any
person, or
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(ii) the Lender becomes involved in any capacity in any action,
proceeding or investigation brought by the Securities and Exchange
Commission, any self-regulatory organization or other body having
jurisdiction in connection with or as a result of the consummation of
the transactions contemplated by the Related Agreements, or
(iii) if the Lender is impleaded in any such action, proceeding or
investigation by any person, then in any such case, the Company hereby
agrees to indemnify, defend and hold harmless the Lender from and
against and in respect of all losses, claims, liabilities, damages or
expenses resulting from, imposed upon or incurred by the Lender,
directly or indirectly, and reimburse such Lender for its reasonable
legal and other expenses (including the cost of any investigation and
preparation) incurred in connection therewith, as such expenses are
incurred. The foregoing indemnification does not include any obligation
to reimburse the Lender for internal and overhead costs for the time of
any officers or employees of the Lender devoted to appearing and
preparing to appear as witnesses, assisting in preparation for hearings,
trials or pretrial matters, or otherwise with respect to inquiries,
hearing, trials, and other proceedings relating to the subject matter of
the Note and Related Agreements. The indemnification and reimbursement
obligations of the Company under this paragraph shall be in addition to
any liability which the Company may otherwise have, and shall extend
upon the same terms and conditions to any affiliates of the Lender who
are actually named in such action, proceeding or investigation, and
partners, directors, agents, employees and controlling persons (if any),
as the case may be, of the Lender and any such affiliate, and shall be
binding upon and inure to the benefit of any successors, assigns, heirs
and personal representatives of the Company, the Lender, any such
affiliate and any such person. The Company also agrees that neither the
Lender nor any such affiliate, partner, director, agent, employee or
controlling person shall have any liability to the Company or any person
asserting claims on behalf of or in right of the Company in connection
with or as a result of the consummation of the transactions hereunder,
except as provided in or contemplated by the Note or Related Agreements
unless such action by the Lender or any affiliate, partner, director,
agent, employee, or controlling person results from the fraud,
negligence, criminal act or omission, or other action or omission by
such person that violates any applicable law or regulation.
(b) Notwithstanding the above, the Company shall have no obligation
under this Section 9 if any such action, proceeding, or investigation
arises out of or relates to any fraudulent, negligent, or criminal act
or omission of the Lender or any affiliate, partner, director, agent,
employee, or controlling person of the Lender in connection with the
transactions contemplated by this Financing Agreement or otherwise, or
other action or omission by such person that violates any applicable law
or regulation.
10. ASSIGNMENT. This Financing Agreement and the Related Agreements may
be assigned by the Lender to transferees or assignees of the Note, provided that
such assignment or transfer is accomplished in accordance with all applicable
laws and in a manner that is reasonably satisfactory to the Company, and
provided further that the Company is, prior to or simultaneously with such
transfer, furnished with written notice of the name and address of such
transferee or assignee, and such assignee agrees in writing to be bound by the
terms hereof and provided further that, if the Note is only assigned or
transferred in part, then such assignment shall only be made in part on an
appropriate proportionate basis. If there is a conflict between this provision
and any
19
provision of the Related Agreements, this provision shall govern.
11. [RESERVED]
12. NOTICES. Any notice required or permitted hereunder shall be given
in writing (unless otherwise specified herein) and shall be deemed effectively
given upon personal delivery or seven business days after deposit in the United
States Postal Service, by (a) advance copy by fax, and (b) mailing by express
courier or registered or certified mail with postage and fees prepaid, addressed
to each of the other parties thereunto entitled at the following addresses, or
at such other addresses as a party may designate by ten days advance written
notice to each of the other parties hereto.
COMPANY: MED-EMERG INTERNATIONAL INC.
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
Tel: (000) 000-0000
with a copy to: (which shall not constitute notice)
Telephone No.:
Facsimile No.: and
Telephone No.:
Facsimile No.:
LENDER: to the address, telephone number, and facsimile
number set forth beneath his, her or its
signature, below.
ESCROW AGENT: Xxxxxxx & Xxxxxx, Esqs.
00 Xxxxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
20
13. SEVERABILITY. If a court of competent jurisdiction determines that
any provision of this Financing Agreement is invalid, unenforceable or illegal
for any reason, such determination shall not affect or impair the validity,
legality and enforceability of the other provisions of this Financing Agreement.
If any such invalidity, unenforceability or illegality of a provision of this
Financing Agreement becomes known or apparent to any of the parties hereto, the
parties shall negotiate promptly and in good faith in an attempt to make
appropriate changes and adjustments to such provision specifically and this
Financing Agreement generally to achieve as closely as possible, consistent with
applicable law, the intent and spirit of such provision specifically and this
Financing Agreement generally.
14. EXECUTION IN COUNTERPARTS. This Financing Agreement may be signed
in any number of counterparts with the same effect as if the signatures upon any
counterpart were upon the same instrument. All signed counterparts shall be
deemed to be one original. This Financing Agreement, once executed by a party,
may be delivered to the other parties hereto by telephone line facsimile
transmission of a copy of this Financing Agreement bearing the signature of the
parties so delivering this Financing Agreement. A facsimile transmission of this
signed Agreement shall be legal and binding on all parties hereto.
15. EXPENSES. Each party shall bear its own expenses in connection with
the preparation of this Financing Agreement and the Related Agreements. In order
to a portion of the expenses
21
incurred by the Lender and others involved in the transaction, the Company will
pay the Lender's due diligence expenses, and $13,000 to the law firm of Xxxxxxx
& Prager, LLP on behalf of the Lender and others, to be allocated as the Lender
may deem appropriate.
16. GOVERNING LAW. This Financing Agreement and the Related Agreements
shall be governed by and construed in accordance with the laws of the State of
New York. Each of the parties consents to the jurisdiction of the federal courts
whose districts encompass any part of the City of New York or the state courts
of the State of New York sitting in the City of New York in connection with any
dispute arising under this Financing Agreement and hereby waives, to the maximum
extent permitted by law, any objection, including any objection based on FORUM
NON COVENIENS, to the bringing of any such proceeding in such jurisdictions.
17. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
(a) The Lender has the right to rely fully upon the
representations, warranties, covenants and agreements of the Company contained
in this Agreement or in any documents delivered pursuant to this Agreement. All
such representations and warranties of the Company shall survive the execution
and delivery of this Agreement, the Lender's advancement of the Loan, and the
Company's delivery of the Note to the Lender hereunder. All such representations
and warranties of the Company shall continue in full force and effect for six
months from the date of payment in full of the Note with respect to claims which
may arise hereunder or under the Related
22
Documents.
(b) The Company has the right to rely fully upon the
representations, warranties, covenants and agreements of the Lender contained in
this Agreement or in any documents delivered pursuant to this Agreement. All
such representations and warranties of the Lender shall survive the execution
and delivery of this Agreement, the Lender's advancement of the Loan, and the
Company's delivery of the Note to the Lender hereunder. All such representations
and warranties of the Lender shall continue in full force and effect for six
months from the date of payment in full of the Note with respect to claims which
may arise hereunder or under the Related Documents.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
23
IN WITNESS WHEREOF, the parties have executed this Financing Agreement
as of the date first written above.
MED-EMERG INTERNATIONAL INC.
By: ______________________________________
, President
BRECKENRIDGE FUND LLC
By:______________________________
Its Manager
By: ______________________________________
Name:
Tax ID # Title:
____________________ Address:45 Orchard Street,
Manhasset, New York
State of Residence for the Lender: Telephone: 000-000-0000
Facsimile: 516
SCHEDULES
Schedule 4(c) There are no exceptions except as set forth in the Reports.
Schedule 4(d) There is no litigation (etc.) except as set forth in the Reports.
Schedule 4(h) There are no exceptions except as set forth in the Reports.
24
EXHIBIT A
FORM OF NOTE
25
EXHIBIT B
THE SHARES
26
EXHIBIT C
PLEDGE AGREEMENT
27
EXHIBIT E
REGISTRATION RIGHTS AGREEMENT
28
