EXHIBIT 10.2
PREFERRED SHARE REPURCHASE AGREEMENT
THIS AGREEMENT dated as of the 31st day of May, 2004.
BETWEEN:
MED-EMERG INTERNATIONAL INC., being a corporation incorporated under
the laws of the Province of Ontario
(hereinafter referred to as "MEII")
OF THE FIRST PART;
-and-
1245841 ONTARIO INC., being a corporation incorporated under the laws
of the Province of Ontario,
(hereinafter referred to as the "Shareholder")
OF THE SECOND PART;
REFERENCE is made to a Securities Purchase Agreement (the "SPA") made
as of the 31st day of May, 2004, amongst MEII and the Buyers (as such
capitalized term is defined in the SPA);
AND WHEREAS MEII presently has 500,000 preferred shares (the "Preferred
Shares") issued and outstanding;
AND WHEREAS the holders of the Preferred Shares have the right to:
(a) cumulative quarterly dividends of US $0.27 per Preferred
Share; and
(b) in the event of the liquidation, dissolution or winding up of
MEII, before any distribution to any part of the assets of
MEII amongst the holders of the common shares the sum of US
$4,500,000.00.
AND WHEREAS the Shareholder owns all of the issued and outstanding
Preferred Shares;
AND WHEREAS the Articles of Incorporation, and amendments thereto, of
MEII do not contain a redemption privilege with respect to the Preferred Shares
obligating the Shareholder to sell the Preferred Shares to MEII or to convert
the Preferred Shares into common shares of MEII;
AND WHEREAS MEII is presently indebted to the Shareholder in the amount
of Five Hundred Ninety Seven Thousand Seven Hundred Fifty Dollars US
($597,750.00) in unpaid dividends (the "Dividend Debt");
AND WHEREAS as a condition to the completion of the SPA, the Buyers
required that the 500,000 Preferred Shares be purchased by MEII for
cancellation;
AND WHEREAS pursuant to a resolution of the directors of MEII dated May
31, 2004, the directors approved and authorized the issuance of 4,348,000 common
shares of MEII to the Shareholder as a stock dividend (the "Stock Dividend") in
satisfaction of the Dividend Debt;
AND WHEREAS pursuant to a resolution of the directors of MEII dated May
31, 2004, the directors approved the terms of a certain Preferred Share
Repurchase Agreement, between MEII and the Shareholder (the "Original
Agreement"), whereby MEII agreed to purchase the Preferred Shares in
consideration for the issuance of the 5,000,000 common shares of MEII and the
New Warrants (as such capitalized term is defined in the Original Agreement);
AND WHEREAS subsequent to the passing of said directors resolutions
(the "Resolutions"), the Shareholder advised that its professionals required
that all common shares to be issued to the Shareholder be issued pursuant to the
preferred share repurchase agreement and not through the issuance of a stock
dividend;
AND WHEREAS the Shareholder has agreed to forgive the Dividend Debt in
its entirety;
AND WHEREAS MEII has agreed to issue the Common Shares (as hereinafter
defined) and the New Warrants in consideration of:
(a) the sale by the Shareholder of the Preferred Shares to MEII
for cancellation by MEII; and
(b) the Shareholder forgiving the Dividend Debt in its entirety;
AND WHEREAS the total number of common shares to be issued by MEII to
the Shareholder pursuant to the New PSRA Agreement is the same number of common
shares that MEII would have issued to the Shareholder pursuant to the Stock
Dividend and the Original Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the
respective covenants herein contained, the sum of Ten Dollars ($10.00) now paid
by each party to the other and for other good and valuable consideration (the
receipt and sufficiency of which is hereby acknowledged), the parties hereto
agree as follows:
1. MEII hereby accepts the forgiveness by the Shareholder of the
Dividend Debt in its entirety.
2. Subject to the terms and conditions hereof, the Shareholder hereby
sells, assigns and transfers to MEII and MEII hereby purchases from the
Shareholder, for cancellation, all right, title and interest in the Preferred
Shares.
3. The purchase price for the Preferred Shares shall be paid by MEII
issuing 9,348,000 common shares in the capital of MEII (the "Common Shares"). In
conjunction with the issuance of the Shares, MEII shall also issue to the
Shareholder an aggregate of 3,083,949 warrants entitling the Shareholder to
purchase additional common shares as follows:
(a) 1,931,250 common shares on the basis of one (1) common share
for each two (2) Option Shares (as such capitalized term is
defined in the New Warrants) issued; and
(b) 1,152,699 common shares on the basis of three (3) common
shares for each one (1) Option Shares issued.
and upon the terms contained in the certificates representing such warrants (the
"New Warrants") and attached hereto as Schedules A & B.
3. The Shareholder represents and warrants that (which representations
and warranties shall survive the closing of the transaction contemplated herein
and shall continue in full force and effect):
(a) it owns the Preferred Shares with good and marketable title
thereto, free of any claim, lien, security interest, or
encumbrance of any nature or kind and free of any rights or
privileges capable of becoming claims, liens, security
interests or encumbrances; it is entitled to sell, transfer
and assign the Preferred Shares to MEII, free of any such
claims, liens, encumbrances, rights and privileges; and no
person, firm or corporation has any agreement or option or any
right capable of becoming an agreement for the purchase of any
of the Preferred Shares.
(b) it is not a "non-resident" of Canada within the meaning of the
Income Tax Act (Canada).
(c) the Shareholder is a corporation duly organized, validly
existing, and in good standing under the laws of the Province
of Ontario.
(d) this Agreement constitutes a valid and binding obligation of
the Shareholder enforceable against the Shareholder, in
accordance with its terms subject, however, to limitations on
enforcement imposed by bankruptcy, insolvency, reorganization
or other laws affecting the enforcement of the rights of
creditors and others and to the extent that equitable remedies
such as specific performance and injunctions are only
available in the discretion of the court from which they are
sought.
(e) the Shareholder has the requisite power, authority and
capacity to enter into, and to carry out its obligations
under, this Agreement. The execution and delivery of this
Agreement and the completion of the transactions contemplated
by this Agreement have been duly authorized by all necessary
corporate action on the part of the Shareholder, and its
directors and/or shareholders.
(f) The Shareholder is a resident of the Province of Ontario and
has no other residency.
(g) The Shareholder has not received any document purporting to
describe the business and affairs of MEII that has been
prepared primarily for delivery to and review by the
Shareholder so as to assist the Shareholder to make an
investment decision in respect of the Common Shares being
issued.
(h) The Shareholder qualifies as an "accredited investor", as such
term is defined in Ontario Securities Commission Rule 00-000
Xxxxxx Distributions (the "Rule"), and as such the Buyer is
one of the following:
(i) an individual whose net income before taxes exceeded
$200,000.00 in each of the two most recent years or
whose net income before taxes combined with that of a
spouse exceeded $300,000.00 in each of those years
and who, in either case, has a reasonable expectation
of exceeding the same threshold net income level in
the current year; or
(ii) a person or company in respect of which all of the
owners of interests, direct or indirect, legal or
beneficially, are persons or companies that qualify
under any one or more of the above categories; or
(iii) a person, company or other entity that qualifies
under any one of the "accredited investor" categories
listed in the Rule, and the Buyer agrees to provide
specifics thereof.
4. The Shareholder acknowledges that:
(a) the Common Shares are subject to transfer and resale
restrictions pursuant to the Securities Act (Ontario) and the
regulation, rules, orders, instruments and published policy
statements applicable thereunder, including Multilateral
Instrument 45-102 Resale of Securities;
(b) the Shareholder's purchase of the Common Shares has not been
made through or as a result of and the distribution of the
Common Shares is not being accompanied by an advertisement or
general solicitation in printed or public media, or general or
regular print circulation, radio or television or
telecommunications, including electronic display of any other
form of advertisement; and
(c) the Shareholder is generally responsible for obtaining such
legal advice as the Shareholder considers appropriate in
connection with the execution, delivery and performance of
this Agreement and any subsequent transfer or resale of the
Common Shares.
(d) the Shareholder understands that until (a) the Common Shares
may be sold by the Investor under Rule 144(k) or (b) such time
as the resale of the Common Shares have been registered under
the Securities Act of 1933, the certificates representing the
Common Shares will bear a restrictive legend in substantially
the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE
SECURITIES MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER APPLICABLE SECURITIES LAWS, OR UNLESS
OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN OPINION FROM
COUNSEL THAT SUCH OFFER, SALE OR TRANSFER FALLS WITHIN AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENT OF THOSE
LAWS.
THE BUYER FURTHER UNDERSTANDS THAT THE CERTIFICATES
REPRESENTING THE COMMON SHARES WILL BEAR A LEGEND, OR AN
OWNERSHIP STATEMENT ISSUED UNDER A DIRECT REGISTRATION SYSTEM
OR OTHER ELECTRONIC BOOK-ENTRY SYSTEM ACCEPTABLE TO THE
ONTARIO SECURITIES COMMISSION WILL BEAR A LEGEND RESTRICTION
NOTATION, STATING AS FOLLOWS:
UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF
THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE THE DATE THAT
IS FOUR MONTHS AND ONE DAY AFTER THE EFFECTIVE DATE OF THIS
AGREEMENT.
5. MEII represents and warrants that (which representations and
warranties shall survive the closing of the transaction contemplated herein and
shall continue in full force and effect):
(a) MEII is a corporation duly organized, validly existing, and in
good standing under the laws of the Province of Ontario
(b) this Agreement constitutes a valid and binding obligation of
MEII enforceable against MEII, in accordance with its terms
subject, however, to limitations on enforcement imposed by
bankruptcy, insolvency, reorganization or other laws affecting
the enforcement of the rights of creditors and others and to
the extent that equitable remedies such as specific
performance and injunctions are only available in the
discretion of the court from which they are sought.
(c) MEII has the requisite power, authority and capacity to enter
into, and to carry out its obligations under, this Agreement.
The execution and delivery of this Agreement and the
completion of the transactions contemplated by this Agreement
have been duly authorized by all necessary corporate action on
the part of MEII, and its directors and/or shareholders.
(d) there are reasonable grounds for believing that MEII is, and
after issuing the Common Shares will be, able to pay its
liabilities as they become due, and after issuing the Common
Shares, the realizable value of MEII's assets will be greater
than the aggregate of its liabilities and the amount that
would be required to pay holders of securities of MEII who
have a right to be paid, upon redemption or in a liquidation,
rateably with or prior to the holders of the Preferred Shares.
(e) none of the execution and delivery of this Agreement, the
fulfilment of the terms of this Agreement or the issue by MEII
of the Common Shares in accordance herewith result, or will
result in, a breach (whether after notice or lapse of time or
both) of any of the terms, conditions or provisions of: (i)
the constating documents of MEII; or (ii) resolutions of the
directors or the shareholders of MEII; or (iii) any agreement
or instrument to which MEII is a party or its assets are
bound; or (iv), contravene any laws, rules or regulations
applicable to MEII (including without limitation any United
States federal or state securities laws or Ontario securities
laws).
(f) upon issuance, the Common Shares will be outstanding as fully
paid, non-assessable shares in the capital of MEII.
6. The Shareholder hereby covenants that, coincidentally with the
execution of this Agreement, it will cause all necessary steps and proceedings
to be taken so that the Preferred Shares may be properly transferred to MEII and
in that regard to deliver to MEII certificates representing all of the Preferred
Shares, such certificates being duly endorsed for cancellation to MEII in
exchange for the issuance of the Common Shares.
7. This agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators, successors
and assigns.
8. The parties hereto covenant and agree to sign such other papers,
cause such meetings to be held, resolutions passed and bylaws enacted, exercise,
their vote and influence, do and perform and cause to be done and performed such
further and other acts and things as may be necessary or desirable in order to
give full effect to this Agreement and every part hereof.
9. This Agreement shall be governed by the laws of Canada to the extent
they apply and by the laws of the Province of Ontario.
10. This Agreement may be executed in several counterparts, each of
which so executed shall be deemed to be an original and such counterparts
together shall constitute one and the same agreement.
IN WITNESS WHEREOF the parties hereto have duly executed as of
this Agreement this 31st day of May, 2004.
SIGNED, SEALED AND ) 1245841 ONTARIO INC.
DELIVERED )
in the presence of )
) Per: _____________________________
) MED-EMERG INTERNATIONAL INC.
)
)
) Per: _____________________________
SCHEDULE "A"
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE ON THE EXERCISE OF THIS WARRANT
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS.
UNLESS PERMITTED BY APPLICABLE SECURITIES LEGISLATION, THE HOLDER SHALL NOT
TRADE EITHER THIS WARRANT OR THE SECURITIES ISSUABLE ON THE EXERCISE OF THIS
WARRANT UNTIL OCTOBER 2, 2004.
COMMON SHARE PURCHASE WARRANT
To Subscribe for and Purchase
Common Shares
MED-EMERG INTERNATIONAL INC.
Series A, No. 1 Warrant to Purchase 1,931,250 Common Shares
REFERENCE is made to 1,437,500 common share purchase warrants currently
outstanding for the purchase common shares of Med-Emerg International Inc. (the
"CORPORATION") exercisable at $0.50 (U.S.) per common share.
AND REFERENCE is made to 2,325,000 options currently outstanding for the
purchase of common shares of the Corporation, exercisable at $0.50 (U.S.) per
common share.
(The aggregate of the 1,437,500 common share purchase warrants and the 2,325,000
options shall collectively hereinafter be referred to as the "$0.50 OPTION
SHARES")
AND REFERENCE is made to 100,000 options currently outstanding for the purchase
of common shares of the Corporation, exercisable at $1.00 (U.S.) per common
share (hereinafter referred to as the "$1.00 OPTION SHARES").
THIS IS TO CERTIFY that, for the sum of $1.00 now paid by 1245841 Ontario Inc.
(the "HOLDER") and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Holder is entitled, subject to
the terms and conditions hereinafter set forth, to subscribe for and purchase
from the Corporation:
a) one (1) common share of the Corporation at $0.50 U.S. per
common share for each two (2) $0.50 Option Shares of the
Corporation issued;
b) one (1) common share of the Corporation at $1.00 U.S. per
common share for each two (2) $1.00 Option Shares of the
Corporation issued;
by surrendering to the Corporation at its principal office in the City of
Mississauga, Province of Ontario, this Warrant, together with a subscription
form, duly completed and executed, and a certified cheque or bank draft in
lawful money of the United States payable to or to the order of the Corporation
for an amount equal to the Exercise Price (as hereinafter defined), on and
subject to the terms and conditions set forth below.
1. Definitions In this Warrant, including the preamble, unless there is
something in the subject matter or context inconsistent herewith, the
following terms shall have the following meanings, respectively:
"BUSINESS DAY" means any day except Saturday, Sunday or any day on
which banks are generally not open for business in the City of Toronto;
"COMMON SHARES" means the common shares of the Corporation as the same
are constituted on the date hereof, together with any other class or
classes of shares in the capital of the Corporation, whether now
existing or hereafter created, entitling the Holder to share in the
final distribution of the property and assets of the Corporation upon
liquidation, dissolution or winding-up after any fixed payments to the
holders of any other class or classes of shares, and includes any
shares or securities into which such shares may be converted or changed
or which result from a consolidation, subdivision, reclassification or
re-designation of Common Shares or other such shares or securities
which are received as a stock dividend or distribution payable in
Common Shares or other such shares or securities of the Corporation or
Common Shares or other such shares or securities received on the
exercise of any option, warrant or other similar right and any Common
Shares or other such shares or securities which may be received by the
parties hereto or bound hereby as a result of an amalgamation, merger,
arrangement or other reorganization of or including the Corporation,
and where the context permits, includes any Common Shares issuable
pursuant to any instrument of the Corporation that is convertible into
Common Shares or evidences the right to acquire Common Shares;
"CAPITAL REORGANIZATION" has the meaning ascribed thereto in
Section 9.1;
"CORPORATION" means Med-Emerg International Inc., a corporation
incorporated under the laws of the Province of Ontario;
"EXERCISE PRICE" means the sum of $0.50 US per common share for each of
the $0.50 Option Shares and $1.00 US for each for the $1.00 Option
Shares, subject to adjustment as provided herein;
"EXPIRY DATE" means the date that is the latest date that any of the
$0.50 Option Shares or the $1.00 Option Shares have expired without
being exercised by the holder thereof;
"FULLY DILUTED" means the number of Common Shares outstanding at any
time, including any stock dividends which have been declared but not
issued and assuming all securities which are convertible directly or
indirectly into such Common Shares are converted into Common Shares and
all options, warrants or rights to acquire directly or indirectly such
Common Shares shall be treated as if exercised;
"HOLDER" means 1245841 Ontario Inc.;
"OPTION SHARES" means the $0.50 Option Shares or the $1.00 Options
Shares, as the case may be;
"SECURITIES PURCHASE AGREEMENT" means the securities purchase agreement
made as of even date hereof between the Corporation and the Buyers (as
such capitalized term is defined in the Securities Purchase Agreement)
and for the purpose of referring herein to the purchase of common
shares of the Corporation pursuant to the "Securities Purchase
Agreement" the term "Securities Purchase Agreement" shall include any
other agreement pursuant to which any of the aforementioned parties
have, directly or indirectly, acquired securities of the Corporation on
the date hereof;
"SHARE REORGANIZATION" has the meaning ascribed thereto in Section 9.2;
"SUBSCRIPTION LIMIT" means the aggregate of One Million Nine Hundred
Thirty One Thousand Two Hundred and Fifty (1,931,250) common shares of
the Corporation on the basis of one (1) common share for each two (2)
common shares of the Corporation issued pursuant to the exercise of the
Option Shares. If within three hundred and sixty five days (365) days
from the date upon which notice of such exercise was, or was deemed to
be, received by the Holder, the Holder has failed to exercise the
Warrant with respect to that number of Common Shares he is entitled to
purchase on the issuance of Option Shares in accordance with the terms
of this Warrant, then the number of Underlying Shares issuable upon
exercise of this Warrant as a result of the issuance of said Option
Shares shall be reduced by such amount;
"UNDERLYING SHARES" means the Common Shares of the Corporation issuable
upon the exercise of the Warrant; and
"WARRANT" means this warrant and any deed or instrument supplemental or
ancillary hereto and any schedules hereto or thereto and not to any
particular article, section, subsection, clause, subclause or other
portion hereof.
2. Conditions This Warrant entitles the Holder, upon exercise of this
Warrant, to subscribe for and purchase Common Shares for the Exercise
Price, subject to adjustment as hereinafter provided. Notwithstanding
anything to the contrary contained herein, the aggregate number of
Common Shares subscribed for and purchased by the Holder pursuant to
this Warrant shall not exceed the Subscription Limit.
3. Expiration of Warrant Rights under this Warrant in respect of which the
right of subscription and purchase herein provided for have not been
exercised shall wholly cease and such Warrant shall be wholly void and
of no valid or binding effect as of 5 p.m. (Toronto time) on the Expiry
Date and of no further force and effect and the Holder shall tender to
the Corporation this Warrant (if in its possession) for cancellation.
4. Notice by Corporation to Holder Upon the issuance by the Corporation of
share certificates representing the exercise of any of the Option
Shares, the Corporation shall forthwith, by notice in writing advise
the Holder of:
(a) the number of Common Shares issued by the Corporation upon the
exercise of the $0.50 Option Shares or the $1.00 Option
Shares; and
(b) the number of Common Shares that the Holder is entitled to
purchase and the purchase price for such Common Shares based
on (a) above.
The Holder shall have three hundred and sixty five days (365) days from
the date upon which such notice was, or was deemed to be, received by
the Holder to exercise the Warrant with respect to that number of
Common Shares and otherwise in accordance with the terms of this
Warrant.
5. Exercise of Warrant The rights represented by this Warrant may be
exercised by the Holder by the surrender of this Warrant, with the
attached Subscription Form duly executed, at the principal office of
the Corporation at 0000 Xxxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxxx,
Xxxxxxx X0X 0X0 (or such other office or agency of the Corporation as
it may designate by notice in writing to the Holder hereof) at the
address of such holder appearing in the records of the Corporation and
upon payment to it for the account of the Corporation, by certified
cheque or bank draft, of the Exercise Price for the number of Common
Shares in respect of which this Warrant is being exercised. The
Corporation agrees that the shares subscribed for and purchased by
exercise of this Warrant shall be and be deemed to be issued to the
Holder as the registered owner of such shares as of the close of
business on the date on which this Warrant shall have been surrendered
and payment made for such shares as aforesaid. Certificates for the
shares so purchased shall be delivered to the Holder within three (3)
Business Days, if the Holder address as registered in the books of the
Corporation is in North America, or four (4) Business Days if the
Holder address as registered in the books of the Corporation is outside
of North America, after the rights represented by this Warrant shall
have been so exercised.
6. Not a Shareholder Nothing in this certificate or in the holding of a
Warrant evidenced hereby shall be construed as conferring upon the
Holder any right or interest whatsoever as a shareholder of the
Corporation.
7. No Fractional Shares Notwithstanding any provisions to the contrary
herein, the Corporation shall not be required to issue any fractional
shares in the capital of the Corporation (unless such fractional shares
arise from a consolidation of shares) in connection with any exercise
of the right to convert this Warrant into Common Shares, and in the
event that the calculation of the number of Common Shares issuable upon
such exercise results in a number which includes a fraction of whole
shares, then the Corporation shall be required to issue the largest
number of whole shares into which the Warrant is exercisable, and the
remainder of such amount shall be paid in cash at the time of the
issuance of the Common Shares in connection with the exercise of this
Warrant in an amount determined by the Corporation's board of
directors.
8. Representations and Warranties of the Corporation The Corporation
incorporates herein by reference the representations and warranties of
the Corporation contained in the Securities Purchase Agreement and
agrees and acknowledges that the Holder is relying thereupon.
9. Covenants of the Corporation The Corporation hereby agrees as follows:
9.1 All Common Shares which may be issued upon the exercise of the
rights represented by this Warrant will, upon issuance and
assuming that the Exercise Price therefore has been received
by the Corporation for each Common Share so subscribed, be
validly issued as fully paid and non-assessable and shall be
free from any and all taxes, liens and charges with respect to
the issue thereof.
9.2 As long as this Warrant or any part evidenced hereby remains
outstanding, the Corporation shall reserve and there shall
remain unissued out of its capital a sufficient number of its
Common Shares to satisfy the right of purchase herein provided
for should the Holder determine to exercise its rights in
respect of the Common Shares for the time being called for and
represented by this Warrant.
10. Adjustment of Subscription Rights
10.1 Capital Reorganization. If at any time while this Warrant
remains outstanding there shall be any reclassification of any
class of Common Shares at any time outstanding or a change of
any class of Common Shares into other shares or into other
securities, or in case of the consolidation, amalgamation or
merger of the Corporation with or into any other corporation
(other than a consolidation, amalgamation or merger which does
not result in a reclassification of any class of the
outstanding Common Shares or a change of any class of the
Common Shares into other shares), or in case of any transfer
of the undertaking or assets of the Corporation as an entirety
or substantially as an entirety to another corporation, at any
time while this Warrant remains outstanding (collectively, a
"Capital Reorganization"), any holder who exercises its right
to purchase Common Shares pursuant to this Warrant after the
effective date of such Capital Reorganization shall be
entitled to receive, and shall accept, in lieu of the number
of Common Shares to which it was theretofore entitled upon
such exercise, the kind and amount of shares and other
securities or property which the Holder would have been
entitled to receive as a result of such reclassification,
change, consolidation, amalgamation, merger or transfer if, on
the effective date thereof, the Holder had been the registered
holder of the number of Common Shares to which the Holder was
theretofore entitled upon exercise. If necessary, appropriate
adjustments shall be made in the application of the provisions
set forth in this Section 10 with respect to the rights and
interests thereafter of the Holder to the end that the
provisions set forth in this Section 9 shall thereafter
correspondingly be made applicable as nearly as may reasonably
be possible in relation to any shares or other securities or
property thereafter deliverable upon the exercise of this
Warrant. The subdivision or consolidation of any class of the
Common Shares at any time outstanding into a greater or lesser
number of Common Shares shall be deemed not to be a
reclassification of the capital of the Corporation for the
purposes of this Section 10.1.
10.2 Share Reorganization. If at any time while this Warrant
remains outstanding, the Corporation shall (i) subdivide any
class of outstanding Common Shares into a greater number of
Common Shares, (ii) consolidate any class of outstanding
Common Shares into a lesser number of Common Shares, (iii)
issue Common Shares or securities exchangeable for or
convertible into Common Shares to the holders of all or
substantially all of any class of outstanding Common Shares by
way of stock dividend (other than as a dividend paid in the
ordinary course on any class of Common Shares) or (iv) make a
distribution on any class of outstanding Common Shares payable
in Common Shares or securities exchangeable for or convertible
into Common Shares (other than as a dividend paid in the
ordinary course) (any of such events in these clauses (i),
(ii), (iii) and (iv) being called a "SHARE REORGANIZATION"),
the Exercise Price shall be adjusted effective immediately on
the effective date of such Share Reorganization or the record
date at which the holders of Common Shares are determined for
the purposes of the Share Reorganization by multiplying in
each case, the Exercise Price in effect immediately prior to
such record date by a fraction, the numerator of which shall
be the number of outstanding Common Shares on such record date
calculated on a Fully Diluted basis, but before giving effect
to such Share Reorganization, and the denominator of which
shall be the number of outstanding Common Shares after giving
effect to such Share Reorganization calculated on a Fully
Diluted basis (including, in the case where securities
exchangeable for or convertible into Common Shares are
distributed, the number of Common Shares that would have been
outstanding had such securities been exchanged for or
converted into Common Shares on such record date). Such
adjustment shall be made successively whenever any such
effective date or record date shall occur and any such issue
of Common Shares by way of stock dividend or other
distribution shall be deemed to have been made on the record
date for the stock dividend or other distribution for the
purpose of calculating the number of outstanding Common
Shares.
If at any time while this Warrant remains outstanding, a Share
Reorganization shall occur which results in an adjustment in
the Exercise Price pursuant to the provisions of this Section
10.2, the number of Common Shares which may be acquired
pursuant to this Warrant shall be adjusted contemporaneously
with the adjustment of the Exercise Price by multiplying the
number of Common Shares theretofore purchasable on the
exercise thereof by a fraction the numerator of which shall be
the Exercise Price in effect immediately prior to such
adjustment and the denominator of which shall be the Exercise
Price resulting from such adjustment.
10.3 Rules Regarding Calculation of Adjustment of Exercise Price
and Number of Common Shares Purchasable Upon Exercise
10.3.1 In case the Corporation shall take any action
affecting the Common Shares, other than any action
described in this Section 10, which would materially
affect the rights of the Holder, the number of Common
Shares purchasable upon exercise shall be adjusted,
in consultation with the Holder.
10.3.2 In any case in which this Section 10 shall require
that an adjustment shall become effective immediately
after a record date for an event referred to herein,
the Corporation may defer, until the occurrence of
such event, issuing to the Holder (in the event this
Warrant is exercised after such record date and
before the occurrence of such event) the additional
Common Shares issuable upon such exercise by reason
of the adjustment required by such event; provided,
however, that the Corporation shall deliver to the
Holder an appropriate instrument evidencing the
Holder's right to receive such additional Common
Shares or other applicable securities upon the
occurrence of the event requiring such adjustment and
the right to receive any distributions made on such
additional Common Shares declared in favour of
holders of record of Common Shares on and after the
exercise date or such later date as the Holder would,
but for the provisions of this Section 10.3.2, have
become the Holder of record of such additional Common
Shares pursuant to Section 10.
10.3.3 The adjustments provided for in this Section 10 are
cumulative and shall be made successively whenever an
event referred to herein shall occur.
10.3.4 In the event of any question arising with respect to
the adjustments provided in this Section 10, such
question shall be conclusively determined by a firm
of chartered accountants appointed by the Corporation
and acceptable to the Holder, acting reasonably (who
may be the Corporation's auditors), such accountants
shall have access to all necessary records of the
Corporation and such determination shall be binding
upon the Corporation and the Holder.
10.3.5 As a condition precedent to the taking of any action
which would result in an adjustment to the number of
Common Shares purchasable upon exercise of this
Warrant, the Corporation shall take any corporate
action which may be necessary in order that the
securities to which the Holder is entitled on the
full exercise of its exercise right in accordance
with the provisions hereof shall be available for
such purpose and that such shares may be validly and
legally issued as fully paid and non-assessable
shares.
10.3.6 If the issuance of any Common Shares upon the
exercise of this Warrant requires any filing or
registration with or approval of any governmental
authority or compliance with any other requirement
under any law before such shares may be validly
issued upon such exercise, the Corporation agrees to
take such actions as may be necessary to secure such
filing, registration, approval or compliance, as the
case may be; provided that, in the event that such
filing, registration, approval or compliance is
required only by reason of the particular
circumstances of or actions taken by any such person,
the Corporation will not be required to take such
action.
10.3.7 The Corporation shall from time to time immediately
after the occurrence of any event which requires an
adjustment in the number of Common Shares purchasable
upon exercise of this Warrant as above provided,
deliver a certificate of an officer of the
Corporation to the Holder specifying the nature of
the event requiring the adjustment and the amount of
the adjustment thereby necessitated and setting forth
in reasonable detail the method of calculation and
the facts upon which such calculation is based.
11. Exchange of Warrant This Warrant is exchangeable, upon the surrender
hereof by the Holder at the office or agency of the Corporation
referred to in Section 5 hereof, for new warrants of like tenor
representing in the aggregate the right to subscribe for and purchase
the number of Common Shares which may be subscribed for and purchased
hereunder, each such new warrant to represent the right to subscribe
for and purchase such number of Common Shares as shall be designated by
the Holder at the time of such surrender. In the event that this
Warrant is exercised for less than the maximum number of Common Shares
which may be purchased hereunder, at the time of and as a condition to
the obligation of the Corporation to deliver the certificates
representing the Common Shares, the Holder shall surrender this Warrant
and the Corporation shall issue a new warrant to represent the right to
subscribe for the remaining number of Common Shares calculated in
accordance with the provisions thereof.
12. Mutilated or Missing Warrant Upon receipt of evidence satisfactory to
the Corporation of the loss, theft, destruction or mutilation of this
Warrant and, in the case of any such loss, theft or destruction, upon
delivery of a bond or indemnity satisfactory to the Corporation, acting
reasonably, or, in the case of any such mutilation, upon surrender or
cancellation of this Warrant, the Corporation will issue to the Holder
a new warrant of like tenor, in lieu of this Warrant, representing the
right to subscribe for and purchase the number of Common Shares which
may be subscribed for and purchased hereunder.
13. Assignment/Transfer of Warrant
13.1 This Warrant may not be sold, transferred, assigned,
hypothecated or divided into two or more Warrant of smaller
denominations, nor may any Underlying Shares be transferred,
sold, assigned or hypothecated except in accordance with this
Section. The Holder, by acceptance hereof, agrees to give
written notice to the Corporation before transferring this
Warrant or transferring any Underlying Shares; such notice
will describe briefly the any proposed transfer and will give
the Corporation the name, address, and tax identification
number of the proposed transferee, and will further provide
the Corporation with an opinion of the Holder's counsel that
such transfer can be accomplished in accordance with federal
and applicable state securities laws (unless such transaction
is permitted by the plan of distribution in an effective
Registration Statement). Promptly upon receiving such written
notice, the Corporation shall present copies thereof to the
Corporation's counsel.
13.1.1 If in the opinion of such counsel the proposed
transfer may be effected without registration or
qualification (under any federal or state securities
laws), the Corporation, as promptly as practicable,
shall notify the Holder of such opinion, whereupon
the Holder shall be entitled to transfer this Warrant
or to dispose of Underlying Shares received upon the
previous conversion of this Warrant, all in
accordance with the terms of the notice delivered by
the Holder to the Corporation; provided that an
appropriate legend may be endorsed on this Warrant or
the certificates for such Underlying Shares
respecting restrictions upon transfer thereof
necessary or advisable in the opinion of counsel and
satisfactory to the Corporation to prevent further
transfers which would be in violation of Section 5 of
the Act and applicable state securities laws; and
provided further that the prospective transferee or
purchaser shall execute such documents and make such
representations, warranties, and agreements as may be
required solely to comply with the exemptions relied
upon by the Corporation for the transfer or
disposition of the Warrant or Underlying Shares.
13.1.2 If in the opinion of the counsel referred to in this
Section 2, the proposed transfer or disposition of
this Warrant or such Underlying Shares described in
the written notice given pursuant to this Section 2
may not be effected without registration or
qualification of this Warrant or such Underlying
Shares the Corporation shall promptly give written
notice thereof to the Holder, and the Holder will
limit its activities in respect to such as, in the
opinion of such counsel, are permitted by law.
13.2 Prior to transfer of this Warrant in compliance with this
Section 2, the Corporation and any agent of the Corporation
may treat the person in whose name this Warrant is duly
registered on the Warrant Register as the owner hereof for the
purpose of receiving payment as herein provided and for all
other purposes, neither the Corporation nor any such agent
shall be affected by notice to the contrary.
14. Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the Province of Ontario. All disputes will
be settled in accordance with section 8.04 of the Securities Purchase
Agreement.
15. Severability If any one or more of the provisions or parts thereof
contained in this Warrant should be or become invalid, illegal or
unenforceable in any respect in any jurisdiction, the remaining
provisions or parts thereof contained herein shall be and shall be
conclusively deemed to be, as to such jurisdiction, severable therefrom
and:
15.1 the validity, legality or enforceability of such remaining
provisions or parts thereof shall not in any way be affected
or impaired by the severance of the provisions or parts
thereof severed; and
15.2 the invalidity, illegality or unenforceability of any
provision or part thereof contained in this Warrant in any
jurisdiction shall not affect or impair such provision or part
thereof or any other provisions of this Warrant in any other
jurisdiction.
16. Headings The headings of the sections, subsections, paragraphs,
subparagraphs and clauses of this Warrant have been inserted for
convenience of reference only and do not define, limit, alter or
enlarge the meaning of any provision of this Warrant.
17. Numbering of Articles, etc Unless otherwise stated, a reference herein
to a numbered or lettered section, subsection, paragraph, subparagraph
or schedule refers to the section, subsection, paragraph, subparagraph
or schedule bearing that number or letter in this Warrant.
18. Gender Whenever used in this Warrant, words importing the singular
number only shall include the plural, and vice versa, and words
importing the masculine gender shall include the feminine gender.
19. Day not a Business Day In the event that any day on or before which any
action is required to be taken hereunder is not a Business Day, then
such action shall be required to be taken on or before the requisite
time on the next succeeding day that is a Business Day. If the payment
of any amount is deferred for any period, then such period shall be
included for purposes of the computation of any interest payable
hereunder.
20. Binding Effect This Warrant and all of its provisions shall enure to
the benefit of the Holder and its successors and permitted assigns and
shall be binding upon the Corporation and its successors and permitted
assigns. This Warrant is not assignable by the Corporation without the
prior written consent of the Holder.
21. Registration Rights The Holder shall have the same rights as set forth
in Section 2.25 of the Securities Purchase Agreement with respect to
the Common Shares issuable upon the exercise of this Warrant.
22. Notices All notices, requests, demands or other communications by the
terms hereof required or permitted to be given one party to the other
shall be given in writing by personal delivery or by registered mail,
postage prepaid, addressed to the other party or delivered to such
other party as provided in Section 5 hereof, or at such other address
as may be given by either of them to the other in writing from time to
time and such notices, requests, demands or other communications shall
be deemed to have been received when delivered or faxed, or, if mailed,
One Hundred and Twenty (120) hours after 12:01 a.m. on the day
following the day of the mailing thereof if to the Company or if the
Holder is in North America, and Two Hundred and Forty (240) hours after
12:00 a.m. on the day following the day of the mailing thereof if the
Holder is outside of North America; provided that if any such notice,
request, demand or other communication shall have been mailed and if
regular mail service shall be interrupted by strikes or other
irregularities, such notices, requests, demands or other communications
shall be deemed to have been received forty-eight (48) hours after
12:01 a.m. on the day following the resumption of normal mail service.
IN WITNESS WHEREOF the Corporation has caused this Warrant to be signed by its
duly authorized officers under its corporate seal, and this Warrant to be dated
the 31st day of May, 2004.
MED-EMERG INTERNATIONAL INC.
By:
-------------------------------------
Name: Xxxx Xxxxx, Chief Financial Officer
SCHEDULE "A"
SUBSCRIPTION FORM
(To be signed only upon exercise of this Warrant)
The undersigned hereby exercises the within Warrant for the
purchase of One (1) Common Shares covered by such New Warrants in accordance
with the terms and conditions thereof, and herewith makes payment of the
exercise price in full.
The Corporation is instructed to issue certificates for such
shares and any New Warrants to which the undersigned may be entitled on partial
exercise hereof in the name of the undersigned and to deliver the same to the
address indicated.
--------------------------------------------------------------------------------
Name
--------------------------------------------------------------------------------
Street and Number City and Province
Date:
-------------------------- ----------------------------------
Purchaser's Signature [Signature must
conform exactly
with the name of
the registered
owner on the form
of this Warrant.]
SCHEDULE "B"
TRANSFER FORM
FOR VALUE RECEIVED, the undersigned hereby sells, transfers and assigns to
(print name of address of transferee)
[Print name and address of transferee]
(Warrants)
[Number of Warrants to be transferred]
represented by the attached Warrant Certificate and does hereby appoint [INSERT]
with full power of substitution to transfer the Warrants on the register
maintained by the Corporation.
The undersigned acknowledges that any transfer of Warrants is subject to the
resale restrictions of the securities legislation in those jurisdictions where
the transferor and transferee are normally resident. The undersigned confirms
that he, she or it has ascertained that exemptions from the relevant prospectus
and registration requirements are available and undertakes to file all necessary
forms with the appropriate bodies, in connection with such transfer.
The signature below must be guaranteed by a Canadian chartered bank or by a
Canadian trust company.
DATED this day of May, 2004.
[Signature of Registered Holder]
[Signature Guarantee] [Name of Registered Holder]
NOTICE: The signature of the registered holder must correspond with
the name appearing on the face of this Warrant Certificate as
in every particular without alteration or enlargement or any
change whatsoever.
SCHEDULE "B"
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE ON THE EXERCISE OF THIS WARRANT
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS.
UNLESS PERMITTED BY APPLICABLE SECURITIES LEGISLATION, THE HOLDER SHALL NOT
TRADE EITHER THIS WARRANT OR THE SECURITIES ISSUABLE ON THE EXERCISE OF THIS
WARRANT UNTIL OCTOBER 2, 2004.
COMMON SHARE PURCHASE WARRANT
To Subscribe for and Purchase
Common Shares
MED-EMERG INTERNATIONAL INC.
Series A, No. 1 Warrant to Purchase 1,152,699 Common Shares
REFERENCE is made to 1,437,500 common share purchase warrants currently
outstanding for the purchase common shares of Med-Emerg International Inc. (the
"CORPORATION") exercisable at $0.50 (U.S.) per common share.
AND REFERENCE is made to 2,325,000 options currently outstanding for the
purchase of common shares of the Corporation, exercisable at $0.50 (U.S.) per
common share.
(The aggregate of the 1,437,500 common share purchase warrants and the 2,325,000
options shall collectively hereinafter be referred to as the "$0.50 OPTION
SHARES")
AND REFERENCE is made to 100,000 options currently outstanding for the purchase
of common shares of the Corporation, exercisable at $1.00 (U.S.) per common
share (hereinafter referred to as the "$1.00 OPTION SHARES").
THIS IS TO CERTIFY that, for the sum of $1.00 now paid by 1245841 Ontario Inc.
(the "HOLDER") and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Holder is entitled, subject to
the terms and conditions hereinafter set forth, to subscribe for and purchase
from the Corporation:
c) three (3) common shares of the Corporation at $0.50 U.S. per common
share for each $0.50 Option Shares of the Corporation issued;
d) three (3) common shares of the Corporation at $1.00 U.S. per common
share for each $1.00 Option Shares of the Corporation issued;
by surrendering to the Corporation at its principal office in the City of
Mississauga, Province of Ontario, this Warrant, together with a subscription
form, duly completed and executed, and a certified cheque or bank draft in
lawful money of the United States payable to or to the order of the Corporation
for an amount equal to the Exercise Price (as hereinafter defined), on and
subject to the terms and conditions set forth below.
1. Definitions In this Warrant, including the preamble, unless there is
something in the subject matter or context inconsistent herewith, the
following terms shall have the following meanings, respectively:
"BUSINESS DAY" means any day except Saturday, Sunday or any day on
which banks are generally not open for business in the City of Toronto;
"COMMON SHARES" means the common shares of the Corporation as the same
are constituted on the date hereof, together with any other class or
classes of shares in the capital of the Corporation, whether now
existing or hereafter created, entitling the Holder to share in the
final distribution of the property and assets of the Corporation upon
liquidation, dissolution or winding-up after any fixed payments to the
holders of any other class or classes of shares, and includes any
shares or securities into which such shares may be converted or changed
or which result from a consolidation, subdivision, reclassification or
re-designation of Common Shares or other such shares or securities
which are received as a stock dividend or distribution payable in
Common Shares or other such shares or securities of the Corporation or
Common Shares or other such shares or securities received on the
exercise of any option, warrant or other similar right and any Common
Shares or other such shares or securities which may be received by the
parties hereto or bound hereby as a result of an amalgamation, merger,
arrangement or other reorganization of or including the Corporation,
and where the context permits, includes any Common Shares issuable
pursuant to any instrument of the Corporation that is convertible into
Common Shares or evidences the right to acquire Common Shares;
"CAPITAL REORGANIZATION" has the meaning ascribed thereto in
Section 9.1;
"CORPORATION" means Med-Emerg International Inc., a corporation
incorporated under the laws of the Province of Ontario;
"EXERCISE PRICE" means the sum of $0.50 US per common share for each of
the $0.50 Option Shares and $1.00 US for each for the $1.00 Option
Shares, subject to adjustment as provided herein;
"EXPIRY DATE" means the date that is the latest date that any of the
$0.50 Option Shares or the $1.00 Option Shares have expired without
being exercised by the holder thereof;
"FULLY DILUTED" means the number of Common Shares outstanding at any
time, including any stock dividends which have been declared but not
issued and assuming all securities which are convertible directly or
indirectly into such Common Shares are converted into Common Shares and
all options, warrants or rights to acquire directly or indirectly such
Common Shares shall be treated as if exercised;
"HOLDER" means 1245841 Ontario Inc.;
"OPTION SHARES" means the $0.50 Option Shares or the $1.00 Options
Shares, as the case may be;
"SECURITIES PURCHASE AGREEMENT" means the securities purchase agreement
made as of even date hereof between the Corporation and the Buyers (as
such capitalized term is defined in the Securities Purchase Agreement)
and for the purpose of referring herein to the purchase of common
shares of the Corporation pursuant to the "Securities Purchase
Agreement" the term "Securities Purchase Agreement" shall include any
other agreement pursuant to which any of the aforementioned parties
have, directly or indirectly, acquired securities of the Corporation on
the date hereof;
"SHARE REORGANIZATION" has the meaning ascribed thereto in Section 9.2;
"SUBSCRIPTION LIMIT" means the aggregate of One Million One Hundred
Fifty Two Thousand Six Hundred and Ninety Nine (1,152,599) common
shares of the Corporation on the basis of three (3) common shares for
each common share of the Corporation issued p to the exercise of the
Option Shares. If within three hundred and sixty five days (365) days
from the date upon which notice of such exercise was, or was deemed to
be, received by the Holder, the Holder has failed to exercise the
Warrant with respect to that number of Common Shares he is entitled to
purchase on the issuance of Option Shares in accordance with the terms
of this Warrant, then the number of Underlying Shares issuable upon
exercise of this Warrant as a result of the issuance of said Option
Shares shall be reduced by such amount;
"UNDERLYING SHARES" means the Common Shares of the Corporation issuable
upon the exercise of the Warrant; and
"WARRANT" means this warrant and any deed or instrument supplemental or
ancillary hereto and any schedules hereto or thereto and not to any
particular article, section, subsection, clause, subclause or other
portion hereof.
2. Conditions This Warrant entitles the Holder, upon exercise of this
Warrant, to subscribe for and purchase Common Shares for the Exercise
Price, subject to adjustment as hereinafter provided. Notwithstanding
anything to the contrary contained herein, the aggregate number of
Common Shares subscribed for and purchased by the Holder pursuant to
this Warrant shall not exceed the Subscription Limit.
3. Expiration of Warrant Rights under this Warrant in respect of which the
right of subscription and purchase herein provided for have not been
exercised shall wholly cease and such Warrant shall be wholly void and
of no valid or binding effect as of 5 p.m. (Toronto time) on the Expiry
Date and of no further force and effect and the Holder shall tender to
the Corporation this Warrant (if in its possession) for cancellation.
4. Notice by Corporation to Holder Upon the issuance by the Corporation of
share certificates representing the exercise of any of the Option
Shares, the Corporation shall forthwith, by notice in writing advise
the Holder of:
(a) the number of Common Shares issued by the Corporation upon the
exercise of the $0.50 Option Shares or the $1.00 Option
Shares; and
(b) the number of Common Shares that the Holder is entitled to
purchase and the purchase price for such Common Shares based
on (a) above.
The Holder shall have three hundred and sixty five days (365) days from
the date upon which such notice was, or was deemed to be, received by
the Holder to exercise the Warrant with respect to that number of
Common Shares and otherwise in accordance with the terms of this
Warrant.
5. Exercise of Warrant The rights represented by this Warrant may be
exercised by the Holder by the surrender of this Warrant, with the
attached Subscription Form duly executed, at the principal office of
the Corporation at 0000 Xxxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxxx,
Xxxxxxx X0X 0X0 (or such other office or agency of the Corporation as
it may designate by notice in writing to the Holder hereof) at the
address of such holder appearing in the records of the Corporation and
upon payment to it for the account of the Corporation, by certified
cheque or bank draft, of the Exercise Price for the number of Common
Shares in respect of which this Warrant is being exercised. The
Corporation agrees that the shares subscribed for and purchased by
exercise of this Warrant shall be and be deemed to be issued to the
Holder as the registered owner of such shares as of the close of
business on the date on which this Warrant shall have been surrendered
and payment made for such shares as aforesaid. Certificates for the
shares so purchased shall be delivered to the Holder within three (3)
Business Days, if the Holder address as registered in the books of the
Corporation is in North America, or four (4) Business Days if the
Holder address as registered in the books of the Corporation is outside
of North America, after the rights represented by this Warrant shall
have been so exercised.
6. Not a Shareholder Nothing in this certificate or in the holding of a
Warrant evidenced hereby shall be construed as conferring upon the
Holder any right or interest whatsoever as a shareholder of the
Corporation.
7. No Fractional Shares Notwithstanding any provisions to the contrary
herein, the Corporation shall not be required to issue any fractional
shares in the capital of the Corporation (unless such fractional shares
arise from a consolidation of shares) in connection with any exercise
of the right to convert this Warrant into Common Shares, and in the
event that the calculation of the number of Common Shares issuable upon
such exercise results in a number which includes a fraction of whole
shares, then the Corporation shall be required to issue the largest
number of whole shares into which the Warrant is exercisable, and the
remainder of such amount shall be paid in cash at the time of the
issuance of the Common Shares in connection with the exercise of this
Warrant in an amount determined by the Corporation's board of
directors.
8. Representations and Warranties of the Corporation The Corporation
incorporates herein by reference the representations and warranties of
the Corporation contained in the Securities Purchase Agreement and
agrees and acknowledges that the Holder is relying thereupon.
9. Covenants of the Corporation The Corporation hereby agrees as follows:
9.1 All Common Shares which may be issued upon the exercise of the
rights represented by this Warrant will, upon issuance and
assuming that the Exercise Price therefore has been received
by the Corporation for each Common Share so subscribed, be
validly issued as fully paid and non-assessable and shall be
free from any and all taxes, liens and charges with respect to
the issue thereof.
9.2 As long as this Warrant or any part evidenced hereby remains
outstanding, the Corporation shall reserve and there shall
remain unissued out of its capital a sufficient number of its
Common Shares to satisfy the right of purchase herein provided
for should the Holder determine to exercise its rights in
respect of the Common Shares for the time being called for and
represented by this Warrant.
10. Adjustment of Subscription Rights
10.1 Capital Reorganization. If at any time while this Warrant
remains outstanding there shall be any reclassification of any
class of Common Shares at any time outstanding or a change of
any class of Common Shares into other shares or into other
securities, or in case of the consolidation, amalgamation or
merger of the Corporation with or into any other corporation
(other than a consolidation, amalgamation or merger which does
not result in a reclassification of any class of the
outstanding Common Shares or a change of any class of the
Common Shares into other shares), or in case of any transfer
of the undertaking or assets of the Corporation as an entirety
or substantially as an entirety to another corporation, at any
time while this Warrant remains outstanding (collectively, a
"Capital Reorganization"), any holder who exercises its right
to purchase Common Shares pursuant to this Warrant after the
effective date of such Capital Reorganization shall be
entitled to receive, and shall accept, in lieu of the number
of Common Shares to which it was theretofore entitled upon
such exercise, the kind and amount of shares and other
securities or property which the Holder would have been
entitled to receive as a result of such reclassification,
change, consolidation, amalgamation, merger or transfer if, on
the effective date thereof, the Holder had been the registered
holder of the number of Common Shares to which the Holder was
theretofore entitled upon exercise. If necessary, appropriate
adjustments shall be made in the application of the provisions
set forth in this Section 10 with respect to the rights and
interests thereafter of the Holder to the end that the
provisions set forth in this Section 9 shall thereafter
correspondingly be made applicable as nearly as may reasonably
be possible in relation to any shares or other securities or
property thereafter deliverable upon the exercise of this
Warrant. The subdivision or consolidation of any class of the
Common Shares at any time outstanding into a greater or lesser
number of Common Shares shall be deemed not to be a
reclassification of the capital of the Corporation for the
purposes of this Section 10.1.
10.2 Share Reorganization. If at any time while this Warrant
remains outstanding, the Corporation shall (i) subdivide any
class of outstanding Common Shares into a greater number of
Common Shares, (ii) consolidate any class of outstanding
Common Shares into a lesser number of Common Shares, (iii)
issue Common Shares or securities exchangeable for or
convertible into Common Shares to the holders of all or
substantially all of any class of outstanding Common Shares by
way of stock dividend (other than as a dividend paid in the
ordinary course on any class of Common Shares) or (iv) make a
distribution on any class of outstanding Common Shares payable
in Common Shares or securities exchangeable for or convertible
into Common Shares (other than as a dividend paid in the
ordinary course) (any of such events in these clauses (i),
(ii), (iii) and (iv) being called a "SHARE REORGANIZATION"),
the Exercise Price shall be adjusted effective immediately on
the effective date of such Share Reorganization or the record
date at which the holders of Common Shares are determined for
the purposes of the Share Reorganization by multiplying in
each case, the Exercise Price in effect immediately prior to
such record date by a fraction, the numerator of which shall
be the number of outstanding Common Shares on such record date
calculated on a Fully Diluted basis, but before giving effect
to such Share Reorganization, and the denominator of which
shall be the number of outstanding Common Shares after giving
effect to such Share Reorganization calculated on a Fully
Diluted basis (including, in the case where securities
exchangeable for or convertible into Common Shares are
distributed, the number of Common Shares that would have been
outstanding had such securities been exchanged for or
converted into Common Shares on such record date). Such
adjustment shall be made successively whenever any such
effective date or record date shall occur and any such issue
of Common Shares by way of stock dividend or other
distribution shall be deemed to have been made on the record
date for the stock dividend or other distribution for the
purpose of calculating the number of outstanding Common
Shares.
If at any time while this Warrant remains outstanding, a Share
Reorganization shall occur which results in an adjustment in
the Exercise Price pursuant to the provisions of this Section
10.2, the number of Common Shares which may be acquired
pursuant to this Warrant shall be adjusted contemporaneously
with the adjustment of the Exercise Price by multiplying the
number of Common Shares theretofore purchasable on the
exercise thereof by a fraction the numerator of which shall be
the Exercise Price in effect immediately prior to such
adjustment and the denominator of which shall be the Exercise
Price resulting from such adjustment.
10.3 Rules Regarding Calculation of Adjustment of Exercise Price
and Number of Common Shares Purchasable Upon Exercise
10.3.1 In case the Corporation shall take any action
affecting the Common Shares, other than any action
described in this Section 10, which would materially
affect the rights of the Holder, the number of Common
Shares purchasable upon exercise shall be adjusted,
in consultation with the Holder.
10.3.2 In any case in which this Section 10 shall require
that an adjustment shall become effective immediately
after a record date for an event referred to herein,
the Corporation may defer, until the occurrence of
such event, issuing to the Holder (in the event this
Warrant is exercised after such record date and
before the occurrence of such event) the additional
Common Shares issuable upon such exercise by reason
of the adjustment required by such event; provided,
however, that the Corporation shall deliver to the
Holder an appropriate instrument evidencing the
Holder's right to receive such additional Common
Shares or other applicable securities upon the
occurrence of the event requiring such adjustment and
the right to receive any distributions made on such
additional Common Shares declared in favour of
holders of record of Common Shares on and after the
exercise date or such later date as the Holder would,
but for the provisions of this Section 10.3.2, have
become the Holder of record of such additional Common
Shares pursuant to Section 10.
10.3.3 The adjustments provided for in this Section 10 are
cumulative and shall be made successively whenever an
event referred to herein shall occur.
10.3.4 In the event of any question arising with respect to
the adjustments provided in this Section 10, such
question shall be conclusively determined by a firm
of chartered accountants appointed by the Corporation
and acceptable to the Holder, acting reasonably (who
may be the Corporation's auditors), such accountants
shall have access to all necessary records of the
Corporation and such determination shall be binding
upon the Corporation and the Holder.
10.3.5 As a condition precedent to the taking of any action
which would result in an adjustment to the number of
Common Shares purchasable upon exercise of this
Warrant, the Corporation shall take any corporate
action which may be necessary in order that the
securities to which the Holder is entitled on the
full exercise of its exercise right in accordance
with the provisions hereof shall be available for
such purpose and that such shares may be validly and
legally issued as fully paid and non-assessable
shares.
10.3.6 If the issuance of any Common Shares upon the
exercise of this Warrant requires any filing or
registration with or approval of any governmental
authority or compliance with any other requirement
under any law before such shares may be validly
issued upon such exercise, the Corporation agrees to
take such actions as may be necessary to secure such
filing, registration, approval or compliance, as the
case may be; provided that, in the event that such
filing, registration, approval or compliance is
required only by reason of the particular
circumstances of or actions taken by any such person,
the Corporation will not be required to take such
action.
10.3.7 The Corporation shall from time to time immediately
after the occurrence of any event which requires an
adjustment in the number of Common Shares purchasable
upon exercise of this Warrant as above provided,
deliver a certificate of an officer of the
Corporation to the Holder specifying the nature of
the event requiring the adjustment and the amount of
the adjustment thereby necessitated and setting forth
in reasonable detail the method of calculation and
the facts upon which such calculation is based.
11. Exchange of Warrant This Warrant is exchangeable, upon the surrender
hereof by the Holder at the office or agency of the Corporation
referred to in Section 5 hereof, for new warrants of like tenor
representing in the aggregate the right to subscribe for and purchase
the number of Common Shares which may be subscribed for and purchased
hereunder, each such new warrant to represent the right to subscribe
for and purchase such number of Common Shares as shall be designated by
the Holder at the time of such surrender. In the event that this
Warrant is exercised for less than the maximum number of Common Shares
which may be purchased hereunder, at the time of and as a condition to
the obligation of the Corporation to deliver the certificates
representing the Common Shares, the Holder shall surrender this Warrant
and the Corporation shall issue a new warrant to represent the right to
subscribe for the remaining number of Common Shares calculated in
accordance with the provisions thereof.
12. Mutilated or Missing Warrant Upon receipt of evidence satisfactory to
the Corporation of the loss, theft, destruction or mutilation of this
Warrant and, in the case of any such loss, theft or destruction, upon
delivery of a bond or indemnity satisfactory to the Corporation, acting
reasonably, or, in the case of any such mutilation, upon surrender or
cancellation of this Warrant, the Corporation will issue to the Holder
a new warrant of like tenor, in lieu of this Warrant, representing the
right to subscribe for and purchase the number of Common Shares which
may be subscribed for and purchased hereunder.
13. Assignment/Transfer of Warrant
13.1 This Warrant may not be sold, transferred, assigned,
hypothecated or divided into two or more Warrant of smaller
denominations, nor may any Underlying Shares be transferred,
sold, assigned or hypothecated except in accordance with this
Section. The Holder, by acceptance hereof, agrees to give
written notice to the Corporation before transferring this
Warrant or transferring any Underlying Shares; such notice
will describe briefly the any proposed transfer and will give
the Corporation the name, address, and tax identification
number of the proposed transferee, and will further provide
the Corporation with an opinion of the Holder's counsel that
such transfer can be accomplished in accordance with federal
and applicable state securities laws (unless such transaction
is permitted by the plan of distribution in an effective
Registration Statement). Promptly upon receiving such written
notice, the Corporation shall present copies thereof to the
Corporation's counsel.
13.1.1 If in the opinion of such counsel the proposed
transfer may be effected without registration or
qualification (under any federal or state securities
laws), the Corporation, as promptly as practicable,
shall notify the Holder of such opinion, whereupon
the Holder shall be entitled to transfer this Warrant
or to dispose of Underlying Shares received upon the
previous conversion of this Warrant, all in
accordance with the terms of the notice delivered by
the Holder to the Corporation; provided that an
appropriate legend may be endorsed on this Warrant or
the certificates for such Underlying Shares
respecting restrictions upon transfer thereof
necessary or advisable in the opinion of counsel and
satisfactory to the Corporation to prevent further
transfers which would be in violation of Section 5 of
the Act and applicable state securities laws; and
provided further that the prospective transferee or
purchaser shall execute such documents and make such
representations, warranties, and agreements as may be
required solely to comply with the exemptions relied
upon by the Corporation for the transfer or
disposition of the Warrant or Underlying Shares.
13.1.2 If in the opinion of the counsel referred to in this
Section 2, the proposed transfer or disposition of
this Warrant or such Underlying Shares described in
the written notice given pursuant to this Section 2
may not be effected without registration or
qualification of this Warrant or such Underlying
Shares the Corporation shall promptly give written
notice thereof to the Holder, and the Holder will
limit its activities in respect to such as, in the
opinion of such counsel, are permitted by law.
13.2 Prior to transfer of this Warrant in compliance with this
Section 2, the Corporation and any agent of the Corporation
may treat the person in whose name this Warrant is duly
registered on the Warrant Register as the owner hereof for the
purpose of receiving payment as herein provided and for all
other purposes, neither the Corporation nor any such agent
shall be affected by notice to the contrary.
14. Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the Province of Ontario. All disputes will
be settled in accordance with section 8.04 of the Securities Purchase
Agreement.
15. Severability If any one or more of the provisions or parts thereof
contained in this Warrant should be or become invalid, illegal or
unenforceable in any respect in any jurisdiction, the remaining
provisions or parts thereof contained herein shall be and shall be
conclusively deemed to be, as to such jurisdiction, severable therefrom
and:
15.1 the validity, legality or enforceability of such remaining
provisions or parts thereof shall not in any way be affected
or impaired by the severance of the provisions or parts
thereof severed; and
15.2 the invalidity, illegality or unenforceability of any
provision or part thereof contained in this Warrant in any
jurisdiction shall not affect or impair such provision or part
thereof or any other provisions of this Warrant in any other
jurisdiction.
16. Headings The headings of the sections, subsections, paragraphs,
subparagraphs and clauses of this Warrant have been inserted for
convenience of reference only and do not define, limit, alter or
enlarge the meaning of any provision of this Warrant.
17. Numbering of Articles, etc Unless otherwise stated, a reference herein
to a numbered or lettered section, subsection, paragraph, subparagraph
or schedule refers to the section, subsection, paragraph, subparagraph
or schedule bearing that number or letter in this Warrant.
18. Gender Whenever used in this Warrant, words importing the singular
number only shall include the plural, and vice versa, and words
importing the masculine gender shall include the feminine gender.
19. Day not a Business Day In the event that any day on or before which any
action is required to be taken hereunder is not a Business Day, then
such action shall be required to be taken on or before the requisite
time on the next succeeding day that is a Business Day. If the payment
of any amount is deferred for any period, then such period shall be
included for purposes of the computation of any interest payable
hereunder.
20. Binding Effect This Warrant and all of its provisions shall enure to
the benefit of the Holder and its successors and permitted assigns and
shall be binding upon the Corporation and its successors and permitted
assigns. This Warrant is not assignable by the Corporation without the
prior written consent of the Holder.
21. Registration Rights The Holder shall have the same rights as set forth
in Section 2.25 of the Securities Purchase Agreement with respect to
the Common Shares issuable upon the exercise of this Warrant.
22. Notices All notices, requests, demands or other communications by the
terms hereof required or permitted to be given one party to the other
shall be given in writing by personal delivery or by registered mail,
postage prepaid, addressed to the other party or delivered to such
other party as provided in Section 5 hereof, or at such other address
as may be given by either of them to the other in writing from time to
time and such notices, requests, demands or other communications shall
be deemed to have been received when delivered or faxed, or, if mailed,
One Hundred and Twenty (120) hours after 12:01 a.m. on the day
following the day of the mailing thereof if to the Company or if the
Holder is in North America, and Two Hundred and Forty (240) hours after
12:00 a.m. on the day following the day of the mailing thereof if the
Holder is outside of North America; provided that if any such notice,
request, demand or other communication shall have been mailed and if
regular mail service shall be interrupted by strikes or other
irregularities, such notices, requests, demands or other communications
shall be deemed to have been received forty-eight (48) hours after
12:01 a.m. on the day following the resumption of normal mail service.
IN WITNESS WHEREOF the Corporation has caused this Warrant to be signed by its
duly authorized officers under its corporate seal, and this Warrant to be dated
the 31st day of May, 2004.
MED-EMERG INTERNATIONAL INC.
By:
-----------------------------------
Name: Xxxx Xxxxx, Chief Financial Officer
SCHEDULE "A"
SUBSCRIPTION FORM
(To be signed only upon exercise of this Warrant)
The undersigned hereby exercises the within Warrant for the
purchase of Three (3) Common Shares covered by such New Warrants in accordance
with the terms and conditions thereof, and herewith makes payment of the
exercise price in full.
The Corporation is instructed to issue certificates for such
shares and any New Warrants to which the undersigned may be entitled on partial
exercise hereof in the name of the undersigned and to deliver the same to the
address indicated.
--------------------------------------------------------------------------------
Name
--------------------------------------------------------------------------------
Street and Number City and Province
Date:
------------------------- ---------------------------------
Purchaser's Signature [Signature must
conform exactly
with the name of
the registered
owner on the form
of this Warrant.]
SCHEDULE "B"
TRANSFER FORM
FOR VALUE RECEIVED, the undersigned hereby sells, transfers and assigns to
(print name of address of transferee)
[Print name and address of transferee]
(Warrants)
[Number of Warrants to be transferred]
represented by the attached Warrant Certificate and does hereby appoint [INSERT]
with full power of substitution to transfer the Warrants on the register
maintained by the Corporation.
The undersigned acknowledges that any transfer of Warrants is subject to the
resale restrictions of the securities legislation in those jurisdictions where
the transferor and transferee are normally resident. The undersigned confirms
that he, she or it has ascertained that exemptions from the relevant prospectus
and registration requirements are available and undertakes to file all necessary
forms with the appropriate bodies, in connection with such transfer.
The signature below must be guaranteed by a Canadian chartered bank or by a
Canadian trust company.
DATED this day of May, 2004.
[Signature of Registered Holder]
[Signature Guarantee] [Name of Registered Holder]
NOTICE: The signature of the registered holder must correspond with
the name appearing on the face of this Warrant Certificate as
in every particular without alteration or enlargement or any
change whatsoever.
