[*] =Certain confidential information contained in this Exhibit 4.2, marked by
brackets with asterisks, has been omitted and filed separately with the
Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities
Exchange Act of 1934, as amended.
Exhibit 4.7
RESEARCH AND DEVELOPMENT AND USE OF SPACE AGREEMENT
THIS AGREEMENT made as of the 31st day of October, 2000
BETWEEN:
McMASTER UNIVERSITY
(hereinafter called "McMaster")
- and -
IMI INTERNATIONAL MEDICAL INNOVATIONS INC., a corporation existing
under the laws of Canada
(hereinafter called "IMI").
WHEREAS IMI has agreed to provide research and development funding to McMaster
for the IMI Sponsorship Program (as hereinafter defined);
AND WHEREAS in consideration of such funding, McMaster has agreed to grant to
IMI a right of first refusal for an exclusive worldwide license for the
Intellectual Property (as hereinafter defined) created as a result of research
from the IMI Sponsorship Program and a right to use certain laboratory space
located on the campus of McMaster.
AND WHEREAS the parties have entered into this Agreement for the purpose of
outlining the terms and conditions of such arrangement.
NOW THEREFORE, IN CONSIDERATION of the premises and the mutual covenants and
agreements hereinafter contained and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto
covenant and agree as follows:
1. DEFINITIONS
In this Agreement; the following definitions will apply:
"Business Day" means a day other than a Saturday, Sunday, any statutory holiday
or any other day on which Canadian chartered banks are generally closed in
Toronto.
"Confidential Information" means all information and materials received from one
party from the other party pursuant to this Agreement and all information and
materials developed in the course of the parties carrying out the research
contemplated by this Agreement.
"Copyright" means any and all copyrights which arise from research conducted
pursuant to the IMI Sponsorship Program including, but not limited to, the
Patents and/or the Information.
"IMI Sponsorship Program" means the program to provide research and development
support in areas of research mutually agreeable to IMI and McMaster from time to
time with the initial support being provided in the area of research as
described in Schedule "A" attached hereto;
"Improvements" means any technical improvement; modification, invention or
discovery, whether patented or unpatented, made or acquired by or for the
benefit of McMaster from the IMI Sponsorship Program constituting additions to
and/or betterments in the Process or the Licenced Products.
"Information" means and includes, but not necessarily limited to, the technical
information, technical systems, know-how, engineering and other data, outline
and sketches, drawings, flow diagrams, standard product specification, operating
procedures, testing and inspection procedures, computer programs and analytical
methods relating to or arising out of the IMI Sponsorship Program, which
McMaster now or at any time in the future owns or has an interest in (including,
a right to licence).
"Intellectual Property" means and includes all Patents, Information, Copyright,
Processes and Improvements.
"Licenced Products" means products derived from ROFR Intellectual Property.
"Patents" means, arising out of the IMI Sponsorship Program, any and all patents
and patent applications (i) generated from work conducted or created at or under
the control and direction of, or on behalf of, McMaster or its personnel; or
(ii) which at present or in the future McMaster owns or has an interest
(including, the right to licence) in.
"Premises" those premises located at 0000 Xxxx Xxxxxx Xxxx; Xxxxx 0X0 XX,
Xxxxxxxx, Xxxxxxx being shown in outline on Schedule "B" attached hereto.
"Processes" shall mean the processes for manufacturing Licenced Products.
"ROFR Intellectual Property" has the meaning attributed to it in subsection
3(b).
"Term" means a period of five years commencing on November 1, 2000 and ending on
the 31st day of October, 2005.
2
2. FUNDING OF IMI SPONSORSHIP PROGRAM
(a) IMI hereby covenants to pay to McMaster, during the Term, One Hundred and
Twenty Thousand Dollars ($120,000.00) per annum, payable in quarterly
instalments of Thirty Thousand Dollars ($30,000) in advance on the first
day of each of November, February, May and August of each and every year of
the Term, commencing November 1, 2000.
(b) McMaster hereby covenants and agrees to use the funds described in
subsection 2(a) above to support the IMI Sponsorship Program, programs
directly related thereto, the indirect costs of such programs and for such
other purposes as may be agreed to with the prior written consent of IMI.
(c) Subject to the prior receipt of any necessary regulatory approval
including, without limitation, the approval of The Toronto Stock Exchange,
IMI hereby grants to McMaster warrants to purchase an aggregate of up to
50,000 common shares in the capital of IMI at an exercise price equal to
$4.50 per share. Such warrants shall be issued by IMI in five tranches of
10,000 warrants with the first tranche of 10,000 warrants being issued on
the date of this Agreement and with the remaining four tranches being
issued on each of the next four anniversaries of the date of this Agreement
provided that this Agreement is still in effect and has not been
terminated. Each tranche of warrants will be exercisable until 5:00 p.m.
(Toronto time) on the date which is one year from the date of its issue.
Notwithstanding the foregoing, any warrants not yet exercised by McMaster
may be immediately cancelled by IMI at any time after the occurrence of any
breach by McMaster of the terms of this Agreement. The warrants shall be
evidenced by a warrant certificate substantially in the form attached
hereto as Schedule "C".
3. INTELLECTUAL PROPERTY
(a) Disclosure. McMaster hereby agrees to immediately provide IMI with
----------
disclosure of any Intellectual Property which comes into existence after
the date hereof. The disclosure of such Intellectual Property shall be in
sufficient detail to permit IMI to determine whether it wishes to exercise
its rights hereinafter referred to in this Section 3. No publication or
public disclosure will be made by McMaster prior to or during the first 30
days after disclosure to IMI.
(b) Right of First Refusal. McMaster hereby grants IMI a right of first refusal
----------------------
(the "ROFR Right") to obtain an exclusive world wide licence for the
Intellectual Property (the "ROFR Intellectual Property") disclosed on the
terms contemplated herein. IMI, if it chooses to, shall exercise the ROFR
Right within 90 days (the "Option Period") of such disclosure and if the
ROFR Right is so exercised, then the parties shall negotiate the terms and
conditions of a licence agreement for a period of not more than 90 days
(the "Negotiation Period") from the date of the ROFR Right being exercised.
The licence agreement shall provide licence terms standard for agreements
between institutions and industry, including, without limitation, clauses
of the nature providing for reasonable objectives, payment of patent
expenses, time limited due diligence, provisions for the development,
commercialization and marketing of a product embodying the ROFR
Intellectual Property disclosed and the payment to McMaster of reasonable
royalties to be negotiated by the parties in good faith.
3
(c) Third Party Offer. In the event that:
-----------------
(i) IMI fails to exercise the ROFR Right during the Option Period; or
(ii) MI exercises the ROFR Right during the Option Period but a license
agreement is not successfully completed within the Negotiation Period,
McMaster shall have [***] from the last day of the Option Period to reach a
conditional agreement to [***] (failing which the provisions of this
subsection 3(c) shall be repeated prior to any future negotiations between
McMaster and any third party with respect to the ROFR Intellectual
Property); provided that any person to whom McMaster shows the ROFR
Intellectual Property signs a confidentiality agreement containing terms
reasonably satisfactory to IMI or to which IMI has previously agreed. If
McMaster and the Third Party propose to enter into an agreement (which form
of agreement is herein referred to as the "Third Party Offer") in respect
of [***] which McMaster is prepared to accept, then McMaster shall, prior
to acceptance thereof, submit the Third Party Offer to IMI (and McMaster
shall be deemed to have offered to [***], and IMI shall be entitled to
consider such Third Party Offer for a period of not more than [***], at or
before which time IMI shall be entitled to accept the Third Party Offer and
agree to become [***] on the terms and conditions of the Third Party Offer.
The terms and conditions of the Third Party Offer shall only include terms
and conditions which are able to be accepted by any [***], and shall not
include provisions which are unique to the Third Party. If IMI has not
submitted its written agreement to McMaster to be bound by the terms of the
Third Party Offer within such time, it shall be deemed to have rejected
such offer and McMaster shall be free to enter into the Third Party Offer
with the Third Party at any time during the 30 days following the date IMI
rejects or is deemed to have rejected the Third Party Offer.
(d) Term of ROFR Right. Except as hereinafter contemplated, the ROFR Right and
------------------
other rights contemplated in this Article 3 hereof shall terminate on the
[***]. The remaining rights and obligations hereunder (including, without
limitation, the provisions of any [***].
(e) Publication. Each party to this Agreement recognizes that the publication
-----------
of papers regarding results of Intellectual Property, including oral
presentations and abstracts, may be beneficial to the parties provided such
publications are subject to reasonable controls to protect Confidential
Information (it being acknowledged that the patent and other proprietary
rights can be jeopardized by public disclosure prior to the filing of
suitable patent applications and without appropriate protections to protect
other commercially valuable rights). In particular, it is the intent of the
parties to maintain the confidentiality of any Confidential Information
included in any patent application until such patent
4
application has been filed. Accordingly, IMI shall have the right to review
and approve any paper proposed for publication by McMaster, including oral
presentations and abstracts, which utilizes data generated from the
Intellectual Property with respect to which IMI may acquire rights
hereunder and/or includes Confidential Information of IMI. Before any such
paper, abstract, release or presentation is submitted for publication or a
third party for assessment, McMaster shall deliver a complete copy to IMI
at least 30 days prior to such submission. IMI shall review any such
material and give its comments to McMaster within 30 days of the delivery
of such paper to IMI. Upon IMI's request during such 30 day period,
publication or submission shall be delayed for up to an additional 60 days
from the date of the request to provide adequate time for IMI to (or for
IMI to request McMaster to) prepare and file patent applications related to
the inventions that are proposed for publication or presentation and for
the other party to remove any Confidential Information from such
publication or presentation. With respect to oral presentation materials
and abstracts, IMI shall make reasonable efforts to expedite review of such
materials and abstracts, and shall return such items as soon as practicable
to the publishing party with appropriate comments. McMaster shall comply
with IMI's reasonable request to delete references to IMI's Confidential
Information in any such paper and agrees to withhold publication of same in
accordance with the foregoing in order to permit IMI to (or to permit IMI
to request IMI to) obtain patent protection, if IMI deems it necessary, in
accordance with the terms of this Agreement. If IMI fails to respond within
such periods, IMI shall be deemed to have approved the paper or abstract
for publication or presentation, as the case maybe. For greater certainty,
this subsection shall only apply to publications which relate to the IMI
Sponsorship Program.
4. LICENCE TO USE PREMISES
(a) Licence. McMaster hereby grants a licence to IMI to use the Premises, on
the terms and conditions as set forth in this Section 4.
(b) Possession
----------
(i) IMI shall have the non-exclusive possession and use of the Premises
during the term on the terms and conditions contained herein and
subject to any other rule, regulation, procedure or practice in force
for this type of space at McMaster University.
(ii) Subject to McMaster's rights under this Agreement, and as long as this
Agreement is in good standing, McMaster covenants that IMI shall have
quiet enjoyment of the Premises during the Term without any
interruption or disturbance from McMaster or any other person or
persons lawfully claiming through McMaster.
(c) Use
---
(i) During the Term, the Premises shall not be used for any purpose other
than as a research laboratory and related uses.
5
(ii) IMI shall not knowingly do or permit to be done at the Premises
anything which may:
(A) constitute a nuisance;
(B) cause damage to the Premises;
(C) cause injury or annoyance to occupants of neighbouring premises;
(D) make void or voidable any insurance upon the Premises; and
(E) constitute a breach of any by-law, statute, order or regulation
of any municipal, provincial or other competent authority
relating to the Premises.
(iii)(A) IMI shall comply with WSIB, Health & Safety, Hazardous Material
and other reasonable workplace requirements for personnel; and
(B) IMI will maintain at least [***] in liability insurance naming
McMaster as beneficiary.
(d) Repair and Maintenance. IMI covenants that during the Term and any renewal
----------------------
thereof it shall keep the Premises in good condition.
(e) Utilities and Other Charges. McMaster and IMI agree that IMI shall not be
---------------------------
obligated to pay any additional charges or expenses relating to the
Premises including, without limitation, any realty taxes, utilities,
maintenance fees, operating costs.
(f) Signage. IMI shall be entitled to place signage on the door to the Premises
-------
in accordance with the normal signage policies that may be applicable at
the relevant time.
(g) Option to Renew. Provided IMI is not in default pursuant to the terms of
---------------
this Agreement, IMI shall have the right to extend the licence to use the
Premises for an additional period of five (5) years on payment terms to be
negotiated in good faith and on the other terms and conditions as contained
in this Section 4, provided IMI gives McMaster sixty (60) days written
notice of its intention to do so prior to the expiration of the Term. The
said payment terms shall be based on the payment terms contained in this
agreement including cash payments pursuant to section 2(a) and, subject to
the prior receipt of any necessary approval including, without limitation,
The Toronto Stock Exchange, the issuance of warrants (with an exercise
price based upon the then current market price of the common shares of IMI)
pursuant to section 2(c).
(h) Termination. IMI shall have the right, on making the payments referred to
-----------
in this subsection 4(h), to terminate the licence to use the Premises
contained in subsection 4(a) at any time during the Term (or any extension
thereof), provided IMI delivers written notice to McMaster not less than
ninety (90) days prior to the date it intends to do so. On such
termination, the amounts payable under subsection 2(a) shall be pro-rated,
and the
6
payment thereof accelerated to the date of such termination, to the shorter
of the following two periods:
(i) six months following such date of termination; and
(ii) the period from the date of such notice of termination until the end
of the "Term" as such term is defined in section 1.
On the making of the said payments, IMI shall be released from all
obligations under this Section 4 from and after the date of such
termination.
(i) Expansion. Provided IMI is not in default of its obligations under this
---------
Agreement and provided McMaster is prepared to offer any premises located
in suite 3N11B (the "Expansion Space") for lease to a third party, McMaster
shall deliver notice to IMI as to the availability of the Expansion Space,
whereupon IMI shall have thirty (30) days in which to provide notice to
McMaster that it intends to occupy the Expansion Space. In the event IMI
exercises its right to occupy such space, it shall do so: (A) on the same
terms as contained in subsections 2(a) and 2(b), the amounts to be paid and
the number of warrants to be issued being pro-rated based on the actual
area of the Expansion Space (provided however that the issuance of any
additional warrants shall be subject to the prior receipt of any necessary
regulatory approvals and shall have an exercise price based upon the then
current market value of the common shares of IMI); and (B) on the same
terms and conditions as contained in this Section 4.
5. GENERAL
(a) All notices, requests, demands or other communications by the terms hereof
required or permitted to be given by one party to another shall be given in
writing by personal delivery, facsimile transmission or by registered mail,
postage prepaid, addressed to such other party or delivered to such other party
as follows:
(i) to McMaster: McMaster University
0000 Xxxx Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxx
X0X 0X0
Attention: Executive Director, Office of Research
Contracts and Intellectual Property
- and -
Xxxx and Vice President, Faculty of
Health Sciences
Facsimile: (000) 000-0000
7
(ii) to IMI: 0000 Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Dr. H.B. Xxxxx Xxxxxx
Facsimile: (000) 000-0000
with a copy to: Aird&Berlis
BCE Place
Suite 1800
000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 219
Attention: Xxx X. Xxxxxx or Xxxxxxx X. Xxxxx
Facsimile: (000) 000-0000
or at such other address as may be given by any of them to the others in writing
from time to time and such notices, requests, demands or other communications
shall be deemed to have been received, if sent by facsimile, on the first
Business Day after sending or, if sent by registered mail, on the fifth Business
Day after mailing or, if delivered, upon the date of delivery.
(b) The parties hereto agree to execute and deliver to each other such further
instruments and other written assurances and to do or cause to be done such
further acts or things as any of the parties may reasonably request in order to
carry out the transactions contemplated herein.
(c) This Agreement sets forth the entire agreement among the parties hereto
pertaining to the specific subject matter hereof and supersedes all prior
agreements, understandings, negotiations and discussions, whether oral or
written, of the parties hereto, and there are no warranties, representations or
other agreements between the parties hereto in accordance with the subject
matter hereof except as specifically set forth herein. No supplement,
modification or waiver of this Agreement shall be binding unless executed in
writing by the party to be bound thereby.
(d) This Agreement shall be governed by the laws of the Province of Ontario and
the federal laws of Canada applicable therein.
(e) Time shall be of the essence of this Agreement.
(f) The insertion of headings and the division of this Agreement into articles
and sections are for convenience and reference only and shall not affect the
interpretation hereof.
(g) Each provision of this Agreement is severable, and in the event that any
one or more thereof may be declared invalid, the remainder of the provisions of
this Agreement shall nevertheless remain in full force and effect.
8
(h) The parties may at any time terminate this Agreement by written agreement
executed by each of the parties.
(i) Promptly following termination or expiration of this Agreement, each of the
parties shall return to the other party all of such other party's Confidential
Information.
(j) This Agreement may be executed by the parties hereto in separate
counterparts each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute one and the same instrument.
(k) This Agreement or any rights thereunder may be assigned by either party
with the prior written consent of the other party, which consent shall not be
unreasonably withheld, provided however that no consent will be required for the
assignment by IMI to an affiliate (as such term is defined in the Canada
Business Corporations Act) thereof.
(l) This Agreement shall be binding upon and shall enure to the benefit of the
parties' respective successors and assigns.
9
IN WITNESS of the foregoing covenants, McMaster and IMI have executed this
Agreement.
MCMASTER UNIVERSITY
Per: /s/ Xxxxxx X. Xxxxxx
--------------------
Name: Xxxxxx X. Xxxxxx
Title: VP Research & Int'l Affairs
Authorized Signing Officer
Per: /s/ Xxxx Xxxxxx
---------------
Name: Xxxx Xxxxxx
Title: Assoc. Xxxx Research FHS
Authorized Signing Officer
IMI INTERNATIONAL MEDICAL
INNOVATIONS INC.
Per: /s/ Xxxxx Xxxxxx
----------------
Name: Xxxxx Xxxxxx
Title: President
Authorized Signing Officer
[execution page of Research and Development and Use of Space Agreement]
10
Schedule "A"
Description of IMI Sponsorship Program
Scientists at IMI have extensive experience in the design and development of
diagnostic procedures which can be used to detect [***]As part of the [***] and
in collaboration with other members of the [***] McMaster is [***] McMaster will
make use of the collaboration with IMI to [***] The research to be performed
under this agreement will be under the supervision of Drs. Xxxx XxXxxxxxx and
Xxxx Xxxxxxx who shall have authority for the scope and direction of the
research funded by IMI.
It is expected that the bulk of the expenses to be incurred will be for the
payment of post-doctoral fellows and the supplies required by them.
Reports will be provided to IMI as appropriate and, in any event, at no less
than annual intervals.
A-1
Schedule "B"
Diagram of Premises
Suite 3N11B - 0000 Xxxx Xxxxxx West, Xxxxxxxx
Cross-hatched area shows premises
[DIAGRAM APPEARS HERE]
B-1
Schedule "C"
PURCHASE WARRANT
To Acquire Common Shares of
IMI INTERNATIONAL MEDICAL INNOVATIONS INC.
THE RIGHT TO PURCHASE COMMON SHARES UNDER THIS WARRANT EXPIRES AT
5:00 P.M. TORONTO TIME ON OCTOBER 31, 2001.
Warrant Certificate No. MC1 CERTIFICATE FOR 10,000 Purchase Warrants
THIS CERTIFIES that, for value received, McMaster University (the "Holder")
is entitled, subject to the terms and conditions set forth in this Warrant
Certificate, to purchase from IMI International Medical Innovations Inc., a
corporation existing under the laws of Canada (the "Corporation"), one fully
paid and non-assessable common share in the capital of the Corporation, as
constituted on the date hereof (the "Common Shares"), for each whole purchase
warrant (a "Warrant") at any time commencing on the date hereof and continuing
up to 5:00p.m. (Toronto time) on October 31, 2001 (the "Time of Expiry") upon
the payment of $4.50 per Share (the "Exercise Price"). The number of Common
Shares which the Holder is entitled to acquire upon exercise of each Warrant and
the Exercise Price are subject to adjustment as hereafter provided.
[the remainder of this page is left intentionally blank]
C-1
1. Exercise of Warrants
--------------------
(a) Election to Purchase. The right to purchase Common Shares evidenced by this
--------------------
Warrant certificate may be exercised by the Holder in whole or in part and in
accordance with the provisions hereof by delivery of an Election to Purchase in
the form substantially the same as that attached hereto as Schedule "A",
properly completed and executed, together with payment of the Exercise Price for
the number of Common Shares specified in the Election to Purchase at the
principal office of the Corporation at 0000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxx,
Xxxxxxx, X00X 0X0 or such other address in Canada as may be notified in writing
by the Corporation.
(b) Exercise. The Corporation shall, on the date it receives a duly executed
--------
E1ection to Purchase and the Exercise Price for the number of Common Shares
specified in the Election to Purchase (the "Exercise Date"), issue that number
of Common Shares specified in the Election to Purchase as fully paid and
non-assessable Common Shares.
(c) Share Certificates. As promptly as practicable after the Exercise Date, the
------------------
Corporation shall issue and deliver to the Holder, registered in the name of the
Holder, a certificate or certificates for the number of Common Shares specified
in the Election to Purchase. To the extent permitted by law, such exercise shall
be deemed to have been effected immediately prior to 5:00 p.m. (Toronto time) on
the Exercise Date, and at such time the rights of the Holder with respect to the
number of Warrants which have been exercised as such shall cease, and the person
or persons in whose name or names any certificate or certificates for Common
Shares shall then be issuable upon such exercise shall be deemed to have become
the holder or holders of record of the Common Shares represented thereby.
(d) Fractional Common Shares. No fractional Common Shares shall be issued upon
------------------------
exercise of any Warrant and no payments or adjustment shall be made upon any
exercise on account of any cash dividends on the Common Shares issued upon such
exercise. If any fractional interest in a Common Share would, except for the
provisions of the first sentence of this Subsection 1(d), be deliverable upon
the exercise of a Warrant, the Corporation shall, in lieu of delivering the
fractional share therefor, pay to the Holder an amount in cash equal to the Fair
Market Value (as hereinafter defined) of such fractional interest.
(e) Corporate Changes
-----------------
(i) Subject to subparagraph 1(e)(ii) hereof, if the Corporation shall be a party
to any reorganization, merger, dissolution or sale of all or substantially all
of its assets, whether or not the Corporation is the surviving entity, each
unexercised Warrant shall be adjusted so as to apply to the securities to which
the holder of that number of Common Shares of the Corporation subject to each
unexercised Warrant would have been entitled by reason of such reorganization,
merger, dissolution or sale of all or substantially all of its assets
(collectively, the "Event"), and the Exercise Price shall be adjusted to be the
amount determined by multiplying the Exercise Price in effect immediately prior
to the Event by
C-2
the number of Common Shares subject to the unexercised Warrant immediately prior
to the Event, and dividing the product thereof by the number of securities to
which the holder of that number of Common Shares subject to the unexercised
Warrant would have been entitled to by reason of such Event.
(ii) If the Corporation is unable to deliver securities to the Holder pursuant
to the proper exercise of a Warrant, the Corporation may satisfy such
obligations to the Holder hereunder by paying to the Holder in cash the
difference between the Exercise Price of such Warrant and the Fair Market Value
of the securities to which the Holder would be entitled to upon exercise of such
Warrant. Adjustments under this paragraph (e) or (subject to paragraph (n)) any
determinations as to the Fair Market Value of any securities shall be made by
the board of directors of the Corporation, or any committee thereof specifically
designated by the board of directors to be responsible therefor, and any
reasonable determination made by such board or committee thereof shall be
binding and conclusive, subject only to any disputes being resolved by the
Corporation's auditors, whose determination shall be binding and conclusive.
(f) Subdivision or Consolidation of Common Shares
---------------------------------------------
(i) In the event the Corporation shall subdivide its outstanding Common Shares
into a greater number of Common Shares, the Exercise Price in effect immediately
prior to such subdivision shall be proportionately reduced, and conversely, in
case the outstanding Common Shares of the Corporation shall be consolidated into
a smaller number of Common Shares, the Exercise Price in effect immediately
prior to such consolidation shall be proportionately increased.
(ii) Upon each adjustment of the Exercise Price as provided herein, the Holder
of a Warrant shall thereafter be entitled to acquire, at the Exercise Price
resulting from such adjustment, the number of Common Shares (calculated to the
nearest tenth of a Share) obtained by multiplying the Exercise Price in effect
immediately prior to such adjustment by the number of Common Shares which may be
acquired upon the exercise of such Warrant immediately prior to such adjustment
and dividing the product thereof by the Exercise Price resulting from such
adjustment.
(g) Change or Reclassification of Common Shares. In the event the Corporation
-------------------------------------------
shall change or reclassify its outstanding Common Shares into a different class
of securities, each Warrant shall be adjusted as follows so as to apply to the
successor class of securities:
(i) the number of the successor class of securities which the Holder shall be
entitled to acquire shall be that number of the successor class of securities
which a holder of that number of Common Shares subject to each Warrant
immediately prior to the change or reclassification would have been entitled to
by reason of such change or reclassification; and
(ii) the Exercise Price shall be determined by multiplying the Exercise Price in
effect immediately prior to the change or reclassification by the number of
Common Shares subject to the unexercised Warrant immediately prior to the change
or reclassification, and
C-3
dividing the product thereof by the number of Common Shares determined in
subparagraph l(g)(i) hereof.
(h) Offering to Shareholders. If and whenever at any time prior to the Time of
------------------------
Expiry, the Corporation shall fix a record date or if a date of entitlement to
receive is otherwise established (any such date being hereinafter referred to in
this Subsection 1(h) as the "record date") for the issuance of rights, options
or warrants to all or substantially all the holders of the outstanding Common
Shares of the Corporation entitling them, for a period expiring not more than 45
days after such record date, to subscribe for or purchase Common Shares or
securities convertible into or exchangeable for Common Shares at a price per
share or, as the case may be, having a conversion or exchange price per share
less than 90% of the Fair Market Value (as hereinafter defined) on such record
date, the Exercise Price shall be adjusted immediately after such record date so
that it shall equal the price determined by multiplying the Exercise Price in
effect on such record date by a fraction, of which the numerator shall be the
total number of Common Shares outstanding on such record date plus a number
equal to the number arrived at by dividing the aggregate subscription or
purchase price of the total number of additional Common Shares offered for
subscription or purchase or, as the case maybe, the aggregate conversion or
exchange price of the convertible or exchangeable securities so offered by such
Fair Market Value, and of which the denominator shall be the total number of
Common Shares outstanding on such record date plus the total number of
additional Common Shares so offered (or into which the convertible or
exchangeable securities so offered are convertible or exchangeable); Common
Shares owned by or held for the account of the Corporation or any subsidiary of
the Corporation shall be deemed not to be outstanding for the purpose of any
such computation; such adjustment shall be made successively whenever such a
record date is fixed; and to the extent that any rights or warrants are not so
issued or any such rights or warrants are not exercised prior to the expiration
thereof, the Exercise Price shall then be readjusted to the Exercise Price which
would then be in effect if such record date had not been fixed or to the
Exercise Price which would then be in effect based upon the number of Common
Shares or conversion or exchange rights contained in convertible or exchangeable
securities actually issued upon the exercise of such rights or warrants, as the
case may be.
(i) Carry Over of Adjustments. No adjustment of the Exercise Price shall be made
-------------------------
if the amount of such adjustment shall be less than 1% of the Exercise Price in
effect immediately prior to the event giving rise to the adjustment, provided,
however, that in such case any adjustment that would otherwise be required then
to be made shall be carried forward and shall be made at the time of and
together with the next subsequent adjustment which, together with any adjustment
so carried forward, shall amount to at least 1% of the Exercise Price.
(j) Notice of Adjustment. Upon any adjustment of the number of Common Shares and
--------------------
upon any adjustment of the Exercise Price, then and in each such case the
Corporation shall give written notice thereof to the Holder, which notice shall
state the Exercise Price and the number of Common Shares or other securities
subject to each unexercised
C-4
Warrant resulting from such adjustment, and shall set forth in reasonable detail
the method of calculation and the facts upon which such calculation is based.
Upon the request of the Holder there shall be transmitted promptly to the Holder
a statement of the firm of independent certified public accountants retained to
audit the financial statements of the Corporation to the effect that such firm
concurs in the Corporation's calculation of the change.
(k) Other Notices. In case at any time:
-------------
(i) the Corporation shall declare any dividend upon its Common Shares payable in
Common Shares;
(ii) the Corporation shall offer for subscription pro rata to the holders of its
Common Shares any additional Common Shares of any class or other rights;
(iii) there shall be any capital reorganization or reclassification of the
capital stock of the Corporation, or consolidation, amalgamation or merger of
the Corporation with, or sale of all or substantially all of its assets to,
another corporation; or
(iv) there shall be a voluntary or involuntary dissolution, liquidation or
winding-up of the Corporation,
then, in any one or more of such cases, the Corporation shall give to the Holder
(i) at least 10 days' prior written notice of the date on which a record shall
be taken for such dividend, distribution or subscription rights or for
determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, amalgamation, sale, dissolution,
liquidation or winding-up and (ii) in the case of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up, at least 10 days' prior written notice of the date when the same
shall take place. Such notice in accordance with the foregoing clause (i) shall
also specify, in the case of any such dividend, distribution or subscription
rights, the date on which the holders of Common Shares shall be entitled
thereto, and such notice in accordance with the foregoing clause (ii) shall also
specify the date on which the holders of Common Shares shall be entitled to
exchange their Common Shares for securities or other property deliverable upon
such reorganization, reclassification, consolidation, merger, amalgamation,
sale, dissolution, liquidation or winding-up, as the case may be.
(l) Common Shares to be Reserved. The Corporation will at all times keep
----------------------------
available, and reserve if necessary under Canadian law, out of its authorized
Common Shares, solely for the purpose of issue upon the exercise of Warrants,
such number of Common Shares as shall then be issuable upon the exercise of all
unexercised Warrants. The Corporation covenants and agrees that all Common
Shares which shall be so issuable will, upon issuance, be duly authorized and
issued, fully paid and non-assessable. The Corporation will take all such action
as may be necessary to assure that all such Common Shares may be so issued
without violation of any applicable requirements of any exchange upon which the
Common Shares may be listed or in respect of which the Common Shares are
qualified for unlisted trading privileges. The Corporation will take all such
action as is within its
C-5
power to assure that all such Common Shares may be so issued without violation
of any applicable law.
(m) Issue Tax. The issuance of certificates for Common Shares upon the exercise
---------
of each Warrant shall be made without charge to the Holder for any issuance tax
in respect thereto, provided that the Corporation shall not be required to pay
any tax which may be payable in respect of any transfer involved in the issuance
and delivery of any certificate in a name other than that of the Holder.
(n) Fair Market Value. For the purposes of any computation hereunder, the "Fair
-----------------
Market Value" at any date shall be the weighted average sale price per share for
the Common Shares of the Corporation for the 20 consecutive trading days
immediately before such date on The Toronto Stock Exchange, or, if the Common
Shares in respect of which a determination of Fair Market Value is being made
are not listed on The Toronto Stock Exchange or any stock exchange, the Fair
Market Value shall be determined by the directors, which determination shall be
conclusive. The weighted average price shall be determined by dividing the
aggregate sale price of all such Common Shares sold on the said exchange during
the said 20 consecutive trading days by the total number of such Common Shares
so sold.
2. Transfer of Purchase Warrants
-----------------------------
(a) By completing the form of transfer attached hereto, the Holder may, subject
to compliance with applicable laws, transfer the Purchase Warrants evidenced
hereby either in whole or in part. Every transfer of Purchase Warrants must be
in writing under the hand of the Holder or the Holder's legal personal
representatives or the attorney authorized in writing of such Holder with
signatures guaranteed by a Canadian chartered bank, a trust company, a member
firm of The Toronto Stock Exchange or The Investment Dealers Association of
Canada and in compliance with such other requirements as the Corporation may
prescribe. Any such transfer, accompanied by this Purchase Warrant certificate,
must be delivered to the Corporation at its principal office in the City of
Toronto, together with such evidence of identity or title as the Corporation may
reasonably require, whereupon the transfer will be registered and duly noted by
endorsement hereon signed by the Corporation. If part only of the Purchase
Warrants evidenced hereby is transferred, the Corporation will deliver to the
Holder and the transferee replacement Purchase Warrants certificates
substantially in the form of this certificate.
(b) Transfers of the Purchase Warrants evidenced hereby may be subject to
restrictions under applicable securities law. The Holder should consult its own
professional advisers in order to assess the legal aspects of a transfer of the
Purchase Warrants evidenced hereby.
(c) The Corporation shall not register a transfer if the Corporation has reason
to believe that the transferee is a person in the United States or is acquiring
the Purchase Warrants evidenced hereby for the account or benefit of a person in
the United States or if the transfer is not in accordance. with all applicable
securities laws.
C-6
3. Replacement
-----------
Upon receipt of evidence satisfactory to the Corporation of the loss, theft,
destruction or mutilation of this Certificate and, if requested by the
Corporation, upon delivery of a bond of indemnity satisfactory to the
Corporation (or, in the case of mutilation, upon surrender of this Certificate),
the Corporation will issue to the Holder a replacement Certificate (containing
the same terms and conditions as this Warrant certificate).
4. Expiry Date
-----------
Each unexercised Warrant shall expire and all rights to purchase Common Shares
hereunder shall cease and become null and void at 5:00 p.m. Toronto time on the
Time of Expiry.
5. Inability to Deliver Common Shares
----------------------------------
If for any reason, other than the failure or default of the Holder, the
Corporation is unable to issue and deliver the Common Shares or other securities
as contemplated herein to the Holder upon the proper exercise by the Holder of a
Warrant, the Corporation may pay, at its option and in complete satisfaction of
its obligations hereunder, to the Holder, in cash, an amount equal to the
difference between the Exercise Price and the Fair Market Value of such Common
Shares or other securities on the Exercise Date.
6. Governing Law
-------------
The laws of the Province of Ontario and the laws of Canada applicable therein
shall govern this Warrant.
7. Successors
----------
The rights under this Warrant certificate shall enure to the benefit of and
shall be binding upon the Holder and the Corporation and their respective
successors and assigns.
C-7
IN WITNESS WHEREOF the Corporation has caused this Warrant certificate to be
signed by a duly authorized officer and its corporate seal hereto affixed.
DATED the 31St day of October, 2000.
IMI INTERNATIONAL MEDICAL INNOVATIONS INC.
Per: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: President-
Authorized Signing Officer
C-8
Schedule "A"
Election to Purchase
TO: IMI INTERNATIONAL MEDICAL INNOVATIONS INC.
The undersigned holder of the within Warrant certificate hereby exercises
_______ purchase warrants (the "Warrants") of IMI International Medical
Innovations Inc. (or such number of Warrants or other securities or property to
which such exercise entitles him in lieu thereof or in addition thereto in
accordance with the provisions of the within Warrant certificate) at the price
determined under, and on the terms specified in, the Warrant certificate and
encloses herewith a bank draft, certified cheque or money order payable at par
to or to the order of IMI International Medical Innovations Inc. in payment
therefor.
The Common Shares subscribed for will be issued to the undersigned and
will be mailed to the address set forth below.
DATED this _____ day of______________________, ________.
__________ __________
Witness Signature of Subscriber
Signature of Holder
Guaranteed by:
_____
*
_____
_____
* Authorized Signature Number
NOTE: If the signature of the person executing this form is to be guaranteed, it
must be guaranteed by a Canadian chartered bank or trust company or by a member
firm of The Toronto, Stock Exchange of The Investment Dealers Association of
Canada.
Print below the address in full of the person in whose name the Common Shares
subscribed for are to be issued.
Address: ____________________
____________________
____________________
FORM OF TRANSFER
Any transfer will require compliance with applicable securities legislation.
Transferors and transferees are urged to contact legal counsel before effecting
any such transfer.
FOR VALUE RECEIVED the undersigned holder of the Warrants of IMI INTERNATIONAL
MEDICAL INNOVATIONS INC. evidenced by the within Warrant certificate hereby
sells, assigns and transfers ___________ of such Warrants unto:
__________
(name)
__________
(address)
__________
DATED THIS ____day of_______________, ______
__________ __________
Witness Signature of Holder
__________
Name of Holder
__________
Address of Holder
__________
Signature of Guaranteed by:
_____
*
_____
_____
* Authorized Signature Number
NOTE: 1. The signature to this transfer must correspond with the name as
recorded on the within Warrant certificate in every particular without
alteration or enlargement or any change whatever.
2. If the signature of the person executing this form Is to be guaranteed, It
must be guaranteed by a Canadian chartered bank or trust company or by a member
firm of The Toronto Stock Exchange or The Investment Dealers Association of
Canada.
3. If this transfer form is signed by a trustee, executor, administrator,
curator, guardian, attorney, officer of a corporation or any other person acting
in a fiduciary or representative capacity, the certificate must be accompanied
by evidence of authority to sign satisfactory to the Corporation.
