Exhibit 10.12
THE BUCK-A-DAY COMPANY INC.
WARRANT CERTIFICATE
SERIES "E" WARRANT
FOR PURCHASE OF SHARES
This is to certify that FOR VALUE RECEIVED, subject to the Articles of THE
BUCK-A-DAY COMPANY INC. (the "Company"), <<fullname>> is the registered owner
(the "Warrant Holder") of <<numberofshares>> Series "E" Warrants ("Warrants")
represented hereby and is entitled, at any time up to 3:00 o'clock in the
afternoon (Toronto Time) (August 29, 2003), to acquire One (1) Common Share of
the Company for each Warrant, at the price (the "Exercise Price") of $1.00 (U.S.
Funds) per share.
The Company agrees that the shares so purchased shall be and be deemed to be
issued to the Warrant Holder 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.
Nothing contained herein shall confer any right upon the Warrant Holder to
subscribe for or purchase any shares of the Company at any time after the Expiry
Time, and from and after the Expiry Time this Warrant and all rights hereunder
shall be void and of no value.
The above provisions are subject to the following:
1. In the event the Warrant Holder desires to exercise the right to purchase
shares in the capital of the Company conferred hereby, the Warrant Holder
shall within the times hereinbefore set out:
(a) duly complete in the manner indicated and execute a subscription in
the form attached to this Warrant;
(b) surrender this Warrant to the Company; and
(c) pay the amount payable on the exercise of this Warrant in respect of
the shares of the capital of Company subscribed for either in cash
or by certified cheque payable to the Company.
Upon such surrender and payment as aforesaid, the Warrant Holder
shall:
(i) be deemed for all purposes to be a shareholder of record of
the number of shares in the capital of the Company to be so
issued hereunder, (the "Purchased Shares") and the Warrant
Holder shall be entitled to delivery of a certificate or
certificates evidencing such Purchased shares and the Company
shall cause such certificate or certificates to be
delivered to the Warrant Holder at the address specified in
the said subscription form within fifteen (15) days of said
surrender and payment as aforesaid. No fractional Common
Shares will be issuable upon any exercise of the Warrant and
the Warrant Holder will not be entitled to any cash payment or
compensation in lieu of fractional Common Shares; and
2. The Warrant Holder may subscribe for and purchase any lesser number of
full shares than the number of shares expressed in this Warrant. In the
event that the Warrant Holder subscribes for and purchases any such lesser
number of shares prior to the Expiry Time, it shall be entitled to receive
a replacement Warrant with respect to the unexercised balance.
3. The holding of this Warrant shall not constitute the Warrant Holder a
shareholder of the Company nor entitle it to any right or interest in
respect thereof except as herein expressly provided.
4. The Company covenants and agrees that it is duly authorised to create and
issue this Warrant and that it is a valid and enforceable obligation of
the Company in accordance with the terms hereof and that it will cause the
shares from time to time subscribed for and purchased in the manner herein
provided and the certificate evidencing such shares to be duly issued and
that, at all times prior to the Expiry Time, it shall reserve and there
shall remain unissued out of its authorised capital a sufficient number of
shares to satisfy the right of purchase herein provided for. All shares
which shall be issued upon the exercise of the right of purchase herein
provided for, upon payment therefore of the amount at which such shares
may be purchased pursuant to the provisions hereof, shall be and be deemed
to be fully paid and non-assessable and free from all taxes, liens and
charges with respect to the issue thereof.
5. The Company covenants and agrees that so long as this Warrant is
outstanding, in whole or in part, it will not:
(a) pay any dividends payable in shares of the capital of the Company on
the shares of the same class as those in respect of which the right
to purchase herein is then given, or
(b) give rateably to holders of shares in the capital of the company of
the same class as those in respect of which the right to purchase
herein is then given rights or warrants to subscribe for additional
shares in the capital of the Company, or
(c) make any repayment of capital on any of the shares of the capital of
the Company of the same class as those in respect of which the right
to purchase herein is then given, or
(d) consolidate, amalgamate or merge with any company or corporation, or
sell or lease the whole or substantially the whole of its assets or
undertaking or terminate its corporate existence, or
(e) subdivide, consolidate, change or reclassify any shares in the
capital of the Company, or
(f) distribute to holders of shares in the capital of the Company, any
class of shares or rights, options or warrants (other than those
referred to above or granted by the Company as of the date hereof)
or evidence of indebtedness or property (excluding cash dividends
paid in the ordinary course), unless and until it shall have given
at least (fifteen) 15 days' prior written notice to the Warrant
Holder of its intention so to do and of the particulars (including,
in each case, the record date therefor) of any such dividend and/or
the right to subscribe for additional shares and/or of the repayment
of capital on its shares, as the case may be, and/or the general
terms (including the record date for determining the persons
entitled to attend any meeting of shareholders held for the purpose
of approving or confirming the same) of any such consolidation,
amalgamation or merger with any other company or corporation or the
sale or lease of the whole or substantially the whole of its assets
or undertaking, and/or of such subdivision, consolidation, change or
reclassification, as the case may be and/or of such distribution.
The Company further covenants and agrees that it will not within the
said (fifteen) 15 day period take any corporate action which might
deprive the Warrant Holder of the opportunity of exercising the
right to purchase shares of the capital of the Company during such
(fifteen) 15 day period and thereby to participate as a shareholder
in or with respect to any of the aforementioned matters.
6. If at any time after the date hereof and prior to the Expiry Time there
shall be a reclassification of the Common Shares outstanding at any time
or change of the Common Shares into other shares or securities, or any
other capital reorganisation except as described in Section 8, or a
consolidation, amalgamation or merger of the Company with or into any
other corporation (other than a consolidation, amalgamation or merger
which does not result in any reclassification of outstanding Common Shares
or a change of the Common Shares into other shares or securities), or a
transfer of the undertaking or assets of the Company as an entirety or
substantially as a entirety to another corporation or other entity (any of
such events being called a "Capital Reorganisation"), the Warrant Holder
shall thereafter be entitled to receive upon exercise of this Warrant, and
shall accept for the same aggregate consideration, in lieu of the number
of Common Shares to which it was theretofore entitled upon such exercise,
the kind and amount of shares or other securities or property which it
would have been entitled to receive as a result of such Capital
Reorganisation if, on the effective date thereof, it had been the
registered holder of the number of Common Shares to which it was
theretofore entitled upon such exercise.
7. If at any time after the date hereof and prior to the Expiry Time any
adjustment in the Exercise Price shall occur as a result of an event
referred to in section 8, then the number of Common Shares purchasable
upon the subsequent exercise of this Warrant shall be simultaneously
adjusted by multiplying the number of Common Shares purchasable upon the
exercise of this Warrant immediately prior to such adjustment by a
fraction which shall be the reciprocal of the fraction employed in the
adjustment of the Exercise Price. To the extent that any adjustment in
subscription rights occurs pursuant to this Section 7 as a result of a
distribution of exchangeable or convertible securities referred to in
section 8, the number of Common Shares purchasable upon exercise of this
Warrant shall be readjusted immediately after the expiration of any
relevant exchange, conversion or exercise right to the number of Common
Shares which would be purchasable based upon the number of Common Shares
actually issued and remaining issuable immediately after such expiration,
and shall be further readjusted in such manner upon expiration of any
further such right.
For the purposes of Sections 7 and 8 hereof,
"dividend in the ordinary course" means a dividend paid on the Common
Shares in any financial year of the Company, whether in (1) cash, (2)
securities of the Company, including rights, options or warrants to
purchase any securities of the Company or property or other assets of the
Company, or (3) property or other assets of the Company, to the extent
that the amount or value of such dividend together with the amount or
value of all other dividends theretofore paid during such financial year
on all of the outstanding Common Shares (any such securities, property or
other assets so distributed to be valued at the fair market value of such
securities, property or other assets, as the case may be, as determined by
the directors acting reasonably which determination shall be conclusive)
does not exceed 100% of the consolidated net income of the Company before
extraordinary items as certified by the Company to the Warrant Holder (but
after dividends payable on all shares ranking prior to or on a parity with
respect to the payment of dividends with the Common Shares) for the period
of twelve (12) consecutive months ended immediately prior to the first day
of such financial year (such consolidated net income, extraordinary items
and dividends to be as shown in the audited consolidated financial
statements of the Company for such period of twelve (12) consecutive
months or, if there are no audited financial statements for such period,
computed in accordance with generally accepted accounting principles,
consistent with those applied in the preparation of the most recent
audited financial statements of the Company).
8. The Exercise Price in effect at any date shall be subject to adjustment
from time to time as follows:
If and whenever at any time after the date hereof and prior to the Expiry
Time, the Company shall:
(a) subdivide the outstanding Common Shares into a greater number of
Common Shares;
(b) consolidate the outstanding Common Shares into a lesser number of
Common Shares; or
(c) make any distribution, other than by way of a dividend in the
ordinary course, to the holders of all or substantially all of the
outstanding Common Shares payable in Common Shares or securities
exchangeable for or convertible into Common Shares (any of such
events being called a "Common Share Reorganisation"), the Exercise
Price shall be adjusted effective immediately after the effective
date or record date, as the case may be, on which the holders of
Common Shares are determined for the purpose of the Common Share
Reorganisation by multiplying the Exercise Price in effect
immediately prior to such effective date or record date by a
fraction, the numerator of which shall be the number of
Common Shares outstanding on such effective date or record date
before giving effect to such Common Share Reorganisation and the
denominator of which shall be the number of Common Shares
outstanding immediately after giving effect to such Common Share
Reorganisation 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.
9. (a) In any case in which Sections 6 to 8, inclusive, shall require that
an adjustment shall become effective immediately after a record date
for an event referred to herein, the Company may defer, until the
occurrence of such event:
(i) issuing to the Warrant Holder in respect of any exercise of
this Warrant 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;
and
(ii) delivering to the Warrant Holder any distributions declared
with respect to such additional Common Shares after such
exercise date and before such event,
provided, however, that the Company shall deliver to the
Warrant Holder an appropriate instrument evidencing the
Warrant Holder's rights upon the occurrence of the event
requiring the adjustment, to an adjustment in the Exercise
Price or the number of Common Shares purchasable upon exercise
of this Warrant and to such distributions declared with
respect to any such additional Common Shares issuable on the
exercise of this Warrant.
(b) The adjustments provided for herein are cumulative; shall, in the
case of adjustments to the Exercise Price, be computed to the
nearest one-tenth of one cent; and shall apply (without duplication)
to successive subdivisions, consolidations, distributions, issuances
or other events resulting in any adjustment under the provisions
hereof; provided that, notwithstanding any other provision hereof,
provided that notwithstanding any other provision hereof, no
adjustment of the Exercise Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in
the Exercise Price then in effect and no adjustment shall be made in
the number of Common Shares purchasable on the exercise of a Warrant
unless it would result in a change of at least one share (provided,
however, that any adjustments which by reason of this Subsection
9(2) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment).
(c) In the event of any question arising with respect to the adjustments
provided herein such question shall be conclusively determined by a
firm of chartered accountants appointed by the Company and
acceptable to Warrant Holder (who may be the Company's auditors);
such accountants shall have access to all necessary records of the
Company and such determination shall be binding upon the Company and
the Warrant Holder. In the event that any such determination is
made, the Company shall deliver a certificate to the Warrant Holder
describing such determination.
(d) No adjustment in the Exercise Price or in the number of Common
Shares purchasable upon exercise of this Warrant shall be made in
respect of any event described herein, other than the events
referred to in clauses (i) and (ii) of section 8, if the Warrant
Holder is entitled to participate in such event on the same terms
mutatis mutandis as if it had exercised this Warrant prior to or on
the effective date or recorded date of such event.
(e) In case the Company after the date of this Warrant shall take any
action affecting the Common Shares, other than action described
herein, which in the opinion of the directors of the Company would
materially affect the rights of the Warrant Holder hereunder, the
Exercise Price or the number of Common Shares purchasable upon
exercise of this Warrant shall be adjusted in such manner, if any,
and at such time, by such action by the directors, as they, in their
sole discretion, may determine to be equitable in the circumstances.
Failure of the directors to make an adjustment in accordance with
this Subsection 9(5) shall be conclusive evidence that the directors
have determined that it is equitable to make no adjustment in the
circumstances. In the event that any such adjustment is made, the
Company shall deliver a certificate to the Warrant Holder describing
such adjustment.
(f) If the Company shall set a record date to determine the holders of
the Common Shares for the purpose of entitling them to receive any
issue or distribution or for the issue of any rights, options or
warrants and shall thereafter and before such distribution or issue
to such shareholders legally abandon its plan to make such
distribution or issue, then no adjustment in the Exercise Price of
the number of Common Shares purchasable upon exercise of this
Warrant shall be required by reason of the setting of such record
date.
(g) As a condition precedent to the taking of any action which would
require an adjustment pursuant to Sections 6, 7 or 8, the Company
shall take any action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue as
fully paid and non-assessable all the Common Shares which the
Warrant Holder is entitled to receive on the full exercise thereof
in accordance with the provisions hereof.
(h) (i) At least fifteen (15) days prior to the effective date or record
date, as the case may be, of any event which, if implemented, will
require an adjustment in any of the subscription rights pursuant to
this Warrant, including the Exercise Price and the number of Common
Shares which are purchasable upon the exercise thereof, the Company
shall give notice to the Warrant Holder of the particulars of such
event and, if determinable, the required adjustment.
(ii) In case any adjustment for which a notice in Subsection (i)
has been given is not then determinable, the Company shall
promptly after such adjustment is determinable give notice to
the Warrant Holder of the adjustment.
(iii) Where a notice in Subsection 9(b) (i) or (ii) has been given,
the Warrant Holder shall be entitled to rely absolutely on any
adjustment calculation of the Company or the Company's
auditor.
10. In the event that the Warrant Holder exercises less than all of the rights
to purchase shares of the Company conferred hereby, the Company shall,
upon surrender of this Warrant and payment (as provided in section 1
hereof), issue to the Warrant Holder a replacement Warrant evidencing the
rights remaining unexercised.
11. The Company covenants and agrees that it will do, execute, acknowledge and
deliver, or cause to be done, executed, acknowledged and delivered, all
and every such other acts, deeds and assurances as the Warrant Holder
shall reasonably require for the better accomplishing and effectuating of
the intentions and provisions of this Warrant.
12. Time shall be of the essence hereof.
13. This Warrant shall be construed in accordance with the laws of the
Province of Ontario and shall be treated in all respects as an Ontario
contract.
14. Any notice required or permitted to be given hereunder shall be in writing
and may be given by mailing the same postage prepaid or delivering the
same addressed to the Company at:
1410 - 181 University Avenue
Toronto ON M5H 3M7
and to the Warrant Holder at:
<<fullname>>
<<address>>
Any notice aforesaid if delivered shall be deemed to have been given or
make on the date on which it was delivered or if mailed, shall be deemed
to have been given on the third business day following the day on which it
was mailed. Either of the parties hereto may change its address for
service from time to time by notice given in accordance with the
foregoing.
15. This Warrant shall enure to the benefit of the Warrant Holder and be
binding upon the Company and their respective successors and permitted
assigns.
16. This Warrant is not transferable by the Warrant Holder without the prior
express consent of the Board of Directors of the Company.
IN WITNESS WHEREOF The Buck-A-Day Company Inc. (the "Company") has caused
this Warrant to be signed by its duly authorised officer as of the 1st day of
October, 2001.
THE BUCK-A-DAY COMPANY INC.
Per: "ED LABUICK"
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ED LABUICK A.S.O.