THESE AGENT'S WARRANTS ARE ONLY EXERCISABLE IN THE PROVINCE OF ONTARIO. NO
SHARES ISSUABLE UPON EXERCISE OF THE AGENT'S WARRANTS WILL BE DELIVERED IN ANY
JURISDICTION OTHER THAN THE PROVINCE OF ONTARIO.
THE AGENT'S WARRANTS AND THE SHARES ISSUABLE UPON EXERCISE OF THE AGENT'S
WARRANTS HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES AND ARE NOT OFFERED, DIRECTLY OR
INDIRECTLY, IN THE UNITED STATES OR TO A "U.S. PERSON," AS DEFINED BY REGULATION
S UNDER THE SECURITIES ACT, UNLESS REGISTERED UNDER THE SECURITIES ACT AND THE
SECURITIES LAWS OF ALL APPLICABLE STATES OF THE UNITED STATES OR AN EXEMPTION
FROM SUCH REGISTRATION REQUIREMENTS IS AVAILABLE. THE AGENT IN ACCEPTING
DELIVERY OF THE AGENT'S WARRANTS ACKNOWLEDGES AND AGREES THAT THE AGENT'S
WARRANTS MAY NOT BE SOLD AND THE RIGHTS HEREIN PROVIDED MAY NOT BE EXERCISED IN
THE UNITED STATES OR BY OR ON BEHALF OF A U.S. PERSON UNLESS REGISTERED UNDER
THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR UNLESS AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE, AND THAT CERTIFICATES
REPRESENTING THE AGENT'S WARRANTS AND THE SHARES ISSUABLE UPON THEIR EXERCISE
WILL BEAR A LEGEND TO SUCH EFFECT.
NON-TRANSFERABLE AGENT'S WARRANTS
TO PURCHASE COMMON SHARES OF
MYO DIAGNOSTICS, INC.
EXERCISABLE COMMENCING
DECEMBER 6, 1996
VOID AFTER
DECEMBER 6, 1998
THIS CERTIFIES that, for value received, Griffiths McBurney & Partners
(the "Agent"), is the registered holder of 43,200 Agent's warrants (the "Agent's
Warrants"). Each Agent's Warrant entitles the Agent, subject to the terms and
conditions set forth in this Agent's Warrant Certificate, to purchase from Myo
Diagnostics, Inc. (the "Company"), one fully paid and non-assessable common
shares of the Company (a "Share"), at any time commencing on the date hereof and
continuing up to 5:00 p.m. Toronto time on December 6, 1998 (the "Time of
Expiry") on payment of U.S$2.50 per Share (the "Exercise Price"). The number of
Shares which the Agent is entitled to acquire upon exercise of the Agent's
Warrants and the Exercise Price are subject to adjustment as hereinafter
provided.
1. EXERCISE OF AGENT'S WARRANTS
(a) ELECTION TO PURCHASE. The rights evidenced by this certificate may be
exercised by the Agent in whole or in part and in accordance with the
provisions hereof by delivery of an Election to Purchase in
substantially the form attached hereto as Schedule "A", properly
completed and executed, together with payment of the Exercise Price in
United States Dollars for the number of Shares specified in the
Election to Purchase at the principal office of the Company or such
other address as may be notified in writing by the Company (the
"Company Office"). In the event that the rights evidenced by this
certificate are exercised in part, the Company shall,
contemporaneously with the issuance of the Shares issuable on the
exercise of the Agent's Warrants so exercised, issue to the Agent a
substitute certificate, on identical terms in respect of that number
of Shares in respect of which the Agent has not exercised the rights
evidenced by this certificate.
(b) EXERCISE. The Company shall, on the date it receives a duly executed
Election to Purchase and the Exercise Price for the number of Shares
specified in the Election to Purchase (the "Exercise Date"), issue
that number of Shares specified in the Election to Purchase as fully
paid and non-assessable common shares in the capital of the Company.
(c) SHARE CERTIFICATES. As promptly as practicable after the Exercise
Date, the Company shall issue and deliver to the Agent, registered in
the name of the Agent, a certificate or certificates for the number of
Shares specified in the Election to Purchase. To the extent permitted
by law, such exercise shall be deemed to have been effected as of the
close of business on the Exercise Date, and at such time the rights of
the Agent with respect to the number of Agent's Warrants which have
been exercised as such shall cease, and the person or persons in whose
name or names any certificate or certificates for Shares shall then be
issuable upon such exercise shall be deemed to have become the holder
or holders of record of the Shares represented thereby.
(d) FRACTIONAL SHARES. No fractional Shares shall be issued upon exercise
of any Agent's Warrants and no payments or adjustment shall be made
upon any exercise on account of any cash dividends on the Shares
issued upon such exercise. If any fractional interest in a Share
would, except for the provisions of the first sentence of this Section
l(d), be deliverable upon the exercise of an Agent's Warrant, the
Company shall, in lieu of delivering the fractional share therefor,
pay to the Agent an amount
2
in cash equal to the Fair Market Value (as hereinafter defined) of
such fractional interest.
(e) CORPORATE CHANGES.
(i) Subject to paragraph l(e)(ii) hereof, if the Company shall be a
party to any reorganization, merger, dissolution or sale of all
or substantially all of its assets, whether or not the Company is
the surviving entity, the number of Agent's Warrants evidenced by
this certificate shall be adjusted so as to apply to the
securities to which the holder of that number of Shares of the
Company subject to the unexercised Agent's Warrants would have
been entitled by reason of such reorganization, merger,
dissolution or sale of all or substantially all of its assets
(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 the number of Shares subject to
the unexercised Agent's Warrants immediately prior to the Event,
and dividing the product thereof by the number of securities to
which the holder of that number of Shares subject to the
unexercised Agent's Warrants would have been entitled to by
reason of such Event.
(ii) If the Company is unable to deliver securities to the Agent
pursuant to the proper exercise of an Agent's Warrant, the
Company may satisfy such obligations to the Agent hereunder by
paying to the Agent in cash the difference between the Exercise
Price of all unexercised Agent's Warrants granted hereunder and
the Fair Market Value of the securities to which the Agent would
be entitled to upon exercise of all unexercised Agent's Warrants.
Adjustments under this subparagraph (e) or (subject to
subparagraph (o)) any determinations as to the Fair Market Value
of any securities shall be made by the board of directors of the
Company, 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 Company's auditors, whose determination shall be
binding and conclusive.
(f) SUBDIVISION OR CONSOLIDATION OF SHARES
3
(i) In the event the Company shall subdivide its outstanding common
shares into a greater number of 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 Company 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 Agent shall thereafter be entitled to acquire, at the
Exercise Price resulting from such adjustment, the number of
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 Shares which may be acquired
hereunder immediately prior to such adjustment and dividing the
product thereof by the Exercise Price resulting from such
adjustment.
(g) CHANGE OR RECLASSIFICATION OF SHARES. In the event the Company shall
change or reclassify its outstanding common shares into a different
class of securities, the rights evidenced by the Agent's Warrants
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 Agent
shall be entitled to acquire shall be that number of the
successor class of securities which a holder of that number of
Shares subject to the unexercised Agent's Warrants 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 Shares subject to the
unexercised Agent's Warrants immediately prior to the change or
reclassification, and dividing the product thereof by the number
of common shares determined in paragraph 1(g)(i) hereof.
(h) OFFERING TO SHAREHOLDERS. If and whenever at any time prior to the
Time of Expiry, the Company 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")
4
for the issuance of rights, options or warrants to all or
substantially all the holders or the outstanding common shares of the
Company entitling them, for a period expiring not more than 45 days
after such record date, to subscribe for or purchase common shares of
the Company 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 80% 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 may be, 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
Company or any subsidiary of the Company 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; 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.
5
(j) NOTICE OF ADJUSTMENT. Upon any adjustment of the number of Shares and
upon any adjustment of the Exercise Price, then and in each such case
the Company shall give written notice thereof to the Agent, which
notice shall state the Exercise Price and the number of Shares or
other securities subject to the unexercised Agent's Warrants 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 Agent there shall be transmitted
promptly to the Agent a statement of the firm of independent chartered
accountants retained to audit the financial statements of the Company
to the effect that such firm concurs in the Company's calculation of
the change.
(k) OTHER NOTICES. In case at any time:
(i) the Company shall declare any dividend upon its common shares
payable in Shares;
(ii) the Company shall offer for subscription pro rata to the holders
of its common shares any additional shares of any class or other
rights;
(iii) there shall be any capital reorganization or reclassification of
the capital stock of the Company, or consolidation, amalgamation
or merger of the Company 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 Company,
then, in any one or more of such cases, the Company shall give to
the Agent (A) 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 (B) 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 (A) 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
6
entitled thereto, and such notice in accordance with the
foregoing clause (B) 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) SHARES TO BE RESERVED. The Company will at all times keep available,
and reserve if necessary under applicable law, out of its authorized
common shares, solely for the purpose of issue upon the exercise of
the Agent's Warrants, such number of Shares as shall then be issuable
upon the exercise of the Agent's Warrants. The Company covenants and
agrees that all Shares which shall be so issuable will, upon issuance,
be duly authorized and issued as fully paid and non-assessable. The
Company will take all such actions as may be necessary to ensure that
all such Shares may be so issued without violation of any applicable
requirements of any exchange upon which the common shares of the
Company may be listed or in respect of which the common shares are
qualified for unlisted trading privileges. The Company will take all
such actions are within its power to ensure that all such Shares may
be so issued without violation of any applicable law.
(m) ISSUE TAX. The issuance of certificates for Shares upon the exercise
of Agent's Warrants shall be made without charge to the Agent for any
issuance tax in respect thereto, provided that the Company 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 Agent.
(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 Company for the 20
consecutive trading days immediately before such date on The Toronto
Stock Exchange, or, if the shares in respect of which a determination
of Fair Market Value is being made are not listed on 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
shares sold on the said exchange during the said 20 consecutive
trading days by the total number of such shares so sold.
7
2. REPLACEMENT
Upon receipt of evidence satisfactory to the Company of the loss,
theft, destruction or mutilation of this Agent's Warrant Certificate and, if
requested by the Company, upon delivery of a bond of indemnity satisfactory to
the Company (or, in the case of mutilation, upon surrender of this Agent's
Warrant Certificate), the Company will issue to the Agent a replacement
certificate (containing the same terms and conditions as this Agent's Warrant
Certificate).
3. EXPIRY DATE
The Agent's Warrants shall expire and all rights to purchase Shares
hereunder shall cease and become null and void at the Time of Expiry.
4. GOVERNING LAW
The laws of the State of California and the federal laws of United
States of America applicable therein shall govern the Warrants.
5. SUCCESSORS
This Agent's Warrant Certificate shall enure to the benefit of and
shall be binding upon the Agent and the Company and their respective successors.
6. NON U.S. PERSON
The Agent in accepting delivery of this Agent's Warrant Certificate,
acknowledges it is not a U.S. Person (as defined in Rule 902(0) of Regulation S
("Regulation s") promulgated by the United States Securities and Exchange
Commission, which definition includes, but is not limited to, any natural person
resident in the United States, any corporation or partnership incorporated or
organized under the laws of the United States, or any estate or trust of which
any executor, administrator or trustee is a U.S. Person), the Agent will not
receive delivery of the Agent's Warrants or the Shares for the account or
benefit of any U.S. Person or for offering, resale or delivery for the account
or benefit of any U.S. Person or for the account of any person in any
jurisdiction other than the Province of Ontario.
7. WARRANTS NON-TRANSFERABLE
The Warrants are non-transferable.
IN WITNESS WHEREOF the Company has caused this Agent's Warrant
Certificate to be signed by its duly authorized officers and its corporate seal
hereto affixed.
8
DATED as of December 6, 1996.
MYO DIAGNOSTICS, INC.
Per: /s/ Gerald Appel
-------------------------
Gerald Appel, President
9
SCHEDULE "A"
ELECTION TO EXERCISE
The undersigned hereby irrevocably elects to exercise the number of Agent's
Warrants of MYO Diagnostics, Inc. set out below for the number of Shares (or
other property or securities subject thereto) as set forth below:
(a) Number of Agent's Warrants to be Exercised: __________
(b) Number of Shares to be Acquired: __________
(c) Exercise Price per Share: $_________
(d) Aggregate Purchase Price
[(b) multiplied by (c)] $_________
and hereby tenders a certified cheque, bank draft or cash in United States
dollars for such aggregate purchase price, and directs such Shares to be
registered and a certificate therefor to be issued as directed below.
DATED this __ day of __________, 199___
GRIFFITHS MCBURNEY & PARTNERS
Per:
--------------------------
10