EXHIBIT 2.2
LOCK-UP AGREEMENT
THIS AGREEMENT made as of the 10th day of August, 1999.
BETWEEN:
MED-EMERG INTERNATIONAL INC., a corporation incorporated under
the laws of the Province of Ontario
(hereinafter referred to as "MEII")
- and -
XXXXXX XXXXXX AND XXXXXX XXXXXXXX
(collectively, the "PRINCIPALS" and individually, a
"PRINCIPAL")
- and -
977675 ONTARIO INC. ("977675"), a corporation incorporated
under the laws of Ontario and PAGE, XXXXXXX & ASSOCIATES LTD.
("PRAL"), a corporation incorporated under the laws of Ontario
(977675 and PRAL are hereinafter referred to as the "PRINCIPAL
SHAREHOLDERS")
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YFMC HEALTHCARE INC., a corporation continued under the laws
of the Province of Ontario
(hereinafter referred to as "YFMC")
- and -
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MONTREAL TRUST COMPANY OF CANADA
(hereinafter referred to as the "ESCROW AGENT")
WHEREAS MEII, YFMC, the Principals and the Principal Shareholders
entered into the Business Combination Agreement pursuant to which MEII has
agreed, among other things, to make an offer to purchase all of the YFMC
Securities;
AND WHEREAS Xxxxxx Xxxxxx is an officer, director and principal
shareholder of 977675; and
AND WHEREAS Xxxxxx Xxxxxxxx is an officer, director and principal
shareholder of PRAL;
AND WHEREAS the Principal Shareholders are at the present time the
holders of the number of YFMC Securities as set out in Schedule "A" hereto;
AND WHEREAS the Principal Shareholders have mutually agreed with
each other and with MEII and YFMC to forthwith deposit all of their YFMC
Securities with the Escrow Agent pursuant to the terms hereof, such that such
securities will be deposited under the Offer;
AND WHEREAS the YFMC Common Shares and the YFMC Preferred Shares
set out in Schedule "A" hereto are currently being held in escrow pursuant to
certain agreements, in each case, between the Principal Shareholders and the
Escrow Agent pursuant to the requirements of the Alberta Stock Exchange and
the Alberta Securities Commission, as applicable (the "ASC/ASE Escrow");
NOW THEREFORE in consideration of the mutual covenants and
agreements contained in this Agreement and other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged
by each of the parties), the parties hereto do hereby agree as follows:
ARTICLE 1
INTERPRETATIONS
1.1 DEFINITIONS. In this Agreement the following capitalized terms
shall have the following respective meanings ascribed thereto:
"AGREEMENT" means this agreement and all schedules attached hereto,
in each case as they may be supplemented or amended from time to
time and the expressions "HEREOF", "HEREIN", "HERETO", "HEREUNDER",
"HEREBY" and similar expressions refer to this agreement and,
unless otherwise indicated, references to Articles and Sections are
to the specified Articles and Sections in this Agreement;
"ASC/ASE ESCROW" has the meaning ascribed thereto in the recitals
hereto;
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"BUSINESS COMBINATION AGREEMENT" means the agreement made as of
even date among MEII, YFMC, the Principals and the Principal
Shareholders relating to, among other things, the Offer;
"BUSINESS DAY" means a day on which Canadian chartered banks are
open for business in Toronto, Ontario;
"DEPOSITED SECURITIES" means, prior to completion of the Offer, the
YFMC Common Shares and the YFMC Preferred Shares deposited by the
Principal Shareholders pursuant to Section 2.1;
"MEII" means Med-Emerg International, Inc.;
"MEII COMMON SHARES" means common shares of MEII, as constituted on
the date hereof;
"NON-ARM'S LENGTH TRANSACTION" means, except for contracts of
employment, any contract or agreement between YFMC or any
subsidiary and any officer, director, employee of YFMC and/or any
subsidiary or any person not dealing at arm's length (within the
meaning of the INCOME TAX ACT (Canada)) with any of them or any
affiliate of any of them;
"OFFER" means the offer to be made by MEII to purchase, among other
things, all of the YFMC Common Shares in exchange for MEII Common
Shares, as contemplated by the Business Combination Agreement;
"YFMC COMMON SHARES" means common shares of YFMC, as constituted on
the date hereof; and
"YFMC PREFERRED SHARES" means the 1,000,000 outstanding first
preferred shares, Series A of YFMC, as the same are constituted on
the date hereof;
"YFMC SECURITIES" means YFMC Common Shares, YFMC Preferred Shares
and YFMC Warrants; and
"YFMC SERIES A WARRANTS" means the 356,680 outstanding common share
purchase warrants of YFMC, each such warrant entitling the holder
thereof to acquire one YFMC Common Share at an exercise price of
$0.40 per share for a period of two years from the date of issuance;
"YFMC SERIES B WARRANTS" means the 356,680 outstanding common share
purchase warrants of YFMC, each such warrant entitling the holder
thereof to acquire one YFMC Common Share at an exercise price of
$0.50 per share for a period of two years from the date of
issuance; and
"YFMC WARRANTS" means the YFMC Series A Warrants and the YFMC
Series B Warrants, collectively.
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Capitalized terms which are not otherwise defined herein shall have the meanings
ascribed to them in the Business Combination Agreement.
1.2 MUTATIS MUTANDIS. The provisions of this Agreement relating to the
Deposited Securities shall apply MUTATIS MUTANDIS to any other securities
into which the Deposited Securities or any of them may be exchanged,
converted, changed, reclassified, subdivided or consolidated.
1.3 GENDER AND NUMBER. In this Agreement, unless the context otherwise
requires, words importing the singular include the plural and vice versa and
words importing gender include all genders.
1.4 INVALIDITY OF PROVISIONS. Each of the provisions of this Agreement
is distinct and severable and a declaration of invalidity or unenforceability
of any such provision by a court of competent jurisdiction shall not affect
the validity or enforceability of any other provision hereof.
1.5 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties pertaining to the subject matter of this Agreement. There
are no warranties, representations or agreements among the parties in
connection with such subject matter, except as specifically set forth or
referred to in this Agreement. No reliance is placed on any representation,
opinion, advice or assertion of fact made by any party or its directors,
officers and agents, except to the extent that the same has been reduced to
writing and included as a term of this Agreement. Accordingly, there shall be
no liability, either in tort or in contract, assessed in relation to any such
representation, opinion, advice or assertion of fact, except to the extent
aforesaid.
1.6 AMENDMENT, WAIVER. Except as expressly provided in this Agreement,
no amendment of this Agreement shall be binding unless executed in writing by
all of the parties hereto. No waiver of this Agreement shall be binding
unless executed in writing and no such waiver shall constitute a waiver of
any other provision, nor shall any waiver of any provision of this Agreement
constitute a continuing waiver, unless otherwise expressly provided.
1.7 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Province of Ontario and the laws of Canada
applicable therein, and shall in all respects be treated as an Ontario
contract.
1.8 TERMINATION. This Agreement and all obligations of MEII, YFMC, the
Principals and the Principal Shareholders hereunder shall terminate on the
earlier of: (a) January 31, 2000, if the Offer is not completed by MEII, (b)
the date upon which all of the Deposited Securities have been taken up and
paid for pursuant to the Offer or (c) at the option of MEII, YFMC or the
Principal Shareholders, if the Business Combination Agreement is terminated
in accordance with Article 6 thereof and written notice of the same is
provided by any party hereto to the Escrow Agent.
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ARTICLE 2
RELEASE FROM ASC/ASE ESCROW
2.1 APPLICATION. The Principals will, and the Principals agree to cause
the Principal Shareholders to, forthwith after the execution of this
Agreement, make an application to the Alberta Securities Commission and the
Alberta Stock Exchange for the release of all of the YFMC Common Shares and
the YFMC Preferred Shares subject to the ASC/ASE Escrow.
2.2 PURSUE DILIGENTLY. The Principals and the Principal Shareholders
agree to cause such application to be pursued diligently and expeditiously.
2.3 KEEP INFORMED. The Principals and the Principal Shareholders agree
to keep MEII and its counsel fully informed as to the status of the
application for the release of the YFMC Common Shares and the YFMC Preferred
Shares from the ASC/ASE Escrow and to fully consult with MEII's counsel with
respect thereto.
ARTICLE 3
ESCROW
3.1 DEPOSITED SECURITIES. Upon release of the YFMC Common Shares and
the YFMC Preferred Shares from the ASC/ASE Escrow, the Principal Shareholders
hereby agree to, and the Principals agree to cause the Principal Shareholders
to, place and deposit with the Escrow Agent the YFMC Common Shares and the
YFMC Preferred Shares held by the Principal Shareholders as set forth in
Schedule "A" to this Agreement. The Principal Shareholders hereby undertake
and agree forthwith to, and the Principals agree to cause the Principal
Shareholders to, deliver to the Escrow Agent duly completed and executed
powers of attorney permitting the transfer of such shares in blank (with
signatures guaranteed by a bank, trust company or investment dealer) to the
Escrow Agent for deposit.
ARTICLE 4
THE OFFER
4.1 AGREEMENT TO DEPOSIT UNDER THE OFFER
(1) Subject to the Deposited Securities being released from the ASC/ASE
Escrow and subject to Section 1.8 hereof, each of the Principal
Shareholders hereby irrevocably and unconditionally agrees to, and
the applicable Principal agrees to cause such Principal Shareholder
to, deposit all of the YFMC Common Shares and the YFMC Preferred
Shares owned by such Principal Shareholder under the Offer.
(2) Subject to the Deposited Securities being released from the ASC/ASE
Escrow and subject to Section 1.8 hereof, each of the Principal
Shareholders hereby irrevocably authorizes and directs the Escrow
Agent to, and the Principals agree to cause the Principal
Shareholders to, deposit with the Escrow Agent in its capacity as
depository with respect to the Offer all of the YFMC Common Shares
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and the YFMC Preferred Shares deposited hereunder under the Offer
and to execute and deliver for and on behalf of such Principal
Shareholder all instruments and documents as may be required to be
executed or delivered by such Principal Shareholder in connection
with the Offer and, notwithstanding the rights granted to each such
Principal Shareholder pursuant to applicable securities legislation
or the terms of the Offer, further irrevocably agrees that
thereafter the Principal or the Principal Shareholder will not
withdraw any of the Deposited Securities deposited by such
shareholder under the Offer until the date on which the Offer
expires or is terminated without MEII having taken up and paid for
the Deposited Securities under the Offer.
ARTICLE 5
ESCROW TERMS AND RELEASES FROM ESCROW
5.1 TRANSFER OF DEPOSITED SECURITIES. Upon completion of the Offer, any
Deposited Securities deposited under this Agreement shall be transferred to
MEII.
5.2 ESCROW AGENT. Once the Deposited Securities are deposited
hereunder, the Principal Shareholders hereby direct the Escrow Agent to
retain their respective securities and the certificates or agreements
representing the same (including any replacement securities, agreements or
certificates) and not to do or cause anything to be done to release the same
from escrow or to allow any transfer, hypothecation or alienation thereof,
except with and as directed by a written consent, order or direction as
contemplated herein. The Escrow Agent hereby accepts the responsibilities
placed on it hereby and agrees to perform the same in accordance with the
terms hereof and the written consents, orders or directions as contemplated
herein.
5.3 TRANSFER OF SECURITIES. The Escrow Agent shall at all times hold
the certificates and agreements representing the Deposited Securities held by
the Principal Shareholders and deposited hereunder on behalf of the Principal
Shareholders. The Principal Shareholders hereby irrevocably appoint MEII as
their attorney for the purpose of transferring their Deposited Securities
deposited hereunder in accordance with the terms of this Agreement. Any such
transfer shall be effected in accordance with the terms hereof.
5.4 RESTRICTIONS ON TRANSFER. The Principal Shareholders hereby agree
that the Deposited Securities deposited hereunder and the beneficial
ownership of or any interest in them and the certificates and agreements
representing them (including any replacement securities, agreements or
certificates) shall not be sold, assigned, pledged, mortgaged, hypothecated,
alienated or otherwise in any manner dealt with except in accordance with
this Agreement or except as may be required by reason of the death or
bankruptcy of one of the Principal Shareholders, in which case, the Escrow
Agent shall hold the said certificates or agreements, subject to this
Agreement, for whatever persons, firms or corporations shall be legally
entitled to be or become the registered owner thereof. Notwithstanding the
foregoing, there shall be no restriction or prohibition on any transfer of
any Deposited Securities deposited hereunder for estate or tax planning or
other similar purposes, provided that MEII's prior written approval to such
transfer is obtained (which approval will not be unreasonably withheld), and
further
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provided that the transferee agrees to be bound by the terms and conditions
of this Agreement and to execute such further documents or instruments as
MEII considers necessary or desirable.
5.5 RIGHTS OF SHAREHOLDERS. If during the period in which any of the
Deposited Securities are retained in escrow pursuant hereto, any cash
dividend is received by the Escrow Agent in respect of the Deposited
Securities, any such dividend shall be forthwith paid or transferred to the
respective Principal Shareholders entitled thereto. All voting rights
attached to the Deposited Securities shall at all times be exercised by the
respective registered owners thereof.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
6.1 REPRESENTATIONS AND WARRANTIES. Each of the Principals severally
represents and warrants to MEII that:
(a) the Principal Shareholder owned by him is the registered and
beneficial owner of the YFMC Common Shares and the YFMC Preferred Shares
set forth opposite his name in Schedule "A" annexed hereto and the
Principal Shareholder owns such shares free and clear of all
encumbrances of any nature or kind and no person has any right to
purchase any such shares, except pursuant to the terms hereof and the
Offer;
(b) each of YFMC and its subsidiaries has not made any payment or loan
to, or borrowed any monies from or is otherwise indebted to, any person
pursuant to a Non-Arm's Length Transaction, except as disclosed in
YFMC's audited financial statements for its fiscal year ended December
31, 1998, the Business Combination Agreement or the take-over bid
circular prepared in connection with the Offer and except for usual
compensation paid in the ordinary course of business, consistent with
past practice; and
(c) except for contracts of employment or as disclosed in the Business
Combination Agreement or in the take-over bid circular prepared in
connection with the Offer, each of YFMC and its subsidiaries is not
party to any Non-Arm's Length Transaction.
ARTICLE 7
GENERAL CONTRACT PROVISIONS
7.1 NOTICES. Any notice herein required or permitted to be given by
any party to the others shall be in writing and shall be delivered or sent by
telex or facsimile transmission, personal delivery or pre-paid registered
mail to the applicable address set forth below:
(1) in the case of MEII, to the following:
Med-Emerg International Inc.
0000 Xxxxxxxx Xxxx,
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxx
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L5N 5R1
Attention: The President
Facsimile: (000) 000-0000
(2) in the case of the Principals and the Principal Shareholders, to
the address therefor shown in the registers maintained by YFMC from
time to time or as otherwise shown in YFMC's records.
(3) in the case of YFMC, to:
YFMC Healthcare Inc.
Xxxxx 000 - 000 XxxXxxxx Xxxxxx
Xxxxxx, Xxxxxxx
X0X 0X0
Attention: The President
Fax No.: (000) 000-0000
(4) in the case of the Escrow Agent, to:
Montreal Trust Company of Canada
Xxxxx 000
000-0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxx Xxxxxxxx
Fax No.: (000) 000-0000
Any notice delivered shall be deemed to have been validly and effectively
given on the day of such delivery. If the day of delivery is not a Business
Day, notice shall be deemed to have been given and received on the next
Business Day following such date. Any notice sent by telex or facsimile
transmission or other means of prepaid recorded communication shall be deemed
to have been validly and effectively given on the Business Day next following
the day on which it was sent.
7.2 TIME OF THE ESSENCE. Time shall be of the essence of this
Agreement.
7.3 FURTHER ACTS. The parties hereto agree to sign such other papers,
cause such meetings to be held, resolutions (including special resolutions)
passed, by-laws enacted, exercise their vote and influence and do and perform
and cause to be done and performed such further and other acts and things as
may be necessary to give full effect and force to this Agreement.
7.4 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an
original and such counterparts together shall constitute one and the same
document.
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7.5 SUCCESSORS AND ASSIGNS. This Agreement shall enure to the benefit
of and be binding upon the parties hereto and their respective heirs,
executors, administrators, successors and assigns.
7.6 ESCROW AGREEMENT. Upon completion of the Offer, MEII and the
Principal Shareholders agree to enter into an escrow agreement with the
Escrow Agent substantially in the form annexed hereto as Schedule "B".
7.7 PREFERRED SHARE ESCROW AGREEMENT. Upon completion of the Offer,
MEII and the Principal Shareholders agree to enter into an escrow agreement
with the Escrow Agent substantially in the form annexed hereto as Schedule
"C".
IN WITNESS WHEREOF the parties hereto have executed these presents
as of the day and year first above-written.
SIGNED, SEALED AND DELIVERED )
In the presence of: )
) MED-EMERG INTERNATIONAL INC.
)
) /s/ Xxxxxxx Xxxxxx
) By: ---------------------------------
) Name:
) Title:
)
)
) YFMC HEALTHCARE INC.
)
) /s/ Xxxxxx Xxxxxxxx
) By: ---------------------------------
) Name:
) Title:
)
)
) MONTREAL TRUST COMPANY OF CANADA
)
) By: _________________________________
) Name:
) Title:
)
)
) By: _________________________________
) Name:
) Title:
)
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)
/s/ Xxxx Xxxxx ) /s/ Xxxxxx Xxxxxx
------------------------------------- ) -------------------------------------
Witness ) XXXXXX XXXXXX
)
/s/ Xxxx Xxxxx ) /s/ Xxxxxx Xxxxxxxx
------------------------------------- ) -------------------------------------
Witness ) XXXXXX XXXXXXXX
)
) 977675 ONTARIO INC.
)
) /s/ Xxxxxx Xxxxxx
) By: ---------------------------------
) Name:
) Title:
)
)
) PAGE, XXXXXXX & ASSOCIATES LTD.
)
) /s/ Xxxxxx Xxxxxxxx
) By: ---------------------------------
) Name:
) Title:
SCHEDULE "A"
PRINCIPAL SHAREHOLDERS
------------------------------- ----------------------- ------------------ ------------- ---------------------
NAME OF PRINCIPAL NUMBER OF SHARE CERTIFICATE
SHAREHOLDER ADDRESS CLASS OF SHARES SHARES NUMBERS
------------------------------- ----------------------- ------------------ ------------- ---------------------
977675 Ontario Inc. 00 Xxxxxxx Xxxxxxxx Xxxxxx 3,641,331 -
(Xxxxxx Xxxxxx) Kanata, Ontario Preferred 506,354 1,2,3,7,8,9
K2K 1W2
------------------------------- ----------------------- ------------------ ------------- ---------------------
Page Xxxxxxx & Associates Ltd. 00 Xxxxxxxx Xxxxxxxx Xxxxxx 3,360,165 -
(Xxxxxx Xxxxxxxx) Gloucester, Ontario Preferred 463,102 4,5,6,10,11,12
K1B 4A6
------------------------------- ----------------------- ------------------ ------------- ---------------------
SCHEDULE "B"
ESCROW AGREEMENT
(for MEII Common Shares exchanged
for YFMC Common Shares)
SCHEDULE "C"
PREFERRED SHARE ESCROW AGREEMENT
(for MEII Common Shares exchanged
for YFMC Preferred Shares)
