EXHIBIT 10.9
FORM OF WARRANT BETWEEN ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ AND ZIM CORPORATION DATED
OCTOBER 7, 2004
SCHEDULE "A"
The Warrant and the securities issuable upon exercise of this Warrant (the
"Securities") have not been registered under the United States Securities Act of
1933, as amended (the "US Securities Act") or under any state securities or Blue
Sky laws ("Blue Sky Laws"). No transfer, sale, assignment, pledge, hypothecation
or other disposition of this Warrant or the Securities or any interest therein
may be made except (a) pursuant to an effective registration statement under the
US Securities Act and any applicable Blue Sky Laws or (b) if the Corporation has
been furnished with both an opinion of counsel for the holder, which opinion and
counsel shall be reasonably satisfactory to the Corporation, to the effect that
no registration is required because of the availability of an exemption from
registration under the US Securities Act and applicable Blue Sky Laws, and
assurances that the transfer, sale, assignment, pledge, hypothecation or other
disposition will be made only in compliance with the conditions of any such
registration or exemption.
WARRANT TO PURCHASE COMMON SHARES IN THE CAPITAL
OF ZIM CORPORATION
WARRANT NO. 89 Ottawa, Ontario
October 7, 2004
This certifies that, for value received, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (the "Holder")
is entitled to purchase from ZIM Corporation (the "Corporation"), two million,
thirty-six thousand, one hundred and fifty-four (2,036,154) fully paid and
non-assessable common shares (the "Common Shares") in the capital of the
Corporation at an exercise price of US$0.39 per Common Share (the "Exercise
Price"), subject to adjustment as herein provided. This Warrant may be exercised
by Holder at any time on or before January 7, 2006 (the "Expiry Date") after
which Exercise Date all rights under this Warrant shall terminate and be of no
further force or effect.
This Warrant is subject to the following provisions, terms and conditions:
1. Exercise of Warrant. The rights represented by this Warrant may be
exercised by the Holder, in whole or in part (but not as to a fractional Common
Share), at any time prior to the Expiry Date, by the surrender of this Warrant
(properly endorsed, if required, at the Corporation's principal office in
Ottawa, Ontario, or such other office or agency of the Corporation as the
Corporation may designate by notice in writing to the Holder at the address of
such Holder appearing on the books of the Corporation at any time within the
period above named), and upon payment to it by certified check, bank draft, wire
transfer or cash of the purchase price for such Common Shares. The Corporation
agrees that the Common Shares so purchased shall have been and are hereby deemed
to be issued to the Holder as the record owner of such Common Shares as of the
close of business on the date on which this Warrant shall have been surrendered
and payment made for such Common Shares as aforesaid (the "Exercise Date").
Certificates for the Common Shares so purchased shall be delivered to the Holder
within a reasonable time, not exceeding ten (10) business days, after the rights
represented by this Warrant shall have been so exercised, and, unless this
Warrant has expired, a new Warrant representing the number of Common Shares, if
any, with respect to which this Warrant shall not then have been exercised shall
also be delivered to the Holder within such time. The Corporation may require
that any such new Warrant or any certificate for Common Shares purchased upon
the exercise hereof bear legends substantially similar to those contained on the
face of this Warrant.
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2. No Transfer. This Warrant is non-transferable.
3. Certain Covenants of the Corporation. The Corporation covenants and
agrees that all Common Shares which may be issued upon the exercise of the
rights represented by this Warrant, upon issuance and full payment for the
Common Shares so purchased, will be duly authorized and issued, fully paid and
non-assessable and free from all taxes, liens and charges with respect to the
issue hereof, except those that may be created by or imposed upon the Holder or
its property. The Corporation further covenants and agrees that during the
period within which the rights represented by this Warrant may be exercised, the
Corporation will at all times have authorized and reserved, free of preemptive
or other rights, for the exclusive purpose of issue upon exercise of the
purchase rights evidenced by this Warrant, a sufficient number of Common Shares
to provide for the exercise of the rights represented by this Warrant.
4. Adjustment of Exercise Price and Number of Common Shares. The
Exercise Price and number of Common Shares which may be purchased pursuant to
the rights represented by this Warrant are subject to the following adjustments:
(a) Adjustment of Exercise Price for Stock Dividend, Stock
Split or Stock Combination. In the event that (i) any dividends on any class of
shares of the Corporation payable in Common Shares or securities convertible
into or exercisable for Common Shares ("Common Share Equivalents") shall be paid
by the Corporation, (ii) the Corporation shall subdivide its then outstanding
Common Shares into a greater number of shares, or (iii) the Corporation shall
combine its outstanding Common Shares, by reclassification or otherwise, then,
in each such event, the Exercise Price in effect immediately prior to such event
shall (until adjusted again pursuant hereto) be adjusted immediately after such
event to a price (calculated to the nearest full cent) determined by dividing
(a) the number of Common Shares outstanding immediately prior to such event,
multiplied by the then existing Exercise Price, by (b) the total number of
Common Shares outstanding immediately after such event, and the resulting
quotient shall be the adjusted Exercise Price per share. No adjustment of the
Exercise Price shall be made if the amount of such adjustment shall be less than
1% of the Exercise Price then in effect, but 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 and together with the next subsequent adjustment which,
together with any adjustment or adjustments so carried forward, shall amount to
not less than 1% of the Exercise Price then in effect.
(b) Adjustment of Number of Shares Purchasable on Exercise of
Warrants. Upon each adjustment of the Exercise Price pursuant to this Section,
the Holder shall thereafter (until another such adjustment) be entitled to
purchase at the adjusted Exercise Price the number of Common Shares, calculated
to the nearest full share, obtained by multiplying the number of Common Shares
specified in such Warrant (as adjusted as a result of all adjustments in the
Exercise Price in effect prior to such adjustment) by the Exercise Price in
effect prior to such adjustment and dividing the product so obtained by the
adjusted Exercise Price.
(c) Notice as to Adjustment. Upon any adjustment of the
Exercise Price and any increase or decrease in the number of Common Shares
purchasable upon the exercise of the Warrant, then, and in each such case, the
Corporation shall, as soon as practicable (and in any event within seven days)
after the occurrence of any event which requires an adjustment pursuant to this
Section 4, give written notice thereof to each Holder as shown on the books of
the Corporation, which notice shall state the adjusted Exercise Price and the
increased or decreased number of Common Shares purchasable upon the exercise of
the Warrants, and shall set forth in reasonable detail the method of calculation
and the facts upon which such calculation is based.
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(d) Effect of Reorganization, Reclassification, Merger, etc.
If at any time while this Warrant is outstanding there should be (i) any capital
reorganization of the Corporation (other than the issuance of any Common Shares
in subdivision of outstanding Common Shares by reclassification or otherwise and
other than a combination of shares provided for in Section 4(a) hereof), (ii)
any consolidation or merger of the Corporation with another corporation, or any
sale, conveyance, lease or other transfer by the Corporation of all or
substantially all of its property to any other corporation, which is effected in
such a manner that the holders of Common Shares shall be entitled to receive
cash, shares, securities, or assets with respect to or in exchange for Common
Shares, or (iii) any dividend or any other distribution upon any class of shares
of the Corporation payable in shares of the Corporation of a different class,
other securities of the Corporation, or other property of the Corporation (other
than cash), then, as a part of such transaction, lawful provision shall be made
so that Holder shall have the right thereafter to receive, upon the exercise
hereof, the number of shares or other securities or property of the Corporation,
or of the successor corporation resulting from such consolidation or merger, or
of the corporation to which the property of the Corporation has been sold,
conveyed, leased or otherwise transferred, as the case may be, which the Holder
would have been entitled to receive upon such capital reorganization,
consolidation, merger, sale, conveyance, lease or other transfer, if this
Warrant had been exercised immediately prior to such capital reorganization,
consolidation, merger, sale, conveyance, lease or other transfer, or dividend
payment or other distribution. In any such case, appropriate adjustments (as
determined by the Board) shall be made in the application of the provisions set
forth in this Warrant (including the adjustment of the Exercise Price and the
number of Common Shares issuable upon the exercise of the Warrant) to the end
that the provisions set forth herein shall thereafter be applicable, as near as
reasonably may be, in relation to any shares or other property thereafter
deliverable upon the exercise of the Warrant as if the Warrant had been
exercised immediately prior to such capital reorganization, consolidation,
merger, sale, conveyance, lease or other transfer, or dividend payment or other
distribution and the Holder had carried out the terms of the exchange as
provided for by such capital reorganization, consolidation or merger. The
Corporation shall not effect any such capital reorganization, consolidation,
merger, sale, conveyance, lease or other transfer, or dividend payment or other
distribution unless, upon or prior to the consummation thereof, the successor
corporation or the corporation to which the property of the Corporation has been
sold, conveyed, leased or otherwise transferred shall assume by written
instrument the obligation to deliver to the Holder such shares, securities, cash
or property as in accordance with the foregoing provisions such Holder shall be
entitled to purchase.
5. No Rights as Shareholders. This Warrant shall not entitle the Holder
as such to any voting rights or other rights as a shareholder of the
Corporation.
6. Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the Province of Ontario and the laws of Canada
applicable therein.
7. Amendments and Waivers. The provisions of this Warrant may not be
amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, unless the Corporation agrees in writing
and has obtained the written consent of the Holder.
8. Notices. All notices or communications hereunder, except as herein
otherwise specifically provided, shall be in writing and if sent to the Holder
shall be mailed, delivered, or telecopied and confirmed to the Holder at his or
her address set forth on the records of the Corporation; or if sent to the
Corporation shall be mailed, delivered, or telecopied and confirmed to the head
office of the Corporation, or to such other address as the Corporation or the
Holder shall notify the other as provided in this Section.
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9. Restrictions on Transfer. Neither this Warrant nor the Common Shares
issuable on exercise of this Warrant have been registered under the U.S.
Securities Act or any other securities laws (the "Acts"). Neither this Warrant
nor the Common Shares purchasable hereunder may be sold, transferred, pledged or
hypothecated in the absence of (a) an effective registration statement for this
Warrant or Common Shares purchasable hereunder, as applicable, under the Acts,
or (b) an opinion of counsel reasonably satisfactory to the Corporation that
registration is not required under such Acts. In addition, neither this Warrant
nor any of the rights accruing hereunder may be sold, transferred, pledged or
hypothecated. Each certificate evidencing shares of Common Stock purchased
hereunder will bear a legend describing the restrictions on transfer contained
in this paragraph unless, in the opinion of counsel reasonably acceptable to the
Corporation, the shares need no longer to be subject to the transfer
restrictions
10. Loss, etc., of Warrant. Upon receipt of evidence satisfactory to
the Corporation of the loss, theft, destruction or mutilation of this Warrant,
and of indemnity reasonably satisfactory to the Corporation, if lost, stolen or
destroyed, and upon surrender and cancellation of this Warrant if mutilated, the
Corporation shall execute and deliver to the Holder a new Warrant of like date,
tenor and denomination.
IN WITNESS WHEREOF, ZIM Corporation has caused this Warrant to be
signed by its duly authorized officer in the date set forth above.
ZIM CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Its: CFO
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