EXHIBIT 4.22
BOARD SUPPORT AGREEMENT
BETWEEN
XXX.XXX INTERNATIONAL INC.
A COMPANY ORGANIZED AND EXISTING UNDER THE LAWS OF ONTARIO, CANADA
HEREUNDER REFERRED TO AS BII
AND
ADB SYSTEMER ASA
A COMPANY ORGANIZED AND EXISTING UNDER THE LAWS OF NORWAY
HEREUNDER REFERRED TO AS ADB
WHEREAS
A. BII intends to submit an offer to the shareholders of ADB relating to
the purchase of all of the shares, options and warrants in ADB;
B. ADB's share capital is NOK 12,732,000 consisting of 12,732,000
outstanding shares, in addition to 701,000 warrants and 880,000 options
to acquire shares of ADB;
C. BII's share capital consists of an unlimited number of common shares, of
which 54,638,468 are issued and outstanding (61,242,127 on a fully
diluted basis);
D. BII and ADB signed on 18 July 2001 a letter of intent, which, in broad
terms, sets out the basis upon which BII proposes and ADB agrees to
complete the acquisition;
E. BII intends to offer the shareholders of ADB as compensation for its
acquisition of shares in ADB both shares in BII and cash payment, and
will offer options and warrants in BII for options and warrants in ADB;
F. BII intends to submit to the shareholders of BII an offer relating to
the purchase of shares in ADB, together with a prospectus relating to
the issuance of shares in BII as partial compensation for the
acquisition of shares in ADB;
G. BII intends to submit the terms of the proposed acquisition to the
shareholders of BII for approval at a special meeting called for such
purpose, hereafter referred to as the Special Meeting;
H. The Board of Directors of ADB has reviewed and approved the following
documents (the "Documents") in connection with this proposed
transaction:
1. A draft of the above-mentioned purchase offer (with prospectus),
hereafter referred to as the Offer.
2. A draft responsibility statement in favour of BII, detailing
certain representations and warranties regarding ADB, hereafter
referred to as the Responsibility Statement.
3. A draft board representation agreement providing for the
nomination of two individuals representing ADB and its
shareholders to the board of directors of BII, hereafter
referred to as the Board Representation Agreement.
4. A draft employment agreement for Xxx Xxxxxxxx, hereafter
referred to as the Employment Agreement.
5. Draft lock-up agreements, committing certain shareholders to
tender their shares to the Offer and regulating their trading in
shares of BII following completion of the Offer, hereafter
referred to as the Lock-Up Agreements.
6. A draft information circular in respect of the Special Meeting,
hereafter referred to as the Circular.
I. The current drafts of the Documents are attached as Appendices 1 to 6.
J. In order to successfully acquire the shares of ADB, BII needs the strong
support, both in principle and in practice, of the board of directors of
ADB.
NOW, THEREFORE, BII AND ADB HAVE AGREED AS FOLLOWS:
PART A - BII OBLIGATIONS
A.1. Subject to the terms and conditions contained herein, BII agrees to
proceed with the Offer and to call the Special Meeting by no later than
September 12, 2001 (the "Expiration Date"). This shall involve BII
mailing to its shareholders by the Expiration Date the necessary
management information circular regarding the Offer, which circular
shall include a recommendation to proceed with the Offer.
A.2 The Board of Directors and management of BII shall support the Offer in
all communications with shareholders of BII. Such support shall continue
while the Offer remains outstanding, provided that in the event that
there have been any events, changes, developments or circumstances
related to the business or affairs of ADB, which in the opinion of the
board of directors of BII materially and adversely affect the value,
business or prospects of ADB, such support may be withdrawn.
A.3 The obligation to proceed with the Offer and the Special Meeting shall
be subject to the satisfaction of the following conditions by no later
than September 7, 2001:
i. Delivery by ADB to BII of the Responsibility Statement, executed
by the members of the board of directors and management of ADB.
ii. Delivery by Xxx Xxxxxxxx to BII of the Employment Agreement,
executed by Xx. Xxxxxxxx.
iii. Delivery by ADB to BII of Lock-Up Agreements executed by by all
members of the board of directors, Jone Skaara, and Riverside
Investment/LimeRock Ventures, Xxx Xxxxxxxx, AIG Private Bank
Ltd, Sandnes Investering and Rogaland Investering.
iv. Delivery by ADB to BII of a certified copy of the Support
Resolution (as defined below).
v. BII being satisfied, acting reasonably, that all of the
conditions contained in the Offer are likely to be satisfied on
or before Closing (as defined below).
A.4 The conditions to the Offer shall be as contained in the draft attached
hereto.
A.5 BII's obligations to complete the Offer shall be as set out therein. BII
agrees that it shall use all reasonable efforts to complete the Offer by
no later than October 31, 2001, and to take up and pay for all shares,
warrants and options tendered to the Offer before such time (the
"Closing").
PART B - ADB OBLIGATIONS
B.1 The obligations of ADB contained in this Part B are subject to the
satisfaction of the following conditions on or before the delivery of
the Offer to the shareholders of ADB:
a. Delivery by BII to ADB of a certified resolution of the board of
directors of BII stating that the BII shareholder meeting
circular shall provide for the appointment of Xxxxxx Xxxxxxxxxx
and Xxxx Xxxxxxxx in place of Xxxxxxx Xxxxxx, Xxxxxx Xxxxxxxx
and Xxxxxx Xxxxxx, and that Xxx Xxxxxxxx shall be granted
observer status, in accordance with the terms of the Board
Representation Agreement.
b. Delivery by BII to ADB of the Board Representation Agreement,
signed by BII.
B.2 The board of directors of ADB shall approve a resolution, hereafter
referred to as the Support Resolution, stating that the board
unanimously supports the Offer from BII relating to the purchase of all
shares in ADB, including all terms and conditions thereto, and the form
of all of the Documents, subject to such changes as may be accepted by
an officer of ADB Such resolution is not to be rescinded or amended
while the Offer remains outstanding, provided that in the event that
there have been any events, changes, developments or circumstances
related to the business or affairs of BII, which in the opinion of the
board of directors of ADB materially and adversely affect the value,
business or prospects of BII (a "Material Adverse Event"), the Support
Resolution may be rescinded.
B.3 ADB, ADB management, and the individual members of the board of
directors shall:
a) actively promote the transactions as described in the Offer to
the shareholders of ADB, customers, suppliers and other
interested third parties, by inter alia disclosing that those
board members and members of management who are shareholders in
ADB have committed themselves to sell the shares in ADB which
they control directly or indirectly to BII on similar conditions
to those stated in the Offer of share purchase in the
prospectus, and otherwise in a way as agreed with BII, or any
other legal entity which has been given the authority to
represent BII, all with the express intent of ensuring the
successful acquisition by BII of all of the shares of ADB.
b) not permit the occurrence of any of the following events:
(i) the alteration of any of the provisions of the
constituent documents of ADB or of any subsidiary of ADB
so as to:
(A) increase its share capital by the creation of
new shares; or
(B) consolidate or divide all or any of its share
capital, or convert shares of one class into
shares of another class;
(ii) ADB or any subsidiary of ADB resolving to reduce its
share capital in any way;
(iii) ADB or any subsidiary of ADB making an allotment of, or
granting an option to subscribe for, any of its shares,
or agreeing to make such an allotment or grant such an
option;
(iv) ADB or any subsidiary of ADB issuing or agreeing to
issue convertible securities;
(v) ADB or any subsidiary of ADB disposing or agreeing to
dispose of the whole or a substantial part of its
business or property;
(vi) ADB or any subsidiary of ADB charging or agreeing to
charge subsequent to the date hereof the whole or a
substantial part of its business or property, other than
in the ordinary course of business;
(vii) ADB or any subsidiary of ADB resolving that it be wound
up;
(viii) the appointment of a liquidator, receiver or trustee in
bankruptcy for ADB or a subsidiary of ADB or in relation
to the assets of either;
(ix) the making of an order by a court for the winding up or
dissolution of ADB or any subsidiary of ADB; or
(x) the declaration of dividends or the making of any other
payment or distribution to shareholders of ADB.
B.4 ADB agrees to continue to make available to representatives of BII, its
advisors, counsel and other professionals, such financial, business and
other information, in written, printed, graphic and other tangible form
and in oral form including, but not limited to access to senior
management, financial and technical staff, senior programmers and major
customers, suppliers and distributors of ADB and also written, printed,
graphic, electronic and other tangible form, concerning the business of
ADB as may be requested for the purpose of enabling BII to determine
compliance with the Offer and develop a post-acquisition integration
plan for the companies.
B.5 ADB agrees to work with BII to complete all necessary analyses, reviews,
discussions and assessments that will be necessary to finalize the Offer
by no later than the Expiration Date or such other date mutually agreed
to by the parties.
B.6 ADB acknowledges that BII has and will continue to incur substantial
costs, directly and indirectly, in evaluating and investigating the
business of ADB. In consideration of BII's commitment hereunder, ADB
agrees to not enter into, or continue, any negotiation or discussions
with or provide any information to any third party in respect of a
subscription for shares by any person and ADB will not enter into, or
continue, any negotiations or discussions with or provide any
information to any third party in respect of the sale of the business of
ADB or any part thereof in any manner whatsoever to any person or in
respect of the acquisition, merger or combination of ADB and the
business of any person or in any manner which would be inconsistent with
the matter contemplated by this agreement unless BII previously agrees,
in writing, to allow such activity or abandons the Offer, provided that
nothing herein shall be construed as to prevent the board of directors
of ADB, on notice to BII, from responding to an unsolicited bona fide
offer or purchase proposal made by a third party in relation to the
foregoing where such offer or purchase proposal is reasonably believed
to provide more favourable consideration to the holders of ADB
securities, provided that in
such event ADB shall advise BII of all material terms of such bona fide
offer or purchase proposal.
B.7 ADB agrees that in the event that the ADB board elects not to support or
recommend the Offer subsequent to the execution of this agreement (which
shall only be permitted in the event of the receipt of an unsolicited
bona fide offer or purchase proposal as described in B.6 above), ADB
will promptly pay BII a break-up fee of CAD $ 1 Million, provided that
if such support is withdrawn as a result of a Material Adverse Event
pursuant to B.2 hereof, the above-mentioned break-up fee shall not
apply.
PART C - MISCELLANEOUS
C.1 BII and ADB agree that all press releases and corporate communication by
the companies with respect to the Offer or which may reasonably be
considered to have a material effect on the perception of value of ADB,
the marketplace for the shares of ADB or the ability of ADB to conduct
business shall be agreed upon, in advance of release, by the companies,
such approvals not to be unreasonably withheld and subject to applicable
law and regulatory requirements. The companies acknowledge they will
promptly issue a press release and announce the fact of the Offer in
conjunction with the execution and delivery of this agreement unless
either of them is otherwise required to make a prior announcement by
applicable law or pursuant to the requirements of any securities
regulatory authority having jurisdiction.
C.2 The companies agree that all information provided hereunder or pursuant
to the letter of intent dated 18 July 2001 will be treated as
confidential information ("Confidential Information") and that the
Confidential Information received by them will not be disclosed to any
person except such persons, officers and directors to whom disclosure is
necessary in connection with the due diligence contemplated in the
letter of intent, the execution of this agreement and the completion and
delivery of the Offer, and who are themselves made aware of and subject
to this obligation of confidence.
C.3 Except as otherwise stated hereing, each party shall be responsible for
and pay for their respective professional and financial advisory fees
incurred in the Offer.
C.4 In the event that the Offer has not been delivered to the shareholders
of ADB by the Expiration Date or such other date mutually agreed to by
the parties in writing, then all of the terms of this agreement relating
to ADB's obligations to support the Offer, save and except for the
provisions relating to confidentiality, will be terminated and of no
further force and effect.
C.5 This agreement has prior to its signing been approved by the board of
directors of ADB.
C.6 This agreement is governed by Norwegian law. Stavanger City Court is the
legal venue of any possible disputes.
C.7 This agreement and the Offer replace and supersede the letter of intent
dated 18 July 2001 between the parties.
This agreement is entered into in 2 - two - originals, one to each party.
5 September, 2001
Xxx.Xxx International Inc ADB Systemer ASA
------------------------ ------------------------
Xxxx Xxxxxxxxx Xxxxxx Bekkehein
President & CEO Chairman
Approved by the members of board of directors of ADB
Systemer ASA, both in their capacities as
directors and individually:
-----------------------
Xxxxxx Xxxxxxxxxx
-----------------------
Xxxx Xxxxx
-----------------------
Xxxx Xxxxxx Xxxxxxxx
-----------------------
Hakon Ulltveit-Moe
Approved by the members of management of ADB Systemer ASA,
both in their capacities as officers and individually:
-----------------------
Xxx Xxxxxxxx
-----------------------
Jone Skaara
