CONTRIBUTION AGREEMENT
Exhibit
99.4
THIS
AGREEMENT is dated as of March 10, 2003.
BETWEEN:
THE
RAVELSTON CORPORATION LIMITED, a corporation
incorporated
under
the
laws of Ontario
("Ravelston")
-
and
-
RAVELSTON
MANAGEMENT INC., a corporation incorporated under the
laws
of
Ontario
("RMI")
-
and
-
XXXXXXXXX
INC., a corporation incorporated under the laws of Canada
("HI")
RECITALS
|
A.
|
HI
and RMI have entered into an indenture dated as of March 10, 2003
(the
"Indenture") with Wachovia Trust Company , National Association,
as
trustee (the "Trustee"), which provides for the use by HI of senior
secured notes (the "Notes").
|
|
B.
|
Ravelston
is the holder, directly or indirectly, of 78.2% of the issued and
outstanding retractable common shares of HI. RMI is a
wholly-owned direct subsidiary of Ravelston. RMI has entered
into a guarantee of the Notes.
|
|
C.
|
Pursuant
to the Support Agreement (as defined below), RMI has agreed to
provide
support to HI in connection with the
Notes.
|
|
D.
|
Ravelston
has borrowed U.S. $11,500,000 from HI under a promissory note dated
March
10, 2003 made by Ravelston as borrower in favour of HI as lender
(the "RCL
Loan") used by Ravelston to repay currently outstanding senior
bank debt
of Ravelston. The amounts to be contributed by RMI to HI under
the Support Agreement are reduced by any RCL Repayment Amounts
(as defined
in the Support Agreement) paid by Ravelston to HI in respect of
the RCL
Loan.
|
|
E.
|
Section
2 of the Support Agreement provides that the Annual Support Amount
(as
defined below) shall be contributed by RMI to HI as either (i)
subscription for Qualified Capital Stock, (ii) contributions to
capital in
respect of Capital Stock of HI already issued and without the issuance
of
additional Capital Stock of HI to RMI, or (iii) Subordinated Debt
(all as
defined in the Support Agreement), as determined by RMI and
HI. RMI and HI may make the determination as to the manner in
which the Annual Support Amount is contributed, and change that
determination, from to time in their sole discretion without approval
of
the Trustee.
|
|
F.
|
In
connection with the issuance of the Notes, the board of directors
of HI
formed a Special Committee (as defined below) who reviewed the
Notes
offering and related transactions.
|
|
G.
|
This
Agreement sets forth, among other things, RMI and HI's current
agreement
as to the manner in which the Annual Support Amount shall be contributed
by RMI to HI for purposes of the Support
Agreement.
|
NOW
THEREFORE, in consideration of the mutual promises herein contained and other
good and valuable consideration, the parties hereto agree as
follows:
|
1.
|
Definitions. For
the purposes of this Agreement:
|
|
"Agreement"
means this agreement as it may be amended, supplemented, restated
or
replaced from time to time; the expressions "hereof", "herein",
"hereto",
"hereunder", "hereby" and similar expressions refer to this Agreement
as a
whole and not to any particular article, section, schedule or other
portion hereof;
|
|
"Annual
Support Amount" has the meaning assigned to such term
in the Support Agreement.
|
|
"Capital
Stock" has the meaning assigned to such term in the
Indenture.
|
|
"Floor
Amount" has the meaning assigned to such term in the Support
Agreement.
|
|
"Liens"
has the meaning assigned to such term in the
Indenture.
|
|
"Negative
Net Cash Flow" has the meaning assigned to such term in the
Support Agreement.
|
|
"Obligations"
means all of the obligations, liabilities and indebtedness of RMI
to HI
from time to time, whether present or future, absolute or contingent,
liquidated or unliquidated, of whatsoever nature or kind, in any
currency,
under or in respect of this Agreement and the Support
Agreement.
|
|
"Permitted
Liens" has the meaning assigned to such term in the
Indenture.
|
|
"Public
Company" means a company whose voting, participating equity
securities are (1) held by persons who are not affiliates of the
company
or acting jointly or in concert with an affiliate of the company
and (2)
listed on a stock exchange.
|
|
"RCL
Ownership Percentage" means, at any time, the percentage of
retractable common shares of HI owned by Ravelston and its Affiliates
(as
defined in the Indenture).
|
-
2 -
|
"RMI
Loan" means the grid promissory note in favour of RMI as lender
from HI as borrower dated the date
hereof.
|
|
"Special
Committee" means a committee of the board of directors of HI
comprised of not less than three directors, each of whom is neither
an
officer nor an employee of HI or any of its
Affiliates.
|
|
"Support
Agreement" means the RMI/HI support agreement between RMI and HI
dated the date hereof;
|
|
2.
|
Support
Amounts. The Annual Support Amount which RMI is required to
contribute under the Support Agreement for any fiscal year shall
be paid
to HI by RMI as follows:
|
|
(a)
|
if
Negative Net Cash Flow in that fiscal year is greater than the
Floor
Amount, then all amounts to be contributed by RMI to HI in respect
of that
fiscal year pursuant to the Support Agreement shall be contributions
by
RMI to the capital of Hi in respect of Capital Stock already issued
and
without the issuance of additional Capital Stock of HI to
RMI;
|
|
(b)
|
if
Negative Net Cash Flow in that fiscal year is zero, then all amounts
to be
contributed by RMI in respect of that fiscal year pursuant to the
Support
Agreement shall be contributions by way of advances from RMI to
HI under
the RMI Loan; and
|
|
(c)
|
if
Negative Net Cash Flow in that fiscal year is less than the Floor
Amount,
then (1) all amounts to be contributed by RMI to HI in respect
of that
fiscal year pursuant to the Support Agreement up to the amount
of the
Negative Net Cash Flow for that fiscal year shall be contributions
by RMI
to the capital of HI in respect of Capital Stock already issued
and
without the issuance of additional Capital Stock of HI to RMI,
and (2) all
amounts to be contributed by RMI to HI in respect of that
fiscal year pursuant to the Support Agreement in excess of the
Negative
Net Cash Flow for such fiscal year shall be contributions by way
of
advances from RMI to HI under the RMI
Loan.
|
|
3.
|
Payment
of Support Amounts. The Annual Support Amount shall be paid
by RMI to HI as follows:
|
|
(a)
|
for
the first three quarters of each fiscal year, the amount to tbe
paid by
RMI pursuant to section 3(a) of the Support Agreement shall be
paid by way
of contributions by RMI to the capital of HI in respect of Capital
Stock
already used and without the issuance of additional Capital Stock
of HI to
RMI; and
|
|
(b)
|
for
the last quarter of each fiscal year, the amount to be paid pursuant
to
section 3(b) of the Support Agreement shall be paid by way of either
(i)
advances from RMI to Hi or, if permitted by the Indenture, repayments
from
HI to RMI under the RMI Loan, (ii) contributions by RMI to the
capital of
HI in respect of Capital Stock already issued and without the issuance
of
additional Capital Stock of HI to RMI and/or (iii) if permitted
by the
Indenture, returns of capital of HI to RMI, all in such amounts
as shall
be required to meet the requirements of section 2
hereof.
|
-
3 -
|
For
greater certainty, with respect to any period that is less than
a fiscal
quarter or a fiscal year, the Annual Support Amount to be paid
by RMI to
HI for such period shall be calculated pro rata by reference to
the number
of days in such period, computed on the basis of a 360-day year
of twelve
30-day months.
|
|
4.
|
Ravelston
Covenants. At all times while the Obligations are
outstanding, Ravelston covenants in favour of HI
to:
|
|
(a)
|
take
all actions, including without limitation voting the capital stock
of RMI,
so as to cause RMI to comply with its obligations under (i) the
covenants
of RMI set out in sections 10.22(a) and 10.23 of the Indenture,
(ii) the
Support Agreement, and (iii) this Agreement;
and
|
|
(b)
|
comply
with the covenants of Ravelston set out in section 10.22(b) of
the
Indenture.
|
|
5.
|
RMI
Covenants. At all times while the Obligations aer
outstanding, RMI covenants in favour of
HI:
|
|
(a)
|
not
to create, incur, assume or suffer to exist any Lien on any of
its assets
or properties, other than Permitted Liens;
and
|
|
(b)
|
to
comply with the covenants of RMI set out in sections 10.22(a) and
10.23 of
the Indenture.
|
|
6.
|
Additional
Contribution to Pay Dividends. In the event that, in any
fiscal year (i) the board of directors of HI resolves to declare
a cash
dividend on the retractable common shares of HI which is permitted
under
the Indenture, and (ii) after giving effect to the Annual Support
Payment
paid by RMI to HI under the Support Agreement, HI does not have
sufficient
cash to pay such dividend (the "Dividend Cash Shortfall"), then
RMI will
contribute to HI an amount equal to the Dividend Cash Shortfall,
as
follows:
|
|
(a)
|
an
amount equal to the product obtained by multiplying (i) the RCL
Ownership
Percentage immediately prior to the date for payment of such dividend,
by
(ii) the Dividend Cash Shortfall, shall be paid by way of contributions
by
RMI to the capital of HI in respect of Captial Stock of already
issued and
without the issuance of additional Capital Stock of HI to RMI;
and
|
|
(b)
|
the
balance of the Dividend Cash Shortfall, shall be paid by way of
advances
from RMI to HI under the RMI Loan.
|
|
7.
|
Merger,
Consolidation, Amalgamation. RMI shall not, in a single
transaction or a series of related transactions, consolidate with,
amalgamate or merge with or into any other person, or sell, assign,
convey, transfer, lease or otherwise dispose of all or substantially
all
of its properties and assets to any person, if such transaction
or
transactions, in the aggregate, would result in a sale, assignment,
conveyance, transfer, lease or disposition of all or substantially
all of
the properties and assets of RMI to any other person, unless at
the time
and after giving effect thereto either (i) RMI shall be the continuing
corporation or (b) the person (if other than RMI) formed by such
consolidation or into which RMI is merged or amalgamated or the
person
which acquires by sale, assignment, conveyance, transfer, lease,
or
disposition all or substantially all of the properties and assets
of RMI
expressly assumes all the obligations of RMI hereunder and this
Agreement
remains in full force and effect.
|
-
4 -
|
8.
|
Termination. This
Agreement shall terminate upon (i) repayment in full of the Notes
and
termination of the Support Agreement, or (ii) HI ceasing to be
a Public
Company.
|
|
9.
|
Modification,
Amendment and Termination. This Agreement may be modified,
amended or terminated only by the written agreement of all parties
hereto,
and, so long as HI is a Public Company, with the approval of a
Special
Committee.
|
|
10.
|
Assignment. The
benefits of this Agreement may not be assigned without the express
written
consent of the parties hereto.
|
|
11.
|
Successor
and No Third Party Beneficiaries. This Agreement will enure
to the benefit of, and be binding upon, the parties to this agreement
and
their respective successors and permitted assigns. No provision
of this agreement, express or implied, is intended to confer upon
any
person other than the parties to this agreement and their successors
or
permitted assigns, any rights or remedies under or by reason of
this
agreement or any beneficial interest in this agreement or any such
rights
or remedies.
|
|
12.
|
Governing
Law. This agreement shall be governed by the laws of the
Province of Ontario and the laws of Canada applicable
therein. The parties hereto irrevocably submit and
attorn to the non-exclusive jurisdiction of the courts of the
Province of Ontario for all matters arising out of or in connection
with
this Agreement.
|
|
DATED
as of the date first set out above.
|
-
5 -
|
THE
RAVELSTON
CORPORATION
LIMITED
|
|||
|
|
By:
|
/s/Xxxxx X. Xxxxxxxx | |
| Name:Xxxxx X. Xxxxxxxx | |||
| Title: Executive Vice-President | |||
|
RAVELSTON
MANAGEMENT INC.
|
|||
|
By:
|
/s/Xxxxx X. Xxxxxxxx | ||
| Name:Xxxxx X. Xxxxxxxx | |||
| Title: Executive Vice-President | |||
|
XXXXXXXXX
INC.
|
|||
|
By:
|
/s/Xxxxx X. Xxxxxxxx | ||
| Name:Xxxxx X. Xxxxxxxx | |||
| Title: Executive Vice-President | |||
- 6
-
