Exhibit 4.11
SUPPORT AGREEMENT
THIS AGREEMENT made as of the 1st day of June, 1999,
BETWEEN:
LEVEL JUMP FINANCIAL GROUP, INC., a corporation
incorporated under the laws of the State of Colorado
(the "Parent"),
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xxxxxxxxxxxx.xxx inc., a corporation incorporated
under the laws of the Province of Ontario (the
"Corporation").
WHEREAS the articles of the Corporation create and set forth the
rights, privileges, restrictions and conditions (collectively the "Exchangeable
Share Provisions") attaching to a class of non-voting exchangeable shares
without nominal or par value of the Corporation (the "Exchangeable Shares");
AND WHEREAS the parties hereto desire to make appropriate provision and
to establish a procedure whereby the Parent will take certain actions and make
certain payments and deliveries necessary to ensure that the Corporation will be
able to make certain payments and to deliver or cause to be delivered, Parent
Common Shares in satisfaction of the obligations of the Corporation under the
Exchangeable Share Provisions with respect to the payment and satisfaction of
Liquidation Amounts and Retraction Prices, all in accordance with the
Exchangeable Share Provisions;
NOW THEREFORE in consideration of the respective covenants and
agreements provided in this agreement and for other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged),
the parties agree as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
1.1 Defined Terms. Each term denoted herein by initial capital letters and
not otherwise defined herein shall have the meaning ascribed thereto in the
Exchangeable Share Provisions, unless the context requires otherwise.
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1.2 Interpretation not Affected by Headings, etc. The division of this
agreement into articles, sections and paragraphs and the insertion of headings
are for convenience of reference only and shall not affect the construction or
interpretation of this agreement.
1.3 Number, Gender, etc. Words importing the singular number only shall
include the plural and vice versa. Words importing the use of any gender shall
include all genders.
1.4 Date for any Action. In the event that any date on or by which any
action is required or permitted to be taken under this agreement is not a
Business Day, such action shall be required or permitted to be taken on or by
the next succeeding Business Day. For the purposes of this agreement, a
"Business Day" means any day other than a Saturday, Sunday or a day when banks
are not open for business in either or both of Xxx Xxxx, Xxx Xxxx xxx Xxxxxxx,
Xxxxxxx.
ARTICLE 2
COVENANTS OF THE PARENT AND THE CORPORATION
2.1 Funding of the Corporation. So long as any Exchangeable Shares are
outstanding, the Parent will:
(a) not declare or pay any dividend on the Parent Common Shares
unless (i) the Corporation will have sufficient assets, funds and other
property available to enable the due declaration and the due and punctual
payment in accordance with applicable law, of an equivalent dividend on the
Exchangeable Shares and (ii) the Corporation shall simultaneously declare
or pay, as the case may be, an equivalent dividend on the Exchangeable
Shares, in each case in accordance with the Exchangeable Share Provisions;
(b) cause the Corporation to declare simultaneously with the
declaration of any dividend on the Parent Common Shares an equivalent
dividend on the Exchangeable Shares and, when such dividend is paid on the
Parent Common Shares, cause the Corporation to pay simultaneously therewith
such equivalent dividend on the Exchangeable Shares, in each case in
accordance with the Exchangeable Share Provisions;
(c) advise the Corporation sufficiently in advance of the
declaration by the Parent of any dividend on the Parent Common Shares and
take all such other actions as are necessary, in cooperation with the
Corporation, to ensure that the respective declaration date, record date
and payment date for a dividend on the Exchangeable Shares shall be the
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same as the record date, declaration date and payment date for the
corresponding dividend on the Parent Common Shares;
(d) ensure that the record date for any dividend declared on the
Parent Common Shares is not less than 10 Business Days after the
declaration date for such dividend;
(e) take all such actions and do all such things as are necessary
or desirable to enable and permit the Corporation, in accordance with
applicable law, to pay and otherwise perform its obligations with respect
to the satisfaction of the Liquidation Amount in respect of each issued and
outstanding Exchangeable Share upon the liquidation, dissolution or
winding-up of the Corporation, including without limitation all such
actions and all such things as are necessary or desirable to enable and
permit the Corporation to cause to be delivered Parent Common Shares to the
holders of Exchangeable Shares in accordance with the provisions of Article
5 of the Exchangeable Share Provisions; and
(f) take all such actions and do all such things as are necessary
or desirable to enable and permit the Corporation, in accordance with
applicable law, to pay and otherwise perform its obligations with respect
to the satisfaction of the Retraction Price, including without limitation
all such actions and all such things as are necessary or desirable to
enable and permit the Corporation to cause to be delivered Parent Common
Shares to the holders of Exchangeable Shares, upon the redemption of the
Exchangeable Shares in accordance with the provisions of Article 6 of the
Exchangeable Share Provisions.
2.2 Segregation of Funds. The Parent will and if applicable will cause the
Corporation to deposit a sufficient amount of funds in a separate account and
segregate a sufficient amount of such assets and other property as is necessary
to enable the Corporation to pay or otherwise satisfy the applicable Liquidation
Amount or Retraction Price, in each case for the benefit of holders from time to
time of the Exchangeable Shares, and will use such funds, assets and other
property so segregated exclusively for the payment or other satisfaction of the
Liquidation Amount or the Retraction Price, as applicable.
2.3 Reservation of Parent Common Shares. The Parent hereby represents,
warrants and covenants that it has irrevocably reserved for issuance and will at
all times keep available, free from pre-emptive and other rights, out of its
authorized and unissued capital stock such number of Parent Common Shares (or
other shares or securities into which the Parent Common Shares may be
reclassified or changed as contemplated by section 2.7 hereof) (a) as is equal
to the number of Exchangeable Shares issued and outstanding from time to time
and (b) as are now and may hereafter be required to enable and permit the
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Corporation to meet its obligations hereunder, under the Voting and Exchange
Agreements, under the Exchangeable Share Provisions and under any other security
or commitment pursuant to which the Parent may now or hereafter be required to
issue Parent Common Shares.
2.4 Notification of Certain Events. In order to assist the Parent to comply
with its obligations hereunder, the Corporation will give the Parent notice of
each of the following events at the time set forth below:
(a) in the event of any determination by the Board of Directors of
the Corporation to institute voluntary liquidation, dissolution or winding
up proceedings with respect to the Corporation or to effect any other
distribution of the assets of the Corporation among its shareholders for
the purpose of winding up its affairs, at least 60 days prior to the
proposed effective date of such liquidation, dissolution, winding up or
other distribution;
(b) immediately, upon the earlier of receipt by the Corporation of
notice of and the Corporation otherwise becoming aware of any threatened or
instituted claim, suit, petition or other proceeding with respect to the
involuntary liquidation, dissolution or winding up of the Corporation or to
effect any other distribution of the assets of the Corporation among its
shareholders for the purpose of winding up its affairs;
(c) immediately, upon receipt by the Corporation of a Retraction
Request (as defined in the Exchangeable Share Provisions); and
(d) as soon as practicable upon the issuance by the Corporation of
any Exchangeable Shares or rights to acquire Exchangeable Shares.
2.5 Delivery of Parent Common Shares. In furtherance of its obligations
under sections 2.1(e) and 2.1(f) hereof, upon notice from the Corporation of any
event which requires the Corporation to cause to be delivered Parent Common
Shares to any holder of Exchangeable Shares, the Parent shall forthwith deliver
the requisite Parent Common Shares to or to the order of the former holder of
the surrendered Exchangeable Shares, as the Corporation shall direct. All such
Parent Common Shares shall be duly issued as fully paid and non-assessable and
shall be free and clear of any lien, claim, encumbrance, security interest or
adverse claim. In consideration of the delivery of each such Parent Common Share
by the Parent, the Corporation shall issue to the Parent, or as the Parent shall
direct, such number of common shares of the Corporation as is equal to the fair
value of such Parent Common Share.
2.6 Qualification of Parent Common Shares in the United States. The Parent
represents and warrants that it will take all actions and do all things as are
necessary or desirable to cause the Parent Common Shares to be issued and
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delivered pursuant to the Exchangeable Share Provisions, the Exchange Right or
the Automatic Exchange Rights (as defined in the Voting and Exchange Agreements)
to be freely tradeable thereafter in the United States (other than any
restrictions on transfers by reason of a holder being an "affiliate" of the
Parent or for purposes of United States federal or state securities law). The
Parent will in good faith expeditiously take all such actions and do all such
things as are necessary or desirable to cause all Parent Common Shares to be
delivered pursuant to the Exchangeable Share Provisions, Exchange Right or the
Automatic Exchange Rights to be listed, quoted or posted for trading on all
stock exchanges and quotation systems on which outstanding Parent Common Shares
are listed, quoted or posted for trading at such time.
2.7 Economic Equivalence.
(a) The Parent will not without the prior approval of the Corporation and
the prior approval of the holders of the Exchangeable Shares given in accordance
with Section 9.2 of the Exchangeable Share Provisions:
(i) issue or distribute Parent Common Shares (or securities
exchangeable for or convertible into or carrying rights to acquire Parent
Common Shares) to the holders of all or substantially all of the then
outstanding Parent Common Shares by way of stock dividend or other
distribution, other than an issue of Parent Common Shares (or securities
exchangeable for or convertible into or carrying rights to acquire Parent
Common Shares) to holders of Parent Common Shares who exercise an option to
receive dividends in Parent Common Shares (or securities exchangeable for
or convertible into or carrying rights to acquire Parent Common Shares) in
lieu of receiving cash dividends; or
(ii) issue or distribute rights, options or warrants to the holders
of all or substantially all of the then outstanding Parent Common Shares
entitling them to subscribe for or to purchase Parent Common Shares (or
securities exchangeable for or convertible into or carrying rights to
acquire Parent Common Shares); or
(iii) issue or distribute to the holders of all or substantially
all of the then outstanding Parent Common Shares (A) shares or securities
of the Parent of any class other than Parent Common Shares (other than
shares convertible into or exchangeable for or carrying rights to acquire
Parent Common Shares), (B) rights, options or warrants other than those
referred to in section 2.7(a)(ii) above, (C) evidences of indebtedness of
the Parent or (D) assets of the Parent;
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unless (i) the Corporation is able under applicable law to issue or distribute
the economic equivalent on a per share basis of such rights, options,
securities, shares, evidences of indebtedness or other assets simultaneously to
holders of the Exchangeable Shares, and (ii) the Corporation shall issue or
distribute such rights, options, securities, shares, evidences of indebtedness
or other assets simultaneously to holders of the Exchangeable Shares.
(b) The Parent will not without the prior approval of the Corporation and
the prior approval of the holders of the Exchangeable Shares given in accordance
with Section 9.2 of the Exchangeable Share Provisions:
(i) subdivide, redivide or change the then outstanding Parent
Common Shares into a greater number of Parent Common Shares; or
(ii) reduce, combine or consolidate or change the then outstanding
Parent Common Shares into a lesser number of Parent Common Shares; or
(iii) reclassify or otherwise change the Parent Common Shares or
effect an amalgamation, merger, reorganization or other transaction
affecting the Parent Common Shares;
unless (i) the Corporation is able under applicable law to simultaneously make
the same or an economically equivalent change to, or in the rights of the
holders of, the Exchangeable Shares, and (ii) the Corporation simultaneously
does make the same or an economically equivalent change to, or in the rights of
the holders of, the Exchangeable Shares.
(c) The Parent will ensure that the record date for any event referred to
in section 2.7(a) or 2.7(b) above, or (if no record date is applicable for such
event) the effective date for any such event, is not less than 20 Business Days
(or such shorter period as the Parent and the Corporation may agree upon) after
the date on which such event is declared or announced by the Parent (with
simultaneous notice thereof to be given by the Parent to the Corporation).
(d) The Board of Directors of the Corporation shall determine, in good
faith and in its sole discretion (with the assistance of such reputable and
qualified independent financial advisors and/or other experts as the board may
require), economic equivalence for the purposes of any event referred to in
section 2.7(a) or 2.7(b) above and each such determination shall be conclusive
and binding on the Parent. In making each such determination, the following
factors shall, without excluding other factors determined by the Board of
Directors of the Corporation to be relevant, be considered by the Board of
Directors of the Corporation:
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(i) in the case of any stock dividend or other distribution payable
in Parent Common Shares, the number of such shares issued in proportion to
the number of Parent Common Shares previously outstanding;
(ii) in the case of the issuance or distribution of any rights,
options or warrants to subscribe for or purchase Parent Common Shares (or
securities exchangeable for or convertible into or carrying rights to
acquire Parent Common Shares), the relationship between the exercise price
of each such right, option or warrant and the current market value (as
determined by the Board of Directors of the Corporation in the manner above
contemplated) of a Parent Common Share;
(iii) in the case of the issuance or distribution of any other form
of property (including without limitation any shares or securities of the
Parent of any class other than Parent Common Shares, any rights, options or
warrants other than those referred to in section 2.7(d)(ii) above, any
evidences of indebtedness of the Parent or any assets of the Parent), the
relationship between the fair market value (as determined by the Board of
Directors of the Corporation in the manner above contemplated) of such
property to be issued or distributed with respect to each outstanding
Parent Common Share and the current market value (as determined by the
Board of Directors of the Corporation in the manner above contemplated) of
a Parent Common Share; and
(iv) in the case of any subdivision, redivision or change of the
then outstanding Parent Common Shares into a greater number of Parent
Common Shares or the reduction, combination or consolidation or change of
the then outstanding Parent Common Shares into a lesser number of Parent
Common Shares or any amalgamation, merger, reorganization or other
transaction affecting the Parent Common Shares, the effect thereof upon the
then outstanding Parent Common Shares.
For purposes of the foregoing determinations, the current market value of
any security listed and traded or quoted on a securities exchange or automated
quotation system shall be the average of the closing prices of such security
during the three consecutive trading days ending not more than five trading days
before the date of determination on the principal securities exchange on which
such securities are listed and traded or quoted; provided, however, that if
there is no active public distribution or trading activity of such securities
during such period, then the current market value thereof shall be determined by
the Board of Directors of the Corporation, in good faith and in its sole
discretion (with the assistance of such reputable and qualified independent
financial advisors and/or other experts as the board may require), and provided
further that any such determination by the Board of Directors of the Corporation
shall be conclusive and binding on the Parent.
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2.8 Tender Offers, Etc. If a tender offer, share exchange offer, issuer
bid, take-over bid or similar transaction with respect to Parent Common Shares
(an "Offer") is proposed by the Parent or is proposed to the Parent or its
shareholders and is recommended by the Board of Directors of the Parent, or is
otherwise effected or to be effected with the consent or approval of the Board
of Directors of the Parent, the Parent will use its best efforts expeditiously
and in good faith to take all such actions and do all such things as are
necessary or desirable to enable and permit holders of Exchangeable Shares to
participate in such Offer to the same extent and on an economically equivalent
basis as the holders of Parent Common Shares, without discrimination. Without
limiting the generality of the foregoing, the Parent will use its best efforts
expeditiously and in good faith to ensure that holders of Exchangeable Shares
may participate in all such Offers without being required to retract
Exchangeable Shares as against the Corporation (or, if so required, to ensure
that any such retraction shall be effective only upon, and shall be conditional
upon, the closing of the Offer and only to the extent necessary to tender or
deposit to the Offer).
2.9 Ownership of Outstanding Shares. Without the prior approval of the
Corporation and the prior approval of the holders of the Exchangeable Shares
given in accordance with Section 9.2 of the Exchangeable Share Provisions, the
Parent covenants and agrees in favour of the Corporation that, as long as any
outstanding Exchangeable Shares are owned by any person or entity other than the
Parent or any of its Affiliates, the Parent will be and remain the direct or
indirect beneficial owner of all issued and outstanding shares in the capital of
the Corporation carrying or otherwise entitled to voting rights in any
circumstances, and in each case other than the Exchangeable Shares.
2.10 Parent Not To Vote Exchangeable Shares. The Parent covenants and
agrees that it will appoint and cause to be appointed proxyholders with respect
to all Exchangeable Shares held by the Parent and its subsidiaries and
Affiliates for the sole purpose of attending each meeting of holders of
Exchangeable Shares in order to be counted as part of the quorum for each such
meeting. The Parent further covenants and agrees that it will not, and will
cause its subsidiaries and Affiliates not to, exercise any voting rights which
may be exercisable by holders of Exchangeable Shares from time to time pursuant
to the Exchangeable Share Provisions or pursuant to the provisions of the
Business Corporation Act (Ontario) (or any successor or other corporate statute
by which the Corporation in the future shall be governed) with respect to any
Exchangeable Shares held by it or by its subsidiaries or Affiliates in respect
of any matter considered at any meeting of holders of Exchangeable Shares.
2.11 Preservation of Existence of Corporation. Without the prior approval
of the holders of Exchangeable Shares given in accordance with Section 9.2 of
the Exchangeable Shares Provisions, the Parent and Corporation covenant and
agree that, so long as any Exchangeable Shares are owned by any person or entity
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other than the Parent or its Affiliates, the separate existence of the
Corporation shall be preserved and the Corporation shall not be liquidated,
wound up or dissolved or merged with or into another entity.
2.12 Certain Requirements in Respect of Combination, etc. The Parent shall
not enter into any transaction (whether by way of reconstruction,
reorganization, consolidation, merger, transfer, sale, lease or otherwise)
whereby all or substantially all of its undertaking, property and assets would
become the property of any other person or, in the case of a merger, of the
continuing corporation resulting therefrom unless:
(a) such other person or continuing corporation (herein called the
"Parent Successor"), by operation of law, becomes, without more, bound by the
terms and provisions of this agreement or, if not so bound, executes, prior to
or contemporaneously with the consummation of such transaction an agreement
supplemental hereto and such other instruments (if any) as are satisfactory to
the holders of the Exchangeable Shares and in the opinion of legal counsel to
the holders of the Exchangeable Shares are necessary or advisable to evidence
the assumption by the Parent Successor of liability for all moneys payable and
property deliverable hereunder and the covenant of such Parent Successor to pay
and deliver or cause to be delivered the same and its agreement to observe and
perform all the covenants and obligations of the Parent under this agreement;
and
(b) such transaction shall, to the satisfaction of the holders of the
Exchangeable Shares and in the opinion of legal counsel to the holders of the
Exchangeable Shares, be upon such terms as substantially to preserve and not to
impair in any material respect any of the rights of the holders of the
Exchangeable Shares.
ARTICLE 3
GENERAL
3.1 Term. This agreement shall come into force and be effective upon the
issue by the Corporation of Exchangeable Shares and shall terminate and be of no
further force and effect at such time as no Exchangeable Shares (or securities
or rights convertible into or exchangeable for or carrying rights to acquire
Exchangeable Shares) are held by any party other than the Parent and any of its
Affiliates.
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3.2 Changes in Capital of Parent and the Corporation. Notwithstanding the
provisions of section 3.4, at all times after the occurrence of any event
effected pursuant to section 2.7 or 2.8 hereof, as a result of which either the
Parent Common Shares or the Exchangeable Shares or both are in any way changed,
this agreement shall forthwith be amended and modified as necessary in order
that it shall apply with full force and effect, mutatis mutandis, to all new
securities into which the Parent Common Shares or the Exchangeable Shares or
both are so changed and the parties hereto shall execute and deliver an
agreement in writing giving effect to and evidencing such necessary amendments
and modifications.
3.3 Severability. If any provision of this agreement is held invalid,
illegal or unenforceable, the validity, legality or enforceability of the
remainder of this agreement shall not in any way be affected or improved thereby
and this agreement shall be carried out as near as possible in accordance with
its original terms and conditions; and to this end the provisions of this
agreement are intended to be and shall be deemed severable; provided, however,
that if the provision or provisions so held to be invalid, in the reasonable
judgment of the parties hereto, is or are so fundamental to the intent of the
parties hereto and the operation of this agreement that the enforcement of the
other provisions hereof, in the absence of such invalid provision or provisions,
would damage irreparably the intent of the parties in entering into this
agreement, the parties hereto shall agree to amend or otherwise modify this
agreement so as to carry out the intent and purposes hereof and the transactions
contemplated hereby.
3.4 Amendments, Modifications, etc. Except as contemplated by section 3.5,
this agreement may not be amended or modified except by an agreement in writing
executed by the Corporation and the Parent and approved by the holders of the
Exchangeable Shares in accordance with Section 9.2 of the Exchangeable Share
Provisions.
3.5 Ministerial Amendments. Notwithstanding the provisions of section 3.4,
the parties to this agreement may in writing, at any time and from time to time,
without the approval of the holders of the Exchangeable Shares, amend or modify
this agreement for the purposes of:
(a) adding to the covenants of any of the parties for the protection of the
holders of the Exchangeable Shares;
(b) making such amendments or modifications not inconsistent with this
agreement as may be necessary or desirable with respect to matters or questions
which, in the opinion of the Boards of Directors of each of the Corporation and
the Parent, it may be expedient to make, provided that each such Board of
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Directors shall be of the opinion that such amendments or modifications will not
be prejudicial to the interests of the holders of the Exchangeable Shares; or
(c) making such changes or corrections which, on the advice of counsel to
the Corporation and the Parent, are required for the purpose of curing or
correcting any ambiguity or defect or inconsistent provision or clerical
omission or mistake or manifest error, provided that the Boards of Directors of
each of the Corporation and the Parent shall be of the opinion that such changes
or corrections will not be prejudicial to the interests of the holders of the
Exchangeable Shares.
3.6 Meeting to Consider Amendments. The Corporation, at the request of the
Parent shall call a meeting or meetings of the holders of the Exchangeable
Shares for the purpose of considering any proposed amendment or modification
requiring approval pursuant to section 3.4 hereof. Any such meeting or meetings
shall be called and held in accordance with the by-laws of the Corporation, the
Exchangeable Share Provisions and all applicable laws.
3.7 Amendments Only in Writing. No amendment to or modification or waiver
of any of the provisions of this agreement otherwise permitted hereunder shall
be effective unless made in writing and signed by all of the parties hereto.
3.8 Enurement. This agreement shall be binding upon and enure to the
benefit of the parties hereto and their respective successors and assigns.
3.9 Notices to Parties. All notices and other communications between the
parties shall be in writing and shall be deemed to have been given if delivered
personally or by confirmed telecopy to the parties at the following addresses
(or at such other address for either such party as shall be specified in like
notice):
(a) if to the Parent at:
000 Xxxxxxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attention: Secretary
Fax: 000-000-0000
(b) if to the Corporation at:
000 Xxxxxxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attention: President
Fax: 000-000-0000
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Any notice or other communication given personally shall be deemed to have been
given and received upon delivery thereof and if given by telecopy shall be
deemed to have been given and received on the date of confirmed receipt thereof,
provided such notice or other communication is received prior to 5:00 p.m.
(local time) on a Business Day, and otherwise it shall be deemed to have been
given and received upon the immediately following Business Day.
3.10 Counterparts. This agreement may be executed in counterparts, each of
which shall be deemed an original, and all of which taken together shall
constitute one and the same instrument.
3.11 Jurisdiction. This agreement shall be construed and enforced in
accordance with the laws of the Province of Ontario and the laws of Canada
applicable therein.
3.12 Attornment. The Parent and the Corporation agree that any action or
proceeding arising out of or relating to this agreement may be instituted in the
courts of Ontario, waive any objection which they may have now or hereafter to
the venue of any such action or proceeding, irrevocably submit to the
non-exclusive jurisdiction of the said courts in any such action or proceeding,
agree to be bound by any judgment of the said courts and not to seek, and hereby
waive, any review of the merits of any such judgment by the courts of any other
jurisdiction and the Parent hereby appoints the Corporation at its registered
office in the Province of Ontario as the Parent's attorney for service of
process.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
duly executed as of the date first above written.
LEVEL JUMP FINANCIAL GROUP, INC.
By ________________________________
Name: Xxxxx Xxxx
Title: Treasurer
xxxxxxxxxxxx.xxx inc.
By ________________________________
Name: Xxx Xxxxxx
Title: President
