Exhibit 4.9
VOTING AND EXCHANGE 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"),
- and -
xxxxxxxxxxxx.xxx inc.,
a company incorporated under the laws
of the Province of Ontario (the "Corporation"),
- and -
XXXXXX XXXXXX, of the City of
Toronto, in the Province of Ontario (the "Holder").
WHEREAS the Holder is the registered and beneficial owner of 5,580,000
non-voting exchangeable shares without nominal or par value ("Exchangeable
Shares") in the capital of the Corporation;
AND WHEREAS the articles of the Corporation set forth the rights,
privileges, restrictions and conditions (the "Exchangeable Share Provisions")
attaching to the Exchangeable Shares;
AND WHEREAS pursuant to the terms and conditions of the Exchangeable
Shares, the Parent is to provide voting rights in the Parent to each holder
(other than the Parent, its subsidiaries and Affiliates) of Exchangeable Shares,
such voting rights per Exchangeable Share to be equivalent to the voting rights
per Parent Common Share;
AND WHEREAS pursuant to the terms and conditions of the Exchangeable
Shares, the Parent is to grant to and in favour of the holders (other than the
Parent, its subsidiaries and Affiliates) of Exchangeable Shares the right, in
the circumstances set forth herein, to require the Parent to purchase from each
such holder all or any part of the Exchangeable Shares held by the holder;
AND WHEREAS the parties desire to make appropriate provision and to
establish a procedure whereby voting rights in the Parent shall be exercisable
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by the Holder who will hold one share of Class A Preferred Stock of the Parent
to which voting rights attach and whereby the right to require the Parent to
purchase Exchangeable Shares from the Holder shall be exercisable by the Holder;
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 Definitions. In this Agreement, the following terms shall have the
following meanings:
"Affiliate" of any person means any other person directly or indirectly
controlled by, or under common control of, that person. For the purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlled by" and "under common control of"), as applied to any person, means
the possession by another person, directly or indirectly, of the power to direct
or cause the direction of the management and policies of that first mentioned
person, whether through the ownership of voting securities, by contract or
otherwise.
"Automatic Exchange Rights" means the benefit of the obligation of the
Parent to effect the automatic exchange of Parent Common Shares for Exchangeable
Shares pursuant to section 4.11 hereof.
"Board of Directors" means the Board of Directors of the Corporation.
"Business Day" means a day other than a Saturday, Sunday or a day when
banks are not open for business in either or both of New York, New York or
Xxxxxxx, Xxxxxxx.
"Canadian Dollar Equivalent" means in respect of an amount expressed in a
foreign currency (the "Foreign Currency Amount") at any date the product
obtained by multiplying (a) the Foreign Currency Amount by (b) the noon spot
exchange rate on such date for such foreign currency expressed in Canadian
dollars as reported by the Bank of Canada or, if such spot exchange rate is not
available, such exchange rate on such date for such foreign currency expressed
in Canadian dollars as may be deemed by the Board of Directors to be appropriate
for such purpose.
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"Current Market Price" means, in respect of a Parent Common Share on any
date, the Canadian Dollar Equivalent of the average of the closing prices of a
Parent Common Share on Nasdaq on each of the 30 consecutive trading days ending
not more than three trading days before such date, or, if the Parent Common
Shares are not then quoted on Nasdaq, on such other stock exchange or automated
quotation system on which the Parent Common Shares are listed or quoted, as the
case may be, as may be selected by the Board of Directors for such purpose;
provided, however, that if there is no public distribution or trading activity
of Parent Common Shares during such period then the Current Market Price of a
Parent Common Share shall be determined by the Board of Directors based upon the
advice of such qualified independent financial advisors as the Board of
Directors may deem to be appropriate, and provided further that any such
selection, opinion or determination by the Board of Directors shall be
conclusive and binding.
"Exchange Right" has the meaning ascribed thereto in section 4.1 hereof.
"Holder Votes" has the meaning ascribed thereto in section 3.2 hereof.
"Insolvency Event" means the institution by the Corporation of any
proceeding to be adjudicated bankrupt or insolvent or to be dissolved or wound
up, or the consent of the Corporation to the institution of bankruptcy,
insolvency, dissolution or winding up proceedings against it, or the filing of a
petition, answer or consent seeking dissolution or winding up under any
bankruptcy, insolvency or analogous laws, including without limitation the
Companies Creditors' Arrangement Act (Canada) and the Bankruptcy and Insolvency
Act (Canada), and the failure by the Corporation to contest in good faith any
such proceedings commenced in respect of the Corporation within 15 days of
becoming aware thereof, or the consent by the Corporation to the filing of any
such petition or to the appointment of a receiver, or the making by the
Corporation of a general assignment for the benefit of creditors, or the
admission in writing by the Corporation of its inability to pay its debts
generally as they become due, or the Corporation not being permitted, pursuant
to solvency requirements of applicable law, to redeem any Retracted Shares
pursuant to section 6.6 of the Exchangeable Share Provisions.
"Liquidation Call Right" has the meaning ascribed thereto in the
Exchangeable Share Provisions.
"Liquidation Event" has the meaning ascribed thereto in section 4.11(a)
hereof.
"Liquidation Event Effective Date" has the meaning ascribed thereto in
section 4.11(b) hereof.
"Nasdaq" means the Nasdaq National Market.
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"Officer's Certificate" means, with respect to the Parent or the
Corporation, as the case may be, a certificate signed by any one of the Chairman
of the Board, the President, any Vice-President or any other senior officer of
the Parent or the Corporation, as the case may be.
"Parent Consent" has the meaning ascribed thereto in section 3.2 hereof.
"Parent Meeting" has the meaning ascribed thereto in section 3.2 hereof.
"Parent Successor" has the meaning ascribed thereto in section 6.1(a)
hereof.
"person" includes an individual, partnership, corporation, company,
unincorporated syndicate or organization, trust, trustee, executor,
administrator and other legal representative.
"Retracted Shares" has the meaning ascribed thereto in section 4.6 hereof.
"Retraction Call Right" has the meaning ascribed thereto in the
Exchangeable Share Provisions.
"Support Agreement" means that certain support agreement made as of even
date hereof between the Corporation and the Parent.
"Voting Rights" means the voting rights attached to the Voting Share.
"Voting Share" means the one share of Class A Preferred Stock of the
Parent, issued by the Parent to the Holder, which entitles the Holder to a
number of votes at meetings of holders of Parent Common Shares equal to the
number of votes that the Holder would be entitled to if the Exchangeable Shares
held by the Holder were exchanged for Parent Common Shares.
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. If any date on which any action is required to be
taken under this agreement is not a Business Day, such action shall be required
to be taken on the next succeeding Business Day.
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ARTICLE 2
VOTING SHARE
2.1 Issue of the Voting Share. The Parent hereby acknowledges the issuance
of the Voting Share to the Holder and the receipt from the Holder of good and
valuable consideration (and the sufficiency thereof) for such issuance.
ARTICLE 3
EXERCISE OF VOTING SHARE
3.1 Voting Share. The Holder shall be entitled to all of the Voting Rights,
including the right to consent to or to vote the Voting Share in person or by
proxy, on any matter, question or proposition whatsoever that may properly come
before the shareholders of the Parent at a Parent Meeting or in connection with
a Parent Consent (in each case, as hereinafter defined). The Voting Rights shall
be and remain vested in and exercised by the Holder.
3.2 Number of Votes. With respect to all meetings of shareholders of the
Parent at which holders of Parent Common Shares are entitled to vote (a "Parent
Meeting") and with respect to all written consents sought by the Parent from its
shareholders including the holders of Parent Common Shares (a "Parent Consent"),
the Holder shall be entitled to cast and exercise one of the votes comprised in
the Voting Rights for each Exchangeable Share owned of record by the Holder on
the record date established by the Parent or by applicable law for such Parent
Meeting or Parent Consent, as the case may be (the "Holder Votes") in respect of
each matter, question or proposition to be voted on at such Parent Meeting or to
be consented to in connection with such Parent Consent.
3.3 Mailings to Shareholders. With respect to each Parent Meeting and
Parent Consent, the Parent will mail or cause to be mailed (or otherwise
communicate in the same manner as the Parent utilizes in communications to
holders of Parent Common Shares) to the Holder on the same day as the initial
mailing or notice (or other communication) with respect thereto is given by the
Parent to its shareholders:
(a) a copy of such notice, together with any related materials to
be provided to shareholders of the Parent; and
(b) a statement that the Holder is entitled to attend such Parent
Meeting and to exercise personally or by proxy the Holder Votes thereat.
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For the purpose of determining the Holder Votes to which the Holder is
entitled in respect of any such Parent Meeting or Parent Consent, the number of
Exchangeable Shares owned of record by the Holder shall be determined at the
close of business on the record date established by the Parent or by applicable
law for purposes of determining shareholders entitled to vote at such Parent
Meeting or to give written consent in connection with such Parent Consent. The
Parent will notify the Holder in writing of any decision of the Board of
Directors of the Parent with respect to the calling of any such Parent Meeting
or the seeking of any such Parent Consent and shall provide all necessary
information and materials to the Holder in each case promptly.
3.4 Copies of Shareholder Information. The Parent will deliver to the
Holder copies of all proxy materials (including notices of Parent Meetings but
excluding proxies to vote Parent Common Shares), information statements, reports
(including without limitation all interim and annual financial statements) and
other written communications that are to be distributed from time to time to
holders of Parent Common Shares.
3.5 Other Materials. Immediately after receipt by the Parent or any
shareholder of the Parent of any material sent or given generally to the holders
of Parent Common Shares by or on behalf of a third party, including without
limitation dissident proxy and information circulars (and related information
and material) and tender and exchange offer circulars (and related information
and material), the Parent shall use its best efforts to obtain and deliver to
the Holder a copy thereof.
3.6 Voting by Holder, and Attendance of Holder, at Parent Meetings. In
connection with each Parent Meeting and Parent Consent, the Holder shall
exercise, either in person or by proxy, the Holder Votes.
3.7 Termination of Voting Rights. All of the rights of the Holder with
respect to the Holder Votes exercisable in respect of the Exchangeable Shares
held by the Holder shall be deemed to be surrendered by the Holder to the Parent
and such Holder Votes and the Voting Rights represented thereby shall cease
immediately upon the delivery by the Holder to the Parent or the Corporation of
the certificates representing such Exchangeable Shares in connection with the
exercise by the Holder of the Exchange Right or the occurrence of the automatic
exchange of Exchangeable Shares for Parent Common Shares, as specified in
Article 4 hereof (unless in either case (a) the Parent shall not have delivered
the requisite Parent Common Shares issuable in exchange therefor to the Holder
or (b) such exchange of Exchangeable Shares for Parent Common Shares occurs
after the close of business on the record date for a Parent Meeting or the
seeking of a Parent Consent but prior to such Parent Meeting or the effective
date of such Parent Consent), or upon the retraction of Exchangeable Shares
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pursuant to Article 6 of the Exchangeable Share Provisions, or upon the
effective date of the liquidation, dissolution or winding-up of the Corporation
pursuant to Article 5 of the Exchangeable Share Provisions, or upon the purchase
of Exchangeable Shares from the Holder by the Parent pursuant to the exercise by
the Parent of the Retraction Call Right or the Liquidation Call Right (unless
the Parent shall not have delivered the requisite Parent Common Shares and
cheque, if any, deliverable in exchange thereof to the Holder and such
retraction or purchase occurs after the close of business on the record date for
a Parent Meeting or the seeking of a Parent Consent but prior to such Parent
Meeting or the effective date of such Parent Consent).
ARTICLE 4
EXCHANGE RIGHT AND AUTOMATIC EXCHANGE
4.1 Grant and Ownership of the Exchange Right. The Parent hereby grants to
the Holder the right (the "Exchange Right"), upon the occurrence and during the
continuance of an Insolvency Event, to require the Parent to purchase from the
Holder all or any part of the Exchangeable Shares held by the Holder and the
Automatic Exchange Rights, all in accordance with the provisions of this
Agreement. The Parent hereby acknowledges receipt from the Holder of good and
valuable consideration (and the sufficiency thereof) for the grant of the
Exchange Right and the Automatic Exchange Right by the Parent to the Holder.
4.2 Legended Share Certificates. The Corporation will cause each
certificate representing Exchangeable Shares to bear an appropriate legend
notifying the Holder (and any transferee) of the Exchange Right and the
Automatic Exchange Rights.
4.3 Purchase Price. The purchase price payable by the Parent for each
Exchangeable Share to be purchased by the Parent under the Exchange Right shall
be an amount per share equal to (a) the Current Market Price of a Parent Common
Share on the last Business Day prior to the day of closing of the purchase and
sale of such Exchangeable Share under the Exchange Right plus (b) an additional
amount equivalent to the full amount of all dividends declared and unpaid on
each such Exchangeable Share and all dividends declared on Parent Common Shares
which have not been declared on such Exchangeable Shares in accordance with
section 3.1 of the Exchangeable Share Provisions (provided that if the record
date for any such declared and unpaid dividends occurs on or after the day of
closing of such purchase and sale the purchase price shall not include such
additional amount equivalent to such declared and unpaid dividends). In
connection with each exercise of the Exchange Right, the Parent will provide to
the Holder an Officer's Certificate setting forth the calculation of the
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purchase price for each Exchangeable Share. The purchase price for each such
Exchangeable Share so purchased may be satisfied only by the Parent delivering
or causing to be delivered to the Holder, one Parent Common Share and a cheque
for the balance, if any, of the purchase price.
4.4 Exercise Instructions. Subject to the terms and conditions herein set
forth, the Holder shall be entitled, upon the occurrence and during the
continuance of an Insolvency Event, to exercise the Exchange Right with respect
to all or any part of the Exchangeable Shares registered in the name of the
Holder on the books of the Corporation. To exercise the Exchange Right, the
Holder shall deliver to the Corporation, in person or by certified or registered
mail, the certificates representing the Exchangeable Shares which the Holder
desires the Parent to purchase, duly endorsed in blank, and accompanied by such
other documents and instruments as may be required to effect a transfer of
Exchangeable Shares under the Business Corporations Act (Ontario) and the
by-laws of the Corporation and such additional documents and instruments as the
Parent may reasonably require together with (a) a duly completed form of notice
of exercise of the Exchange Right, contained on the reverse of or attached to
the Exchangeable Share certificates, stating (i) that the Holder requires the
Parent to purchase from the Holder the number of Exchangeable Shares specified
therein, (ii) that the Holder has good title to and owns all such Exchangeable
Shares to be acquired by the Parent free and clear of all liens, claims and
encumbrances, (iii) the names in which the certificates representing the Parent
Common Shares deliverable in connection with the exercise of the Exchange Right
are to be issued and (iv) the names and addresses of the persons to whom such
new certificates should be delivered and (b) payment (or evidence satisfactory
to the the Corporation and the Parent of payment) of the taxes (if any) payable
as contemplated by section 4.7 of this Agreement. If only a part of the
Exchangeable Shares represented by any certificate or certificates delivered to
the Corporation is to be purchased by the Parent under the Exchange Right, a new
certificate for the balance of such Exchangeable Shares shall be issued to the
holder at the expense of the Corporation.
4.5 Delivery of Parent Common Shares; Effect of Exercise. Promptly after
receipt of the certificates representing the Exchangeable Shares which the
Holder desires the Parent to purchase under the Exchange Right together with
such documents and instruments of transfer and a duly completed form of notice
of exercise of the Exchange Right (and payment of taxes, if any, or evidence
thereof), duly endorsed for transfer to the Parent, the Parent shall immediately
thereafter deliver or cause to be delivered to the Holder (or to such other
persons, if any, properly designated by the Holder), the certificates for the
number of Parent Common Shares deliverable in connection with the exercise of
the Exchange Right, which shares shall be duly issued as fully paid and
non-assessable and shall be free and clear of any lien, claim or encumbrance,
and cheques for the balance, if any, of the total purchase price therefor.
Immediately thereafter, the closing of the transaction of purchase and sale
contemplated by the Exchange Right shall be deemed to have occurred, and the
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Holder shall be deemed to have transferred to the Parent all of his right, title
and interest in and to such Exchangeable Shares and shall cease to be a holder
of such Exchangeable Shares and shall not be entitled to exercise any of the
rights of a holder in respect thereof, other than the right to receive the
purchase price therefor, unless the requisite number of Parent Common Shares
(together with a cheque for the balance, if any, of the total purchase price
therefor) is not allotted, issued and delivered by the Parent to the Holder (or
to such other persons, if any, properly designated by the Holder), within five
Business Days of the date of delivery of such Exchangeable Share certificates by
the Holder, in which case the rights of the Holder shall remain unaffected until
such Parent Common Shares are so allotted, issued and delivered by the Parent
and any such cheque is so delivered and paid. Concurrently with the Holder
ceasing to be a holder of Exchangeable Shares, the Holder shall be considered
and deemed for all purposes to be the holder of the Parent Common Shares to be
delivered to him pursuant to the Exchange Right.
4.6 Exercise of Exchange Right Subsequent to Retraction. If the Holder has
exercised his right under Article 6 of the Exchangeable Share Provisions to
require the Corporation to redeem any or all of the Exchangeable Shares held by
the Holder (the "Retracted Shares") and is notified by the Corporation pursuant
to section 6.6 of the Exchangeable Share Provisions that the Corporation will
not be permitted as a result of solvency requirements of applicable law to
redeem all such Retracted Shares, and provided that the Parent shall not have
exercised the Retraction Call Right with respect to the Retracted Shares and
that the Holder has not revoked the retraction request delivered by the Holder
to the Corporation pursuant to section 6.7 of the Exchangeable Share Provisions,
the retraction request will constitute the exercise of the Exchange Right with
respect to those Retracted Shares which the Corporation is unable to redeem.
4.7 Stamp or Other Transfer Taxes. Upon any sale of Exchangeable Shares to
the Parent pursuant to the Exchange Right or the Automatic Exchange Rights, the
share certificate or certificates representing the Parent Common Shares to be
delivered in connection with the payment of the total purchase price therefor
shall be issued in the name of the Holder or in such names as the Holder may
otherwise direct in writing without charge to the Holder; provided, however,
that the Holder (a) shall pay (and neither the Parent, nor the Corporation shall
be required to pay) any documentary, stamp, transfer or other taxes that may be
payable in respect of any transfer involved in the issuance or delivery of such
shares to a person other than the Holder or (b) shall have established to the
satisfaction of the Parent and the Corporation that such taxes, if any, have
been paid.
4.8 Notice of Insolvency Event. Immediately upon the occurrence of an
Insolvency Event or any event which with the giving of notice or the passage of
time or both would be an Insolvency Event, the Corporation and/or the Parent, as
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the case may be, shall give written notice thereof to the Holder, which notice
shall contain a brief statement of the right of the Holder with respect to the
Exchange Right.
4.9 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 (and that it will take
all actions and do all things as are necessary or desirable to cause such shares
or securities into which Parent Common Shares may be reclassified or changed) to
be issued and delivered pursuant to the Exchangeable Share Provisions, Exchange
Right or the Automatic Exchange Rights 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.
4.10 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 (a) as
is equal to the sum of (i) the number of Exchangeable Shares issued and
outstanding from time to time and (ii) the number of Exchangeable Shares
issuable upon the exercise of all rights to acquire Exchangeable Shares
outstanding from time to time and (b) as are now and may hereafter be required
to enable and permit the Corporation and the Parent to meet their respective
obligations hereunder, under the Support Agreement, 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.
4.11 Automatic Exchange on Liquidation of the Parent.
(a) The Parent will give the Holder notice of each of the following events (a
"Liquidation Event") at the time set forth below:
(b)
(i) in the event of any determination by the Board of Directors of the
Parent to institute voluntary liquidation, dissolution or winding-up
proceedings with respect to the Parent or to effect any other
distribution of assets of the Parent 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; and
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(ii) immediately, upon the earlier of (A) receipt by the Parent of notice
of and (B) the Parent otherwise becoming aware of any threatened or
instituted claim, suit, petition or other proceedings with respect to
the involuntary liquidation, dissolution or winding-up of the Parent
or to effect any other distribution of assets of the Parent among its
shareholders for the purpose of winding up its affairs.
Such notice shall include a brief description of the automatic exchange of
Exchangeable Shares for Parent Common Shares provided for in section 4.11(b).
(a) In order that the Holder will be able to participate on a pro rata basis
with the holders of Parent Common Shares in the distribution of assets of the
Parent in connection with a Liquidation Event, on the fifth Business Day prior
to the effective date (the "Liquidation Event Effective Date") of a Liquidation
Event all of the then outstanding Exchangeable Shares held by the Holder shall
be automatically exchanged for Parent Common Shares. To effect such automatic
exchange, the Parent shall purchase each Exchangeable Share outstanding on the
fifth Business Day prior to the Liquidation Event Effective Date and held by the
Holder, and the Holder shall sell the Exchangeable Shares held by him at such
time, for a purchase price per share equal to (a) the Current Market Price of a
Parent Common Share on the fifth Business Day prior to the Liquidation Event
Effective Date, which shall be satisfied in full by the Parent delivering or
causing to be delivered to the Holder one Parent Common Share, plus (b) an
additional amount equivalent to the full amount of all dividends declared and
unpaid on each such Exchangeable Share and all dividends declared on Parent
Common Shares which have not been declared on such Exchangeable Shares in
accordance with section 3.1 of the Exchangeable Share Provisions (provided that
if the record date for any such declared and unpaid dividends occurs on or after
the day of closing of such purchase and sale the purchase price shall not
include such additional amount equivalent to such declared and unpaid
dividends). In connection with such automatic exchange, the Parent will provide
to the Holder an Officer's Certificate setting forth the calculation of the
purchase price for each Exchangeable Share.
(b)
(c) On the fifth Business Day prior to the Liquidation Event Effective Date,
the closing of the transaction of purchase and sale contemplated by the
automatic exchange of Exchangeable Shares for Parent Common Shares shall be
deemed to have occurred, and the Holder shall be deemed to have transferred to
the Parent all of the Holder's right, title and interest in and to his
Exchangeable Shares and shall cease to be a holder of such Exchangeable Shares
and the Parent shall deliver or cause to be delivered to the Holder the Parent
Common Shares deliverable upon the automatic exchange of Exchangeable Shares for
Parent Common Shares and shall deliver to the Holder a cheque for the balance,
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if any, of the total purchase price for such Exchangeable Shares. Concurrently
with the Holder ceasing to be a holder of Exchangeable Shares, the Holder shall
be considered and deemed for all purposes to be the holder of the Parent Common
Shares issued to him pursuant to the automatic exchange of Exchangeable Shares
for Parent Common Shares and the certificates held by the Holder previously
representing the Exchangeable Shares exchanged by the Holder with the Parent
pursuant to such automatic exchange shall thereafter be deemed to represent the
Parent Common Shares delivered to the Holder by the Parent pursuant to such
automatic exchange. Upon the request of the Holder and the surrender by the
Holder of Exchangeable Share certificates deemed to represent Parent Common
Shares, duly endorsed in blank and accompanied by such instruments of transfer
as the Parent may reasonably require, the Parent shall deliver or cause to be
delivered to the Holder certificates representing the Parent Common Shares of
which the Holder is the holder.
4.12 Withholding Rights. The Parent shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to this Agreement to
the Holder such amounts as the Parent is required to deduct and withhold with
respect to the making of such payment under the United States Internal Revenue
Code of 1986, as amended, the Income Tax Act (Canada) or any provision of state,
local, provincial or foreign tax law. To the extent that amounts are so
withheld, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the Holder, provided that such withheld amounts
are actually remitted to the appropriate taxing authority. To the extent that
the amount so required to be deducted or withheld from any payment to the Holder
exceeds the cash portion of the consideration otherwise payable to the Holder,
the Parent is hereby authorized to sell or otherwise dispose of at fair market
value such portion of such consideration as is necessary to provide sufficient
funds to the Parent in order to enable it to comply with such deduction or
withholding requirement and the Parent shall give an accounting to the Holder
with respect thereto and any balance of such sale proceeds.
ARTICLE 5
RESTRICTIONS ON ISSUE OF PARENT SPECIAL VOTING STOCK
5.1 Issue of Additional Shares. During the term of this Agreement, the
Parent will not create, issue or allot (or make any agreement to so do) any
other shares of Class A Preferred Stock of the Parent in addition to the Voting
Share.
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ARTICLE 6
PARENT SUCCESSORS
6.1 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") 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 a agreement
supplemental hereto and such other instruments (if any) as are satisfactory
to the Holder and in the opinion of legal counsel to the Holder 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 Holder and
in the opinion of legal counsel to the Holder, be upon such terms as
substantially to preserve and not to impair in any material respect any of
the rights, duties, powers and authorities of the Holder hereunder.
6.2 Vesting of Powers in Successor. Whenever the conditions of section 6.1
hereof have been duly observed and performed, the Holder, if required, by
section 6.1 hereof, the Parent Successor and the Corporation shall execute and
deliver the supplemental agreement provided for in Article 7 and thereupon the
Parent Successor shall possess and from time to time may exercise each and every
right and power of the Parent under this Agreement in the name of the Parent or
otherwise and any act or proceeding by any provision of this Agreement required
to be done or performed by the Board of Directors of the Parent or any officers
of the Parent may be done and performed with like force and effect by the Board
of Directors or officers of such Parent Successor.
6.3. Wholly Owned Subsidiaries. Nothing herein shall be construed as
preventing the amalgamation or merger of any wholly owned subsidiary of the
Parent with or into the Parent or the winding-up, liquidation or dissolution of
any wholly owned subsidiary of the Parent provided that all of the assets of
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such subsidiary are transferred to the Parent or another wholly owned subsidiary
of the Parent and any such transactions are expressly permitted by this Article
6.
ARTICLE 7
AMENDMENTS
7.1 Amendments, Modifications. This Agreement may not be amended or
modified except by an agreement in writing executed by the Corporation, the
Parent and the Holder.
7.2 Changes in Capital of Parent and the Corporation. At all times after
the occurrence of any event effected pursuant to section 2.7 or section 2.8 of
the Support Agreement, 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 a supplemental agreement giving effect
to and evidencing such necessary amendments and modifications.
ARTICLE 8
GENERAL
8.1 Term. This Agreement shall be effective upon the issuance by the
Corporation of Exchangeable Shares to the Holder and shall continue until no
outstanding Exchangeable Shares are held by the Holder.
8.2 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.
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8.3 Enurement. This Agreement shall be binding upon and enure to the
benefit of the parties hereto and their respective heirs, executors, legal
personal representatives, successors and assigns.
8.4 Notices to Parties. All notices and other communications between the
parties hereunder 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 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
(c) if to the Holder at:
00 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
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.
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8.5 Risk of Payments by Post. Whenever payments are to be made or documents
are to be sent to the Holder by the Corporation or by the Parent, the making of
such payment or sending of such document sent through the post shall be at the
risk of the Corporation or the Parent, as applicable.
8.6 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.
8.7 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.
8.8 Attornment. Each party hereto agrees 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 it may have now or hereafter to the venue of
any such action or proceeding, irrevocably submits to the non-exclusive
jurisdiction of the said courts in any such action or proceeding, agrees to be
bound by any judgment of the said courts and not to seek, and hereby waives, any
review of the merits of any such judgment by the courts of any other
jurisdiction and the Parent hereby appoints Xxxx & Berlis at its office in
Toronto as 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
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Name: Xxxxx Xxxx
Title: Treasurer
xxxxxxxxxxxx.xxx inc.
By
------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Secretary
SIGNED, SEALED AND DELIVERED )
in the presence of )
)
)
)
------------------------------- ) --------------------------
Witness ) Xxxxxx Xxxxxx
