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Securities and Exchange Commission
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 28, 1999
CALDERA CORPORATION
(Exact name of registrant as specified in its charter)
Florida 1-12023
(State or other jurisdiction of incorporation) (Commission File No.)
133 Richmond Street West M5H 2L3
Suite 401 (Zip Code)
Toronto, Ontario
Canada
(Address of principal executive offices)
Registrant's telephone number, including area code: (416) 777-0477
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Item 1. Change of Control
Pursuant to the exchange transaction described in Item 2, there has
been a change in control of Caldera Corporation ("Registrant") as a result of
(i) the issuance of 5,087,500 shares of Common Stock of the Registrant to the
holders of the Common Stock of Level Jump Financial Group, Inc., a Colorado
corporation ("Level Jump"), and (ii) the appointment in seriatim of Robert
Landau, David Roff, Brice Scheschuk and Glen Akselrod as directors of the
Registrant upon the increase in the size of the board of directors and
resignation of the three former directors of the Registrant.
In addition, the former officers of the Registrant offered for sale and
sold to a number of persons including Mr. Landau and Mr. Roff, additional shares
of Common Stock of the Registrant in a separate transaction. In this
transaction, Mr. Landau acquired 780,573 shares of Common Stock of the
Registrant and Mr. Roff acquired 526,000 shares of Common Stock of the
Registrant.
Certain disclosure about the directors, officer and principal
stockholders of the Registrant after consummation of the exchange transaction is
attached as Exhibit 99.1 to this Form 8-K
Descriptions of securities of Level Jump that will remain outstanding
after the October 28, 1999 exchange transaction are described in Exhibit 99.1 to
this Form 8-K.
Item 2.
On October 28, 1999 the Registrant and Level Jump consummated an
exchange transaction pursuant to an Agreement and Plan of Exchange dated October
20, 1999 ("Exchange Agreement"), whereby the Registrant acquired Level Jump as a
wholly owned subsidiary by the exchange of all of the currently outstanding
common stock of Level Jump for 5,087,500 shares of its Common Stock ("Exchange
Transaction").
Notwithstanding the Exchange Transaction, the Class A Preferred Stock
and Class B Preferred Stock of Level Jump (described in Exhibit 99.1 to this
Form 8-K) will remain outstanding after the Exchange Transaction, but the
Registrant has agreed to enter into another series of exchange agreements to
exchange the outstanding Level Jump Series A Preferred Stock and Series B
Preferred Stock for similar preferred stock of the Registrant with equivalent
rights of voting, dividends and liquidation rights and the outstanding
exchangeable preferred stock of thestockpage.com inc. with similar exchangeable
rights into 5,912,500 shares of Common Stock. This will require an amendment to
the Certificate of Incorporation of the Registrant to create a class of
preferred stock and delegate to the board of directors of the Registrant the
authority to create series of preferred stock with specific terms. This
amendment will require the authorization of the holders of the Common Stock of
the Registrant. The exchange will also require the Registrant to enter into
various agreements with the holders of the Class A Preferred Stock and the Class
B Preferred Stock, none of which will require the approval of the stockholders
of the Registrant.
Under the Exchange Agreement, the Registrant has agreed to adopt the
Level Jump 1999 Performance Equity Plan as an incentive and award plan of the
Registrant. The plan will represent 2,750,000 shares of Common Stock of the
Registrant of which 1,375,000 shares will be reserved for awards previously
granted thereunder.
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The exchange ratios for the Level Jump common stock for shares of
Common Stock of the Registrant were determined by negotiation between the
directors and officers of the Registrant and the principal stockholders of Level
Jump.
Certain Information about the Registrant
The Registrant was formerly engaged in the mining business which was
terminated in 1997. Since that time, the Registrant has been an inactive
company. The Registrant is a reporting company under the Securities Exchange Act
of 1934, as amended.
Certain Information about Level Jump
Level Jump provides financial public relations on the Internet through
its web site www.thestockpage.com. The current business plan of Level Jump will
be to build upon the financial public relations and its other financial services
to create a comprehensive source for on-line financial services.
Financial Public Relations
Level Jump owns 100 percent of thestockpage.com. thestockpage.com has
been providing on-line financial public relations services to small- and
micro-cap companies for over two years and has built up a member base of
approximately 30,000 users. thestockpage.com provides a free newsletter to its
members that contains public relations and marketing information about its
clients. thestockpage.com has been profitable since shortly after inception. The
web site provides market information to members including free real-time stock
quotes, news, market highlights and SEC company reports through a service
agreement with InfoSpace.com. thestockpage.com plans to continue to grow its
financial public relations services and related revenues.
On-Line Financial Services
Financial services have begun to explode on the Internet. Financial
portals and on-line brokerage have become very popular and account for a
noticeable percentage of web traffic. Current research indicates that on-line
users of all types of financial services are expected to grow rapidly and in
significant numbers over the next five to ten years as more and more people
operate on-line and become comfortable with on-line financial technology.
Presently, there are few, if any, comprehensive financial services companies
operating on-line. Those that offer more than one or two services typically
provide weak financial data and spotty content.
Level Jump is in the early stages of developing a financial portal that
will be launched at www.leveljump.com and that it intends to be a precursor to
offering comprehensive financial services to its members over the Internet.
Level Jump intends to launch in a carefully staged and controlled manner, a
suite of on-line financial services as follows:
. financial portal with free financial data and content
. real-time market data including NASDAQ Level II
. trading
. offerings
. banking including deposits, credit cards, mortgages, loans and bill
payments
. wealth management including hedge funds and mutual funds
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. insurance including life, health, home and auto
. financial planning.
In addition to building some of these financial services itself, Level
Jump will seek and enter joint ventures and other arrangements with highly
visible financial services companies for other of these services. Level Jump
believes that using its resources and obtaining the products of others will
allow it to use capital efficiently and build the web site expeditiously.
Moreover, using the services of others will provide important name recognition
and reduce regulatory hurdles.
In the broadest sense, Level Jump will provide both free and paid
financial services to customers in the U.S. marketplace. Free services have been
broadly categorized into tools, quotes, news, charts, market data, research
data, industry data, reference and community. Paid services have been identified
as trading, offerings, banking (including deposits, loans, mortgages, credit
cards and bill payments), wealth management, insurance (including life, health,
home, auto, renters) and market data.
Organization
Level Jump was organized under the laws of the State of Colorado on
March 29, 1999. On June 1, 1999, Level Jump acquired a 100 percent interest in
thestockpage.com inc., a corporation formed under the laws of the Province of
Ontario, Canada. On July 29, 1999, Level Jump established Level Jump Asset
Management Inc. as a wholly owned subsidiary under the laws of the State of
Delaware. The offices of Level Jump and thestockpage.com inc. are 133 Richmond
Street West, Toronto, Ontario, Canada, M5H 2L3. The offices of Level Jump Asset
Management Inc. are in New York City, New York.
Item 7. Financial Statement and Exhibits
(a) The financial statements of the Registrant and Level Jump will
be filed within 60 days of the event causing this report.
(b) Pro forma financial information required hereunder will be
filed within 60 days of the event causing this report.
(c) The following documents are filed herewith as exhibits:
2.1 Agreement and Plan of Exchange dated October 20, 1999
(without exhibits).
4.1 Voting Agreement between ZDG Holdings Inc. and Brice
Scheschuk, dated October 26, 1999 relating to 252,000
(183,272) shares of Common Stock.
4.2 Voting Agreement between ZDG Holdings Inc. and Glen
Akselrod, dated October 26, 1999 relating to 252,000
(183,272) shares of Common Stock.
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4.3 Voting Agreement between David Roff and Brice Scheschuk,
dated October 26, 1999 relating to 168,000 (122,181) shares
of Common Stock.
4.4 Voting Agreement between David Roff and Glen Akselrod, dated
October 26, 1999 relating to 168,000 (122,181) shares of
Common Stock.
4.5 Option Agreement between ZDG Holdings Inc. and Brice
Scheschuk, dated October 26, 1999 relating to 252,000
(183,272) shares of Common Stock
4.6 Option Agreement between ZDG Holdings Inc. and Glen
Akselrod, dated October 26, 1999 relating to 252,000
(183,272) shares of Common Stock
4.7 Option Agreement between David Roff and Brice Scheschuk,
dated October 26, 1999 relating to 168,000 (122,181) shares
of Common Stock
4.8 Option Agreement between David Roff and Glen Akselrod, dated
October 26, 1999 relating to 168,000 (122,181) shares of
Common Stock
4.9 Voting and Exchange Agreement among thestockpage.com inc.,
Level Jump and Robert Landau
4.10 Voting and Exchange Agreement among thestockpage.com inc.,
Level Jump and David Roff
4.11 Support Agreement between Level Jump and thestockpage.com
inc.
10.1 Employment Agreement between Level Jump and Mr. Robert
Landau.
10.2 Employment Agreement between Level Jump and Mr. David Roff.
10.3 Performance Equity Plan of Level Jump Financial Group, Inc.
dated May 1, 1999
99.1 Description of Directors, Officers and Principal
Stockholders and Related Matters
99.2 Statement of Risk Factors
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CALDERA CORPORATION
/S/ ROBERT LANDAU
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Name: Robert Landau
Title: President
Date: November 3, 1999
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Exhibit 2.1
AGREEMENT AND PLAN OF EXCHANGE BETWEEN LEVEL JUMP FINANCIAL GROUP INC.
AND CALDERA CORP
AGREEMENT AND PLAN OF EXCHANGE ("Agreement"), dated as of the 20th day
of October, 1999, by and between Caldera Corporation, a Florida corporation
("Caldera"), and Level Jump Financial Group, Inc., a Colorado corporation
("Level Jump").
Plan of Exchange
The Plan of Exchange will consist of the acquisition of 100% of the
issued and outstanding shares of Level Jump by Caldera and the issuance by
Caldera to the stockholders of Level Jump of a total of 5,087,500 shares of
Caldera's restricted common stock, having a par value of $0.0025, to be issued
upon and subject to the terms and conditions of the Agreement hereinafter set
forth.
NOW, THEREFORE, in consideration of the promises and the mutual and
dependent covenants hereinafter contained, the parties hereto represent,
warrant, covenant, and agree as follows:
ARTICLE I
1.1 Agreement to Consummate Transactions. Subject to the terms and conditions of
this Agreement, Level Jump and Caldera agree to use reasonable commercial
efforts, subject to any conditions stated herein, to consummate or cause to be
consummated, the transactions contemplated by Sections 1.2 through 8.1 of this
Agreement ("Transactions"), and agree that the consummation of each of the
Transactions is conditional upon the consummation of each of the other
Transactions.
1.2 Closing. A meeting of the parties to this Agreement ("Closing") will take
place on October 29, 1999, or such other date as may be agreed upon by the
parties in writing, at which time certificates, letters and other documents
required by this Agreement will be delivered or exchanged. The Closing will take
place at the office of Caldera as soon as practicable after the parties have
obtained the required shareholder approval, and this Agreement shall be declared
effective as of October 20, 1999.
1.3 Consummation of Transactions. If at the Closing no condition exists which
would permit any of the parties to terminate this Agreement, or a condition then
exists and the party entitled to terminate because of that condition elects not
to do so, then and thereupon Caldera and Level Jump will exchange the documents
necessary to effect the reorganization contemplated by this agreement.
1.4 Acquisition of Level Jump Financial Group, Inc. Shares. Upon, and subject to
the terms and conditions herein stated, Caldera shall acquire from Level Jump's
shareholders and Level Jump's shareholders shall transfer, assign and convey to
Caldera 3,700,000 common shares of Level Jump constituting 100% of the issued
and outstanding shares of common stock thereof.
1.5 Consideration, Issuance and Delivery of Stock. In consideration of, and in
exchange for the foregoing transfer, assignment and conveyance, and subject to
the terms and conditions herein stated, Caldera shall, at Closing, issue and
deliver to Level Jump's stockholders, in the numbers set forth opposite their
names on Exhibit A hereto, 5,087,500 shares of Caldera's common stock in
exchange for all of the issued and outstanding common shares of Level Jump. The
shares to be issued pursuant to this paragraph will not, when issued, have been
registered under the Securities Act of 1933, (the "Act"), but will be issued in
reliance on the exemption provided by "4(2) of the Act for transactions by an
issuer not involving any public offering. As a result, the shares will be
"restricted securities" as that phrase is defined by paragraph (a)(3) of SEC
Rule 144 under the Act (17 C.F.R. " 230.144), and will be subject to the resale
restrictions set forth in that Rule. The shares, when issued, will be validly
authorized and issued, duly paid and non-assessable common shares of Caldera.
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Each certificate representing the Caldera shares to be issued pursuant hereto
shall be imprinted with a standard form investment legend stating that the
shares are not registered under the Securities Act of 1933 and may be sold,
hypothecated, or transferred pursuant to an effective registration statement
under the Act or pursuant to an appropriate exemption from registration. Caldera
has not represented, directly or indirectly, that it will take any measure to
make any exemption available
1.6 Reservation of 5,912,500 common shares of Caldera for exchange with
4,300,000 exchangeable preference shares of thestockpage.com inc., a subsidiary
of Level Jump, which are exchangeable into 4,300,000 shares of Level Jump shall
be completed after the Closing according to the provisions related thereto found
in the Articles, By-laws and covenants of Level Jump.
1.7 Reservation of 2,750,000 common shares of Caldera for exchange with the
2,000,000 shares reserved by Level Jump in the Level Jump Financial Group
Inc.1999 Performance Equity Plan shall be completed after the Closing according
to the provisions related thereto found in the Articles, By-laws and covenants
of Level Jump.
ARTICLE II
Representations and Warranties of Level Jump
Level Jump represents and warrants to Caldera as follows:
2.1 Organization and Good Standing. Level Jump is a corporation duly organized,
validly existing and in good standing under the laws of the State of Colorado
and has the corporate power to carry on its business as it is now being
conducted. Copies of Level Jump's Articles of Incorporation, as amended or as
restated, and By-laws, both as presently in effect, and attached hereto as
Exhibit B and Exhibit C are complete and correct,
2.2 Capitalization. Level Jump's authorized capital stock consists of 50,000,000
shares of common stock having $.001 par value per share, of which 3,700,000
shares are presently issued and outstanding, and of which 4,300,000 shares have
been reserved for issuance upon the conversion of thestockpage.com's
exchangeable preference shares, whenever that may be required, together with
5,000,000 shares of preferred stock having $.001 par value per share, of which
there have been designated two shares, of which one share has been designated
Class A, and one share has been designated Class B preferred stock, and such two
shares of preferred stock are presently issued and outstanding, all of which are
held by two of the Shareholders. Level Jump has reserved 2,000,000 shares as
part of an option plan, of which 1,150,000 options have been granted to
employees of Level Jump. No pre-emptive rights are conferred by any class of
Level Jump stock, and there are no outstanding calls, commitments, convertible
securities (except thestockpage.com's exchangeable preferred shares), or
demands, other than those listed above, of any character relating to the capital
stock of Level Jump, whether issued or unissued.
2.3 Authority. Level Jump has the corporate power to enter into this Agreement
and carry out the transactions contemplated hereby. The execution, delivery, and
performance of the Agreement by Level Jump will have been duly and validly
authorized and adopted by Level Jump's Board of Directors. This Agreement and
the consummation of the Plan of Exchange will have been duly and validly
authorized and approved by all necessary corporate action on the part of Level
Jump, and this Agreement will be legally binding, and enforceable against Level
Jump in accordance with its terms, subject to applicable bankruptcy,
reorganization, insolvency, moratorium and other laws affecting creditors'
rights generally from time to time in effect and subject to principles of
equity, which may affect the availability of remedies with respect thereto. To
the best knowledge of Level Jump, the entering into this Agreement by Level Jump
does not, and the consummation by Level Jump of the Transactions contemplated by
this Agreement will (A) not violate the provisions of (i) any applicable laws of
the United States or any other state or jurisdiction in which Level Jump does
business; (ii) Level Jump's Certificate of Incorporation or By-Laws, or (iii)
any judgment or decree applicable to Level Jump subject to the obtaining by
Level Jump of the permits, approvals, consents, authorizations and modifications
referred to in Section 6.3 hereof, (B) not cause a default or breach of any
material obligation of Level Jump under any material contract, agreement,
mortgage, indenture or other instrument, which Level Jump is a part or by which
it is bound, and (C) not cause any material right of Level Jump under any
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existing contract, agreement, mortgage, indenture or other instrument to which
Level Jump is a party, to be extinguished by virtue of the Agreement.
2.4 Rights, Titles and Interests. The shares to be acquired by Caldera represent
100% of the issued and outstanding common stock of Level Jump. .
2.5 Financial Statements. Level Jump's subsidiary thestockpage.com inc., audited
financial report dated March 31, 1999 and September 30, 1998, attached hereto as
Exhibit D are true and correct in all material particulars, as are interim
unaudited financial statements dated June 30, 1999 included therewith in Exhibit
D
2.6 Absence of Certain Changes of Events. Except as permitted or contemplated by
this Agreement, or disclosed to Caldera, there has not been:
A. Any material adverse change in the assets (including any such change caused
by damage, destruction or loss, whether or not insured), the results of
operations (including any change caused by discontinued operations), or the
business prospects or conditions, financial or otherwise of Level Jump; nor to
the knowledge of Level Jump has any event or condition occurred which may result
in such change;
B. Any declaration, setting aside or payment of any dividend or other
distribution in respect to Level Jump Common Stock;
C. Any repurchase or redemption by Level Jump of any Level Jump Common Stock; or
D. Any sale or transfer by Level Jump of any material, tangible asset, or any
mortgage, pledge, lease or lien, charge or encumbrance on any assets, or any
such lease or real property, machinery, equipment or buildings, other than in
the ordinary course of business.
2.7 Litigation. Except as disclosed to Caldera, there are no judicial or
administrative actions, suits, proceeding or investigations pending, or, to the
best knowledge and belief of Level Jump, threatened in writing against Level
Jump which might result in any material adverse change in the condition
(financial or other), of the properties, assets, business, or operations of
Level Jump or in any material liability on the part of Level Jump or which
question the validity of this Agreement or of any action taken or to be taken in
connection herewith. There are no citations, fines or penalties heretofore
asserted against Level Jump under any federal, state or local law relating to
air or water pollution, or other environmental protection matters, or relating
to occupational health or safety.
2.8 Disclosing of Material Information. Neither this Agreement nor any exhibit
hereto contains any untrue statement or material fact, or omits to state a
material fact necessary to make the statements herein or therein, under the
circumstances in which it has been made, not misleading, relating to the
business or affairs of Level Jump. There is no fact known to Level Jump which
materially, adversely affects the business or condition (financial or otherwise)
of Level Jump which has not been set forth herein or disclosed to Caldera in
writing.
2.9 Liabilities. There are no material liabilities of Level Jump, whether
accrued, absolute, contingent or otherwise, which arose or relate to any
transaction of Level Jump, its agents or servants occurring prior to the
statement date, which are not disclosed by or reflected in said financial
statements, except as have been disclosed to Caldera in writing. There are no
such liabilities of Level Jump which have arisen or relate to any transaction of
Level Jump, its agents or servants, occurring since that statement date, other
than normal liabilities incurred in the normal conduct of the business of Level
Jump, and none of which have a material adverse effect on the business or
financial condition of Level Jump, except as have been disclosed in writing. As
of the date hereof, there are no known circumstances, conditions, happenings,
events or arrangements, contractual or otherwise, which may hereafter give rise
to liabilities, except in the normal course of business of Level Jump, except as
have been disclosed in writing.
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2.10 Taxes. All federal, province, county and local income, ad valorem, excise,
profits, franchise, occupation, property, sales, use, gross receipts and other
taxes (including any interest or penalties relating thereto) and assessments
which are due and payable have been duly reported, by Level Jump, and there are
no unpaid taxes which are, or could become a lien on the properties and assets
of Level Jump, except as provided for in the financial statements, as of their
date, or which have been incurred in the normal course of business of Level Jump
since that date. All tax returns of any kind that are required to be filed have
been filed and the taxes paid or accrued.
2.11 Accuracy of All Statements Made by Level Jump. No representation or
warranty by Level Jump in this Agreement, nor any statement certificate,
schedule or exhibit hereto furnished by or on behalf of Level Jump pursuant to
this Agreement, nor any document or certificate delivered to Level Jump pursuant
to this Agreement or in connection with actions contemplated hereby, contains
any untrue statement of material fact or omits a material fact necessary to make
the statement contained therein not misleading.
ARTICLE III
Representations and Warranties of Caldera
Caldera represents and warrants to Level Jump as follows;
3.1 Organization and Good Standing of Caldera. Caldera is a corporation duly
organized, existing and of good standing under the laws of the State of Florida
with full corporate power to carry on its business as it is now being conducted.
Caldera has qualified as a foreign corporation to do business and is in good
standing in each jurisdiction in which it is conducting such business or
otherwise required to be so qualified. Copies of Caldera's Articles of
Incorporation, as amended, and By-Laws, both as presently in effect are attached
as Exhibit E and Exhibit F respectively and these exhibits, are complete and
correct.
3.2 Capitalization. Caldera's authorized capital stock consists of 200,000,000
shares of common stock, par value of $.0025, of which 2,776,250 shares, are
issued and outstanding, fully paid and non-assessable. There are no securities
outstanding for the acquisition of or conversion into Caldera common stock and
there are no agreements, understandings or other rights for the acquisition of
any securities of Caldera, including without limitation, options, warrants,
preferred stock and common stock of Caldera. There are no pre-emptive rights in
respect of any class of capital stock of Caldera, The 5,087,500 shares of common
Stock of Caldera to be issued in connection with this Agreement, when so issued
will be duly authorized, validly issued, fully paid, and non-assessable with no
personal liability attaching to the ownership thereof and will be free and clear
of all liens, charges, restrictions, claims and encumbrances.
3.3 Authority. Caldera has the corporate power to enter into this Agreement and
to carry out the transactions contemplated hereby. The execution, delivery and
performance of this Agreement by Caldera has been duly and validly authorized
and approved by Caldera's Board of Directors. Stockholders who are the
registered owners of more than a majority of the outstanding shares of Caldera
have signed and delivered to Caldera their written consent to the adoption of
this agreement in accordance with Section_______ of the Florida Business
Corporations Act, and notice of the adoption of a resolution approving this
Agreement by written consent has been sent to each stockholder who did not
approve the same in writing in accordance with the aforesaid provision of
Florida law. The entering into of this Agreement by Caldera does not, and the
consummation by Caldera of the transactions contemplated hereby, (A) will not
violate the provisions of (i) any applicable laws of the State of Florida, or
any other jurisdiction in which Caldera does business; (ii) Caldera's Articles
of Incorporation; as amended, or its By-Laws; or (iii) any judgement or decree
applicable to Caldera subject to the obtaining by Caldera of approvals,
consents, authorizations and modifications referred to in Sections 6.3 hereof,
(B) will not cause a default or breach of any material obligation of Caldera
under any material contract mortgage, agreement, indenture or other instrument
applicable to Caldera and, (C) will not cause any rights of Caldera under any
existing contract, agreement, mortgage, indenture or other instrument to be
extinguished by virtue of the Agreement.
3.4 Financial Statements. Caldera's audited financial report dated December 31,
1998, listed as Exhibit G, attached hereto and made a part hereof, is true and
complete in all material respects, such having been prepared in accordance with
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generally accepted accounting principles consistently followed through the
periods covered by such statements, and present fairly, in accordance with
generally accepted accounting principles ("GAAP"), the financial condition of
Caldera and the results of its operations for the period covered thereby. The
unaudited quarterly financial information included in Exhibit H as found in
Forms 10-Q SB for the quarters ended March 31 and June 30, 1999 are true and
correct in all material respects and have been prepared in accordance with GAAP,
consistently applied. The unaudited balance sheet in the June 30, 1999 Form
10-QSB is referred to as the Unaudited Balance sheet. Since the Unaudited
Balance Sheet, there has not been any material change in the financial
condition, properties, assets, liabilities, business or operations of Caldera
which has been, or to the best knowledge of Caldera, is likely to be, materially
adverse with respect to Caldera. .
3.5 Absence of Certain Changes of Events. Since the date of Caldera's Unaudited
Balance Sheet there have not been:
A. Any material adverse change in the assets (including any such change caused
by damage, destruction or loss, whether or not insured). The results of
operations (including any change caused by discontinued operations) or the
business prospects or condition, financial or otherwise of Caldera, nor, to the
knowledge of Caldera, has any event or condition occurred which may result in
such change;
B. Until the date of Closing, Caldera will not conduct any business or take any
action which would result in a material change in the financial condition, or
the business, prospects or legal status of Caldera without the written consent
of Level Jump.
3.6 Litigation. There are no judicial or administrative actions, suits of a
material nature, proceedings or investigations pending, or threatened against
Caldera which might result in any material adverse change in the condition
(financial or other), properties, assets, business, operations or prospects of
Caldera or in any material liability on the part of Caldera or which question
the validity of the Agreement or of any action taken or to be taken in
connections herewith. There are no citations, fines or penalties heretofore
asserted against Caldera under any federal, state or local law relating to air
or water pollution, or other environmental protection matters, or relating to
occupational health or safety.
3.7 Disclosing of Material Information. Neither this Agreement nor any exhibit
hereto contains any untrue statement of material fact, or omits to state a
material fact necessary to make the statement herein or therein, under the
circumstances in which they are made, not misleading, relating to the business
or affairs of to the best knowledge and belief of its officers and directors.
There is no fact known to Caldera which materially adversely affects the
business, condition (financial or otherwise) or prospects of Caldera not set
forth herein or otherwise disclosed to Level Jump and its legal counsel in
writing.
3.8 Liabilities. There are no material liabilities of Caldera, whether accrued,
absolute, contingent or otherwise, which arose or relate to any transaction of
Caldera, its agents or servants occurring prior to the statement date, which are
not disclosed by or reflected in said financial statements, except as have been
disclosed to Level Jump in writing. There are no such liabilities of Caldera
which have arisen or relate to any transaction of Caldera, its agents or
servants, occurring since that statement date, other than normal liabilities
incurred in the normal conduct of the business of Caldera, and none of which
have a material adverse effect on the business or financial condition of
Caldera, except as have been disclosed to Level Jump in writing. As of the date
hereof, there are no known circumstances, conditions, happenings, events or
arrangements, contractual or otherwise, which may hereafter give rise to
liabilities, except in the normal course of business of Caldera.
3.9 Deleted
3.10 Accuracy of All Statements Made by Caldera. No representation or warranty
by Caldera in this Agreement, nor any statement certificate, schedule or exhibit
hereto furnished or to be furnished by or on behalf of Caldera pursuant to this
Agreement, nor any document or certificate delivered to Level Jump pursuant to
this Agreement or in connection with actions contemplated hereby, contains or
shall contain any untrue statement of material fact or omits or shall omit a
material fact necessary to make the statements contained therein, under the
circumstances in which they have been made, not misleading.
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3.11 Caldera has no subsidiaries. Caldera does not (i) own of record or
beneficially, directly or indirectly, (a) any shares of capital stock or
securities convertible into capital stock of any other corporation or (B) any
participating interest or other equity interest in any partnership, limited
liability company, joint venture or other non-corporate business enterprise, or
(ii) control, directly or indirectly, any other entity.
3.12 The stockholders of the Common Stock and all the outstanding series of
Preferred Stock are as set forth on Schedule I
3.13 All the outstanding securities of Caldera were issued in compliance with
all applicable Federal and state securities laws.
3.14 Removed.
3.15 Caldera has no obligation (contingent or other) to purchase, redeem or
otherwise acquire any of its equity securities or any interest therein or to pay
any dividend or make any distribution in respect thereof, except as set forth on
Schedule I. There are no voting trusts or agreements, stockholders' agreements,
pledge agreements, buy-sell agreements, rights of first refusal, pre-emptive
rights or proxies relating to any securities of Caldera (whether or not Caldera
is a party thereto).
3.16 The rights, preferences, restrictions and privileges in respect of each
class and series of authorized capital stock of Caldera are as set forth in the
Charter, and all such rights, preferences and privileges are valid, binding and
enforceable and in accordance with all applicable laws.
3.17 Since the date of the Unaudited Balance Sheet, Caldera has not (i) issued
any stock, bond or other security, (ii) borrowed any amount or incurred any
liability (absolute or contingent), except current liabilities incurred and
liabilities under contracts entered into in the ordinary course of business,
(iii) discharged or satisfied any lien or encumbrance or incurred or paid any
obligation or liability (absolute or contingent) other than current liabilities
shown on the Unaudited Balance Sheet and current liabilities incurred since the
date of the Unaudited Balance Sheet in the ordinary course of business, (iv)
declared or made any payment or distribution to stockholders or purchased or
redeemed any shares of capital stock or other securities, (v) mortgaged, pledged
or subjected to lien any of its assets, tangible or intangible, other than liens
of current real property taxes not yet due and payable, (vi) sold, assigned,
licensed or transferred any of its tangible assets except in the ordinary course
of business, or canceled any debt or claim, (vii) sold, assigned, or transferred
any patent, trademarks, trade names, copyrights, trade secrets or other
intangible assets, (viii) suffered any loss of property or waived any right of
substantial value, (ix) made any change in officer compensation, (X) made any
material change in the manner of business or operations of Caldera, xi) entered
into any transaction except as contemplated hereby or (xii) entered into any
commitment to do any of the foregoing.
3.18 The Execution and delivery of this Agreement by Caldera does not and the
performance of this Agreement by Caldera will not require any consent, approval,
authorization or permit of, or filing with or notification to any governmental
entity, except for the approval of the stockholders of Caldera.
3.19 Caldera has filed all forms, reports, statements and other documents
required to be filed with the SEC since January 1, 1997 (all such forms, reports
and other documents are collectively referred to as Caldera SEC Reports). As of
their respective filing dates, Caldera SEC Reports (i) complied as to form in
all material respects with the requirements of the Securities Exchange Act of
1934, as amended, the Securities Act of 1933, as amended and the SEC's rules and
regulations thereunder, and (ii) did not at the time they were filed contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under with they were made, not misleading.
3.20 Caldera is not in default with respect to any judgment, order, demand, or
regulation of any court, arbitrator, grand jury, or governmental agency. Caldera
has complied in all material respects with all laws, rules, regulations and
orders applicable to its business, operations, properties, assets, products and
services, and Caldera has all necessary permits, licenses and other
authorizations required to conduct its business as conducted and as proposed to
he conducted, except where failure to obtain such permits, licenses and/or other
authorizations would have no material adverse effect on the financial condition,
business or prospects of Caldera. There is no existing law, rule, regulation or
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order, whether Federal or state, which would prohibit or restrict Caldera from
conducting its business as currently conducted, or otherwise have a material
adversely effect on the financial condition, business or prospects of Caldera.
3.21 To the best of Caldera's knowledge, no third party has claimed that any
person affiliated with Caldera has violated any of the terms or conditions of
his employment contract with such third party, or disclosed or utilized any
trade secrets or proprietary information or documentation of such third party,
or interfered in the employment relationship between such third party and any of
its employees. To the best of Caldera's knowledge, no person affiliated with
Caldera has employed any trade secrets or any information or documentation
proprietary to any former employer, and no person affiliated with Caldera has
violated any confidential relationship which such person may have had with any
third party, in connection with the development or sale of any services of
Caldera.
3.22 Caldera has good and marketable title to, or a valid leasehold interest in,
its material properties and assets reflected on the Unaudited Balance Sheet or
acquired or leased by it since the date of the Unaudited Balance Sheet, and all
such properties and assets are free and clear of mortgages, pledges, security
interests, liens, charges, claims, restrictions and other encumbrances, except
for liens for current taxes not yet due and payable.
3.23 Each lease or agreement to which Caldera is a party and under which it is a
lessee of any property, real or personal, is a valid and subsisting agreement,
without any material default of Caldera thereunder and, to the best of Caldera's
knowledge, without any default thereunder of any other party thereto. No event
has occurred and is continuing which, with due notice or lapse of time, or both,
would constitute a material default or event of default by Caldera under any
such lease or agreement or, to the best of Caldera's knowledge, by any other
party thereto. Caldera's possession of such property has not been disturbed and
no claim has been asserted against Caldera adverse to its rights in such
leasehold interests.
3.24 Caldera has no property or operating business which prudence would dictate
should be insured.
3.25 Caldera has filed all tax returns. Federal, state, county and local,
required to be filed by it, and Caldera has paid all taxes shown to be due by
such returns as well as all other taxes, assessments and governmental charges
which have become due or payable, including, without limitation, all taxes which
Caldera is obligated to withhold from amounts owing to employees, creditors and
third parties. All such taxes with respect to which Caldera has become obligated
pursuant to elections made by Caldera in accordance with generally accepted
practice have been paid and adequate reserves have been established for all
taxes accrued but not yet payable. The Internal Revenue Service has never
audited the Federal income tax returns of Caldera. No deficiency assessment with
respect to or proposed adjustment of Caldera's Federal, state, county or local
taxes is pending or, to the best of Caldera's knowledge, threatened. There is no
tax lien, whether imposed by any Federal, state, county or local taxing
authority, outstanding against the assets, properties or business of Caldera.
Caldera has C Corporation status under the Internal Revenue Code of 1986, as
amended (the "Code").
3.26 Set forth on Schedule J, hereto is a list of all patents, patent rights,
trademarks, service marks, trade names and copyrights, and all applications for
such which are in the process of being prepared in the name of Caldera. Caldera
owns or possesses sufficient legal rights to use all patents, patent
applications, trademarks, trademark applications, service marks, service mark
applications, trade names, copyrights, trade secrets and know-how (collectively,
"Intellectual Property") necessary or desirable to the conduct of its business,
and no claim is pending or, to the best of Caldera's knowledge, threatened to
the effect that the operations of Caldera infringe upon or conflict with the
asserted rights of any other person under any Intellectual Property, and, to the
least of Caldera's knowledge, there is no basis for any such claim. There are no
claims on behalf of Caldera pending to the effect that the operations of a third
party infringe upon or conflict with the rights of Caldera under any
Intellectual Property, and, to the best of Caldera's knowledge, there is no
basis for any such claim. With respect to any registrations of the Intellectual
Property owned by Caldera, Schedule J also sets forth, as to each such item of
the Intellectual Property, the (i) relevant application or registration number,
(ii) relevant filing, registration, issue or application date, (iii) record
owner, (iv) country, (v) title or description and (vi) remaining life. In
addition, Schedule J identifies whether each item of the Intellectual Property
thereof is owned by Caldera or is possessed and used by Caldera under any
license, contract, agreement or other commitment, and if under any such
commitment, the identity of the parties thereto, the term thereof and all
accounts payable thereunder together with the payment terms therefor. No claim
is pending or, to the best of Caldera's knowledge, threatened to the effect that
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any such Intellectual Property owned or licensed by Caldera, or which Caldera
otherwise has the right to use, is invalid or unenforceable by Caldera, and, to
the best of Caldera's knowledge, there is no basis for any such claim, To the
best of Caldera's knowledge, all Intellectual Property developed by and
belonging to Caldera which has not been patented has been kept confidential.
Except as otherwise provided in Schedule J, Caldera has no obligation to
compensate, or to obtain the consent of, any third party for the use of any item
of Intellectual Property owned or licensed to Caldera. Except as otherwise
provided in Schedule J, Caldera has not granted any license or other right to
use, in any manner, any item of Intellectual Property, whether or not requiring
the payment of royalties, and no third party has any right to use any of the
Intellectual Property. The manufacture, modification, use, promotion,
distribution and/or sale of Caldera's products or services now or prior to the
date hereof do not infringe, and have not infringed, the rights of any third
party. Except as set forth in Schedule J, Caldera has obtained an enforceable
written assignment of all right, title and interest in and to each item of the
Intellectual Property owned by Caldera from each person or entity participating
in the discovery, development or creation of such item and has provided to the
Purchasers true and correct copies of each such assignment.
3.27 No registration or filing with, or consent or approval of or other action
by, any Federal, state or other governmental agency or instrumentality is or
will be necessary for the valid execution, delivery and performance by Caldera
of this Agreement, other than (i) filings pursuant to federal and state
securities laws in connection with the issuance of the 5,087,500 shares of
Common Stock of Caldera under this agreement.
3.28 The offer, sale and issuance of the common stock of Caldera pursuant to
this agreement constitute a transaction exempt from the registration
requirements of Section 5 of the Securities Act of 1933, as amended (the
"Securities Act"). Except in the context of this offering, Caldera has not,
either directly or through an agent, offered the common stock or any similar
security for sale to, or solicited any offer to buy common stock or any similar
security from, or otherwise approached or negotiated with respect thereto with,
any person, and neither Caldera nor any person acting on its behalf has taken or
will take any other action (including, without limitation, any offer, issuance
or sale of any security of Caldera under circumstances which might require the
integration of the offer and sale of such security with the common stock under
the Securities Act of 1933 or the rules and regulations of the Commission
thereunder), in either case so as to subject the offering, issuance or sale of
the common stock to the registration provisions of the Securities Act.
3.29 Caldera is not in violation of any applicable statute, law or regulation
relating to the environment or occupational health and safety, except for
violations which would not have a material adverse effect on the business,
properties or financial condition of Caldera, and no material expenditures are
or will be required in order to comply with any such statute, law or regulation.
3.30 Caldera does not sponsor, maintain, have any obligation to contribute to,
or have any liability under, and is not otherwise a party to, any benefit plan.
For purposes of this Section "benefit plan" shall mean any plan, fund, program,
policy, arrangement or contract, whether formal or informal, which is in the
nature of (i) an employee pension benefit plan (as defined in Section 3(2) of
the Employee Retirement Income Security Art of 1974 ("ERISA")) or (ii) an
employee welfare benefit plan (as defined in Section 3(l) of ERISA). With
respect to each Benefit Plan listed in Schedule K to the extent applicable:
(a) Each benefit plan has been maintained and operated in all material respects
in compliance with its terms and with the applicable provisions of ERISA, the
Code, and all regulations, rulings and other authority issued thereunder;
(b) All contributions required by law to have been made under each benefit plan
(without regard to any waivers granted under Section 412 of the Code) to any
fund or trust established thereunder or in connection therewith have been made
by the due date thereof;
(c) Each benefit plan intended to qualify under Section 401 (a) of the Code is
the subject of a favorable unrevoked determination letter issued by the Internal
Revenue Service as to its qualified status under the Code, which determination
letter may still be relied upon as to such tax-qualified status of any benefit
plan;
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(d) The actuarial present value of all accrued benefits under each benefit plan
subject to Title IV of ERISA did not, as of the latest valuation date of benefit
plan, exceed the then-current value of the assets of the benefit plan allocable
to such accrued benefits, all as based upon the actuarial assumptions and
methods currently used for such benefit plan;
(e) None of such benefit plans that are "employee welfare benefit plans" as
defined in Section 3(j) of ERISA provides for continuing benefits or coverage
for any participant or beneficiary of a participant after such Participant's
termination of employment, except as required by Section 4980B of the Code or
other applicable law; and
Neither Caldera nor any trade or business (whether or not incorporated) under
common control with Caldera within the meaning of Section 4001 of ERISA has, Or
at any time has had, any obligation to contribute to any "multi-employer plan,
as defined in Section 3(37) of ERISA.
3.31 Caldera has taken commercially reasonable steps to ensure that its computer
systems and software are and will be, and the products developed, manufactured,
sold or licensed by Caldera are and will be, able accurately to: (i) process any
date rollover, (ii) process calculations or computations regardless of the dates
used in such calculations whether before, on or after January 1, 2000, (ii)
accept and respond to two (2) digit year date input in a manner that resolves
any ambiguities as to the century to which such two (2) digit date input relates
in an appropriate manner and (iv) store and display date data in a manner that
is unambiguous as to the century to which such two (2) digit year date input
relates. None of the above-referenced systems, software or products are
reasonably likely to malfunction, cease to function, generate incorrect date or
provide incorrect results when providing and/or receiving date in connection
with any valid date, whether occurring before, an or after January 1, 2000.
3.32 Each Material Contract to which Caldera is a party is a valid and
subsisting agreement, without any material default of Caldera thereunder and, to
the best of Caldera's knowledge, without any default thereunder of any other
party thereto. No event has occurred and is continuing which, with due notice or
lapse of time, or both, would constitute a material default or event of default
by Caldera under any Material Contract or, to the best of Caldera's knowledge,
by any other party thereto.
ARTICLE IV
Covenants of Level Jump
4.1 Negative Covenants. From the date of this Agreement, and prior to closing,
Level Jump will not, without the prior written consent of Caldera engage in any
of the following, transactions:
A. Engage in any activities or transactions which will be outside the normal
course of its business;
B. Issue any additional shares of Level Jump common stock, or issue any shares
of stock in Level Jump or any option, warrant or right to acquire stock in Level
Jump;
C. Pay any dividend or make any distribution in respect to this capital stock;
D. Sell any of its assets, other than in the ordinary course of business;
E. Amend its Certificate of Incorporation or its By-Laws;
F. Recapitalize, reorganize or be a party to any merger or consolidation or
sale of all or substantially all of its assets; or
G. Make any loans or grant increases in compensation to its officers or
employees.
4.2 Affirmative Covenants. Prior to the Closing Date, Level Jump will do or has
done the following.
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A. The Board of Directors of Level Jump has adopted a resolution at a special
meeting of the Board of Directors, convened in accordance with Level Jump's
By-Laws, authorizing and approving this agreement;
B. Level Jump will use its commercially reasonable efforts to preserve its
business organization intact, and retain the services of its officers and
employees;
C. Level Jump will afford to the officers, attorneys, accountants and other
authorized representatives of Caldera full and free access to its properties,
books, tax returns and records in order that Caldera may have a full opportunity
to make such investigations as Caldera desires of the affairs of Level Jump;
D. Level Jump will promptly advise Caldera in writing of any materially adverse
change in the financial condition, business, operations or key personnel of
Level Jump, any breach of its representations or warranties contained herein,
and any material contract, agreement, license or other arrangement which, if in
effect on the date of this Agreement should have been included in this
Agreement; and
E. Level Jump will use its commercially reasonable efforts to accomplish all
actions necessary to consummate the Plan of Exchange, including the satisfaction
of all the conditions set forth in this Agreement.
ARTICLE V
Covenants of Caldera
Caldera covenants with Level Jump as follows:
5.1 Negative Covenants. Caldera will not, without the prior written consent of
Level Jump:
A. Engage in any activities or transactions which will be outside the normal
course of its business;
B. Issue any additional shares of Caldera common stock, or issue any shares of
stock in Caldera or any option, warrant or right to acquire stock in Caldera;
C. Pay any dividend or make any distribution in respect to this capital stock;
D. Sell any of its assets, other than in the ordinary course of business;
E. Amend its Certificate of Incorporation or its By-Laws;
F. Recapitalize, reorganize or be a party to any merger or consolidation or sale
of all or substantially all of its assets; or
G. Make any loans or grant increases in compensation to its officers or
employees.
5.2 Affirmative Covenants. Prior to Closing date, Caldera will do the following:
The Board of Directors of Caldera has adopted a resolution at a special meeting
of the Board of Directors, convened in accordance with Caldera's By-Laws,
authorizing and approving this agreement
B. Caldera will reserve, and promptly after the Closing will issue and deliver
the number of shares of Caldera common stock required hereby, and will take all
other actions necessary to insure that the aforesaid Caldera shares have either
been registered under the Securities Act of 1933 and applicable securities laws
of all states in which any purchaser thereof resides, or exempt from
registration under some exemptive provision of those laws;
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Page 11 of 15
C. Caldera will use commercially reasonable efforts to accomplish all actions
necessary to consummate the Agreement and plan of Exchange, including
satisfaction of all the conditions contained in this Agreement;
D. Caldera will promptly advise Level Jump in writing of any materially adverse
changes in the financial condition, business, operations, or key personnel of
Caldera any breach of its representations or warranties contained herein, and
any material contract, agreement, license or other arrangement which, if in
effect on the date of this agreement, should have been included in the
Agreement;
E. Caldera will afford to the officers, attorneys, accountants and other
authorized representatives of Level Jump full and free access to its properties,
books, tax returns and records, in order that Level Jump may have a full
opportunity to make such investigations as Level Jump desires of the affairs of
Caldera.
ARTICLE VI
Covenants of Stockholders
6.1 The individual undersigned Level Jump stockholders hereby represent, warrant
and covenant as follows;
A. That they are the registered owners of the Level Jump shares being conveyed
to Caldera pursuant to this agreement.
B. That they own the aforesaid shares free and clear of any lien, claim
encumbrance which has been, or reasonably could be asserted against the shares
or stockholders' rights to assign them to Caldera, including any claims which
may arise under Community Property laws in any jurisdiction to which any
stockholder may be subject.
C. Stockholders have been advised that the Caldera shares to be issued to them
hereunder have not been registered pursuant to the Securities Act of 1933, the
Securities Laws of Canada, or the "Blue Sky" laws of any state in which any
stockholder may reside, that the shares are being issued to them by Caldera in
reliance on the exemption from registration provided by " 4(2) of the Securities
Act of 1933 for transactions by an issuer not involving any public offering, and
by similar exemptive provisions of the laws of any other jurisdictions whose
laws may be applicable to the sale or purchase of the shares.
D. Stockholders have been advised that as a result of the nature of the
transaction, the Caldera shares to be issued to them are "restricted securities"
as that term is defined by paragraph (a)(3) of SEC Rule 144 promulgated under
the Securities Act of 1933 (17 C.F.R. " 230.144), and that they are familiar
with the resale limitations on restricted securities which are imposed by that
Rule.
E. Stockholders represent that they are purchasing the Caldera shares for
investment, and not with a view to distribution, and agree that they will not
resell all or any part of the shares unless there is, at the time of any such
sale, either a Securities Act registration statement in effect covering the
shares, or an exemption from registration available to permit resale of the
subject shares without registration under the Act.
F. Stockholders consent to the placement on all certificates representing the
Caldera shares to be issued of a standard form restrictive legend indicating
that the shares have not been registered under the Act, and may not be resold
without registration unless there is an available exemption from registration
available to exempt any such resale transaction.
G. Stockholders agree to the placement of "stop-transfer instructions" against
the shares with Caldera's registrar and transfer agency to prohibit transfer of
all or any part of the shares without compliance with the Securities Act of
1933.
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ARTICLE VII
Mutual Conditions
Neither Level Jump nor Caldera will be obligated to complete or cause to be
completed the transactions contemplated by this agreement unless the following
conditions have been met prior to or at the Closing:
7.1 Absence of Restraint. No order to restrain, enjoin or otherwise prevent the
consummation of this Agreement, or the transactions contemplated herein shall
have been entered by any court of or administrative body, and no proceeding to
obtain any such order shall have been commenced or shall be threatened.
7.2 Absence of Termination. The obligations to consummate the transactions
contemplated hereby shall not have been canceled pursuant to sections 10.1.
7.3 Required Approvals. Level Jump and Caldera shall have received all such
approvals, consents, authorizations or modifications as may be required to
permit the performance of Level Jump and Caldera of their respective obligations
under this Agreement, and the consummations of the transactions herein
contemplated (whether for government authorities or other persons), and Level
Jump and Caldera shall each have received any and all permits and approvals from
any regulatory authority having jurisdiction required for the lawful
consummation for the Plan of Exchange.
7.4 Blue Sky Compliance. There shall have been obtained any and all permits,
approvals and consents of the Securities or "Blue Sky" Commissions or any
jurisdictions, and of any other governmental body or agency, which counsel for
Caldera may reasonably deem necessary or appropriate so that consummation of the
transactions contemplated by this Agreement will be in compliance with
applicable laws.
ARTICLE VIII
Conditions to Level Jump's Obligations
Level Jump shall not be obligated to complete or cause to be completed the
transactions contemplated by this Agreement unless the following conditions have
been met prior to or at the Closing:
8.1 Compliance with Representations, Warranties and Covenants. All of the
representations and warranties of Caldera made in or pursuant to this Agreement
are true and shall be true in all material respects at and as of the Closing
date, with the same force and effect for changes contemplated or permitted by
the Agreement or otherwise approved in writing by Level Jump. Caldera shall have
complied with and performed all of the covenants contained in this Agreement to
be performed by them at or prior to the Closing Date. Such shall be evidenced by
appropriate Schedules to be attached hereto and incorporated by reference and
certified as correct by the President of Caldera.
ARTICLE IX
Conditions to Obligations of Caldera
Caldera shall not be obligated to complete or cause to be completed the
transactions contemplated by this Agreement unless the following conditions have
been met prior to or at the Closing:
9.1 Representations, Warranties and Covenants. All of the representations and
warranties of Level Jump contained in this Agreement and in its Business Plan
provided Caldera are true and shall be true in all material respects at and as
of the Closing date. Such shall be evidenced by appropriate Schedules attached
hereto and incorporated by reference and certified as correct by the
Shareholders and President of Level Jump.
<PAGE>
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ARTICLE X
Miscellaneous
10.1 Termination. This Agreement may be terminated or canceled, and the
transactions contemplated hereby may be abandoned, notwithstanding any
stockholder authorization, at any time before Closing of the Agreement:
A. By mutual consent of the Board of Directors of Level Jump and Caldera;
B. By any party in the event that any of the conditions specified in Article VII
shall not have been satisfied within the time contemplated by this Agreement;
C. By Caldera if any of the conditions specified in Article IX shall not have
been satisfied within the time contemplated by this Agreement;
D. By Level Jump if any of the conditions specified in Article VII shall not
have been satisfied within the time contemplated by this Agreement.
10.2 Effect of Termination. If this Agreement is terminated, this Agreement,
except as to Sections 10.3 and 10.4, shall no longer be of any force or effect
and there shall be no liability on the part of any part of any party or its
respective directors, officers or stockholders provided, however, that in the
case of a termination without cause by a party or a termination pursuant to
Sections 10.1 (c) or (d) hereof because of a prior material default under or
material breach of this Agreement by another party, the damages which the
aggrieved party or parties may recover from the defaulting party or parties
shall in no event exceed the amount of out-of-pocket costs and expenses incurred
by such aggrieved party or parties in connection with this Agreement.
10.3 Return of Information; Confidentially. In the event this Agreement is
terminated or the Plan of Exchange is not consummated for any reason. Level Jump
and Caldera agree that all written information and documents supplied by either
Level Jump and Caldera to each other shall be promptly returned to the other
party at its request, and Level Jump and Caldera shall each use its best efforts
to cause confidential information to continue to be treated as confidential.
10.4 Costs and Expenses. The party incurring expenses will pay all costs and
expenses incurred in connection with this Agreement. In the event of any
termination of this Agreement pursuant to Section 10.1, subject to the
provisions of 10.2, Level Jump and Caldera will each bear their own expenses.
10.5 Extension of Time; Waivers. At any time prior to the Closing date:
Caldera may (i) extend the time for the performance of the obligations or other
acts of Level Jump; (ii) waive any inaccuracies in the representations and
warranties of Level Jump contained herein or in any document delivered pursuant
hereto by Level Jump, and (iii) waive compliance with any of the agreements or
conditions herein to be performed by Caldera. Any agreement on the part of Level
Jump to any such extension or waiver shall be valid only if set forth in an
instrument, in writing, signed on behalf of Level Jump. Level Jump may (i)
extend the time for the performance of the obligations or other acts of Caldera;
(ii) waive any inaccuracies in the representations and warranties of Caldera
contained herein or in any document delivered pursuant hereto by Caldera, and
(iii) waive compliance with any of the agreements or conditions herein to be
performed by Level Jump. Any agreement on the part of Caldera to any such
extension or waiver shall be valid only if set forth in an instrument, in
writing, signed on behalf of Caldera.
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10.6 Assignability. This Agreement shall inure to the benefit of, and be binding
on the parties hereto and their respective successors and assigns, provided that
this Agreement may not be assigned by any party without the prior written
consent of the other party.
10.7 Reliance of Counsel. In rendering any opinion referred to herein or
required to be issued as a result of any provision herein contained, counsel may
rely, as to any factual matters involved in their opinion, on certificates of
public officials and of corporate officers, opinions of corporate general
counsel, and such other evidence as such counsel may reasonably deem
appropriate, and as to matters governed by laws of jurisdictions other than the
United States or the state in which said counsel is located, an opinion of local
counsel in jurisdictions, which counsel shall be satisfactory to the other
parties in the exercise of their reasonable judgement.
10.8 Notices. Any notice to any party hereto pursuant to this Agreement shall be
given by Certified or Registered mail, addressed as follows:
Caldera Corporation
3156 East Old Mill Circle, No. 100
Salt Lake City, UT 84121
Level Jump Financial Group
401-133 Richmond St. West
Toronto, ON, Canada, M5H 2L3
10.9 Amendment. This Agreement may be amended with the approval of the Board of
Directors of Level Jump and Caldera at any time before or after approval thereof
by the stockholders of Level Jump and Caldera; bait after any such stockholder
approval, no amendment shall be made which substantially and adversely changes
the terms hereof This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
10.10 Entire Agreement; Counterparts; Applicable Law. This Agreement (a)
constitutes the entire agreement and superseded all prior agreements and
understanding, both written and oral among the parties with respect to the
subject matter hereof, (b) may be executed in several counterparts, each of
which will be deemed an original and all of which shall constitute one and the
same instrument, and (c) shall be governed in all respects, including validity,
interpretation and effect, by the laws of the State of Florida.
10.11 Titles. The titles and capitals of the Sections and paragraphs of this
Agreement are included for convenience of reference any and shall have no effect
on the constructions or meaning of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
CALDERA CORPORATION
By:_____________________________
President
LEVEL JUMP FINANCIAL GROUP, INC.
By:_____________________________
President
ZDG Holdings Inc.
By:________________________________
President
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________________________________
David Roff
________________________________
Brice Scheschuk
________________________________
Glen Akselrod
Exhibit 4.1
VOTING AGREEMENT
This Voting Agreement (the "Agreement") is entered into as of
this 26th day of October, 1999 by and between ZDG Holdings Inc. ("ZDG") and
Brice Scheschuk (the "Shareholder").
RECITAL
WHEREAS, ZDG and Shareholder are shareholders of Level Jump
Financial Group, Inc. ("Company");
WHEREAS, ZDG and the Shareholder wish to enter into an
agreement whereby ZDG would be entitle vote in all matters presented to the
shareholders of the Company, including but not limited to the holders of shares
of Common Stock and Preferred Stock owned directly and indirectly by the
Shareholder;
NOW, THEREFORE, in consideration of the foregoing recitals and
the mutual covenants set forth below, the parties hereto agree as follows:
1. Voting Terms.
(a) During the term of this Agreement, ZDG shall
have the right to vote all the capital shares of the Company with voting rights,
including but not limited to the Common Stock and Preferred Stock of the
Company, owned either directly or indirectly by the Shareholder ("Securities")
as specified on the attached Schedule A hereto (including all Securities issued
as dividends or distributions in respect thereof and as adjusted to reflect
splits, combinations and conversions of the Securities as a result of the change
in par value, merger, combination, exchange or otherwise), on all matters
presented to the vote of the shareholders of the Company, either as separate
classes or together as a single class, as ZDG determines its sole discretion;
provided, however, that this Agreement shall not grant to ZDG the right to vote
the Securities in connection with any transaction or contract between the
Company and one or more of the Company's directors or officers, or between the
Company and any other entity in which one or more of the Company's officers or
directors is an officer or director or has a financial interest. The right to
vote the Securities during the term of this Agreement is given irrevocably by
Shareholder.
Notwithstanding the forgoing, the Securities
are subject to an option granted by the Shareholder to ZDG of even date
herewith, and it is agreed by the parties hereto, that to the extent the option
is exercised by ZDG, the number of Securities to which this Agreement applies
and represented by the option shares will be decreased.
(b) For purposes of clarification, and not as a
limitation, the right to vote the Securities shall extend to all matters
presented to the shareholders of the Company including approvals of mergers,
combinations, and acquisitions regardless of whether the Company is the
surviving entity, reorganizations, recapitalizations, reclassifications, stock
splits or exchanges, stock dividends, combinations of the capital securities of
the Company, any change in the rights and privileges of the capital securities
of the Company, any amendments to the certificate of incorporation of the
Company and the election of directors.
(c) The term Company will include any successor
to the Company by means of merger, combination or exchange.
<PAGE>
2. Power of Appointment. During the term of this Agreement,
ZDG has the power to appoint another shareholder of the Company with the
authority to exercise the voting rights granted under this Agreement. Such power
of appointment may be limited as to time, a specific meeting, a specific issue
or may be unlimited or permanent, as ZDG determines in its sole discretion. The
Shareholder agrees that he shall not be entitled to notice of any exercise of
the above power of appointment.
3. Termination. This Agreement shall terminate on and be of no
further force or effect after October 26, 2004.
4. Entire Agreement; Modifications and Amendments; Addition of
Shareholders. This writing constitutes the entire Agreement of the parties with
respect to the subject matter hereof and may not be modified, amended or
terminated (other than in accordance with its terms) except by a written
agreement specifically referring to this Agreement signed by the Company, ZDG,
and the Shareholder. Notwithstanding the foregoing, any holder of shares of the
capital stock of the Company may subsequently be added as a party to this
Agreement as a "Shareholder" and bound by and entitled to the terms and
conditions herein by the execution of a signature page to this Agreement without
the agreement of any other Shareholder.
5. Waivers. No waiver of any breach or default hereunder shall
be considered valid unless in writing and signed by the party giving such
waiver, and no such waiver shall be deemed a waiver of any subsequent breach or
default of the same or similar nature.
6. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of each party hereto, its successors and assigns.
Otherwise, this Agreement shall not create any rights for the benefit of any
third party.
7. Legends. Each stock certificate issued after the date
hereof evidencing shares of the Company's capital stock subject to the
provisions of this Agreement (including any shares issued upon a transfer, stock
split, stock dividend, recapitalization, merger or other similar event) shall at
all times during the term of this Agreement bear the following legend:
THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO THE
PROVISIONS OF A VOTING AGREEMENT DATED AS OF OCTOBER26, 1999.
BY ACCEPTING ANY INTEREST IN SUCH SHARES THE PERSON ACCEPTING
THE INTEREST SHALL BE DEEMED TO AGREE TO AND SHALL BECOME
BOUND BY ALL THE PROVISIONS OF SAID VOTING AGREEMENT. A COPY
OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICE
OF THE COMPANY.
8. Titles and Subtitles. The section headings contained herein
are for convenience only and are not intended to define or limit the contents of
said sections.
9. Cooperation. Each party hereto shall take such further
action and shall execute and deliver such further documents as may be reasonably
requested by any other party in order to carry out the provisions and purposes
of this Agreement.
10. Counterparts. This Agreement may be executed in one or
more counterparts, all of which taken together shall be deemed one original.
2
1981.1
<PAGE>
11. Governing Law. This Agreement and all amendments hereof
shall be governed by and construed in accordance with the laws of the State of
Colorado, disregarding any principles of conflicts of laws that would otherwise
provide for the application of the substantive laws of another jurisdiction.
12. Specific Performance. Without limiting the rights of each
party hereto to pursue all other legal and equitable rights available to such
party for any other party's failure to perform its obligations under this
Agreement, each such party acknowledges and agrees that the remedy at law for
any failure to perform obligations hereunder would be inadequate and all such
parties shall be entitled to specific performance, injunctive relief or other
equitable remedies in the event of any such failure.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
ZDG HOLDINGS INC.
BY:___________________________
Robert Landau, President
______________________________
Brice Scheschuk
3
<PAGE>
SCHEDULE A
Corresponding Number of
Class of Certificate Representing
Name of Shareholder Security Number of Shares Security
- ------------------- -------- ---------------- -----------------------
Brice Scheschuk Common 183,272
Stock
4
Exhibit 4.2
VOTING AGREEMENT
This Voting Agreement (the "Agreement") is entered into as of
this 26th day of October, 1999 by and between ZDG Holdings Inc. ("ZDG") and Glen
Akselrod (the "Shareholder").
RECITAL
WHEREAS, ZDG and the Shareholder are each shareholders of
Level Jump Financial Group, Inc. ("Company");
WHEREAS, ZDG and the Shareholder wish to enter into an
agreement whereby ZDG would be entitle vote in all matters presented to the
shareholders of the Company, including but not limited to the holders of shares
of Common Stock and Preferred Stock owned directly and indirectly by the
Shareholder;
NOW, THEREFORE, in consideration of the foregoing recitals and
the mutual covenants set forth below, the parties hereto agree as follows:
1. Voting Terms.
(a) During the term of this Agreement, ZDG shall
have the right to vote all the capital shares of the Company with voting rights,
including but not limited to the Common Stock and Preferred Stock of the
Company, owned either directly or indirectly by the Shareholder ("Securities")
as specified on the attached Schedule A hereto (including all Securities issued
as dividends or distributions in respect thereof and as adjusted to reflect
splits, combinations and conversions of the Securities as a result of the change
in par value, merger, combination, exchange or otherwise), on all matters
presented to the vote of the shareholders of the Company, either as separate
classes or together as a single class, as ZDG determines in its sole discretion;
provided, however, that this Agreement shall not grant to ZDG the right to vote
the Securities in connection with any transaction or contract between the
Company and one or more of the Company's directors or officers, or between the
Company and any other entity in which one or more of the Company's officers or
directors is an officer or director or has a financial interest. The right to
vote the Securities during the term of this Agreement is given irrevocably by
Shareholder.
Notwithstanding the forgoing, the Securities
are subject to an option granted by the Shareholder to ZDG of even date
herewith, and it is agreed by the parties hereto, that to the extent the option
is exercised by ZDG, the number of Securities to which this Agreement applies
and represented by the option shares will be decreased.
(b) For purposes of clarification, and not as a
limitation, the right to vote the Securities shall extend to all matters
presented to the shareholders of the Company including approvals of mergers,
combinations, and acquisitions regardless of whether the Company is the
surviving entity, reorganizations, recapitalizations, reclassifications, stock
splits or exchanges, stock dividends, combinations of the capital securities of
the Company, any change in the rights and privileges of the capital securities
of the Company, any amendments to the certificate of incorporation of the
Company and the election of directors.
(c) The term Company will include any successor
to the Company by means of merger, combination or exchange.
<PAGE>
2. Power of Appointment. During the term of this Agreement,
ZDG has the power to appoint another shareholder of the Company with the
authority to exercise the voting rights granted under this Agreement. Such power
of appointment may be limited as to time, a specific meeting, a specific issue
or may be unlimited or permanent, as ZDG determines in its sole discretion. The
Shareholder agrees that he shall not be entitled to notice of any exercise of
the above power of appointment.
3. Termination. This Agreement shall terminate on and be of no
further force or effect after October 26, 2004.
4. Entire Agreement; Modifications and Amendments; Addition of
Shareholders. This writing constitutes the entire Agreement of the parties with
respect to the subject matter hereof and may not be modified, amended or
terminated (other than in accordance with its terms) except by a written
agreement specifically referring to this Agreement signed by the Company, ZDG,
and the Shareholder. Notwithstanding the foregoing, any holder of shares of the
capital stock of the Company may subsequently be added as a party to this
Agreement as a "Shareholder" and bound by and entitled to the terms and
conditions herein by the execution of a signature page to this Agreement without
the agreement of any other Shareholder.
5. Waivers. No waiver of any breach or default hereunder shall
be considered valid unless in writing and signed by the party giving such
waiver, and no such waiver shall be deemed a waiver of any subsequent breach or
default of the same or similar nature.
6. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of each party hereto, its successors and assigns.
Otherwise, this Agreement shall not create any rights for the benefit of any
third party.
7. Legends. Each stock certificate issued after the date
hereof evidencing shares of the Company's capital stock subject to the
provisions of this Agreement (including any shares issued upon a transfer, stock
split, stock dividend, recapitalization, merger or other similar event) shall at
all times during the term of this Agreement bear the following legend:
THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO THE
PROVISIONS OF A VOTING AGREEMENT DATED AS OF OCTOBER26, 1999.
BY ACCEPTING ANY INTEREST IN SUCH SHARES THE PERSON ACCEPTING
THE INTEREST SHALL BE DEEMED TO AGREE TO AND SHALL BECOME
BOUND BY ALL THE PROVISIONS OF SAID VOTING AGREEMENT. A COPY
OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICE
OF THE COMPANY.
8. Titles and Subtitles. The section headings contained herein
are for convenience only and are not intended to define or limit the contents of
said sections.
9. Cooperation. Each party hereto shall take such further
action and shall execute and deliver such further documents as may be reasonably
requested by any other party in order to carry out the provisions and purposes
of this Agreement.
2
<PAGE>
10. Counterparts. This Agreement may be executed in one or
more counterparts, all of which taken together shall be deemed one original.
11. Governing Law. This Agreement and all amendments hereof
shall be governed by and construed in accordance with the laws of the State of
Colorado, disregarding any principles of conflicts of laws that would otherwise
provide for the application of the substantive laws of another jurisdiction.
12. Specific Performance. Without limiting the rights of each
party hereto to pursue all other legal and equitable rights available to such
party for any other party's failure to perform its obligations under this
Agreement, each such party acknowledges and agrees that the remedy at law for
any failure to perform obligations hereunder would be inadequate and all such
parties shall be entitled to specific performance, injunctive relief or other
equitable remedies in the event of any such failure.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
ZDG HOLDINGS INC.
BY:___________________________
Robert Landau, President
______________________________
Glen Akselrod
3
<PAGE>
SCHEDULE A
Corresponding Number of
Class of Certificate Representing
Name of Shareholder Security Number of Shares Security
- ------------------- -------- ---------------- -----------------------
Glen Akselrod Common 183,272
Stock
4
Exhibit 4.3
VOTING AGREEMENT
This Voting Agreement (the "Agreement") is entered into as of
this 26th day of October, 1999 by and between David Roff ("Roff") and Brice
Scheschuk (the "Shareholder").
RECITAL
WHEREAS, Roff and Shareholder are shareholders of Level Jump
Financial Group, Inc. ("Company");
WHEREAS, Roff and the Shareholder wish to enter into an
agreement whereby Roff would be entitle vote in all matters presented to the
shareholders of the Company, including but not limited to the holders of shares
of Common Stock and Preferred Stock owned directly and indirectly by the
Shareholder;
NOW, THEREFORE, in consideration of the foregoing recitals and
the mutual covenants set forth below, the parties hereto agree as follows:
1. Voting Terms.
(a) During the term of this Agreement, Roff
shall have the right to vote all the capital shares of the Company with voting
rights, including but not limited to the Common Stock and Preferred Stock of the
Company, owned either directly or indirectly by the Shareholder ("Securities")
as specified on the attached Schedule A hereto (including all Securities issued
as dividends or distributions in respect thereof and as adjusted to reflect
splits, combinations and conversions of the Securities as a result of the change
in par value, merger, combination, exchange or otherwise), on all matters
presented to the vote of the shareholders of the Company, either as separate
classes or together as a single class, as Roff determines in his sole
discretion; provided, however, that this Agreement shall not grant to Roff the
right to vote the Securities in connection with any transaction or contract
between the Company and one or more of the Company's directors or officers, or
between the Company and any other entity in which one or more of the Company's
officers or directors is an officer or director or has a financial interest. The
right to vote the Securities during the term of this Agreement is given
irrevocably by Shareholder.
Notwithstanding the forgoing, the Securities
are subject to an option granted by the Shareholder to Roff of even date
herewith, and it is agreed by the parties hereto, that to the extent the option
is exercised by Roff, the number of Securities to which this Agreement applies
and represented by the option shares will be decreased.
(b) For purposes of clarification, and not as a
limitation, the right to vote the Securities shall extend to all matters
presented to the shareholders of the Company including approvals of mergers,
combinations, and acquisitions regardless of whether the Company is the
surviving entity, reorganizations, recapitalizations, reclassifications, stock
splits or exchanges, stock dividends, combinations of the capital securities of
the Company, any change in the rights and privileges of the capital securities
of the Company, any amendments to the certificate of incorporation of the
Company and the election of directors.
(c) The term Company will include any successor
to the Company by means of merger, combination or exchange.
<PAGE>
2. Power of Appointment. During the term of this Agreement,
Roff has the power to appoint another shareholder of the Company with the
authority to exercise the voting rights granted under this Agreement. Such power
of appointment may be limited as to time, a specific meeting, a specific issue
or may be unlimited or permanent, as Roff determines in his sole discretion. The
Shareholder agrees that he shall not be entitled to notice of any exercise of
the above power of appointment.
3. Termination. This Agreement shall terminate on and be of no
further force or effect after October 26, 2004.
4. Entire Agreement; Modifications and Amendments; Addition of
Shareholders. This writing constitutes the entire Agreement of the parties with
respect to the subject matter hereof and may not be modified, amended or
terminated (other than in accordance with its terms) except by a written
agreement specifically referring to this Agreement signed by the Company, Roff,
and the Shareholder. Notwithstanding the foregoing, any holder of shares of the
capital stock of the Company may subsequently be added as a party to this
Agreement as a "Shareholder" and bound by and entitled to the terms and
conditions herein by the execution of a signature page to this Agreement without
the agreement of any other Shareholder.
5. Waivers. No waiver of any breach or default hereunder shall
be considered valid unless in writing and signed by the party giving such
waiver, and no such waiver shall be deemed a waiver of any subsequent breach or
default of the same or similar nature.
6. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of each party hereto, its successors and assigns.
Otherwise, this Agreement shall not create any rights for the benefit of any
third party.
7. Legends. Each stock certificate issued after the date
hereof evidencing shares of the Company's capital stock subject to the
provisions of this Agreement (including any shares issued upon a transfer, stock
split, stock dividend, recapitalization, merger or other similar event) shall at
all times during the term of this Agreement bear the following legend:
THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO THE
PROVISIONS OF A VOTING AGREEMENT DATED AS OF OCTOBER26, 1999.
BY ACCEPTING ANY INTEREST IN SUCH SHARES THE PERSON ACCEPTING
THE INTEREST SHALL BE DEEMED TO AGREE TO AND SHALL BECOME
BOUND BY ALL THE PROVISIONS OF SAID VOTING AGREEMENT. A COPY
OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICE
OF THE COMPANY.
8. Titles and Subtitles. The section headings contained herein
are for convenience only and are not intended to define or limit the contents of
said sections.
9. Cooperation. Each party hereto shall take such further
action and shall execute and deliver such further documents as may be reasonably
requested by any other party in order to carry out the provisions and purposes
of this Agreement.
2
<PAGE>
10. Counterparts. This Agreement may be executed in one or
more counterparts, all of which taken together shall be deemed one original.
11. Governing Law. This Agreement and all amendments hereof
shall be governed by and construed in accordance with the laws of the State of
Colorado, disregarding any principles of conflicts of laws that would otherwise
provide for the application of the substantive laws of another jurisdiction.
12. Specific Performance. Without limiting the rights of each
party hereto to pursue all other legal and equitable rights available to such
party for any other party's failure to perform its obligations under this
Agreement, each such party acknowledges and agrees that the remedy at law for
any failure to perform obligations hereunder would be inadequate and all such
parties shall be entitled to specific performance, injunctive relief or other
equitable remedies in the event of any such failure.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
___________________________
DAVID ROFF
____________________________
BRICE SCHESCHUK
3
<PAGE>
SCHEDULE A
Corresponding Number of
Class of Certificate Representing
Name of Shareholder Security Number of Shares Security
- ------------------- -------- ---------------- -----------------------
Brice Scheschuk Common 122,181
Stock
4
Exhibit 4.4
VOTING AGREEMENT
This Voting Agreement (the "Agreement") is entered into as of
this 26th day of October, 1999 by and between David Roff ("Roff") and Glen
Akselrod (the "Shareholder").
RECITAL
WHEREAS, Roff and Shareholder are shareholders of Level Jump
Financial Group, Inc. ("Company");
WHEREAS, Roff and the Shareholder wish to enter into an
agreement whereby Roff would be entitle vote in all matters presented to the
shareholders of the Company, including but not limited to the holders of shares
of Common Stock and Preferred Stock owned directly and indirectly by the
Shareholder;
NOW, THEREFORE, in consideration of the foregoing recitals and
the mutual covenants set forth below, the parties hereto agree as follows:
1. Voting Terms.
(a) During the term of this Agreement, Roff
shall have the right to vote all the capital shares of the Company with voting
rights, including but not limited to the Common Stock and Preferred Stock of the
Company, owned either directly or indirectly by the Shareholder ("Securities")
as specified on the attached Schedule A hereto (including all Securities issued
as dividends or distributions in respect thereof and as adjusted to reflect
splits, combinations and conversions of the Securities as a result of the change
in par value, merger, combination, exchange or otherwise), on all matters
presented to the vote of the shareholders of the Company, either as separate
classes or together as a single class, as Roff determines in his sole
discretion; provided, however, that this Agreement shall not grant to Roff the
right to vote the Securities in connection with any transaction or contract
between the Company and one or more of the Company's directors or officers, or
between the Company and any other entity in which one or more of the Company's
officers or directors is an officer or director or has a financial interest. The
right to vote the Securities during the term of this Agreement is given
irrevocably by Shareholder.
Notwithstanding the forgoing, the Securities
are subject to an option granted by the Shareholder to Roff of even date
herewith, and it is agreed by the parties hereto, that to the extent the option
is exercised by Roff, the number of Securities to which this Agreement applies
and represented by the option shares will be decreased.
(b) For purposes of clarification, and not as a
limitation, the right to vote the Securities shall extend to all matters
presented to the shareholders of the Company including approvals of mergers,
combinations, and acquisitions regardless of whether the Company is the
surviving entity, reorganizations, recapitalizations, reclassifications, stock
splits or exchanges, stock dividends, combinations of the capital securities of
the Company, any change in the rights and privileges of the capital securities
of the Company, any amendments to the certificate of incorporation of the
Company and the election of directors.
(c) The term Company will include any successor
to the Company by means of merger, combination or exchange.
<PAGE>
2. Power of Appointment. During the term of this Agreement,
Roff has the power to appoint another shareholder of the Company with the
authority to exercise the voting rights granted under this Agreement. Such power
of appointment may be limited as to time, a specific meeting, a specific issue
or may be unlimited or permanent, as Roff determines in his sole discretion. The
Shareholder agrees that he shall not be entitled to notice of any exercise of
the above power of appointment.
3. Termination. This Agreement shall terminate on and be of no
further force or effect after October 26, 2004.
4. Entire Agreement; Modifications and Amendments; Addition of
Shareholders. This writing constitutes the entire Agreement of the parties with
respect to the subject matter hereof and may not be modified, amended or
terminated (other than in accordance with its terms) except by a written
agreement specifically referring to this Agreement signed by the Company, Roff,
and the Shareholder. Notwithstanding the foregoing, any holder of shares of the
capital stock of the Company may subsequently be added as a party to this
Agreement as a "Shareholder" and bound by and entitled to the terms and
conditions herein by the execution of a signature page to this Agreement without
the agreement of any other Shareholder.
5. Waivers. No waiver of any breach or default hereunder shall
be considered valid unless in writing and signed by the party giving such
waiver, and no such waiver shall be deemed a waiver of any subsequent breach or
default of the same or similar nature.
6. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of each party hereto, its successors and assigns.
Otherwise, this Agreement shall not create any rights for the benefit of any
third party.
7. Legends. Each stock certificate issued after the date
hereof evidencing shares of the Company's capital stock subject to the
provisions of this Agreement (including any shares issued upon a transfer, stock
split, stock dividend, recapitalization, merger or other similar event) shall at
all times during the term of this Agreement bear the following legend:
THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO THE
PROVISIONS OF A VOTING AGREEMENT DATED AS OF OCTOBER26, 1999.
BY ACCEPTING ANY INTEREST IN SUCH SHARES THE PERSON ACCEPTING
THE INTEREST SHALL BE DEEMED TO AGREE TO AND SHALL BECOME
BOUND BY ALL THE PROVISIONS OF SAID VOTING AGREEMENT. A COPY
OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICE
OF THE COMPANY.
8. Titles and Subtitles. The section headings contained herein
are for convenience only and are not intended to define or limit the contents of
said sections.
9. Cooperation. Each party hereto shall take such further
action and shall execute and deliver such further documents as may be reasonably
requested by any other party in order to carry out the provisions and purposes
of this Agreement.
2 3
<PAGE>
10. Counterparts. This Agreement may be executed in one or
more counterparts, all of which taken together shall be deemed one original.
11. Governing Law. This Agreement and all amendments hereof
shall be governed by and construed in accordance with the laws of the State of
Colorado, disregarding any principles of conflicts of laws that would otherwise
provide for the application of the substantive laws of another jurisdiction.
12. Specific Performance. Without limiting the rights of each
party hereto to pursue all other legal and equitable rights available to such
party for any other party's failure to perform its obligations under this
Agreement, each such party acknowledges and agrees that the remedy at law for
any failure to perform obligations hereunder would be inadequate and all such
parties shall be entitled to specific performance, injunctive relief or other
equitable remedies in the event of any such failure.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
------------------------------
DAVID ROFF
------------------------------
GLEN AKSELROD
3
<PAGE>
SCHEDULE A
Corresponding Number of
Class of Certificate Representing
Name of Shareholder Security Number of Shares Security
- ------------------- -------- ---------------- -----------------------
Glen Akselrod Common 122,181
Stock
4
Exhibit 4.5
NEITHER THIS OPTION NOR THE COMMON STOCK WHICH MAY BE ACQUIRED UPON EXERCISE
HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
("ACT"), OR APPLICABLE STATE LAW. NEITHER THIS OPTION NOR SUCH COMMON STOCK MAY
BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW.
PURCHASE OPTION
For the Purchase of
183,272 Shares of Common Stock
of
LEVEL JUMP FINANCIAL GROUP, INC.
(A Colorado Corporation)
1. Purchase Option.
THIS CERTIFIES THAT, in consideration of $5.00 duly paid by or on
behalf of ZDG Holdings Inc. ("Holder"), with an address
of______________________________ Canada, as owner of this Purchase Option, to
Brice Scheschuk ("Scheschuk"), Holder is entitled, at any time or from time to
time, commencing on the date hereof and expiring at 5:00 p.m., Eastern Time,
October 26, 2004 ("Expiration Date"), but not thereafter, to purchase and
receive from Scheschuk, in whole or in part up to 183,272 shares of common stock
of Level Jump Financial Group, Inc. ("Company"), $.001 par value ("Common
Stock"). This Purchase Option is one of several Purchase Options issued to
purchase an aggregate of 305,453 shares held by Scheschuk and represented by
Certificates Nos. ___ through ____, as set forth on Schedule A to that certain
Voting Agreement ("Voting Agreement"), dated as of October 27, 1999, by and
between Holder and Scheschuk. The 183,272 shares of Common Stock and any
securities into which they are exchanged hereafter are referred to collectively
herein as the "Option Shares." If the Expiration Date is a day on which banking
institutions are authorized by law to close, then this Purchase Option may be
exercised on the next succeeding day which is not such a day in accordance with
the terms herein.
This Purchase Option is initially exercisable at $0.34375 per Option
Share; provided, however, that upon the occurrence of any of the events
specified in Section 5 hereof, the rights granted by this Purchase Option,
including the exercise price and the number of shares of Common Stock to be
received upon such exercise, shall be adjusted as therein specified. The term
"Exercise Price" shall mean the initial exercise price or the adjusted exercise
price of a share of Common Stock, depending on the context.
2. Exercise.
2.1. Exercise Form. In order to exercise this Purchase Option, the
exercise form attached hereto must be duly executed and completed and delivered
to Scheschuk, together with this Purchase Option and payment of the Exercise
<PAGE>
Price in cash or by certified check or official bank check payable to Scheschuk
for the Option Shares being purchased. If the rights represented hereby shall
not be exercised at or before 5:00 p.m., Eastern time, on the Expiration Date,
this Purchase Option shall become and be void without further force or effect,
and all rights represented hereby shall cease and expire.
2.2. Legend. Each certificate for Common Stock purchased under this
Purchase Option shall bear a legend as follows unless the Common Stock has been
registered under the Securities Act of 1933, as amended ("Act"):
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended
("Act"), or applicable state law. The securities may not be
offered for sale, sold or otherwise transferred except
pursuant to an effective registration statement under the Act
or pursuant to an exemption from registration under the Act
and applicable state law."
3. Transfer. This Purchase Option may be assigned or transferred, in whole or in
part, at the discretion of the Holder provided notice of the transfer is
forwarded to Scheschuk together with an opinion of counsel for the Holder,
addressed to Scheschuk, that this Purchase Option may be transferred pursuant to
an exemption from registration under the Act. Such opinion may be the opinion of
Andrew D, Hudders Esq. and/or Graubard Mollen & Miller.
4. New Purchase Options to be Issued.
4.1. Partial Exercise. This Purchase Option may be exercised in whole
or in part. In the event of the exercise in part only, upon surrender of this
Purchase Option to Scheschuk, together with the duly executed exercise form and
funds sufficient to pay any Exercise Price, Scheschuk shall indicate the partial
exercise on the signature page hereto and shall return to the Holder this
Purchase Option.
4.2. Partial Transfer. Subject to the restrictions in Section 3 hereof,
in the event of the assignment hereof in part only, upon surrender of this
Purchase Option to Scheschuk for cancellation, together with the duly executed
assignment form, Scheschuk shall cause to be delivered to the Holder new
Purchase Options of like tenor to this Purchase Option in the names of the
Holder and the transferee evidencing the rights of the Holder and the transferee
to purchase the aggregate number of shares of Common Stock purchasable hereunder
and reflecting the transfer.
4.3. Lost Certificate. Upon receipt by Scheschuk of evidence of the
loss, theft, destruction or mutilation of this Purchase Option,, Scheschuk shall
execute and deliver a new Purchase Option of like tenor and date. Any such new
Purchase Option executed and delivered as a result of such loss, theft,
mutilation or destruction shall constitute a substitute contractual obligation
on the part of Scheschuk.
5. Adjustments.
5.1. Adjustments to Exercise Price and Number of Securities. The
Exercise Price and the number of Option Shares shall be subject to adjustment
from time to time as hereinafter set forth:
5.1.1. Stock Dividends, Recapitalization, Reclassification,
Split-Ups. If after the date hereof the number of Option Shares is increased by
2
<PAGE>
a stock dividend payable in shares of Common Stock or by a split-up,
recapitalization or reclassification of shares of Common Stock or other similar
event, then, on the effective date thereof, the number of shares of Common Stock
that may be purchased upon exercise of this Purchase Option shall be increased
in proportion to such increase in the number of Option Shares.
5.1.2. Aggregation of Shares. If after the date hereof the
number of Option Shares is decreased by a consolidation, combination or
reclassification of shares of Common Stock or other similar event, then, upon
the effective date thereof, the number of shares of Common Stock that may be
purchased upon exercise of the Purchase Option shall be decreased in proportion
to such decrease in the number of Option Shares.
5.1.3. Adjustments in Exercise Price. Whenever the number of
shares of Common Stock purchasable upon the exercise of this Purchase Option is
adjusted, as provided in this Section 5.1, the Exercise Price shall be adjusted
(to the nearest one-millionth of one cent) by multiplying such Exercise Price
immediately prior to such adjustment by a fraction (x) the numerator of which
shall be the number of shares of Common Stock purchasable upon the exercise of
this Purchase Option immediately prior to such adjustment, and (y) the
denominator of which shall be the number of shares of Common Stock so
purchasable immediately thereafter. If the Holder exercises this Purchase Option
after an adjustment which requires an aggregate payment in an amount which is
not evenly divisible by one cent, the aggregate amount to be paid shall be
rounded up to the nearest whole cent.
5.1.4. Replacement of Securities Upon Reorganization, Etc. In
case of any reclassification or reorganization of the outstanding shares of
Common Stock other than a change covered by Section 5.1.1 hereof or which solely
affects the par value of such shares of Common Stock, or in the case of any
merger or consolidation (including an exchange of the Common Stock for
securities of another corporation) of the Company with or into another
corporation (other than a consolidation or merger in which the Company is the
continuing corporation and which does not result in any reclassification or
reorganization of the outstanding shares of Common Stock), or in the case of any
sale or conveyance to another corporation or entity of the property of the
Company as an entirety or substantially as an entirety in connection with which
the Company is dissolved, if and to the extent Scheschuk, as the holder of the
Option Shares purchasable upon exercise of this Purchase Option, has the right
to receive shares of stock or other securities or property (including cash) upon
such reclassification, reorganization, merger or consolidation, or upon a
dissolution following any such sale or other transfer, the Holder of this
Purchase Option shall have the right thereafter (until the expiration of the
right of exercise of this Purchase Option) to receive from Scheschuk, upon the
exercise hereof, for the same aggregate Exercise Price payable hereunder
immediately prior to such event, the kind and amount of shares of stock or other
securities or property (including cash) receivable upon such reclassification,
reorganization, merger or consolidation, or upon a dissolution following any
such sale or other transfer, by Scheschuk with respect to the Option Shares
purchasable upon exercise of this Purchase Option immediately prior to such
event,; and if any reclassification also results in a change in shares of Common
Stock covered by Section 5.1.1, then such adjustment shall be made pursuant to
Sections 5.1.1, 5.1.3 and this Section 5.1.4. The provisions of this Section
5.1.4 shall similarly apply to successive reclassifications, reorganizations,
mergers or consolidations, sales or other transfers.
5.1.5. Changes in Form of Purchase Option. This form of
Purchase Option need not be changed because of any change pursuant to this
Section, and Purchase Options issued after such change may state the same
Exercise Price and the same number of shares of Common Stock as are stated in
the Purchase Options initially issued pursuant to this Agreement. The acceptance
3
<PAGE>
by any Holder of the issuance of new Purchase Options reflecting a required or
permissive change shall not be deemed to waive any rights to a prior adjustment
or the computation thereof.
6. Change of Address. As long as this Purchase Option is outstanding, the
Company's books and records shall indicate that the address of the record holder
of the Option Shares is Scheschuk.
7. Notices. All notices, requests, consents and other communications under this
Purchase Option shall be in writing and shall either be delivered personally or
sent by certified mail, return receipt requested, postage prepaid, or by Federal
Express next business day service with signed receipt required, and addressed as
follows, and shall be deemed duly given hereunder when so delivered: (i) if to
the registered Holder of the Purchase Option, to the address of such Holder as
set forth above, (ii) if to Scheschuk,________________________________. A copy
of any notice sent hereunder shall also be sent to Andrew D. Hudders, Esq.,
Graubard Mollen & Miller, 600 Third Avenue, New York, New York 10016-2097.
8. Miscellaneous.
8.1. Headings. The headings contained herein are for the sole purpose
of convenience of reference, and shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this Purchase
Option.
8.2. Entire Agreement. This Purchase Option (together with the other
agreements and documents being delivered pursuant to or in connection with this
Purchase Option) constitutes the entire agreement of the parties hereto with
respect to the subject matter hereof, and supersedes all prior agreements and
understandings of the parties, oral and written, with respect to the subject
matter hereof.
8.3. Binding Effect. This Purchase Option shall inure solely to the
benefit of and shall be binding upon, the Holder and Scheschuk, and their
respective successors, legal representatives and assigns, and no other person
shall have or be construed to have any legal or equitable right, remedy or claim
under or in respect of or by virtue of this Purchase Option or any provisions
herein contained.
8.4. Governing Law; Submission to Jurisdiction. This Purchase Option
shall be governed by and construed and enforced in accordance with the laws of
the State of New York, without giving effect to conflict of laws. Scheschuk and
Holder hereby agree that any action, proceeding or claim against Scheschuk or
the Holder arising out of, or relating in any way to this Purchase Option shall
be brought and enforced in the courts of the State of New York or of the United
States of America for the Southern District of New York, and irrevocably submit
to such jurisdiction, which jurisdiction shall be exclusive. Scheschuk and the
Holder hereby waive any objection to such exclusive jurisdiction and that such
courts represent an inconvenient forum. Any process or summons to be served upon
Scheschuk or the Holder may be served by transmitting a copy thereof by
registered or certified mail, return receipt requested, postage prepaid,
addressed to such party at its address set forth on the signature page hereof.
Such mailing shall be deemed personal service and shall be legal and binding
upon Scheschuk or the Holder, as the case may be, in any action, proceeding or
claim. Scheschuk and the Holder agree that the prevailing party(ies) in any such
4
<PAGE>
action shall be entitled to recover from the other party(ies) all of its
reasonable attorneys' fees and expenses relating to such action or proceeding
and/or incurred in connection with the preparation therefor.
8.5. Waiver, Etc. The failure of Scheschuk or the Holder to at any time
enforce any of the provisions of this Purchase Option shall not be deemed or
construed to be a waiver of any such provision, nor to in any way affect the
validity of this Purchase Option or any provision hereof or the right of
Scheschuk or any Holder to thereafter enforce each and every provision of this
Purchase Option. No waiver of any breach, non-compliance or non-fulfillment of
any of the provisions of this Purchase Option shall be effective unless set
forth in a written instrument executed by the party or parties against whom or
which enforcement of such waiver is sought; and no waiver of any such breach,
non-compliance or non-fulfillment shall be construed or deemed to be a waiver of
any other or subsequent breach, non-compliance or non-fulfillment.
8.6. Execution in Counterparts. This Purchase Option may be executed in
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same agreement, and shall become
effective when one or more counterparts has been signed by each of the parties
hereto and delivered to each of the other parties hereto.
IN WITNESS WHEREOF, Scheschuk has executed this Purchase
Option as of the 26th day of October, 1999.
-----------------------------------
Brice Scheschuk
ZDG HOLDINGS, INC.
By:_________________________________
Robert Landau, President
5
<PAGE>
* Partial Exercise Record *
Date of Exercise Number of Option Shares
- ----------------------------------- ---------------------------------
- ----------------------------------- ---------------------------------
6
<PAGE>
Form to be used to exercise Purchase Option:
Brice Scheschuk
- --------------------------
- --------------------------
Date:_________________, 19__
The undersigned hereby elects irrevocably to exercise the
within Purchase Option and to purchase from you ________________ shares of
Common Stock of Level Jump Financial Group, Inc. and hereby makes payment of
$____________ (at the rate of $_____________ per share of Common Stock) in
payment of the Exercise Price pursuant thereto. Please deliver the Common Stock
as to which this Purchase Option is exercised in accordance with the
instructions given below.
--------------------------------------
Signature
INSTRUCTIONS FOR DELIVERY OF SECURITIES
Name: ______________________________________________________________________
(Print in Block Letters)
Address: ______________________________________________________________________
_______________________________________________________________________________
7
<PAGE>
Form to be used to assign Purchase Option:
ASSIGNMENT
(To be executed by the Holder to effect a transfer of the
within Purchase Option):
FOR VALUE RECEIVED, _________________________________________
_________________________________________________ does hereby sell, assign and
transfer unto _________________________________________________ the right to
purchase ______________ shares of Common Stock to purchase _____________________
shares of Common Stock of Level Jump Financial Group, Inc. evidenced by the
within Purchase Option.
Dated:___________________, 19____
-------------------------------------
Signature
8
Exhibit 4.6
NEITHER THIS OPTION NOR THE COMMON STOCK WHICH MAY BE ACQUIRED UPON EXERCISE
HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
("ACT"), OR APPLICABLE STATE LAW. NEITHER THIS OPTION NOR SUCH COMMON STOCK MAY
BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW.
PURCHASE OPTION
For the Purchase of
183,272 Shares of Common Stock
of
LEVEL JUMP FINANCIAL GROUP, INC.
(A Colorado Corporation)
1. Purchase Option.
THIS CERTIFIES THAT, in consideration of $5.00 duly paid by or on
behalf of ZDG Holdings Inc. ("Holder"), with an address of_____________________
Canada, as owner of this Purchase Option, to Glen Akselrod ("Akselrod"), Holder
is entitled, at any time or from time to time, commencing on the date hereof and
expiring at 5:00 p.m., Eastern Time, October 26, 2004 ("Expiration Date"), but
not thereafter, to purchase and receive from Akselrod, in whole or in part up to
183,272 shares of common stock of Level Jump Financial Group, Inc. ("Company"),
$.001 par value ("Common Stock"). This Purchase Option is one of several
Purchase Options issued to purchase an aggregate of 305,453 shares held by
Akselrod and represented by Certificates Nos. ___ through ____, as set forth on
Schedule A to that certain Voting Agreement ("Voting Agreement"), dated as of
October 27, 1999, by and between Holder and Akselrod. The 183,272 shares of
Common Stock and any securities into which they are exchanged hereafter are
referred to collectively herein as the "Option Shares." If the Expiration Date
is a day on which banking institutions are authorized by law to close, then this
Purchase Option may be exercised on the next succeeding day which is not such a
day in accordance with the terms herein.
This Purchase Option is initially exercisable at $0.34375 per Option
Share; provided, however, that upon the occurrence of any of the events
specified in Section 5 hereof, the rights granted by this Purchase Option,
including the exercise price and the number of shares of Common Stock to be
received upon such exercise, shall be adjusted as therein specified. The term
"Exercise Price" shall mean the initial exercise price or the adjusted exercise
price of a share of Common Stock, depending on the context.
2. Exercise.
2.1. Exercise Form. In order to exercise this Purchase Option, the
exercise form attached hereto must be duly executed and completed and delivered
to Akselrod, together with this Purchase Option and payment of the Exercise
<PAGE>
Price in cash or by certified check or official bank check payable to Akselrod
for the Option Shares being purchased. If the rights represented hereby shall
not be exercised at or before 5:00 p.m., Eastern time, on the Expiration Date,
this Purchase Option shall become and be void without further force or effect,
and all rights represented hereby shall cease and expire.
2.2. Legend. Each certificate for Common Stock purchased under this
Purchase Option shall bear a legend as follows unless the Common Stock has been
registered under the Securities Act of 1933, as amended ("Act"):
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended
("Act"), or applicable state law. The securities may not be
offered for sale, sold or otherwise transferred except
pursuant to an effective registration statement under the Act
or pursuant to an exemption from registration under the Act
and applicable state law."
3. Transfer. This Purchase Option may be assigned or transferred, in whole or in
part, at the discretion of the Holder provided notice of the transfer is
forwarded to Akselrod together with an opinion of counsel for the Holder,
addressed to Akselrod, that this Purchase Option may be transferred pursuant to
an exemption from registration under the Act. Such opinion may be the opinion of
Andrew D, Hudders Esq. and/or Graubard Mollen & Miller.
4. New Purchase Options to be Issued.
4.1. Partial Exercise. This Purchase Option may be exercised in whole
or in part. In the event of the exercise in part only, upon surrender of this
Purchase Option to Akselrod, together with the duly executed exercise form and
funds sufficient to pay any Exercise Price, Akselrod shall indicate the partial
exercise on the signature page hereto and shall return to the Holder this
Purchase Option.
4.2. Partial Transfer. Subject to the restrictions in Section 3 hereof,
in the event of the assignment hereof in part only, upon surrender of this
Purchase Option to Akselrod for cancellation, together with the duly executed
assignment form, Akselrod shall cause to be delivered to the Holder new Purchase
Options of like tenor to this Purchase Option in the names of the Holder and the
transferee evidencing the rights of the Holder and the transferee to purchase
the aggregate number of shares of Common Stock purchasable hereunder and
reflecting the transfer.
4.3. Lost Certificate. Upon receipt by Akselrod of evidence of the
loss, theft, destruction or mutilation of this Purchase Option,, Akselrod shall
execute and deliver a new Purchase Option of like tenor and date. Any such new
Purchase Option executed and delivered as a result of such loss, theft,
mutilation or destruction shall constitute a substitute contractual obligation
on the part of Akselrod.
5. Adjustments.
5.1. Adjustments to Exercise Price and Number of Securities. The
Exercise Price and the number of Option Shares shall be subject to adjustment
from time to time as hereinafter set forth:
5.1.1. Stock Dividends, Recapitalization, Reclassification,
Split-Ups. If after the date hereof the number of Option Shares is increased by
2
<PAGE>
a stock dividend payable in shares of Common Stock or by a split-up,
recapitalization or reclassification of shares of Common Stock or other similar
event, then, on the effective date thereof, the number of shares of Common Stock
that may be purchased upon exercise of this Purchase Option shall be increased
in proportion to such increase in the number of Option Shares.
5.1.2. Aggregation of Shares. If after the date hereof the
number of Option Shares is decreased by a consolidation, combination or
reclassification of shares of Common Stock or other similar event, then, upon
the effective date thereof, the number of shares of Common Stock that may be
purchased upon exercise of the Purchase Option shall be decreased in proportion
to such decrease in the number of Option Shares.
5.1.3. Adjustments in Exercise Price. Whenever the number of
shares of Common Stock purchasable upon the exercise of this Purchase Option is
adjusted, as provided in this Section 5.1, the Exercise Price shall be adjusted
(to the nearest one-millionth of one cent) by multiplying such Exercise Price
immediately prior to such adjustment by a fraction (x) the numerator of which
shall be the number of shares of Common Stock purchasable upon the exercise of
this Purchase Option immediately prior to such adjustment, and (y) the
denominator of which shall be the number of shares of Common Stock so
purchasable immediately thereafter. If the Holder exercises this Purchase Option
after an adjustment which requires an aggregate payment in an amount which is
not evenly divisible by one cent, the aggregate amount to be paid shall be
rounded up to the nearest whole cent.
5.1.4. Replacement of Securities Upon Reorganization, Etc. In
case of any reclassification or reorganization of the outstanding shares of
Common Stock other than a change covered by Section 5.1.1 hereof or which solely
affects the par value of such shares of Common Stock, or in the case of any
merger or consolidation (including an exchange of the Common Stock for
securities of another corporation) of the Company with or into another
corporation (other than a consolidation or merger in which the Company is the
continuing corporation and which does not result in any reclassification or
reorganization of the outstanding shares of Common Stock), or in the case of any
sale or conveyance to another corporation or entity of the property of the
Company as an entirety or substantially as an entirety in connection with which
the Company is dissolved, if and to the extent Akselrod, as the holder of the
Option Shares purchasable upon exercise of this Purchase Option, has the right
to receive shares of stock or other securities or property (including cash) upon
such reclassification, reorganization, merger or consolidation, or upon a
dissolution following any such sale or other transfer, the Holder of this
Purchase Option shall have the right thereafter (until the expiration of the
right of exercise of this Purchase Option) to receive from Akselrod, upon the
exercise hereof, for the same aggregate Exercise Price payable hereunder
immediately prior to such event, the kind and amount of shares of stock or other
securities or property (including cash) receivable upon such reclassification,
reorganization, merger or consolidation, or upon a dissolution following any
such sale or other transfer, by Akselrod with respect to the Option Shares
purchasable upon exercise of this Purchase Option immediately prior to such
event,; and if any reclassification also results in a change in shares of Common
Stock covered by Section 5.1.1, then such adjustment shall be made pursuant to
Sections 5.1.1, 5.1.3 and this Section 5.1.4. The provisions of this Section
5.1.4 shall similarly apply to successive reclassifications, reorganizations,
mergers or consolidations, sales or other transfers.
5.1.5. Changes in Form of Purchase Option. This form of
Purchase Option need not be changed because of any change pursuant to this
Section, and Purchase Options issued after such change may state the same
Exercise Price and the same number of shares of Common Stock as are stated in
the Purchase Options initially issued pursuant to this Agreement. The acceptance
3
<PAGE>
by any Holder of the issuance of new Purchase Options reflecting a required or
permissive change shall not be deemed to waive any rights to a prior adjustment
or the computation thereof.
6. Change of Address. As long as this Purchase Option is outstanding, the
Company's books and records shall indicate that the address of the record holder
of the Option Shares is Akselrod.
7. Notices. All notices, requests, consents and other communications under this
Purchase Option shall be in writing and shall either be delivered personally or
sent by certified mail, return receipt requested, postage prepaid, or by Federal
Express next business day service with signed receipt required, and addressed as
follows, and shall be deemed duly given hereunder when so delivered: (i) if to
the registered Holder of the Purchase Option, to the address of such Holder as
set forth above, (ii) if to Akselrod,________________________________. A copy of
any notice sent hereunder shall also be sent to Andrew D. Hudders, Esq.,
Graubard Mollen & Miller, 600 Third Avenue, New York, New York 10016-2097.
8. Miscellaneous.
8.1. Headings. The headings contained herein are for the sole purpose
of convenience of reference, and shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this Purchase
Option.
8.2. Entire Agreement. This Purchase Option (together with the other
agreements and documents being delivered pursuant to or in connection with this
Purchase Option) constitutes the entire agreement of the parties hereto with
respect to the subject matter hereof, and supersedes all prior agreements and
understandings of the parties, oral and written, with respect to the subject
matter hereof.
8.3. Binding Effect. This Purchase Option shall inure solely to the
benefit of and shall be binding upon, the Holder and Akselrod, and their
respective successors, legal representatives and assigns, and no other person
shall have or be construed to have any legal or equitable right, remedy or claim
under or in respect of or by virtue of this Purchase Option or any provisions
herein contained.
8.4. Governing Law; Submission to Jurisdiction. This Purchase Option
shall be governed by and construed and enforced in accordance with the laws of
the State of New York, without giving effect to conflict of laws. Akselrod and
Holder hereby agree that any action, proceeding or claim against Akselrod or the
Holder arising out of, or relating in any way to this Purchase Option shall be
brought and enforced in the courts of the State of New York or of the United
States of America for the Southern District of New York, and irrevocably submit
to such jurisdiction, which jurisdiction shall be exclusive. Akselrod and the
Holder hereby waive any objection to such exclusive jurisdiction and that such
courts represent an inconvenient forum. Any process or summons to be served upon
Akselrod or the Holder may be served by transmitting a copy thereof by
registered or certified mail, return receipt requested, postage prepaid,
addressed to such party at its address set forth on the signature page hereof.
Such mailing shall be deemed personal service and shall be legal and binding
upon Akselrod or the Holder, as the case may be, in any action, proceeding or
claim. Akselrod and the Holder agree that the prevailing party(ies) in any such
action shall be entitled to recover from the other party(ies) all of its
reasonable attorneys' fees and expenses relating to such action or proceeding
and/or incurred in connection with the preparation therefor.
4
<PAGE>
8.5. Waiver, Etc. The failure of Akselrod or the Holder to at any time
enforce any of the provisions of this Purchase Option shall not be deemed or
construed to be a waiver of any such provision, nor to in any way affect the
validity of this Purchase Option or any provision hereof or the right of
Akselrod or any Holder to thereafter enforce each and every provision of this
Purchase Option. No waiver of any breach, non-compliance or non-fulfillment of
any of the provisions of this Purchase Option shall be effective unless set
forth in a written instrument executed by the party or parties against whom or
which enforcement of such waiver is sought; and no waiver of any such breach,
non-compliance or non-fulfillment shall be construed or deemed to be a waiver of
any other or subsequent breach, non-compliance or non-fulfillment.
8.6. Execution in Counterparts. This Purchase Option may be executed in
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same agreement, and shall become
effective when one or more counterparts has been signed by each of the parties
hereto and delivered to each of the other parties hereto.
IN WITNESS WHEREOF, Akselrod has executed this Purchase Option
as of the 26th day of October, 1999.
_____________________________
Glen Akselrod
ZDG HOLDINGS, INC.
By:___________________________
Robert Landau, President
2074.4
5
<PAGE>
* Partial Exercise Record *
Date of Exercise Number of Option Shares
- ----------------------------------- ---------------------------------
- ----------------------------------- ---------------------------------
6
<PAGE>
Form to be used to exercise Purchase Option:
Brice Scheschuk
- --------------------------
- --------------------------
Date:_________________, 19__
The undersigned hereby elects irrevocably to exercise the
within Purchase Option and to purchase from you ________________ shares of
Common Stock of Level Jump Financial Group, Inc. and hereby makes payment of
$____________ (at the rate of $_____________ per share of Common Stock) in
payment of the Exercise Price pursuant thereto. Please deliver the Common Stock
as to which this Purchase Option is exercised in accordance with the
instructions given below.
--------------------------------------
Signature
INSTRUCTIONS FOR DELIVERY OF SECURITIES
Name: ______________________________________________________________________
(Print in Block Letters)
Address: ______________________________________________________________________
_______________________________________________________________________________
7
<PAGE>
Form to be used to assign Purchase Option:
ASSIGNMENT
(To be executed by the Holder to effect a transfer of the
within Purchase Option):
FOR VALUE RECEIVED, _________________________________________
_________________________________________________ does hereby sell, assign and
transfer unto _________________________________________________ the right to
purchase ______________ shares of Common Stock to purchase _____________________
shares of Common Stock of Level Jump Financial Group, Inc. evidenced by the
within Purchase Option.
Dated:___________________, 19____
-------------------------------------
Signature
8
Exhibit 4.7
NEITHER THIS OPTION NOR THE COMMON STOCK WHICH MAY BE ACQUIRED UPON EXERCISE
HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
("ACT"), OR APPLICABLE STATE LAW. NEITHER THIS OPTION NOR SUCH COMMON STOCK MAY
BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW.
PURCHASE OPTION
For the Purchase of
122,181 Shares of Common Stock
of
LEVEL JUMP FINANCIAL GROUP, INC.
(A Colorado Corporation)
1. Purchase Option.
THIS CERTIFIES THAT, in consideration of $5.00 duly paid by or on
behalf of David Roff. ("Holder"), with an address
of_______________________________ Canada, as owner of this Purchase Option, to
Brice Scheschuk ("Scheschuk"), Holder is entitled, at any time or from time to
time, commencing on the date hereof and expiring at 5:00 p.m., Eastern Time,
October 26, 2004 ("Expiration Date"), but not thereafter, to purchase and
receive from Scheschuk, in whole or in part up to 122,181 shares of common stock
of Level Jump Financial Group, Inc. ("Company"), $.001 par value ("Common
Stock"). This Purchase Option is one of several Purchase Options issued to
purchase an aggregate of 305,453 shares held by Scheschuk and represented by
Certificates Nos. ___ through ____, as set forth on Schedule A to that certain
Voting Agreement ("Voting Agreement"), dated as of October 27, 1999, by and
between Holder and Scheschuk. The 122,181 shares of Common Stock and any
securities into which they are exchanged hereafter are referred to collectively
herein as the "Option Shares." If the Expiration Date is a day on which banking
institutions are authorized by law to close, then this Purchase Option may be
exercised on the next succeeding day which is not such a day in accordance with
the terms herein.
This Purchase Option is initially exercisable at $0.34375 per Option
Share; provided, however, that upon the occurrence of any of the events
specified in Section 5 hereof, the rights granted by this Purchase Option,
including the exercise price and the number of shares of Common Stock to be
received upon such exercise, shall be adjusted as therein specified. The term
"Exercise Price" shall mean the initial exercise price or the adjusted exercise
price of a share of Common Stock, depending on the context.
2. Exercise.
2.1. Exercise Form. In order to exercise this Purchase Option, the
exercise form attached hereto must be duly executed and completed and delivered
to Scheschuk, together with this Purchase Option and payment of the Exercise
<PAGE>
Price in cash or by certified check or official bank check payable to Scheschuk
for the Option Shares being purchased. If the rights represented hereby shall
not be exercised at or before 5:00 p.m., Eastern time, on the Expiration Date,
this Purchase Option shall become and be void without further force or effect,
and all rights represented hereby shall cease and expire.
2.2. Legend. Each certificate for Common Stock purchased under this
Purchase Option shall bear a legend as follows unless the Common Stock has been
registered under the Securities Act of 1933, as amended ("Act"):
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended
("Act"), or applicable state law. The securities may not be
offered for sale, sold or otherwise transferred except
pursuant to an effective registration statement under the Act
or pursuant to an exemption from registration under the Act
and applicable state law."
3. Transfer. This Purchase Option may be assigned or transferred, in whole or in
part, at the discretion of the Holder provided notice of the transfer is
forwarded to Scheschuk together with an opinion of counsel for the Holder,
addressed to Scheschuk, that this Purchase Option may be transferred pursuant to
an exemption from registration under the Act. Such opinion may be the opinion of
Andrew D, Hudders Esq. and/or Graubard Mollen & Miller.
4. New Purchase Options to be Issued.
4.1. Partial Exercise. This Purchase Option may be exercised in whole
or in part. In the event of the exercise in part only, upon surrender of this
Purchase Option to Scheschuk, together with the duly executed exercise form and
funds sufficient to pay any Exercise Price, Scheschuk shall indicate the partial
exercise on the signature page hereto and shall return to the Holder this
Purchase Option.
4.2. Partial Transfer. Subject to the restrictions in Section 3 hereof,
in the event of the assignment hereof in part only, upon surrender of this
Purchase Option to Scheschuk for cancellation, together with the duly executed
assignment form, Scheschuk shall cause to be delivered to the Holder new
Purchase Options of like tenor to this Purchase Option in the names of the
Holder and the transferee evidencing the rights of the Holder and the transferee
to purchase the aggregate number of shares of Common Stock purchasable hereunder
and reflecting the transfer.
4.3. Lost Certificate. Upon receipt by Scheschuk of evidence of the
loss, theft, destruction or mutilation of this Purchase Option,, Scheschuk shall
execute and deliver a new Purchase Option of like tenor and date. Any such new
Purchase Option executed and delivered as a result of such loss, theft,
mutilation or destruction shall constitute a substitute contractual obligation
on the part of Scheschuk.
5. Adjustments.
5.1. Adjustments to Exercise Price and Number of Securities. The
Exercise Price and the number of Option Shares shall be subject to adjustment
from time to time as hereinafter set forth:
5.1.1. Stock Dividends, Recapitalization, Reclassification,
Split-Ups. If after the date hereof the number of Option Shares is increased by
2
<PAGE>
a stock dividend payable in shares of Common Stock or by a split-up,
recapitalization or reclassification of shares of Common Stock or other similar
event, then, on the effective date thereof, the number of shares of Common Stock
that may be purchased upon exercise of this Purchase Option shall be increased
in proportion to such increase in the number of Option Shares.
5.1.2. Aggregation of Shares. If after the date hereof the
number of Option Shares is decreased by a consolidation, combination or
reclassification of shares of Common Stock or other similar event, then, upon
the effective date thereof, the number of shares of Common Stock that may be
purchased upon exercise of the Purchase Option shall be decreased in proportion
to such decrease in the number of Option Shares.
5.1.3. Adjustments in Exercise Price. Whenever the number of
shares of Common Stock purchasable upon the exercise of this Purchase Option is
adjusted, as provided in this Section 5.1, the Exercise Price shall be adjusted
(to the nearest one-millionth of one cent) by multiplying such Exercise Price
immediately prior to such adjustment by a fraction (x) the numerator of which
shall be the number of shares of Common Stock purchasable upon the exercise of
this Purchase Option immediately prior to such adjustment, and (y) the
denominator of which shall be the number of shares of Common Stock so
purchasable immediately thereafter. If the Holder exercises this Purchase Option
after an adjustment which requires an aggregate payment in an amount which is
not evenly divisible by one cent, the aggregate amount to be paid shall be
rounded up to the nearest whole cent.
5.1.4. Replacement of Securities Upon Reorganization, Etc. In
case of any reclassification or reorganization of the outstanding shares of
Common Stock other than a change covered by Section 5.1.1 hereof or which solely
affects the par value of such shares of Common Stock, or in the case of any
merger or consolidation (including an exchange of the Common Stock for
securities of another corporation) of the Company with or into another
corporation (other than a consolidation or merger in which the Company is the
continuing corporation and which does not result in any reclassification or
reorganization of the outstanding shares of Common Stock), or in the case of any
sale or conveyance to another corporation or entity of the property of the
Company as an entirety or substantially as an entirety in connection with which
the Company is dissolved, if and to the extent Scheschuk, as the holder of the
Option Shares purchasable upon exercise of this Purchase Option, has the right
to receive shares of stock or other securities or property (including cash) upon
such reclassification, reorganization, merger or consolidation, or upon a
dissolution following any such sale or other transfer, the Holder of this
Purchase Option shall have the right thereafter (until the expiration of the
right of exercise of this Purchase Option) to receive from Scheschuk, upon the
exercise hereof, for the same aggregate Exercise Price payable hereunder
immediately prior to such event, the kind and amount of shares of stock or other
securities or property (including cash) receivable upon such reclassification,
reorganization, merger or consolidation, or upon a dissolution following any
such sale or other transfer, by Scheschuk with respect to the Option Shares
purchasable upon exercise of this Purchase Option immediately prior to such
event,; and if any reclassification also results in a change in shares of Common
Stock covered by Section 5.1.1, then such adjustment shall be made pursuant to
Sections 5.1.1, 5.1.3 and this Section 5.1.4. The provisions of this Section
5.1.4 shall similarly apply to successive reclassifications, reorganizations,
mergers or consolidations, sales or other transfers.
5.1.5. Changes in Form of Purchase Option. This form of
Purchase Option need not be changed because of any change pursuant to this
Section, and Purchase Options issued after such change may state the same
Exercise Price and the same number of shares of Common Stock as are stated in
the Purchase Options initially issued pursuant to this Agreement. The acceptance
3
<PAGE>
by any Holder of the issuance of new Purchase Options reflecting a required or
permissive change shall not be deemed to waive any rights to a prior adjustment
or the computation thereof.
6. Change of Address. As long as this Purchase Option is outstanding, the
Company's books and records shall indicate that the address of the record holder
of the Option Shares is Scheschuk.
7. Notices. All notices, requests, consents and other communications under this
Purchase Option shall be in writing and shall either be delivered personally or
sent by certified mail, return receipt requested, postage prepaid, or by Federal
Express next business day service with signed receipt required, and addressed as
follows, and shall be deemed duly given hereunder when so delivered: (i) if to
the registered Holder of the Purchase Option, to the address of such Holder as
set forth above, (ii) if to Scheschuk,________________________________. A copy
of any notice sent hereunder shall also be sent to Andrew D. Hudders, Esq.,
Graubard Mollen & Miller, 600 Third Avenue, New York, New York 10016-2097.
8. Miscellaneous.
8.1. Headings. The headings contained herein are for the sole purpose
of convenience of reference, and shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this Purchase
Option.
8.2. Entire Agreement. This Purchase Option (together with the other
agreements and documents being delivered pursuant to or in connection with this
Purchase Option) constitutes the entire agreement of the parties hereto with
respect to the subject matter hereof, and supersedes all prior agreements and
understandings of the parties, oral and written, with respect to the subject
matter hereof.
8.3. Binding Effect. This Purchase Option shall inure solely to the
benefit of and shall be binding upon, the Holder and Scheschuk, and their
respective successors, legal representatives and assigns, and no other person
shall have or be construed to have any legal or equitable right, remedy or claim
under or in respect of or by virtue of this Purchase Option or any provisions
herein contained.
8.4. Governing Law; Submission to Jurisdiction. This Purchase Option
shall be governed by and construed and enforced in accordance with the laws of
the State of New York, without giving effect to conflict of laws. Scheschuk and
Holder hereby agree that any action, proceeding or claim against Scheschuk or
the Holder arising out of, or relating in any way to this Purchase Option shall
be brought and enforced in the courts of the State of New York or of the United
States of America for the Southern District of New York, and irrevocably submit
to such jurisdiction, which jurisdiction shall be exclusive. Scheschuk and the
Holder hereby waive any objection to such exclusive jurisdiction and that such
courts represent an inconvenient forum. Any process or summons to be served upon
Scheschuk or the Holder may be served by transmitting a copy thereof by
registered or certified mail, return receipt requested, postage prepaid,
addressed to such party at its address set forth on the signature page hereof.
Such mailing shall be deemed personal service and shall be legal and binding
upon Scheschuk or the Holder, as the case may be, in any action, proceeding or
claim. Scheschuk and the Holder agree that the prevailing party(ies) in any such
action shall be entitled to recover from the other party(ies) all of its
reasonable attorneys' fees and expenses relating to such action or proceeding
and/or incurred in connection with the preparation therefor.
4
<PAGE>
8.5. Waiver, Etc. The failure of Scheschuk or the Holder to at any time
enforce any of the provisions of this Purchase Option shall not be deemed or
construed to be a waiver of any such provision, nor to in any way affect the
validity of this Purchase Option or any provision hereof or the right of
Scheschuk or any Holder to thereafter enforce each and every provision of this
Purchase Option. No waiver of any breach, non-compliance or non-fulfillment of
any of the provisions of this Purchase Option shall be effective unless set
forth in a written instrument executed by the party or parties against whom or
which enforcement of such waiver is sought; and no waiver of any such breach,
non-compliance or non-fulfillment shall be construed or deemed to be a waiver of
any other or subsequent breach, non-compliance or non-fulfillment.
8.6. Execution in Counterparts. This Purchase Option may be executed in
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same agreement, and shall become
effective when one or more counterparts has been signed by each of the parties
hereto and delivered to each of the other parties hereto.
IN WITNESS WHEREOF, Scheschuk has executed this Purchase
Option as of the 26th day of October, 1999.
----------------------------------
Brice Scheschuk
-----------------------------------
David Roff
5
<PAGE>
* Partial Exercise Record *
Date of Exercise Number of Option Shares
- ----------------------------------- ---------------------------------
- ----------------------------------- ---------------------------------
6
<PAGE>
Form to be used to exercise Purchase Option:
Brice Scheschuk
- --------------------------
- --------------------------
Date:_________________, 19__
The undersigned hereby elects irrevocably to exercise the
within Purchase Option and to purchase from you ________________ shares of
Common Stock of Level Jump Financial Group, Inc. and hereby makes payment of
$____________ (at the rate of $_____________ per share of Common Stock) in
payment of the Exercise Price pursuant thereto. Please deliver the Common Stock
as to which this Purchase Option is exercised in accordance with the
instructions given below.
--------------------------------------
Signature
INSTRUCTIONS FOR DELIVERY OF SECURITIES
Name: ______________________________________________________________________
(Print in Block Letters)
Address: ______________________________________________________________________
_______________________________________________________________________________
7
<PAGE>
Form to be used to assign Purchase Option:
ASSIGNMENT
(To be executed by the Holder to effect a transfer of the
within Purchase Option):
FOR VALUE RECEIVED, _________________________________________
_________________________________________________ does hereby sell, assign and
transfer unto _________________________________________________ the right to
purchase ______________ shares of Common Stock to purchase _____________________
shares of Common Stock of Level Jump Financial Group, Inc. evidenced by the
within Purchase Option.
Dated:___________________, 19____
-------------------------------------
Signature
8
Exhibit 4.8
NEITHER THIS OPTION NOR THE COMMON STOCK WHICH MAY BE ACQUIRED UPON EXERCISE
HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
("ACT"), OR APPLICABLE STATE LAW. NEITHER THIS OPTION NOR SUCH COMMON STOCK MAY
BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE ACT AND APPLICABLE STATE LAW.
PURCHASE OPTION
For the Purchase of
122,181 Shares of Common Stock
of
LEVEL JUMP FINANCIAL GROUP, INC.
(A Colorado Corporation)
1. Purchase Option.
THIS CERTIFIES THAT, in consideration of $5.00 duly paid by or on
behalf of David Roff. ("Holder"), with an address of__________________________
Canada, as owner of this Purchase Option, to Glen Akselrod ("Akselrod"), Holder
is entitled, at any time or from time to time, commencing on the date hereof and
expiring at 5:00 p.m., Eastern Time, October 26, 2004 ("Expiration Date"), but
not thereafter, to purchase and receive from Akselrod, in whole or in part up to
122,181 shares of common stock of Level Jump Financial Group, Inc. ("Company"),
$.001 par value ("Common Stock"). This Purchase Option is one of several
Purchase Options issued to purchase an aggregate of 305,453 shares held by
Akselrod and represented by Certificates Nos. ___ through ____, as set forth on
Schedule A to that certain Voting Agreement ("Voting Agreement"), dated as of
October 27, 1999, by and between Holder and Akselrod. The 122,181 shares of
Common Stock and any securities into which they are exchanged hereafter are
referred to collectively herein as the "Option Shares." If the Expiration Date
is a day on which banking institutions are authorized by law to close, then this
Purchase Option may be exercised on the next succeeding day which is not such a
day in accordance with the terms herein.
This Purchase Option is initially exercisable at $0.34375 per Option
Share; provided, however, that upon the occurrence of any of the events
specified in Section 5 hereof, the rights granted by this Purchase Option,
including the exercise price and the number of shares of Common Stock to be
received upon such exercise, shall be adjusted as therein specified. The term
"Exercise Price" shall mean the initial exercise price or the adjusted exercise
price of a share of Common Stock, depending on the context.
2. Exercise.
2.1. Exercise Form. In order to exercise this Purchase Option, the
exercise form attached hereto must be duly executed and completed and delivered
to Akselrod, together with this Purchase Option and payment of the Exercise
<PAGE>
Price in cash or by certified check or official bank check payable to Akselrod
for the Option Shares being purchased. If the rights represented hereby shall
not be exercised at or before 5:00 p.m., Eastern time, on the Expiration Date,
this Purchase Option shall become and be void without further force or effect,
and all rights represented hereby shall cease and expire.
2.2. Legend. Each certificate for Common Stock purchased under this
Purchase Option shall bear a legend as follows unless the Common Stock has been
registered under the Securities Act of 1933, as amended ("Act"):
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended
("Act"), or applicable state law. The securities may not be
offered for sale, sold or otherwise transferred except
pursuant to an effective registration statement under the Act
or pursuant to an exemption from registration under the Act
and applicable state law."
3. Transfer. This Purchase Option may be assigned or transferred, in whole or in
part, at the discretion of the Holder provided notice of the transfer is
forwarded to Akselrod together with an opinion of counsel for the Holder,
addressed to Akselrod, that this Purchase Option may be transferred pursuant to
an exemption from registration under the Act. Such opinion may be the opinion of
Andrew D, Hudders Esq. and/or Graubard Mollen & Miller.
4. New Purchase Options to be Issued.
4.1. Partial Exercise. This Purchase Option may be exercised in whole
or in part. In the event of the exercise in part only, upon surrender of this
Purchase Option to Akselrod, together with the duly executed exercise form and
funds sufficient to pay any Exercise Price, Akselrod shall indicate the partial
exercise on the signature page hereto and shall return to the Holder this
Purchase Option.
4.2. Partial Transfer. Subject to the restrictions in Section 3 hereof,
in the event of the assignment hereof in part only, upon surrender of this
Purchase Option to Akselrod for cancellation, together with the duly executed
assignment form, Akselrod shall cause to be delivered to the Holder new Purchase
Options of like tenor to this Purchase Option in the names of the Holder and the
transferee evidencing the rights of the Holder and the transferee to purchase
the aggregate number of shares of Common Stock purchasable hereunder and
reflecting the transfer.
4.3. Lost Certificate. Upon receipt by Akselrod of evidence of the
loss, theft, destruction or mutilation of this Purchase Option,, Akselrod shall
execute and deliver a new Purchase Option of like tenor and date. Any such new
Purchase Option executed and delivered as a result of such loss, theft,
mutilation or destruction shall constitute a substitute contractual obligation
on the part of Akselrod.
5. Adjustments.
5.1. Adjustments to Exercise Price and Number of Securities. The
Exercise Price and the number of Option Shares shall be subject to adjustment
from time to time as hereinafter set forth:
5.1.1. Stock Dividends, Recapitalization, Reclassification,
Split-Ups. If after the date hereof the number of Option Shares is increased by
2
<PAGE>
a stock dividend payable in shares of Common Stock or by a split-up,
recapitalization or reclassification of shares of Common Stock or other similar
event, then, on the effective date thereof, the number of shares of Common Stock
that may be purchased upon exercise of this Purchase Option shall be increased
in proportion to such increase in the number of Option Shares.
5.1.2. Aggregation of Shares. If after the date hereof the
number of Option Shares is decreased by a consolidation, combination or
reclassification of shares of Common Stock or other similar event, then, upon
the effective date thereof, the number of shares of Common Stock that may be
purchased upon exercise of the Purchase Option shall be decreased in proportion
to such decrease in the number of Option Shares.
5.1.3. Adjustments in Exercise Price. Whenever the number of
shares of Common Stock purchasable upon the exercise of this Purchase Option is
adjusted, as provided in this Section 5.1, the Exercise Price shall be adjusted
(to the nearest one-millionth of one cent) by multiplying such Exercise Price
immediately prior to such adjustment by a fraction (x) the numerator of which
shall be the number of shares of Common Stock purchasable upon the exercise of
this Purchase Option immediately prior to such adjustment, and (y) the
denominator of which shall be the number of shares of Common Stock so
purchasable immediately thereafter. If the Holder exercises this Purchase Option
after an adjustment which requires an aggregate payment in an amount which is
not evenly divisible by one cent, the aggregate amount to be paid shall be
rounded up to the nearest whole cent.
5.1.4. Replacement of Securities Upon Reorganization, Etc. In
case of any reclassification or reorganization of the outstanding shares of
Common Stock other than a change covered by Section 5.1.1 hereof or which solely
affects the par value of such shares of Common Stock, or in the case of any
merger or consolidation (including an exchange of the Common Stock for
securities of another corporation) of the Company with or into another
corporation (other than a consolidation or merger in which the Company is the
continuing corporation and which does not result in any reclassification or
reorganization of the outstanding shares of Common Stock), or in the case of any
sale or conveyance to another corporation or entity of the property of the
Company as an entirety or substantially as an entirety in connection with which
the Company is dissolved, if and to the extent Akselrod, as the holder of the
Option Shares purchasable upon exercise of this Purchase Option, has the right
to receive shares of stock or other securities or property (including cash) upon
such reclassification, reorganization, merger or consolidation, or upon a
dissolution following any such sale or other transfer, the Holder of this
Purchase Option shall have the right thereafter (until the expiration of the
right of exercise of this Purchase Option) to receive from Akselrod, upon the
exercise hereof, for the same aggregate Exercise Price payable hereunder
immediately prior to such event, the kind and amount of shares of stock or other
securities or property (including cash) receivable upon such reclassification,
reorganization, merger or consolidation, or upon a dissolution following any
such sale or other transfer, by Akselrod with respect to the Option Shares
purchasable upon exercise of this Purchase Option immediately prior to such
event,; and if any reclassification also results in a change in shares of Common
Stock covered by Section 5.1.1, then such adjustment shall be made pursuant to
Sections 5.1.1, 5.1.3 and this Section 5.1.4. The provisions of this Section
5.1.4 shall similarly apply to successive reclassifications, reorganizations,
mergers or consolidations, sales or other transfers.
5.1.5. Changes in Form of Purchase Option. This form of
Purchase Option need not be changed because of any change pursuant to this
Section, and Purchase Options issued after such change may state the same
Exercise Price and the same number of shares of Common Stock as are stated in
the Purchase Options initially issued pursuant to this Agreement. The acceptance
3
<PAGE>
by any Holder of the issuance of new Purchase Options reflecting a required or
permissive change shall not be deemed to waive any rights to a prior adjustment
or the computation thereof.
6. Change of Address. As long as this Purchase Option is outstanding, the
Company's books and records shall indicate that the address of the record holder
of the Option Shares is Akselrod.
7. Notices. All notices, requests, consents and other communications under this
Purchase Option shall be in writing and shall either be delivered personally or
sent by certified mail, return receipt requested, postage prepaid, or by Federal
Express next business day service with signed receipt required, and addressed as
follows, and shall be deemed duly given hereunder when so delivered: (i) if to
the registered Holder of the Purchase Option, to the address of such Holder as
set forth above, (ii) if to Akselrod,________________________________. A copy of
any notice sent hereunder shall also be sent to Andrew D. Hudders, Esq.,
Graubard Mollen & Miller, 600 Third Avenue, New York, New York 10016-2097.
8. Miscellaneous.
8.1. Headings. The headings contained herein are for the sole purpose
of convenience of reference, and shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this Purchase
Option.
8.2. Entire Agreement. This Purchase Option (together with the other
agreements and documents being delivered pursuant to or in connection with this
Purchase Option) constitutes the entire agreement of the parties hereto with
respect to the subject matter hereof, and supersedes all prior agreements and
understandings of the parties, oral and written, with respect to the subject
matter hereof.
8.3. Binding Effect. This Purchase Option shall inure solely to the
benefit of and shall be binding upon, the Holder and Akselrod, and their
respective successors, legal representatives and assigns, and no other person
shall have or be construed to have any legal or equitable right, remedy or claim
under or in respect of or by virtue of this Purchase Option or any provisions
herein contained.
8.4. Governing Law; Submission to Jurisdiction. This Purchase Option
shall be governed by and construed and enforced in accordance with the laws of
the State of New York, without giving effect to conflict of laws. Akselrod and
Holder hereby agree that any action, proceeding or claim against Akselrod or the
Holder arising out of, or relating in any way to this Purchase Option shall be
brought and enforced in the courts of the State of New York or of the United
States of America for the Southern District of New York, and irrevocably submit
to such jurisdiction, which jurisdiction shall be exclusive. Akselrod and the
Holder hereby waive any objection to such exclusive jurisdiction and that such
courts represent an inconvenient forum. Any process or summons to be served upon
Akselrod or the Holder may be served by transmitting a copy thereof by
registered or certified mail, return receipt requested, postage prepaid,
addressed to such party at its address set forth on the signature page hereof.
Such mailing shall be deemed personal service and shall be legal and binding
upon Akselrod or the Holder, as the case may be, in any action, proceeding or
4
<PAGE>
claim. Akselrod and the Holder agree that the prevailing party(ies) in any such
action shall be entitled to recover from the other party(ies) all of its
reasonable attorneys' fees and expenses relating to such action or proceeding
and/or incurred in connection with the preparation therefor.
8.5. Waiver, Etc. The failure of Akselrod or the Holder to at any time
enforce any of the provisions of this Purchase Option shall not be deemed or
construed to be a waiver of any such provision, nor to in any way affect the
validity of this Purchase Option or any provision hereof or the right of
Akselrod or any Holder to thereafter enforce each and every provision of this
Purchase Option. No waiver of any breach, non-compliance or non-fulfillment of
any of the provisions of this Purchase Option shall be effective unless set
forth in a written instrument executed by the party or parties against whom or
which enforcement of such waiver is sought; and no waiver of any such breach,
non-compliance or non-fulfillment shall be construed or deemed to be a waiver of
any other or subsequent breach, non-compliance or non-fulfillment.
8.6. Execution in Counterparts. This Purchase Option may be executed in
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same agreement, and shall become
effective when one or more counterparts has been signed by each of the parties
hereto and delivered to each of the other parties hereto.
IN WITNESS WHEREOF, Akselrod has executed this Purchase Option
as of the 26th day of October, 1999.
----------------------------------
Glen Akselrod
-----------------------------------
David Roff
5
<PAGE>
* Partial Exercise Record *
Date of Exercise Number of Option Shares
- ----------------------------------- ---------------------------------
- ----------------------------------- ---------------------------------
6
<PAGE>
Form to be used to exercise Purchase Option:
Brice Scheschuk
- --------------------------
- --------------------------
Date:_________________, 19__
The undersigned hereby elects irrevocably to exercise the
within Purchase Option and to purchase from you ________________ shares of
Common Stock of Level Jump Financial Group, Inc. and hereby makes payment of
$____________ (at the rate of $_____________ per share of Common Stock) in
payment of the Exercise Price pursuant thereto. Please deliver the Common Stock
as to which this Purchase Option is exercised in accordance with the
instructions given below.
--------------------------------------
Signature
INSTRUCTIONS FOR DELIVERY OF SECURITIES
Name: ______________________________________________________________________
(Print in Block Letters)
Address: ______________________________________________________________________
_______________________________________________________________________________
7
<PAGE>
Form to be used to assign Purchase Option:
ASSIGNMENT
(To be executed by the Holder to effect a transfer of the
within Purchase Option):
FOR VALUE RECEIVED, _________________________________________
_________________________________________________ does hereby sell, assign and
transfer unto _________________________________________________ the right to
purchase ______________ shares of Common Stock to purchase _____________________
shares of Common Stock of Level Jump Financial Group, Inc. evidenced by the
within Purchase Option.
Dated:___________________, 19____
-------------------------------------
Signature
8
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 -
thestockpage.com inc.,
a company incorporated under the laws
of the Province of Ontario (the "Corporation"),
- and -
ROBERT LANDAU, 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
<PAGE>
-2-
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
Toronto, Ontario.
"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.
<PAGE>
-3-
"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.
<PAGE>
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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
<PAGE>
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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
<PAGE>
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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
<PAGE>
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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.
<PAGE>
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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:
133 Richmond Street West
Suite 401
Toronto, Ontario
Canada M5H 2L3
Attention: Secretary
Fax: 416-777-1911
(b) if to the Corporation at:
133 Richmond Street West
Suite 401
Toronto, Ontario
Canada M5H 2L3
Attention: President
Fax: 416-777-1911
(c) if to the Holder at:
66 Broadway Avenue
Suite 1514
Toronto, Ontario
Canada M4P 1T6
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 Aird & 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: David Roff
Title: Treasurer
thestockpage.com inc.
By
------------------------------
Name: Brice Scheschuk
Title: Secretary
SIGNED, SEALED AND DELIVERED )
in the presence of )
)
)
)
- ------------------------------- ) --------------------------
Witness ) Robert Landau
Exhibit 4.10
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"),
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thestockpage.com inc.,
a company incorporated under the laws
of the Province of Ontario (the "Corporation"),
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DAVID ROFF, of the City of
Toronto, in the Province of Ontario (the "Holder").
WHEREAS the Holder is the registered and beneficial owner of 3,720,000
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 B 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
Toronto, Ontario.
"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 B 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
purchase price for each Exchangeable Share. The purchase price for each such
Exchangeable Share so purchased may be satisfied only by the Parent delivering
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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
Holder shall be deemed to have transferred to the Parent all of his right, title
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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 B 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.
<PAGE>
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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:
133 Richmond Street West
Suite 401
Toronto, Ontario
Canada M5H 2L3
Attention: Secretary
Fax: 416-777-1911
(b) if to the Corporation at:
133 Richmond Street West
Suite 401
Toronto, Ontario
Canada M5H 2L3
Attention: President
Fax: 416-777-1911
(c) if to the Holder at:
7 Walmer Road
Apt. 1504
Toronto, Ontario
Canada M5R 2W8
<PAGE>
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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.
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 Aird & 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
------------------------------
Name: Robert Landau
Title: President
thestockpage.com inc.
By
------------------------------
Name: Brice Scheschuk
Title: Secretary
SIGNED, SEALED AND DELIVERED )
in the presence of )
)
)
)
- ------------------------------- ) --------------------------
Witness ) David Roff
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"),
- and -
thestockpage.com 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.
<PAGE>
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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 New York, New York and Toronto,
Ontario.
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
<PAGE>
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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
<PAGE>
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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
<PAGE>
-5-
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;
<PAGE>
-6-
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:
<PAGE>
-7-
(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.
<PAGE>
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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
<PAGE>
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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.
<PAGE>
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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
<PAGE>
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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:
133 Richmond Street West
Suite 401
Toronto, Ontario
Canada M5H 2L3
Attention: Secretary
Fax: 416-777-1911
(b) if to the Corporation at:
133 Richmond Street West
Suite 401
Toronto, Ontario
Canada M5H 2L3
Attention: President
Fax: 416-777-1911
<PAGE>
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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: David Roff
Title: Treasurer
thestockpage.com inc.
By ________________________________
Name: Rob Landau
Title: President
Exhibit 10.1
EMPLOYMENT AGREEMENT
Employment Agreement ("Agreement") made May 1, 1999, by and between Level
Jump Financial Group, Inc., ("Level Jump") a Colorado corporation and
thestockpage.com inc. ("thestockpage") an Ontario corporation, ("collectively
referred to as the Companies" and individually referred to as a "Company") and
Robert Landau ("Landau").
WHEREAS, the Companies desire to employ Landau and Landau desires to be
employed by the Companies upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
1. Employment.
The Companies hereby employ Landau as the President of Level Jump and as the
President of thestockpage for a term commencing on May 1, 1999 and ending on
April 30, 2004 subject to the provisions in this Agreement with respect to
termination. Thereafter, subject to the provisions in this Agreement with
respect to termination, Landau's employment will be deemed to be renewed
annually on the same terms and conditions as are contained herein, unless either
party terminates such employment by notice in writing from one party to the
other party on or before the last day of February in each year commencing with
February 29, 2004. Landau will act as the senior executive officer of each of
the Companies with such duties and responsibilities as are consistent with that
position and as assigned to Landau by the boards of directors of the Companies.
Landau will perform his responsibilities principally from an office located in
Ontario, Canada, provided that he will travel to other locations, from time to
time, at the expense of the Companies, as reasonably required for the full and
proper performance of his duties and responsibilities under this agreement. The
Companies acknowledge, that Landau has other business endeavors that he will be
pursuing at the same time as he serves as an officer of the Companies, and that
his services will not be required on a full time basis.
For so long as Landau is the President of either of the Companies, the Companies
will use their commercially reasonable best efforts to cause Landau to be
elected as a director of each of the Companies and to be selected as the
chairman of the board of each board on which he serves.
2. Best Efforts of Employee.
Landau agrees to perform faithfully, industriously, and to the best of his
ability all of the duties that may be required by this agreement.
3. Compensation.
As compensation for the services under this agreement in respect of the
Companies and their respective divisions, affiliates and subsidiaries and, if
elected, as a director of the Companies and their respective affiliates or
subsidiaries, the Companies their respective affiliates and subsidiaries will
pay Landau an annual salary of US$330,000, payable in equal installments no less
1
<PAGE>
frequently than monthly, in accordance with the Companies' usual payroll
procedures. The Companies or their respective affiliates or subsidiaries may,
but are not required to, pay the compensation provided in this paragraph in
Canadian dollars, in which case for the calendar year ending December 31, 1999,
the rate of exchange is hereby fixed at CDN$1.48148 to US$1.00. For calendar
years after December 31, 1999, the rate of exchange will be fixed as of the
first business day of the year based on the Revenue Canada average exchange rate
for the prior calendar year for the Canadian dollar to the United States dollar.
For greater certainty, despite the foregoing, the Companies are jointly and
severally liable to pay all compensation, remuneration and benefits to which
Landau is entitled pursuant to this Agreement irrespective of whether Landau
performs such services on behalf of affiliates, or subsidiaries.
Landau will also be entitled to receive such bonus compensation as the board of
directors of Level Jump determines from time to time acting reasonably having
regard to bonus compensation customarily paid to senior executives by
corporations similar to Level Jump.
4. Expenses.
The Companies will reimburse Landau for all reasonable and necessary expenses
incurred in the execution of Landau's duties hereunder, upon Landau's submission
to a Company or the Companies, as the case may be, of invoices, receipts and
other documentation evidencing such expenses in accordance with the Companies'
policies and procedures. Landau agrees not to seek reimbursement for personal
charges of any kind.
5. Benefits
Landau will be entitled to participate, on at least the same basis and subject
to the same qualifications as other employees of the Companies, in any medical
or disability insurance, sick leave, holiday, pension and other related employee
benefit plans and policies in effect with respect to senior management personnel
of the Companies.
More specifically;
Landau will be entitled to four weeks of paid vacation per annum. Vacation may
be taken by Landau at times that do not unreasonably interfere with the business
of the Companies.
Annual vacation time will cumulate from year to year, to a maximum of 8 weeks.
Any vacation amount accumulated over 8 weeks will be paid out in cash.
The Companies will provide Landau with full medical and dental benefits
(including comprehensive extended care benefits if and when Landau resides in
Canada) in the country of his residence at the sole expense of the Company.
The Companies will provide Landau with, and maintain in full force and effect,
life Insurance in an amount of not less than $1 million dollars at the sole
expense of the Company.
The Companies will provide Landau with disability insurance in an amount of not
less than one half of Landau's annual salary at the sole expense of the Company.
2
<PAGE>
6. Stock Options.
On the effective date of this agreement, Landau will receive from the Level Jump
an option to purchase shares of Common Stock of Level Jump. The option will be
represented by separate agreement, a true copy of which is annexed as Schedule
"A". The option will provide the right to purchase up to 450,000 shares of
Common Stock of Level Jump.
7. Intentionally Deleted.
8 Termination.
A. Landau's employment under this agreement shall be deemed to be
terminated:
1. upon his death;
2. if a physical or mental illness prevents him from carrying out
his duties hereunder for a period of four consecutive months or
an aggregate of 120 days in any consecutive nine month period
after 30 day's advance notice of termination in writing is given
by the Companies (which may occur before or after the end of the
disability periods described above).
B. The Companies may terminate Landau's employment at any time by notice
in writing to Landau and Landau may terminate his employment at any
time by notice in writing to the Companies.
C. In this Agreement, the term "Cause" means:
(a) theft or dishonesty by Landau in the conduct of the Companies'
business; or
(b) a material breach of this Agreement by Landau,
D. In this Agreement "Good Reason" shall be deemed to have occurred
where:
(a) there is a "change of control" of Level Jump, where a "change of
control" will mean any "person" is or has become the "beneficial
owner" (as such terms are referred to under Sections 13(d) and
14(d)of the Exchange Act of 1934), directly or indirectly, of
securities of Level Jump representing 51% or more of the combined
voting power of the then outstanding voting securities of Level
Jump in one or more transactions after the date of this
agreement, but excluding any acquisition approved by the board of
directors or the shareholders of Level Jump, or
(b) during any period of two consecutive years, individuals who at
the beginning of such period constituting the board of directors
of Level Jump cease for any reason to constitute at least a
majority of the board of directors of Level Jump, unless the
election of each director who was not a director at the beginning
of such period has been approved in advance by directors
representing at least two-thirds of the directors then in office
who were directors at the beginning of the period;
(c) there has been a failure by either Company to comply with any
material provision of this Agreement;
(d) there has been a reduction in the importance of Landau's
responsibilities to either Company, without his consent.
3
<PAGE>
E. In the event the Companies terminate Landau's employment for Cause, or
in the event Landau terminates his employment for Good Reason, the
Companies shall pay to Landau an amount equal to Landau's annual
salary at the time of delivery of the notice of termination, less all
usual withholding amounts, which payment shall be made within 20 days
following the date of delivery of the said notice of termination.
F. In the event the Companies terminate Landau's employment other than
for Cause (or if the Companies purport to terminate Landau's
employment for Cause and it is determined by a court of competent
jurisdiction that no Cause existed) then the Companies shall pay to
Landau an amount equal to the greater of:
(a) Landau's annual salary at the time of delivery of the notice of
termination;
(b) the unpaid portion of Landau's salary accruing from the time of
delivery of the notice of termination to April 30, 2004, less all
usual withholding amounts.
G. Upon termination of Landau's employment under this Agreement, he will
be deemed to have resigned as an officer and director of
thestockpage.com inc..
9. Compliance with Companies' Rules.
Landau agrees to acknowledge if requested and to comply with each and every
reasonable policy, rule and regulation of the Companies or as applicable to
either Company by law, consent, decree or agreement.
10. Return of Property.
Upon the termination of the employment of Landau, all property (including, but
not limited to, keys, records, notes, data, memoranda, models, credit cards and
equipment) that is in Landau's possession or under Landau's control, which is
the property of either Company or related to either Company will be returned to
the Company in question or destroyed at the direction of Company in question,
which destruction will be certified by Landau.
11. Indemnification.
Landau is entitled to the rights of indemnification available to officers and
directors under the corporate law of the state or province of incorporation of
each Company and, if any, the provisions of the certificate of incorporation and
by-laws of each Company. The Companies will obtain director and officer
liability insurance or similar insurance coverage and will provide that Landau
will be covered thereunder at all times during which Landau is an director or an
officer of either Company. The Companies shall jointly and severally indemnify
Landau and his heirs and legal representatives, against all costs, charges and
expenses, including without limiting the generality of the foregoing, all legal
costs incurred by Landau payable to any lawyer(s) or attorney(s) of his choice
and including any amount paid to settle an action or satisfy a judgment,
reasonably incurred by him in respect of any civil, criminal or administrative
4
<PAGE>
action or proceeding to which he is made a party by reason of being or having
been a director or officer of either Company or any subsidiary, affiliate, or
associate of either, if (a) he acted honestly and in good faith with a view to
the best interests of the Company in question or any subsidiary, affiliate, or
associate of either, as the case may be; and (b) in the case of a criminal or
administrative action or proceeding enforced by a monetary penalty, he had
reasonable grounds for believing that his conduct was lawful. The Companies
shall also jointly and severally indemnify Landau in such other circumstances as
the law permits or requires. Nothing in this Agreement shall limit the right of
Landau to claim indemnity apart from the provisions of this Agreement.
12. Notices.
All notices required or permitted under this agreement will be in writing and
will be deemed delivered when (i) delivered in person or (ii) upon receipt if
mailed by United States mail, postage prepaid, return receipt requested, the
addresses as follows:
Company Level Jump Financial Group, Inc.
133 Richmond Street West, Suite 401
Toronto, Ontario M5H 2LH
Canada
Landau Robert Landau
1514- 66 Broadway Ave.
Toronto, Ontario, Canada
M5H-2L3
The above addresses may be changed from time to time by either party by
providing written notice in the manner set forth above.
13 Entire Agreement.
Except for the Option Agreement between Level Jump and Landau, this agreement
contains the entire agreement of the parties with respect to the employment of
Landau by the Companies and their respective affiliates and subsidiaries, and
there are no other promises or conditions in any other agreement, whether oral
or written.
14 Amendment.
This agreement may be modified or amended, if in writing and signed by both
parties to this agreement.
15. Severability.
If any provision of this agreement is held to be invalid or unenforceable for
any reason, the remaining provisions will continue to be valid and enforceable.
If a court or other competent authority finds that any provision of this
agreement is invalid or unenforceable, but that by limiting the provision it
would become valid or enforceable, then the provision will be deemed to be
written, construed, and enforced as so limited.
5
<PAGE>
16. Waiver.
The failure of either party to enforce any provision of this agreement will not
be construed as a waiver or limitation of that party's right to subsequently
enforce and compel strict compliance with every provision of this agreement.
17. Applicable Law.
This agreement will be governed by the laws of the Province of Ontario and the
applicable laws of Canada. The parties elect to be governed by the laws of the
Province of Ontario and attorn to the non-exclusive jurisdiction of the courts
of Ontario.
18. Construction.
It will be an irrefutable presumption that this agreement was co-drafted by the
parties hereof, and therefore this agreement will be construed without regard to
any presumption or other rule requiring construction against any party. The
parties hereto also acknowledge the ability and opportunity to have this
agreement reviewed by independent counsel of their own choosing prior to
signing.
19. Survival of Provisions
All provisions of this Agreement will survive the termination of the employment
of Landau hereunder except for those provisions which require provision of
services by Landau to the Companies or either of them or to their associates,
affiliates or subsidiaries.
20. Dollar Amounts
Unless otherwise stated herein, all dollar amounts refer to U.S. funds.
In witness whereof the parties have hereunto set their hands and seals this 1st
day of May, 1999.
Signed, Sealed and Delivered in the )
presence of )
) Level Jump Financial Group, Inc.
)
)
) Per:
)
) ------------------------------
) Name: David Roff
) Office: Vice-President
) I have authority to bind the
) corporation.
)
) -------------------------------
) Robert Landau
)
)
) thestockpage.com inc.
)
) Per:
)
) ------------------------------
) Name: David Roff
) Office: Vice-President
) I have authority to bind the
) corporation.
6
Exhibit 10.2
EMPLOYMENT AGREEMENT
Employment Agreement ("Agreement") made May 1, 1999, by and between Level
Jump Financial Group, Inc., ("Level Jump") a Colorado corporation and
thestockpage.com inc. ("thestockpage") an Ontario corporation, ("collectively
referred to as the Companies" and individually referred to as a "Company") and
David Roff ("Roff").
WHEREAS, the Companies desire to employ Roff and Roff desires to be
employed by the Companies upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
1. Employment.
The Companies hereby employ Roff as the Vice-President of Level Jump and as the
Vice-President of thestockpage for a term commencing on May 1, 1999 and ending
on April 30, 2004 subject to the provisions in this Agreement with respect to
termination. Thereafter, subject to the provisions in this Agreement with
respect to termination, Roff's employment will be deemed to be renewed annually
on the same terms and conditions as are contained herein, unless either party
terminates such employment by notice in writing from one party to the other
party on or before the last day of February in each year commencing with
February 29, 2004.. Roff will act as the senior executive officer of each of the
Companies with such duties and responsibilities as are consistent with that
position and as assigned to Roff by the boards of directors of the Companies.
Roff will perform his responsibilities principally from an office located in
Ontario, Canada, provided that he will travel to other locations, from time to
time, at the expense of the Companies, as reasonably required for the full and
proper performance of his duties and responsibilities under this agreement. The
Companies acknowledge, that Roff has other business endeavors that he will be
pursuing at the same time as he serves as an officer of the Companies, and that
his services will not be required on a full time basis.
For so long as Roff is the Vice-President of either of the Companies, the
Companies will use their commercially reasonable best efforts to cause Roff to
be elected as a director of each of the Companies.
2. Best Efforts of Employee.
Roff agrees to perform faithfully, industriously, and to the best of his ability
all of the duties that may be required by this agreement.
3. Compensation.
As compensation for the services under this agreement in respect of the
Companies and their respective divisions, affiliates and subsidiaries and, if
elected, as a director of the Companies and their respective affiliates or
subsidiaries, the Companies their respective affiliates and subsidiaries will
pay Roff an annual salary of US$256,000, payable in equal installments no less
1
<PAGE>
frequently than monthly, in accordance with the Companies' usual payroll
procedures. The Companies or their respective affiliates or subsidiaries may,
but are not required to, pay the compensation provided in this paragraph in
Canadian dollars, in which case for the calendar year ending December 31, 1999,
the rate of exchange is hereby fixed at CDN$1.48148 to US$1.00. For calendar
years after December 31, 1999, the rate of exchange will be fixed as of the
first business day of the year based on the Revenue Canada average exchange rate
for the prior calendar year for the Canadian dollar to the United States dollar.
For greater certainty, despite the foregoing, the Companies are jointly and
severally liable to pay all compensation, remuneration and benefits to which
Roff is entitled pursuant to this Agreement irrespective of whether Roff
performs such services on behalf of affiliates, or subsidiaries.
Roff will also be entitled to receive such bonus compensation as the board of
directors of Level Jump determines from time to time acting reasonably having
regard to bonus compensation customarily paid to senior executives by
corporations similar to Level Jump.
4. Expenses.
The Companies will reimburse Roff for all reasonable and necessary expenses
incurred in the execution of Roff's duties hereunder, upon Roff's submission to
a Company or the Companies, as the case may be, of invoices, receipts and other
documentation evidencing such expenses in accordance with the Companies'
policies and procedures. Roff agrees not to seek reimbursement for personal
charges of any kind.
5. Benefits
Roff will be entitled to participate, on at least the same basis and subject to
the same qualifications as other employees of the Companies, in any medical or
disability insurance, sick leave, holiday, pension and other related employee
benefit plans and policies in effect with respect to senior management personnel
of the Companies.
More specifically;
Roff will be entitled to four weeks of paid vacation per annum. Vacation may be
taken by Roff at times that do not unreasonably interfere with the business of
the Companies.
Annual vacation time will cumulate from year to year, to a maximum of 8 weeks.
Any vacation amount accumulated over 8 weeks will be paid out in cash.
The Companies will provide Roff with full medical and dental benefits (including
comprehensive extended care benefits if and when Roff resides in Canada) in the
country of his residence at the sole expense of the Company.
The Companies will provide Roff with, and maintain in full force and effect,
life Insurance in an amount of not less than $1 million dollars at the sole
expense of the Company.
The Companies will provide Roff with disability insurance in an amount of not
less than one half of Roff's annual salary at the sole expense of the Company.
2
<PAGE>
6. Stock Options.
On the effective date of this agreement, Roff will receive from the Level Jump
an option to purchase shares of Common Stock of Level Jump. The option will be
represented by separate agreement, a true copy of which is annexed as Schedule
"A". The option will provide the right to purchase up to 300,000 shares of
Common Stock of Level Jump.
7. Intentionally Deleted.
8 Termination.
A. Roff's employment under this agreement shall be deemed to be
terminated:
1. upon his death;
2. if a physical or mental illness prevents him from carrying out
his duties hereunder for a period of four consecutive months or
an aggregate of 120 days in any consecutive nine month period
after 30 day's advance notice of termination in writing is given
by the Companies (which may occur before or after the end of the
disability periods described above).
B. The Companies may terminate Roff's employment at any time by notice in
writing to Roff and Roff may terminate his employment at any time by
notice in writing to the Companies.
C. In this Agreement, the term "Cause" means:
(a) theft or dishonesty by Roff in the conduct of the Companies'
business; or
(b) a material breach of this Agreement by Roff,
D. In this Agreement "Good Reason" shall be deemed to have occurred
where:
(a) there is a "change of control" of Level Jump, where a "change of
control" will mean any "person" is or has become the "beneficial
owner" (as such terms are referred to under Sections 13(d) and
14(d)of the Exchange Act of 1934), directly or indirectly, of
securities of Level Jump representing 51% or more of the combined
voting power of the then outstanding voting securities of Level
Jump in one or more transactions after the date of this
agreement, but excluding any acquisition approved by the board of
directors or the shareholders of Level Jump, or
(b) during any period of two consecutive years, individuals who at
the beginning of such period constituting the board of directors
of Level Jump cease for any reason to constitute at least a
majority of the board of directors of Level Jump, unless the
election of each director who was not a director at the beginning
of such period has been approved in advance by directors
representing at least two-thirds of the directors then in office
who were directors at the beginning of the period;
(c) there has been a failure by either Company to comply with any
material provision of this Agreement;
(d) there has been a reduction in the importance of Roff's
responsibilities to either Company, without his consent.
3
<PAGE>
E. In the event the Companies terminate Roff's employment for Cause, or
in the event Roff terminates his employment for Good Reason, the
Companies shall pay to Roff an amount equal to Roff's annual salary at
the time of delivery of the notice of termination, less all usual
withholding amounts, which payment shall be made within 20 days
following the date of delivery of the said notice of termination.
F. In the event the Companies terminate Roff's employment other than for
Cause (or if the Companies purport to terminate Roff's employment for
Cause and it is determined by a court of competent jurisdiction that
no Cause existed) then the Companies shall pay to Roff an amount equal
to the greater of:
(a) Roff's annual salary at the time of delivery of the notice of
termination;
(b) the unpaid portion of Roff's salary accruing from the time of
delivery of the notice of termination to April 30, 2004, less all
usual withholding amounts.
G. Upon termination of Roff's employment under this Agreement, he will be
deemed to have resigned as an officer and director of
thestockpage.com.
9. Compliance with Companies' Rules.
Roff agrees to acknowledge if requested and to comply with each and every
reasonable policy, rule and regulation of the Companies or as applicable to
either Company by law, consent, decree or agreement.
10. Return of Property.
Upon the termination of the employment of Roff, all property (including, but not
limited to, keys, records, notes, data, memoranda, models, credit cards and
equipment) that is in Roff's possession or under Roff's control, which is the
property of either Company or related to either Company will be returned to the
Company in question or destroyed at the direction of Company in question, which
destruction will be certified by Roff.
11. Indemnification.
Roff is entitled to the rights of indemnification available to officers and
directors under the corporate law of the state or province of incorporation of
each Company and, if any, the provisions of the certificate of incorporation and
by-laws of each Company. The Companies will obtain director and officer
liability insurance or similar insurance coverage and will provide that Roff
will be covered thereunder at all times during which Roff is an director or an
officer of either Company. The Companies shall jointly and severally indemnify
Roff and his heirs and legal representatives, against all costs, charges and
expenses, including without limiting the generality of the foregoing, all legal
costs incurred by Roff payable to any lawyer(s) or attorney(s) of his choice and
including any amount paid to settle an action or satisfy a judgment, reasonably
incurred by him in respect of any civil, criminal or administrative action or
proceeding to which he is made a party by reason of being or having been a
4
<PAGE>
director or officer of either Company or any subsidiary, affiliate, or associate
of either, if (a) he acted honestly and in good faith with a view to the best
interests of the Company in question or any subsidiary, affiliate, or associate
of either, as the case may be; and (b) in the case of a criminal or
administrative action or proceeding enforced by a monetary penalty, he had
reasonable grounds for believing that his conduct was lawful. The Companies
shall also jointly and severally indemnify Roff in such other circumstances as
the law permits or requires. Nothing in this Agreement shall limit the right of
Roff to claim indemnity apart from the provisions of this Agreement.
12. Notices.
All notices required or permitted under this agreement will be in writing and
will be deemed delivered when (i) delivered in person or (ii) upon receipt if
mailed by United States mail, postage prepaid, return receipt requested, the
addresses as follows:
Company Level Jump Financial Group, Inc.
133 Richmond Street West, Suite 401
Toronto, Ontario M5H 2LH
Canada
Roff David Roff
7 Walmer Rd. Apt #1504
Toronto, Ontario, Canada
M5R 2W8
The above addresses may be changed from time to time by either party by
providing written notice in the manner set forth above.
13 Entire Agreement.
Except for the Option Agreement between Level Jump and Roff, this agreement
contains the entire agreement of the parties with respect to the employment of
Roff by the Companies and their respective affiliates and subsidiaries, and
there are no other promises or conditions in any other agreement, whether oral
or written.
14 Amendment.
This agreement may be modified or amended, if in writing and signed by both
parties to this agreement.
15. Severability.
If any provision of this agreement is held to be invalid or unenforceable for
any reason, the remaining provisions will continue to be valid and enforceable.
If a court or other competent authority finds that any provision of this
agreement is invalid or unenforceable, but that by limiting the provision it
would become valid or enforceable, then the provision will be deemed to be
written, construed, and enforced as so limited.
5
<PAGE>
16. Waiver.
The failure of either party to enforce any provision of this agreement will not
be construed as a waiver or limitation of that party's right to subsequently
enforce and compel strict compliance with every provision of this agreement.
17. Applicable Law.
This agreement will be governed by the laws of the Province of Ontario and the
applicable laws of Canada. The parties elect to be governed by the laws of the
Province of Ontario and attorn to the non-exclusive jurisdiction of the courts
of Ontario.
18. Construction.
It will be an irrefutable presumption that this agreement was co-drafted by the
parties hereof, and therefore this agreement will be construed without regard to
any presumption or other rule requiring construction against any party. The
parties hereto also acknowledge the ability and opportunity to have this
agreement reviewed by independent counsel of their own choosing prior to
signing.
19. Survival of Provisions
All provisions of this Agreement will survive the termination of the employment
of Roff hereunder except for those provisions which require provision of
services by Roff to the Companies or either of them or to their associates,
affiliates or subsidiaries.
20. Dollar Amounts
Unless otherwise stated herein, all dollar amounts refer to U.S. funds.
In witness whereof the parties have hereunto set their hands and seals this 1st
day of May, 1999.
Signed, Sealed and Delivered in the )
presence of )
) Level Jump Financial Group, Inc.
)
)
) Per:
)
) ------------------------------
) Name: Robert Landau
) Office: President
) I have authority to bind the corporation.
)
)
)
) -------------------------------
) David Roff
)
)
) thestockpage.com inc.
)
) Per:
)
) ------------------------------
) Name: Robert Landau
) Office: President
) I have authority to bind the corporation.
Exhibit 10.3
Approved by Board of Directors on ______, 1999
Approved by Stockholders on ______, 1999
YOUTICKET.COM INC.
1999 Performance Equity Plan
Section 1. Purpose; Definitions.
1.1 Purpose. The purpose of the youticket.com inc. (the "Company") 1999
Performance Equity Plan (the "Plan") is to enable the Company to offer to its
key employees, officers, directors and consultants whose past, present and/or
potential contributions to the Company and its Subsidiaries have been, are or
will be important to the success of the Company, an opportunity to acquire a
proprietary interest in the Company. The various types of long-term incentive
awards which may be provided under the Plan will enable the Company to respond
to changes in compensation practices, tax laws, accounting regulations and the
size and diversity of its businesses.
1.2 Definitions. For purposes of the Plan, the following terms shall be
defined as set forth below:
(a) "Agreement" means the agreement between the Company and the Holder
setting forth the terms and conditions of an award under the Plan.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended from
time to time, and any successor thereto and the regulations promulgated
thereunder.
(d) "Committee" means the Compensation Committee of the Board or any
other committee of the Board, which the Board may designate to administer
the Plan or any portion thereof. If no Committee is so designated, then all
references in this Plan to "Committee" shall mean the Board.
(e) "Common Stock" means the Common Stock of the Company, par value
$.0001 per share.
(f) "Company" means youticket.com inc., a corporation organized under
the laws of the State of Nevada.
(g) "Deferred Stock" means Stock to be received, under an award made
pursuant to Section 9, below, at the end of a specified deferral period.
(h) "Disability" means disability as determined under procedures
established by the Committee for purposes of the Plan.
(i) "Effective Date" means the date set forth in Section 13.1, below.
(j) "Fair Market Value", unless otherwise required by any applicable
provision of the Code or any regulations issued thereunder, means, as of any
given date: (i) if the Common Stock is listed on a national securities exchange
or quoted on the Nasdaq National Market or Nasdaq SmallCap Market, the last sale
price of the Common Stock in the principal trading market for the Common Stock
on the last trading day preceding the date of grant of an award hereunder, as
reported by the exchange or Nasdaq, as the case may be; (ii) if the Common Stock
is not listed on a national securities exchange or quoted on the Nasdaq National
Market or Nasdaq SmallCap Market, but is traded in the over-the-counter market,
the closing bid price for the Common Stock on the last trading day preceding the
date of grant of an award hereunder for which such quotations are reported by
the OTC Bulletin Board or the National Quotation Bureau, Incorporated or
<PAGE>
similar publisher of such quotations; and (iii) if the fair market value of
the Common Stock cannot be determined pursuant to clause (i) or (ii) above, such
price as the Committee shall determine, in good faith.
(k) "Holder" means a person who has received an award under the Plan.
(l) "Incentive Stock Option" means any Stock Option intended to be and
designated as an "incentive stock option" within the meaning of Section 422 of
the Code.
(m) "Nonqualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
(n) "Normal Retirement" means retirement from active employment with
the Company or any Subsidiary on or after age 65.
(o) "Other Stock-Based Award" means an award under Section 10, below,
that is valued in whole or in part by reference to, or is otherwise based
upon, Stock.
(p) "Parent" means any present or future parent corporation of the
Company, as such term is defined in Section 424(e) of the Code.
(q) "Plan" means the youticket.com inc. 1999 Performance Equity Plan,
as hereinafter amended from time to time.
(r) "Restricted Stock" means Stock, received under an award made
pursuant to Section 8, below, that is subject to restrictions under said
Section 8.
(s) "SAR Value" means the excess of the Fair Market Value (on the
exercise date) of the number of shares for which the Stock Appreciation Right is
exercised over the exercise price that the participant would have otherwise had
to pay to exercise the related Stock Option and purchase the relevant shares.
(t) "Stock" means the Common Stock of the Company, par value $.0001
per share.
(u) "Stock Appreciation Right" means the right to receive from the
Company, on surrender of all or part of the related Stock Option, without a cash
payment to the Company, a number of shares of Common Stock equal to the SAR
Value divided by the exercise price of the Stock Option.
(v) "Stock Option" or "Option" means any option to purchase shares of
Stock which is granted pursuant to the Plan.
(w) "Stock Reload Option" means any option granted under Section 6.3,
below, as a result of the payment of the exercise price of a Stock Option and/or
the withholding tax related thereto in the form of Stock owned by the Holder or
the withholding of Stock by the Company.
(x) "Subsidiary" means any present or future subsidiary corporation of
the Company, as such term is defined in Section 424(f) of the Code.
Section 2. Administration.
2.1 Committee Membership. The Plan shall be administered by the Board or a
Committee. Committee members shall serve for such term as the Board may in each
case determine, and shall be subject to removal at any time by the Board. The
Committee members, to the extent possible, shall be "non-employee" as defined in
Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended.
2.2 Powers of Committee. The Committee shall have full authority to award,
pursuant to the terms of the Plan: (i) Stock Options, (ii) Stock Appreciation
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Rights, (iii) Restricted Stock, (iv) Deferred Stock, (v) Stock Reload Options
and/or (vi) Other Stock-Based Awards. For purposes of illustration and not of
limitation, the Committee shall have the authority (subject to the express
provisions of this Plan):
(a) to select the officers, key employees, directors and consultants
of the Company or any Subsidiary to whom Stock Options, Stock Appreciation
Rights, Restricted Stock, Deferred Stock, Reload Stock Options and/or Other
Stock-Based Awards may from time to time be awarded hereunder.
(b) to determine the terms and conditions, not inconsistent with the
terms of the Plan, of any award granted hereunder (including, but not limited
to, number of shares, share price or other consideration, such as other
securities of the Company or other property, any restrictions or limitations,
and any vesting, exchange, surrender, cancellation, acceleration, termination,
exercise or forfeiture provisions, as the Committee shall determine);
(c) to determine any specified performance goals or such other factors
or criteria which need to be attained for the vesting of an award granted
hereunder;
(d) to determine the terms and conditions under which awards granted
hereunder are to operate on a tandem basis and/or in conjunction with or apart
from other equity awarded under this Plan and cash awards made by the Company or
any Subsidiary outside of this Plan;
(e) to permit a Holder to elect to defer a payment under the Plan
under such rules and procedures as the Committee may establish, including the
crediting of interest on deferred amounts denominated in cash and of dividend
equivalents on deferred amounts denominated in Stock;
(f) to determine the extent and circumstances under which Stock and
other amounts payable with respect to an award hereunder shall be deferred which
may be either automatic or at the election of the Holder; and
(g) to substitute (i) new Stock Options for previously granted Stock
Options, which previously granted Stock Options have higher option exercise
prices and/or contain other less favorable terms, and (ii) new awards of any
other type for previously granted awards of the same type, which previously
granted awards are upon less favorable terms.
2.3 Interpretation of Plan.
(a) Committee Authority. Subject to Section 12, below, the Committee
shall have the authority to adopt, alter and repeal such administrative rules,
guidelines and practices governing the Plan as it shall, from time to time, deem
advisable, to interpret the terms and provisions of the Plan and any award
issued under the Plan (and to determine the form and substance of all Agreements
relating thereto), and to otherwise supervise the administration of the Plan.
Subject to Section 12, below, all decisions made by the Committee pursuant to
the provisions of the Plan shall be made in the Committee's sole discretion and
shall be final and binding upon all persons, including the Company, its
Subsidiaries and Holders.
(b) Incentive Stock Options. Anything in the Plan to the contrary
notwithstanding, no term or provision of the Plan relating to Incentive Stock
Options (including but limited to Stock Reload Options or Stock Appreciation
rights granted in conjunction with an Incentive Stock Option) or any Agreement
providing for Incentive Stock Options shall be interpreted, amended or altered,
nor shall any discretion or authority granted under the Plan be so exercised, so
as to disqualify the Plan under Section 422 of the Code, or, without the consent
of the Holder(s) affected, to disqualify any Incentive Stock Option under such
Section 422.
Section 3. Stock Subject to Plan.
3.1 Number of Shares. The total number of shares of Common Stock reserved
and available for distribution under the Plan shall be 3,000,000 shares. Shares
of Stock under the Plan may consist, in whole or in part, of authorized and
unissued shares or treasury shares. If any shares of Stock that have been
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granted pursuant to a Stock Option cease to be subject to a Stock Option, or if
any shares of Stock that are subject to any Stock Appreciation Right, Restricted
Stock, Deferred Stock Award, Reload Stock Option or Other Stock-Based Award
granted hereunder are forfeited or any such award otherwise terminates without a
payment being made to the Holder in the form of Stock, such shares shall again
be available for distribution in connection with future grants and awards under
the Plan. Only net shares issued upon a stock-for-stock exercise (including
stock used for withholding taxes) shall be counted against the number of shares
available under the Plan.
3.2 Adjustment Upon Changes in Capitalization, Etc. In the event of any
change in the number of outstanding shares of Common Stock of the Company
occurring as the result of a stock split, reverse stock split or stock dividend
on the Common Stock, after the grant of an Award, the Company shall
proportionately adjust the number of shares of Stock subject to the Award and
the price to be paid on exercise of an Award as well as the aggregate number of
shares reserved for issuance under the Plan. Any right to acquire a fractional
share of Stock resulting from any adjustments will be rounded to the nearest
whole share of Stock. If the Company shall be the surviving corporation in any
merger, combination or consolidation, any outstanding Award shall pertain and
apply to the shares of Stock to which the Holder is entitled, without adjustment
for issuance by the Company of any securities in the merger, combination or
consolidation. In the event of a change in the par value of the Common Stock of
the Company which is subject to any outstanding Award, such Award will be deemed
to pertain to the shares of Stock resulting from any such change. To the extent
that the foregoing adjustments relate to the Common Stock of the Company, the
adjustments will be made by the Committee whose determination will be final,
binding and conclusive.
Section 4. Eligibility.
Awards may be made or granted to key employees, officers, directors and
consultants who are deemed to have rendered or to be able to render significant
services to the Company or its Subsidiaries and who are deemed to have
contributed or to have the potential to contribute to the success of the
Company. No Incentive Stock Option shall be granted to any person who is not an
employee of the Company or a Subsidiary at the time of grant.
Section 5. Required Six-Month Holding Period.
A period of not less than six months must elapse from the date of grant of
an award under the Plan, (i) before any disposition by a Holder of a derivative
security (as defined in Rule 16a-1 promulgated under the Securities Exchange Act
of 1934, as amended) issued under this Plan or (ii) before any disposition by a
Holder of any Stock purchased or granted pursuant to an award under this Plan.
Section 6. Stock Options.
6.1 Grant and Exercise. Stock Options granted under the Plan may be of two
types: (i) Incentive Stock Options and (ii) Nonqualified Stock Options. Any
Stock Option granted under the Plan shall contain such terms, not inconsistent
with this Plan, or with respect to Incentive Stock Options, not inconsistent
with the Plan and the Code, as the Committee may from time to time approve. The
Committee shall have the authority to grant Incentive Stock Options,
Non-Qualified Stock Options, or both types of Stock Options and which may be
granted alone or in addition to other awards granted under the Plan. To the
extent that any Stock Option intended to qualify as an Incentive Stock Option
does not so qualify, it shall constitute a separate Nonqualified Stock Option.
An Incentive Stock Option may be granted only within the ten-year period
commencing from the Effective Date and may only be exercised within ten years of
the date of grant (or five years in the case of an Incentive Stock Option
granted to an optionee ("10% Stockholder") who, at the time of grant, owns Stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company.
6.2 Terms and Conditions. Stock Options granted under the Plan shall be
subject to the following terms and conditions:
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(a) Exercise Price. The exercise price per share of Stock purchasable
under a Stock Option shall be determined by the Committee at the time of grant
and may not be less than 100% of the Fair Market Value of the Stock as defined
above; provided, however, that the exercise price of an Incentive Stock Option
granted to a 10% Stockholder shall not be less than 110% of the Fair Market
Value of the Stock.
(b) Option Term. Subject to the limitations in Section 6.1, above, the
term of each Stock Option shall be fixed by the Committee.
(c) Exercisability. Stock Options shall be exercisable at such time or
times and subject to such terms and conditions as shall be determined by the
Committee and as set forth in Section 11, below. If the Committee provides, in
its discretion, that any Stock Option is exercisable only in installments, i.e.,
that it vests over time, the Committee may waive such installment exercise
provisions at any time at or after the time of grant in whole or in part, based
upon such factors as the Committee shall determine.
(d) Method of Exercise. Subject to whatever installment, exercise and
waiting period provisions are applicable in a particular case, Stock Options may
be exercised in whole or in part at any time during the term of the Option, by
giving written notice of exercise to the Company specifying the number of shares
of Stock to be purchased. Such notice shall be accompanied by payment in full of
the purchase price, which shall be in cash or, unless otherwise provided in the
Agreement, in shares of Stock (including Restricted Stock and other contingent
awards under this Plan) or, partly in cash and partly in such Stock, or such
other means which the Committee determines are consistent with the Plan's
purpose and applicable law. Cash payments shall be made by wire transfer,
certified or bank check or personal check, in each case payable to the order of
the Company; provided, however, that the Company shall not be required to
deliver certificates for shares of Stock with respect to which an Option is
exercised until the Company has confirmed the receipt of good and available
funds in payment of the purchase price thereof. Payments in the form of Stock
shall be valued at the Fair Market Value of a share of Stock on the date prior
to the date of exercise. Such payments shall be made by delivery of stock
certificates in negotiable form which are effective to transfer good and valid
title thereto to the Company, free of any liens or encumbrances. Subject to the
terms of the Agreement, the Committee may, in its sole discretion, at the
request of the Holder, deliver upon the exercise of a Nonqualified Stock Option
a combination of shares of Deferred Stock and Common Stock; provided that,
notwithstanding the provisions of Section 9 of the Plan, such Deferred Stock
shall be fully vested and not subject to forfeiture. A Holder shall have none of
the rights of a stockholder with respect to the shares subject to the Option
until such shares shall be transferred to the Holder upon the exercise of the
Option.
(e) Transferability. Except as may be set forth in the Agreement, no
Stock Option shall be transferable by the Holder other than by will or by the
laws of descent and distribution, and all Stock Options shall be exercisable,
during the Holder's lifetime, only by the Holder.
(f) Termination by Reason of Death. If a Holder's employment by the
Company or a Subsidiary terminates by reason of death, any Stock Option held by
such Holder, unless otherwise determined by the Committee at the time of grant
and set forth in the Agreement, shall be fully vested and may thereafter be
exercised by the legal representative of the estate or by the legatee of the
Holder under the will of the Holder, for a period of one year (or such other
greater or lesser period as the Committee may specify at grant) from the date of
such death or until the expiration of the stated term of such Stock Option,
whichever period is the shorter.
(g) Termination by Reason of Disability. If a Holder's employment by
the Company or any Subsidiary terminates by reason of Disability, any Stock
Option held by such Holder, unless otherwise determined by the Committee at the
time of grant and set forth in the Agreement, shall be fully vested and may
thereafter be exercised by the Holder for a period of one year (or such other
greater or lesser period as the Committee may specify at the time of grant) from
the date of such termination of employment or until the expiration of the stated
term of such Stock Option, whichever period is the shorter.
(h) Other Termination. Subject to the provisions of Section 14.3,
below, and unless otherwise determined by the Committee at the time of grant and
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set forth in the Agreement, if a Holder is an employee of the Company or a
Subsidiary at the time of grant and if such Holder's employment by the Company
or any Subsidiary terminates for any reason other than death or Disability, the
Stock Option shall thereupon automatically terminate, except that if the
Holder's employment is terminated by the Company or a Subsidiary without cause
or due to Normal Retirement, then the portion of such Stock Option which has
vested on the date of termination of employment may be exercised for the lesser
of three months after termination of employment or the balance of such Stock
Option's term.
(i) Additional Incentive Stock Option Limitation. In the case of an
Incentive Stock Option, the aggregate Fair Market Value of Stock (determined at
the time of grant of the Option) with respect to which Incentive Stock Options
become exercisable by a Holder during any calendar year (under all such plans of
the Company and its Parent and Subsidiary) shall not exceed $100,000.
(j) Buyout and Settlement Provisions. The Committee may at any time,
in its sole discretion, offer to buy out a Stock Option previously granted,
based upon such terms and conditions as the Committee shall establish and
communicate to the Holder at the time that such offer is made.
(k) Stock Option Agreement. Each grant of a Stock Option shall be
confirmed by, and shall be subject to the terms of, the Agreement executed by
the Company and the Holder.
6.3 Stock Reload Option. The Committee may also grant to the Holder
(concurrently with the grant of an Incentive Stock Option and at or after the
time of grant in the case of a Nonqualified Stock Option) a Stock Reload Option
up to the amount of shares of Stock held by the Holder for at least six months
and used to pay all or part of the exercise price of an Option and, if any,
withheld by the Company as payment for withholding taxes. Such Stock Reload
Option shall have an exercise price equal to the Fair Market Value as of the
date of the Stock Reload Option grant. Unless the Committee determines
otherwise, a Stock Reload Option may be exercised commencing one year after it
is granted and shall expire on the date of expiration of the Option to which the
Reload Option is related.
Section 7. Stock Appreciation Rights.
7.1 Grant and Exercise. The Committee may grant Stock Appreciation Rights
to participants who have been, or are being granted, Options under the Plan as a
means of allowing such participants to exercise their Options without the need
to pay the exercise price in cash. In the case of a Nonqualified Stock Option, a
Stock Appreciation Right may be granted either at or after the time of the grant
of such Nonqualified Stock Option. In the case of an Incentive Stock Option, a
Stock Appreciation Right may be granted only at the time of the grant of such
Incentive Stock Option.
7.2 Terms and Conditions. Stock Appreciation Rights shall be subject to the
following terms and conditions:
(a) Exercisability. Stock Appreciation Rights shall be exercisable as
shall be determined by the Committee and set forth in the Agreement, subject to
the limitations, if any, imposed by the Code, with respect to related Incentive
Stock Options.
(b) Termination. A Stock Appreciation Right shall terminate and shall
no longer be exercisable upon the termination or exercise of the related Stock
Option.
(c) Method of Exercise. Stock Appreciation Rights shall be exercisable
upon such terms and conditions as shall be determined by the Committee and set
forth in the Agreement and by surrendering the applicable portion of the related
Stock Option. Upon such exercise and surrender, the Holder shall be entitled to
receive a number of Option Shares equal to the SAR Value divided by the exercise
price of the Option.
(d) Shares Affected Upon Plan. The granting of a Stock Appreciation
Right shall not affect the number of shares of Stock available under for awards
under the Plan. The number of shares available for awards under the Plan will,
however, be reduced by the number of shares of Stock acquirable upon exercise of
the Stock Option to which such Stock Appreciation Right relates.
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Section 8. Restricted Stock.
8.1 Grant. Shares of Restricted Stock may be awarded either alone or in
addition to other awards granted under the Plan. The Committee shall determine
the eligible persons to whom, and the time or times at which, grants of
Restricted Stock will be awarded, the number of shares to be awarded, the price
(if any) to be paid by the Holder, the time or times within which such awards
may be subject to forfeiture (the "Restriction Period"), the vesting schedule
and rights to acceleration thereof, and all other terms and conditions of the
awards.
8.2 Terms and Conditions. Each Restricted Stock award shall be subject to
the following terms and conditions:
(a) Certificates. Restricted Stock, when issued, will be represented
by a stock certificate or certificates registered in the name of the Holder to
whom such Restricted Stock shall have been awarded. During the Restriction
Period, certificates representing the Restricted Stock and any securities
constituting Retained Distributions (as defined below) shall bear a legend to
the effect that ownership of the Restricted Stock (and such Retained
Distributions), and the enjoyment of all rights appurtenant thereto, are subject
to the restrictions, terms and conditions provided in the Plan and the
Agreement. Such certificates shall be deposited by the Holder with the Company,
together with stock powers or other instruments of assignment, each endorsed in
blank, which will permit transfer to the Company of all or any portion of the
Restricted Stock and any securities constituting Retained Distributions that
shall be forfeited or that shall not become vested in accordance with the Plan
and the Agreement.
(b) Rights of Holder. Restricted Stock shall constitute issued and
outstanding shares of Common Stock for all corporate purposes. The Holder will
have the right to vote such Restricted Stock, to receive and retain all regular
cash dividends and other cash equivalent distributions as the Board may in its
sole discretion designate, pay or distribute on such Restricted Stock and to
exercise all other rights, powers and privileges of a holder of Common Stock
with respect to such Restricted Stock, with the exceptions that (i) the Holder
will not be entitled to delivery of the stock certificate or certificates
representing such Restricted Stock until the Restriction Period shall have
expired and unless all other vesting requirements with respect thereto shall
have been fulfilled; (ii) the Company will retain custody of the stock
certificate or certificates representing the Restricted Stock during the
Restriction Period; (iii) other than regular cash dividends and other cash
equivalent distributions as the Board may in its sole discretion designate, pay
or distribute, the Company will retain custody of all distributions ("Retained
Distributions") made or declared with respect to the Restricted Stock (and such
Retained Distributions will be subject to the same restrictions, terms and
conditions as are applicable to the Restricted Stock) until such time, if ever,
as the Restricted Stock with respect to which such Retained Distributions shall
have been made, paid or declared shall have become vested and with respect to
which the Restriction Period shall have expired; (iv) a breach of any of the
restrictions, terms or conditions contained in this Plan or the Agreement or
otherwise established by the Committee with respect to any Restricted Stock or
Retained Distributions will cause a forfeiture of such Restricted Stock and any
Retained Distributions with respect thereto.
(c) Vesting; Forfeiture. Upon the expiration of the Restriction Period
with respect to each award of Restricted Stock and the satisfaction of any other
applicable restrictions, terms and conditions (i) all or part of such Restricted
Stock shall become vested in accordance with the terms of the Agreement, subject
to Section 11, below, and (ii) any Retained Distributions with respect to such
Restricted Stock shall become vested to the extent that the Restricted Stock
related thereto shall have become vested, subject to Section 11, below. Any such
Restricted Stock and Retained Distributions that do not vest shall be forfeited
to the Company and the Holder shall not thereafter have any rights with respect
to such Restricted Stock and Retained Distributions that shall have been so
forfeited.
Section 9. Deferred Stock.
9.1 Grant. Shares of Deferred Stock may be awarded either alone or in
addition to other awards granted under the Plan. The Committee shall determine
the eligible persons to whom and the time or times at which grants of Deferred
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Stock will be awarded, the number of shares of Deferred Stock to be awarded to
any person, the duration of the period (the "Deferral Period") during which, and
the conditions under which, receipt of the shares will be deferred, and all the
other terms and conditions of the awards.
9.2 Terms and Conditions. Each Deferred Stock award shall be subject to the
following terms and conditions:
(a) Certificates. At the expiration of the Deferral Period (or the
Additional Deferral Period referred to in Section 9.2 (d) below, where
applicable), share certificates shall be issued and delivered to the Holder, or
his legal representative, representing the number equal to the shares covered by
the Deferred Stock award.
(b) Rights of Holder. A person entitled to receive Deferred Stock
shall not have any rights of a stockholder by virtue of such award until the
expiration of the applicable Deferral Period and the issuance and delivery of
the certificates representing such Stock. The shares of Stock issuable upon
expiration of the Deferral Period shall not be deemed outstanding by the Company
until the expiration of such Deferral Period and the issuance and delivery of
such Stock to the Holder.
(c) Vesting; Forfeiture. Upon the expiration of the Deferral Period
with respect to each award of Deferred Stock and the satisfaction of any other
applicable restrictions, terms and conditions all or part of such Deferred Stock
shall become vested in accordance with the terms of the Agreement, subject to
Section 11, below. Any such Deferred Stock that does not vest shall be forfeited
to the Company and the Holder shall not thereafter have any rights with respect
to such Deferred Stock.
(d) Additional Deferral Period. A Holder may request to, and the
Committee may at any time, defer the receipt of an award (or an installment of
an award) for an additional specified period or until a specified event (the
"Additional Deferral Period"). Subject to any exceptions adopted by the
Committee, such request must generally be made at least one year prior to
expiration of the Deferral Period for such Deferred Stock award (or such
installment).
Section 10. Other Stock-Based Awards.
10.1 Grant and Exercise. Other Stock-Based Awards may be awarded, subject
to limitations under applicable law, that are denominated or payable in, valued
in whole or in part by reference to, or otherwise based on, or related to,
shares of Common Stock, as deemed by the Committee to be consistent with the
purposes of the Plan, including, without limitation, purchase rights, shares of
Common Stock awarded which are not subject to any restrictions or conditions,
convertible or exchangeable debentures, or other rights convertible into shares
of Common Stock and awards valued by reference to the value of securities of or
the performance of specified Subsidiaries. Other Stock-Based Awards may be
awarded either alone or in addition to or in tandem with any other awards under
this Plan or any other plan of the Company.
10.2 Eligibility for Other Stock-Based Awards. The Committee shall
determine the eligible persons to whom and the time or times at which grants of
such other stock-based awards shall be made, the number of shares of Common
Stock to be awarded pursuant to such awards, and all other terms and conditions
of the awards.
10.3 Terms and Conditions. Each Other Stock-Based Award shall be subject to
such terms and conditions as may be determined by the Committee and to Section
11, below.
Section 11. Accelerated Vesting and Exercisability.
If (i) any "person" (as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934 (the "Exchange Act"), is or becomes the
"beneficial owner" (as referred in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 25% or more of the
combined voting power of the Company's then outstanding securities in one or
more transactions, or (ii) during any period of two consecutive years,
individuals who at the beginning of such period constitute the board of
directors cease for
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any reason to constitute at least a majority thereof, unless the election of
each director who was not a director at the beginning of such period has been
approved in advance by directors representing at least two-thirds of the
directors then in office who were directors at the beginning of the periods,
then, the vesting periods of any and all Options and other awards granted and
outstanding under the Plan shall be accelerated and all such Options and awards
will immediately and entirely vest, and the respective holders thereof will have
the immediate right to purchase and/or receive any and all Stock subject to such
Options and awards on the terms set forth in this Plan and the respective
agreements respecting such Options and awards.
Section 12. Amendment and Termination.
The Board may at any time, and from time to time, amend alter, suspend or
discontinue any of the provisions of the Plan, but no amendment, alteration,
suspension or discontinuance shall be made which would impair the rights of a
Holder under any Agreement theretofore entered into hereunder, without the
Holder's consent.
Section 13. Term of Plan.
13.1 Effective Date. The Plan shall be effective as of May 1, 1999
("Effective Date"), subject to the approval of the Plan by the Company's
stockholders within one year after the Effective Date. Any awards granted under
the Plan prior to such approval shall be effective when made (unless otherwise
specified by the Committee at the time of grant), but shall be conditioned upon,
and subject to, such approval of the Plan by the Company's stockholders and no
awards shall vest or otherwise become free of restrictions prior to such
approval.
13.2 Termination Date. Unless terminated by the Board, this Plan shall
continue to remain effective until such time no further awards may be granted
and all awards granted under the Plan are no longer outstanding. Notwithstanding
the foregoing, grants of Incentive Stock Options may only be made during the ten
year period following the Effective Date.
Section 14. General Provisions.
14.1 Written Agreements. Each award granted under the Plan shall be
confirmed by, and shall be subject to the terms of the Agreement executed by the
Company and the Holder. The Committee may terminate any award made under the
Plan if the Agreement relating thereto is not executed and returned to the
Company within 10 days after the Agreement has been delivered to the Holder for
his or her execution.
14.2 Unfunded Status of Plan. The Plan is intended to constitute an
"unfunded" plan for incentive and deferred compensation. With respect to any
payments not yet made to a Holder by the Company, nothing contained herein shall
give any such Holder any rights that are greater than those of a general
creditor of the Company.
14.3 Employees.
(a) Engaging in Competition With the Company. In the event a Holder's
employment with the Company or a Subsidiary is terminated for any reason
whatsoever, and within twenty-four months after the date thereof such Holder
accepts employment with any competitor of, or otherwise engages in competition
with, the Company, the Committee, in its sole discretion, may require such
Holder to return to the Company the economic value of any award which was
realized or obtained by such Holder at any time during the period beginning on
that date which is six months prior to the date of such Holder's termination of
employment with the Company.
(b) Termination for Cause. The Committee may, in the event a Holder's
employment with the Company or a Subsidiary is terminated for cause, annul any
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award granted under this Plan to such employee and, in such event, the
Committee, in its sole discretion, may require such Holder to return to the
Company the economic value of any award which was realized or obtained by such
Holder at any time during the period beginning on that date which is six months
prior to the date of such Holder's termination of employment with the Company.
(c) No Right of Employment. Nothing contained in the Plan or in any
award hereunder shall be deemed to confer upon any Holder who is an employee of
the Company or any Subsidiary any right to continued employment with the Company
or any Subsidiary, nor shall it interfere in any way with the right of the
Company or any Subsidiary to terminate the employment of any Holder who is an
employee at any time.
14.4 Investment Representations. The Committee may require each person
acquiring shares of Stock pursuant to a Stock Option or other award under the
Plan to represent to and agree with the Company in writing that the Holder is
acquiring the shares for investment without a view to distribution thereof.
14.5 Additional Incentive Arrangements. Nothing contained in the Plan shall
prevent the Board from adopting such other or additional incentive arrangements
as it may deem desirable, including, but not limited to, the granting of Stock
Options and the awarding of stock and cash otherwise than under the Plan; and
such arrangements may be either generally applicable or applicable only in
specific cases.
14.6 Withholding Taxes. Not later than the date as of which an amount must
first be included in the gross income of the Holder for Federal income tax
purposes with respect to any option or other award under the Plan, the Holder
shall pay to the Company, or make arrangements satisfactory to the Committee
regarding the payment of, any Federal, state and local taxes of any kind
required by law to be withheld or paid with respect to such amount. If permitted
by the Committee, tax withholding or payment obligations may be settled with
Common Stock, including Common Stock that is part of the award that gives rise
to the withholding requirement. The obligations of the Company under the Plan
shall be conditioned upon such payment or arrangements and the Company or the
Holder's employer (if not the Company) shall, to the extent permitted by law,
have the right to deduct any such taxes from any payment of any kind otherwise
due to the Holder from the Company or any Subsidiary.
14.7 Governing Law. The Plan and all awards made and actions taken
thereunder shall be governed by and construed in accordance with the laws of the
State of Colorado (without regard to choice of law provisions).
14.8 Other Benefit Plans. Any award granted under the Plan shall not be
deemed compensation for purposes of computing benefits under any retirement plan
of the Company or any Subsidiary and shall not affect any benefits under any
other benefit plan now or subsequently in effect under which the availability or
amount of benefits is related to the level of compensation (unless required by
specific reference in any such other plan to awards under this Plan).
14.9 Non-Transferability. Except as otherwise expressly provided in the
Plan or the Agreement, no right or benefit under the Plan may be alienated,
sold, assigned, hypothecated, pledged, exchanged, transferred, encumbranced or
charged, and any attempt to alienate, sell, assign, hypothecate, pledge,
exchange, transfer, encumber or charge the same shall be void.
14.10 Applicable Laws. The obligations of the Company with respect to all
Stock Options and awards under the Plan shall be subject to (i) all applicable
laws, rules and regulations and such approvals by any governmental agencies as
may be required, including, without limitation, the Securities Act of 1933, as
amended, and (ii) the rules and regulations of any securities exchange on which
the Stock may be listed.
14.11 Conflicts. If any of the terms or provisions of the Plan or an
Agreement (with respect to Incentive Stock Options) conflict with the
requirements of Section 422 of the Code, then such terms or provisions shall be
deemed inoperative to the extent they so conflict with the requirements of said
Section 422 of the Code. Additionally, if this Plan or any Agreement does not
contain any provision required to be included herein under Section 422 of the
Code, such provision shall be deemed to be incorporated herein and therein with
the same force and effect as if such provision had been set out at length herein
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and therein. If any of the terms or provisions of any Agreement conflict with
any terms or provision of the Plan, then such terms or provisions shall be
deemed inoperative to the extent they so conflict with the requirements of the
Plan. Additionally, if any Agreement does not contain any provision required to
be included therein under the Plan, such provision shall be deemed to be
incorporated therein with the same force and effect as if such provision had
been set out at length therein.
14.12 Non-Registered Stock. The shares of Stock to be distributed under
this Plan have not been, as of the Effective Date, registered under the
Securities Act of 1933, as amended, or any applicable state or foreign
securities laws and the Company has no obligation to any Holder to register the
Stock or to assist the Holder in obtaining an exemption from the various
registration requirements, or to list the Stock on a national securities
exchange.
14.13 Cash-Out of Exercisable Options. In connection with the sale of
substantially all the assets of the Company or a merger or combination of the
Company with another entity where the Company is not the survivor, and the
transaction is approved by the Board of the Directors and the stockholders as
provided under applicable law, in the discretion of the Board of Directors, the
terms of the transaction may provide that any exercisable Award under the Plan
may be terminated as part of the transaction on payment of the value of the
Award on the consummation date of the transaction in cash and/or securities as
determined by the Board of Directors in their discretion.
Exhibit 99.1
DESCRIPTION OF DIRECTORS, OFFICERS AND
PRINCIPAL STOCKHOLDERS AND RELATED MATTERS
Directors and Officers
The persons listed below are the current directors and officers of the
Registrant.
Name Age Director Since Position
- ------ ---- -------------- ---------
Robert Landau 28 1999 President and Director
David Roff 28 1999 Treasurer and Director
Brice Scheschuk 28 1999 Secretary and Director
Glen Akselrod 30 1999 Director
Robert Landau is a co-founder of Level Jump and has been President
since its inception in March 1999. Mr. Landau is a co-founder of
thestockpage.com and has been President since its inception in August 1997. Mr.
Landau designed the first thestockpage.com web site and was one of the pioneers
of on-line investment newsletters. He has significant experience in capital
markets, Internet marketing, investor relations and web site design. Mr. Landau
is responsible for strategic direction and overall management of Level Jump and
thestockpage.com. He is also actively involved in sales to investor relations
clients. Prior to founding Level Jump and thestockpage.com, Mr. Landau worked
for Watson Wyatt from February 1995 to February 1998. Watson Wyatt is an
actuarial consultant to some of the largest pension plans in Canada. He has a
Bachelor of Commerce - Actuarial Science and Finance degree from the University
of Toronto in Toronto, Ontario, Canada.
David Roff, CA is a co-founder of Level Jump and has been Vice President
Operations and Administration since its inception in March 1999. Mr. Roff is a
co-founder of thestockpage.com and has been Vice President since its inception
in August 1997. Mr. Roff designed the marketing campaigns that resulted in
member growth to over 30,000 members. He has significant experience in Internet
marketing, capital markets and financial management. Mr. Roff is responsible for
human resources, administration and internal operations at Level Jump and
thestockpage.com. He is a Canadian Chartered Accountant and previously worked
for Coopers & Lybrand (now PricewaterhouseCoopers) Consulting in Toronto from
May 1995 to March 1998 where he advised large financial institutions, investment
fund complexes and other organizations on technology and internal control
strategies. Mr. Roff has a Bachelor of Arts degree from the University of
Western Ontario in London, Ontario, Canada.
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Brice Scheschuk, CA is a co-founder of Level Jump and has been Vice President
Finance since its inception March 1999. Mr. Scheschuk joined thestockpage.com in
August 1998 as Vice President Finance. Mr. Scheschuk has significant experience
in areas that include corporate finance, financial accounting, internal control
and taxation. He is a Canadian Chartered Accountant and previously worked for
Coopers & Lybrand (now PricewaterhouseCoopers) Consulting from May 1994 to
August 1998 in Boston and Toronto where he advised large banks, broker/dealers
and investment fund complexes on business and operations strategy, risk
management, derivative products, internal control and compliance, technology and
business processes. Mr. Scheschuk has a Bachelor of Commerce First Class Honors
Finance degree from Dalhousie University in Halifax, Nova Scotia, Canada.
Glen Akselrod is a co-founder of Level Jump in March 1999 and is Vice President
in charge of thestockpage.com. Mr. Akselrod joined thestockpage.com in November
1998 as Vice President Investor Relations and oversaw the development and
co-branding of the revamped thestockpage.com web site, which was unveiled in
February 1999. Mr. Akselrod is responsible for investor relations at
thestockpage.com. Prior to joining thestockpage.com, he worked from October 1996
to October 1998 at Blair Insurance Company and from March 1995 to October 1996
at State Farm Insurance Company, two property and casualty insurers, as an
analyst. Mr. Akselrod has a Bachelor of Science - Actuarial Science and
Economics degree from the University of Toronto in Toronto, Ontario, Canada.
Management Employment Agreements and Compensation
On May 1, 1999, Level Jump and thestockpage.com signed written
employment agreements with Robert Landau and David Roff. Mr. Landau acts as the
president of the two companies and is compensated at an annual rate of $330,000.
Mr. Roff acts as the Vice President Operations and Administration and is
compensated at an annual rate of $256,000. Currently, each of these executives
has agreed to reduce their salaries to $60,000 under these agreements until the
time that Level Jump and thestockpage.com are funded in a manner to implement
the initial phases of their business plan
Each of the employment agreements provides for a five-year employment
term. Each executive will be paid the annual salary indicated and will receive
various benefits including four weeks paid vacation, medical, dental and
disability insurance and reimbursement for the premiums of term life insurance
in the face amount of $1,000,000. Each of the executives may engage in other
businesses, either individually or through partnerships or corporations in which
they have an interest, hold an office or serve on boards of directors. Certain
conflicts of interest may arise between the company and the executives. The
agreements may be terminated by the company or executives at any time, or upon a
showing of cause by the company or upon good reason by the executive. If
terminated by the company without reason, the company will pay the salary amount
for the full term of the agreement, otherwise if for cause by the company or
good reason by executives he will be paid one year's salary. Upon death or
disability, the executives will not be paid anything after the date of
termination. The executives are not subject to any non-competition or
non-disclosure obligations.
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Stock Options
The 1999 Performance Equity Plan of Level Jump will be adopted by the
Registrant. The amounts set forth below have been adjusted to reflect the
adoption of the plan. Currently the plan provides for 2,750,000 shares of Common
Stock to be reserved for issuance upon incentive or non-qualified stock options,
stock appreciation rights, restricted stock awards, deferred stock and other
stock based awards. Awards may be made to officers, directors, key employees and
consultants. The plan will terminate at such time as no further awards may be
granted and awards granted are no longer outstanding, provided incentive options
may only be granted until April 30, 2009. The plan is administered by the board
of directors. The board of directors, to the extent permitted by the provisions
of the plan, has the authority to determine the selection of participants,
allotment of shares, price, and other conditions of purchase of awards and
administration of the plan in order to attract and retain persons instrumental
to the success of the company.
Level Jump has granted stock options under the plan to its executive
officers as follows:
Name Number of Stock Vesting Date Expiration Exercise
Options Date Price
Robert Landau 123,750 May 1, 1999 April 30, 2004 $1.00
123,750 May 1, 2000 April 30, 2005 $1.25
123,750 May 1, 2001 April 30, 2006 $1.50
123,750 May 1, 2002 April 30, 2007 $1.75
123,750 May 1, 2003 April 30, 2008 $2.00
David Roff 82,500 May 1, 1999 April 30, 2004 $1.00
82,500 May 1, 2000 April 30, 2005 $1.25
82,500 May 1, 2001 April 30, 2006 $1.50
82,500 May 1, 2002 April 30, 2007 $1.75
82,750 May 1, 2003 April 30, 2008 $2.00
Brice Scheschuk 34,375 May 1, 1999 April 30, 2004 $1.00
34,375 May 1, 2000 April 30, 2005 $1.25
34,375 May 1, 2001 April 30, 2006 $1.50
34,375 May 1, 2002 April 30, 2007 $1.75
34,375 May 1, 2003 April 30, 2008 $2.00
Glen Akselrod 34,375 May 1, 1999 April 30, 2004 $1.00
34,375 May 1, 2000 April 30, 2005 $1.25
34,375 May 1, 2001 April 30, 2006 $1.50
34,375 May 1, 2002 April 30, 2007 $1.75
34,375 May 1, 2003 April 30, 2008 $2.00
Total 1,375,000
The other plans of the Company have been or will be terminated.
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Remuneration of the Board of Directors
Directors who are not employees currently do not receive any
compensation for their duties as directors. All directors are reimbursed for any
actual expense incurred in attending meetings of the board of directors.
Keyman Life Insurance
Level Jump does not presently own life insurance covering the death of
any officer, director or key employee.
Voting Agreements related to Registrant Common Stock
ZDG Holdings Inc., a corporation wholly owned by Marnie Miller, the
spouse of Robert Landau, and of which Mr. Robert Landau is the sole director and
president, entered into a Voting Agreement with each of Brice Scheschuk and Glen
Akselrod relating to 504,000 shares of Common Stock of the Registrant. These
agreements give ZDG the right to vote all the shares of Common Stock and any
other securities issued by right of the Common Stock on all matters that may be
presented to the voting securities holders of the Registrant, as it decides in
its sole discretion. The term of these Voting Agreements ends on October 26,
2004.
David Roff entered into a Voting Agreement with each of Brice Scheschuk
and Glen Akselrod relating to 336,000 shares of Common Stock of the Registrant.
These agreements give Mr. Roff the right to vote all the shares of Common Stock
and any other securities issued by right of the Common Stock on all matters that
may be presented to the voting securities holders of the Registrant, as he
decides in his sole discretion. The term of these Voting Agreements ends on
October 26, 2004.
Inter-Stockholder Option Agreements
ZDG Holdings Inc., a corporation wholly owned by Marnie Miller, the
spouse of Robert Landau, and of which Robert Landau is the sole director and
president, entered into an Option Agreement with each of Brice Scheschuk and
Glen Akselrod. Under these agreements, ZDG has the right to acquire at any time,
in whole or in part, up to an aggregate of 504,000 shares of Common Stock of the
Registrant. The option may be exercised for $0.25 per share, until October 26,
2004.
David Landau entered into an Option Agreement with each of Brice
Scheschuk and Glen Akselrod. Under these agreements, Mr. Roff has the right to
acquire at any time, in whole or in part, up to an aggregate of 336,000 shares
of Common Stock of the Registrant. The option may be exercised for $0.25 per
share, until October 26, 2004.
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CERTAIN TRANSACTIONS
On June 1, 1999, Level Jump acquired all the issued and outstanding
common shares of thestockpage.com.
Transaction Mechanics
The acquisition comprised the following elements:
o The articles of incorporation of thestockpage.com were amended to create a
class of non-voting Exchangeable Shares without nominal or par value,
o Level Jump amended its charter to create two classes of Preferred Stock,
Class A Preferred Stock and Class B Preferred Stock, and thestockpage.com
subscribed for and was issued one share of each such class,
o thestockpage.com purchased from Messrs. Landau and Roff, the two previous
common shareholders of thestockpage.com, for cancellation all the issued
and outstanding common shares of thestockpage.com for consideration
consisting of 9,300,000 shares of Exchangeable Stock and the two shares of
Level Jump Preferred Stock referred to in b) above.
o Level Jump subscribed for and was issued 100 common shares of
thestockpage.com,
o Each of Messrs. Landau and Roff entered into a Voting and Exchange
Agreement with Level Jump and thestockpage.com, and
o Level Jump and thestockpage.com entered into a Support Agreement.
On October 14, 1999, Messrs. Landau and Roff agreed to modify the terms
of the Exchangeable Shares of thestockpage.com to reduce the number of
outstanding shares from 9,300,000 to 4,300,000 and modify the corresponding
agreements. In exchange for the modification, Messrs. Landau and Roff were
issued an aggregate of 5,000,000 shares a new class of Preference Shares, no par
value, of thestockpage.com ("Preference Shares").
Description of Securities of Level Jump Preferred Shares and thestockpage.com,
Exchangeable Shares
Voting Rights of Exchangeable Shares and Level Jump Preferred Stock
Holders of Exchangeable Shares will generally not be permitted to vote
at meetings of the shareholders of thestockpage.com (except, where required by
law, as a separate class). Level Jump will be the only voting shareholder of
thestockpage.com.
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Each share of the Class A Preferred Stock and Class B Preferred Stock
of Level Jump (the " Special Voting Shares" ) will in the aggregate carry the
number of votes, exercisable at any meeting at which Level Jump stockholders are
entitled to vote or in a consent action, the number of votes equal to the number
of outstanding Exchangeable Shares not owned by Level Jump or its subsidiaries
and affiliates Except as to matters on which applicable law or Articles of
Incorporation require a separate vote, the Special Voting Shares will vote with
the Common Stock as a single class.
Level Jump will send to the holders of Special Voting Shares the notice
of each meeting at which Level Jump stockholders are entitled to vote, together
with the related meeting materials, at the same time as Level Jump sends such
notice and materials to the Level Jump stockholders. Level Jump will also send
to the holders of Special Voting Shares copies of all information statements,
interim and annual financial statements, reports and other materials sent by
Level Jump to the Level Jump stockholders at the same time as such materials are
sent to the Level Jump stockholders.
All rights of a holder of Special Voting Shares to exercise votes
attached to the Special Voting Shares will cease upon the exchange, redemption
or other cancellation of Exchangeable Shares for shares of Common Stock.
Dividend Rights of the Exchangeable Shares
Under the share provisions of the Exchangeable Shares, holders of
Exchangeable Shares will be entitled to receive dividends which are intended, so
far as possible, to be functionally and economically equivalent to those
declared on Level Jump shares of Common Stock. The record date for the
determination of the holders of Exchangeable Shares entitled to receive payment
of, and the payment date for, any dividend declared on Exchangeable Shares shall
be the same dates as the record date and payment date, respectively, for the
corresponding dividend on Level Jump shares of Common Stock.
Retraction Rights of the Exchangeable Shares
Pursuant to the share provisions of the Exchangeable Shares, subject to
applicable law and an overriding retraction call right of Level Jump described
below, holders of Exchangeable Shares shall be entitled at any time to require
thestockpage.com to retract any or all such Exchangeable Shares and to receive,
for each Exchangeable Share, an amount equal to the market price of a share of
Level Jump Common Stock, plus an additional amount equal to declared and unpaid
dividends which shall be satisfied by Level Jump causing to be delivered to such
holder one share of Level Jump Common Stock for each such Exchangeable Share and
paying to such holder the amount in respect of declared and unpaid dividends.
Upon receipt of a retraction request, the stockpage.com shall
immediately notify Level Jump of such request. Level Jump shall thereafter have
two business days in which to notify thestockpage.com that it intends to
exercise its overriding retraction call right to purchase all, but not less than
all, of the Exchangeable Shares submitted by the holder thereof for retraction.
The purchase price for each such Exchangeable Share purchased by Level Jump
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shall be an amount equal to the market price of a share of Common Stock, plus an
additional amount equal to declared and unpaid dividends, and shall be satisfied
by Level Jump causing to be delivered to such holder one share of Level Jump
Common Stock for each such Exchangeable Share and paying to such holder the
amount in respect of the declared and unpaid dividends.
Liquidation Exchange Rights related to the Exchangeable Shares
Pursuant to each Voting and Exchange Agreement, upon the occurrence and
during the continuance of an Insolvency Event, with respect to thestockpage.com,
a holder of Exchangeable Shares may require Level Jump to purchase any or all of
the Exchangeable Shares held by the holder. Insolvency Event is defined to
include (i) any insolvency or bankruptcy proceeding instituted by or against
thestockpage.com, including any such proceeding under the Companies Creditors
Arrangement Act (Canada) and the Bankruptcy and Insolvency Act (Canada), (ii)
the admission in writing by the stockpage.com of its inability to pay its debts
generally as they become due and (iii) the inability of thestockpage.com, as a
result of solvency requirements of applicable law, to redeem any Exchangeable
Shares tendered for retraction. Immediately upon the occurrence of an Insolvency
Event or any event which may, with the passage of time or the giving of notice,
become an Insolvency Event, thestockpage.com and/or Level Jump will give written
notice thereof to the holders of Exchangeable Shares.
Level Jump is granted the overriding right, in the event of and
notwithstanding the proposed voluntary or involuntary liquidation, dissolution
or winding-up of thestockpage.com, to purchase all, but not less than all, of
the Exchangeable Shares then outstanding and, upon the exercise by Level Jump of
such right, the holders of Exchangeable Shares will be obligated to sell such
shares to Level Jump The purchase by Level Jump of all the outstanding
Exchangeable Shares upon the exercise of such right will occur on the effective
time of the voluntary or involuntary liquidation, dissolution or winding-up of
thestockpage.com. The purchase price payable by Level Jump for each Exchangeable
Share will be equal to the market price of a share of Level Jump common stock as
of the last business day immediately prior to the effective time of such
voluntary or involuntary liquidation, dissolution or winding up of
thestockpage.com plus an additional amount equal to declared and unpaid
dividends and shall be satisfied by Level Jump causing to be delivered to such
holder one share of Level Jump Common Stock for each such Exchangeable Share and
paying to such holder the amount in respect of declared and unpaid dividends.
If, as a result of solvency provisions of applicable law,
thestockpage.com is unable to redeem all Exchangeable Shares specified in a
retraction request and provided that Level Jump has not exercised its retraction
call right with respect to such shares and the holder of Exchangeable Shares has
not revoked the retraction request, the holder will be deemed to have exercised
his right to require Level Jump to purchase the Exchangeable Shares and Level
Jump will be required to purchase such shares from the holder in the manner set
forth above.
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Automatic Exchange Rights in the Event of the Insolvency of Level Jump Related
to the Exchangeable Shares
Under each Voting and Exchange Agreement, in the event of the voluntary
or involuntary liquidation, dissolution or winding-up of Level Jump, Level Jump
will be required to purchase each outstanding Exchangeable Share for a purchase
price equal to the market price of a share of Level Jump Common Stock as of the
last business day immediately prior to the effectiveness of such voluntary or
involuntary liquidation, dissolution or winding up of Level Jump, plus an
additional amount equal to declared and unpaid dividends, which shall be
satisfied by Level Jump causing to be delivered to such holder one share of
Level Jump Common Stock for each such Exchangeable Share and paying to such
holder the amount in respect of declared and unpaid dividends.
Certain Restrictions of the Exchangeable Shares
While any of the Exchangeable Shares are outstanding, and dividends
thereon resulting from distribution by Level Jump are unpaid, thestockpage.com
cannot, without the approval of the holders of two-thirds of the Exchangeable
Shares obtained under Ontario Law, take any of the following actions:
o pay dividends on the common stock or other junior ranking shares,
redeem, retract or purchase or make a capital distribution on the
common stock or other junior ranking shares,
o redeem or purchase any other shares of thestockpage.com ranking equally
with or junior to the Exchangeable Shares with respect to the payment
of dividends, or
o issue any Exchangeable Shares or other equally ranking shares, other
than as required upon a dividend or distribution by Level Jump.
Anti-dilution Rights of the Exchangeable Shares
The Exchangeable Shares are subject to adjustment as to number based
upon changes in the capitalization of Level Jump, in the event of stock
dividends or split-ups and are exchangeable into any securities into which the
Common Stock of Level Jump is converted in connection with any merger or
combination. In addition the Exchangeable Shares are entitled to receive the
cash equivalent of any property distributed on the Common Stock of Level Jump or
securities distributed in respect of the Common Stock of Level Jump.
Support Agreement Related to the Exchangeable Shares
Level Jump and thestockpage.com have entered into a Support Agreement.
The Support Agreement provides that no dividends will be declared or paid on the
Level Jump Common Stock unless thestockpage.com simultaneously declares and pays
an economically equivalent dividend (after appropriate adjustments for currency
translations) on the Exchangeable Shares. The Support Agreement also provides
that Level Jump will do all things necessary to ensure that thestockpage.com
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will be able to make all payments on the Exchangeable Shares required in the
event of the liquidation, dissolution or winding-up of thestockpage.com or the
retraction of Exchangeable Shares by a holder.
The Support Agreement also provides that, without the prior approval of
thestockpage.com and the holders of the Exchangeable Shares, Level Jump will not
distribute additional Level Jump Common Stock or rights to subscribe therefor or
other assets or evidences of indebtedness to all or substantially all holders of
Level Jump common stock nor change the Level Jump Common Stock nor effect any
reorganization or other transaction affecting the Level Jump Common Stock,
unless the same or an economically equivalent distribution on, or change to, the
Exchangeable Shares (or in the rights of the holders thereof) is made
simultaneously.
The Support Agreement also provides that so long as there remain
outstanding any Exchangeable Shares not owned by Level Jump or any of its
affiliates, Level Jump will be and remain the direct or indirect beneficial
owner of all outstanding shares of thestockpage.com other than the Exchangeable
Shares.
With the exception of administrative changes for the purposes of adding
covenants for the protection of the holder of the Exchangeable Shares, making
certain necessary amendments or curing ambiguities or clerical errors (in each
case provided that the board of directors of each of Level Jump and
thestockpage.com is of the opinion that such amendments are not prejudicial to
the interests of the holders of the Exchangeable Shares), the Support Agreement
may not be amended without the approval of the holders of the Exchangeable
Shares.
Level Jump has agreed that it will not, and it will cause its
subsidiaries and affiliates not to, exercise any voting rights attached to
Exchangeable Shares owned by it or any of its subsidiaries or affiliates on any
matter considered at meetings of holders of Exchangeable Shares (including any
approval sought from such holders in respect of matters arising under the
Support Agreement).
Voting and Exchange Agreements Relating to the Exchangeable Shares
Level Jump and thestockpage.com have entered into a Voting and Exchange
Agreement with each of Robert Landau and David Roff, pursuant to which each of
Mr. Landau and Mr. Roff will be granted (i) voting rights with respect to
matters presented to stockholders and (ii) rights relating to the exchange of
Exchangeable Shares for shares of Common Stock.
Preference Shares
The Preference Shares of thestockpage.com include 5,000,000 issued and
outstanding shares. These shares do not have any voting rights except as
required by law, but they are entitled to receive notice of all meetings of the
stockholders of thestockpage.com called to approve a termination of the company
or sale of substantially all the assets. The Preference Shares are entitled to
receive dividends, subject to the prior rights of the Exchangeable Shares, at
the non-cumulative rate of 12% per annum of the redemption amount, currently
CD$.265 per share ("Redemption Amount"), when and as declared by the board of
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directors. The Preference Shares are subject to redemption by thestockpage.com,
in whole or in part upon payment of the Redemption Amount and declared but
unpaid dividends. In the event of a liquidation, dissolution or winding-up of
thestockpage.com, subject to the rights of higher ranking shares, the Preference
Shares are entitled to payment of the Redemption Amount prior to any payment in
respect of junior ranking securities. Each holder of the Preference Shares has
the right, at any time, in whole or in part, to have thestockpage.com redeem
them at the Redemption Price.
BENEFICIAL OWNERSHIP OF PRINCIPAL STOCKHOLDERS
The following table sets forth, the name, number of shares beneficially
owned, and the percentage of the Registrant's total outstanding Common Stock
owned by (i) each of the officers and directors of the Registrant after the
Exchange Transaction, (ii) the officers and directors as a group after the
Exchange Transaction, and (iii) each person known to be the beneficial owner of
more than 5% of the total outstanding shares of Common Stock. The number of
shares and percentages in the table are calculated as if the 1999 Performance
Equity Plan of Level Jump has been assumed by the Registrant and represents
2,750,000 shares of Common Stock of the Registrant. It also assumes that the
Registrant has assumed the obligations of Level Jump under the Series A
Preferred Stock and Series B Preferred Stock and Voting and Exchange Agreements,
Support Agreements and Section 85(1) Rollover Agreements relating to such
preferred stock which will obligate it to issue an aggregate of 5,912,500 shares
of Common Stock in the future.
Name Number of Shares Percentage
- ---- ---------------- ----------
ZDG Holdings Inc. (1) 7,059,573 61.2
David Roff (2) 4,712,000 45.7
Brice Scheschuk (3) 825,000 10.5
Glen Akselrod (4) 825,000 10.5
All officer and directors (5) 12,581,573 89.5
(1) Includes 3,547,500 shares which may be issued upon exercise of the
retraction rights of thestockpage.com Exchangeable Shares. Includes
252,000 shares subject to a voting agreement and an option agreement
with Mr. Brice Scheschuk and 252,000 shares subject to a voting
agreement and an option agreement with Mr. Glen Akselrod. Includes
780,573 shares owned by Mr. Landau and 123,750 shares subject to
currently exercisable options issued to Mr. Robert Landau under the
1999 Performance Equity Plan of Level Jump and excludes 495,000 shares
subject to options issued to Mr. Robert Landau under the plan which
vest in the future. ZDG Holdings Inc. is a corporation wholly owned by
the spouse of Mr. Landau, Ms. Marnie Miller. Mr. Landau is the sole
director and president of ZDG Holdings Inc. If the assumptions for this
table are not considered, ZDG has the authority to vote 2,607,750
shares and dispose of 2,103,750 shares and Mr. Landau has the authority
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to vote and dispose of 780,573 shares representing an aggregate voting
authority over 3,388,323 shares or 43.1% and an aggregate dispositive
authority over 2,884,323 shares.
(2) Includes 2,365,000 shares which may be issued upon exercise of the
retraction rights of thestockpage.com Exchangeable Shares. Includes
168,000 shares subject to a voting agreement and an option agreement
with Mr. Brice Scheschuk and 168,000 shares subject to a voting
agreement and an option agreement with Mr. Glen Akselrod. Includes
82,500 shares subject to currently exercisable options under the 1999
Performance Equity Plan of Level Jump and excludes 330,000 shares
subject to options under the plan which vest in the future. If the
assumptions for this table are not considered, Mr. Roff has the
authority to vote an aggregate of 2,264,500 shares or 28.9% and dispose
of an aggregate of 1,928,500 shares.
(3) Includes the 420,000 shares subject to voting agreements and option
agreements with ZDG Holdings Inc. and Mr. David Roff. Includes 34,375
shares subject to currently exercisable options under the 1999
Performance Equity Plan of Level Jump and excludes 137,500 shares
subject to options under the plan which vest in the future. If the
assumptions for this table are not considered, Mr. Scheschuk has the
authority to vote an aggregate of 370,625 shares or 4.7 % and dispose
of an aggregate of 790,625 shares.
(4) Includes 420,000 shares subject to voting agreements and option
agreements with ZDG Holdings Inc. and Mr. David Roff. Includes 34,375
shares subject to currently exercisable options under the 1999
Performance Equity Plan of Level Jump and excludes 137,500 shares
subject to options under the plan which vest in the future. If the
assumptions for this table are not considered, Mr. Akselrod has the
authority to vote an aggregate of 370,625 shares or 4.7% and dispose
of an aggregate of 790.625 shares.
(5) Includes 275,000 shares subject to currently exercisable options under
the 1999 Performance Equity Plan of Level Jump and excludes 1,100,000
shares subject to options under the plan which vest in the future. If
the assumptions for this table are not considered, all the directors
and officers have the authority to vote 6,394,073 shares or 81.3%.
11
Exhibit 99.2
STATEMENT OF RISK FACTORS
We have a limited operating history on which to base an investment decision.
Our prospects must be considered in light of the risks, expenses and
difficulties frequently encountered by companies in their early stage of
development, particularly companies in new and rapidly evolving markets such as
Internet-based services. To address these risks, we must, among other things,
maintain and increase the customer base, maintain and develop relationships with
suppliers of financial data and content, implement and successfully execute the
business and marketing strategy, continue to develop and upgrade technology and
systems, improve the web site, provide superior functionality for users, respond
to competitive developments and attract, retain and motivate qualified
personnel. There can be no assurance that we will be successful in addressing
such risks. We have a limited operating history on which to base an evaluation
of our business and prospects.
We anticipate negative cash flow in the near future.
We intend to expend significant financial and management resources on
brand development, marketing and promotion, web site development, strategic
relationships, technology and operating infrastructure. As a result, we will
incur losses and negative cash flow from operations. There can be no assurance
that our revenues will increase or even continue at their current level or that
we will achieve or maintain profitability or generate cash from operations in
future periods. Our current and future expense levels are fixed to a large
extent and are based on our proposed operating plans and estimates of future
revenues. We may be unable to adjust spending in a timely manner to compensate
for any unexpected revenue shortfall. In view of the rapidly evolving nature of
our business and the limited operating history, we are unable to accurately
forecast its revenues.
Because of many factors, we believe our future operating results will be
unpredictable.
We expect to experience significant fluctuations in revenues due to a
variety of factors, many of which are outside our control. These factors
include:
(i) Our ability to attract new investor relations customers at a
steady rate;
(ii) the ability to sell a second investor relations service and
maintain customer satisfaction;
(iii) the announcement or introduction of new sites, services and
products and our competitors;
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(iv) price competition;
(v) Our ability to upgrade and develop systems and infrastructure
and attract new personnel in a timely and effective manner;
(vi) the level of traffic on our web sites;
(vii) the failure to close or the termination of any strategic
marketing alliances pursuant to which we have exposure to
traffic on third-party web sites;
(viii) technical difficulties, system downtime or Internet brownouts;
(ix) the failure of Internet bandwidth to increase significantly
over time and/or an increase in the cost to consumers of
obtaining or utilizing Internet bandwidth;
(x) the amount and timing of operating costs and capital
expenditures relating to expansion of our business, operations
and infrastructure; and
(xi) general economic conditions and economic conditions specific
to the Internet sectors in which we operate.
We believe it is necessary to establish brand recognition which is difficult and
costly.
We believe that establishing, maintaining and enhancing Level Jump's
and thestockpage.com's brand is a critical aspect of its efforts to attract and
expand our online traffic. The growing number of Internet sites that offer
competing products and services increase the importance of establishing and
maintaining brand name recognition. Promotion of our brands will depend largely
on successful advertising and public relations campaigns as well as providing a
high quality online experience to users. In addition, to attract and retain
online users and to promote and maintain our brands in response to competitive
pressures, we may find it necessary to increase substantially its financial
commitment to creating and maintaining a strong brand loyalty among users. If we
are unable to provide high quality online services or otherwise fails to promote
and maintain our brand, or if we incur excessive expenses in an attempt to
promote and maintain its brand, our business, financial condition and results of
operations would be materially adversely affected.
Although we intent to seek trademark and service mark protection and employ
other intellectual property protections, these may not be adequate to protect
our rights.
We intend to register "Level Jump" and "thestockpage.com" as trademarks
or service marks in the United States, Canada, Europe and other jurisdictions.
We will actively protect and police the use of its service marks, trademarks,
trade dress, trade secrets and similar intellectual property critical to our
success. We rely on trademark and copyright law, trade secret protection and
confidentiality and/or license agreements with employees, customers, partners
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and others to protect our proprietary rights. Effective trademark, service mark,
copyright and trade secret protection may not be available in every country in
which Level Jump's services are made available online. There can be no assurance
that the steps taken by us to protect our proprietary rights will be adequate or
that third parties will not infringe or misappropriate our copyrights,
trademarks, trade dress and similar proprietary rights. In addition, it is
possible that other parties will assert infringement claims against us. We are
not currently aware of any legal proceedings relating to trademarks and
proprietary rights pending against us.
We are dependent on our key personnel, and if they are unavailable to us, our
business will be adversely affected.
We are dependent upon the continuing services of Messrs. Landau, Roff,
Scheschuk and Akselrod, the principal officers of our company. Without their
services, the growth, progress, and overall success of our company will be
adversely affected.
We will need to add new employees which may be difficult because of competition
in our business segment is strong and which may unduly strain our current
management resources.
Our plan calls for expanded operations to grow the member base and
number of investor relations clients. This is expected to place a significant
strain on our managerial and operational resources. We will have to hire new
employees in key managerial, technical and operations positions, all of whom
require time to become fully integrated. To manage the expected growth of its
operations and personnel, we will have to improve existing and implement new web
development and database development tools and skills, operational and financial
systems, procedures and controls, and to expand, train and manage a growing
employee base, including its finance, administrative and operations staff. Our
current or planned personnel, systems, procedures and controls may not be
adequate to support our future operations. Management may not be able to hire,
train, retain, motivate and manage required personnel. Our management may not be
able to successfully identify, manage and exploit existing and potential market
opportunities. If we are unable to manage growth effectively, our business,
financial condition and results of operations will be materially adversely
affected.
To the extent we acquire other operating businesses, we will encounter the risks
of their proper assimilation, our ability to divide resources adequately and
effectively control their operations.
Our business plan requires a broadened scope and content of the
financial portal and commercial services. We anticipate that some of this
expansion will be through the acquisition of other businesses. Any acquisition
will expose out company to a variety of risks including the following:
(i) those associated with the assimilation of new operations, web
sites and personnel;
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(ii) the diversion of resources from our existing businesses, web
sites and technologies;
(iii) the inability to generate revenues from new web sites
sufficient to offset associated acquisition costs; and
(iv) the maintenance of uniform standards, controls, procedures and
policies and the impairment of relationships with employees
and customers as a result of any integration of new management
personnel.
Acquisitions may also result in additional expenses associated with
amortization of acquired intangible assets or potential businesses. We may not
be successful in overcoming these risks or any other problems encountered in
connection with such acquisitions. Its inability to overcome the risks could
have a material adverse effect on our business, financial condition and results
of operations.
We do not anticipate paying any dividends.
We have not paid or declared any dividends. By reason of its present
financial status and its contemplated financial requirements, we do not
anticipate paying any dividends in the foreseeable future. The future payment of
dividends by our company on its common stock rests within the sole discretion of
the board of directors. Dividends will depend, on among other things, earnings,
capital requirements and financial condition.
The year 2000 issue may have an impact on our business due to factors not under
our control.
We have evaluated the potential impact of the situation commonly
referred to as the "Year 2000 Issue". The Year 2000 Issue concerns the inability
of information systems, whether due to computer hardware or software, to
properly recognize and process date sensitive information relating to the Year
2000 and beyond. To attempt to ensure that our computer systems will not be
disrupted by the Year 2000 Issue, we developed a plan to assess, and to fix
where necessary, any Year 2000 Issue with respect to our computer systems. We
have completed our determination and repair efforts on our internal computer
systems. We have sent correspondence to our Internet Service Provider and our
supplier of financial data and information to determine their status with
respect to the Year 2000 Issue. We do not currently have in place a contingency
plan of action in the event that the failure by one or more third parties to
make their computer systems Year 2000 Ready causes us to suffer material adverse
effects. We will consider on an ongoing basis whether such a contingency plan
should be developed.
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Because our business is dependant totally on the Internet, any failure of the
Internet will adversely impact our business.
The increased use of the Internet for retrieving, sharing and
transferring information between users and suppliers has only recently begun to
develop. Our success will depend in large part on continued growth in, and use
of, the Internet. Critical issues concerning the commercial use of the Internet,
including security, reliability, cost, ease of access, quality of service and
bandwidth availability, remain unresolved and are likely to affect the
development of the market for our services. Demand and market acceptance of the
Internet are subject to a high level of uncertainty and are dependent on a
number of factors, including the growth in consumer access to and acceptance of
new interactive technologies, the development of technologies that facilitate
interactive communication between organizations and targeted audiences and
increases in user bandwidth.
The recent growth in the use of the Internet has caused frequent
periods of performance degradation, requiring the upgrade of routers and
switches, telecommunications links and other components forming the
infrastructure of the Internet by Internet Service Providers and other
organizations with links to the Internet. Any perceived degradation in the
performance of the Internet as a whole could undermine the benefits of Level
Jump's services. By the year 2002, the number of devices equipped to tap into
the Internet may rise to 320 million, up from 69 million in 1997, according to
market researcher International Data Corp ("IDC"). Nearly 46 million people will
be buying goods and services over the net, up from 4 million who do so now. A
decade after that, IDC envisions 1 billion wired consumers. IBM researcher Steve
R. White expects 'flash crowds' to occur as more businesses mount widely
publicized online sales and other events. Our ability to increase the speed with
which it provides services to customers and to increase the scope of such
services ultimately is limited by and reliant upon the speed and reliability of
the networks operated by third parties. Consequently, the emergence and growth
of the market for our services is dependent on improvements being made to the
entire Internet infrastructure to alleviate overloading and congestion.
Because we currently have only one site, we believe we have unique exposure from
disruption on the Internet and from our service providers.
Our success, in particular its ability to successfully accommodate
members and provide high quality investor relations services, largely depends on
the efficient and uninterrupted operation of its computer and communications
systems. Substantially all of our development and management systems are located
at its Toronto, Ontario facility. We contract with a local Internet Service
Provider to host Level Jump's web site. The Internet Service Provider operates
at a single location in Toronto, Ontario. Our systems and operations are
vulnerable to damage or interruption from fire, flood, power loss,
telecommunications failure, break-ins, earthquake and similar events. We do not
have a formal disaster recovery plan and does not carry sufficient business
interruption insurance to compensate it for losses that may occur. Furthermore,
there can be no assurance that either our security mechanisms or those of other
suppliers will prevent security breaches or service breakdowns. Despite the
implementation of security measures by us, our servers may be vulnerable to
computer viruses, physical or electronic break-ins and similar disruptions,
which could lead to interruptions, delays, loss of data or the inability to
accept and fulfill customer orders.
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Because privacy is such a concern on the Internet, any breach of our members'
privacy will have an adverse effect on their willingness to use our web sites.
Consumers worry about protecting the privacy of their personal
information. Our sites may request that new members volunteer certain personal
information upon entering the site. An action on the part of a member may
trigger the gathering and creation of a member profile. Our customers and
visitors may not be given the opportunity to block the gathering of information
although, when they give it, they will be free to indicate how they would like
that information to be used (for instance, whether we should restrict its use to
internal purposes, whether it can be disseminated to external companies if
specific conditions are met, or whether it can be widely disseminated).
There are many web sites with financial services of one kind or another, each of
which offers competition to our services and which we must address.
Financial portals are new, rapidly evolving and intensely competitive,
and Level Jump expects competition to intensify in the future. Barriers to entry
are minimal and current and new competitors can launch new web sites at a
relatively low cost. In the online market, we compete with other financial
portals that maintain sites that offer varying degrees of financial content and
data as well as investment tools. Some popular vendors include Yahoo! Finance,
Altavista Finance, Etrade, Microsoft Network Money Central, Financial Web, and
The Stockgroup.
We believe that the principal competitive factors in its market are
brand recognition, financial services functionality, quality of site content,
ease of site layout, convenience, speed and accessibility. Many of Level Jump's
current and potential competitors have longer operating histories, larger
customer bases, greater brand recognition and significantly greater financial,
marketing and other resources than us. In addition, larger, well-established and
well-financed entities may acquire, invest in or form joint ventures with online
competitors as the use of the Internet and other online services increases. Some
of our competitors may be able to secure financial content from vendors on more
favorable terms, devote greater resources to marketing and promotional
campaigns, and devote substantially more resources to web site and systems
development than us.
In addition, companies that control access to the Internet through
network access or web browsers could promote our competitors or charge us a
substantial fee for inclusion in their service offerings. Increased competition
may result in loss of both market share and brand recognition.
Our business is subject to rapid technological change which if we do not keep up
with, we will suffer additional competition and may become obsolete.
To remain competitive, we must continue to enhance and improve the
responsiveness, functionality and features of our web site. The online financial
portal industry is characterized by rapid technological change, changes in user
and customer preferences, frequent new product and service introductions and the
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emergence of new industry standards and practices. Any of these could render our
existing web site and systems obsolete. Our success will depend on its ability
to both license and internally develop leading technologies useful in its
business, enhance its existing services, develop new services and technology
that address the increasingly sophisticated and varied needs of its prospective
customers, and respond to technological advances and emerging industry standards
and practices on a cost-effective and timely basis. If we are unable to adapt in
a timely manner to changing market conditions, user requirements or emerging
industry standards, our business, financial condition and results of operations
could be materially adversely affected.
If we are unable to obtain banner advertising or it is effectively filtered by
users of the Internet, our revenues will suffer from the lack of advertiser
appeal.
Banner advertising, from which we expect to derive some of our revenue
and a portion of our new customer leads, may not be an effective advertising
method in the future. There can be no assurance that any other forms of Internet
advertising will be developed or accepted by the market. Also, there can be no
assurance that we will effectively make any required transition to the marketing
and sale of other forms of online advertising. Moreover, "filter" software
programs that limit advertising from being delivered from a web site are
currently available. Failure to successfully develop alternative forms of online
advertising or widespread adoption of filter software could have an adverse
effect upon the Internet advertising market and our business, results of
operations and financial condition.
If we are unable to develop a large number of members or a sufficient community
of interest, our business will suffer.
A key element of our business strategy is to generate a high volume of
traffic to our web site. We seek members who register to use our site as well as
desire to establish a community of persons who refer to our site. Our revenues
depend on the number of members who use its web site to access the investment
newsletters and the company profiles. Accordingly, the satisfactory performance,
reliability and availability of our web sites, systems and network
infrastructure are critical to our reputation and our ability to attract and
retain members. Any systems interruptions that result in the unavailability of
our web sites or co-branded partners would reduce the attractiveness of our
product and service offerings. We have experienced periodic system
interruptions, which we believe will continue to occur from time to time. We are
continually enhancing and expanding its technology and systems, network
infrastructure and other technologies to accommodate a substantial increase in
the volume of traffic on our web sites. There can be no assurance that we will
be successful in these efforts or that we will be able to accurately project the
rate or timing of increases in the use of our web sites or timely expand and
upgrade our systems and infrastructure to accommodate increases. In addition,
there can be no assurance that additional network capacity will be available
from third party suppliers as it is needed.
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In the future some of our services may be regulated by governmental entities
which will impose an additional level of expense and heightened compliance
requirements, any failure of which will subject us to fines or possible
curtailment.
We are not currently subject to direct regulation by any domestic or
foreign governmental agency other than regulations applicable to businesses
generally and laws or regulations directly applicable to the provision of
investment services online. However, due to the increasing popularity and use of
the Internet and other online services, it is possible that a number of laws and
regulations may be adopted with respect to the Internet or other online services
covering issues such as user privacy, pricing, content, copyrights, distribution
and characteristics and quality of products and services. Furthermore, the
growth and development of the market for online financial information and
content may prompt calls for more stringent consumer protection laws that may
impose additional burdens on those companies conducting business online. The
adoption of certain additional laws or regulations may decrease the growth of
the Internet or other online services, which could, in turn, decrease the demand
for our products and services and increase our cost of doing business, or
otherwise have an adverse effect on our business, financial condition and
results of operations. Applicability to the Internet of existing laws governing
issues such as property ownership, copyrights and other intellectual property
issues, taxation, libel, obscenity and personal privacy is uncertain. The vast
majority of such laws were adopted prior to the advent of the Internet and
related technologies and, as a result, do not contemplate or address the unique
issues of the Internet and related technologies. Changes to such laws intended
to address these issues, including some recently proposed changes, could create
uncertainty in the Internet marketplace which could reduce demand for the our
services or increase our cost of doing business.
Many of the lines of business we are planning to enter are highly
regulated by a variety of bodies in the U.S. including the Securities and
Exchange Commission ("SEC") and National Association of Securities Dealers
("NASD") for broker/dealers, the Federal Reserve, Office of the Comptroller of
the Currency and State regulatory bodies for banks, and State regulatory bodies
for insurance companies. Regulation required extensive and costly compliance
with numerous rules and procedures and fiduciary duties to clients. Regulated
companies can incur losses resulting from breaches of regulatory duties.
Examples of losses and restrictions include:
o Legal claims for misconduct by brokers
o Revocation of licenses to do business for violation of rules
o Restrictions on the ability to grow business because of net capital
requirements.
Our business will depend on providing timely, respected and accurate
information. The failure to do this will result in traffic to our sites to
diminish and impair our financial results.
We believe that our future success will depend in part upon our ability
to deliver original and compelling descriptive content about financial markets,
industries and companies on the Internet. As a publisher of online content, we
face potential liability for defamation, negligence, copyright, patent or
trademark infringement or other claims based on the nature and content of
materials that we publish or distribute. In the event we implement a greater
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level of interconnectivity on our site, we will not and cannot practically
screen all of the content generated or accessed by users. Therefore we could be
exposed to liability with respect to such content. Although we will carry
general liability insurance, our insurance may not cover claims of these types
or may not be adequate to indemnify us for all liability that may be imposed.
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