EXHIBIT 10.15
SUPPORT AGREEMENT
SUPPORT AGREEMENT, dated as of May 16, 2000 (the "Agreement"), by and among
UNIVERSE2U INC., a Nevada Corporation, (formerly known as PAXTON MINING
CORPORATION and referred to herein as "Paxton"), 1418276 ONTARIO INC., an
Ontario Corporation ("Newco"), and ANGELO BOUJOS, JOSIE BOUJOS, JOSIE BOUJOS, in
trust, BILL MCGILL AND ANDREW EYERS ( collectively, the "Sellers").
W I T N E S S E T H
WHEREAS, pursuant to a Stock Purchase Agreement, dated as of May 16, 2000 (the
"Purchase Agreement"), among Paxton, Newco, Universe2U Inc., an Ontario
corporation (the "Company"), and Sellers, the parties to the Purchase Agreement
have agreed, subject to the terms and conditions set forth therein, that Newco
will acquire from Sellers all of the issued and outstanding shares of the
Company, and Sellers shall receive Non-Voting Exchangeable Shares of Newco (the
"Newco Exchangeable Shares");
WHEREAS, Newco's Articles of Incorporation ("Newco's Articles") set forth the
rights, privileges, restrictions and conditions attaching to the Newco
Exchangeable Shares;
WHEREAS, on the date hereof, Paxton, Newco and Sellers have entered into a Share
Exchange Agreement (the "Share Exchange Agreement");
WHEREAS, Paxton is the registered and beneficial owner of all of the issued and
outstanding common shares of Newco (the "Newco Common Shares"); and
WHEREAS, the parties hereto desire to make appropriate provision and to
establish a procedure whereby Paxton will take certain actions to enable Newco
to make certain payments and to deliver common shares of Paxton, without par
value (the "Paxton Common Shares"), in satisfaction of the obligations of Newco
under Newco's Articles with respect to the payment and satisfaction of dividends
and the Liquidation Amount, all in accordance with Newco's Articles;
NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements herein contained, the parties agree as follows:
ARTICLE 1
DEFINITIONS
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1.1. Definitions. Capitalized terms used herein and not otherwise defined herein
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shall have the meanings ascribed thereto in Newco's Articles.
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ARTICLE 2
COVENANTS OF PAXTON AND NEWCO
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2.1. Funding of Newco. So long as any Newco Exchangeable Shares are outstanding
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and held by Sellers, Paxton shall:
(a) subject to Section 2.7 hereof, not declare or pay any dividend on the
Paxton Common Shares unless Newco shall on the same day (or if such
day is not a Business Day, the next succeeding day that is a Business
Day) declare or pay, as the case may be, a dividend on the Newco
Exchangeable Shares as required by the Newco Articles;
(b) subject to Section 2.7 hereof, advise Newco sufficiently in advance of
the declaration by Paxton of any dividend on the Paxton Common Shares
and take all such other actions as are necessary, in cooperation with
Newco, to ensure that the respective declaration date, record date and
payment date for a dividend on the Newco Exchangeable Shares shall be
the same day (or if such day is not a Business Day, then the next
succeeding day that is a Business Day) as the declaration date, record
date and payment date for the corresponding dividend on the Paxton
Common Shares;
(c) subject to Section 2.7 hereof, provide or cause to be provided to
Newco, by any means which Paxton deems appropriate from time to time,
such assets, funds and other property as may be necessary in order
that Newco will have sufficient assets, funds and other property
available to enable (i) the due declaration and the due and punctual
payment, in accordance with applicable law, of all dividends on the
Newco Exchangeable Shares in accordance with Newco's Articles and (ii)
the due performance by Newco of its obligatibns under this Agreement
and the Newco Articles;
(d) subject to Paxton's exercise of the Liquidation Call Right, take all
such actions and do all such things as are necessary or desirable to
enable and permit Newco, 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 Newco
Exchangeable Share upon the liquidation, dissolution or winding-up of
Newco, including all such actions and all such things as are necessary
or desirable to enable and permit Newco to deliver Paxton Common
Shares to the holders of Newco Exchangeable Shares in accordance with
the
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provisions of Newco's Articles; and
(e) subject to Paxton's exercise of the Retraction Call Right, take all
such actions and do all such things as are necessary or desirable to
enable and permit Newco, in accordance with applicable law, to pay and
otherwise perform its obligations with respect to the satisfaction of
the Retraction Price, including all such actions and all such things
as are necessary or desirable to enable and permit Newco to deliver
Paxton Common Shares to the holders of Newco Exchangeable Shares in
accordance with the provisions of Newco's Articles.
2.2. Segregation of Funds. (a) Upon Paxton providing or causing to be provided
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to Newco any funds, assets or other property in accordance with Section 2.1,
Newco shall deposit such funds in a separate account and segregate such assets
and other property, in each case for the benefit of holders from time to time of
the Newco Exchangeable Shares, and will use such funds, assets and other
property exclusively for the payment of dividends and the payment or other
satisfaction of the Liquidation Amount and the Retraction Price.
(b) Newco shall promptly return to Paxton or its designees, in accordance
with Paxton's directions, any Paxton Common Shares, assets, funds or other
property delivered to Newco pursuant to this Agreement if, after such delivery
has been made, Newco shall no longer be obligated to deliver such Paxton Common
Shares, assets, funds or other property, or any part thereof, to Sellers
pursuant to the provisions of Newco's Articles or applicable law.
2.3. Notification of Certain Events. In order to assist Paxton to comply with
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its obligations hereunder, Newco will give Paxton 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 Newco
to (i) institute voluntary liquidation, dissolution or winding-up
proceedings with respect to Newco or (ii) effect any other
distribution of the assets of Newco 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 the receipt by Newco of notice of, or
Newco otherwise becoming aware of, any instituted claim, suit,
petition or other proceedings with respect to the involuntary
liquidation, dissolution or winding-up of Newco or to effect any other
distribution of the assets of Newco among its
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shareholders for the purpose of winding-up its affairs;
(c) immediately, upon receipt by Newco of a Retraction Request; and
(d) as soon as practicable upon the issuance by Newco of any Newco
Exchangeable Shares or rights to acquire Newco Exchangeable Shares
(other than the issuance of Newco Exchangeable Shares pursuant to the
Purchase Agreement).
2.4. Delivery of Paxton Common Shares. In furtherance of its obligations under
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Section 2.1(d) hereof (but subject to the exercise by Paxton of the Liquidation
Call Right and the Retraction Call Right and the purchase of Newco Exchangeable
Shares by Paxton pursuant to Article 2 of the Share Exchange Agreement), upon
notice from Newco of any event which requires Newco to deliver Paxton Common
Shares to any holder of Newco Exchangeable Shares pursuant to Newco's Articles,
Paxton shall forthwith issue and deliver the requisite Paxton Common Shares to
Newco so that Newco can then deliver such shares to such holder of the
surrendered Newco Exchangeable Shares in accordance with Newco's Articles. All
such Paxton Common Shares shall be duly issued as fully paid and non-assessable
and shall be free and clear of any lien, claim or encumbrance. In consideration
of the delivery of such Paxton Common Shares by Paxton to Newco, Newco shall
deliver to Paxton one common share of Newco.
2.5. Paxton Not To Vote Newco Exchangeable Shares. Paxton covenants and agrees
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that it will appoint and cause to be appointed proxyholders with respect to all
Newco Exchangeable Shares held by Paxton and its subsidiaries (as such term is
defined in the Purchase Agreement) for the sole purpose of attending each
meeting of holders of Newco Exchangeable Shares in order to be counted as part
of the quorum for each such meeting. Paxton further covenants and agrees that it
will not, and will cause its subsidiaries not to, exercise any voting rights
which may be exercisable by holders of Newco Exchangeable shares from time to
time pursuant to Newco's Articles or pursuant to the provisions of the Business
Corporations Act (Ontario) (or any successor or other corporate statute by which
Newco may in the future be governed) with respect to any Newco Exchangeable
Shares held by it or its subsidiaries in respect of any matter considered at any
meeting of holders of Newco Exchangeable Shares.
2.6. Tender Offers, Etc. In the event that a tender offer, share exchange offer,
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issuer bid, take-over bid or similar transaction with respect to shares of
Paxton Common Shares (an "Offer") is proposed by Paxton or is proposed to Paxton
or its shareholders and is recommended by the Board of Directors of Paxton, or
is otherwise effected or to be effected with the consent or approval of the
Board of Directors of Paxton, Paxton will use its best efforts to take all such
actions and do all such things as are necessary or desirable to enable and
permit holders of Newco Exchangeable Shares to participate in such Offer to the
same extent and on an economically
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equivalent basis as the holders of Paxton Common Shares, without discrimination.
Without limiting the generality of the foregoing, Paxton will use its best
efforts to ensure that holders of Newco Exchangeable Shares may participate in
all such Offers without being required to exchange with Paxton Newco
Exchangeable Shares for Paxton Common Shares (or, if so required, to ensure that
any such exchange 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).
2.7. Certain Dividends. So long as any Newco Exchangeable Shares are
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outstanding and held by Sellers, if Paxton shall declare dividends on the Paxton
Common Shares, the record date for which shall occur prior to the date on which
Newco's assets shall be distributed to its shareholders in connection with the
liquidation, dissolution or winding up of Newco, whether voluntary or
involuntary, and the distribution date with respect to such dividends shall
occur after such date, Paxton shall not be bound by the provisions of Section
2.1(a) through (c); provided, however, that Sellers shall be entitled to receive
payment of such dividends from Paxton to the same extent as if they had been
holders of the Specified Number of Paxton Common Shares on the record date for
such dividends with respect to each Newco Exchangeable Share held by them
immediately prior to the date on which Newco's assets are distributed to its
shareholders in connection with such liquidation, dissolution or winding-up of
Newco.
ARTICLE 3
GENERAL
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3.1. Term. This Agreement shall come into force and be effective as of the date
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hereof and shall terminate and be of no further force and effect at such time as
no Newco Exchangeable Shares (or securities or rights convertible into or
exchangeable for or carrying rights to acquire Newco Exchangeable Shares) are
held by any party other than Paxton and any of its subsidiaries.
3.2. Changes in Capital of Paxton and Newco. At all times after the occurrence
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of any event in which either the Paxton Common Shares or the Newco 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 Paxton Common Shares
or the Newco 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. Amendments and Supplements. This Agreement may not be amended, modified or
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supplemented by the parties hereto in any manner, except by an instrument in
writing signed on behalf of Paxton and Newco by their duly authorized officers
or representatives and by Sellers.
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3.4. Consequential Amendments. Notwithstanding the provisions of Section 3.3,
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Paxton and Newco may in writing, at any time and from time to time, without the
approval of Sellers, amend or modify this Agreement for the purposes of:
(a) adding to the covenants of either or both parties for the protection
of the Sellers; or
(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 Board of Directors of each of
Newco and Paxton, it may be expedient to make, provided that such
amendments or modifications will not be prejudicial to the interests
of the holders of the Newco Exchangeable Shares; or
(c) making such changes or corrections which, on the advice of counsel to
Newco and Paxton, 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 such changes or
corrections will not be prejudicial to the interests of the holders of
the Newco Exchangeable Shares.
3.5. No Waiver. The failure of any party hereto to enforce at any time any of
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the provisions of this Agreement shall in no way be construed to be a waiver of
any such provision, nor in any way affect the validity of this Agreement or any
part hereof or the right of such party thereafter to enforce each and every such
provision. No waiver of any breach of or non-compliance with this Agreement
shall be held to be a waiver of any other or subsequent breach or non-
compliance.
3.6. Governing Law. This Agreement shall be governed by and construed and
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enforced in accordance with the laws of Ontario (and the laws of Canada
applicable therein), without regard to their respective conflict of law rules.
3.7. Notice. All notices and other communications hereunder shall be in writing
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and shall be deemed given if delivered in person or sent by facsimile or via a
reputable international overnight courier service to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice), and shall be deemed given on the date on which delivered by
hand or otherwise on the date of receipt:
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If to Paxton or Newco:
c/o 30 West Beaver Creek
Suite 109
Richmond Hill, Ontario
L4B 3K1
Attention: Kim Allen
Facsimile Number: (905) 881-1152
With a copy to:
Wuersch & Gering
11 Hanover Square
21/st/ Floor
New York, New York
10005
Attention: Travis Gering
Facsimile Number: (212) 509-5050
If to the Sellers:
c/o 30 West Beaver Creek
Suite 109
Richmond Hill, Ontario
L4B 3K1
Attention: Angelo Boujos
Facsimile Number: (905) 881-1152
With a copy to:
Chitiz Pundit Pathak & Sokoloff
85 Richmond Street West
Suite 901
Toronto, Ontario
M5H 2C9
Attention: S. Paul Pathak
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Facsimile Number: (416) 368-0300
3.8. Construction of Agreement. A reference to an Article or a Section shall
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mean an Article of or a Section in this Agreement unless otherwise expressly
stated. The titles and headings herein are for reference purposes only and shall
not in any manner limit the construction of this Agreement which shall be
considered as a whole. The words "include," "includes" and "including" when used
herein shall be deemed in each case to be followed by the words "without
limitation."
3.9. Entire Agreement, Assignability, etc. This Agreement constitutes the
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entire agreement, and supersedes all other prior agreements and understandings,
both written and oral, between the parties with respect to the subject matter
hereof. This Agreement is not intended to confer upon any person other than the
parties hereto any rights or remedies hereunder, except as otherwise expressly
provided herein, and shall not be assignable by operation of law or otherwise.
3.10. Validity. The invalidity or unenforceability of any provisions of this
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Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, each of which shall remain in full force and
effect.
3.11. Counterparts. This Agreement may be executed in one or more counterparts,
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all of which together shall constitute one and the same Agreement.
3.12. Successors and Assigns. This Agreement shall be binding on the legal
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representatives, successors and permitted assigns of the parties hereto.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
UNIVERSE2U INC.
(formerly Paxton Mining Corporation)
By: /s/ Barry Herman
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Barry Herman
Title: President
1418276 ONTARIO INC.
By: /s/ Barry Herman
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Barry Herman
Title: President
/s/ Angelo Boujos
________________________ ________________________________
Witness Angelo Boujos
/s/ Josie Boujos
________________________ ________________________________
Witness Josie Boujos
/s/ Josie Boujos
________________________ ________________________________
Witness Josie Boujos, in trust
/s/ Bill McGill
________________________ ________________________________
Witness Bill McGill
/s/ Andrew Eyers
________________________ ________________________________
Witness Andrew Eyers