EXHIBIT 4.2
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FORM 5D
ESCROW AGREEMENT
VALUE SECURITY
THIS AGREEMENT is made as of the 7th day of May, 2004
AMONG:
TLC Ventures Corp.
000 - 000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX
X0X 0X0
(the "ISSUER")
AND:
Pacific Corporate Trust Company
00xx Xxxxx, 000 Xxxx Xxxxxx
Xxxxxxxxx, XX
X0X 0X0
(the "ESCROW AGENT")
AND:
EACH OF THE UNDERSIGNED SECURITYHOLDERS OF THE ISSUER
(a "SECURITYHOLDER" or "YOU")
(collectively, the "PARTIES")
THIS AGREEMENT is being entered into by the Parties under Exchange POLICY 5.4 -
ESCROW, VENDOR CONSIDERATION AND RESALE RESTRICTIONS (the POLICY) in connection
with a transaction. The Issuer is a Tier 2 Issuer as described in POLICY 2.1 -
MINIMUM LISTING REQUIREMENTS.
FOR GOOD AND VALUABLE CONSIDERATION, the Parties agree as follows:
PART 1 ESCROW
1.1 APPOINTMENT OF ESCROW AGENT. The Issuer and the Securityholders appoint
the Escrow Agent to act as escrow agent under this Agreement. The
Escrow Agent accepts the appointment.
1.2 DEPOSIT OF ESCROW SECURITIES IN ESCROW
(1) You are depositing the securities (ESCROW SECURITIES) listed opposite
your name in Schedule "A" with the Escrow Agent to be held in escrow
under this Agreement. You will immediately deliver or cause to be
delivered to the Escrow Agent any share certificates or other evidence
of these securities which you have or which you may later receive.
(2) If you receive any other securities (ADDITIONAL ESCROW SECURITIES):
(a) as a dividend or other distribution on escrow securities;
(b) on the exercise of a right of purchase, conversion or exchange
attaching to escrow securities, including securities received
on conversion of special warrants;
(c) on a subdivision, or compulsory or automatic conversion or
exchange of escrow securities; or
(d) from a successor issuer in a business combination, if Part 6
of this Agreement applies,
you will deposit them in escrow with the Escrow Agent. You will deliver
or cause to be delivered to the Escrow Agent any share certificates or
other evidence of those additional escrow securities. When this
Agreement refers to ESCROW SECURITIES, it includes additional escrow
securities.
(3) You will immediately deliver to the Escrow Agent any replacement share
certificates or other evidence of additional escrow securities issued
to you.
1.3 DIRECTION TO ESCROW AGENT. The Issuer and the Securityholders direct
the Escrow Agent to hold the escrow securities in escrow until they are
released from escrow under this Agreement.
PART 2 RELEASE OF ESCROW SECURITIES
2.1 RELEASE PROVISIONS. The provisions of Schedule B(2) is incorporated
into and form part of this Agreement.
2.2 ADDITIONAL ESCROW SECURITIES. If you acquire additional escrow
securities in connection with the transaction to which this agreement
relates, those securities will be added to the securities already in
escrow, to increase the number of remaining escrow securities. After
that, all of the escrow securities will be released in accordance with
the applicable release schedule.
2.3 ADDITIONAL REQUIREMENTS FOR TIER 2 SURPLUS ESCROW SECURITIES. Where
securities are subject to a Tier 2 Surplus Security Escrow Agreement
[Schedule B(4)], the following additional conditions apply:
(1) The escrow securities will be cancelled if the asset, property,
business or interest therein in consideration of which the securities
were issued, is lost, or abandoned, or the operations or development of
such asset, property or business is discontinued.
(2) The Escrow Agent will not release escrow securities from escrow under
schedule B(4) unless the Escrow Agent has received, within the 15 days
prior to the release date, a certificate from the Issuer that:
(a) is signed by two directors or officers of the Issuer;
(b) is dated not more than 30 days prior to the release date;
(c) states that the assets for which the escrow securities were
issued (the "Assets") were included as assets on the balance
sheet of the Issuer in the most recent financial statements
filed by the Issuer with the Exchange; and
(d) states that the Issuer has no reasonable knowledge that the
Assets will not be included as assets on the balance sheet of
the Issuer in the next financial statements to be filed by the
Issuer with the Exchange.
(3) If, at any time during the term of this Agreement, the Escrow Agent is
prohibited from releasing escrow securities on a release date specified
schedule B(4) as a result of section 2.3(2) above, then the Escrow
Agent will not release any further escrow securities from escrow
without the written consent of the Exchange.
(4) If as a result of this section 2.3, the Escrow Agent does not release
escrow securities from escrow for a period of five years, then:
(a) the Escrow Agent will deliver a notice to the Issuer, and will
include with the notice any certificates that the Escrow Agent
holds which evidence the escrow securities; and
(b) the Issuer and the Escrow Agent will take such action as is
necessary to cancel the escrow securities.
(5) For the purposes of cancellation of escrow securities under this
section, each Securityholder irrevocably appoints the Escrow Agent as
his or her attorney, with authority to appoint substitute attorneys, as
necessary.
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2.4 DELIVERY OF SHARE CERTIFICATES FOR ESCROW SECURITIES. The Escrow Agent
will send to each Securityholder any share certificates or other
evidence of that Securityholder's escrow securities in the possession
of the Escrow Agent released from escrow as soon as reasonably
practicable after the release.
2.5 REPLACEMENT CERTIFICATES. If, on the date a Securityholder's escrow
securities are to be released, the Escrow Agent holds a share
certificate or other evidence representing more escrow securities than
are to be released, the Escrow Agent will deliver the share certificate
or other evidence to the Issuer or its transfer agent and request
replacement share certificates or other evidence. The Issuer will cause
replacement share certificates or other evidence to be prepared and
delivered to the Escrow Agent. After the Escrow Agent receives the
replacement share certificates or other evidence, the Escrow Agent will
send to the Securityholder or at the Securityholder's direction, the
replacement share certificate or other evidence of the escrow
securities released. The Escrow Agent and Issuer will act as soon as
reasonably practicable.
2.6 RELEASE UPON DEATH
(1) If a Securityholder dies, the Securityholder's escrow securities will
be released from escrow. The Escrow Agent will deliver any share
certificates or other evidence of the escrow securities in the
possession of the Escrow Agent to the Securityholder's legal
representative provided that:
(a) the legal representative of the deceased Securityholder
provides written notice to the Exchange of the intent to
release the escrow securities as at a specified date which is
at least 10 business days and not more than 30 business days
prior to the proposed release; and
(b) the Exchange does not provide notice of its objection to the
Escrow Agent prior to 10:00 a.m. (Vancouver time) or 11:00
a.m. (Calgary time) on such specified date.
(2) Prior to delivery the Escrow Agent must receive:
(a) a certified copy of the death certificate; and
(b) any evidence of the legal representative's status that the
Escrow Agent may reasonably require.
2.7 EXCHANGE DISCRETION TO TERMINATE. If the Escrow Agent receives a
request from the Exchange to halt or terminate the release of escrow
securities from escrow, then the Escrow Agent will comply with that
request, and will not release any escrow securities from escrow until
it receives the written consent of the Exchange.
2.8 DISCRETIONARY APPLICATIONS. The Exchange may consent to the release
from escrow of escrow securities in other circumstances and on terms
and on conditions it deems appropriate. Securities may be released from
escrow provided that the Escrow Agent receives written notice from the
Exchange.
PART 3 EARLY RELEASE ON CHANGE OF ISSUER STATUS
3.1 EARLY RELEASE - GRADUATION TO TIER 1
(1) When a Tier 2 Issuer becomes a Tier 1 Issuer, the release schedule for
its escrow securities changes.
(2) If the Issuer reasonably believes that it meets the Minimum Listing
Requirements of a Tier 1 Issuer as described in POLICY 2.1 - MINIMUM
LISTING REQUIREMENTS, the Issuer may make application to the Exchange
to be listed as a Tier 1 Issuer. The Issuer must also concurrently
provide notice to the Escrow Agent that it is making such an
application.
(3) If the graduation to Tier 1 is accepted by the Exchange, the Exchange
will issue an Exchange Bulletin confirming final acceptance for listing
of the Issuer on Tier 1. Upon issuance of this Bulletin the Issuer must
immediately:
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(a) issue a news release:
(i) disclosing that it has been accepted for graduation
to Tier 1; and
(ii) disclosing the number of escrow securities to be
released and the dates of release under the new
schedule; and
(b) provide the news release, together with a copy of the Exchange
Bulletin, to the Escrow Agent.
(4) Upon completion of the steps in section 3.1(3) above, the Issuer's
release schedule will be replaced as follows:
------------------------------------ -------------------------------------
APPLICABLE SCHEDULE PRE-GRADUATION APPLICABLE SCHEDULE POST-GRADUATION
------------------------------------ -------------------------------------
Schedule B(2) Schedule B(1)
------------------------------------ -------------------------------------
Schedule B(4) Schedule B(3)
------------------------------------ -------------------------------------
(5) Within 10 days of the Exchange Bulletin confirming the Issuer's listing
on Tier 1, the Escrow Agent must release any escrow securities from
escrow securities which under the new release schedule would have been
releasable at a date prior to the Exchange Bulletin.
PART 4 DEALING WITH ESCROW SECURITIES
4.1 RESTRICTION ON TRANSFER, ETC. Unless it is expressly permitted in this
Agreement, you will not sell, transfer, assign, mortgage, enter into a
derivative transaction concerning, or otherwise deal in any way with
your escrow securities or any related share certificates or other
evidence of the escrow securities. If a Securityholder is a private
company controlled by one or more Principals of the Issuer, the
Securityholder may not participate in a transaction that results in a
change of its control or a change in the economic exposure of the
Principals to the risks of holding escrow securities.
4.2 PLEDGE, MORTGAGE OR CHARGE AS COLLATERAL FOR A LOAN. Subject to
Exchange acceptance, you may pledge, mortgage or charge your escrow
securities to a financial institution as collateral for a loan,
provided that no escrow securities or any share certificates or other
evidence of escrow securities will be transferred or delivered by the
Escrow Agent to the financial institution for this purpose. The loan
agreement must provide that the escrow securities will remain in escrow
if the lender realizes on the escrow securities to satisfy the loan.
4.3 VOTING OF ESCROW SECURITIES. Although you may exercise voting rights
attached to your escrow securities, you may not, while your securities
are held in escrow, exercise voting rights attached to any securities
(whether in escrow or not) in support of one or more arrangements that
would result in the repayment of capital being made on the escrow
securities prior to a winding up of the Issuer.
4.4 DIVIDENDS ON ESCROW SECURITIES. You may receive a dividend or other
distribution on your escrow securities, and elect the manner of payment
from the standard options offered by the Issuer. If the Escrow Agent
receives a dividend or other distribution on your escrow securities,
other than additional escrow securities, the Escrow Agent will pay the
dividend or other distribution to you on receipt.
4.5 EXERCISE OF OTHER RIGHTS ATTACHING TO ESCROW SECURITIES. You may
exercise your rights to exchange or convert your escrow securities in
accordance with this agreement.
PART 5 PERMITTED TRANSFERS WITHIN ESCROW
5.1 TRANSFER TO DIRECTORS AND SENIOR OFFICERS
(1) You may transfer escrow securities within escrow to existing or, upon
their appointment, incoming directors or senior officers of the Issuer
or any of its material operating subsidiaries, if the Issuer's board of
directors has approved the transfer and provided that:
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(a) you make application to transfer under the Policy at least 10
business days and not more than 30 business days prior to the
date of the proposed transfer; and
(b) the Exchange does not provide notice of its objection to the
Escrow Agent prior to 10:00 a.m. (Vancouver time) or 11:00
a.m. (Calgary time) on such specified date.
(2) Prior to the transfer the Escrow Agent must receive:
(a) a certified copy of the resolution of the board of directors
of the Issuer approving the transfer;
(b) a certificate signed by a director or officer of the Issuer
authorized to sign, stating that the transfer is to a director
or senior officer of the Issuer or a material operating
subsidiary and that any required acceptance from the Exchange
the Issuer is listed on has been received;
(c) an acknowledgment in the form of Form 5E signed by the
transferee; and
(d) a transfer power of attorney, completed and executed by the
transferor in accordance with the requirements of the Issuer's
transfer agent.
5.2 TRANSFER TO OTHER PRINCIPALS
(1) You may transfer escrow securities within escrow:
(a) to a person or company that before the proposed transfer holds
more than 20% of the voting rights attached to the Issuer's
outstanding securities; or
(b) to a person or company that after the proposed transfer
(i) will hold more than 10% of the voting rights attached
to the Issuer's outstanding securities, and
(ii) has the right to elect or appoint one or more
directors or senior officers of the Issuer or any of
its material operating subsidiaries,
provided that:
(c) you make an application to transfer under the Policy at least
10 business days and not more than 30 business days prior to
the date of the proposed transfer; and
(d) the Exchange does not provide notice of its objection to the
Escrow Agent prior to 10:00 a.m. (Vancouver time) or 11:00
a.m. (Calgary time) on such specified date.
(2) Prior to the transfer the Escrow Agent must receive:
(a) a certificate signed by a director or officer of the Issuer
authorized to sign, stating that:
(i) the transfer is to a person or company that the
officer believes, after reasonable investigation,
holds more than 20% of the voting rights attached to
the Issuer's outstanding securities before the
proposed transfer; or
(ii) the transfer is to a person or company that:
(A) the officer believes, after reasonable
investigation, will hold more than 10% of
the voting rights attached to the Issuer's
outstanding securities; and
(B) has the right to elect or appoint one or
more directors or senior officers of the
Issuer or any of its material operating
subsidiaries
after the proposed transfer; and
(iii) any required approval from the Exchange or any other
exchange on which the Issuer is listed has been
received;
(b) an acknowledgment in the form of Form 5E signed by the
transferee; and
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(c) a transfer power of attorney, completed and executed by the
transferor in accordance with the requirements of the Issuer's
transfer agent.
5.3 TRANSFER UPON BANKRUPTCY
(1) You may transfer escrow securities within escrow to a trustee in
bankruptcy or another person or company entitled to escrow securities
on bankruptcy provided that:
(a) you make application to transfer under the Policy at least 10
business days and not more than 30 business days prior to the
date of the proposed transfer; and
(b) the Exchange does not provide notice of its objection to the
Escrow Agent prior to 10:00 a.m. (Vancouver time) or 11:00
a.m. (Calgary time) on such specified date.
(2) Prior to the transfer, the Escrow Agent must receive:
(a) a certified copy of either
(i) the assignment in bankruptcy filed with the
Superintendent of Bankruptcy, or
(ii) the receiving order adjudging the Securityholder
bankrupt;
(b) a certified copy of a certificate of appointment of the
trustee in bankruptcy;
(c) a transfer power of attorney, duly completed and executed by
the transferor in accordance with the requirements of the
Issuer's transfer agent; and
(d) an acknowledgment in the form of Form 5E signed by
(i) the trustee in bankruptcy or
(ii) on direction from the trustee, with evidence of that
direction attached to the acknowledgement form,
another person or company legally entitled to the
escrow securities.
5.4 TRANSFER UPON REALIZATION OF PLEDGED, MORTGAGED OR CHARGED ESCROW
SECURITIES
(1) You may transfer escrow securities you have pledged, mortgaged or
charged under section 4.2 to a financial institution as collateral for
a loan within escrow to the lender on realization provided that:
(a) you make application to transfer under the Policy at least 10
business days and not more than 30 business days prior to the
date of the proposed transfer; and
(b) the Exchange does not provide notice of its objection to the
Escrow Agent prior to 10:00 a.m. (Vancouver time) or 11:00
a.m. (Calgary time) on such specified date.
(2) Prior to the transfer the Escrow Agent must receive:
(a) a statutory declaration of an officer of the financial
institution that the financial institution is legally entitled
to the escrow securities;
(b) evidence that the Exchange has accepted the pledge, mortgage
or charge of escrow securities to the financial institution;
(c) a transfer power of attorney, executed by the transferor in
accordance with the requirements of the Issuer's transfer
agent; and
(d) an acknowledgement in the form of Form 5E signed by the
financial institution.
5.5 TRANSFER TO CERTAIN PLANS AND FUNDS
(1) You may transfer escrow securities within escrow to or between a
registered retirement savings plan (RRSP), registered retirement income
fund (RRIF) or other similar registered plan or fund with a trustee,
where the beneficiaries of the plan or fund are limited to you and your
spouse, children and parents provided that:
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(a) you make application to transfer under the Policy at least 10
business days and not more than 30 business days prior to the
date of the proposed transfer; and
(b) the Exchange does not provide notice of its objection to the
Escrow Agent prior to 10:00 a.m. (Vancouver time) or 11:00
a.m. (Calgary time) on such specified date.
(2) Prior to the transfer the Escrow Agent must receive:
(a) evidence from the trustee of the transferee plan or fund, or
the trustee's agent, stating that, to the best of the
trustee's knowledge, the annuitant of the RRSP or RRIF or the
beneficiaries of the other registered plan or fund do not
include any person or company other than you and your spouse,
children and parents;
(b) a transfer power of attorney, executed by the transferor in
accordance with the requirements of the Issuer's transfer
agent; and
(c) an acknowledgement in the form of Form 5E signed by the
trustee of the plan or fund.
5.6 EFFECT OF TRANSFER WITHIN ESCROW. After the transfer of escrow
securities within escrow, the escrow securities will remain in escrow
and released from escrow under this Agreement as if no transfer has
occurred, on the same terms that applied before the transfer. The
Escrow Agent will not deliver any share certificates or other evidence
of the escrow securities to transferees under this Part 5.
5.7 DISCRETIONARY APPLICATIONS. The Exchange may consent to the transfer
within escrow of escrow securities in other circumstances and on such
terms and conditions as it deems appropriate.
PART 6 BUSINESS COMBINATIONS
6.1 BUSINESS COMBINATIONS
This Part applies to the following (BUSINESS COMBINATIONS):
(a) a formal take-over bid for all outstanding securities of the
Issuer or which, if successful, would result in a change of
control of the Issuer
(b) a formal issuer bid for all outstanding equity securities of
the Issuer
(c) a statutory arrangement
(d) an amalgamation
(e) a merger
(f) a reorganization that has an effect similar to an amalgamation
or merger
6.2 DELIVERY TO ESCROW AGENT
(1) You may tender your escrow securities to a person or company in a
business combination. At least five business days prior to the date the
escrow securities must be tendered under the business combination, you
must deliver to the Escrow Agent:
(a) a written direction signed by you that directs the Escrow
Agent to deliver to the depositary under the business
combination any share certificates or other evidence of the
escrow securities and a completed and executed cover letter or
similar document and, where required, transfer power of
attorney completed and executed for transfer in accordance
with the requirements of the Issuer's depository, and any
other documentation specified or provided by you and required
to be delivered to the depositary under the business
combination;
(b) written consent of the Exchange; and
(c) any other information concerning the business combination as
the Escrow Agent may reasonably require.
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6.3 DELIVERY TO DEPOSITARY
(1) As soon as reasonably practicable, and in any event no later than three
business days after the Escrow Agent receives the documents and
information required under section 6.2, the Escrow Agent will deliver
to the depositary, in accordance with the direction, any share
certificates or other evidence of the escrow securities, and a letter
addressed to the depositary that
(a) identifies the escrow securities that are being tendered;
(b) states that the escrow securities are held in escrow;
(c) states that the escrow securities are delivered only for the
purposes of the business combination and that they will be
released from escrow only after the Escrow Agent receives the
information described in section 6.4;
(d) if any share certificates or other evidence of the escrow
securities have been delivered to the depositary, requires the
depositary to return to the Escrow Agent, as soon as
practicable, the share certificates or other evidence of
escrow securities that are not released from escrow into the
business combination; and
(e) where applicable, requires the depositary to deliver or cause
to be delivered to the Escrow Agent, as soon as practicable,
share certificates or other evidence of additional escrow
securities that you acquire under the business combination.
6.4 RELEASE OF ESCROW SECURITIES TO DEPOSITARY
(1) The Escrow Agent will release from escrow the tendered escrow
securities provided that:
(a) you or the Issuer make application to release the tendered
securities under the Policy on a date at least 10 business
days and not more than 30 business days prior to the date of
the proposed release date; and
(b) the Exchange does not provide notice of its objection to the
Escrow Agent prior to 10:00 a.m. (Vancouver time) or 11:00
a.m. (Calgary time) on such specified date;
(c) the Escrow Agent receives a declaration signed by the
depositary or, if the direction identifies the depositary as
acting on behalf of another person or company in respect of
the business combination, by that other person or company,
that
(i) the terms and conditions of the business combination
have been met or waived; and
(ii) the escrow securities have either been taken up and
paid for or are subject to an unconditional
obligation to be taken up and paid for under the
business combination.
6.5 ESCROW OF NEW SECURITIES
(1) If you receive securities (NEW SECURITIES) of another issuer (SUCCESSOR
ISSUER) in exchange for your escrow securities, the new securities will
be subject to escrow in substitution for the tendered escrow
securities, unless, immediately after completion of the business
combination,
(a) the successor issuer is an exempt issuer as defined in the
National Policy;
(b) the escrow holder was subject to a Value Security Escrow
Agreement and is not a Principal of the successor issuer; and
(c) the escrow holder holds less than 1% of the voting rights
attached to the successor issuer's outstanding securities. (In
calculating this percentage, include securities that may be
issued to the escrow holder under outstanding convertible
securities in both the escrow holders securities and the total
securities outstanding.)
6.6 RELEASE FROM ESCROW OF NEW SECURITIES
(1) The Escrow Agent will send to a Securityholder share certificates or
other evidence of the Securityholder's new securities as soon as
reasonably practicable after the Escrow Agent receives
(a) a certificate from the successor issuer signed by a director
or officer of the successor issuer authorized to sign
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(i) stating that it is a successor issuer to the Issuer
as a result of a business combination;
(ii) containing a list of the securityholders whose new
securities are subject to escrow under section 6.5;
(iii) containing a list of the securityholders whose new
securities are not subject to escrow under section
6.5;
(b) written confirmation from the Exchange that it has accepted
the list of Securityholders whose new securities are not
subject to escrow under section 6.5; and
(2) The escrow securities of the Securityholders whose securities are not
subject to escrow under section 6.5, will be released, and the Escrow
Agent will send any share certificates or other evidence of the escrow
securities in the possession of the Escrow Agent in accordance with
section 2.4.
(3) If your new securities are subject to escrow, unless subsection (4)
applies, the Escrow Agent will hold your new securities in escrow on
the same terms and conditions, including release dates, as applied to
the escrow securities that you exchanged.
(4) If the Issuer is a Tier 2 Issuer and the successor issuer is a Tier 1
Issuer, the release provisions in section 3.1(4) relating to graduation
will apply. .
PART 7 RESIGNATION OF ESCROW AGENT
7.1 RESIGNATION OF ESCROW AGENT
(1) If the Escrow Agent wishes to resign as escrow agent, the Escrow Agent
will give written notice to the Issuer and the Exchange.
(2) If the Issuer wishes to terminate the Escrow Agent as escrow agent, the
Issuer will give written notice to the Escrow Agent and the Exchange.
(3) If the Escrow Agent resigns or is terminated, the Issuer will be
responsible for ensuring that the Escrow Agent is replaced not later
than the resignation or termination date by another escrow agent that
is acceptable to the Exchange and that has accepted such appointment,
which appointment will be binding on the Issuer and the
Securityholders.
(4) The resignation or termination of the Escrow Agent will be effective,
and the Escrow Agent will cease to be bound by this Agreement, on the
date that is 60 days after the date of receipt of the notices referred
to above by the Escrow Agent or Issuer, as applicable, or on such other
date as the Escrow Agent and the Issuer may agree upon (the
"resignation or termination date"), provided that the resignation or
termination date will not be less than 10 business days before a
release date.
(5) If the Issuer has not appointed a successor escrow agent within 60 days
of the resignation or termination date, the Escrow Agent will apply, at
the Issuer's expense, to a court of competent jurisdiction for the
appointment of a successor escrow agent, and the duties and
responsibilities of the Escrow Agent will cease immediately upon such
appointment.
(6) On any new appointment under this section, the successor Escrow Agent
will be vested with the same powers, rights, duties and obligations as
if it had been originally named herein as Escrow Agent, without any
further assurance, conveyance, act or deed. The predecessor Escrow
Agent, upon receipt of payment for any outstanding account for its
services and expenses then unpaid, will transfer, deliver and pay over
to the successor Escrow Agent, who will be entitled to receive, all
securities, records or other property on deposit with the predecessor
Escrow Agent in relation to this Agreement and the predecessor Escrow
Agent will thereupon be discharged as Escrow Agent.
(7) If any changes are made to Part 8 of this Agreement as a result of the
appointment of the successor Escrow Agent, those changes must not be
inconsistent with the Policy and the terms of this Agreement and the
Issuer to this Agreement will fie a copy of the new Agreement with the
Exchange.
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PART 8 OTHER CONTRACTUAL ARRANGEMENTS
8.1 ESCROW AGENT NOT A TRUSTEE. The Escrow Agent accepts duties and
responsibilities under this Agreement, and the escrow securities and
any share certificates or other evidence of these securities, solely as
a custodian, bailee and agent. No trust is intended to be, or is or
will be, created hereby and the Escrow Agent shall owe no duties
hereunder as a trustee.
8.2 ESCROW AGENT NOT RESPONSIBLE FOR GENUINENESS. The Escrow Agent will not
be responsible or liable in any manner whatever for the sufficiency,
correctness, genuineness or validity of any escrow security deposited
with it.
8.3 ESCROW AGENT NOT RESPONSIBLE FOR FURNISHED INFORMATION. The Escrow
Agent will have no responsibility for seeking, obtaining, compiling,
preparing or determining the accuracy of any information or document,
including the representative capacity in which a party purports to act,
that the Escrow Agent receives as a condition to a release from escrow
or a transfer of escrow securities within escrow under this Agreement.
8.4 ESCROW AGENT NOT RESPONSIBLE AFTER RELEASE. The Escrow Agent will have
no responsibility for escrow securities that it has released to a
Securityholder or at a Securityholder's direction according to this
Agreement.
8.5 INDEMNIFICATION OF ESCROW AGENT. The Issuer and each Securityholder
hereby jointly and severally agree to indemnify and hold harmless the
Escrow Agent, its affiliates, and their current and former directors,
officers, employees and agents from and against any and all claims,
demands, losses, penalties, costs, expenses, fees and liabilities,
including, without limitation, legal fees and expenses, directly or
indirectly arising out of, in connection with, or in respect of, this
Agreement, except where same result directly and principally from gross
negligence, wilful misconduct or bad faith on the part of the Escrow
Agent. This indemnity survives the release of the escrow securities,
the resignation or termination of the Escrow Agreement and the
termination of this Agreement.
8.6 ADDITIONAL PROVISIONS
(1) The Escrow Agent will be protected in acting and relying reasonably upon any
notice, direction, instruction, order, certificate, confirmation, request,
waiver, consent, receipt, statutory declaration or other paper or document
(collectively referred to as "Documents") furnished to it and purportedly signed
by any officer or person required to or entitled to execute and deliver to the
Escrow Agent any such Document in connection with this Agreement, not only as to
its due execution and the validity and effectiveness of its provisions, but also
as to the truth or accuracy of any information therein contained, which it in
good faith believes to be genuine.
(2) The Escrow Agent will not be bound by any notice of a claim or demand with
respect thereto, or any waiver, modification, amendment, termination or
rescission of this Agreement unless received by it in writing, and signed by the
other Parties and approved by the Exchange, and, if the duties or
indemnification of the Escrow Agent in this Agreement are affected, unless it
has given its prior written consent.
(3) The Escrow Agent may consult with or retain such legal counsel and advisors
as it may reasonably require for the purpose of discharging its duties or
determining its rights under this Agreement and may rely and act upon the advice
of such counsel or advisor. The Escrow Agent will give written notice to the
Issuer as soon as practicable that it has retained legal counsel or other
advisors. The Issuer will pay or reimburse the Escrow Agent for any reasonable
fees, expenses and disbursements of such counsel or advisors.
(4) In the event of any disagreement arising under the terms of this Agreement,
the Escrow Agent will be entitled, at its option, to refuse to comply with any
and all demands whatsoever until the dispute is settled either by a written
agreement among the Parties or by a court of competent jurisdiction.
10
(5) The Escrow Agent will have no duties or responsibilities except as expressly
provided in this Agreement and will have no duty or responsibility under the
Policy or arising under any other agreement, including any agreement referred to
in this Agreement, to which the Escrow Agent is not a party.
(6) The Escrow Agent will have the right not to act and will not be liable for
refusing to act unless it has received clear and reasonable documentation that
complies with the terms of this Agreement. Such documentation must not require
the exercise of any discretion or independent judgment.
(7) The Escrow Agent is authorized to cancel any share certificate delivered to
it and hold such Securityholder's escrow securities in electronic, or
uncertificated form only, pending release of such securities from escrow.
(8) The Escrow Agent will have no responsibility with respect to any escrow
securities in respect of which no share certificate or other evidence or
electronic or uncertificated form of these securities has been delivered to it,
or otherwise received by it.
8.7 LIMITATION OF LIABILITY OF ESCROW AGENT. The Escrow Agent will not be
liable to any of the Parties hereunder for any action taken or omitted
to be taken by it under or in connection with this Agreement, except
for losses directly, principally and immediately caused by its bad
faith, wilful misconduct or gross negligence. Under no circumstances
will the Escrow Agent be liable for any special, indirect, incidental,
consequential, exemplary, aggravated or punitive losses or damages
hereunder, including any loss of profits, whether foreseeable or
unforeseeable. Notwithstanding the foregoing or any other provision of
this Agreement, in no event will the collective liability of the Escrow
Agent under or in connection with this Agreement to any one or more
Parties, except for losses directly caused by its bad faith or willful
misconduct, exceed the amount of its annual fees under this Agreement
or the amount of three thousand dollars ($3,000.00), whichever amount
shall be greater.
8.8 REMUNERATION OF ESCROW AGENT. The Issuer will pay the Escrow Agent
reasonable remuneration for its services under this Agreement, which
fees are subject to revision from time to time on 30 days' written
notice. The Issuer will reimburse the Escrow Agent for its expenses and
disbursements. Any amount due under this section and unpaid 30 days
after request for such payment, will bear interest from the expiration
of such period at a rate per annum equal to the then current rate
charged by the Escrow Agent, payable on demand.
PART 9 INDEMNIFICATION OF THE EXCHANGE
9.1 INDEMNIFICATION
(1) The Issuer and each Securityholder jointly and severally:
(a) release, indemnify and save harmless the Exchange from all
costs (including legal cost, expenses and disbursements),
charges, claims, demands, damages, liabilities, losses and
expenses incurred by the Exchange;
(b) agree not to make or bring a claim or demand, or commence any
action, against the Exchange; and
(c) agree to indemnify and save harmless the Exchange from all
costs (including legal costs) and damages that the Exchange
incurs or is required by law to pay as a result of any
person's claim, demand or action,
arising from any and every act or omission committed or omitted by the
Exchange, in connection with this Agreement, even if said act or
omission was negligent, or constituted a breach of the terms of this
Agreement.
(2) This indemnity survives the release of the escrow securities and the
termination of this Agreement.
11
PART 10 NOTICES
10.1 NOTICE TO ESCROW AGENT. Documents will be considered to have been
delivered to the Escrow Agent on the next business day following the
date of transmission, if delivered by fax, the date of delivery, if
delivered by hand during normal business hours or by prepaid courier,
or 5 business days after the date of mailing, if delivered by mail, to
the following:
Pacific Corporate Trust Company
00xx Xxxxx, 000 Xxxx Xxxxxx
Xxxxxxxxx, XX X0X 0X0
Attention: Manager, Corporate Trust
Fax: 000-000-0000
10.2 NOTICE TO ISSUER. Documents will be considered to have been delivered
to the Issuer on the next business day following the date of
transmission, if delivered by fax, the date of delivery, if delivered
by hand or by prepaid courier, or 5 business days after the date of
mailing, if delivered by mail, to the following:
TLC Ventures Corp.
000 - 000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX
X0X 0X0
Contact Person: Xx Xxxxxxxx
Fax Number:
10.3 DELIVERIES TO SECURITYHOLDERS. Documents will be considered to have
been delivered to a Securityholder on the date of delivery, if
delivered by hand or by prepaid courier, or 5 business days after the
date of mailing, if delivered by mail, to the address on the Issuer's
share register.
Any share certificates or other evidence of a Securityholder's escrow
securities will be sent to the Securityholder's address on the Issuer's
share register unless the Securityholder has advised the Escrow Agent
in writing otherwise at least ten business days before the escrow
securities are released from escrow. The Issuer will provide the Escrow
Agent with each Securityholder's address as listed on the Issuer's
share register.
10.4 CHANGE OF ADDRESS
(1) The Escrow Agent may change its address for delivery by delivering
notice of the change of address to the Issuer and to each
Securityholder.
(2) The Issuer may change its address for delivery by delivering notice of
the change of address to the Escrow Agent and to each Securityholder.
(3) A Securityholder may change that Securityholder's address for delivery
by delivering notice of the change of address to the Issuer and to the
Escrow Agent.
10.5 POSTAL INTERRUPTION. A party to this Agreement will not mail a Document
if the party is aware of an actual or impending disruption of postal
service.
PART 11 GENERAL
11.1 INTERPRETATION - "HOLDING SECURITIES". Unless the context otherwise
requires, all capitalized terms that are not otherwise defined in this
Agreement, shall have the meanings as defined in POLICY 1.1 -
INTERPRETATION or in POLICY 5.4 - ESCROW, VENDOR CONSIDERATION AND
RESALE RESTRICTIONS.
When this Agreement refers to securities that a Securityholder "holds",
it means that the Securityholder has direct or indirect beneficial
ownership of or control or direction over the securities.
12
11.2 ENFORCEMENT BY THIRD PARTIES. The Issuer enters this Agreement both on
its own behalf and as trustee for the Exchange and the Securityholders
of the Issuer, and this Agreement may be enforced by either the
Exchange, or the Securityholders of the Issuer, or both.
11.3 TERMINATION, AMENDMENT, AND WAIVER OF AGREEMENT
(1) Subject to subsection 11.3(3), this Agreement shall only terminate:
(a) with respect to all the Parties:
(i) as specifically provided in this Agreement;
(ii) subject to subsection 11.3(2), upon the agreement of
all Parties; or
(iii) when the Securities of all Securityholders have been
released from escrow pursuant to this Agreement; and
(b) with respect to a Party:
(i) as specifically provided in this Agreement; or
(ii) if the Party is a Securityholder, when all of the
Securityholder's Securities have been released from
escrow pursuant to this Agreement.
(2) An agreement to terminate this Agreement pursuant to section
11.3(1)(a)(ii) shall not be effective unless and until the agreement to
terminate
(a) is evidenced by a memorandum in writing signed by all Parties;
(b) has been consented to in writing by the Exchange; and
(c) has been approved by a majority of securityholders of the
Issuer who are not Securityholders.
(3) Notwithstanding any other provision in this Agreement, the obligations
set forth in section 9.1 shall survive the termination of this
Agreement and the resignation or removal of the Escrow Agent.
(4) No amendment or waiver of this Agreement or any part of this Agreement
shall be effective unless the amendment or waiver:
(a) is evidenced by a memorandum in writing signed by all Parties;
(b) has been approved in writing by the Exchange; and
(c) has been approved by a majority of securityholders of the
Issuer who are not Securityholders.
(5) No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provision (whether similar or
not), nor shall any waiver constitute a continuing waiver, unless
expressly provided.
11.4 SEVERANCE OF ILLEGAL PROVISION. Any provision or part of a provision of
this Agreement determined by a court of competent jurisdiction to be
invalid, illegal or unenforceable shall be deemed stricken to the
extent necessary to eliminate any invalidity, illegality or
unenforceability, and the rest of the Agreement and all other
provisions and parts thereof shall remain in full force and effect and
be binding upon the parties hereto as though the said illegal and/or
unenforceable provision or part thereof had never been included in this
Agreement.
11.5 FURTHER ASSURANCES. The Parties will execute and deliver any further
documents and perform any further acts reasonably requested by any of
the Parties to this agreement which are necessary to carry out the
intent of this Agreement.
11.6 TIME. Time is of the essence of this Agreement.
13
11.7 CONSENT OF EXCHANGE TO AMENDMENT. The Exchange must approve any
amendment to this Agreement.
11.8 ADDITIONAL ESCROW REQUIREMENTS. A Canadian exchange may impose escrow
terms or conditions in addition to those set out in this Agreement.
11.9 GOVERNING LAWS. The laws of British Columbia and the applicable laws of
Canada will govern this Agreement.
11.10 COUNTERPARTS. The Parties may execute this Agreement by fax and in
counterparts, each of which will be considered an original and all of
which will be one agreement.
11.11 SINGULAR AND PLURAL. Wherever a singular expression is used in this
Agreement, that expression is considered as including the plural or the
body corporate where required by the context.
11.12 LANGUAGE. This Agreement has been drawn up in the English language at
the request of all parties. Cet acte a ete redige en anglais a la
demande de toutes les parties.
11.13 BENEFIT AND BINDING EFFECT. This Agreement will benefit and bind the
Parties and their heirs, executors, administrators, successors and
permitted assigns and all persons claiming through them as if they had
been a Party to this Agreement.
11.14 ENTIRE AGREEMENT. This is the entire agreement among the Parties
concerning the subject matter set out in this Agreement and supersedes
any and all prior understandings and agreements.
11.15 SUCCESSOR TO ESCROW AGENT. Any corporation with which the Escrow Agent
may be amalgamated, merged or consolidated, or any corporation
succeeding to the business of the Escrow Agent will be the successor of
the Escrow Agent under this Agreement without any further act on its
part or on the part or any of the Parties, provided that the successor
is recognized by the Exchange.
The Parties have executed and delivered this Agreement as of the date set out
above.
PACIFIC CORPORATE TRUST COMPANY
/s/_________________________________________
Authorized signatory
/s/_________________________________________
Authorized signatory
TLC VENTURES CORP.
/s/_________________________________________
Authorized signatory
/s/_________________________________________
Authorized signatory
If the Securityholder is an individual:
/s/_________________________________________
Xx Xxxxxxxx
/s/_________________________________________
Xxxxxxx Xxxxxx
14
SCHEDULE "A" TO ESCROW AGREEMENT
SECURITYHOLDER
NAME: XX XXXXXXXX
SIGNATURE: /s/ Xx Xxxxxxxx
ADDRESS FOR NOTICE: 000 - 000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, X.X. X0X 0X0
SECURITIES:
----------------------------------- ----------- --------------------------------
CLASS AND TYPE NUMBER CERTIFICATE(S) (IF APPLICABLE)
(I.E. VALUE SECURITIES OR SURPLUS
SECURITIES
----------------------------------- ----------- --------------------------------
Value 440,000
SECURITYHOLDER
NAME: XXXXXXX XXXXXX
SIGNATURE: /S/ XXXXXXX XXXXXX
ADDRESS FOR NOTICE: 000 - 000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, X.X. X0X 0X0
SECURITIES:
----------------------------------- ----------- --------------------------------
CLASS AND TYPE NUMBER CERTIFICATE(S) (IF APPLICABLE)
(I.E. VALUE SECURITIES OR SURPLUS
SECURITIES
----------------------------------- ----------- --------------------------------
Value 250,000
15
SCHEDULE B(1) - TIER 1 VALUE SECURITY ESCROW AGREEMENT
RELEASE OF SECURITIES
TIMED RELEASE
--------------------------------- ----------------------------- --------------------------------------
PERCENTAGE OF TOTAL ESCROWED TOTAL NUMBER OF ESCROWED SECURITIES TO
RELEASE DATES SECURITIES TO BE RELEASED BE RELEASED
--------------------------------- ----------------------------- --------------------------------------
[INSERT DATE OF EXCHANGE BULLETIN 1/4 OF YOUR ESCROW SECURITIES
FOR A RTO]
--------------------------------- ----------------------------- --------------------------------------
[INSERT DATE 6 MONTHS FOLLOWING 1/3 OF YOUR REMAINING ESCROW
EXCHANGE BULLETIN FOR A RTO] SECURITIES
--------------------------------- ----------------------------- --------------------------------------
[INSERT DATE 12 MONTHS FOLLOWING 1/2 OF YOUR REMAINING ESCROW
EXCHANGE BULLETIN FOR A RTO] SECURITIES
--------------------------------- ----------------------------- --------------------------------------
[INSERT DATE 18 MONTHS FOLLOWING ALL OF YOUR REMAINING ESCROW
EXCHANGE BULLETIN FOR A RTO] SECURITIES
--------------------------------- ----------------------------- --------------------------------------
TOTAL 100%
--------------------------------- ----------------------------- --------------------------------------
*In the simplest case where there are no changes to the escrow securities
initially deposited and no additional escrow securities, then the release
schedule outlined above results in the escrow securities being released in equal
tranches of 25%.
16
SCHEDULE B(2) - TIER 2 VALUE SECURITY ESCROW AGREEMENT
RELEASE OF SECURITIES
TIMED RELEASE
--------------------------------- -------------------------------- -----------------------------------
PERCENTAGE OF TOTAL ESCROWED TOTAL NUMBER OF ESCROWED SECURITIES
RELEASE DATES SECURITIES TO BE RELEASED TO BE RELEASED
--------------------------------- -------------------------------- -----------------------------------
[INSERT DATE OF EXCHANGE BULLETIN 1/10 OF YOUR ESCROWED SECURITIES
FOR A RTO]
--------------------------------- -------------------------------- -----------------------------------
[INSERT DATE 6 MONTHS FOLLOWING 1/6 OF YOUR REMAINING ESCROW
EXCHANGE BULLETIN FOR A RTO] SECURITIES
--------------------------------- -------------------------------- -----------------------------------
[INSERT DATE 12 MONTHS FOLLOWING 1/5 OF YOUR REMAINING ESCROW
EXCHANGE BULLETIN FOR A RTO] SECURITIES
--------------------------------- -------------------------------- -----------------------------------
[INSERT DATE 18 MONTHS FOLLOWING 1/4 OF YOUR REMAINING ESCROW
EXCHANGE BULLETIN FOR A RTO] SECURITIES
--------------------------------- -------------------------------- -----------------------------------
[INSERT DATE 24 MONTHS FOLLOWING 1/3 OF YOUR REMAINING ESCROW
EXCHANGE BULLETIN FOR A RTO] SECURITIES
--------------------------------- -------------------------------- -----------------------------------
[INSERT DATE 30 MONTHS FOLLOWING 1/2 OF YOUR REMAINING ESCROW
EXCHANGE BULLETIN FOR A RTO] SECURITIES
--------------------------------- -------------------------------- -----------------------------------
[INSERT DATE 36 MONTHS FOLLOWING ALL OF YOUR REMAINING ESCROW
EXCHANGE BULLETIN FOR A RTO] SECURITIES
--------------------------------- -------------------------------- -----------------------------------
TOTAL 100%
--------------------------------- -------------------------------- -----------------------------------
*In the simplest case where there are no changes to the escrow securities
initially deposited and no additional escrow securities, the release schedule
outlined above results in the escrow securities being released in equal tranches
of 15% after completion of the release on the date of the Exchange Bulletin.
17
SCHEDULE B(3) - TIER 1 SURPLUS SECURITY ESCROW AGREEMENT
RELEASE OF SECURITIES
TIMED RELEASE
--------------------------------- --------------------------------------- -----------------------------------
PERCENTAGE OF TOTAL ESCROWED SECURITIES TOTAL NUMBER OF ESCROWED SECURITIES
RELEASE DATES TO BE RELEASED TO BE RELEASED
--------------------------------- --------------------------------------- -----------------------------------
[INSERT DATE OF EXCHANGE BULLETIN 1/10 OF YOUR ESCROW SECURITIES
FOR A RTO]
--------------------------------- --------------------------------------- -----------------------------------
[INSERT DATE 6 MONTHS FOLLOWING 1/6 OF YOUR REMAINING ESCROW SECURITIES
EXCHANGE BULLETIN FOR A RTO]
--------------------------------- --------------------------------------- -----------------------------------
[INSERT DATE 12 MONTHS FOLLOWING 1/5 OF YOUR REMAINING ESCROW SECURITIES
EXCHANGE BULLETIN FOR A RTO]
--------------------------------- --------------------------------------- -----------------------------------
[INSERT DATE 18 MONTHS FOLLOWING 1/4 OF YOUR REMAINING ESCROW SECURITIES
EXCHANGE BULLETIN FOR A RTO]
--------------------------------- --------------------------------------- -----------------------------------
[INSERT DATE 24 MONTHS FOLLOWING 1/3 OF YOUR REMAINING ESCROW SECURITIES
EXCHANGE BULLETIN FOR A RTO]
--------------------------------- --------------------------------------- -----------------------------------
[INSERT DATE 30 MONTHS FOLLOWING 1/2 OF YOUR REMAINING ESCROW SECURITIES
EXCHANGE BULLETIN FOR A RTO]
--------------------------------- --------------------------------------- -----------------------------------
[INSERT DATE 36 MONTHS FOLLOWING ALL OF YOUR REMAINING ESCROW SECURITIES
EXCHANGE BULLETIN FOR A RTO]
--------------------------------- --------------------------------------- -----------------------------------
TOTAL 100%
--------------------------------- --------------------------------------- -----------------------------------
*In the simplest case where there are no changes to the escrow securities
initially deposited and no additional escrow securities, the release schedule
outlined above results in the escrow securities being released in equal tranches
of 15% after completion of the release on the date of the Exchange Bulletin.
18
SCHEDULE B(4) - TIER 2 SURPLUS SECURITY ESCROW AGREEMENT
RELEASE OF SECURITIES
TIMED RELEASE
----------------------------------------- --------------------------------- -------------------------
PERCENTAGE OF TOTAL ESCROWED TOTAL NUMBER OF ESCROWED
RELEASE DATES SECURITIES TO BE RELEASED SECURITIES TO BE RELEASED
----------------------------------------- --------------------------------- -------------------------
[INSERT DATE OF EXCHANGE BULLETIN FOR A NO RELEASE
RTO]
----------------------------------------- --------------------------------- -------------------------
[INSERT DATE 6 MONTHS FOLLOWING EXCHANGE 1/20 OF YOUR ESCROW SECURITIES
BULLETIN FOR A RTO]
----------------------------------------- --------------------------------- -------------------------
[INSERT DATE 12 MONTHS FOLLOWING EXCHANGE 1/19 OF YOUR REMAINING ESCROW
BULLETIN FOR A RTO] SECURITIES
----------------------------------------- --------------------------------- -------------------------
[INSERT DATE 18 MONTHS FOLLOWING EXCHANGE 1/18 OF YOUR REMAINING ESCROW
BULLETIN FOR A RTO] SECURITIES
----------------------------------------- --------------------------------- -------------------------
[INSERT DATE 24 MONTHS FOLLOWING EXCHANGE 1/17 OF YOUR REMAINING ESCROW
BULLETIN FOR A RTO] SECURITIES
----------------------------------------- --------------------------------- -------------------------
[INSERT DATE 30 MONTHS FOLLOWING EXCHANGE 1/8 OF YOUR REMAINING ESCROW
BULLETIN FOR A RTO] SECURITIES
----------------------------------------- --------------------------------- -------------------------
[INSERT DATE 36 MONTHS FOLLOWING EXCHANGE 1/7 OF YOUR REMAINING ESCROW
BULLETIN FOR A RTO] SECURITIES
----------------------------------------- --------------------------------- -------------------------
[INSERT DATE 42 MONTHS FOLLOWING EXCHANGE 1/6 OF YOUR REMAINING ESCROW
BULLETIN FOR A RTO] SECURITIES
----------------------------------------- --------------------------------- -------------------------
[INSERT DATE 48 MONTHS FOLLOWING EXCHANGE 1/5 OF YOUR REMAINING ESCROW
BULLETIN FOR A RTO] SECURITIES
----------------------------------------- --------------------------------- -------------------------
[INSERT DATE 54 MONTHS FOLLOWING EXCHANGE 1/4 OF YOUR REMAINING ESCROW
BULLETIN FOR A RTO] SECURITIES
----------------------------------------- --------------------------------- -------------------------
[INSERT DATE 60 MONTHS FOLLOWING EXCHANGE 1/3 OF YOUR REMAINING ESCROW
BULLETIN FOR A RTO] SECURITIES
----------------------------------------- --------------------------------- -------------------------
[INSERT DATE 66 MONTHS FOLLOWING EXCHANGE 1/2 OF YOUR REMAINING ESCROW
BULLETIN FOR A RTO] SECURITIES
----------------------------------------- --------------------------------- -------------------------
[INSERT DATE 72 MONTHS FOLLOWING EXCHANGE ALL OF YOUR REMAINING ESCROW
BULLETIN FOR A RTO] SECURITIES
----------------------------------------- --------------------------------- -------------------------
TOTAL 100%
----------------------------------------- --------------------------------- -------------------------
19
