Exhibit 10.24
[Form of Lockup Agreement]
April 11, 2002
Universe2U Inc.
00 Xxxx Xxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxxx
X0X 0X0 Xxxxxx
Attention: Xxx Xxxxx, CEO
Re: Lock-Up Agreement (the "Agreement")
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Ladies and Gentlemen:
1. General. The undersigned (the "Stockholder") is an owner of record, or
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beneficially the owner, of such number of shares of Common Stock, par value
$0.00001 per share ("Common Stock"), of Universe2U Inc., a Nevada
corporation (the "Company"), and/or securities convertible into or
exchangeable or exercisable for Common Stock ("Derivative Securities"), as
set forth on the signature page hereto. The Stockholder understands that
the Company proposes to raise additional capital through private financing
(the "Refinancing Plan"). The Stockholder recognizes that the Refinancing
Plan will be of benefit to the Stockholder and will benefit the Company by,
among other things, providing an enhanced basis upon which the Company may
possibly raise additional capital for its operations. The Stockholder
acknowledges that the Company and other stockholders of the Company are
expressly relying on the covenants, representations, and agreements of the
Stockholder contained in this letter for purposes of carrying out the
Refinancing Plan. The Company agrees that any decision whether to enter
into any and all financing arrangements during the Effective Period (as
defined below) will be at the Company's sole discretion upon the consent of
its Board of Directors.
2. Lockup. To induce prospective financing sources to provide capital to
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the Company, the Stockholder hereby agrees that it will not, during the
period commencing on the date hereof and ending one year from the date
hereof (the "Effective Period"), (1) offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, lend, or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock
or any Derivative Securities locked up under this agreement, or (2) enter
into any swap or other arrangement that transfers to another, in whole or
in part, any of the economic consequences of ownership of the Common Stock
or any Derivative Securities locked up under this agreement, whether any
such transaction described in clause (1) or (2) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise.
3. No Hedging. The foregoing restrictions are expressly agreed to
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preclude the Stockholder from engaging in any hedging or other transaction
which is designed to or reasonably expected to lead to or result in a sale
or disposition of the Common Stock even if such Common Stock would be
disposed of by someone other than the Stockholder. Such prohibited hedging
or other transactions would include, without limitation, any short sale or
any purchase, sale or grant of any right (including without limitation any
put option or put equivalent position or call option or call equivalent
position) with respect to any of the Common Stock or with respect to any
security that includes, relates to, or derives any significant part of its
value from such Common Stock.
4. No Encumbrances. The Stockholder has title to all of shares owned of
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record, in each case subject to no mortgage, pledge, lien, security
interest, conditional sale agreement, encumbrance, or charge, and the
Stockholder undertakes not to subject any of such shares, or any shares
issuable upon the exercise of any Derivative Securities, to any mortgage,
pledge, lien, security interest, conditional sale agreement, encumbrance,
or charge during the Effective Period except in accordance with the terms
and conditions of this Agreement. The Stockholder further represents that
it has no contract, undertaking, agreement, or arrangement with any person
to sell, transfer, or grant participation to such person or to any third
person, with respect to any of the shares of Common Stock except in
accordance with the terms and conditions of this Agreement.
5. Lockup Minimum Threshold. To induce the Stockholder to enter into this
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Agreement, the Company and the Stockholder agree that this Agreement shall
not be binding nor take effect unless and until the Company has obtained
executed consent in the form of this Agreement with the owners of record,
or beneficial owners, of an aggregate minimum of twenty-nine million
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(29,000,000) shares of Common Stock and all of the Derivative Securities
held by affiliates, officers and directors of the Company and all
certificates, instruments and option forms representing the same (the
"Minimum Threshold"). In the event the Minimum Threshold is not obtained
within 10 days following the date approved by the Board of Directors for
solicitation of shareholders, this Agreement shall be of no further force
or effect except as set forth in Section 22.
6. Options Price Reset. To induce the officers, directors and employees
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of the Company to enter into this Agreement, the Company and the
Stockholder agree that the exercise price of any and all of Stockholder's
"out-of-money" options shall be reset to a purchase price of $0.75 per
share of Common Stock and the Expiration Date for all such options shall be
extended to March 31, 2007. In addition, any contractual provisions
applicable to such options which may require the Stockholder to exercise
such options within 30 days of leaving the Company shall be removed from
the Option Agreement for all Options submitted to this Agreement. In
addition, the Optionee shall have the right to exercise any and all such
options on a "cashless" basis. Optionee may convert any and all vested
options to common stock during the Effective Period, provided, however,
that such Securities shall be and shall remain subject to the terms and
conditions of this Agreement.
7. Exceptions. Notwithstanding the foregoing, the Stockholder may
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transfer shares of Common Stock or Derivative Securities (i) as a bona fide
gift or gifts, provided that the donee or donees thereof agree in writing
to be bound by the restrictions set forth herein; (ii) following unanimous
approval of the Board of Directors, to any person, trust or other legal
entity, in a non-public transaction exempted from registration under the
Securities Act, provided that such transferee and/or entity agrees in
writing to be bound by the terms of this Agreement and provided further
that any and all certificates and/or instruments representing the Common
Stock or Derivative Securities which are the subject matter of such
transfer remain under the sole control of the Escrow Agent, except with
respect to delivery to the Company's transfer agent and return to the
Escrow Agent for purposes of registration of the transfer of title thereof.
In addition, notwithstanding the foregoing, if the Stockholder is a
corporation, the corporation may transfer the capital stock of the Company
to any wholly-owned subsidiary of such corporation; provided, however, that
in any such case, it shall be a condition to the transfer that the
transferee execute an agreement stating that the transferee is receiving
and holding such capital stock subject to the provisions of this Agreement
and there shall be no further transfer of such capital stock except in
accordance with this Agreement. During the Effective Period, the Company
agrees that it shall not issue any Common Stock or any Derivative
Securities except in connection with the Refinancing Plan; (iii) a pledge
by any stockholder that would directly benefit the company as approved by
the Officers of the Company.
8. No Warranties; Informed Consent. The Stockholder understands that
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whether or not the Refinancing Plan is successful depends on a number of
factors, including, without limitation, prospects for near-term performance
of the Company and stock market conditions. The Company makes no
representation or warranty that the Refinancing Plan will be successful or
that the Company will enter into any arrangements or agreements that will
provide any financing to the Company. The legally binding obligations set
forth herein shall not be contingent on the success or results of the
Refinancing Plan. The Stockholder represents that: (a) it has such
knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of entering into this Agreement; (b) it
believes it has received all the information it has requested from the
Company and considers necessary or appropriate for deciding whether to
enter into this Agreement; (c) it has had the opportunity to discuss the
Company's business, management, and financial affairs with the Company's
management, (d) it has the ability to bear the economic risks of this
Agreement; and (e) it is able, without materially impairing its financial
condition, to subject its shares of Common Stock and/or Derivative
Securities to the terms of this Agreement during the Effective Period and
to suffer a complete loss on its investment if the Refinancing Plan is not
successful.
9. Escrow. The Company and the Stockholder agree that any and all shares
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of Common Stock and Derivative Securities, which are subject to this
Agreement, shall be placed in physical escrow and shall be maintained in
paper form until the end of the Effective Period subject to the terms of
this Agreement. Such escrow shall be subject to the terms and conditions of
the escrow agreement attached hereto as Exhibit A. In the event of any
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conflict between the escrow agreement and this Agreement, this Agreement
shall control.
10. No Ancillary Restrictions. Except for the foregoing escrow, the
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Company shall not request the Company's transfer agent to place any
restrictive transfer legends on any of the shares of Common Stock or shares
issuable upon exercise of Derivative Securities for any reason except as
may be required under U.S. federal securities laws, and the Company shall
not issue any instructions to the Company's transfer agent preventing the
transferability of any such shares of Common Stock or Derivative Securities
for any reason, and to the extent any such instructions have previously
been given for any reason, such instructions shall
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irrevocably be removed pursuant to a supplemental instruction provided in
writing upon commencement of the Effective Period.
11. Beneficial Rights. Notwithstanding the terms of the Escrow, the owner
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of record of each issued and outstanding share of Common Stock subject to
this Agreement shall continue to have one vote per share. Such owners of
record shall not vote separately as a class. Except for the limitations on
disposition set forth herein, owners of record of Common Stock subject to
this Agreement shall be entitled to any and all rights incident to
ownership of their respective securities, including, without limitation,
notice of any shareholders' meetings, dividends, and stock splits in
accordance with the Company's charter instruments. Nothing in this
Agreement shall be construed to operate as a proxy to grant to any person
the right to vote any of the shares of Common Stock which are subject to
this Agreement or to grant to any person a power-of-attorney with respect
to powers of disposition over any of the shares of Common Stock or any
Derivative Securities subject to this Agreement.
12. Due Authorization and Binding Intent. If the holder of shares of
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Common Stock or Derivative Securities is a corporation, partnership trust,
estate or other legal entity, the person executing this Agreement on behalf
of such legal entity represents and warrants to the Company that such
person has reached the age of 21 and has been duly authorized and is fully
qualified to execute and deliver this Agreement, and this Agreement does
not result in any violation of, or conflict with any term of the charter,
bylaws, partnership agreement, trust instrument or other governing
instrument of such legal entity or any other agreement to which it is bound
or any law or regulation applicable to it. If the Common Stock and/or
Derivative Securities are held in joint-tenancy, tenancy-in-common and/or
subject to spousal consent or subject to any other similar statutory law,
common law, rule, regulation, court order, contract or understanding of any
nature with respect to any prerequisite authorization prior to execution of
this Agreement, the Stockholder represents and warrants that any and all
such consents have been obtained and duly documented under reasonable
conditions of fully informed consent.
13. Arbitration. Except for injunctive relief as provided below, the
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parties hereto agree to submit to arbitration any and all matters in
dispute or in controversy among them concerning the terms and provisions of
this Agreement. All such disputes and controversies shall be determined and
adjudged by the decision of a panel of three arbitrators (hereinafter
sometimes called the "Arbitration Panel"). Each party shall select one
arbitrator for the Arbitration Panel and the two such arbitrators shall
mutually select a third arbitrator for the Arbitration Panel. Arbitration
shall take place in Xxxxxxx, Xxxxxxx, Xxxxxx, or such other place as the
parties hereto may agree in writing. The Arbitration Panel shall reach and
render a decision in writing with respect to the amount, if any, of payment
respecting the disputed matter. Any award rendered shall be final and
conclusive upon the parties and a judgment thereon may be entered in any
court of the forum, provincial, state, federal or national, having
jurisdiction. The fees and expenses of the Arbitration Panel and the
respective fees and expenses of the parties hereto in connection with any
such arbitration (including, without limitation, reasonable fees and
expenses of legal counsel and consultants) shall be paid by the party
against whom a decision by the Arbitration Panel is rendered, provided,
however, that the Arbitration Panel shall be specially empowered, in
addition to making any award, to award fees and expenses of the prevailing
party to be paid by the non-prevailing party. If the two arbitrators are
unable to agree on a third arbitrator within 10 business days of the
commencement of arbitration, the third arbitrator shall be appointed by the
American Arbitration Association who shall be an attorney with not less
than ten years of corporate and securities legal experience. In the event
any matter or issue in connection with this Agreement requires the
interpretation of law, this Agreement shall be governed by and construed in
accordance with the laws of Nevada without giving effect to any choice of
law principles that would require the application of the laws of a
different state or jurisdiction.
14. Injunctive Remedies. The remedies provided in this Agreement shall be
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cumulative and in addition to all other remedies available under this
Agreement, under arbitration, law or in equity (including a decree of
specific performance and/or other injunctive relief), no remedy contained
herein shall be deemed a waiver of compliance with the provisions giving
rise to such remedy and nothing herein shall limit either party's right to
pursue actual damages for any failure by the other party to comply with the
terms of this Agreement. Each of the parties acknowledge that a breach by
it of its respective obligations hereunder will cause irreparable harm to
the other party and that any remedy at law for any such breach may be
inadequate. Each party therefore agrees that, notwithstanding anything to
the contrary herein, in the event of any such breach or threatened breach,
each party shall be entitled, in addition to all other available remedies,
to an injunction issued by any court of competent jurisdiction restraining
any breach of this Agreement, without the necessity of showing economic
loss and without any bond or other security being required.
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15. Definitions. Terms not otherwise defined herein shall have the meaning
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set forth in the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder.
16. Waivers and Amendments. This Agreement is irrevocable and any
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provision hereof may not be changed, waived, discharged or terminated
except upon a showing of extraordinary hardship and then only upon
unanimous approval by the Board of Directors.
17. Successor and Assigns; Entire Agreement. The provisions hereof shall
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inure to the benefit of, and be binding upon, the successors, heirs,
assigns, executors and administrators of the parties hereto, including each
transferee of any shares of Common Stock or any Derivative Securities. This
Agreement constitutes the entire agreement of the parties pertaining to the
subject matter hereof and supersedes any and all prior and contemporaneous
agreements, representations, and understandings.
18. Notices. All notices required or permitted hereunder shall be in
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writing and shall be deemed effectively given: (a) upon personal delivery
to the party to be notified upon signed receipt thereof, (b) when sent by
confirmed telex or facsimile if sent during normal business hours of the
recipient; if not, then on the next business day, (c) five (5) calendar
days after having been sent by registered or certified mail, return receipt
requested, postage prepaid, or (d) one (1) day after deposit with a
recognized overnight courier, specifying next day delivery, with written
verification of receipt. All communications shall be sent to the party to
be notified at the address as set forth on the signature pages hereof or at
such other address as such party may designate by five (5) business days
advance written notice to the other parties hereto.
19. Severability. In case any provision of this Agreement shall be
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invalid, illegal, or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
20. Indemnities. Each party agrees to indemnify and hold harmless the
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other party (and its respective directors, officers, affiliates, agents,
successors and assigns) from and against any and all losses, liabilities,
deficiencies, costs, damages and expenses (including, without limitation,
reasonable attorney's fees, charges and disbursements) incurred by such
other party as a result of any inaccuracy in or breach of the
representations, warranties or covenants made by such party herein. In the
event that any dispute among the parties to this Agreement should result in
an action for injunction or arbitration, the prevailing party in such
dispute shall be entitled to recover all fees, costs and expenses of
enforcing any right of such prevailing party under this Agreement,
including without limitation, the reasonable fees and expenses of attorneys
and all fees, costs and expenses of appeals.
21. Titles and Subtitles. The titles of the sections and subsections of
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this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
22. Publicity. The Company agrees that it will not disclose, and will not
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include in any public announcement, the name of the Stockholder, unless and
until such disclosure is required by law or applicable regulation,
including, without limitation, the Company's public reporting obligations
under the Securities Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
23. Survival. This Agreement shall survive until the earlier of (i) the
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termination of the Effective Period; or (ii) termination pursuant to the
terms of Sections 5, provided, however, that termination of this Agreement
for any reason, Sections 10 through 22, inclusive, shall survive and
continue in effect. Third parties may be entitled to rely upon this
Agreement.
24. Counterparts. This Agreement may be executed in any number of
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counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Stockholder and the Company have executed this Agreement
as of the date first set forth above.
Securities Owned Of Record:
___________________________
Derivative Securities Owned:
___________________________
Stockholder and/or holder of Derivative Securities:
By: _________________________ ___________________________________
Name: Social Security Number(s) or other
Taxpayer Identification Number if
applicable
Title:
By: _________________________
Name:
Title:
Address:
Telephone:
__________________________________ -----------------------------------
Fax:
__________________________________ -----------------------------------
e-mail:
__________________________________ -----------------------------------
__________________________________
__________________________________
Accepted and Agreed:
UNIVERSE2U INC.
By:
_________________________
Xxx Xxxxx,
CEO
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Exhibit A
Form of Escrow Agreement
ESCROW AGREEMENT
THIS AGREEMENT made as of the* day of April, 2002.
BETWEEN:
The persons whose names are set out
in the First Column of
Schedule "A" annexed hereto
(the "Security Holders")
OF THE FIRST PART;
- and -
Equity Transfer Services Inc.
a corporation formed and subsisting under
the laws of the Province of Ontario
(the "Escrow Agent")
OF THE SECOND PART;
WHEREAS the Security Holders have agreed to enter into a Lock-Up
Agreement dated April *, 2002, pursuant to which each of the Security
Holders has agreed to deposit with the Escrow Agreement the number of
Common Shares of Universe2U Inc. (the "Issuer") indicated in Schedule A
attached hereto (the "Escrowed Shares");
AND WHEREAS the Escrow Agent has agreed to undertake and perform its
duties according to the terms and conditions hereof;
NOW THEREFORE THIS AGREEMENT WITNESSETH that for and in consideration
of the aforesaid agreements, and of the sum of one dollar ($1.00) now paid by
the parties hereto each to the other (receipt of which sum the parties do hereby
respectively acknowledge each to the other) the Security Holder and the Escrow
Agent covenant and agree each with the other as follows:
1. Contemporaneous with the execution of this Agreement, the Security
Holders hereby place and deposit in escrow with the Escrow Agent the
Escrowed Shares and hereby undertake and agree forthwith to deliver
those certificate(s) representing the Escrowed Shares (including any
replacement securities or certificates if and when such are issued) to
the Escrow Agent for deposit in escrow.
2. The parties hereby agree that the Escrowed Shares and the beneficial
ownership of or any interest in them and the certificates representing
them (including any replacement securities or certificates) shall not
be sold, assigned, hypothecated, pledged, charged, alienated, released
from escrow, transferred within escrow, or otherwise in any manner
dealt with, until such Escrowed Shares are released to the Security
Holders in accordance with Section 3 of this Agreement. The foregoing
shall not prevent any transfer or assignment of title to the Escrowed
Shares that may be required by reason of the death, bankruptcy or
dissolution, as the case may be, of any of the Security Holders, in
which case, the Escrow Agent shall thereafter hold the said securities
and certificates in escrow, subject to the provisions of this
Agreement, for whatever person or company shall be legally entitled to
be or become the registered owner thereof. In addition, should an
officer, director, or employee of the Company terminate their
relationship with the Company for any reason, if requested the
securities held shall be released from this Agreement provided that the
number of securities does not drop below the Minimum Threshold.
3. It is agreed that the Escrowed Shares will be released from escrow on
the 365/th/ day following the date of this Agreement.
4. The Security Holders hereby direct the Escrow Agent to retain the
Escrowed Shares and the certificates (including any replacement
securities or certificates) representing the same and not to do or
cause anything to be done to release the same from escrow or to allow
any sale, assignment, hypothecation, pledge, charge, or alienation
thereof except in accordance with the terms hereof. The Escrow Agent
accepts the responsibilities placed on it hereby and agrees to perform
the same according to the terms hereof.
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5. Other than as set out in Section 2, nothing in this Agreement shall
diminish the rights of the Security Holder as shareholders of the Issuer.
If during the period in which any of the Escrowed Shares retained in escrow
pursuant hereto any cash dividend is received by the Escrow Agent in
respect of the Escrowed Shares, any such cash dividend shall be forthwith
paid or transferred to the Security Holder entitled thereto. If during the
period in which any of the Escrowed Shares are retained in escrow pursuant
hereto, any share dividend or other distribution of securities is received
by the Escrow Agent in respect of the Escrowed Shares, any certificates
representing such share dividend or securities must be held by the Escrow
Agent on and subject to the terms of this agreement. If during the period
in which any of the Escrowed Shares are retained in escrow pursuant hereto,
any share dividend or other distribution of securities is received by the
Security Holders in respect of the escrowed securities, any certificates
representing such share dividend or securities must be forthwith deposited
with the Escrow Agent to be held by the Escrow Agent on and subject to the
terms of this agreement.
6. All voting rights attached to the Escrowed Shares shall at all times be
exercised by the Security Holders and the Escrow Agent shall take all
necessary steps from time to time to permit the Security Holders to
exercise such rights.
7. The Security Holders hereby agree to and do hereby release and indemnify
and save harmless the Escrow Agent from and against all claims, suits,
demands, costs, damages and expenses which may be occasioned by reason of
the Escrow Agent's compliance in good faith with the terms hereof.
8. The reasonable costs and expenses of the Escrow Agent and any replacement
of the Escrow Agent will be paid by the Security Holders. The Issuer shall
bear no responsibility for the costs and expenses of the Escrow Agent or
any replacement of the Escrow Agent.
9. If the Escrow Agent should wish to resign, it shall give at least six
months' notice to the Security Holders, whereupon the Security Holders may
by writing jointly agree and appoint another Escrow Agent in its place and
such appointment shall be binding on the Security Holders, and the new
Escrow Agent shall assume and be bound by the obligations of the Escrow
Agent hereunder.
10. (1) Any notice, designation, communication, request, demand or other
document, required or permitted to be given or sent or delivered
hereunder to any party hereto shall be in writing and shall be
sufficiently given or sent or delivered if it is:
(a) delivered personally to an officer or director of such party;
(b) sent to the party entitled to receive it by registered mail,
postage prepaid, mailed in Canada, or
(c) sent by telecopy machine.
(2) Notices shall be sent to the following addresses or telecopy numbers:
(a) in the case of the Security Holders, to each of their respective
addresses or telecopy numbers as indicated in Schedule A attached
hereto;
(b) in the case of the Escrow Agent,
Equity Transfer Services Inc.
Xxxxx 000
000 Xxxxxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Fax: 000-000-0000
or to such other address or telecopier number as the party entitled to
or receiving such notice, designation, communication, request, demand
or other document shall, by a notice given in accordance with this
section, have communicated to the party giving or sending or delivering
such notice, designation, communication, request, demand or other
document.
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Any notice, designation, communication, request, demand, or
other document given or sent or delivered as aforesaid shall:
(d) if delivered as aforesaid, be deemed to have been given,
sent, delivered, and received on the date of delivery;
(e) if sent by mail as aforesaid, be deemed to have been
given, sent, delivered and received (but not actually
received) on the fourth Business Day following the date of
mailing, unless at any time between the date of mailing and
the fourth Business Day thereafter there is a discontinuance
or interruption of regular postal service, whether due to
strike or lockout or work slowdown, affecting postal service
at the point of dispatch or delivery or any intermediate
point, in which case the same shall be deemed to have been
given, sent, delivered and received in the ordinary course of
the mails, allowing for such discontinuance or interruption of
regular postal service, and
(f) if sent by telecopy machine, be deemed to have been given,
sent, delivered and received on the date the sender receives
the telecopy answer back confirming receipt by the recipient.
11. This agreement may be executed in several parts in the same form and such
parts as so executed shall together form one original agreement, and such
parts if more than one shall be read together and construed as if all the
signing parties hereto had executed one copy of this agreement.
12. This agreement shall terminate on the date on which all of the Escrowed
Shares have been distributed.
13. Wherever the singular or masculine are used throughout this agreement, the
same shall be construed as being the plural or feminine or neuter where the
context so requires.
14. This agreement shall be construed and enforced according to, and the rights
of the parties shall be governed by, the laws of the Province of Ontario.
Each of the parties hereto irrevocably attorns to the jurisdiction of the
courts of the Province of Ontario.
15. This agreement shall enure to the benefit of and be binding upon the
parties hereto, their heirs, executors, administrators, successors, and
assigns.
(balance of this page intentionally left blank)
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IN WITNESS WHEREOF, this agreement has been executed by the parties
hereto as of the date first above written.
SIGNED, SEALED & DELIVERED ) Equity Transfer Services Inc.
in the presence of: )
)
) Per:
) _____________________________
) Name:
)
) Title:
)
)
) Per: _____________________________
) Name:
)
) Title:
)
)
) Per: _____________________________
) Name:
)
) Title:
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