ESCROW AGREEMENT
(Performance Escrow Agreement)
THIS AGREEMENT made in triplicate and dated for reference the 7th day of
October, 1994.
AMONG:
ADVENTURE CAPITAL CORPORATION c/o 4000 Petro-Canada Centre,
West Tower, ▇▇▇ - ▇▇▇ ▇▇▇▇▇▇ ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
(hereinafter called the "Issuer")
OF THE FIRST PART
AND:
THE R-M TRUST COMPANY Suite 600, The Dome Tower, ▇▇▇ - ▇▇▇
▇▇▇▇▇▇ ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇ (herein called the
"Trustee")
OF THE SECOND PART
AND:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. GOOD, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ all ▇/▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇ (herein called the "Security Holders")
OF THE THIRD PART
WHEREAS the Security Holders and the Issuer entered into an
agreement dated the 26th day of August, 1994 and September 2, 1994 whereby the
Security Holders agreed to sell certain property to the Issuer, the
consideration for such property being at least in part the allotment of
securities in the Issuer to the Security Holders, the property and the number of
securities and the names of the Security Holders presently owning or about to
receive such securities being respectively and more particularly described in
Schedule "A" attached to and forming part of this agreement.
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AND WHEREAS in order to comply with the requirements of The
Alberta Stock Exchange, the Security Holders are desirous of depositing in
escrow certain securities in the Issuer owned or to be received by them;
AND WHEREAS the Trustee has agreed to undertake and perform
its duties according to the terms and conditions thereof;
NOW THEREFORE this agreement witnesses that, in consideration
of the sum of one dollar ($1) paid by the parties to each other, receipt of this
sum being acknowledged by each of the parties, the Security Holders jointly and
severally covenant and agree with the Issuer and with the Trustee, and the
Issuer and the Trustee covenant and agree each with the other and with the
Security Holders jointly and severally as follows:
1. Where used in this agreement, or in any amendment or supplement hereto,
unless the context otherwise requires, the following words and phrases shall
have the following ascribed to them below:
(a) "Cash Flow" means net income derived from the property,
as shown on the audited financial statements or
verified by the Issuer's auditors, adjusted for the
following add-backs:
(i) depreciation,
(ii) depletion,
(iii) deferred taxes,
(iv) amortization of goodwill,
(v) amortization of research and development costs.
(b) "Deferred Expenditures" means expenditures which have
been verified by the Issuer's auditors and incurred in
exploring, developing or maintaining in good standing
the aforesaid property.
(c) "Related Party" means promoters, officers, directors,
other insiders of the issuer and any associates or
affiliates of the foregoing.
2. Each of the Security Holders hereby places and deposits in escrow with the
Trustee those of his securities in the Issuer which are represented by the
certificates described in Schedule "A" and the Trustee hereby acknowledges
receipt of those certificates. The Security Holders agree to deposit in escrow
any further certificates representing securities in the Issuer which he may
receive as a stock dividend on securities hereby escrowed, and to deliver to the
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Trustee immediately on receipt thereof the certificates for any such further
securities and any replacement certificates which may at any time be issued for
any escrowed securities.
3. The Parties hereby agree that, subject to the provisions of paragraph 6
herein, the securities and the beneficial ownership of or any interest in them
and the certificate representing them (including any replacement securities or
certificates) shall not be sold, assigned, hypothecated, alienated, released
from escrow, transferred within escrow, or otherwise in any manner dealt with,
without the written consent of The Alberta Stock Exchange (hereinafter referred
to as the "Exchange") given to the Trustee or except as may be required by
reason of the death or bankruptcy of any Security Holder, in which cases the
Trustee shall hold the said certificates subject to this agreement, for whatever
person, or company shall be legally entitled to become the registered owner
thereof.
4. The Security Holders direct the Trustee to retain their respective securities
and the certificates (including any replacement securities or certificates)
representing them and not to do or cause anything to be done to release them
from escrow or to allow any transfer, hypothecation or alienation thereof,
without the written consent of the Exchange. The Trustee accepts the
responsibilities placed on it by the agreement and agrees to perform them in
accordance with the terms of this agreement and the written consents, orders or
directions of the Exchange.
5. Any Security Holder applying to the Exchange for a consent for a transfer
within escrow shall, before applying, give reasonable notice in writing of his
intention to the Issuer and the Trustee.
6.
(a) The Exchange will consent to the release from escrow on
the following basis:
(i) one share for each $0.11 of cash flow generated
by or from the property.
(b) Any release from escrow under paragraph 6(a)(i) shall
be made pursuant to a written application on behalf of
the Issuer or the Security Holders, which application
shall be accompanied by evidence of the Cash Flow
received in a form satisfactory to the Exchange.
Application for release may only be made once per year
and may only relate to Cash Flow received or Deferred
Expenditures incurred in the preceding fiscal year or
the fiscal years of the Issuer since the last release
from escrow pursuant to this agreement, whichever is
greater. All shares released from escrow shall, unless
otherwise directed by the Exchange, be distributed
pro-rata to all Security Holders.
(c) Notwithstanding subparagraph (b) above, the maximum
number of shares
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to be released from escrow in any year to a Security
Holder who is a Related Party shall be one third of the
original number of shares held in escrow on behalf of
such Security Holder.
7. A release from escrow of all or part of the escrowed securities shall
terminate this agreement only in respect to those securities so released. For
greater certainty this paragraph does not apply to securities transferred within
escrow.
8. The Security Holders shall, if a dividend is declared while the Escrowed
Shares or any of them continue to be held in escrow under this Agreement,
renounce and release any right to receive payment of the dividend on the shares
then held in escrow.
9. If the Issuer is wound up and any securities remain in escrow under this
agreement at the time when a distribution of assets to holders of securities is
made by the liquidator, the Security Holders shall assign their right to receive
that part of the distribution which is attributable to the escrowed securities
to the Trustee, for the benefit of, and in trust for the persons and companies
who are then holders of free securities in the Issuer rateably in proporation to
their holdings.
10.
(a) In the event that the Issuer has lost, alienated or has
not obtained a good or marketable title to, or has
abandoned or discontinued development of, any or all of
the aforesaid property which was or formed part of the
consideration for which the aforesaid securities were
issued, or that any or all of the said property has
become of little or no value, the issuer shall declare
the occurrence of that event, with full particulars
thereof, to the Exchange by a resolution of its
directors, and those Security Holders who are directors
from time to time hereby agree to cause such resolution
to be passed and certified to the satisfaction of the
Exchange.
(b) The Security Holder jointly and severally agree with
the Issuer and the Trustee that in the event of any
such loss, alienation, failure to acquire title, or of
such abandonment or discontinuance of development or
diminution of value, the securities held in escrow
shall not be cancelled or released from escrow, in
whole or in part, except with the consent of the
Exchange.
(c) The Exchange may, in its sole discretion, having regard
to the number and value of the securities issued for
the property, the value of the property as ultimately
established and such other circumstances as it may
consider relevant, determine the number of securities
to be cancelled or released and shall communicate its
decision in writing to the Trustee. If the Exchange
determines that less than all the securities then held
in escrow shall be cancelled or released, the
securities to be cancelled or released shall be taken
rateably from the escrowed security holding of each of
the Security
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Holders, unless the Exchange otherwise directs or the
Security Holders, with the consent of the Exchange,
otherwise agree in writing.
(d) On receipt by the Trustee of a determination to cancel,
each of the Security Holders shall tender the required
number of escrowed securities to the Issuer by way of
gift for cancellation and, the Issuer shall thereupon
take the necessary action, by way of reduction of
capital or otherwise, to cancel them, and the
certificates for these securities shall be delivered up
for cancellation by the Issuer's transfer agent.
(e) Each of the Security Holders undertakes and agrees to
vote and cause to be voted their respective securities
in a manner consistent with the terms, conditions and
intent of this agreement in relation to the aforesaid
gifting back of securities for cancellation.
11. Notwithstanding paragraphs 6 and 10, any shares remaining in escrow on the
seventh anniversary of the date of this agreement, unless otherwise exempted in
writing by the Exchange, shall be cancelled by the Trustee within 6 months of
the said seventh anniversary.
12. All voting rights attached to the escrowed securities shall at all times be
exercised by the respective registered owners thereof.
13. The Security Holders hereby jointly and severally agree to and do hereby
release and indemnify and save harmless the Trustee from and against all claims,
suits, demands, costs, damages and expenses which may be occasioned by reason of
the Trustee's compliance in good faith with the terms hereof.
14. The Issuer hereby acknowledges the terms and conditions of this Agreement
and agrees to take all reasonable steps to facilitate its performance and to pay
the Trustee's proper charges for its services as trustee of this escrow.
15. If the Trustee should wish to resign, it shall give at least 6 months'
notice to the Issuer which may, with the written consent of the Exchange, by
writing appoint another Trustee in its place and such appointment shall be
binding on the Security Holders, and the new Trustee shall assume and be bound
by the obligations of the Trustee hereunder.
16. The covenants of the Security Holders with the Issuer in this agreement are
made with the Issuer both in its own right and as trustee for the holders from
time to time of free securities in the Issuer, and may be enforced not only by
the Issuer but also by any holder of free securities.
17. This agreement may be executed in several parts of the same form and the
parts
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as so executed shall together constitute one original agreement, and the 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.
18. Wherever the singular or masculine is used, the same shall be construed to
include the plural or feminine or neuter where the context so requires.
19. This agreement shall enure to the benefit of and be binding on the parties
to this agreement and each of their heirs, executors, administrators, successors
and assigns.
IN WITNESS WHEREOF the Issuer and Trustee have caused their
respective corporate seals to be hereto affixed and the Security Holders have
hereto set their respective hands and seals.
ADVENTURE CAPITAL CORPORATION
Per:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
c/s
Per:
THE R-M TRUST COMPANY
Per:/s/ Signature
c/s
Per:/s/ Signature
SIGNED, SEALED AND DELIVERED by the respective Security Holders
whose names are subscribed in the right-hand column in the presence of the
respective persons whose names are subscribed in the left-hand column.
WITNESSES SECURITY HOLDERS
/s/ Signature /s/ Signature
Witness to the Signature of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ Signature /s/ ▇▇▇▇▇▇▇ ▇. Good
Witness to the Signature of ▇▇▇▇▇▇▇ ▇. Good ▇▇▇▇▇▇▇ ▇. GOOD
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/s/ Signature /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Witness to the Signature of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
WIN:4035
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SCHEDULE "A"
to agreement dated for reference the 7th day of October, 1994 and made among
Adventure Capital Corporation, therein called the "Issuer", The R-M Trust
Company, therein called the "Trustee", and some security holders of the
Fraserview Hearing & Speech Clinic Ltd., therein called the "Security Holders".
CERTIFICATE NUMBERS
NAMES OF TYPE OF NUMBER OF OF SECURITIES
SECURITY HOLDERS SECURITIES SECURITIES ESCROWED ESCROWED
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Common Shares 1,951,258
▇▇▇▇▇▇▇ ▇. Good Common Shares 1,149,371
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Common Shares 1,149,371
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4,250,000
DESCRIPTION OF PROPERTY
All of the issued and outstanding shares of Fraserview Hearing and
Speech Clinic Ltd., a British Columbia company.
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