ESCROW AGREEMENT
THIS AGREEMENT made in triplicate this 5th day of March, 1996
BETWEEN:
ELIAS VAMVAKAS, of the City of Toronto,
1111881 ONTARIO LIMITED, a corporation incorporated
under the laws of Ontario
JEFFERY J. MACHAT, of the City of Windsor
1123562 ONTARIO LIMITED, a corporation incorporated
under the laws of Ontario
and LNG ENTERPRISES, INC., a corporation incorporated
under the laws of Michigan
(hereinafter collectively called the "Security
Holders")
OF THE FIRST PART
-and-
THE R-M TRUST COMPANY, a company incorporated under
the laws of Canada and having a registered office in
the City of Toronto, Ontario
(hereinafter called the "Trustee")
OF THE SECOND PART
-and-
TLC THE LASER CENTER INC., a corporation incorporated
under the laws of the Province of Ontario
(hereinafter called the "Issuer")
OF THE THIRD PART.
WHEREAS in furtherance of complying with the requirements of the
Securities Act (Ontario), the Security Holders are desirous of depositing in
escrow certain securities in the Issuer owned or to be received by them;
AND WHEREAS 1111881 Ontario Limited is a corporation indirectly
controlled by Elias Vamvakas and 1123562 Ontario Limited is a corporation
indirectly controlled by Jeffery J. Machat;
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AND WHEREAS the Trustee has agreed to undertake and perform its
duties according to the terms and conditions hereof;
NOW THEREFORE this Agreement witnesseth that in consideration of the
aforesaid agreements, and of the sum of one dollar ($l.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 Holders 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, as
follows:
1. Each of the Security Holders hereby places and deposits in escrow those
securities of the Issuer which are represented by the certificates described or
referred to in Schedule "A" (hereinafter, the "Escrowed Securities") hereto with
the Trustee and hereby undertakes and agrees forthwith to deliver those
securities (including any replacement securities or certificates if and when
such are issued or allotted) to the Trustee for deposit in escrow. Included in
and forming part of the Escrowed Securities are certain common shares of the
Issuer to be issued to certain of the Security Holders prior to closing of the
initial public offering of the Issuer pursuant to the Prospectus (as hereinafter
defined).
2. The parties hereby agree that the Escrowed 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 express consent,
order or direction in writing of the Ontario Securities Commission (hereinafter
referred to as the "Commission") being first had and obtained 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, firm or corporation shall be legally entitled to
be or become the registered owner thereof.
3. The Security Holders hereby direct the Trustee to retain their respective
Escrowed Securities 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 transfer, hypothecation or
alienation thereof except with and as directed by the written
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consent, order or direction of the Commission. The Trustee hereby accepts the
responsibilities placed on it hereby and agrees to perform the same in
accordance with the terms hereof and the written consents, orders or directions
of the Commission.
4. (a) The Trustee shall release from escrow the Escrowed Securities held by the
Trustee in the following amounts and at the following times, pro rata to the
Security Holders:
(i) 10% of the Escrowed Securities immediately after that date
which is nine months following the date of the final receipt
of the Director under the Securities Act (Ontario) (the
"Director") for the prospectus dated March 5, 1996 of the
Issuer relating to the offering of common shares in the
capital of the Issuer (the "Prospectus");
(ii) a further 20% of the Escrowed Securities immediately after
each of the first, second and third anniversaries of the
release contemplated in clause 4(a)(i) above; and
(iii) the remaining 30% of the Escrowed Securities immediately after
the fourth anniversary of the release contemplated in clause
4(a)(i) above.
(b) Notwithstanding the provisions of paragraph 4(a), any Security Holder
may, at any time while any of the Escrowed Securities remain with the Trustee
pursuant to this agreement, apply to the Commission in accordance with the
policies of the Commission for the Commission's consent to the release from
escrow of all or part of the Escrowed Securities and the Trustee shall, upon
receipt of the written direction of such Security Holder and the consent of the
Commission, release such securities.
(c) Notwithstanding the provisions of paragraph 4(a), upon the death of
any Security Holder who is an individual, that individual's Escrowed Securities
may be released from escrow by the Trustee such that 1/3 of such Escrowed
Securities have been released after the date of death, 2/3 of such Escrowed
Securities have been released after the first anniversary of the date of death
and all such Escrowed Securities have been released after the second anniversary
of the date of death, provided that the Trustee receives from the legal
representative of the deceased
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Security Holder proper evidence that the Commission has been informed by notice
in writing of the date of death of such Security Holder.
(d) This agreement has been made in connection with a proposed
distribution by the Issuer of common shares in respect of which the Issuer has
filed and obtained a receipt from the Commission for the preliminary prospectus
dated January 15, 1996. If a final receipt is not obtained from the Commission
for the Prospectus, or if subscriptions for the minimum offering of common
shares are not received by the agents by May 4, 1996:
(i) the Trustee shall forthwith after May 4, 1996 release all of
the Escrowed Securities from the provisions of this agreement;
and
(ii) this agreement shall cease, on May 4, 1996, to be of any
further force and effect.
5. The Security Holders, or any of them, may pledge, charge, hypothecate or
otherwise encumber their respective Escrowed Securities in order to secure their
bona fide indebtedness to a third party lender with whom the relevant Security
Holder deals at arm's length, if such lender acknowledges in writing, addressed
to the parties hereto and to the Commission, that the securities are held by,
and shall be dealt with by the Trustee, subject to and in accordance with this
agreement, and such acknowledgement is filed with the Commission.
6. If during the period in which any of the said Escrowed Securities are
retained in escrow pursuant hereto, any dividend is received by the Trustee in
respect of the Escrowed Securities, any such dividend shall be forthwith paid or
transferred to the respective Security Holders entitled thereto.
7. All voting rights attached to the Escrowed Securities shall at all times be
exercised by the respective registered owners thereof.
8. The Issuer and each Security Holder hereby agree to indemnify and hold
harmless the Trustee from and against any liability, loss, claim, action, cost,
and expense, including legal fees and disbursements, (collectively, the
"Liabilities") which may be asserted against the Trustee arising from or out of
this Agreement; provided that the Issuer and each Security Holder
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shall not be required to indemnify the Trustee in the event that such
Liabilities are a result of the gross negligence or wilful misconduct of the
Trustee. This provision shall survive the resignation or removal of the Trustee
or the termination of this Agreement.
9. The Trustee shall be protected in acting and relying reasonably upon any
written 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 signed by
any person required to or entitled to execute and deliver to the Trustee any
such Documents 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 and accuracy of any information therein contained, which it in good
faith believes to be genuine.
10. The Trustee may retain legal counsel and advisors as may be reasonably
required 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.
11. In consideration of the Trustee fulfilling its obligations hereunder, the
Issuer agrees to pay the Trustee such reasonable fees and expenses as the Issuer
and the Trustee may agree upon from time to time.
12. The Trustee shall have no duties or responsibilities except as expressly
provided in this Agreement and shall have no liability or responsibility arising
under any other agreement, including any agreement referred to in this
Agreement, to which the Trustee is not a party.
13. The Issuer hereby acknowledges the terms and conditions of this agreement
and agrees to take all reasonable steps to facilitate its performance.
14. If the Trustee should wish to resign, it shall give at least six months'
notice to the Issuer, which may, with the written consent of the Commission, 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.
15. The written consent, order or direction of the Commission as to a release
from escrow of all or part of the said Escrowed Securities shall terminate this
agreement only in
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respect to those securities so released. For greater certainty this clause does
not apply to Escrowed Securities transferred within escrow.
16. Each Security Holder covenants and agrees that their respective, current
mailing address is set out in the register of the securities kept by the Trustee
as transfer agent and registrar and that, from time to time, they shall provide
to the Trustee their respective current mailing address.
17. 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.
18. 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.
19. This agreement shall enure to the benefit of and be binding upon the parties
hereto, their and each of their heirs, executors, administrators, successors and
assigns.
IN WITNESS WHEREOF the parties hereto have executed these presents
the day and year first above written.
TLC THE LASER CENTER INC.
By: /s/ John Riegert
---------------------------------
Authorized Signing Officer
THE R-M TRUST COMPANY
By:
---------------------------------
Authorized Signing Officer
By:
---------------------------------
Authorized Signing Officer
LNG ENTERPRISES, INC.
By:
---------------------------------
Authorized Signing Officer
IN WITNESS WHEREOF the parties hereto have executed these presents
the day and year first above written.
TLC THE LASER CENTER INC.
By:
---------------------------------
Authorized Signing Officer
THE R-M TRUST COMPANY
By: /s/ Charito Librodo
---------------------------------
CHARITO LIBRODO
Authorized Signing Officer
By: /s/ Bruce Cornish
---------------------------------
BRUCE CORNISH
Authorized Signing Officer
LNG ENTERPRISES, INC.
By:
---------------------------------
Authorized Signing Officer
be read together and construed as if all the signing parties hereto had executed
one copy of this agreement.
17. 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.
18. This agreement shall enure to the benefit of and be binding upon the parties
hereto, their and each of their heirs, executors, administrators, successors and
assigns.
IN WITNESS WHEREOF the parties hereto have executed these presents
the day and year first above written.
TLC THE LASER CENTER INC.
By:
---------------------------------
Authorized Signing Officer
THE R-M TRUST COMPANY
By:
---------------------------------
Authorized Signing Officer
By:
---------------------------------
Authorized Signing Officer
LNG ENTERPRISES, INC.,
a Michigan corporation
By: /s/ Lawrence M. Loewenthal
---------------------------------
Authorized Signing Officer
LAWRENCE M. LOEWENTHAL,
Its President
1111881 ONTARIO LIMITED
By: /s/ Elias Vamvakas
---------------------------------
Authorized Signing Officer
1123562 ONTARIO LIMITED
By:
---------------------------------
Authorized Signing Officer
1111881 ONTARIO LIMITED
By: /s/ Elias Vamvakas
---------------------------------
Authorized Signing Officer
1123562 ONTARIO LIMITED
By: /s/ Jeffrey J. Machat
---------------------------------
Authorized Signing Officer
)
)
)
) /s/ Elias Vamvakas
- ------------------------------ ) ---------------------------------------
Witness ) Elias Vamvakas
)
)
- ------------------------------ ) ---------------------------------------
Witness ) Jeffery J. Machat
)
)
)
)
- ------------------------------ ) ---------------------------------------
Witness ) Elias Vamvakas
)
) /s/ Jeffery J. Machat
- ------------------------------ ) ---------------------------------------
Witness ) Jeffery J. Machat
SCHEDULE A
Number
Name of of Securities Certificate
Security Holder Beneficial Owner Subject to Escrow Number
--------------- ---------------- ----------------- ------
LNG Enterprises, Inc. LNG Enterprises, Inc. 2,466,667 C-11
Elias Vamvakas
(a) Delivered Herewith:
Elias Vamvakas Elias Vamvakas 750,000 C-9
1111881 Ontario
Limited Elias Vamvakas 2,220,000 C-8
(b) Shares to be issued Elias Vamvakas 376,504
and delivered prior
to closing upon
exercise of value
options
Jeffery Machat
(a) Delivered Herewith:
Jeffery Machat Jeffery Machat 12,500 C-30
1123562 Ontario
Limited Jeffery Machat 4,440,000 C-10A
(b) Shares to be issued Jeffery Machat 9,496
and delivered prior
to closing upon
exercise of value
options