THIS POOLING AGREEMENT made effective the __ day of August, 2000.
B E T W E E N:
LIONEL MERCIER, JANICE MERCIER, RICHARD A. BLOCK,
ANDREA A. BLOCK, HUGH D. TURNER, JEFF EISEN,
DOMINIQUE MATHERS EISEN and MERCHANT BANKING
SERVICES INC.
(hereinafter sometimes collectively called the "Depositors")
OF THE FIRST PART
- and -
WEIR & FOULDS
(hereinafter called the "Pooling Agent")
OF THE SECOND PART
- and -
MURRAY SMITH
OF THE THIRD PART
WHEREAS American Quantum Cycles, Inc. (the "Corporation") is a corporation
duly incorporated under the laws of the State of Florida;
AND WHEREAS the Depositors are at the present time the beneficial holders
of 225,000 preferred shares (the "Preferred Stock") of the Corporation free and
clear of any liens or encumbrances as follows:
Name of Depositor Number of Shares
----------------- ----------------
Lionel and Janice Mercier 75,000
Richard A. and Andrea A. Block, JT 75,000
Merchant Banking Services Inc. 75,000
Hugh D. Turner 15,000
Jeff and Dominique Mathers Eisen 5,000
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AND WHEREAS each of the Depositors will cause to be delivered to the
Pooling Agent certificates for their respective number of the said Preferred
Stock beneficially held in the capital of the Corporation as set out above to be
held and disposed of by the Pooling Agent under and pursuant to the terms and
conditions hereof;
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the
respective covenants and agreements herein contained and other good and valuable
consideration, it is agreed by and between the parties hereto as follows:
1. Each Depositor hereby places and deposits in escrow that number of
Preferred Stock in which it has a beneficial interest as set forth opposite its
name above, under the column " Number of Shares" (hereinafter collectively,
together with any additional shares deposited hereunder, referred to as the
"Pooled Shares") with the Pooling Agent, and hereby undertakes and agrees
forthwith to deliver share certificates for the Pooled Shares (including any
replacement certificates if and when such are issued) to the Pooling Agent for
deposit in escrow. If, during the period in which any of the Pooled Shares are
retained by the Pooling Agent pursuant hereto, any share consolidation,
subdivision, redivision, split or other change of the shares of the Corporation
occurs, the securities issued as a result (the "Additional or Substituted
Securities") in respect of the Pooled Shares shall be held by the Pooling Agent
according to the terms of this Agreement and shall be conclusively deemed to be
Pooled Shares for purposes of this Agreement. Notwithstanding anything to the
contrary herein, the parties hereto specifically acknowledge, confirm and agree
that the Pooled Shares and this Agreement shall not include any shares of the
Corporation which are legally or beneficially held by any of the Depositors in
addition to the Pooled Shares, save and except for any Additional or Substituted
Securities in respect of the Pooled Shares. By way of example, Merchant Banking
Services Inc., on the date hereof, is the beneficial holder of 200,000
preference shares of the Corporation, of which only 75,000 of such preference
shares are Pooled Shares and covered by this Agreement.
2. Subject to Section 3 below, the parties hereby agree that the Pooled
Shares and the beneficial ownership of, or any interest in them and the
certificates and evidences 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 unless the express written consent, order or direction of, all
parties hereto is provided to the Pooling Agent.
3. The Pooled Shares shall be held by the Pooling Agent who shall, subject
to the provisions of this Agreement, take directions with respect to the release
of such shares from Murray Smith who shall have the complete and unfettered
discretion in that regard, subject to the terms of this Pooling Agreement.
4. The Pooled Shares shall be released upon the following terms and
conditions:
(a) subject to subsection (b) herein:
(i) on December 28, 2000, one-half (1/2) of the Pooled Shares shall
be released pro rata among the Depositors, based on the number of
Pooled Shares beneficially held; and
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(ii) on December 28, 2001, all of the remaining Pooled Shares shall be
released pro rata among the Depositors, based on the number of
Pooled Shares beneficially held;
(b) if any of Murray Smith, Richard A. Block, Lionel Mercier, Hugh D.
Turner or Jeff Eisen are not employed by or consulting to the
Corporation (or its successor) on either of the aforementioned release
dates, then the following shall occur:
o if Murray Smith is not employed or consulting on such date as a
result of his resignation or termination for cause, then the
Pooled Shares of Merchant Banking Services Inc. shall be released
to Merchant Banking Services Inc.
o If Richard A. Block is not employed or consulting on such date as
a result of his resignation or termination for cause, then the
Pooled Shares of Richard A. and Andrea A. Block, JT shall be
released to Merchant Banking Services Inc.
o if Lionel Mercier is not employed or consulting on such date as a
result of his resignation or termination for cause, then the
Pooled Shares of Lionel and Janice Mercier shall be released to
Merchant Banking Services Inc.
o if Hugh D. Turner is not employed or consulting on such date as a
result of his resignation or termination for cause, then the
Pooled Shares of Hugh D. Turner shall be released to Merchant
Banking Services Inc.
o if Jeff Eisen is not employed or consulting on such date as a
result of his resignation or termination for cause, then the
Pooled Shares of Jeff and Dominique Eisen shall be released to
Merchant Banking Services Inc.
(c) each of Richard A. Block, Andrea A. Block, Lionel Mercier, Janice
Mercier, Hugh D. Turner, Jeff Eisen and Dominique Mathers Eisen hereby
irrevocably transfer and assign all legal and beneficial rights to
their respective Pooled Shares to Merchant Banking Services Inc., in
the event that the Pooled Shares are to be released to Merchant
Banking Services Inc. pursuant to subsection (b) hereof;
(d) each of Murray Smith, Richard A. Block, Lionel Mercier, Hugh D. Turner
and Jeff Eisen agree to enter into employment or consulting agreements
with the Corporation within ninety (90) days from the date hereof and
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<PAGE>
all of the parties hereto shall use their best efforts to cause the
Corporation to enter into the said employment or consulting agreements
with the said individuals within the said time period.
5. The Depositors hereby jointly and severally agree to and do hereby
release and indemnify and save harmless Murray Smith from and against all
claims, suits, demands, costs, damages and expenses which may be occasioned by
reason of Murray Smith giving directions in good faith with respect to the
release of the Pooled Shares in accordance with the terms hereof.
6. The Depositors hereby direct the Pooling Agent to retain the Pooled
Shares and the certificates and evidences representing them (including any
replacement securities or certificates) and not to cause anything to be done to
release the same from escrow or allow any transfer, hypothecation or alienation
thereof except as expressly provided herein. The Pooling Agent agrees to perform
the same in accordance with the terms hereof.
7. If during the Pooling Period any dividend or other distribution is
received by the Pooling Agent in respect of the Pooled Shares any such dividend
or other distribution shall be forthwith paid or transferred pro-rata to the
relevant Depositors.
8. Subject to the provisions of any other agreement, attorney or proxy to
the contrary, all voting rights attached to the Pooled Shares held hereunder
shall at all times be exercised by the respective registered owners thereof.
9. The acceptance by the Pooling Agent of its duties and obligations under
this Pooling Agreement is subject to the following terms and conditions which
the parties to this Pooling Agreement hereby agree shall govern and control the
Pooling Agent with respect to its rights, duties, liabilities and immunities:
(a) the Pooling Agent shall not be liable or accountable for any loss or
damage whatsoever to any person caused by the performance or failure
to perform its responsibilities under this Pooling Agreement, save
only to the extent that such loss or damage is attributable to the
negligence or wilful misconduct of the Pooling Agent;
(b) the Pooling Agent shall have no duties except those which are
expressly herein set forth and the rights, duties, liabilities and
immunities of the Pooling Agent may not be altered without its prior
written consent;
(c) the Pooling Agent shall not be bound by any notice, claim or demand
with respect hereto or any waiver, modification, termination or
rescission of this Pooling Agreement, unless received by it in writing
and signed by all of the other parties hereto;
(d) upon the release and delivery by the Pooling Agent of the Deposited
Shares as provided in this Pooling Agreement, the Pooling Agent shall
be released and discharged from all of its obligations hereunder;
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(e) in acting hereunder, the Pooling Agent shall be jointly and severally
indemnified and saved harmless by the Depositors from all expenses,
liabilities, claims, suits, costs and demands (collectively the
"Expenses") arising in connection with the performance by it of its
duties under this Pooling Agreement, save only to the extent that the
Expenses arise from the negligence or wilful misconduct of the Pooling
Agent;
(f) the Pooling Agent may act on the opinion or advice obtained from its
counsel or accountants duly qualified to practice in the Province of
Ontario and shall not be responsible for any loss occasioned by doing
so nor shall it incur any liability or responsibility for deciding in
good faith not to act upon such opinion or advice;
(g) the Pooling Agent may rely upon any document or instrument delivered
to it in compliance with or purporting to be in compliance with any
provision of this Pooling Agreement without any obligation whatsoever
for it to make any inquiry as to the correctness of any statement made
therein;
(h) each of the Depositors shall be jointly and severally responsible for
the payment of all the reasonable fees and expenses charged and
incurred by the Pooling Agent in the carrying out of its duties and
obligations hereunder; and
(i) the Pooling Agent may resign and be discharged from any further duties
or liabilities hereunder by giving fifteen (15) days' written notice
to the Depositors or such shorter notice as they may accept. Upon the
resignation of the Pooling Agent, its successors shall be forthwith
appointed by the Depositors and upon such appointment the Deposited
Shares will be transferred to the successor and it shall be vested
with the same powers, rights, duties and responsibilities as if the
successor had been originally named as the Pooling Agent hereunder.
10. This Pooling Agreement shall, unless otherwise agreed in writing by all
of the parties hereto, continue in force and effect until the last of the Pooled
Shares are released pursuant to Section 4 herein. 11. This Agreement may be
executed in several counterparts in the same form and such counterparts as so
executed shall together form one original agreement, and such counterparts, 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. Unless the context otherwise requires, words importing the singular
include the plural and vice versa and words importing gender include all
genders.
13. This Agreement shall enure to the benefit of and be binding upon the
parties hereto and each of their heirs, executors, administrators, successors
and assigns.
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<PAGE>
14. This Agreement shall be governed by and construed under the laws of the
Province of Ontario.
IN WITNESS WHEREOF the parties hereto have executed these presents the day
and year first above written.
/s/ Lionel Mercier
---------------------------------
Lionel Mercier
/s/ Janice Mercier
---------------------------------
Janice Mercier
/s/ Richard A. Block
---------------------------------
Richard A. Block
/s/ Andrea A. Block
---------------------------------
Andrea A. Block
/s/ Hugh D. Turner
---------------------------------
Hugh D. Turner
/s/ Jeff Eisen
---------------------------------
Jeff Eisen
/s/ Dominique Mathers Eisen
---------------------------------
Dominique Mathers Eisen
MERCHANT BANKING SERVICES INC.
Per: /s/ Murray Smith
---------------------------------
WEIR & FOULDS
Per: /s/ John L. Pandell
---------------------------------
John L. Pandell
/s/ Murray Smith
---------------------------------
Murray Smith
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