ESCROW INSTRUCTIONS (SECURITIES OFFERING)
These Escrow Instructions are given by Lions Gate Investment Limited, a Nevada
corporation (the "Company") to City National Bank, a national banking
association ("Escrow Holder").
1. OFFERING: The Company desires to offer to subscribers a maximum of 500,000
shares of common stock at a price of $0.20 per share (the "Shares"), payable in
cash as more particularly set forth in a Prospectus dated September 19, 2000, a
copy of which has been delivered to Escrow Holder (the "Disclosure Document").
Escrow Holder is not to be concerned with the Disclosure Document, except as
specifically set forth below.
2. ESTABLISHMENT OF THE ESCROW:
(a) Escrow Holder will open one or more escrow accounts (the "Escrow"), and the
Company will deliver to Escrow Holder from time to time for deposit into
the Escrow the full amount of each payment received from each subscriber
(the "Subscription Price"), together with a full copy of the Subscription
Agreement executed by such subscriber, showing the name, address and
taxpayer identification number of such subscriber, the number of shares
subscribed for and the amount paid therefor and an I.R.S. Form W-9 or Form
W-8, as applicable, completed and executed by each subscriber. Escrow
Holder shall have no obligation to accept monies, documents or instructions
from any party other than the Company with respect to the Escrow. All
monies so deposited will be in the form of a subscriber's personal check in
favor of "CITY NATIONAL BANK - LIONS GATE INVESTMENT LIMITED". Should any
such check be returned to Escrow Holder as uncorrectable for any reason,
Escrow Holder will charge the amount of such unpaid check to Escrow, notify
the Company of the amount of such return check, the name of the subscriber
and the reason for return, and hold such check subject to further
instructions from the Company. Escrow Holder will hold all monies and other
property in the escrow free from any lien, claim or offset, except as set
forth herein, and such monies and other property shall not become the
property of the Company, nor subject to the debts thereof, unless the
conditions set forth in these instructions to disbursement of such monies
to the Company have been fully satisfied.
(b) All share certificates representing the Shares issued in connection with
the Company's offering shall also be deposited by the Company directly into
the Escrow Account promptly upon issuance for safekeeping only. The
identity of the purchasers of the securities shall be included on the stock
certificates or other documents evidencing such securities. Securities held
in the Escrow Account are to remain as issued and deposited and shall be
held for the sole benefit of the purchasers, who shall have voting rights
with respect to securities held in their names, as provided by applicable
state law. No transfer or other disposition of securities held in the
Escrow Account or any interest related such securities shall be permitted
other than by will or the laws of descent and distribution, or pursuant to
a qualified domestic relations order as defined by the Internal Revenue
code of 1986 as amended [26 U.S.C. 1 et seq.], or Title 1 of the Employee
Retirement Income Security Act [29 U.S.C. 1001 et seq.], or the rules
thereunder.
3. INVESTMENT: All funds will be held by Escrow Holder in a Money Market
Investment Account bearing interest at Escrow Holder's then applicable rate. No
funds will earn
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interest until Escrow Holder receives an I.R.S. Form W-9 or Form W-8 completed
and executed by the Company and the subscriber's check has been collected in
good funds.
4. (a) CANCELLATION BY THE COMPANY: The Company may reject or cancel any
subscription in whole or in part. If the Subscription Price for such rejected or
cancelled subscription has been delivered to Escrow Holder, the Company will
inform Escrow Holder of the rejection or cancellation, and Escrow Holder upon
receiving such notice will refund to the purchaser the Subscription Price.
(b) CANCELLATION BY SUBSCRIBERS: All Subscriptions are irrevocable, and no
subscriber will have any right to cancel or rescind the subscription, except as
required under the law of any jurisdiction in which the shares are sold.
5. CLOSING: The Escrow will remain open until the earliest to occur of the
following (the "Closing Date"):
(i) receipt by the Escrow Agent of a signed representation from the
Company to the Escrow Agent, that the requirements of Rule 419(e)(1)
and (e)(2) of the Securities Act of 1933 have been met, and there has
been consummation of an acquisition meeting the requirements of Rule
419(e)(2); or
(ii) written notification from the Company to the Escrow Agent stating that
an acquisition meeting the requirements of Rule 419(e)(1) has not
occurred within 18 months after the effective date of the Disclosure
Document and that the subscription funds held in escrow are to be
returned to the Company's subscribers and the Shares are to be
returned to the Company; or
(iii)written notification from the Company to the Escrow Agent to deliver
all funds and securities to another escrow agent in accordance with
Paragraph 11 then, in such event, the Escrow Agent shall deliver all
funds and securities to such other escrow agent whereupon the Escrow
Agent shall be released from further liability hereunder.
Upon Closing, the Escrow Holder will disburse all monies, share certificates,
instruments and other documents in the Escrow to the Company or as otherwise
instructed by the Company. The Escrow Agent may deliver the Shares in trust to
an officer of the Company for distribution to the registered shareholders. Under
no circumstances will Escrow Holder be required to disburse any monies until the
check therefore has been collected in good funds.
6. INSTRUCTIONS AND AMENDMENTS: All notices and instructions to Escrow Holder
must be in writing and may be delivered personally or mailed, certified or
registered mail, return receipt requested, addressed to CITY NATIONAL BANK, 400
N. ROXBURY DR., 6TH FLOOR, BEVERLY HILLS, CALIFORNIA, 90210, ATTENTION: SUE
BEHNING/VP, SENIOR TRUST OFFICER/CNI - TRUST DEPARTMENT. All such notices and
instructions will be deemed given when received by Escrow Holder, as shown on
the receipt therefor. All Instructions from the Company
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will be signed by Keith Ebert. Unless otherwise provided herein, these
instructions may be amended or further instructions given only to the extent
that such amendments or instructions are consistent with, and do not add
materially to, the description of the Escrow contained in the Disclosure
document, unless consented to in writing by all subscribers whose Subscription
Prices have been received by Escrow Holder therefore and unless disclosed to all
subscribers thereafter.
7. FEES: Escrow Holder shall be entitled to an initial, non refundable, set-up
fee of $2,000 payable concurrently with its acceptance, and upon opening of this
Escrow, plus actual expenses incurred in performing its duties hereunder. The
Company or partnership will pay Escrow Holder's fees and expenses provided that
upon the close of the escrow, Escrow Holder may withhold from any amounts
disbursed to the Company the amount of its then earned but unpaid fees and
expenses. Fees will be charged pursuant to the fee schedule attached hereto and
incorporated herein by reference.
8. EXCULPATION: Escrow Holder will not be liable for:
(a) The genuineness, sufficiency, correctness as to form, manner of
execution or validity of any instrument deposited in the Escrow, nor
the identity, authority or rights of any person executing the same.
(b) Any misrepresentation or omission in the Disclosure Document or any
failure to keep or comply with any of the provisions of any agreement,
contract, or other instrument referred to therein; or
(c) The failure of the Company to transmit, or any delay in transmitting
any subscriber's Subscription Price to Escrow Holder.
Escrow Holder's duties hereunder shall be limited to the safekeeping of monies,
instruments or other documents received by the Escrow Holder into the Escrow,
and for the disposition of same in accordance with this Escrow Agreement and any
further instructions pursuant to this Escrow Agreement.
9. INTERPLEADER: In the event conflicting demands are made or notices served
upon Escrow Holder with respect to the Escrow, Escrow Holder shall have the
absolute right at its election to do either or both of the following:
(a) Withhold and stop all further proceedings in, and performance of, this
escrow; or
(b) File a suit in interpleader and obtain an order from the court
requiring the parties to litigate their several claims and rights
among themselves. In the event such interpleader suit is brought,
Escrow Holder shall be fully released from any obligation to perform
any further duties imposed upon it hereunder, and the Company shall
pay Escrow Holder all costs, expenses and reasonable attorney's fees
expended or incurred by Escrow Holder, (or allocable to its in-house
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counsel), the amount thereof to be fixed and a judgment thereof to be
rendered by the court in such suit.
10. INDEMNITY: The Company further agrees to pay on demand, and to indemnify and
hold Escrow Holder harmless from and against, all cost, damages, judgments,
attorney's fees, expenses, obligations and liabilities of any kind or nature
which, in good faith, Escrow Holder may incur or sustain in connection with or
arising out of the Escrow and Escrow Holder is hereby given a lien upon all the
rights, titles, interest of the Company in monies and other property deposited
in the Escrow, to protect Escrow Holder's rights and to indemnify and reimburse
Escrow Holder under these Escrow Instructions.
11. REMOVAL OF BANK AS ESCROW HOLDER. The Company may at any time remove the
Bank as Escrow Holder by delivery to the Bank of a written notice signed by the
Company stating that the Bank is being removed as Escrow Holder and instructing
the Bank to deliver all documents and property held in Escrow hereunder to a
successor escrow holder designated in said notice. Upon delivery of all
documents and property held in Escrow hereunder to such successor escrow holder,
the Bank shall be relieved of any and all liability.
12. RESIGNATION OF ESCROW HOLDER: Escrow Holder may resign herefrom upon
fourteen (14) days' written notice to the Company and shall thereupon be fully
released from any obligation to perform any further duties imposed upon it
hereunder. Escrow Holder will transfer all files and records relating to the
Escrow to any successor escrow holder upon receipt of a copy of executed escrow
instructions designating such successor.
13. FACSIMILE: The Company agrees that Escrow Holder may, but need not, honor
and follow instructions, amendments or other orders ("orders") which shall be
provided by telephone facsimile transmission ("faxed") to Escrow Holder in
connection with this escrow and may act thereon without further inquiry and
regardless of by whom or by what means the actual or purported signature of the
Company may have been affixed thereto if such signature in Escrow Holder's sole
judgment resembles the signature of the Company. The Company indemnifies and
holds Escrow Holder free and harmless from any and all liability, suits, claims
or causes of action which may arise from loss or claim of loss resulting from
any forged, improper, wrongful or unauthorized faxed order. The Company agrees
to pay all attorney fees and cost incurred by Escrow Holder (or allocable to its
in-house counsel), in connection with said claim(s).
14. OTHER:
(a) Time is of the essence of these and all additional or changed
instructions.
(b) These Escrow Instructions may be executed in counterparts, each of
which so executed shall, irrespective of the date of its execution and
delivery, be deemed an original, and said counterparts together shall
constitute one and the same instrument.
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(c) These Escrow Instructions shall be governed by, and shall be construed
according to, the laws of the State of California.
(d) The Company will not make any reference to City National Bank in
connection with the Offering except with respect to its role as Escrow
Holder hereunder, and in no event will the Company state or imply the
Escrow Holder has investigated or endorsed the offering in any manner
whatsoever.
IN WITNESS WHEREOF, The parties have executed these Escrow Instructions as of
the date set forth beside such parties' signature below.
"COMPANY" Name: Lions Gate Investment Limited
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Address: Suite 2901, 1201 Marinaside Crescent
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Vancouver, British Columbia V6Z 2V2
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Phone Number: (604)681-9588
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Fax Number: (604)688-4933
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By:
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Its: President and Director
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Date:
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"ESCROW HOLDER" City National Bank, a national banking association
By:
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Its:
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Date:
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