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EXHIBIT 1(3)
Canargo Energy Corporation
Xxxxx 0000, 000 - 0xx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx X0X XX0
XXXXXX
June 3, 1999
Orkla Finans (Fondsmegling) ASA
Tordenskioldsgt. 8/10
X.X. Xxx 0000 Xxxx
X-0000 Xxxx
XXXXXX
Re: Escrow Agreement
Gentlemen:
This will confirm the terms under which you will act as escrow agent to
collect and deposit subscription funds received in connection with the public
offering of up to 21, 264,643 shares of common stock by CanArgo Energy
Corporation pursuant to a Registration Statement filed with the Securities and
Exchange Commission and approved by the Oslo Stock Exchange. Prospective
purchasers of the shares will be required to deliver to you a completed
subscription agreement in the form approved by CanArgo and pay for the shares in
the manner indicated in the subscription agreement. Orkla Finans will establish
a separate, non-interest bearing account with Den Norske Bank ASA (the
"Account") into which it will promptly deposit all subscription monies which are
received from subscribers for the shares. For the purpose of determining the
order in which subscriptions are received, you will date and time stamp each
subscription agreement as it is received by you. You agree to promptly return to
any prospective investor his subscription agreement and payment if the
subscription agreement is not signed and complete or if the payment for shares
is not in accordance with the instructions for payment on the subscription
agreement.
The offering will commence at 4:00 p.m. Oslo time on the date after the
day when prospectuses are first available for distribution in Norway. Orkla
Finans will not accept any subscriptions or payments prior to that date. After
the offering commences, subscription monies will be deposited in the Account
until termination of the offering. The offering will terminate on the earlier of
(1) the time on which all 21,264,643 shares have been sold or (2) at 4:00 p.m.
Oslo time June 30, 1999, unless this date is extended by CanArgo to a date not
later than August 6, 1999. CanArgo will give you at least two business days
prior notice if it decides to extend the termination date beyond June 30, 1999.
The date that the offering terminates is referred to as the "Termination Date."
No subscriptions will be accepted or monies deposited in the Account after the
Termination Date.
Orkla Finans will notify CanArgo, on a daily basis, of the amount of
subscription monies that have been deposited in the Account and have cleared the
banking system. CanArgo will provide Orkla Finans with similar information with
respect to any other escrow account used in the offering to enable Orkla Finans
to determine when the minimum offering (defined below) has been achieved.
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Orkla Finans (Fondsmegling) ASA
June 8, 1999
Page 2
If by the Termination Date the total monies which have been deposited
into the Account and all other escrow accounts established for the offering and
which monies have cleared the banking system and been collected in those
accounts (the "Fund") is less than the amount in U.S. dollars or Norwegian
kroner necessary to pay the total subscription price set forth in the
Registration Statement for at least 11,500,000 shares of common stock (the
"minimum offering"), then Orkla Finans will promptly refund to each subscriber
the subscription monies received from such subscriber then held in the Account
for such subscriber. Orkla Finans will promptly notify CanArgo upon the
distribution of Funds out of the Account.
If at any time up to 4:00 p.m. Oslo time on the Termination Date the
Fund is at least equal to the minimum offering, Orkla Finans will promptly
notify CanArgo in writing. CanArgo will instruct its registrar and transfer
agent to issue certificates for the shares sold in accordance with instructions
from Orkla Finans. When CanArgo confirms to Orkla Finans that such certificates
have been issued, Orkla Finans will then promptly disburse the Funds in
accordance with CanArgo's instructions.
After the minimum offering has been reached and Funds relating to the
minimum offering have been disbursed to CanArgo, Orkla Finans will continue to
receive and deposit subscription monies into the Account and will, upon
confirmation by CanArgo that certificates for the shares have been issued,
disburse Funds at the instruction of CanArgo, until the Termination Date.
If CanArgo decides to reject in whole or in part the subscription of any
prospective purchaser whose subscription payment has been deposited into the
Account, CanArgo will promptly notify Orkla Finans and Orkla Finans will then
promptly refund that purchaser's subscription monies.
Any amounts refunded to subscribers due to the failure to obtain the
minimum offering amount or due to the rejection of a subscription for any reason
will be promptly refunded to the subscriber without interest thereon and without
any deductions therefrom.
Please confirm your agreement to the foregoing by signing below and
returning a copy of this letter.
Very truly yours,
CANARGO ENERGY CORPORATION
By /s/ Xxxxxxx Xxxxxxx
---------------------------------
Xxxxxxx Xxxxxxx
President
ORKLA FINANS (FONDSMEGLING) ASA
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Orkla Finans (Fondsmegling) ASA
June 8, 1999
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By /s/ Jan-Xxxx Xxxxxx
--------------------------------
Jan-Xxxx Xxxxxx, Director
