ESCROW AGREEMENT
THIS
ESCROW AGREEMENT (this “Agreement”)
is
dated as of the 29th day of August, 2005, among Goldstrike, Inc. (the
“Company”),
Gran
Tierra Energy, Inc. (“Gran
Tierra”)
and
McGuireWoods LLP (the “Escrow
Agent”).
RECITALS:
WHEREAS,
the Company and Gran Tierra are parties to a certain Agreement of Merger and
Plan of Reorganization pursuant to which a newly organized, wholly-owned
subsidiary of the Company will merge with and into Gran Tierra, with Gran Tierra
being the surviving entity (the “Merger”).
Immediately after the effective time of the Merger (the “Merger Effective
Date”),
the
Company will change its name to a name determined by Gran Tierra;
WHEREAS,
as a condition to the closing of the Merger, and to provide financing capital
required by Gran Tierra to close on the acquisition of certain properties
located in Argentina, the Company intends to offer and sell to accredited
investors in a private placement transaction (the “Offering”),
units
(“Units”)
consisting of 1 share of the Company’s common stock, par value $.001 per share
(“Common
Stock”)
and a
warrant (the “Investor
Warrants”)
to
purchase .5 shares of Common Stock for five years at the exercise price of
$0.625 per .5 shares;
WHEREAS,
the closing of the offering is conditioned on the receipt of acceptable
subscriptions representing aggregate gross proceeds of at least $7,000,000
(the
“Minimum
Offering Amount”)
and
the receipt of a duly authorized certificate of the principal executive officer
of Gran Tierra Energy, Inc. (“Gran
Tierra”)
certifying that all conditions precedent to the closing of the acquisition
by
Gran Tierra of certain properties located in Argentina have been satisfied
(the
“Officer’s
Certificate”)
(the
Minimum Offering Amount and the Officer’s Certificate are collectively referred
to as the “Closing
Conditions”);
WHEREAS,
the Offering will close only after the satisfaction of all Closing Conditions
and is expected to close on or prior to September 1, 2005 (the “Closing
Date”);
WHEREAS,
the investors in the Offering (the “Investors”),
in
connection with their intent to purchase Units in the Offering, shall execute
and deliver Subscription Agreements (the “Subscription
Agreements”)
and
Investor Questionnaires (the “Investor
Questionnaires”)
memorializing the Investors’ agreement to purchase and the Company’s agreement
to sell the number of Units set forth therein (the “Investor’s
Units”)
at the
purchase price of $0.80 per Unit (the “Purchase
Price”)
and
Registration Rights Agreements (the “Registration
Rights Agreements”)
pursuant to which the Company will provide certain registration rights related
to the shares of Common Stock underlying the Units and the Investor Warrants
on
the terms set forth therein and Stockholder Voting Agreements (the “Stockholder
Voting Agreements”)
pursuant to which the Investors will agree to vote the shares of Common Stock
acquired in connection with their purchase of Investor’s Units for the person
designated by the Company for election to the Company’s Board of Directors (the
Subscription Agreements, Investor Questionnaires, Registration Rights Agreements
and Stockholder Voting Agreements are collectively referred to as the
“Transaction
Documents”);
WHEREAS,
the parties hereto desire to provide for the safekeeping of the Transaction
Documents and the Escrowed Funds (as defined in Section 2.1 herein) until such
time as the Transaction Documents and Escrowed Funds are released by the Escrow
Agent in accordance with the terms and conditions of this Agreement;
and
WHEREAS,
the Escrow Agent is willing to serve as escrow agent pursuant to the terms
and
conditions of this Agreement.
NOW
THEREFORE, the parties agree as follows:
ARTICLE
I
INTERPRETATION
1.1. Entire
Agreement.
This
Agreement and the Transaction Documents constitute the entire agreement between
the parties hereto pertaining to the subject matter contained herein and
supersede all prior agreements, understandings, negotiations and discussions,
whether oral or written, of the parties. There are no warranties,
representations or other agreements made by the parties in connection with
the
subject matter hereof except as specifically set forth in this Agreement or
as
set forth in the Transaction Documents.
1.2. Extended
Meanings.
In this
Agreement words importing the singular number include the plural and vice versa;
words importing the masculine gender include the feminine and neuter genders.
The word “person” includes an individual, body corporate, partnership, or other
entity in whatever form, a trustee or trust or unincorporated association,
an
executor, administrator or legal representative.
1.3. Waivers
and Amendments.
This
Agreement may be amended, modified, superseded, cancelled, renewed or extended,
and the terms and conditions hereof may be waived, only by a written instrument
signed by all parties, or, in the case of a waiver, by the party waiving
compliance. Except as expressly stated herein, no delay on the part of any
party
in exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of any party of any right, power
or
privilege hereunder preclude any other or future exercise of any other right,
power or privilege hereunder.
1.4. Headings.
The
division of this Agreement into articles, sections, subsections and paragraphs
and the insertion of headings are for convenience of reference only and shall
not affect the construction or interpretation of this Agreement.
1.5. Law
Governing this Agreement.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York without regard to principles of conflicts of laws. Any action
brought by either party against the other concerning the transactions
contemplated by this Agreement may be brought in the state courts of New York
or
in the federal courts located in the state of New York. The parties and the
individuals executing this Agreement and other agreements referred to herein
or
delivered in connection herewith agree to submit to the jurisdiction of such
courts. The prevailing party shall be entitled to recover from the other party
its reasonable attorney’s fees and costs. In the event that any provision of
this Agreement or any other agreement delivered in connection herewith is
invalid or unenforceable under any applicable statute or rule of law, then
such
provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule
of
law. Any such provision which may prove invalid or unenforceable under any
law
shall not affect the validity or enforceability of any other provision of any
agreement.
1.6. Specific
Enforcement, Consent to Jurisdiction.
The
Company and Gran Tierra acknowledge and agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached.
It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent or cure breaches of the provisions of this Agreement
and
to enforce specifically the terms and provisions hereof or thereof, this being
in addition to any other remedy to which any of them may be entitled by law
or
equity. Nothing in this Section shall affect or limit any right to serve process
in any other manner permitted by law.
2
ARTICLE
II
DELIVERIES
TO THE ESCROW AGENT
2.1. Subscriber
Deliveries.
On or
before the Closing Date, each Investor shall have delivered to the Escrow Agent
the full purchase price for the Investor’s Units (the aggregate of such purchase
prices for all Subscribers being referred to as the “Escrowed
Funds”)
by
wire transfer of immediately available funds pursuant to the wire transfer
instructions provided below and the completed and executed Transaction Documents
to the address provided below.
Escrow
Agent - Wire Transfer Instructions:
BANK
OF
AMERICA - Jacksonville, FL
ABA:
000000000 (Domestic Wires)
Swift
Code: XXXXXX0X (International Wires)
Credit:
McGuireWoods LLP IOLTA Account
Account
Number: 2101206537
Reference:
Xxxxx Xxxxx - Gran Tierra Escrow - 2046112-0001
McGuireWoods
Accounting Contact: Xxxxx Xxxxx (000) 000-0000
Bank
Contact: Xxxxxxx Xxxxx (000) 000-0000, Opt. 2, Ext. 2160
Escrow
Agent - Mailing Address and Facsimile Number:
McGuireWoods
LLP
00
Xxxxx
Xxxxx Xxxxxx
Xxxxx
0000
Xxxxxxxxxxxx,
Xxxxxxx 00000
Facsimile
Number: (000) 000-0000
Attention:
Xxxxxxxx Xxxxxx
Telephone
Number: (000) 000-0000
2.2. Intention
to Create Escrow Over Transaction Documents and Escrowed Funds.
The
Company and Gran Tierra intend that the Transaction Documents and the Escrowed
Funds shall be held in escrow by the Escrow Agent pursuant to this Agreement
for
their benefit and for the benefit of the Investors. The Escrow Agent shall
provide copies of the Transaction Documents to the Company and Gran Tierra
promptly after their receipt in order for the Company and Gran Tierra to
determine whether to accept the subscriptions for the Investor’s Units evidenced
thereby.
2.3. Escrow
Agent to Deliver Transaction Documents and Escrowed Funds.
The
Escrow Agent shall hold and release the Transaction Documents and the Escrowed
Funds only in accordance with the terms and conditions of this
Agreement.
ARTICLE
III
RELEASE
OF TRANSACTION DOCUMENTS AND ESCROWED FUNDS
3.1. Release
of Escrow.
Subject
to the provisions of Sections 4.1(d) and 4.2, the Escrow Agent shall release
the
Transaction Documents and Escrowed Funds as follows:
3
(a) Release
of Escrowed Funds and Transaction Documents upon Closing.
Prior
to the Closing Date, the Company and Gran Tierra shall deliver to Escrow Agent
joint written instructions (“Joint
Instructions”)
duly
executed by their respective principal executive officer which Joint
Instructions providing the day designated as the Closing Date, acknowledging
and
agreement that as of the Closing Date the Closing Conditions have been or will
be fully satisfied and specifying the time, place and method of delivery of
the
Escrowed Funds and the Transaction Documents. Escrow Agent shall, at the time
and place and by the method specified in the Joint Instructions, deliver the
Escrowed Funds and the Transaction Documents.
(b) Return
of Escrowed Funds on Termination of Offering.
In the
event that the Escrow Agent shall have received written notice executed by
the
principal executive officer of each ofthe Company and Gran Tierra indicating
that Offering has been terminated and designating a termination date, the Escrow
Agent shall return to each Investor the purchase price and Transactions
Documents delivered by such Investor to the Escrow Agent. The Company and Gran
Tierra shall provide the Escrow Agent with time, place and method of delivery
for each Investor whose purchase price and Transaction Documents the Escrow
Agent is to deliver pursuant to this Section.
(c) Return
of Escrowed Funds and Transaction Documents on Rejection of
Subscription.
In the
event the Company and Gran Tierra determine it necessary or appropriate to
reject the subscription of any Investor for whom the Escrow Agent has received
Escrowed Funds and Transaction Documents, the Company and Gran Tierra shall
deliver written notice of such event to the Escrow Agent which notice shall
include the time, place and method of delivery for the return to such Investor
of the Purchase Price and Transaction Documents delivered by such Investor
and
the Escrow Agent shall deliver such funds and documents pursuant to such written
notice.
(e) Delivery
Pursuant to Court Order.
Notwithstanding an provision contained herein, upon receipt by the Escrow Agent
of a final and non-appealable judgment, order, decree or award of a court of
competent jurisdiction (a “Court
Order”),
the
Escrow Agent shall deliver the Transaction Documents and the Escrowed Funds
in
accordance with the Court Order. Any Court Order shall be accompanied by an
opinion of counsel for the party presenting the Court Order to the Escrow Agent
(which opinion shall be satisfactory to the Escrow Agent) to the effect that
the
court issuing the Court Order has competent jurisdiction and that the Court
Order is final and non-appealable.
3.2. Acknowledgement
of Company and Gran Tierra.
The
Company and Gran Tierra acknowledge that the only terms and conditions upon
which the Transaction Documents and Escrowed Funds are to be released are set
forth in Sections 3.1, 4.1(d) and 4.2 of this Agreement. The Company and Gran
Tierra reaffirm their agreement to abide by the terms and conditions of this
Agreement with respect to the release of the Transaction Documents and the
Escrowed Funds. Any dispute with respect to the release of the Transaction
Documents or Escrowed Funds shall be resolved pursuant to Section 4.2 or by
agreement between the Company and Gran Tierra.
ARTICLE
IV
CONCERNING
THE ESCROW AGENT
4.1. Duties
and Responsibilities of the Escrow Agent.
The
Escrow Agent’s duties and responsibilities shall be subject to the following
terms and conditions:
4
(a) The
Company and Gran Tierra acknowledge and agree that the Escrow Agent
(i) shall not be responsible for or bound by, and shall not be required to
inquire into whether either the Company or Gran Tierra are entitled to receipt
of the Transaction Documents or Escrowed Funds pursuant to, any other agreement
or otherwise; (ii) shall be obligated only for the performance of such
duties as are specifically assumed by the Escrow Agent pursuant to this
Agreement; (iii) may rely on and shall be protected in acting or refraining
from acting upon any written notice, instruction, instrument, statement, request
or document furnished to it hereunder and believed by the Escrow Agent in good
faith to be genuine and to have been signed or presented by the proper person
or
party, without being required to determine the authenticity or correctness
of
any fact stated therein or the propriety or validity or the service thereof;
(iv) may assume that any person believed by the Escrow Agent in good faith
to be authorized to give notice or make any statement or execute any document
in
connection with the provisions hereof is so authorized; (v) shall not be
under any duty to give the property held by Escrow Agent hereunder any greater
degree of care than Escrow Agent gives its own similar property, but in no
event
less than a reasonable amount of care; and (vi) may consult counsel
satisfactory to Escrow Agent, the opinion of such counsel to be full and
complete authorization and protection in respect of any action taken, suffered
or omitted by Escrow Agent hereunder in good faith and in accordance with the
opinion of such counsel.
(b) The
Company and Gran Tierra acknowledge that the Escrow Agent is acting solely
as a
stakeholder at their request and that the Escrow Agent shall not be liable
for
any action taken by Escrow Agent in good faith and believed by Escrow Agent
to
be authorized or within the rights or powers conferred upon Escrow Agent by
this
Agreement. The Company and Gran Tierra, jointly and severally, agree to
indemnify and hold harmless the Escrow Agent and any of Escrow Agent’s partners,
employees, agents and representatives for any action taken or omitted to be
taken by Escrow Agent or any of them hereunder, including the fees of outside
counsel and other costs and expenses of defending itself against any claim
or
liability under this Agreement, except in the case of gross negligence, willful
misconduct or material breach of this Agreement on Escrow Agent’s part committed
in its capacity as Escrow Agent under this Agreement. The Escrow Agent shall
owe
a duty only to the Company and Gran Tierra under this Agreement and to no other
person.
(c) The
Company and Gran Tierra jointly and severally agree to reimburse the Escrow
Agent for outside counsel fees, to the extent authorized hereunder and incurred
in connection with the performance of its duties and responsibilities
hereunder.
(d) The
Escrow Agent may at any time resign as Escrow Agent hereunder by giving five
(5)
days prior written notice of resignation to the Company and Gran Tierra. Prior
to the effective date of the resignation as specified in such notice, the
Company and Gran Tierra will issue to the Escrow Agent a Joint Instruction
authorizing delivery of the Transaction Documents and the Escrowed Funds to
a
substitute Escrow Agent selected by the Company and Gran Tierra. If no successor
Escrow Agent is named by the Company and Gran Tierra, the Escrow Agent may
apply
to a court of competent jurisdiction in the State of New York for appointment
of
a successor Escrow Agent, and to deposit the Transaction Documents and Escrowed
Funds with the clerk of any such court.
(e) The
Escrow Agent does not have and will not have any interest in the Transaction
Documents or the Escrowed Funds, but is serving only as escrow agent, having
only possession thereof.
(f) This
Agreement sets forth exclusively the duties of the Escrow Agent with respect
to
any and all matters pertinent thereto, and no implied duties or obligations
shall be read into this Agreement.
(g) The
provisions of this Section 4.1 shall survive the resignation of the Escrow
Agent
or the termination of this Agreement.
5
4.2. Dispute
Resolution: Judgments.
Resolution of disputes arising under this Agreement shall be subject to the
following terms and conditions:
(a) If
any
dispute shall arise with respect to the delivery, ownership, right of possession
or disposition of the Transaction Documents or the Escrowed Funds, or if the
Escrow Agent shall in good faith be uncertain as to its duties or rights
hereunder, the Escrow Agent shall be authorized, without liability to anyone,
to
(i) refrain from taking any action other than to continue to hold the
Transaction Documents or the Escrowed Funds pending receipt of a Joint
Instruction from the Company and Gran Tierra, or (ii) deposit the
Transaction Documents and Escrowed Funds with any court of competent
jurisdiction in the State of New York, in which event the Escrow Agent shall
give written notice thereof to the Company and Gran Tierra and shall thereupon
be relieved and discharged from all further obligations pursuant to this
Agreement. The Escrow Agent may, but shall be under no duty to, institute or
defend any legal proceedings which relate to the Transaction Documents or the
Escrowed Funds. The Escrow Agent shall have the right to retain counsel if it
becomes involved in any disagreement, dispute or litigation on account of this
Agreement or otherwise determines that it is necessary to consult
counsel.
(b) The
Escrow Agent is hereby expressly authorized to comply with and obey any Court
Order. In case the Escrow Agent obeys or complies with a Court Order, the Escrow
Agent shall not be liable to the Investors, the Company, Gran Tierra or to
any
other person, firm, corporation or entity by reason of such
compliance.
ARTICLE
V
GENERAL
MATTERS
5.1. Termination.
This
escrow shall terminate upon the disbursement in accordance with the provisions
herein of the Transaction Documents and the Escrowed Funds in full or at any
time upon the agreement in writing of the Company and Gran Tierra.
5.2. Notices.
All
notices, demands, requests, consents, approvals, and other communications
required or permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (i) personally served, (ii) deposited in
the mail, registered or certified, return receipt requested, postage prepaid,
(iii) delivered by reputable air courier service with charges prepaid, or
(iv) transmitted by hand delivery, telegram, or facsimile, addressed as set
forth below or to such other address as such party shall have specified most
recently by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand
delivery or delivery by facsimile, with accurate confirmation generated by
the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice
is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice
is
to be received) or (b) on the second business day following the date of
mailing by express courier service, fully prepaid, addressed to such address,
or
upon actual receipt of such mailing, whichever shall first occur. The addresses
for such communications shall be:
| (a) |
If
to the Company, to:
|
Goldstrike,
Inc.
0000
Xxxx
Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx,
Xxxxxxx Xxxxxxxx
Xxxxxx
X0X
0X0
Attention:
Dr. Yenyou Zheng
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
6
copy
to:
Gottbetter
& Partners, LLP
000
Xxxxxxx Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxxxxx X. Xxxxxxx, Esq.
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
| (b) |
If
to Gran Tierra, to:
|
00-
0xx
Xxxxxx
XX, Xxxxx Xxxxx
Xxxxxxx,
Xxxxxxx
Xxxxxx
X0X
0X0
Attention:
Xxxx Xxxxxxxx
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
copy
to:
McGuireWoods
LLP
1345
Avenue of the Americas
Xxxxxxx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxx X. Xxxxx, Esq.
Facsimile
Number: (000) 000-0000
| (c) |
If
to the Escrow Agent, to:
|
McGuireWoods
LLP
1345
Avenue of the Americas
Xxxxxxx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxx X. Xxxxx, Esq.
Facsimile
Number: (000) 000-0000
or
to
such other address as any of them shall give to the others by notice made
pursuant to this Section 5.2.
5.3. Interest.
The
Escrowed Funds shall not be held in an interest bearing account nor will
interest be payable in connection therewith. In the event the Escrowed Funds
are
deposited in an interest bearing account, each Investor shall be entitled to
receive its pro rata
portion
of any accrued interest thereon, but only if the Escrow Agent receives from
such
Investor the Investor’s United States taxpayer identification number and other
requested information and forms.
7
5.4. Assignment;
Binding Agreement.
Neither
this Agreement nor any right or obligation hereunder shall be assignable by any
party without the prior written consent of the other parties hereto. This
Agreement shall enure to the benefit of and be binding upon the parties hereto
and their respective legal representatives, successors and assigns.
5.5. Invalidity.
In the
event that any one or more of the provisions contained herein, or the
application thereof in any circumstance, is held invalid, illegal, or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be in any way impaired thereby, it being
intended that all of the rights and privileges of the parties hereto shall
be
enforceable to the fullest extent permitted by law.
5.6. Counterparts/Execution.
This
Agreement may be executed in any number of counterparts and by different
signatories hereto on separate counterparts, each of which, when so executed,
shall be deemed an original, but all such counterparts shall constitute but
one
and the same instrument. This Agreement may be executed by facsimile
transmission and delivered by facsimile transmission.
5.7. Agreement.
Each of
the undersigned states that he has read the foregoing Escrow Agreement and
understands and agrees to it.
[SIGNATURE
PAGES FOLLOW]
8
IN
WITNESS WHEREOF, the parties hereto have duly executed this Escrow Agreement
as
of the date first above written.
|
GOLDSTRIKE,
INC.
|
|
|
By :
______________________________
|
|
|
Name :_________________________
|
|
|
Title :__________________________
|
[SIGNATURE
PAGES FOR GRAN TIERRA AND ESCROW AGENT FOLLOW]
9
|
By :
______________________________
|
|
|
Name :_________________________
|
|
|
Title :__________________________
|
[SIGNATURE
PAGE FOR ESCROW AGENT FOLLOWS]
10
|
ESCROW
AGENT
|
|
|
McGuireWoods
LLP
|
|
|
By :
______________________________
|
|
|
Name
Xxxxx X. Xxxxx
|
|
|
Title :
Partner
|
11
