ESCROW AGREEMENT
AMONG
MONTREAL TRUST COMPANY OF CANADA
4th Floor - 000 Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X. X0X 0X0
(The "Escrow Agent");
AND
CONSOLIDATED XXXXXXXX RESOURCES INC
#0 - 000 Xxxxxxxx Xxxxxx
Xxxxxxx, X.X. X0X 0x0
(the "Issuer");
AND:
EACH SHAREHOLDER as defined in this Agreement
(Collectively, the "Parties").
WHEREAS the Shareholder has acquired or is about to acquire shares of the
Issuer;
AND WHEREAS the Escrow Agent has agreed to act as escrow agent in respect of
the shares upon the acquisition of the shares by the shareholder;
AND WHEREAS the shareholders of the Company approved a share consolidation of
the shares of the Company on a five to one basis at the Annual General Meeting
of the Company held on December 9, 1994.
NOW THEREFORE in consideration of the covenants contained in this agreement
and other good and valuable consideration (the receipt and sufficiency of
which is acknowledged), the Parties agree as follows:
1. INTERPRETATION
In this agreement:
(a) "Acknowledgment" means the acknowledgment and agreement to be bound in
the form attached as Schedule A to this agreement;
(b) "Act" means the Securities Act, S.B.C. 1985, c.83
(c) "Exchange" means the Vancouver Stock Exchange;
(d) "IPO" means the initial public offering of common shares of the Issuer
under a prospectus which has been filed with, and for which a receipt has been
obtained from the Superintendent under section 42 of the Act;
(e) "Local Policy Statement 3-07" means the Local Policy Statement 3-07 in
effect as of the date of reference of this agreement and attached as Schedule
B to this agreement;
(f) "Shareholder" means a holder of shares of the Issuer who executes this
agreement or an Acknowledgment;
(g) Shares" means the post-consolidation shares of the Shareholder described
in Schedule C to this agreement, as amended from time to time in accordance
with section 9;
(i) "Superintendent or the Exchange" means the Superintendent, if the shares
of the Issuer are not listed on the Exchange, or the Exchange, if the shares
of the Issuer are listed on the Exchange.
2. PLACEMENT OF SHARES IN ESCROW
The Shareholder places the Shares in escrow with the Escrow Agent and shall
deliver the certificates representing the Shares to the Escrow Agent as soon
as practicable.
3. VOTING OF SHARES IN ESCROW
Except as provided by section 4(a), the Shareholder may exercise all voting
rights attached to the Shares.
4. WAIVER OF SHAREHOLDER'S RIGHTS
The Shareholder waives the rights attached to the Shares.
(a) to vote the Shares on a resolution to cancel any of the Shares,
(b) to receive dividends, and
(c) to participate in the assets and property of the Issuer on a winding
up or dissolution of the Issuer.
5. ABSTENTION FROM VOTING AS A DIRECTOR
A Shareholder that is or becomes a director of the Issuer shall abstain from
voting on a directors' resolution to cancel any of the Shares.
6. TRANSFER WITHIN ESCROW
(1) The Shareholder shall not transfer any of the Shares except in
accordance with Local Policy Statement 3-07 and with the consent of the
Superintendent of the Exchange.
(2) The Escrow Agent shall not effect a transfer of the Shares within
escrow unless the Escrow Agent has received
(a) a copy of an Acknowledgment executed by the person to whom the
Shares are to be transferred, and
(b) a letter from the Superintendent or the Exchange consenting to
the transfer.
(3) Upon the death or bankruptcy of a Shareholder, the Escrow Agent shall
hold the Shares subject to this agreement for the person that is legally
entitled to become the registered owner of the Shares.
(4) In the event that a Shareholder
(a) ceases to be a principal of the Issuer, as that term is defined
in Local Policy Statement 3-07, the directors of the Issuer have the express
right to decide whether the Shareholder may retain or must transfer or
surrender any Shares, subject to the terms and conditions of Local Policy
Statement 3-07; or
(b) dies or becomes bankrupt, the directors of the Issuer have the
express right to decide whether the Estate or Receiver of the Shareholder or
any person that is legally entitled to become the registered owner of the
Shares may retain or must transfer or surrender any Shares, subject to the
terms and conditions of Local Policy Statement 3-07.
7. RELEASE FROM ESCROW
(1) The Shareholder irrevocably directs the Escrow Agent to retain the
Shares until the Shares are released from escrow pursuant to subsection (2) or
surrendered for cancellation pursuant to section 8.
(2) The Shares will be released from escrow on the basis of cash flow from
operations as derived from the audited financial statements of the Company and
any subsidiary. "Cash Flow" means net income or loss before tax, adjusted to
add back the following expenses:
(a) depreciation
(b) amortization of goodwill and deferred research and development
costs, excluding general and administrative costs;
(c) expensed research and development costs, excluding general and
administrative costs;
(d) any other amounts permitted or required by the Superintendent.
Cumulative cash flow means at any time the aggregate cash flow of an issuer up
to that time from a date no earlier than the issuer's financial year end
immediately preceding the date of its initial public offering, net of any
negative cash flow. The number of shares released from escrow in that year
will be that number of shares computed by taking the cumulative cash flow not
previously applied toward a release and dividing the same by $0.31. The
Escrow Agent shall not release the Shares from escrow unless the Escrow Agent
has received a letter from the Superintendent or the Exchange consenting to
the release.
(3) The approval of the Superintendent or the Exchange to a release from
escrow of any of the Shares shall terminate this agreement only in respect of
the Shares so released.
8. SURRENDER FOR CANCELLATION
The Shareholder shall surrender the Shares for cancellation and the Escrow
Agent shall deliver the certificates representing the Shares to the Issuer:
(a) at the time of a major reorganization of the Issuer, if required
as a condition of the consent to the reorganization by the Superintendent or
the Exchange,
(b) where the Issuer's shares have been subject to a cease trade
order issued under the Act for a period of 2 consecutive years,
(c) 5 years from the date the Exchange has accepted this Agreement
for filing.
(d) where required by section 6(4).
9. AMENDMENT OF AGREEMENT
(1) Subject to subsection (2) this agreement may be amended only by a
written agreement among the Parties and with the written consent of the
Superintendent or the Exchange.
(2) Schedule C to this agreement shall be amended upon
(a) a transfer of Shares pursuant to section 6,
(b) a release of Shares from escrow pursuant to section 7, or
(c) a surrender of Shares for cancellation pursuant to section 8,
and the Escrow Agent shall note the amendment on the Schedule C in its
possession.
10. INDEMNIFICATION OF ESCROW AGENT
The Issuer and the Shareholders, jointly and severally, release, indemnify and
save harmless the Escrow Agent from all costs, charges, claims, demands,
damages, losses and expenses resulting from the Escrow Agent's compliance in
good faith with this agreement.
11. RESIGNATION OF ESCROW AGENT
(1) If the Escrow Agent wishes to resign as escrow agent in respect of the
Shares, the Escrow Agent shall give notice to the Issuer.
(2) If the Issuer wishes the Escrow Agent to resign as escrow agent in
respect of the Shares, the Issuer shall give notice to the Escrow Agent.
(3) A notice referred to in subsection (1) or (2) shall be in writing and
delivered to
(a) the Issuer at #0-000 Xxxxxxxx Xxxxxx, Xxxxxxx, X.X. X0X 0X0, or
(b) the Escrow Agent at 4th Floor - 000 Xxxxxxx Xxxxxx, Xxxxxxxxx,
X.X. X0X 0X0
and the notice shall be deemed to have been received on the date of
delivery. The Issuer or the Escrow Agent may change its address for notice by
giving notice to the other party in accordance with this subsection.
(4) A copy of a notice referred to in subsection (1) or (2) shall
concurrently be delivered to the Superintendent or the Exchange.
(5) The resignation of the Escrow Agent shall be effective and the Escrow
Agent shall cease to be bound by this agreement on the date that is 180 days
after the date of receipt of the notice referred to in subsection (1) or (2)
or on such other date as the Escrow Agent and the Issuer may agree upon (the
"resignation date").
(6) The Issuer shall, before the resignation date and with the written
consent of the Superintendent or the Exchange, appoint another escrow agent
and that appointment shall be binding on the Issuer and the Shareholders.
12. FURTHER ASSURANCES
The Parties shall execute and deliver any documents and perform any acts
necessary to carry out the intent of this agreement.
13. TIME
Time is of the essence of this agreement.
14. GOVERNING LAWS
This agreement shall be construed in accordance with and governed by the laws
of British Columbia and the laws of Canada applicable in British Columbia.
15. COUNTERPARTS
This agreement may be executed in two or more counterparts, each of which
shall be deemed to be an original and all of which shall constitute one
agreement.
16. LANGUAGE
Wherever a singular expression is used in this agreement, that expression is
deemed to include the plural or the body corporate where required by the
context.
17. INUREMENT
This Agreement enures to the benefit of and is binding on the Parties and
their heirs, executors, administrators, successors and permitted assigns.
The Parties have executed and delivered this agreement as of the date of
reference of this agreement.
The Common Seal of MONTREAL
TRUST COMPANY OF CANADA
was affixed in the presence of:
/s/
--------------------
/s/
------------------------
The Common Seal of CONSOLIDATED
XXXXXXXX RESOURCES INC
was affixed in the presence of:
/s/
-------------------------------
/s/
-------------------------------
Signed, sealed and delivered by
XXXX SINTICHAKIS in the
presence of:
/s/ Xxxxxx X. Xxxx
-----------------------
Name
325 - 0000 XxXxxxxxx Xx /S/ Xxxx Sintichakis
------------------------ --------------------------
Address XXXX XXXXXXXXXXX
Xxxxxxx, X.X. X0X 0X0
Accounting Clerk
----------------------
Occupation
SCHEDULE A TO ESCROW AGREEMENT
ACKNOWLEDGMENT AND AGREEMENT TO BE BOUND
TO: Vancouver Stock Exchange
4th Floor - 000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, X.X.
X0X 0X0
I acknowledge that:
(a) I have entered into an agreement with _______________ under which
______________ shares of Consolidated XxXxxxxx Resources Inc. (The "Shares")
will be transferred to me upon receipt of regulatory approval, and
(b) the Shares are held in escrow subject to an escrow agreement dated for
reference __________, 19___ (the "Escrow Agreement"), a copy of which is
attached as Schedule A to this Acknowledgment.
In consideration of $1.00 and other good and valuable consideration (the
receipt and sufficiency of which is acknowledged) I agree, effective upon
receipt of regulatory approval of the transfer to me of the Shares, to be
bound by the Escrow Agreement in respect of the Shares as if I were an
original signatory to the Escrow Agreement.
Dated at __________________ on ________________, 19 ____.
Signed, sealed and delivered by
_____________________ in the
presence of:
____________________
Name
______________________ ____________________
Address
______________________
______________________
Occupation
SCHEDULE C TO ESCROW AGREEMENT
NAME OF SHAREHOLDER NUMBER OF SHARES HELD IN ESCROW
Xxxx Sintichakis 354,000
