EXHIBIT 6.2.3
ESCROW AGREEMENT
THIS AGREEMENT made as of the 27th day of February, 1996.
A M O N G:
XXXXXX X. XXXXX, for and on behalf of the persons listed on Schedule A
hereto
(hereinafter collectively called the "Escrowed Shareholders")
- and -
ALTAIR INTERNATIONAL GOLD INC.
(hereinafter called the "Company")
- and -
XXXX CORPORATE SERVICES INC.
(hereinafter called the "Escrow Agent")
WHEREAS in furtherance of the acquisition by the Company of all of the
common shares of Trans Mar, Inc. ("TMI"), pursuant to a merger agreement (the
"Merger Agreement") dated February 8, 1996, as amended by an agreement dated
February 22, 1996 (the "Merger"), the Escrowed Shareholders have agreed to
deposit in escrow certain securities of the Company owned or to be received by
them upon the terms set forth herein;
AND WHEREAS the Escrow Agent has agreed to undertake and perform its duties
according to the terms and conditions hereof;
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the mutual
covenants and agreements contained herein, the Escrowed Shareholders jointly and
severally covenant and agree with the Company and with the Escrow Agent and the
Company and the Escrow Agent covenant and agree with each other and with the
Escrowed Shareholder jointly and severally as follows:
1. Where used in this agreement, or in any amendment or supplement
hereto, unless the context otherwise requires, the phrase "Cash Flow" shall mean
net income derived from the assets of TMI, as shown on the audited consolidated
financial statements or verified by the Company's auditors, adjusted for the
following add-backs:
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(a) depreciation;
(b) depletion;
(c) deferred taxes;
(d) amortization of goodwill;
(e) amortization of research and development costs.
2. The Escrowed Shareholders hereby place and deposit those of the
securities of the Company which are listed opposite their names in Appendix "1"
hereto, with the Escrow Agent, in transferable form, upon the terms and
conditions set out herein for deposit in escrow including any replacement
securities or certificates if and when such are issued or allotted and
represents and warrants to the Company and the Escrow Agent that it is the legal
and beneficial owner of such securities free and clear of any claims, liens or
other form of encumbrances.
3. The parties hereby agree that the shares deposited pursuant to section
1 (hereinafter called the "Escrowed Shares") and the beneficial ownership of or
any interest in them shall not be sold, assigned, hypothecated, alienated,
released from escrow, transferred within escrow, or otherwise in any manner
dealt with, without the prior written consent of the Alberta Stock Exchange (the
"Exchange") being obtained. Each of the Escrowed Shareholders hereby directs
the Escrow Agent to retain the Escrowed Shares upon the terms and conditions set
out herein and not to do or cause anything to be done to release the same from
this escrow or to allow any transfer, hypothecation or alienation thereof except
as herein expressly provided.
4. The Escrow Agent hereby accepts the responsibilities placed on it
under this agreement and agrees to perform such responsibilities in accordance
with the terms hereof and the written consents, orders or directions of the
Exchange. In particular, but without limitation, the Escrow Agent shall hold
shares represented by the certificates for the persons, firms, or corporations
respectively legally entitled thereto. Any consent, order or direction
releasing any portion of the Escrowed Shares from this escrow shall terminate
this agreement only in respect to the portion of the Escrowed Shares so
released. For greater certainty, the preceding sentence shall not apply to
Escrowed Shares transferred within escrow.
5. The Company hereby acknowledges the terms and conditions of this
agreement and agrees to take all reasonable steps to facilitate its performance.
6. The Escrowed Shareholders shall, if a dividend is declared while the
Escrowed Shares or any of them continue to be held in escrow under this
agreement, renounce and release any right to receive payment of the dividend on
the Escrowed Shares then held in escrow.
7. Any shares received by the Escrow Agent by way of dividend in respect
of the Escrowed Shares shall be dealt with as if they were Escrowed Shares
hereunder.
8. All voting rights attached to the Escrowed Shares may at all times be
exercised by the respective owners thereof.
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9. The Escrowed Shares shall be released from the terms of this escrow to
the respective owners thereof in accordance with the following provisions:
(a) The Exchange will consent to the release from escrow of one
Escrowed Share for each $1.80 of Cash Flow generated by or from
the assets of TMI.
(b) Any release from escrow under this paragraph 9 shall be made
pursuant to a written application on behalf of the Company or the
Escrowed Shareholders, which application shall be accompanied by
evidence of the Cash Flow received in a form satisfactory to the
Exchange. Application for release may only be made once per year
and may only relate to Cash Flow received in the preceding fiscal
year or the fiscal years of the Company since the last release
from escrow pursuant to this agreement, whichever is greater.
All Escrowed Shares released from escrow shall, unless otherwise
directed by the Exchange, be distributed pro-rata to all Escrowed
Shareholders.
(c) Notwithstanding subparagraph (b) above, the maximum number of
Escrowed Shares to be released from escrow in any of the first
three years of this agreement to an Escrowed Shareholder shall be
one third of the original number of Escrowed Shares held in
escrow on behalf of such Escrowed Shareholder.
10. Escrowed Shares may be transferred within escrow as may be required by
reason of the death or bankruptcy of any Escrowed Shareholder, in which case the
Escrow Agent shall hold the certificates representing such Escrowed
Shareholder's Escrowed Shares for the person, firm or corporation legally
entitled thereto.
11. Any Escrowed Shareholder applying to the Exchange for a consent for a
transfer within escrow shall before applying, give reasonable notice in writing
of his intention to the Company and the Escrow Agent. The Escrow Agent shall
send a written report to the parties to this Agreement of trades, transfers and
releases of Escrowed Shares in accordance with this Agreement at the end of any
month in which such activity has occurred to the Company.
12. A release from escrow of all or part of the Escrowed Shares shall
terminate this agreement only in respect to those securities so released. For
greater certainty this paragraph does not apply to securities transferred within
escrow.
13. If the Company is wound up and any securities remain in escrow under
this agreement at the time when a distribution of assets to holders of
securities is made by the liquidator, the Escrowed Shareholders shall assign
their right to receive that part of the distribution which is attributable to
the Escrowed Securities to the Escrow Agent, for the benefit of, and in trust
for the persons and companies who are then holders of free securities in the
Company rateably in proportion to their holdings.
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14. The Escrowed Shareholders and the Company hereby jointly and severally
agree to and do hereby release and indemnify and save harmless the Escrow Agent
from and against all claims, suits, demands, costs, damages and expenses which
may be occasioned by reason of the Escrow Agent's compliance in good faith with
the terms of this agreement and which are not attributable to the gross
negligence of the Escrow Agent, provided that, the parties agree that the
liability of the Escrow Agent in carrying out its duties hereunder for which it
is not indemnified hereunder shall not exceed the fees paid to the Escrow Agent
for acting in such capacity.
15. If the Escrow Agent should wish to resign, it shall give at least
three months' notice to the Company, which may by writing appoint another escrow
agent in its place and such appointment shall be binding on the Escrowed
Shareholder and the new escrow agent shall assume and be bound by the
obligations of the Escrow Agent hereunder.
16. The Company shall be responsible for paying to the Escrow Agent a
mutually agreed upon fee for its services provided pursuant to this agreement.
17. (a) The parties acknowledge that, among other purposes, this
agreement has been entered into by the parties hereto and the
Escrowed Shares have been deposited with the Escrow Agent as
security for the indemnification obligations of TMI set forth in
Article 4 of the Merger Agreement subject to the limitations set
forth in section 17(c) below, and the prior approval of the
Exchange, if the Company or Fine Gold Recovery Systems Inc.
("Fine Gold") incurs any loss, claim, damage, expense, liability
or action for which TMI has agreed to indemnify the Company or
Fine Gold under section 4.1(b) of the Merger Agreement
(collectively, an "Indemnified Claim"), the Company or Fine Gold,
as the case may be, may instruct the Escrow Agent to sell, in a
public or private sale or open market transaction, all or a
portion of the Escrowed Shares necessary to satisfy the full
amount of the Indemnified Claim, together with all legal or other
expenses incurred by the Company or Fine Gold in connection with
such Indemnified Claim. Upon receipt of such instructions and
the prior approval of the Exchange, the Escrow Agent shall sell
such Escrowed Shares as necessary to satisfy the full amount of
the Indemnified Claim and shall immediately thereafter deliver to
Fine Gold the amounts payable to the Company or Fine Gold
pursuant to section 6(b) of the Merger Agreement. In such event,
the Escrow Agent and the Escrowed Shareholders shall take all
actions and execute and deliver to the Company or any third party
all instruments or certificates reasonably requested by the
Company or Fine Gold to effect the sale of the Escrowed Shares as
contemplated by this section 17(a).
(b) For purposes of determining the number of Escrowed Shares to be
sold pursuant to section 17(a) above, the Escrow Agent shall
divide the aggregate amount of the Indemnified Claim to be
satisfied and the anticipated costs and expenses expected to be
incurred with respect to each Indemnified Claim by the greater
of: (i)
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closing bid price of the common shares of the Company, as
reported by the Exchange, as of the trading day immediately prior
to the date on which the Indemnified Claim is presented to the
Escrow Agent; and (ii) CDN $1.80.
(c) The sale of any Escrowed Shares pursuant to this section 17 shall
be subject to the following conditions: (i) the amount of the
Indemnified Claim shall be assessed against the Escrowed Shares
on a pro rata basis based upon the number of Escrowed Shares held
in escrow pursuant to this agreement (subject to receipt of the
prior approval of the Exchange to sell the Escrowed Shares for
such purposes) and common shares of the Company held in escrow
pursuant to the escrow agreement dated as of the date hereof made
between Xxxxxx X. Xxxxx, for and on behalf of the persons listed
on Schedule A thereto, the Company and the Escrow Agent, as at
the date the Indemnified Claim is presented to the Escrow Agent;
(ii) the recourse of the Company and Fine Gold for any
Indemnified Claim pursuant to this agreement shall be limited to
the aggregate value of the Escrowed Shares held at the time such
Indemnified Claim is presented by the Company or Fine Gold, as
the case may be, to the Escrow Agent, and (iii) neither Fine Gold
nor the Company may exercise any remedy under this agreement with
respect to an Indemnified Claim until the aggregate amount of all
such Indemnified Claims exceeds Fifty Thousand Dollars ($50,000),
upon which time the Company and/or Fine Gold may recover with
respect to all Indemnified Claims, up to the full value of all
Escrowed Shares then held under this Agreement.
18. Any notice required or permitted to be given hereunder shall be in
writing and shall be effectively given if (i) delivered personally, (ii) sent by
prepaid courier service or mail, or (iii) sent prepaid by telex, telecopier or
other similar means of electronic communication addressed, in case of notice to
the Escrow Agent and the Company, as follows:
Escrow Agent: Xxxx Corporate Services Inc.
00 Xxxxxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: J. Xxxxx Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
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the Company: Altair International Gold Inc.
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxx, Xxxxxxx
00000
X.X.X.
Tel: (000) 000-0000
Fax: (000) 000-0000
and in the case of notice to an Escrowed Shareholder, to the latest address of
such Escrowed Shareholder as shown in the records of the Company.
19. Notwithstanding paragraph 9, any shares remaining in escrow on the
fifth anniversary of the date of this agreement, unless otherwise exempted in
writing by the Exchange, shall be cancelled by the Escrow Agent within 6 months
of the said fifth anniversary.
20. This agreement may be executed in several parts in the same form and
such parts as so executed shall together form one original agreement, and such
parts if more than one shall be read together and construed as if all the
signing parties hereto had executed one copy of this agreement. Pages delivered
by telecopy, including executed pages, shall be deemed to be original pages.
21. This agreement shall enure to the benefit of and be binding upon the
parties hereto, they and each of their heirs, executors, administrators,
successors and permitted assigns.
22. This agreement shall be governed by the laws of Ontario and the
federal laws of Canada applicable herein.
23. Whenever the singular or masculine is used, the same shall be
construed to include the plural or feminine or neutral where the context so
requires.
24. Xxxxxx X. Xxxxx hereby represents, warrants and agrees that he has
been duly authorized to enter into this agreement for and on behalf of the
Escrowed Shareholders and that the representations, warranties, covenants and
agreements contained herein are binding upon each Escrowed Shareholder as if
they were signatories hereto by virtue of their having signed a subscription
agreement between each such Escrowed Shareholder and the Company in respect of
their acquisition of the Escrowed Shares.
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25. The parties agree that any disputes relating to the interpretation of
the provisions of this agreement shall be referred to a mediator mutually
acceptable to the Company and the Escrow Agent whose decision shall be binding
on the parties hereto.
IN WITNESS WHEREOF the parties hereto have executed this agreement on
the day and year first above written.
)
)
________________________ ) ------------------------------------------
Witness ) XXXXXX X. XXXXX, for and on behalf of the
) Escrowed Shareholders listed on Schedule A
hereto
ALTAIR INTERNATIONAL GOLD, INC.
By:
---------------------------------------
XXXX CORPORATE SERVICES INC.
By:
---------------------------------------
APPENDIX I
LIST OF ESCROWED SHAREHOLDERS
Shareholder Number of Shares Certificate Numbers
----------- ---------------- -------------------
Xxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
Xxxxx Negra, X.X.
Xxxxxxx X. Xxxxxxxxx
The D.M.P. Trust
The Xxxxxx Family Trust
