1
EXHIBIT 10(g)
THIS AGREEMENT is dated for reference June 14, 1991 and made
AMONG:
CENTRAL GUARANTY TRUST COMPANY, a company having an office at 2nd Floor,
000 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
(the "Escrow Agent");
AND:
PUFF PAC INDUSTRIES INC., a corporation duly incorporated pursuant to the
laws of the state of Delaware and having an office at Suite 1500, 000 Xxxx
Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, 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 by an Escrow Agreement - Principal's Shares dated November 14,
1989 (the "Principal's Agreement") among the Escrow Agent, the Issuer and six
various shareholders, a total of 637,500 shares were originally held in escrow,
of which 525,000 shares remain held in escrow;
AND WHEREAS by an Earn-Out Escrow Agreement dated November 16, 1989 (the
"Earn-Out Agreement") among the Escrow Agent, the Issuer and 28 various
shareholders, a total of 3,935,423 shares are held in escrow;
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:
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1. INTERPRETATION
In this agreement:
(a) "Acknowledgement" means the acknowledgement 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 the shares of the Issuer who executes
this agreement or an Acknowledgement;
(g) "Shares" means the shares of each Shareholder described in Schedule C
to this agreement, as amended from time to time in accordance with
section 9;
(h) "Superintendent" means the Superintendent of Brokers appointed under
the Act; and
(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.
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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
or 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) Upon the death or bankruptcy of a Shareholder or upon a Shareholder who is
a principal of the Issuer as at the date of this agreement ceasing to be a
principal of the Issuer, upon the request of the board of directors of the
Issuer on behalf of the Issuer, any Shares held by the Shareholder shall,
in accordance with the request, be transferred to a then current principal
of the Issuer or surrendered to the Issuer for cancellation or other
disposition by the Issuer, in each case of transfer or surrender, for
consideration paid to the Shareholder of $0.01 per Share or such higher
price as the board of directors of the Issuer may determine.
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7. RELEASE FROM ESCROW
(1) The Shareholder irrevocably directs the Escrow Agent to retain the Shares
until such Shares are released from escrow pursuant to subsection (2) or
surrendered for cancellation pursuant to section 8.
(2) 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 pro-rata release of such number of Shares as is
determined by dividing the Cumulative Cash Flow (as presently defined in
the Exchange's Listings Policy Statement No. 18) of the Issuer since
January 1, 1990 not previously applied towards a release by $0.468 Cdn.
(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) on December 1, 1999 if such Shares have not previously been released
from the terms of this agreement, or
(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
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(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 Suite 1500, 000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx
Xxxxxxxx, X0X 0X0, or
(b) the Escrow Agent at 2nd Floor, 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxx Xxxxxxxx, 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 in writing 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.
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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. APPROVALS
This agreement is subject to the approval of the Exchange and of the
shareholders of the Issuer (the "Approvals").
18. OTHER AGREEMENTS
Subject to the receipt of the Approvals, this agreement supercedes
and cancels all previous agreements among the Parties with respect to the
Shares, and in particular, the Principal's Agreement and the Earn-Out Agreement
will terminate and be of no further force or effect immediately upon the
execution of this agreement by all Parties and the receipt of the Approvals.
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19. ENUREMENT
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 )
CENTRAL GUARANTY TRUST COMPANY )
was hereunder affixed in the )
presence of: )
)
)
-------------------------------- ) C/S
Authorized Signatory )
)
)
-------------------------------- )
Authorized Signatory )
The COMMON SEAL of )
PUFF PAC INDUSTRIES INC. )
was hereunder affixed in the )
presence of: )
)
/s/ [Signature Illegible] )
-------------------------------- ) C/S
Authorized Signatory )
)
/s/ [Signature Illegible] )
-------------------------------- )
Authorized Signatory )
SIGNED, SEALED AND DELIVERED )
by XXXXXX X. XXXXXXXX )
in the presence of: )
)
Name: Xxxx Xxxxxxxx Appleton ) /s/ Xxxxxx X. Xxxxxxxx
-------------------------- ) ---------------------
Address: 0000 000xx Xxx. XX ) XXXXXX X. XXXXXXXX
----------------------- )
Xxxxxxxx, XX 00000 )
-------------------------------- )
Occupation: Writer )
-------------------- )
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SIGNED, SEALED AND DELIVERED )
by XXXXXXXX XXXXXX XXXXX )
in the presence of: )
)
Name: ?? Xxxxxx ) /s/ Xxxxxxxx Xxxxxx Xxxxx
-------------------------- ) --------------------------
Address: 0000 X. 000xx Xx. ) XXXXXXXX XXXXXX XXXXX
----------------------- )
Xxxxxxx, XX 00000 )
-------------------------------- )
Occupation: Fashion )
-------------------- )
SIGNED, SEALED AND DELIVERED )
by XXXXX XXXX XXXXX )
in the presence of: )
)
Name: Xxxxxxxxx Xxxx ) /s/ Xxxxx Xxxx Xxxxx
-------------------------- ) --------------------------
Address: ) XXXXX XXXX XXXXX
----------------------- )
)
-------------------------------- )
Occupation: )
-------------------- )
SIGNED, SEALED AND DELIVERED )
by XXXXXXX XXXXX )
in the presence of: )
)
Name: )
-------------------------- ) --------------------------
Address: ) XXXXXXX XXXXX
----------------------- )
)
-------------------------------- )
Occupation: )
-------------------- )
SIGNED, SEALED AND DELIVERED )
by XXXXXXX CIAFA )
in the presence of: )
)
Name: )
-------------------------- ) --------------------------
Address: ) XXXXXXX CIAFA
----------------------- )
)
-------------------------------- )
Occupation: )
-------------------- )
SIGNED, SEALED AND DELIVERED )
by XXXXXXXX XXXXXX XXXXX )
in the presence of: )
)
Name: )
-------------------------- ) --------------------------
Address: ) XXXXXXXX XXXXXX XXXXX
----------------------- )
)
-------------------------------- )
Occupation: )
-------------------- )
SIGNED, SEALED AND DELIVERED )
by XXXXX XXXX XXXXX )
in the presence of: )
)
Name: Xxxxxxxxx X. Xxxx ) /s/ Xxxxx Xxxx Xxxxx
Barrister & Solicitor ) --------------------------
Xxxxxxx & XxXxxxxx ) XXXXX XXXX XXXXX
-------------------------- )
Address: 1700 - 1075 West )
Georgia Street )
----------------------- )
Xxxxxxxxx, X.X. X0X 0X0 )
(000) 000-0000 )
-------------------------------- )
Occupation: )
-------------------- )
SIGNED, SEALED AND DELIVERED )
by XXXXXXX XXXXX )
in the presence of: )
)
Name: )
-------------------------- ) --------------------------
Address: ) XXXXXXX XXXXX
----------------------- )
)
-------------------------------- )
Occupation: )
-------------------- )
SIGNED, SEALED AND DELIVERED )
by XXXXXXX CIAFA )
in the presence of: )
)
Name: )
-------------------------- ) --------------------------
Address: ) XXXXXXX CIAFA
----------------------- )
)
-------------------------------- )
Occupation: )
-------------------- )
SIGNED, SEALED AND DELIVERED )
by XXXXXXXX XXXXXX XXXXX )
in the presence of: )
)
Name: )
-------------------------- ) --------------------------
Address: ) XXXXXXXX XXXXXX XXXXX
----------------------- )
)
-------------------------------- )
Occupation: )
-------------------- )
SIGNED, SEALED AND DELIVERED )
by XXXXX XXXX XXXXX )
in the presence of: )
)
Name: Xxxxxxxxx Xxxx ) /s/ Xxxxx Xxxx Xxxxx
-------------------------- ) --------------------------
Address: ) XXXXX XXXX XXXXX
----------------------- )
)
-------------------------------- )
Occupation: )
-------------------- )
SIGNED, SEALED AND DELIVERED )
by XXXXXXX XXXXX )
in the presence of: )
)
Name: R. H. Wiedeino ) /s/ Xxxxxxx Xxxxx
-------------------------- ) --------------------------
Address: 37214 Village 37 ) XXXXXXX XXXXX
----------------------- )
Xxxxxxxxx, XX 00000 )
-------------------------------- )
Occupation: )
-------------------- )
SIGNED, SEALED AND DELIVERED )
by XXXXXXX CIAFA )
in the presence of: )
)
Name: )
-------------------------- ) --------------------------
Address: ) XXXXXXX CIAFA
----------------------- )
)
-------------------------------- )
Occupation: )
-------------------- )
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SIGNED, SEALED AND DELIVERED )
by XXXX XXXXX XXXX )
in the presence of: )
)
/s/ XXXXXXXXX XXXX )
)
Name: ) /s/ XXXX XXXXX XXXX
------------------------- ) ---------------------------
Address: ) XXXX XXXXX XXXX
----------------------- )
)
------------------------------- )
Occupation: )
-------------------- )
SIGNED, SEALED AND DELIVERED by )
XXXXX X. XXXXXX and DARVILLA XXXXXX )
in the presence of: )
)
/s/ XXXXXXX XXXXXX )
) /s/ XXXXX X. XXXXXX
Name: Xxxxx & Darvilla Xxxxxx ) ---------------------------
------------------------- ) XXXXX X. XXXXXX
Address: 000 Xxxxx Xxxx Xx. )
----------------------- ) /s/ XXXXXXXX XXXXXX
Xxxx XX 00000 ) ---------------------------
------------------------------- ) DARVILLA XXXXXX
Occupation: Retired/Printers )
-------------------- )
SIGNED, SEALED AND DELIVERED )
by XXXXXXX XXXXXX )
in the presence of: )
)
/s/ XXXXX XXXXXX )
)
Name: Xxxxxxx Xxxxxx ) /s/ XXXXXXX XXXXXX
------------------------- ) ---------------------------
Address: 000 Xxxxx Xxxx Xx. ) XXXXXXX XXXXXX
----------------------- )
Xxxx XX 00000 )
------------------------------- )
Occupation: Printer )
-------------------- )
SIGNED, SEALED AND DELIVERED )
by XXXXX X. XXXXXXXX and )
XXXXXX XXXXXXXX in the )
presence of: )
)
/s/ XXXXXX XXXXXXX )
)
Name: Xxxxxx Xxxxxxx ) /s/ XXXXX X. XXXXXXXX
------------------------- ) ---------------------------
Address: 0000 X. Xxxxxxx Xx. ) XXXXX X. XXXXXXXX
----------------------- )
Xxxxxxx Xxxxx, XX 00000 ) /s/ XXXXXX XXXXXXXX
------------------------------- ) ---------------------------
Occupation: [Illegible] ) XXXXXX XXXXXXXX
-------------------- )
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SIGNED, SEALED AND DELIVERED )
by XXXXX XXXXXX )
in the presence of: )
)
)
Name: Xxxxxx Xxxxxxxx ) /s/ XXXXX XXXXXX
------------------------- ) ---------------------------
Address: 0000 Xxxxxxxx ) XXXXX XXXXXX
----------------------- )
Xxxxxxx, XX 00000 )
------------------------------- )
Occupation: D. J. Roofing )
-------------------- )
SIGNED, SEALED AND DELIVERED )
by XXXXX X. XXXXXX )
in the presence of: )
)
) /s/ XXXXX X. XXXXXX
Name: Xxxxxxxxx XxXxxxx ) ---------------------------
------------------------- ) XXXXX X. XXXXXX
Address: 0000 X. Xxxx Xxxx )
----------------------- )
Cape Girardeau, MA. )
------------------------------- )
Occupation: Homemaker )
-------------------- )
SIGNED, SEALED AND DELIVERED )
by XXXXXXX XXXXXX )
in the presence of: )
)
[Signature Illegible] )
)
Name: Jacselila Tamers ) /s/ XXXXXXX XXXXXX
------------------------- ) ---------------------------
Address: 00000 Xxxx Xxx ) XXXXXXX XXXXXX
----------------------- )
Xxx Xxxxxxx, XX 00000 )
------------------------------- )
Occupation: Editor )
-------------------- )
SIGNED, SEALED AND DELIVERED )
by XXXXXX XXXXXXXX )
in the presence of: )
)
)
Name: Xxxxxx Xxxxxxxx ) /s/ XXXXXX XXXXXXXX
------------------------- ) ---------------------------
Address: 2923 Snow Brook ) XXXXXX XXXXXXXX
----------------------- )
Xxxxxxxx, XX 00000 )
------------------------------- )
Occupation: )
-------------------- )
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SIGNED, SEALED AND DELIVERED )
by XXXX XXXXX )
in the presence of: )
)
Name: [Signature Illegible] ) /s/ XXXX XXXXX
------------------------------- ) ------------------------------------
) XXXX XXXXX
Address: 00000 Xxxxx Xxxx. )
---------------------------- )
)
------------------------------- )
)
Occupation: Self-employed )
------------------------- )
SIGNED, SEALED AND DELIVERED )
by XXXXXXXXX X. XXXXXX )
in the presence of: )
)
Name: Xxxxxxxxx X. Xxxxxx ) /s/ XXXXXXXXX X. XXXXXX
------------------------------- ) ------------------------------------
) XXXXXXXXX X. XXXXXX
Address: 0000 Xxxxxxxx Xxxxxx )
---------------------------- ) Notary Public in and for Xxxxxxxxxx
Xxxxx Xxxxx, Xxxxxxxx 00000 ) County, State of Maryland
------------------------------------ )
) /s/ PARRIZ KANOZI
Occupation: sales-management ) ------------------------------------
------------------------- ) My Commission Expires June 20, 199?
)
)
SIGNED, SEALED AND DELIVERED )
by YOUNG XXX XXX )
in the presence of: )
)
Name: Youngji Nam ) /s/ YOUNG XXX XXX
------------------------------- ) ------------------------------------
) YOUNG XXX XXX
Address: 0000 Xxxxxx Xx. #000 )
---------------------------- )
Xxx Xxxxxxxxx, XX 00000 )
------------------------------------ )
)
Occupation: Designer )
------------------------- )
)
SIGNED, SEALED AND DELIVERED )
by XXXXXX X. XXXXXX and )
XXXXXXX X. XXXXXX in the )
presence of: )
)
Name: Xxxx X. Aundo ) /s/ XXXXXX X. XXXXXX
------------------------------- ) ------------------------------------
) XXXXXX X. XXXXXX
Address: W 0000 Xxx 00 )
---------------------------- ) /s/ XXXXXXX X. XXXXXX
Mayston, WI ) ------------------------------------
------------------------------------ ) XXXXXXX X. XXXXXX
)
Occupation: Painting Contractor )
------------------------- )
)
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SIGNED, SEALED AND DELIVERED )
by XXXX X. XXXXXX )
in the presence of: )
)
)
Name: Xxxxx X. Xxxxxx ) /s/ XXXX X. XXXXXX
------------------------- ) -----------------------------
) XXXX X. XXXXXX
Address: 00 Xxx Xxxxx )
---------------------- )
)
Kentfield, CA. )
------------------------------ )
)
Occupation: House Engineer )
------------------- )
)
)
SIGNED, SEALED AND DELIVERED )
by XXXXXXXX XXXXX XXXXXXXX )
in the presence of: )
)
)
Name: Xxx Plan ) /s/ XXXXXXXX XXXXX XXXXXXXX
------------------------- ) -----------------------------
) XXXXXXXX XXXXX XXXXXXXX
Address: 00000 Xxxxxxxxx Xx. )
---------------------- )
)
Xxxxxxxx, XX 00000 )
------------------------------ )
)
Occupation: Self employed )
------------------- )
SIGNED, SEALED AND DELIVERED )
by XXXXX XXXXXX )
in the presence of: )
)
)
Name: [SIG] ) /s/ XXXXX XXXXXX
------------------------- ) -----------------------------
) XXXXX XXXXXX
Address: 23641 Via Delos )
---------------------- )
)
Xxxxxxxx, XX 00000 )
------------------------------ )
)
Occupation: Computer Sales Rep )
------------------- )
SIGNED, SEALED AND DELIVERED )
by XXXXXX XXXX XXXXX )
in the presence of: )
)
)
Name: Xxxxxxxxx Xxxx ) /s/ XXXXXX XXXX XXXXX
------------------------- ) -----------------------------
) XXXXXX XXXX XXXXX
Address: )
---------------------- )
)
------------------------------ )
)
Occupation: )
------------------- )
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SIGNED, SEALED AND DELIVERED )
by XXXXXXX XXXXXXXX )
in the presence of: )
)
Name: Xxxxx X. Xxxxx ) /s/ XXXXXXX X. XXXXXXXX
------------------------------ ) --------------------------------
Address: PRECISE METAL PRODUCTS CO. ) XXXXXXX XXXXXXXX
X.X. Xxx 00000 )
XXXXXXX, XXXXXXX 00000 )
------------------------------------ )
Occupation: Accounting )
SIGNED, SEALED AND DELIVERED )
by XXXXX X. XXXXX )
in the presence of: )
) /s/ XXXXX X. XXXXX
Name: [Signature Illegible] ) --------------------------------
------------------------------- ) XXXXX X. XXXXX
)
Address: 0000 Xxxxxxx Xxx. )
---------------------------- )
)
Xxxxxx, XX 00000 )
------------------------------------ )
)
Occupation: Manager of Business )
------------------------- )
)
SIGNED, SEALED AND DELIVERED )
by XXXXXX XXXXXXX XXXXXXX )
in the presence of: )
)
Name: Xxxxxxxxx Xxxx ) /s/ XXXXXX XXXXXXX XXXXXXX
------------------------------- ) -------------------------------
) XXXXXX XXXXXXX XXXXXXX
Address:____________________________ )
____________________________________ )
)
Occupation:_________________________ )
VARIETY INVESTMENTS LTD.
Per: [SIGNATURE ILLEGIBLE]
------------------------------------
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SIGNED, SEALED AND DELIVERED )
by XXXXXXX XXXXXXXXX, XX. )
in the presence of: )
)
)
Name: /s/ Xxxxx X. Zantsen ) /s/ Xxxxxxx Xxxxxxxxx
------------------------------- ) ---------------------------
) XXXXXXX XXXXXXXXX
Address: 0000 Xxxxx Xxxx Xx. )
---------------------------- )
Xxxxxxxxx, XX 00000 )
------------------------------------ )
)
Occupation: Personal Banker )
------------------------- )
SIGNED, SEALED AND DELIVERED )
by XXXXXXX XXXXXXXXX, XX. )
in the presence of: )
)
)
Name: )
------------------------------- ) ---------------------------
) XXXXXXX XXXXXXXXX
Address: )
---------------------------- )
)
------------------------------------ )
)
Occupation: )
------------------------- )
SIGNED, SEALED AND DELIVERED )
by XXXXXXX XXXXXXXXX and )
XXXXX XXXXXXXXX )
in the presence of: )
)
)
Name: /s/ Xxxxx X. Zantsen ) /s/ Xxxxxxx Xxxxxxxxx
------------------------------- ) ---------------------------
) XXXXXXX XXXXXXXXX
Address: 0000 Xxxxx Xxxx Xx. )
---------------------------- ) /s/ Xxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000 ) ---------------------------
------------------------------------ ) XXXXX XXXXXXXXX
)
Occupation: Personal Banker )
------------------------- )
WOODLAND HILLS PSYCHIATRIC MEDICAL
GROUP INC. RETIREMENT TRUST
Per:
------------------------------------
SIGNED, SEALED AND DELIVERED )
by XXXXXXX XXXXXXXXX, XX. )
in the presence of: )
)
)
Name: )
------------------------------- ) ---------------------------
) XXXXXXX XXXXXXXXX
Address: )
---------------------------- )
)
------------------------------------ )
)
Occupation: )
------------------------- )
SIGNED, SEALED AND DELIVERED )
by XXXXXXX XXXXXXXXX, XX. )
in the presence of: )
)
)
Name: /s/ A. Xxxx Xxxxx ) /s/ Xxxxxxx Xxxxxxxxx
------------------------------- ) ---------------------------
) XXXXXXX XXXXXXXXX
Address: 000 0XX XX. )
---------------------------- )
Xxxxxxxxx Xxx, XX 00000 )
------------------------------------ )
)
Occupation: School Director )
------------------------- )
SIGNED, SEALED AND DELIVERED )
by XXXXXXX XXXXXXXXX and )
XXXXX XXXXXXXXX )
in the presence of: )
)
)
Name: )
------------------------------- ) ---------------------------
) XXXXXXX XXXXXXXXX
Address: )
---------------------------- ) ----------------------------
) XXXXX XXXXXXXXX
------------------------------------ )
)
Occupation: )
------------------------- )
WOODLAND HILLS PSYCHIATRIC MEDICAL
GROUP INC. RETIREMENT TRUST
Per:
------------------------------------
SIGNED, SEALED AND DELIVERED )
by XXXXXXX XXXXXXXXX )
in the presence of: )
)
)
Name: )
------------------------------- ) ---------------------------
) XXXXXXX XXXXXXXXX
Address: )
---------------------------- )
)
------------------------------------ )
)
Occupation: )
------------------------- )
SIGNED, SEALED AND DELIVERED )
by XXXXXXX XXXXXXXXX and )
XXXXX XXXXXXXXX )
in the presence of: )
)
)
Name: )
------------------------------- ) ---------------------------
) XXXXXXX XXXXXXXXX
Address: )
---------------------------- )
)
------------------------------------ )
)
Occupation: )
------------------------- )
SIGNED, SEALED AND DELIVERED )
by XXXXXXX XXXXXXXXX, XX. )
in the presence of: )
)
)
Name: )
------------------------------- ) ---------------------------
) XXXXXXX XXXXXXXXX
Address: )
---------------------------- ) ---------------------------
) XXXXX XXXXXXXXX
------------------------------------ )
)
Occupation: )
------------------------- )
WOODLAND HILLS PSYCHIATRIC MEDICAL
GROUP INC. RETIREMENT TRUST
Per:
/s/ Xxxxxxx X. Kleuens, M.D. WITNESS: S. Xxx Xxxx
------------------------------------ 00000 Xxxxxxxxx Xx.
XXXXXXX X. KLEUENS, M.D. Xxxxxxx Xxxx, XX 00000
July 17, 1999 /s/ S. Xxx Xxxx
-------------------------------
15
SCHEDULE A
ACKNOWLEDGEMENT AND AGREEMENT TO BE BOUND
TO: Superintendent of Brokers OR Vancouver Stock Exchange
#0000 - 000 Xxxxxx Xxxxxx 609 Granville Street
Vancouver, B.C. Xxxxxxxxx, X.X.
X0X 0X0 X0X 0X0
(if the shares are not (if the shares are listed
listed on the Vancouver on the Vancouver Stock
Stock Exchange) Exchange)
I acknowledge that:
(a) I have entered into an agreement with ______________ under which ________
common shares of Puff Pac Industries 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 June 14, 1991 (the "Escrow Agreement"), a copy of which is
attached as Schedule A to this acknowledgement.
I 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___.
Where the transferee is an individual:
SIGNED, SEALED and DELIVERED )
by )
in the presence of: )
)
_____________________________ ) _____________________
Name )
)
_____________________________ )
Address
)
_____________________________ )
)
_____________________________ )
Occupation
Where the transferee is a company
The CORPORATE/COMMON SEAL of )
)
was affixed in the presence of: )
) C/S
_____________________________ )
Authorized Signatory )
)
_____________________________ )
Authorized Signatory )
00
XXXXXXXX XX
XXXXXXX XXXXXXXX
OFFICE OF THE SCHEDULE "B"
CHAIRMAN
BRITISH COLUMBIA SECURITIES COMMISSION
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LOCAL POLICY STATEMENT 3-07
POLICY GUIDELINES RESPECTING TRADING SHARES,
PERFORMANCE SHARES AND OTHER CONSIDERATION
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TABLE OF CONTENTS
PART TITLE PAGE
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1. IMPLEMENTATION 1
2. APPLICATION 1
2.1 Pre-prospectus
2.2 Reactivations and reorganizations
3. TRANSITION 2
3.1 Agreements made under former policy statement
3.2 Option of conforming with new policy statement
4. DEFINITIONS 2
4.1 Defined terms
4.2 Terms defined in legislation
5. GENERAL MATTERS 5
5.1 Review of opinions and reports
5.2 Requirement for valuation opinion
5.3 Out of pocket costs
5.4 Confirmation of fair value
6. ISSUANCE OF TRADING SHARES 6
6.1 Minimum price and maximum aggregate value
6.2 Interest in operating subsidiary
6.3 Value assigned to non-cash assets
6.4 Purchase of interest in mineral property
6.5 Accumulated deficit related to issuers's
stated business purpose
6.6 Exclusion of amounts by Superintendent
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PART TITLE PAGE
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7. ISSUANCE OF PERFORMANCE SHARES 8
7.1 Issuance to principals
7.2 Natural resource issuer
7.3 Industrial issuer
7.4 Escrow requirement
7.5 Escrow agreement
7.6 Limitations on rights of holders of
performance shares
7.7 Rights on ceasing to be a principal
7.8 Undertaking of holding company
8. TRANSFER OF PERFORMANCE SHARES WITHIN ESCROW 10
8.1 Permitted transferees
8.2 Request for consent to transfer
8.3 Documents to be filed with request for
consent to transfer
8.4 Letter of consent or objection
8.5 No transfer during period between
prospectus receipt and listing
9. RELEASE OF PERFORMANCE SHARES FROM ESCROW 11
9.1 Release of shares of natural
resource issuer
9.2 Reduction in release for natural
resource issuer
9.3 Release of shares of industrial issuer
9.4 Adjustment of release calculation
9.5 Requirements for release
9.6 Annual release based on annual audited
financial statements
9.7 Request for consent to release
9.8 Documents to be filed with request for
consent to release
9.9 Letter of consent or objection
9.10 Request by holder of performance
shares for consent to release
10. SURRENDER OF PERFORMANCE SHARES FOR
CANCELLATION 14
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PART TITLE PAGE
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11. OTHER CONSIDERATION 14
11.1 Natural resource issuer
11.2 Industrial issuer
Appendix A Escrow Agreement
Appendix B Examples of earn-out prices for performance
shares issued by an industrial issuer
Appendix C Undertaking Required from Non-Reporting or
Closely Held Company
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PART 1 IMPLEMENTATION
1.1 The following local policy statements are hereby rescinded and this local
policy statement substituted therefor, effective March 1, 1990:
(a) Local Policy Statement 3-07, dated February 6, 1987 (the "Former
Policy Statement"), and
(b) Local Policy Statements 3-08, 3-09 and 3-10, each dated February 1,
1987.
PART 2 APPLICATION
2.1 Pre-prospectus -- This local policy statement sets out guidelines for
issuance of shares and payment of consideration for assets by an issuer
intending to do an initial public offering and obtain a listing on the
Vancouver Stock Exchange. This local policy statement addresses
(a) the issuance of trading shares, which are common shares issued as
consideration for cash or assets contributed to the issuer and, in
certain cases, expenses incurred to advance the business of the
issuer,
(b) the issuance of and escrow restrictions imposed on performance shares,
which are common shares issued to directors, officers, promoters and
other principals of the issuer to provide them with both a reasonable
assurance of control during the formative stages of the issuer's
development and an incentive to support the issuer, and
(c) the payment of other consideration by the issuer for assets or
services.
2.2 Reactivations and reorganizations -- This local policy statement applies,
with the necessary changes, to
(a) the reactivation of an issuer by way of a prospectus, carried out in
accordance with Local Policy Statement 3-35 and the policies of the
Vancouver Stock Exchange, and
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(b) a major reorganization of an issuer, including a reverse take over,
carried out in accordance with the policies of the British Columbia
Securities Commission and the Vancouver Stock Exchange.
PART 3 TRANSITION
3.1 Agreements made under former policy statement -- Subject to section 3.2,
shares issued in accordance with the Former Policy Statement will continue
to be governed by any agreements made in accordance with the Former Policy
Statement. Such shares, however, will be subject to the transfer
restrictions and procedures set out in Part 8 and the release criteria and
procedures set out in sections 9.5 through 9.10 of this local policy
statement.
3.2 Option of conforming with new policy statement -- An issuer that has issued
shares in accordance with the Former Policy Statement may reorganize its
capital to fully conform with this local policy statement. Before doing so,
the issuer must obtain the approval of its shareholders and the written
consent of the Superintendent of Brokers, if the issuer's shares are not
listed on the Vancouver Stock Exchange, or the Vancouver Stock Exchange, if
the issuer's shares are listed on that exchange. Both the approval and
consent must be obtained by March 1, 1991.
PART 4 DEFINITIONS
4.1 Defined terms -- In this local policy statement:
"Act" means the Securities Act, S.B.C. 1985, c. 83;
"arm's length transaction" means a transaction other than a non-arm's
length transaction;
"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,
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(c) expensed research and development costs, excluding general and
administrative costs, and
(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 IPO, net of any negative
cash flow;
"earn-out factor" means the number obtained by squaring the performance
share percentage, expressed as a decimal, and multiplying by four;
"EARN-OUT PRICE" means the IPO price multiplied by the earn-out factor;
"escrow agreement" means an agreement in the form attached as Appendix A to
this local policy statement;
"Exchange" means the Vancouver Stock Exchange;
"industrial issuer" means an issuer other than a natural resource issuer;
"IPO" means the initial public offering of common shares of an 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;
"IPO price" means the price per share paid by the public on an issuer's
IPO;
"non-arm's length transaction" means a transaction between the issuer and a
person that, at any time from the date of the transaction until the date of
completion of the issuer's IPO, is
(a) an insider, associate, affiliate or principal of the issuer,
(b) a person that
(i) has a control person, insider or promoter that is a control
person, insider or promoter of the issuer, or
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(ii) has a control person, insider or promoter that is an associate
or affiliate of a control person, insider or promoter of the
issuer
except where the person's insiders that are described in paragraphs
(i) and (ii) hold in total less than 10% of the voting securities of
the person, or
(c) determined by the Superintendent not to be at arm's length to the
issuer;
"performance shares" means common shares of an issuer issued in accordance
with Part 7 of this local policy statement, so long as they are held in
escrow in accordance with this local policy statement;
"performance share percentage" means the percentage, determined on the date
the issuer's shares are listed, posted and called for trading on the
Exchange, that the issued performance shares of the issuer are of the total
issued and outstanding voting securities of the issuer;
"principal" means, in relation to an issuer,
(a) a promoter of the issuer,
(b) a director of the issuer or of an operating subsidiary of the issuer,
(c) a full time management employee of the issuer, or of an operating
subsidiary of the issuer, whose direct or indirect employment is with
the issuer or the subsidiary,
(d) a person who has provided key services or contributed a fundamental
asset to the issuer and has elected to be treated as a principal, or
(e) a company all the voting securities of which are owned by one or more
of the persons referred to in subsections (a) through (d);
"Regulation" means the Securities Regulation, B.C. Reg. 270/86;
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"Superintendent or the Exchange" means the Superintendent, if the issuer's
shares are not listed on the Exchange, and the Exchange, if the issuer's
shares are listed on the Exchange;
"trading shares" means shares of the class of common shares issued on an
issuer's IPO, excluding performance shares issued in accordance with Part 7
of this local policy statement;
"valuation opinion" means, in respect of
(a) a natural resource issuer, a written opinion prepared by a qualified
expert as to the fair market value of a resource property, determined
either through the computation of present value or some other
recognized method of valuation acceptable to the Superintendent, and
(b) an industrial issuer, a written opinion prepared in accordance with
generally applied valuation approaches by a Chartered Business
Valuator, or another expert acceptable to the Superintendent, as to
the highest price available for the issuer's business, assets or
shares in an open and unrestricted market between informed, prudent
parties, acting at arm's length and under no compulsion to act,
expressed in terms of money or money's worth.
4.2 Terms defined in legislation -- Subject to section 4.1, terms defined in
the Act, the Regulation and the Interpretation Act, R.S.B.C. 1979, c. 206
and used in this local policy statement have the same meaning as in the
Act, the Regulation and the Interpretation Act.
PART 5 GENERAL MATTERS
5.1 Review of opinions and reports -- The Superintendent may, with the
agreement of an issuer, seek the opinion of an engineer, appraiser,
business valuator, accountant or other expert to determine the
acceptability of a valuation opinion or other report filed pursuant to this
local policy statement and, in such circumstances, the issuer will be
liable for the fees charged by such person in connection with providing the
opinion.
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5.2 Requirement for valuation opinion -- The Superintendent may, at the time of
reviewing an issuer's prospectus for its IPO, require a valuation opinion
in support of the value attributed to any non-cash assets.
5.3 Out of pocket costs -- Where this local policy statement provides that the
value of trading shares issued or other consideration paid to a person by
an issuer for a non-cash asset must be calculated on the basis of the out
of pocket costs incurred by the person in respect of the non-cash asset,
those out of pocket costs must
(a) be reasonable,
(b) have contributed or be reasonably expected to contribute to the future
operations of the issuer,
(c) be supported by an audited statement of costs, and
(d) in respect of a resource property, be restricted to acquisition costs
and such other costs as are necessary to secure a preliminary
evaluation of the resource property and to lead to the identification
of exploration targets.
5.4 Confirmation of fair value -- The onus will be on an issuer, if questioned,
to satisfy the Superintendent that fair value was received for costs or
expenditures associated with a non-arm's length transaction.
PART 6 ISSUANCE OF TRADING SHARES
6.1 Minimum price and maximum aggregate value -- Although in most cases trading
shares will be paid for in cash, trading shares may be issued for
consideration other than cash. Subject to sections 6.2 through 6.6, an
issuer may issue trading shares at a minimum price of $.25 per share up to
an aggregate value equal to:
(a) the amount of cash paid in as share capital; plus
(b) the fair market value of any non-cash assets contributed as share
capital; plus
(c) the issuer's retained earnings, if any; less
(d) where the issuer has an accumulated deficit, that portion of the
accumulated deficit that does not directly relate to the issuer's
stated business purpose at the time of its IPO.
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6.2 Interest in operating subsidiary - Where an issuer has an operating
subsidiary, or is proposing to issue trading shares in order to acquire an
operating subsidiary, and the value of that operating subsidiary is not
supported by a current valuation opinion, the principles of this Part will
apply to the operating subsidiary for the purpose of determining the number
of trading shares that may be issued by the issuer in respect of its
interest in the operating subsidiary.
6.3 Value assigned to non-cash assets - For the purpose of section 6.1(b),
where non-cash assets are contributed to an issuer by a person in a
non-arm's length transaction, the fair market value attributed to the
non-cash assets must be either
(a) supported by a valuation opinion, or
(b) limited to an amount equal to the out of pocket costs incurred by
the person in respect of the non-cash assets, determined in
accordance with section 5.3.
6.4 Purchase of interest in mineral property - A natural resource issuer that,
in an arm's length transaction, agrees to issue trading shares as
consideration for a mineral property or an option on a mineral property,
the value of which is not supported by a current valuation opinion, will
generally be required to meet the following conditions:
(a) The consideration must consist of not more than 200,000 trading shares
issuable in no fewer than four blocks, each block consisting of not
more than 50,000 trading shares.
(b) One block of shares may be issued prior to the date the issuer's
shares are listed, posted and called for trading on the Exchange.
(c) The remaining blocks of shares may be issued in stages upon the filing
with the Exchange of engineering reports, acceptable to the Exchange,
recommending further work on the mineral property.
6.5 Accumulated deficit related to issuer's stated business purpose - For the
purpose of section 6.1(d), that portion of the issuer's accumulated deficit
that directly relates to the issuer's stated business purpose at the time
of its IPO includes
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(a) for a natural resource issuer, expenses incurred
(i) in exploring and developing the resource properties upon which
the issuer's IPO proceeds are to be spent, and
(ii) in exploring and developing other resources properties, provided
that these expenses do not exceed the expenses referred to in
paragraph (i), and
(b) for an industrial issuer, expenses incurred in respect of the project
or business to be financed by the issuer's IPO proceeds.
6.6 Exclusion of amounts by Superintendent - The Superintendent may require
that an amount be excluded from the determination of the number of trading
shares that may be issued under this Part if in the circumstances he
considers, that to include any such amount would be inappropriate or
unconscionable. For example, the Superintendent would question the
appropriateness of issuing trading shares for non-cash assets unrelated to
the issuer's stated business purpose at the time of its IPO or for
excessive administrative expenses.
PART 7 ISSUANCE OF PERFORMANCE SHARES
7.1 Issuance to principals - Performance shares may be issued for cash to the
principles of an issuer
(a) to provide the principals with a measure of control to facilitate the
development of the issuer in an orderly fashion,
(b) to provide an incentive for the principals to diligently support the
affairs of the issuer, and
(c) to provide an incentive for the principals to contribute management
services or fundamental assets to the issuer.
7.2 Natural resource issuer - A natural resource issuer may issue to its
principals up to a total of 750,000 performance shares, at a minimum price
of $.01 per share.
7.3 Industrial issuer - An industrial issuer may issue performance shares to
its principals, at a minimum price of $.01 per share, provided that the
resulting performance share percentage does not exceed 65%.
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7.4 Escrow requirement - Performance shares are required to be escrowed. It
should be noted that the higher the performance share percentage, the
more difficult it becomes to obtain a release of the performance shares
from escrow. The table attached as Appendix B to this local policy
statement provides some examples of the operation of the release
provisions for industrial issuers set out in Part 9 of this local policy
statement.
7.5 Escrow agreement - Prior to or at the time of acquiring performance
shares, principals must execute an escrow agreement. The certificates
representing the performance shares must be registered in the names of
the holders of the shares and deposited with the escrow agent in
accordance with the terms of the escrow agreement. Only a trust company
carrying on business in British Columbia or a company approved by the
Superintendent may act as an escrow agent.
7.6 Limitations on rights of holders of performance shares - The escrow
agreement provides that the holders of performance shares waive any
rights attached to those shares to receive dividends or to participate in
the assets and property of the issuer on a winding up or dissolution.
Holders of performance shares do retain the right to vote those shares,
except on a resolution respecting their cancellation.
7.7 Rights on ceasing to be a principal - The escrow agreement requires that
the parties to it set out in the agreement any rights or obligations of
a person who ceases to be a principal, dies or becomes bankrupt to
retain, transfer or surrender to the issuer for cancellation any
performance shares than held by the person.
7.8 Undertaking of holding company - Where performance shares are to be
issued to a non-reporting or closely held company, wherever situate,
rather than to an individual, the company must, prior to or at the time
of acquiring the performance shares, execute an undertaking in the form
attached as Appendix C to this local policy statement. In the
undertaking, the company agrees not to effect or permit any transfer of
ownership of shares of the company nor to issue further shares of any
class in the company without the consent of the Superintendent or the
Exchange, so long as the company continues to hold any of the issuer's
performance shares. An application for consent should be made in the same
manner as an application for consent to a transfer of performance shares
pursuant to Part 8 of this local policy.
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PART 8 TRANSFER OF PERFORMANCE SHARES WITHIN ESCROW
8.1 Permitted transferees - Performance shares may be transferred only to
(a) other principals, including incoming principals,
(b) the issuer of the performance shares, or
(c) an offeror under a formal bid (as defined in section 74 of the Act).
8.2 Request for consent to transfer - In order to transfer performance shares,
the holder of performance shares must deliver to the Superintendent or the
Exchange a written request for consent to the transfer. The request for
consent to the transfer must include:
(a) the name of the escrow agent and the reference date of the escrow
agreement,
(b) an explanation of the reason for the transfer,
(c) a description of the consideration to be paid for the performance
shares,
(d) where the performance shares are to be transferred to a principal,
confirmation that the transferee is a principal or will become a
principal on or before the date of the proposed transfer, and
(e) a description of the exemptions in the Act or the Regulation, if any,
being relied upon to make the transfer.
8.3 Documents to be filed with request for consent to transfer - The request
for consent to the transfer must be accompanied by:
(a) a copy of the transfer agreement,
(b) an acknowledgement and agreement to be bound in the form attached as
Schedule A to the escrow agreement, executed by the transferee,
(c) where the performance shares are to be transferred to a non-reporting
or closely held company, wherever situate, rather than to an
individual, an undertaking by the company in the form attached as
Appendix C to this local policy statement,
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(d) where applicable, evidence that the proposed change of control has
been approved by the shareholders of the issuer, and
(e) the appropriate application fee.
8.4 Letter of consent or objection - Upon receiving a request for consent to a
transfer and accompanying documents that comply with sections 8.2 and 8.3,
the Superintendent or the Exchange will issue to the applicant a letter
that either consents or objects to the transfer. A letter consenting to the
transfer will be copied to the escrow agent.
8.5 No transfer during period between prospectus receipt and listing - The
Superintendent will generally refuse to consent to a transfer or
performance shares during the period between the date of the receipt for
the issuer's prospectus for its IPO and the date the issuer's securities
are listed, posted and called for trading on the Exchange.
PART 9 RELEASE OF PERFORMANCE SHARES FROM ESCROW
9.1 Release of shares of natural resource issuer - Holders of performance
shares of a natural resource issuer will be entitled to the pro-rata
release of those performance shares on the basis of 15% of the original
number of performance shares for every $100,000 expended on exploration and
development of a resource property by
(a) the issuer, or
(b) a person other than the issuer in order to earn an interest in the
resource property, but only in respect of that proportion of the
expenditure equal to the issuer's remaining proportionate interest in
the resource property after the person's interest has been earned,
provided that
(c) no more than 50% of the original number of performance shares may be
released in any 12 month period, and
(d) no expenditure on exploration and development made prior to the date
of the receipt for the issuer's prospectus for its IPO may be
included.
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9.2 Reduction in release for natural resource issuer - Where administrative
expenses exceed 33% of total expenditures during the period on which the
calculation in section 9.1 is based,
(a) the pro-rata release factor of 15% will be reduced to 7.5%, and
(b) the percentage of the original number of performance shares available
for release in any 12 month period will be reduced to 25%.
9.3 Release of shares of industrial issuer - Holders of performance shares of
an industrial issuer will be entitled to the pro-rata release of a number
of performance shares equal to the amount of cumulative cash flow, not
previously applied towards release, divided by the earn-out price.
9.4 Adjustment of release calculation - On a consolidation, subdivision,
amalgamation or reclassification of the issuer's shares, the release
calculation must be adjusted so that the proportion of the outstanding
performance shares available for release is unaffected by the
consolidation, subdivision, amalgamation or reclassification.
9.5 Requirements for release - No performance shares may be released from
escrow unless, at the time of the application for release,
(a) the issuer is meeting its current obligations in the ordinary course
of business as they generally become due, as evidenced by a statutory
declaration of the president or chief financial officer of the issuer,
(b) the issuer's shares are listed, posted and called for trading on all
stock exchanges having jurisdiction over it, as evidenced by letters
from those stock exchanges,
(c) the issuer is not in default of any requirement of the Act or the
Regulation, as evidenced by a certificate issued by the Commission,
and
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(d) the issuer is in good standing with respect to its filing of returns
with the Registrar of Companies under the Company Act or, if the
issuer is incorporated, organized or continued in a jurisdiction other
than British Columbia, with the registrar of companies or similar
authority in that jurisdiction, as evidenced by a certificate issued
by the Registrar of Companies or by that similar authority.
9.6 Annual release based on annual audited financial statements -- Performance
shares may be released only once during an issuer's financial year. The
release calculation must be based on the issuer's annual audited financial
statements for the year or years during which the release requirements were
met in respect of the performance shares to be released.
9.7 Request for consent to release -- In order to obtain a release of
performance shares, the issuer must deliver to the Superintendent or the
Exchange a written request for consent to the release. The request for
consent to the release must include the name of the escrow agent and the
reference date of the escrow agreement.
9.8 Documents to be filed with request for consent to release -- The request
for consent to release must be accompanied by:
(a) written evidence of compliance with the requirements of section 9.5,
(b) annual audited financial statements of the issuer for the financial
year or years during which the release requirements were met in
respect of the performance shares to be released,
(c) where expenditures on a resource property were made by a person other
than the issuer, an audited statement of costs,
(d) a calculation, prepared by the issuer's auditor, of the number of
performance shares to be released, and
(e) the appropriate application fee.
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9.9 Letter of consent or objection -- Upon receiving a request for consent to
a release and accompanying documents that comply with sections 9.7 and
9.8, the Superintendent or the Exchange will issue to the issuer a letter
that either consents or objects to the release. A letter consenting to
the release will be copied to the escrow agent.
9.10 Request by holder of performance shares for consent to release -- A
holder of performance shares may apply to the Superintendent or the
Exchange for release where the issuer is unable or unwilling to do so. If
the president or chief financial officer of the issuer refuses to provide
the statutory declaration referred to in section 9.5(a), the
Superintendent or the Exchange may waive that requirement.
PART 10 SURRENDER OF PERFORMANCE SHARES FOR CANCELLATION
10.1 Performance shares must be surrendered to the issuer for cancellation
(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, or
(c) 10 years from the later of the date of issue of the performance
shares and the date of the receipt for the issuer's prospectus for
its IPO.
PART 11 OTHER CONSIDERATION
11.1 Natural resource issuer -- Where a natural resource issuer proposes to
acquire from a person a resource property or an option on a resource
property, the value of which is not supported by a valuation opinion, the
following principles apply:
(a) In an arm's length transaction, the issuer may pay the person cash
consideration.
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SCHEDULE C TO THE ESCROW AGREEMENT
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NUMBER OF SHARES
NAME OF SHAREHOLDER HELD IN ESCROW
-------------------------------------------------------------------------------
Xxxxxx X. Xxxxxxxx 41,255
Xxxxxxxx Xxxxxx Xxxxx 30,158
Xxxxx Xxxx Xxxxx 50,882
Xxxxxxx Xxxxx 5,576
Xxxxxxx Ciafa 11,148
Xxxx Xxxxx Xxxx 692,239
Xxxxx X. Xxxxxx and Darvilla Xxxxxx 6,253
Xxxxxxx Xxxxxx 8,230
Xxxxx X. Xxxxxxxx and Xxxxxx Xxxxxxxx 2,923
Xxxxx Xxxxxx 17,891
Xxxxx X. Xxxxxx 8,945
Xxxxxxx Xxxxxx 3,344
Xxxxxx Xxxxxxxx 2,433
Xxxx Xxxxx 5,576
Xxxxxxxxx X. Xxxxxx 11,486
Young Xxx Xxx 251
Xxxxxx X. Xxxxxx and Xxxxxxx X. Xxxxxx 17,891
Xxxx X. Xxxxxx 17,891
Xxxxxxxx Xxxxx Xxxxxxxx 405,344
Xxxxx Xxxxxx 22,257
Xxxxxx Xxxx Xxxxx 2,102,339
Xxxxxxx Xxxxxxxx 10,654
Xxxxx X. Xxxxx 25,065
Xxxxxx Xxxxxxx Xxxxxxx 214,949
Variety Investments Ltd. 725,201
Xxxxxxx Xxxxxxxxx 17,891
Xxxxxxx Xxxxxxxxx, Xx. 1,672
Woodland Hills Psychiatric Medical 2,788
Group Inc. Retirement Trust 17,891
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TOTAL 4,460.423
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