EXHIBIT 99.2
ESCROW AGREEMENT
THIS AGREEMENT made as of the 7th day of December, 2001.
BETWEEN:
JIPANGU INC., a corporation existing under the laws of Japan
(hereinafter called the "Company")
- and -
SPROTT CANADIAN EQUITY FUND, SPROTT HEDGE FUND LP, XXXX X. XXXXXX AND
SPROTT SECURITIES INC., as portfolio manager
(hereinafter collectively called the "Debenture Holders")
- and -
EQUITY TRANSFER SERVICES INC., a corporation incorporated under the laws of
the Province of Ontario
(hereinafter called the "Escrow Agent")
WHEREAS the Company and Sprott have executed a term sheet dated as of December
7, 2001 (the "Term Sheet") pursuant to which the Company granted $10,000,000
principal amount convertible debentures (the "Debentures") to the Holders;
AND WHEREAS the Debentures are convertible at anytime and from time to time into
common shares of Cambior Inc. ("Cambior Shares");
AND WHEREAS the provisions of the Term Sheet provide for the deposit of certain
Cambior Shares with an escrow agent designated by the Company and Sprott to be
held in trust by such escrow agent pending the earlier of (i) conversion of all
of the Debentures; (ii) redemption of all of the Debentures; and (iii) the
Maturity Date;
AND WHEREAS all terms not defined herein shall have the meanings ascribed to
them respectively in the Term Sheet.
NOW THEREFORE IN CONSIDERATION of the mutual covenants and promises contained in
this agreement and the Term Sheet, the parties hereto agree as follows:
1. DESIGNATION OF ESCROW AGENT
1.1 The Company and the Debenture Holders hereby designate the Escrow Agent to
act as the escrow agent in connection with the Debentures.
1.2 The Escrow Agent hereby agrees to act as the escrow agent in connection
with the Debentures on the terms and conditions set out herein.
1.3 In discharging its duties under this agreement, the Escrow Agent shall have
regard only to the provisions hereof and no other agreement, document or
instrument and, specifically, the Escrow Agent shall have no obligation to
read or examine the Term Sheet except to the extent that terms defined
therein are used herein.
2. DELIVERY OF CAMBIOR SHARES
2.1 The Company hereby places and deposits in escrow 17,361,112 Cambior Shares
(the "Escrowed Shares") with the Escrow Agent and hereby undertakes and
agrees forthwith to deliver certificates representing such shares
(including any replacement securities or certificates if and when such are
issued or allotted) and a duly executed blank power of attorney to transfer
shares to the Escrow Agent for deposit in escrow.
2.2 The parties hereby agree that the Escrowed Shares and the beneficial
ownership of or any interest in them and the certificates representing them
(including any replacement certificates) shall not be sold, assigned,
hypothecated, alienated, released from escrow, transferred within escrow,
or otherwise in any manner dealt with, without the express consent, order
or direction in writing of the Debenture Holders being first had and
obtained or except as may be required by reason liquidation, winding-up or
bankruptcy of the Company, in which cases the Escrow Agent shall hold the
said certificates subject to this agreement, for whatever person, firm or
corporation shall be legally entitled to be or become the registered owner
thereof.
2.3 The Company hereby directs the Escrow Agent to retain the Escrowed Shares
and the certificates (including any replacement securities or certificates)
representing the same and not to do or cause anything to be done to release
the same from escrow or to allow any transfer, hypothecation or alienation
thereof except with and as directed by the written consent, order or
direction of a Debenture Holder. The Escrow Agent hereby accepts the
responsibilities placed on it hereby and agrees to perform the same in
accordance with the terms hereof and the written consents, orders or
directions of a Debenture Holder.
2.4 If during the period in which any of the Escrowed Shares are retained in
escrow pursuant hereto, any dividend is received by the Escrow Agent in
respect of the Escrowed Shares, any such dividend shall be forthwith paid
or transferred to the Company.
2.5 All voting rights attached to the Escrowed Shares shall at all times be
exercised by the registered owner thereof.
2.6 In the event that any action or other proceedings are commenced by any of
the parties hereto to which one or both of the other parties hereto is a
party relating to this agreement, the Escrow Agent shall be permitted to
deposit into court the Escrowed Shares pursuant to the applicable rules of
procedure governing such action or proceedings and shall thereafter be
released from any and all obligation to hold the Escrowed Shares as Escrow
Agent hereunder.
3. DISCHARGE OF ESCROW AGENT
3.1 The Escrow Agent shall be discharged from any further duty upon release of
all of the Escrowed Shares held in escrow in accordance with Article 3 of
this agreement or the deposit into court of the Escrowed Shares in
accordance with Article 2.6 of this agreement.
3.2 Upon receipt by the Escrow Agent of a notice of conversion ("Notice of
Conversion") substantially in the form attached to the Debenture
certificate and duly completed and executed by a Debenture Holder together
with a certified cheque or bank draft for an amount equal the exercise
price of the Escrowed Shares to be purchased (the "Proceeds"), the Escrow
Agent shall forthwith notify the Company of such exercise of conversion
right.
3.3 As soon as practicable after receipt of a Notice of Conversion, but in any
event not later than five business days thereafter, the Escrow Agent shall
cause such number of Escrowed Shares as specified in the Notice of
Conversion to be registered in accordance with such notice and delivered to
the Debenture Holder. Concurrently with the delivery of such Escrowed
Shares, the Escrow Agent shall release the Proceeds to the Company.
3.4 As soon as practicable after receipt by the Escrow Agent of a notice of
redemption ("Notice of Redemption") duly executed by the Company and each
of the Debenture Holders but in any event not later than three business
days thereafter, the Escrow Agent shall release to the Company all Escrowed
Shares then held by the Escrow Agent.
3.5 As soon as practicable after the Maturity Date, but in any event note later
than three business days thereafter, the Escrow Agent shall release to the
Company all Escrowed Shares then held by the Escrow Agent.
3.6 Should there be an insufficient number of Escrowed Shares to transfer to
all Debenture Holders electing to exercise their conversion rights, the
Company shall forthwith transfer to the Escrow Agent that number of Cambior
Shares equal to the difference between the number of Cambior Shares
required for the conversion of the Debentures and the number of Escrowed
Shares.
4. CO-OPERATION OF THE DEBENTURE HOLDERS AND THE COMPANY WITH ESCROW AGENT
4.1 The Debenture Holders and the Company shall deliver to the Escrow Agent all
documents, pay to the Escrow Agent all sums and do or cause to be done all
other things necessary to enable the Escrow Agent to comply with this
agreement.
5. NOTICE
5.1 Any notice required to be given hereunder shall be sufficiently given and
delivered to the Escrow Agent if personally delivered, addressed to the
Escrow Agent as set out below. Any notice, certificate or other writing
required or permitted to be given hereunder (a "Notice") shall be
sufficiently given and delivered to the party to whom it is given if
personally delivered or mailed, by prepaid registered mail, addressed to
such party as follows:
If to the Company, to: JIPANGU INC.
c/o 000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxx Xxxxxx
Telecopier No.: (000) 000-0000
with a copy to: XXXXXXX XXXXX & YOUNG
000 Xxx Xxxxxx
Xxxxx 0000
Ernst & Xxxxx Xxxxx, XX Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxx X. Xxxxxxx
Telecopier No.: (000) 000-0000
If to the Debenture Holders, to: SPROTT SECURITIES INC.
Xxxxx Xxxx Xxxxx, Xxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxx Xxxxxxx
Telecopier No.: (000) 000-0000
If to the Escrow Agent, to: EQUITY TRANSFER SERVICES INC.
000 Xxxxxxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxx Xxxxx
Telecopier No.: (000) 000-0000
or such other address as the party to whom a Notice is to be given shall
have last notified in writing the other parties hereto of a change of
address for the purposes of this provision. Any Notice mailed as aforesaid
shall be deemed to have been given and received on the date that the Notice
is signed for by the party to whom it is addressed or any employee or
Underwriter thereof. Any Notice personally delivered to the party to whom
it is addressed shall be deemed to have been given and received on the day
it is personally delivered, but if any such day falls on a weekend or
statutory holiday in the City of Toronto, then the Notice shall be deemed
to have been given and received on the business day next following such
day. In the event of a postal disruption, a Notice must be personally
delivered.
6. AMENDMENT
6.1 This agreement shall not be amended, revoked or rescinded as to any of its
terms and conditions except by agreement in writing signed by all of the
parties hereto.
7. INDEMNIFICATION OF ESCROW AGENT
7.1 The Company agrees to indemnify and hold the Escrow Agent harmless against
any and all losses, claims, suits, demands, costs and expenses that may be
incurred by the Escrow Agent or made on the Escrow Agent by the Company,
the Debenture Holders or any third party by reason of the Escrow Agent's
compliance in good faith with the terms of this agreement, except claims,
suits or demands arising from, the wilful default or gross negligence of
the Escrow Agent in the performance of its duties hereunder. In no event
shall the Escrow Agent be liable to the Company for any act which it may do
or which it may omit to do with respect to this agreement, except in the
case of gross negligence or wilful misconduct of the Escrow Agent.
8. BINDING AGREEMENT - NOT ASSIGNABLE
8.1 This agreement shall constitute a binding obligation and shall enure to the
benefit of each of the parties hereto and their respective successors and
assigns and shall not be assignable by any of them without the prior
consent in writing of each of the other parties.
9. GOVERNING LAWS
9.1 This agreement shall be governed by and construed in accordance with the
laws of the Province of Ontario and the laws of Canada applicable therein.
10. INTERPRETATION
10.1 The headings of the articles and sections of this agreement are inserted
for convenience only and shall not be deemed to constitute part of this
agreement or to affect the construction hereof.
11. SEVERABILITY
11.1 Any provision hereof which is prohibited or unenforceable in any
jurisdiction will, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction will not invalidate or render unenforceable such provision in
any other jurisdiction. To the extent permitted by law, the parties hereto
waive any provision of law which renders any such provision prohibited or
unenforceable in any respect.
12. ENTIRE AGREEMENT
12.1 This agreement constitutes the entire agreement between the parties
pertaining to the subject matter hereof and supersedes all prior
agreements, understandings, negotiations and discussions, whether oral or
written. There are no conditions, warranties, representations or other
agreements between the parties in connection with the subject matter of
this agreement (whether oral or written, express or implied, statutory or
otherwise) except as specifically set out in this agreement.
13. WAIVER
13.1 A waiver of any default, breach or non-compliance under this agreement is
not effective unless in writing and signed by the party to be bound by the
waiver. No waiver shall be inferred from or implied by any failure to act
or delay in acting by a party in respect of any default, breach or
non-observance or by anything done or omitted to be done by the other
party. The waiver by a party of any default, breach or non-compliance under
this agreement shall not operate as a waiver of that party's rights under
this agreement in respect of any continuing or subsequent default, breach
or non-observance (whether of the same or any other nature).
14. TIME OF THE ESSENCE
14.1 Time shall be of the essence of this agreement.
15. EXECUTION
15.1 This agreement may be executed in one or more counterparts, and may be
delivered by facsimile, each of which so executed or delivered shall
constitute an original and all of which together shall constitute one and
the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed and delivered these
presents as of the date first above written.
JIPANGU INC.
Per: "Xxxxx Xxxxxx"
--------------------------------------------
SPROTT CANADIAN EQUITY FUND
Per: "Xxxx Xxxxxxx"
--------------------------------------------
SPROTT HEDGE FUND LP
Per: "Xxxx Xxxxxxx"
--------------------------------------------
SPROTT SECURITIES INC.
Per: "Xxxx Xxxxxxx"
--------------------------------------------
SIGNED, SEALED AND DELIVERED )
in the presence of )
)
"Xxxxx X. Xxxx" ) "Xxxx X. Xxxxxx"
-------------------------------- -----------------------------
Witness ) XXXX X. XXXXXX
EQUITY TRANSFER SERVICES INC.
Per: "Xxxxxxx Xxxxxxxxx"
--------------------------------------------