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ESCROW AGREEMENT
THIS AGREEMENT made as of the 29th day of July, 1996.
A M O N G :
XXXXXX X. XXXXXXXX, of the State of Texas
XXXXX X. XXXXXX, of the State of Texas
(hereinafter collectively called the "Security Holders")
OF THE FIRST PART
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EQUITY TRANSFER SERVICES INC.,
a company incorporated under the laws of the
Province of Ontario
(hereinafter called the "Escrow Agent")
OF THE SECOND PART
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CHAMPION COMMUNICATION SERVICES, INC.,
a company incorporated under the laws of the State of Delaware
(hereinafter called the "Issuer")
OF THE THIRD PART
WHEREAS in furtherance of complying with the requirements of the
Ontario Securities Act in connection with a prospectus related to the issuance
of 811,000 units and the qualification of 600,000 common shares issuable upon
the exercise of previously outstanding special warrants of the Issuer, the
Security Holders are desirous of depositing in escrow certain securities of the
Issuer owned or to be received by them;
AND WHEREAS the Security Holders and the Issuer have requested the
Escrow Agent act as escrow agent and the Escrow Agent has agreed to such
request;
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AND WHEREAS the Escrow Agent has agreed to undertake and perform its
duties according to the terms and conditions hereof;
NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of the
aforesaid agreements and the sum of one dollar ($1.00) now paid by the parties
hereto each to the other and in consideration of the Ontario Securities
Commission (the "Commission") delivering a final receipt for the prospectus as
hereinafter referred to (receipt of which sum the parties do hereby
respectively acknowledge each to the other) the Security Holders jointly and
severally covenant and agree with the Issuer and with the Escrow Agent and with
the Commission and the Issuer and the Escrow Agent covenant and agree each with
the other and the Security Holders jointly and severally and with the
Commission as follows:
1. Each of the Security Holders hereby places and deposits in escrow
those of his securities of the Issuer which are represented by the certificates
described or referred to in Schedule "A" hereto (the "Securities") with the
Escrow Agent and hereby undertakes and agrees forthwith to deliver those
Securities (including any replacement securities or certificates if and when
such are issued or allotted) to the Escrow Agent for deposit in escrow.
2. The parties hereby agree that the Securities and the beneficial
ownership of or any interest in them and the certificates representing them
(including any replacement securities or 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 Commission being first had and obtained or
except as may be required by reason of the death or bankruptcy of any Security
Holder, in which case as 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.
3. The Security Holders hereby direct the Escrow Agent to retain their
respective Securities 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 and as directed by the express
written consent, order or direction of the Commission.
4. If, during the period in which any of the Securities are retained in
escrow pursuant hereto, any dividend is received by the Escrow Agent in respect
of the Securities, any such dividend shall be forthwith paid or transferred to
the respective Security Holders entitled thereto.
5. All voting rights attached to the Securities shall at all times be
exercised by the respective registered owners thereof.
6. The Issuer hereby acknowledges the terms and conditions of this
Agreement and agrees to take all reasonable steps to facilitate its
performance.
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7. Notwithstanding Section 3, the Securities shall be released to the
Security Holders on the following basis:
(a) 10% of the escrowed Securities immediately after 9 months
following the date of issuance of a receipt by the
Commission for the prospectus of the Issuer;
(b) 20% of the escrowed Securities immediately after each of the
first, second and third anniversaries of the initial
release; and
(c) 30% of the escrowed Securities immediately after the fourth
anniversary of the initial release.
The Issuer agrees to provide written notice to the Escrow Agent advising the
Escrow Agent of the date of issuance of the said final receipt by the
Commission.
8. In exercise of its rights, duties and obligations hereunder, the
Escrow Agent may, if it is acting in good faith, rely as to the truth of the
statements and the accuracy of the opinions expressed therein and shall be
protected in acting upon any resolution, direction, statutory declaration,
opinion, report, notice, certificate or other paper or document believed by it
to be genuine and to have been signed, sent or presented by or on behalf of the
proper parties. However, the Escrow Agent may in its discretion require
reasonable evidence of the due execution thereof before acting or relying
thereon.
9. For services performed hereunder, the Security Holders and the Issuer
shall pay from time to time the reasonable fees of the Escrow Agent as agreed
to between the Issuer and the Escrow Agent (and as set out in Schedule "B"
hereto), together with the Escrow Agent's expenses and disbursements.
10. The Escrow Agent may retain such independent counsel or other advisor
as it may reasonably require for the purpose of discharging its duties
hereunder, may act on the advice or opinion so obtained and may pay any
reasonable fees for any such legal or other advice.
11. The Security Holders hereby jointly and severally indemnify and save
harmless the Escrow Agent of and from any and all losses, claims and demands
whatsoever arising out of the performance of its duties hereunder, save only
those arising from an event of negligence or wilful default of the Escrow
Agent.
12. If the Escrow Agent should wish to resign, it shall give at least
sixty (60) days notice to the Issuer which may, with the written consent of the
Commission, by writing, appoint another escrow agent in its place and such
appointment shall be binding on the Security Holders and the new escrow agent
shall assume and be bound by the obligations of the Escrow Agent hereunder.
Upon
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payment of any outstanding fees, expenses or disbursements, the Escrow Agent
shall transfer all records and assets to the successor escrow agent so
appointed.
13. The written consent, order or direction of the Commission as to a
release from escrow of all or part of the Securities shall terminate this
Agreement only in respect of those Securities so released. For greater
certainty this clause does not apply to Securities transferred within escrow.
14. Any certificate, opinion, direction, request, instruction or other
communication required or permitted to be given pursuant to this Agreement
shall be in writing and shall be deemed to have been sufficiently given if
delivered personally, by facsimile, or sent by prepaid registered mail
addressed to the party at the address shown below:
(a) if to the Security Holders:
Xxxxxx X. Xxxxxxxx
c/o 0000 Xxxxxxxxx Xxxxx
Xxxxx 000
Xxx Xxxxxxxxx, Xxxxx
00000, X.X.X.
Facsimile: (000) 000-0000
Xxxxx X. Xxxxxx
c/o1610 Woodstead Court
Suite 000
Xxx Xxxxxxxxx, Xxxxx
00000, X.X.X.
Facsimile: (000) 000-0000
(b) if to the Escrow Agent:
Equity Transfer Services Inc.
000 Xxxxxxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx
X0X 0X0
Facsimile: 361-0470
Attention: Manager, Corporate Trust
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(c) if to the Issuer:
Champion Communication Services, Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxx 000
Xxx Xxxxxxxxx, Xxxxx
00000, X.X.X.
Facsimile: (000) 000-0000
15. This Agreement may be executed in several parts in the same form and
such parts so executed shall together form one original Agreement and such
parts if more than one shall be read together and construed as if all signing
parties hereto had executed one copy of this Agreement.
16. Wherever the singular or masculine are used through this Agreement,
the same shall be construed as being plural or feminine or neuter where the
context so requires.
17. This Agreement shall enure to the benefit of and be binding upon the
parties hereto, their and each of their heirs, executors, administrators,
successors and assigns.
IN WITNESS WHEREOF this Agreement has been executed by the parties
hereof.
SIGNED, SEALED AND DELIVERED ) CHAMPION COMMUNICATION
IN THE PRESENCE OF ) SERVICES, INC.
)
)
) Per: /s/ XXXXXX X. XXXXXX
) --------------------------------
)
) EQUITY TRANSFER SERVICES INC.
)
)
) Per: /s/ [ILLEGIBLE]
) --------------------------------
/s/ XXXX X. XXXXXX ) /s/ XXXXXX X. XXXXXXXX
--------------------------------- ) ------------------------------------
Witness ) XXXXXX X. XXXXXXXX
/s/ XXXX XXXXX ) /s/ XXXXX X. XXXXXX
--------------------------------- ) ------------------------------------
Witness ) XXXXX X. XXXXXX
)
)
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SCHEDULE "A"
Name of Security Holder Beneficial Holder Number of Common Shares
----------------------- ----------------- -----------------------
Xxxxxx X. Xxxxxxxx Xxxxxx X. Xxxxxxxx 1,555,200
Xxxxx X. Xxxxxx Xxxxx X. Xxxxxx 1,532,520
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SCHEDULE "B"
FEES OF ESCROW AGENT
Annual Fee $450.00
Initial Set-up Fee $0
Out of Pocket Expenses and Disbursements of Equity Transfer Services Inc. to be
reimbursed.
