EXHIBIT 10.8
The Alberta Stock Exchange Form 10B
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ESCROW AGREEMENT
(PERFORMANCE)
THIS AGREEMENT made in triplicate, as of this 28th day of April, 1998.
AMONG:
INZECO HOLDINGS INC.
(herein called the "Issuer")
OF THE FIRST PART
- and -
MONTREAL TRUST COMPANY OF CANADA
(herein called the "Trustee")
OF THE SECOND PART
- and -
ROGER J. SHORT, WILLIAM R. BEAVERS, GREENSULATE L.L.C.,
SHEILA M. FINN, WARREN D. ARSENEAU, MICHAEL BOYD, JUNIOR
INDUSTRIAL FINANCE CORP., ROBERT H. STIKEMAN, GUNDYCO
IN TRUST FOR SHEILA FINN RRSP ACCOUNT #550-28824-17, T/D
INVESTOR COMPANY IN TRUST FOR MIKE BOYD RRSP ACCOUNT
#140422-S, RBC DOMINION IN TRUST FOR WILLIAM BEAVERS RRSP
ACCOUNT #49380616-1-3
(herein called the "Securityholders")
OF THE THIRD PART
WHEREAS, in order to comply with the requirements of the Alberta
Securities Act, S.A. 1981, c.S-6.1 as amended. The Alberta Stock Exchange (the
"Exchange"), the Securityholders have agreed to deposit certain securities of
the Issuer owned or to be received by them into escrow in accordance with the
terms of this Escrow Agreement;
AND WHEREAS, in order to comply with the requirements of The Alberta
Stock Exchange (the "Exchange"), the Securityholders are desirous of depositing
in escrow certain securities of the Issuer owned or to be received by them;
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October 1997 10B-1
The Alberta Stock Exchange Form 10B
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AND WHEREAS, the Trustee has agreed to undertake and perform its
duties according to the terms and conditions thereof;
NOW, THEREFORE, this agreement witnesses that, in consideration of the
sum of One ($1.00) Dollar paid by the parties to each other, receipt of this
sum being acknowledged by each of the parties, the Securityholders jointly and
severally covenant and agree with the Issuer and with the Trustee, and the
Issuer and the Trustee covenant and agree each with the other and with the
Securityholders jointly and severally as follows:
1. Where used in this agreement, or in any amendment or supplement hereto,
unless the context otherwise requires, the following words and phrases
shall have the following ascribed to them below:
(a) "CASH FLOW" means net income derived from the property, as
shown on the audited financial statements or verified by the
Issuer's auditors, adjusted for the following add-backs: (i)
depreciation, (ii) depletion, (iii) deferred taxes, (iv)
amortization of goodwill, (v) amortization of research and
development costs.
(b) "RELATED PARTY" means a promoter, officer, director, insider
or control person of the Issuer and any associates or
affiliates of these parties.
2. Each of the Securityholders hereby places and deposits in escrow with
the Trustee those of his securities of the Issuer which are represented
by the certificates described in Schedule "A" (the "Escrowed
Securities") and the Trustee hereby acknowledges receipt of such
Escrowed Securities. Each Securityholder further undertakes and agrees
to deposit into escrow any further securities of the Issuer which the
Securityholder may receive as a stock dividend on the Escrowed
Securities and to deliver to the Trustee immediately on receipt thereof
the certificates (if any) for any such further securities and any
replacement certificates which may at any time be issued for any of the
Escrowed Securities.
3. Each of the Securityholders shall be entitled to a letter or receipt
from the Trustee stating the number of securities held for the
Securityholder by the Trustee subject to the terms of this Agreement.
It is expressly understood and agreed by the parties hereto that such
letter or receipt shall not be assignable or transferrable.
4. Each of the Securityholders hereby underakes and agrees to deposit in
escrow with the Trustee any securities of the Issuer owned or acquired
by the Securityholder in accordance with the escrow restrictions
imposed by the Exchange.
5. The Parties hereby agree that the Escrowed Securities and the
beneficial ownership of or any interest in them and the certificates
representing them (including any replacement securities or
certificates) shall remain in escrow and shall be released only in
accordance with the terms hereof and on the written consent of the
Exchange to the Trustee.
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October 1997 10B-2
The Alberta Stock Exchange Form 10B
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6. The Securityholders direct the Trustee to retain their respective
securities and the certificates (including any replacement securities
or certificates) representing them and not to do or cause anything to
be done to release them from escrow or to allow any transfer,
hypothecation or alienation thereof, without the written consent of the
Exchange.
7. The Parties agree that a partial release of the Escrowed Securities
shall release from escrow only the securities specified in it, and this
Agreement shall continue in full force and effect in respect of those
securities as may from time to time remain in escrow until all of the
Escrowed Securities have been either released pursuant to paragraph 11
or on the written consent of the Exchange, or canceled pursuant to
paragraph 15 hereof. For greater certainty, this paragraph does not
apply to securities transferred within escrow.
8. In the event of bankruptcy or death of a Securityholder, the Trustee,
upon receipt of written notification by the Exchange, may transmit the
Securityholder's securities by operation of law to the trustee in
bankruptcy, person representative or surviving joint tenant as the case
may be but, notwithstanding such transmission, the securities shall
remain subject to the terms of this Agreement.
9. The Exchange may consent in writing to the transfer within escrow or
hypothecation within escrow of any of the Escrowed Securities, subject
to written confirmation by the transferee or mortgagee to be bound by
the terms of this Agreement and subject also to such other terms and
conditions as the Exchange may impose, and the Trustee, on receipt of
the written consent of the Exchange and of the agreement of the
transferee or mortgagee as described, shall permit such transfer within
escrow or hypothecation within escrow.
10. Any Securityholder 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 Issuer and the Trustee. The
Securityholders hereby acknowledge that any transferee of any Escrowed
Securities shall be required to become bound by all of the provisions
hereof.
11. (a) The Exchange will generally consent to the release from escrow
of one share for each $0.20 of Cash Flow generated by or from
the Issuer.
(b) Any release from escrow under this paragraph 11 shall be made
pursuant to a written application on behalf of the Issuer or
the Securityholders, which application shall be accompanied by
evidence of the Cash Flow received or Deferred Expenditures
incurred 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 or Deferred Expenditures incurred in the
preceding fiscal year or the fiscal years of the Issuer since
the last release from escrow pursuant to this Agreement,
whichever is greater. All shares released from escrow shall,
unless otherwise directed by the Exchange, be distributed
pro-rata to all Securityholders.
(c) Notwithstanding subparagraph (b) above, the maximum number of
shares which may be released from escrow in any one calendar
year to any Securityholder who is a Related Party shall be one
third of the original number of shares held in escrow on
behalf of such Securityholder.
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October 1997 10B-3
The Alberta Stock Exchange Form 10B
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12. The Securityholders hereby renounce and release any right to receive
payment of any dividend (other than a stock dividend) which may be
payable on any Escrowed Securities with the intent that the dividend
shall not be paid on securities which are in escrow on the record date
set for the dividend.
13. If the Issuer 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 Securityholders do hereby
assign their right to receive that part of the distribution which is
attributable to the Escrowed Securities to the Trustee, for the benefit
of, and in trust for the persons and companies who are then
Securityholders of the Issuer whose securities are not subject to this
Agreement, rateably in proportion to their holdings.
14. (a) In the event that the Exchange determines or becomes aware
that the Issuer has lost, alienated or has not obtained a good
or marketable title to, or has abandoned or discontinued
development of, any or all of the aforesaid property or
asset(s) which was or formed all or any part of the
consideration for which the Escrowed Securities were issued,
or that any or all of the said property or asset(s) has become
a little or no value, the Issuer shall declare the occurrence
of that event, with full particulars thereof, to the Exchange
by a resolution of its directors, and those Securityholders
who are directors from time to time hereby agree to cause such
resolution to be passed and certified to the satisfaction of
the Exchange.
(b) The Securityholders jointly and severally agree with the
Issuer and the Trustee that in the vent of any such loss,
alienation, failure to acquire title, or of such abandonment
or discontinuance of development or diminution of value, the
Escrowed Securities shall not be canceled or released from
escrow, in whole or in part, except with the consent of the
Exchange.
(c) The Exchange may, in its sole discretion, having regard to the
number and value of the securities issued for the property or
asset, the value of the property as ultimately established and
such other circumstances as it may consider relevant,
determine the number of securities to be canceled or released
and shall communicate its decision in writing to the Trustee.
If the Exchange determines that less than the total Escrowed
Securities shall be canceled or released, the securities to be
canceled or released shall be allocated proportionately
amongst the Securityholders in relation to their respective
shareholdings of the Issuer, unless the Exchange otherwise
directs or the Securityholders, with the consent of the
Exchange, otherwise agree in writing.
(d) On receipt by the Trustee of a direction from the Exchange to
cancel any Escrowed Securities, the Trustee shall tender the
required number of Escrowed Securities to the Issuer for
cancellation and the Issuer shall thereupon take the necessary
action, by way of reduction of capital or otherwise, to cancel
the Escrowed Securities, and the certificates for these
securities shall be delivered up for cancellation by the
Issuer's transfer agent.
(e) Each of the Securityholders undertakes and agrees to vote and
cause to be voted their respective securities in a manner
consistent with the terms, conditions and intent of this
Agreement in relation to the aforesaid cancellation of
Escrowed Securities.
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October 1997 10B-4
The Alberta Stock Exchange Form 10B
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15. Notwithstanding paragraphs 11 and 14, any Escrowed Securities not
released from escrow in accordance with the terms of this Agreement
before the expiration of five (5) years from the date of this Agreement
shall be canceled forthwith and the Issuer and the Trustee hereby
undertake and agree to take all actions as may be necessary to
expeditiously effect such cancellation.
16. For the purposes of effecting a cancellation of Escrowed Securities
pursuant to paragraphs 14 and 15 the Securityholders hereby irrevocably
appoint the Trustee as their attorney for the purposes of canceling the
Escrowed Securities, with authority to substitute one or more persons
or entities with the like powers.
17. All voting rights attached to the escrowed securities shall at all
times be exercised by the respective registered owners thereof.
18. The Securityholders agree that, while any of their securities are held
in escrow under this Agreement, they will not, without the prior
written consent of the Exchange, vote any of their securities (whether
escrowed or not) in support of any arrangement that would result in a
repayment of capital being made on the Escrowed Securities prior to the
commencement of any winding up of the Issuer.
19. The Securityholders and the Issuer hereby jointly and severally agree
to and do hereby release and indemnify and save harmless the Trustee
from and against all claims, suits, demands, costs, damages and
expenses which may be occasioned by reason of the Trustee's compliance
in good faith with the terms hereof, including, but not limited to, any
action taken by the Trustee to effect the cancellation of or to
surrender to the Issuer for cancellation all or any portion of the
Escrowed Securities pursuant to paragraphs 14 and 15.
20. The Securityholders and the Issuer hereby jointly and severally agree
to and do hereby release and indemnify the Exchange, its governors,
officers and employees from and against all claims, suits, demands,
actions, costs, damages and expenses which may be occasioned by reason
of the enforcement by the Exchange of or compliance with any of the
provisions of this Agreement, including, but not limited to, any
determination made by the Exchange that the cancellation of all or any
portion of the Escrowed Securities is appropriate in accordance with
the provisions of paragraphs 14 and 15.
21. The Trustee accepts the responsibilities placed on it by this Agreement
and agrees to perform them in accordance with the terms of this
Agreement and the written consents, orders or directions of the
Exchange.
22. The Issuer hereby acknowledges the terms and conditions of this
Agreement and agrees to take all reasonable steps to facilitate its
performance and to pay the Trustee's proper charges for its services
under this Agreement.
23. In the event the Trustee wishes to resign, retire or otherwise
terminate its obligations pursuant to this Agreement, it shall be
required to provide at least ninety (90) days written notice to the
Issuer. Upon receipt of such notice the Issuer may, with the written
consent of the Exchange, by writing, appoint another Trustee in its
place and such appointment shall be binding on the Securityholders and
the new Trustee shall assume and be bound by the obligations of the
Trustee hereunder.
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October 1997 10B-5
The Alberta Stock Exchange Form 10B
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24. The covenants of the Securityholders with the Issuer in this agreement
are made with the Issuer both in its own right and as trustee for the
holders from time to time of free securities in the Issuer, and may be
enforced not only by the Issuer but also by any holder of free
securities.
25. This agreement may be executed in several parts of the same form and
the parts as so executed shall together constitute one original
agreement, and the 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.
26. This Agreement may be amended upon agreement of the Issuer, the Trustee
and the Securityholders and upon the written consent having been
obtained from the Exchange.
27. This Agreement and Schedule "A" attached hereto contains the entire
understanding between the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements, understandings,
negotiations and discussions, whether oral or written, between the
parties and there are no warranties, representations or other
agreements between the parties in connection with this Agreement,
except as specifically set forth herein.
28. No waiver, modification or termination of this Agreement shall be
binding on any of the parties unless executed in writing by all parties
hereto. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provision (whether
similar or not), nor shall any waiver constitute a continuing waiver,
unless expressly provided.
29. This Agreement shall be interpreted in accordance with and governed in
all respects by the laws of the Province of Alberta. The courts of
Alberta shall have non-exclusive jurisdiction to entertain any action
or proceeding brought by or against the Exchange or any of the parties
hereto in connection with this Agreement or any alleged breach hereof
and the parties hereby expressly agree to attorn to the jurisdiction of
such courts for that purpose.
30. This Agreement shall be read with all changes in gender or number as
the context may require, and the word "person" or "persons" as used in
this Agreement shall be deemed to include firms, partnerships,
corporations and associations as well as natural persons. Further, the
term "Securityholders" shall include any permitted transferees within
escrow and any person to whom the interest of a Securityholder may be
transmitted by operation of law as provided in paragraph 8 and the term
"Trustee" shall include a new Trustee appointed under paragraph 23, and
whenever the singular or masculine is used, the same shall be construed
to include the plural, feminine, neuter or a corporate or other entity
where the context so requires.
31. Any provision or any portion of any provision or provisions of this
Agreement determined by a court of competent jurisdiction to be
invalid, illegal or unenforceable shall be deemed stricken to the
extent necessary to eliminate any invalidity, illegality or
unenforceability and the rest of the Agreement and all other provisions
and parts thereof shall remain in full force and effect and be binding
up the parties hereto as though he said illegal and/or unenforceable
provision or provisions or part or parts thereof had never been
included in this Agreement.
32. This agreement shall enure to the benefit of and be binding on the
parties to this agreement and each of their heirs, executors,
administrators, successors and assigns.
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October 1997 10B-6
The Alberta Stock Exchange Form 10B
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IN WITNESS WHEREOF, the Issuer, the Trustee and the Securityholders
have executed this Agreement as of the date and year first above written.
INZECO HOLDINGS INC.
Per: /s/ Warren Arseneau
--------------------------
Per:
-------------------------- (corporate seal)
MONTREAL TRUST COMPANY OF CANADA
Per: /s/ Gloria Collins
--------------------------
Per:
-------------------------- (corporate seal)
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October 1997 10B-7
The Alberta Stock Exchange Form 10B
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SIGNED by the respective Securityholders whose names are specified in
the right hand column below in the presence of the witness to such signature as
indicated opposite the signature of each Securityholder as specified in the
left hand column below.
Securityholders
/s/ Roger J. Short
-----------------------------------------
Roger J. Short
/s/ William R. Beavers
-----------------------------------------
William R. Beavers
/s/ Sheila M. Finn
-----------------------------------------
Sheila M. Finn
/s/ Warren D. Arseneau
-----------------------------------------
Warren D. Arseneau
/s/ Michael Boyd
-----------------------------------------
Michael Boyd
/s/ Robert H. Stikeman
-----------------------------------------
Robert H. Stikeman
GREENSULATE L.L.C.
Per: /s/ name of signatory illegible
------------------------------------
JUNIOR INDUSTRIAL FINANCE CORP.
Per: /s/ Michael Boyd
------------------------------------
RBC DOMINION IN TRUST FOR WILLIAM
BEAVERS RRSP ACCOUNT #49380616-1-3
Per: /s/ name of signatory illegible
--------------------------------
GUNDYCO IN TRUST FOR SHEILA FINN
RRSP ACCOUNT #550-28824-17
Per: /s/ name of signatory illegible
--------------------------------
T/D INVESTOR COMPANY IN TRUST FOR
MIKE BOYD RRSP ACCOUNT #140422-S
Per: /s/ name of signatory illegible
--------------------------------
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October 1997 10B-8
The Alberta Stock Exchange Form 10B
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SCHEDULE "A"
To the Escrow Agreement dated as of the 28th day of April, 1998.
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Name of Securityholders Type of Securities Number of Securities
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ROGER J. SHORT Common Shares 701,265
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WILLIAM R. BEAVERS Common Shares 277,657
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RBC DOMINION IN TRUST FOR WILLIAM Common Shares 160,186
BEAVERS RRSP ACCOUNT #49380616-1-3
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GREENSULATE L.L.C. Common Shares 3,470,730
(a corporation controlled by Martin H. Beck)
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SHEILA M. FINN Common Shares 308,984
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GUNDYCO IN TRUST FOR SHEILA FINN Common Shares 138,828
RRSP ACCOUNT #550-28824-17
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WARREN D. ARSENEAU Common Shares 3,384,110
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MICHAEL BOYD Common Shares 249,180
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T/D INVESTOR COMPANY IN TRUST FOR Common Shares 106,791
MIKE BOYD RRSP ACCOUNT #140422-S
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JUNIOR INDUSTRIAL FINANCE CORP. Common Shares 273,386
(a corporation wholly owned by Michael Boyd)
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ROBERT H. STIKEMAN Common Shares 227,822
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October 1997 10B-9