ESCROW AGREEMENT
THIS AGREEMENT IS DATED FOR REFERENCE DECEMBER 6, 1999 AND MADE:
AMONG:
PACIFIC CORPORATE TRUST COMPANY, of 830 - 625 Howe Street, Vancouver, British
Columbia V6C 3B8
(the "Escrow Agent")
AND:
CARTA RESOURCES LTD., a British Columbia company having its registered and
records office at 1488 - 1090 West Georgia Street, Vancouver, British Columbia
V6E 3V7
(the "Issuer")
AND:
EACH PRINCIPAL, as defined in this Agreement
(collectively, the "Parties")
WHEREAS pursuant to the Escrow Agreement among the Escrow Agent, the Issuer and
the Initial Principals, the Initial Principals acquired 750,000 Shares at an
issue price of $0.01 per share;
AND WHEREAS 151,200 Initial Shares were subsequently released from escrow,
resulting in an aggregate of 598,800 Initial Shares remaining subject to the
Escrow Agreement;
AND WHEREAS as a result of acquiring the outstanding shares of Quotes Canada
Financial Network Ltd., the Issuer has Additional Principals;
AND WHEREAS the Issuer has agreed to issue Additional Shares to the Principals;
AND WHEREAS the Issuer wishes to cancel the Escrow Agreement and to convert the
Initial Shares to this Agreement which will cover both the Initial Shares and
the Additional Shares;
AND WHEREAS the Escrow Agent has agreed to act as escrow agent in respect of the
initial Shares and Additional Shares issued to the Principals upon the
acquisition of such shares by the Principals;
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 (the "Agreement") as follows:
<PAGE>
1. Interpretation
In this Agreement:
(a) "Acknowledgment" means the acknowledgment and agreement to be bound in
the form attached as Schedule "A" to this Agreement;
(b) "Act" means the Securities Act, S.B.C. 1997, c.418;
(c) "Additional Principals" means holders of Additional Shares who execute
this Agreement or an Acknowledgment and did not execute the Escrow Agreement;
(d) "Additional Shares" means the shares of the principals described in
Schedule "C" to this Agreement, as amended from time to time in accordance with
section 9 and, for greater clarification, does not include the Initial Shares;
(e) "Escrow agreement" means the escrow agreement dated July 11, 1996 among
the Escrow Agent, the Issuer and the Initial Principals;
(f) "Escrow Shares" means the Initial Shares and the Additional Shares;
(g) "Executive Director" means the Executive Director appointed under the
Act;
(h) "Executive Director or the Exchange" means the Executive Director, 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;
(i) "Initial Principals" means holders of shares of the Issuer who executed
the Escrow Agreement;
(j) "Initial Shares" means the shares of the Initial Principals subject to
the Escrow Agreement;
(k) "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;
(l) "Principals" means, together, the Initial Principals and the Additional
Principals.
2. Placement Of Shares In Escrow
The Principals place the Escrow Shares in escrow with the Escrow Agent and shall
deliver the certificates representing the Additional Shares to the Escrow Agent
as soon as practicable.
3. Voting Of Shares In Escrow
Except as provided by section 4(a), the Principals may exercise all voting
rights attached to the Escrow Shares.
<PAGE>
4. Waiver Of Shareholder's Rights
The Principals waive the rights attached to the Escrow Shares:
(a) to vote the Escrow Shares on a resolution to cancel any of the Escrow
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 Principal that is or becomes a director of the Issuer shall abstain from
voting on a directors' resolution to cancel any of the Escrow Shares.
6. Transfer Within Escrow
(a) The Principals shall not transfer any of the Escrow Shares except in
accordance with Local Policy Statement 3-07 and with the consent of the
Executive Director or the Exchange;
(b) The Escrow Agent shall not effect a transfer of the Escrow Shares within
escrow unless the Escrow Agent has received:
(i) a copy of an Acknowledgment executed by the person to whom the Escrow
Shares are to be transferred; and
(ii) a letter from the Executive Director or the Exchange consenting to the
transfer;
(c) Upon the death or bankruptcy of a Principal, the Escrow Agent shall hold
the Escrow Shares subject to this Agreement for the person that is legally
entitled to become the registered owner of the Escrow Shares;
(d) the Principals acknowledge to, and agree with, the Issuer that the
Principals will continue to be involved in the business affairs of the Issuer,
or an operating subsidiary thereof, as a director or senior officer of one or
both such companies, or by providing key services, whether management services
or otherwise to one or both such companies. If the Principals for any reason
cease to be directors or senior officers of such companies, or ceases to provide
such services, then the Escrow Shareholders shall be entitled to retain their
Escrow Shares and remain bound by the terms of this Agreement. For further
clarity the Principals shall be entitled to a release or releases of the Escrow
Shares pursuant to the provisions of section 7(b) hereof.
<PAGE>
7. Release From Escrow
(a) the Principals irrevocably direct the Escrow Agent to retain the Escrow
Shares until the Escrow Shares are released from escrow pursuant to subsection
(b) or surrendered for cancellation pursuant to section 8;
(b) the Escrow Agent shall not release the Escrow Shares from escrow unless
the Escrow Agent has received a letter from the Executive Director or the
Exchange consenting to the release; and
(c) the approval of the Executive Director or the Exchange to a release from
escrow of any of the Escrow Shares shall terminate this Agreement only in
respect of the Escrow Shares so released.
8. Surrender For Cancellation
The Principals shall surrender the Escrow Shares for cancellation and the Escrow
Agent shall deliver the certificates representing the Escrow 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 Executive Director 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) 10 years from the later of the date of issue of the Escrow Shares and
the date of the receipt for the Issuer's prospectus on its initial public
offering; or
(d) where required by section 6(d).
9. Amendment Of Agreement
(a) Subject to subsection (b), this Agreement may be amended only by a
written agreement among the Parties and with the written consent of the
Executive Director or the Exchange;
(b) Schedule "C" to this Agreement shall be amended upon:
(i) a transfer of Escrow Shares pursuant to section 6;
(ii) a release of Escrow Shares from escrow pursuant to section 7; or
(iii) a surrender of Escrow 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 Principals, 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
(a) If the Escrow Agent wishes to resign as escrow agent in respect of the
Escrow Shares, the Escrow Agent shall give notice to the Issuer;
(b) if the Issuer wishes the Escrow Agent to resign as escrow agent in
respect of the Escrow Shares, the Issuer shall give notice to the Escrow Agent;
(c) a notice referred to in subsection (1) or (2) shall be in writing and
delivered to:
(i) the Issuer at its address appearing on the cover page of this Agreement;
or
(ii) the Escrow Agent at its address appearing on the cover page of this
Agreement;
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 to the other party in accordance with this subsection.
(d) a copy of a notice referred to in subsection (a) or (b) shall
concurrently be delivered to the Executive Director or the Exchange;
(e) 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 (a) r (b) or
on such other date as the Escrow Agent and the Issuer may agree upon (the
"resignation date");
(f) the Issuer shall, before the resignation date and with the written
consent of the Executive Director or the Exchange, appoint another escrow agent
and that appointment shall be binding on the Issuer and the Principals.
12. Entire Agreement
This Agreement supersedes and replaces all other escrow agreements applying to
the Escrow Shares required by securities regulators and all such Agreements are
terminated and of no further force and effect from the reference date of this
Agreement.
13. Further Assurances
The Parties shall execute and deliver any documents and perform any acts
necessary to carry out the intent of this Agreement.
<PAGE>
14. Time
Time is of the essence of this Agreement.
15. 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.
16. Counterparts
This Agreement may be executed in two or more counterparts, each of which shall
be deemed to be an original and al of which shall constitute one agreement.
17. 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.
18. 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 )
CARTA RESOURCES LTD. )
was hereunto affixed in )
the presence of: )
)
)
Authorized Signatory )
)
)
Authorized Signatory ) C/S
PACIFIC CORPORATE TRUST COMPANY
Per:
Authorized Signatory
SIGNED, SEALED AND DELIVERED by )
JOHN E. CHARLESWORTH in the presence of: )
)
Name of )
Witness: )
)
Address of )
Witness: )
)
)
)
Occupation )
of Witness: ) /s/ JOHN E. CHARLESWORTH
)
SIGNED, SEALED AND DELIVERED by )
PENELOPE CHARLESWORTH in the presence of: )
)
Name of )
Witness: )
)
Address of )
Witness: )
)
)
)
Occupation )
of Witness: ) /s/ PENELOPE CHARLESWORTH
)
SIGNED, SEALED AND DELIVERED by )
THOMAS BOYCHUK in the presence of: )
)
Name of )
Witness: )
)
Address of )
Witness: )
)
)
)
Occupation )
of Witness: ) /s/ THOMAS BOYCHUK
)
SIGNED, SEALED AND DELIVERED by )
H. LEO KING in the presence of: )
)
Name of )
Witness: )
)
Address of )
Witness: )
)
)
)
Occupation )
of Witness: ) /s/ H. LEO KING
)
SIGNED, SEALED AND DELIVERED by )
PAUL DICKSON in the presence of: )
)
Name of )
Witness: )
)
Address of )
Witness: )
)
)
)
Occupation )
of Witness: ) /s/ PAUL DICKSON
)
SIGNED, SEALED AND DELIVERED by )
GLEN DICKSON in the presence of: )
)
Name of )
Witness: )
)
Address of )
Witness: )
)
)
)
Occupation )
of Witness: ) /s/ GLEN DICKSON
)
<PAGE>
SCHEDULE "C" TO ESCROW AGREEMENT
SCHEDULE "C" TO ESCROW AGREEMENT
<TABLE>
<CAPTION>
Number of Additional Shares Number of Initial Shares held
held in escrow pursuant to this in escrow pursuant to this
Number of Shareholder Escrow Agreement Escrow Agreement
<S> <C> <C>
JOHN E. CHARLESWORTH. 25,400 199,600
PENELOPE
CHARLESWORTH . . . . 225,000
THOMAS BOYCHUK. . . . 250,400 199,600
H. LEO KING . . . . . 25,400 199,600
PAUL DICKSON. . . . . 500,000
GLEN DICKSON. . . . . 500,000
</TABLE>
<PAGE>
SCHEDULE "D" TO THE ESCROW AGREEMENT
Earn-Out Formula for Release of Performance Shares
The release of performance shares is based upon cumulative cash flow
---------------------
earn-out price
where:
earn-out price = IPO price multiplied by earn-out factor
earn-out factor = (performance share percentage )2 x 4
IPO Price = $0.38
performance share percentage = 2,125,000 = .25
---------
8,232,342
earn-out factor - (.25)2 x 4 - .25
earn-out price = $0.38 x .25 - .095
