CONFIDENTIAL JULY 26, 2000
LOCK-UP AGREEMENT
To the principal shareholder (the "Principal Shareholder") of Bissett &
Associates Investment Management Ltd. listed in Schedule "A-1" and the
individual (the "Individual") listed in Schedule "A-2"
Dear Sirs:
This letter agreement (the "Agreement"), together with the acquisition agreement
dated July 26, 2000 among the parties listed in such agreement (the "Acquisition
Agreement"), sets out the terms and conditions upon which Franklin Resources,
Inc. ( "Purchaser") will cause its wholly-owned subsidiary, FTI Acquisition Inc.
(the "Offeror") to make an offer (the "Offer") on the terms set forth in the
Acquisition Agreement for all of the issued and outstanding common shares (the
"Common Shares") of Bissett & Associates Investment Management Ltd. (the
"Corporation").
This Agreement also sets out the terms and conditions of the agreement by the
Principal Shareholder to deposit irrevocably and unconditionally under the Offer
the 1,945,100 Common Shares owned beneficially and of record by the Principal
Shareholder (the "Shareholder Securities") and sets out the obligations and
commitments of the Principal Shareholder and the Individual in connection
therewith.
1. THE OFFER
(a) TIMING - The Purchaser agrees to cause the Offeror to make the Offer
for 100% of the Common Shares on or before August 15, 2000.
(b) CONDITIONS PRECEDENT - Notwithstanding Section 1(a), the Offeror shall
not be required to make the Offer (and the Purchaser may, without
prejudice to any other rights, by notice to the Principal Shareholder
and the Individual, terminate this Agreement) if any of the conditions
to the making of the Offer as set forth in the Acquisition Agreement
are not satisfied or waived by the Offeror in writing.
(c) DIVIDEND - The Acquisition Agreement provides that the Board of
Directors of the Corporation shall be permitted to declare a dividend
of $0.48 per Common Share, with such to be paid to shareholders of
record immediately prior to the time that any Common Shares are taken
up under the Offer.
<PAGE>
2
2. REPRESENTATIONS AND WARRANTIES
(a) REPRESENTATIONS AND WARRANTIES OF THE PRINCIPAL SHAREHOLDER - The
Principal Shareholder hereby represents and warrants that, as of the
date hereof and as of the date the Offeror first takes up Common
Shares pursuant to the Offer:
(i) of the Common Shares now owned or over which control or direction
is exercised by it, certain of such Common Shares as set forth in
Schedule "B" attached hereto (the "1998 Escrowed Shares") are
held in escrow by Montreal Trust Company of Canada (the "Escrow
Agent") pursuant to an escrow agreement dated June 4, 1998 (the
"1998 Escrow Agreement"), a copy of which has been provided to
the Offeror. The Principal Shareholder agrees to use its best
efforts to make or cause to be made within three business days
from the execution of the Agreement, an application (the "Escrow
Relief Application") to the applicable regulatory authorities to
obtain regulatory approval to allow the Escrow Agent to deposit
the 1998 Escrowed Shares under the Offer (the "Escrow Relief") as
soon as practicable following receipt of the required regulatory
approval, but in any event, not later than the expiry date of the
Offer, provided such regulatory approval has been received and
the Offer has not been withdrawn or terminated.
(ii) it is a corporation that is duly incorporated and validly
existing under the laws of its jurisdiction of incorporation; has
all necessary power, authority, capacity and right, and has
received all requisite approvals (including any necessary
approval of its shareholders), and, subject to the making of the
Escrow Relief Application, has made any required filings to enter
into this Agreement and to complete the transactions contemplated
hereby and that, upon the due execution and delivery of this
Agreement by the Purchaser, this Agreement shall be duly executed
and delivered by the Principal Shareholder and shall be a valid
and binding agreement enforceable by the Purchaser against the
Principal Shareholder in accordance with its terms. subject to
the qualification that such validity, binding effect and
enforceability may be limited by: (i) applicable bankruptcy,
insolvency, moratorium, reorganization or other laws affecting
creditors' rights generally; (ii) equitable remedies, including
the remedies of specific performance and injunctive relief, being
available only in the discretion of the applicable court; (iii)
the statutory and inherent powers of a court to grant relief from
forfeiture, to stay execution of proceedings before it and to
stay executions on judgments; (iv) the applicable laws regarding
limitations of actions; (v) enforceability of provisions which
purport to sever any provision which is prohibited or
unenforceable under applicable law without affecting the
enforceability or validity of the remainder of such document
would be determined only in the discretion of the court; (vi)
enforceability of the provisions exculpating a party from
liability or duty otherwise owed by it may be limited under
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3
applicable law; and (vii) the enforceability of any waiver of
statutory rights may be limited by applicable law;
(iii)it is the sole legal and beneficial owner of the Shareholder
Securities set forth opposite its name on Schedule "B" to this
Agreement and has, subject to the terms of the 1998 Escrow
Agreement, the exclusive right to dispose of such Shareholder
Securities as provided in this Agreement and, subject to the
receipt of the regulatory approvals referred to in Schedule "C"
to the Acquisition Agreement, is not a party to, bound or
affected by or subject to, any charter or by-law provision,
statute, regulation, judgment, order, decree or law which would
be violated, contravened, breached by, or under which default
would occur as a result of, the execution and delivery of this
Agreement or the consummation of any of the transactions provided
for in this Agreement;
(iv) subject to the granting of the Escrow Relief, the Shareholder
Securities to be acquired by the Offeror from it pursuant to the
Offer will be acquired with good title, free and clear of any and
all mortgages, liens, charges, restrictions, security interests,
adverse claims, pledges, encumbrances and demands or rights of
others of any nature or kind whatsoever; and
(v) except for the 1998 Escrow Agreement, it is not a party to or
bound by any indenture, mortgage, lease or agreement which would
be violated, contravened, breached by, or under which default
would occur or which would otherwise be impaired as a result of
the execution and delivery of this Agreement or the consummation
of any of the transactions provided for in this Agreement if the
result of such violation, contravention, breach, default or
impairment, individually or in the aggregate, would materially
adversely affect the Principal Shareholder or the Purchaser;
(b) REPRESENTATIONS AND WARRANTIES OF THE INDIVIDUAL - The Individual
hereby represents and warrants that, as of the date hereof and as of
the date the Offeror first takes up Common Shares pursuant to the
Offer:
(i) he or she is of full age of majority and is legally competent to
execute this Agreement and to take all action pursuant hereto;
has received all requisite approvals, and has made any required
filings, to enter into this Agreement and to complete the
transaction contemplated hereby and that, this Agreement has been
duly executed and delivered by the Individual and shall be a
valid and binding agreement enforceable by the Purchaser against
the Individual in accordance with its terms, subject to the
qualification that such validity, binding effect and
enforceability may be limited by: (i) applicable bankruptcy,
insolvency, moratorium, reorganization or other laws affecting
creditors' rights generally; (ii) equitable remedies, including
the remedies of specific performance and injunctive relief, being
available only in the discretion of the applicable court; (iii)
the statutory and inherent powers of a court to grant relief from
<PAGE>
4
forfeiture, to stay execution of proceedings before it and to
stay executions on judgments; (iv) the applicable laws regarding
limitations of actions; (v) enforceability of provisions which
purport to sever any provision which is prohibited or
unenforceable under applicable law without affecting the
enforceability or validity of the remainder of such document
would be determined only in the discretion of the court; (vi)
enforceability of the provisions exculpating a party from
liability or duty otherwise owed by it may be limited under
applicable law; and (vii) the enforceability of any waiver of
statutory rights may be limited by applicable law;
(ii) the persons listed in Schedule "A-2" and "A-3" are the legal and
beneficial owners of all of the issued and outstanding shares of
the Principal Shareholder, there are no other issued and
outstanding shares or any rights to acquire, exchange for or
convert into shares outstanding, and none of such persons nor, to
his or her knowledge, the Principal Shareholder is a party to,
bound or affected by or subject to, any charter or by-law
provision, statute, regulation, judgment, order, decree or law
which would be violated, contravened, breached by, or under which
default would occur as a result of, the execution and delivery of
this Agreement or the consummation of any of the transactions
provided for in this Agreement; and
(iii)none of the persons described in Schedule "A-2" or "A-3" nor the
Principal Shareholder is a party to or bound by any indenture,
mortgage, lease or agreement which would be violated,
contravened, breached by, or under which default would occur or
which would otherwise be impaired as a result of the execution
and delivery of this Agreement or the consummation of any of the
transactions provided for in this Agreement if the result of such
violation, contravention, breach, default or impairment,
individually or in the aggregate, would materially adversely
affect the Principal Shareholder or the Purchaser;
(c) REPRESENTATIONS AND WARRANTIES OF THE PRINCIPAL SHAREHOLDER AND THE
INDIVIDUAL - Each of the Principal Shareholder and the Individual
hereby represents and warrants to the Purchaser and the Offeror that
the representations and warranties of the Corporation set forth in
Article 4 of the Acquisition Agreement are true and correct as of the
date of such agreement and will be true and correct as of the date the
Offeror first takes up Shares pursuant to the Offer, in each case with
the same effect as if the representations and warranties were repeated
in their entirety in this Agreement.
(d) REPRESENTATIONS AND WARRANTIES OF THE PURCHASER - The Purchaser hereby
represents and warrants that (i) the Purchaser is, and the Offeror
will be at the date of the Offer, a corporation duly incorporated and
validly existing under the laws of its jurisdiction of incorporation;
(ii) the Purchaser has all necessary power, authority, capacity and
right, and has received, or at the time it takes up and pays for
Common Shares pursuant to the Offer will have received all requisite
<PAGE>
5
approvals (including, without limitation, any necessary approval of
its shareholders), to enter into this Agreement and to complete the
transactions contemplated hereby (iii) no other corporate proceedings
on the part of the Purchaser are necessary to authorize this Agreement
and the transactions contemplated hereby; (iv) the execution and
delivery by the Purchaser of this Agreement and the performance by the
Purchaser of its obligations hereunder will not result in a violation
or breach of any provisions of: (A) the Purchaser's articles or
by-laws; or (B) subject to the receipt of requisite regulatory
approvals, any law, regulation, order, judgment or decree; in each
such case, other than any such violations or breaches that will not,
individually or in the aggregate, have an adverse effect on the
ability of the Purchaser to fulfil its obligations under this
Agreement; (v) the Purchaser now has and the Offeror will have at the
date of the Offer and until the Offeror has paid for all of the Common
Shares acquired by it pursuant to the Offer financing immediately
available to make the Offer on the terms as contemplated hereby and to
purchase all outstanding Common Shares (on a fully-diluted basis)
which may be deposited pursuant to the Offer and to pay all related
fees and expenses; and (vi) upon the due execution and delivery of
this Agreement by the Principal Shareholders and the Individuals this
Agreement shall be a valid and binding agreement enforceable by the
Principal Shareholder against the Purchaser in accordance with its
terms subject to the qualification that such validity, binding effect
and enforceability may be limited by: (i) applicable bankruptcy,
insolvency, moratorium, reorganization or other laws affecting
creditors' rights generally; (ii) equitable remedies, including the
remedies of specific performance and injunctive relief, being
available only in the discretion of the applicable court; (iii) the
statutory and inherent powers of a court to grant relief from
forfeiture, to stay execution of proceedings before it and to stay
executions on judgments; (iv) the applicable laws regarding
limitations of actions; (v) enforceability of provisions which purport
to sever any provision which is prohibited or unenforceable under
applicable law without affecting the enforceability or validity of the
remainder of such document would be determined only in the discretion
of the court; (vi) enforceability of the provisions exculpating a
party from liability or duty otherwise owed by it may be limited under
applicable law; and (vii) the enforceability of any waiver of
statutory rights may be limited by applicable law.
3. COVENANTS OF THE PRINCIPAL SHAREHOLDER AND INDIVIDUAL
(a) GENERAL - The Principal Shareholder and the Individual jointly and
severally covenant that until the Offeror has taken up and paid for
the Common Shares under the Offer or abandoned the Offer, she, he or
it will:
(i) not solicit, initiate or encourage enquiries, submissions,
proposals or offers from any other person, entity or group
relating to, and will not participate in any negotiations
regarding or furnish to any other person, entity or group any
information with respect to, or otherwise cooperate in any way
with or assist or participate in, or facilitate or encourage any
effort or attempt with respect to:
<PAGE>
6
(1) the direct or indirect acquisition or disposition of all or
any Common Shares; or
(2) any amalgamation, merger, sale of any part of the
Corporation's assets, take-over bid, reorganization,
recapitalization, liquidation or winding-up of, or other
business combination or similar transaction involving the
Corporation or assets which could materially adversely
affect (a) the successful completion of the Offer, or (b)
individually or in the aggregate, the value of the Common
Shares;
(ii) exercise the voting rights attaching to each of the Shareholder
Securities and otherwise use her, his or its commercially
reasonable best efforts to oppose any proposed action by: (1) the
Corporation, its shareholders or others which might reasonably be
regarded as being directed towards or likely to prevent or delay
the successful completion of the Offer, or (2) the Corporation or
its shareholders, to change the business, assets, operations,
capital, affairs, financial condition, licences, permits, rights
or privileges, whether contractual or otherwise or prospects of
the Corporation which in the sole judgement of the Purchaser,
acting reasonably in the circumstances could, individually or in
the aggregate adversely affect the value of the Common Shares to
the Purchaser or the Offeror; and
(iii)use her, his or its best efforts to (i) assist the reasonable
requests of the Purchaser and the Offeror to successfully
complete the transactions contemplated by this Agreement,
including the Offer, and (ii) as requested by the Purchaser and
the Offeror, cause the Corporation to comply with its obligations
under the Acquisition Agreement.
(b) ACTION BY INDIVIDUAL SHAREHOLDER - The Individual hereby agrees to
take all action necessary to cause the Principal Shareholder to
perform its obligations under this Agreement and to indemnify and save
harmless the Purchaser and the Offeror in the event of the failure of
the Principal Shareholder to so perform its obligations.
(c) FIDUCIARY QUALIFICATION - The foregoing provisions of this Section 3
shall not in any way prevent any person that is the director or
officer of the Corporation or that is in a fiduciary capacity to the
Principal Shareholder, from acting in any manner which such person
believes, acting reasonably, is necessary or appropriate in the
discharge of his fiduciary duties or statutory obligations and
provided further that if such person is a director or officer of the
Corporation, the foregoing provisions of this Section 3, shall not in
any way prevent such person from acting in a manner as instructed or
authorized by the board of directors of the Corporation in the
discharge of their fiduciary duties in accordance with the Acquisition
Agreement.
<PAGE>
7
(d) RESIGNATION - The Individual shall resign as a director of the
Corporation effective at the time and in the manner requested by the
Purchaser, after the Offeror takes up and pays for the Shareholder
Securities.
(e) ESCROW AGREEMENT - The Principal Shareholder shall enter into an
escrow agreement substantially in the form attached to this Agreement
as Schedule "C" (the "2000 Escrow Agreement") forthwith upon the
Trustee (as defined therein) agreeing to the terms thereof, and in any
event prior to the making of the Offer by the Offeror.
(f) 1998 ESCROWED SHARES - In the event that the Escrow Relief is not
obtained prior to the time the Offeror takes up any Common Shares
pursuant to the Offer, the Principal Shareholder and the Individual
jointly and severally covenant to cooperate with the Purchaser and to
use their best efforts establish an alternate arrangement that has the
same economic impact for the Principal Shareholder, the Purchaser and
the Offeror as if the Escrow Relief had been obtained.
4. COVENANTS OF THE PURCHASER
(a) GENERAL - The Purchaser hereby covenants to use, and to cause the
Offeror to use, its best efforts to successfully complete the
transactions contemplated by this Agreement, including the Offer,
including co-operating with the Principal Shareholder in making all
requisite regulatory filings, and giving evidence in relation to such
filings, and in mailing or otherwise making the Offer to holders of
the Common Shares and, except in respect of matters which the
Purchaser is required to maintain as confidential, to provide copies
of drafts of the Offer to the Principal Shareholder and to inform the
Principal Shareholder of all steps taken in respect of applications
for such regulatory approvals and to provide copies of all written
documents and submissions and responses with respect thereto in
connection with regulatory proceedings.
(b) INDEMNITIES; INSURANCE - The Purchaser covenants and agrees in favour
of the Individual (if an officer or director of the Corporation) to
comply with the provisions of Section 5.10 of the Acquisition
Agreement.
(c) LIABLE AS OBLIGOR - The Purchaser covenants to cause the performance
by the Offeror of all of the obligations hereunder and to be directly
liable as principal obligor for any such obligations without the
necessity or the requirement of the Principal Shareholder to pursue or
exhaust its remedies of recourse against the Offeror.
5. ACCEPTANCE
(a) DEPOSIT - Subject to Section 2(a)(i) with respect to only the 1998
Escrowed Shares, the Principal Shareholder hereby irrevocably and
unconditionally agrees to deposit the Shareholder Securities owned by
it, together with a duly completed and executed letter of transmittal,
under the Offer as soon as practicable after the Offer has been made
<PAGE>
8
(or in respect of the Escrowed Shares, after the Escrow Relief has
been granted) and, in any event, on or before the tenth business day
after the date of the Offer or the granting of the Escrow Relief, as
the case may be. The Principal Shareholder agrees to direct the
depository under the Offer to deposit $11,962,365 (the "Escrowed
Amount") with the Escrow Agent under the 2000 Escrow Agreement and
agrees to cause that amount to be deposited with the Escrow Agent.
(b) NO-WITHDRAWAL - The Principal Shareholder hereby irrevocably and
unconditionally agrees not to withdraw or take any action to withdraw
any of the Shareholder Securities deposited under the Offer
notwithstanding any statutory rights or other rights under the terms
of the Offer or otherwise which it might have unless (i) the Purchaser
or Offeror reduces the consideration to be offered pursuant to the
Offer; or (ii) this Agreement is terminated in accordance with its
terms prior to the taking up of the Shareholder Securities under the
Offer.
(c) ASSIGNMENT - Subject to the written approval of the Purchaser, acting
reasonably, notwithstanding Section 5(a) above, the Principal
Shareholder may donate, sell, assign, convey or otherwise dispose of
any of the Shareholder Securities owned by it to a charitable
foundation (the "Charity") provided that the Charity or a wholly-owned
subsidiary thereof executes this Agreement or such other form of
agreement as is satisfactory to the Purchaser, and the Principal
Shareholder remains liable for the performance of this Agreement.
6. TERMINATION BY THE PRINCIPAL SHAREHOLDER AND THE INDIVIDUAL
(a) TERMINATION - The Principal Shareholder and the Individual may,
without prejudice to any other rights, terminate this Agreement by
notice to the Purchaser and withdraw any Shareholder Securities
deposited under the Offer if:
(i) the Offer has not been made on or before August 31, 2000, other
than by reason of the Principal Shareholder, the Individual or
the Corporation having breached its respective obligations under
this Agreement or the Acquisition Agreement;
(ii) the Offer is not on the terms set forth in the Acquisition
Agreement;
(iii)Common Shares deposited under the Offer have not, for any reason
whatsoever, been taken up and paid for on or before 75 days after
the date of the mailing of the Offer to Shareholders of the
Corporation, provided that if the Purchaser is precluded from so
taking up and paying as a result of any breach by the Principal
Shareholder, the Individual or the Corporation of its respective
obligations under this Agreement or the Acquisition Agreement,
such 75 day period shall be deemed extended to the 3rd business
day following the date upon the Purchaser is no longer so
precluded.
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9
(iv) the Offer has been terminated, withdrawn or otherwise expires; or
(v) there shall have been a material breach of any covenant,
representative or warranty on the part of the Purchaser or the
Offeror contained herein or in the Acquisition Agreement.
7. GENERAL
(a) LIABILITY - The liability of the Principal Shareholder and the
Individual for any matters hereunder shall not exceed the aggregate
consideration to be received by the Principal Shareholder under the
Offer, provided however that upon the Escrowed Amount having been
delivered to the Escrow Agent pursuant to Section 5(a) of this
Agreement, the extent of such liability shall be determined with
reference to the 2000 Escrow Agreement only, irrespective of when the
claim giving rise to the liability was first made, and for greater
certainty the Individual shall be released from liability for any
breach of Section 2(c). The Individual shall not have any liability
for any breach of Section 2(c) in the event the Purchaser does not
take up Common Shares pursuant to the Offer.
(b) SURVIVAL OF REPRESENTATIONS AND WARRANTIES - The representations and
warranties shall survive the consummation of the Offer but only for a
period of eighteen months after the date of this Agreement. No
investigations made by or on behalf of the Purchaser, the Offeror or
any of their authorized agents at any time shall have the effect of
waiving, diminishing the scope of or otherwise affecting any
representation or warranty or covenant made by the Principal
Shareholder in or pursuant to this Agreement.
(c) DISCLOSURE - Neither the Purchaser nor the Offeror, on the one hand,
nor the Principal Shareholder on the other hand, shall make any public
announcement or statement with respect to this Agreement without the
approval of the Principal Shareholder or the Purchaser, as the case
may be. Moreover, the parties agree to consult with each other prior
to issuing each public announcement or statement with respect to this
Agreement. A copy of this Agreement may be provided to the directors
of the Corporation.
(d) ASSIGNMENT - The Purchaser or the Offeror may assign all or any part
of its rights under this Agreement to a Subsidiary of the Purchaser or
the Offeror, as the case may be, but, if such assignment takes place,
the Purchaser shall continue to be liable to the Principal Shareholder
for any default in performance by the assignee. This Agreement shall
not otherwise be assignable by any party hereto, except as permitted
under Section 5(c).
(e) TIME - Time shall be of the essence of this Agreement.
(f) CURRENCY - All sums of money referred to in this Agreement shall mean
Canadian funds.
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10
(g) GOVERNING LAW - This Agreement shall be governed by and construed in
accordance with the laws of the Province of Alberta and of Canada
applicable therein.
(h) ENTIRE AGREEMENT - This Agreement constitutes the entire agreement and
understanding between and among the parties hereto with respect to the
subject matter hereof and supersedes any prior agreement,
representation or understanding with respect thereto.
(i) AMENDMENTS - This Agreement may not be modified, amended, altered or
supplemented except upon the execution and delivery of a written
agreement executed by all of the parties hereto.
(j) SPECIFIC PERFORMANCE AND OTHER EQUITABLE RIGHTS - Each of the parties
recognizes and acknowledges that this Agreement is an integral part of
the transactions contemplated in the Offer, that the Purchaser would
not contemplate causing the Offer to be made and the Principal
Shareholder would not agree to the deposit of Common Shares under the
Offer unless this Agreement was executed and that a breach by a party
of any covenants or other commitments contained in this Agreement will
cause the other party to sustain injury for which it would not have an
adequate remedy at law for money damages. Therefore, each of the
parties agrees that in the event of any such breach, the aggrieved
party shall be entitled to the remedy of specific performance of such
covenants or commitments and preliminary and permanent injunctive and
other equitable relief in addition to any other remedy to which it may
be entitled, at law or in equity, and the parties further agree to
waive any requirement for the securing or posting of any bond in
connection with the obtaining of any such injunctive or other
equitable relief.
(k) NOTICES - Any notice, request, consent, agreement or approval which
may or is required to be given pursuant to this Agreement shall be in
writing and shall be sufficiently given or made if delivered, in the
case of:
(i) if to the Purchaser or the Offeror:
Franklin Resources, Inc.
777 Mariners Island Blvd.
San Mateo, California
94404
Attention: Martin L. Flanagan
Telephone No.: (650) 312-2000
Fax No.: (650) 312-3528
with a copy to:
Les M. Kratter, Esq., Senior Vice President
Telephone No.: (650) 312-4018
Fax No.: (650) 312-2804
<PAGE>
11
and to:
Templeton Management Limited
1 Adelaide Street East
Suite 2101
Toronto, Ontario
M5C 3B8
Attention: Donald Reed, President & Chief
Executive Officer
Telephone No.: (416) 957-6000
Fax No.: (416) 360-0481
and to:
Osler, Hoskin & Harcourt LLP
P.O. Box 50
1 First Canadian Place
Toronto, Ontario
M5X 1B8
Attention: Deborah M. Alexander
Telephone No.: (416) 862-6573
Fax No.: (416) 862-6666
(ii) if to the Principal Shareholder or the Individual, addressed as
follows:
David A. Bissett
RR #2
Okotoks, Alberta
T0L 1T0
Telephone No.: (403) 938-4293
Fax No. : (403) 938-4293
or to such other address as the relevant party may from time to time advise by
notice in writing given pursuant to this section. The date of receipt of any
such notice, request, consent, agreement or approval shall be deemed to be the
date of delivery thereof.
(l) EXPENSES - Each of the parties shall pay its legal, financial advisory
and accounting costs and expenses incurred in connection with the
preparation, execution and delivery of this Agreement and all
documents and instruments executed or prepared pursuant hereto and any
other costs and expenses whatsoever and howsoever incurred.
(m) BUSINESS DAY - A business day for the purpose of this Agreement shall
mean a day other than a Saturday, Sunday or other day on which (i)
commercial banks in Calgary or Toronto, Canada are authorized or
<PAGE>
12
required by law, regulation or executive order to close or (ii) the
New York Stock Exchange is not open for trading.
(n) COUNTERPARTS - This Agreement may be executed in one or more
counterparts which together shall be deemed to constitute one valid
and binding agreement and delivery of the counterparts may be effected
by means of a telecopied transmission.
(o) SEVERABILITY - If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law, or
public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is
not affected in any manner adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner
to the end that the transactions contemplated hereby are fulfilled to
the fullest extent possible.
If the terms and conditions of this letter are acceptable to you please so
indicate by executing and returning the enclosed copy hereof to the
undersigned.
Yours truly,
FRANKLIN RESOURCES, INC.
By:
/s/ Leslie M. Kratter
------------------------------
Name:Leslie M. Kratter
Title:Senior Vice President
The terms and conditions set forth above are agreed to this 26th day of July,
2000.
BELMONT CAPITAL MANAGEMENT LTD.
By:/s/ David A. Bissett
------------------------------
Name: David A. Bissett
SIGNED, SEALED & DELIVERED
In the presence of:
/s/ David A. Bissett
------------------------------- ------------------------------
Witness David A. Bissett
<PAGE>
SCHEDULE "A-1"
PRINCIPAL SHAREHOLDER: BELMONT CAPITAL MANAGEMENT LTD.
SCHEDULE "A-2"
INDIVIDUAL: DAVID A. BISSETT
SCHEDULE "A-3"
OTHER SHAREHOLDER(S) OF PRINCIPAL SHAREHOLDERS: NIL
<PAGE>
SCHEDULE "B"
1998 ESCROWED SHARES: 873,803 Common Shares
<PAGE>
SCHEDULE "C"
ESCROW AGREEMENT
ESCROW AGREEMENT, dated _______, 2000 (this "Escrow Agreement"), by and
among Franklin Resources, Inc., a Delaware corporation ("FRI"), Templeton
Management Limited, an Ontario corporation ("Templeton"), FTI Acquisition Inc.,
an Alberta corporation ("FTI") and Belmont Capital Management Ltd., an Alberta
corporation, 571770 Alberta Ltd., an Alberta corporation, 604478 Alberta Inc.,
an Alberta corporation (each of the last three corporations being hereinafter
referred to as a "Principal Shareholder" and collectively as "Principal
Shareholders") and ______ (the "Escrow Agent").
WHEREAS, FRI, FTI and Bissett & Associates Investment Management Ltd.
("Bissett") have entered into an Acquisition Agreement dated July 26, 2000 (the
"Acquisition Agreement"); and
WHEREAS, each of the Principal Shareholders has agreed to deliver to the
Escrow Agent 30% of the aggregate purchase price to be received for shares of
Bissett tendered by such Principal Shareholder to be held and applied in
accordance with the terms hereof (the "Escrowed Amount"); and
WHEREAS, the Escrowed Amount is intended to satisfy certain claims that
may be made by FRI, Templeton and/or FTI in connection with Acquisition
Agreement; and
WHEREAS, each of the Principal Shareholders will, prior to monies being
deposited as set forth herein, direct appropriate persons at Bissett and
Templeton as to its desired initial allocation among Bissett mutual funds and
mutual funds distributed by Templeton in Canada (together with any successors to
such funds, the "Designated Investments") of the Escrowed Amount and to prepare
certificates representing such securities to be held in escrow hereunder; and
WHEREAS, the Escrow Agent is willing to serve as escrow agent and hold the
Escrowed Property in accordance with the terms and conditions hereof.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. Terms - All capitalized terms used and not otherwise defined herein shall
have the respective meanings ascribed to them in the Acquisition Agreement.
2. Deposit - Each of the Principal Shareholders agrees to direct the
depository under the Offer to deposit that amount set forth below opposite
the name of the Principal Shareholder, all such amounts together
constituting the Escrowed Amount (such sum, together with all interest,
dividends and other earnings thereon and all investments and reinvestments
thereof being herein referred to as the "Escrowed Property"), for deposit
with the Escrow Agent and agrees to cause that amount to be deposited with
the Escrow Agent.
<PAGE>
2
Belmont Capital Management Ltd. $11,962,365
571770 Alberta Ltd. $ 9,738,525
604478 Alberta Inc. $ 3,075,000
$24,775,890
3. Investment - Subject to Section 4 below, the Escrow Agent shall reinvest
all Escrowed Property only in securities of the Designated Investments,
pursuant to such allocations as the Principal Shareholders may designate
from time to time. If, and only for so long as, the Escrow Agent is unable
to reinvest any Escrowed Property in the Designated Investments, the Escrow
Agent shall invest such Escrowed Property (pending its investment in the
Designated Investments) in direct obligations of, or obligations guaranteed
by, the Government of Canada, or certificates of deposit or interest
bearing accounts of any bank or trust company incorporated under the laws
of Canada. The Escrow Agent shall promptly notify the Principal
Shareholders in writing if it is unable to invest or reinvest any Escrowed
Property in the Designated Investments, and shall provide the Principal
Shareholders an explanation of such inability.
4. Restriction on Investment - Investment of the Escrowed Property during the
term of this Escrow Agreement shall be restricted to investments in Bissett
mutual funds and mutual funds distributed in Canada by Templeton, excluding
money market, t-bill or similar funds; provided that no new investment
allocation or withdrawal at any given time during the term of this Escrow
Agreement shall cause the then aggregate market value of the Bissett mutual
funds to be less than 40% of the market value of the aggregate account
balance of Escrowed Property.
5. Distributions - All distributions made by the funds in respect of the
amount of Escrowed Property invested in such funds and remaining in escrow
hereunder shall be reinvested by the Escrow Agent.
6. Release - Except as otherwise provided in this Escrow Agreement, no portion
of the Escrowed Property shall be released by the Escrow Agent.
7. Representations, Warranties and Indemnity - Each of the Principal
Shareholders (a) represents and warrants to FRI, FTI and Templeton
(collectively, the "Indemnified Parties") that the representations and
warranties of Bissett set forth in the Acquisition Agreement are true and
correct as of the date of such agreement and as of the date FTI first takes
up Shares pursuant to the Offer, in each case with the same effect as if
such representations and warranties were repeated fully in this Escrow
Agreement; and (b) agrees to defend, indemnify and hold harmless the
Indemnified Parties from, against and in respect of any loss, damage,
claim, obligation, liability, cost and expense (including legal and other
professional fees, on a professional-client basis) suffered or incurred by
any of the Indemnified Parties by reason of a breach of any representation
or warranty of Bissett or the Principal Shareholder in the Acquisition
Agreement or in this Escrow Agreement; provided however that: (c)
notwithstanding anything contained in this Escrow Agreement, the Principal
Shareholders shall not be liable for any amount pursuant to this Section
(and for greater certainty no amount shall be added pursuant to Section
<PAGE>
3
10(a)(i)(A) hereof) unless the sum of: (A) the aggregate of all amounts
claimed under Claim Notices delivered in accordance with this Section 7 not
released and delivered to Templeton in accordance with Section 8 hereof;
and (B) the aggregate of all amounts released and delivered to Templeton in
accordance with Section 8 hereof, exceed $750,000.
8. Release to Templeton - The Escrow Agent shall release from escrow hereunder
and deliver a portion of the Escrowed Property, by transfer of certificates
or other instruments of title evidencing the same, duly endorsed, to
Templeton (or to such other person or entity as Templeton shall designate
to the Escrow Agent in writing) only:
(a) on the receipt by the Escrow Agent of an original release document
executed by or on behalf of Templeton and the Principal Shareholders,
the Escrow Agent shall release and deliver the amount of the Escrowed
Property therein specified; or
(b) on the receipt by the Escrow Agent of a certified copy of a final
arbitration award issued in respect of one or more claims as
contemplated by Section 11 hereof determining an amount to be payable
pursuant to Section 7 hereof, the Escrow Agent shall release and
deliver the amount of the Escrowed Property therein specified.
9. Claims - Templeton shall be entitled to deliver to the Escrow Agent and the
Principal Shareholders, at any time prior to the 18 month anniversary of
the date of this Escrow Agreement (the "Claims Bar Date"), a notice
substantially in the form attached hereto as Schedule "A" (a "Claim
Notice") thereby (i) demanding payment from the Escrowed Property of an
amount equal to a claim under Section 7 hereof; and (ii) notifying the
Escrow Agent and the Principal Shareholders of the existence of a claim, or
circumstances that could give rise thereto, under Section 7 hereof against
the Escrowed Property. Every Claim Notice shall include Templeton's
reasonable, good faith estimate of the amount of each claim. Templeton may,
by further Claim Notice but prior to the Claims Bar Date, file a further
Claim Notice notifying the Escrow Agent and the Principal Shareholders of
any material increase or decrease in Templeton's reasonable, good faith
estimate of the amount of any claim previously identified in a Claim
Notice.
10. Release to Principal Shareholders -
(a) The Escrow Agent shall release from escrow hereunder and deliver a
portion of the Escrowed Property, by transfer of certificates or other
instruments of title evidencing the same, duly endorsed, to the
Principal Shareholders (or to such other person or entity as the
Principal Shareholders shall designate in writing to the Escrow Agent)
only:
(i) In respect of each of the four anniversaries of the date of this
Escrow Agreement set forth below (each, an "Anniversary Date"),
when the Principal Shareholders request, not earlier than 30 days
preceding such Anniversary Date, the Escrow Agent to release the
amount of Escrowed Property in excess of the sum of: (A) the
aggregate of all amounts claimed under Claim Notices delivered in
<PAGE>
4
accordance with Section 7 hereof not released and delivered to
Templeton in accordance with Section 8 hereof; (B) the aggregate
of all amounts determined by a final arbitration award issued in
respect of claims made by such Claim Notices but not yet released
and delivered to Templeton in accordance with Section 8(b)
hereof; and (C) the Determination Amount (as hereinafter defined)
for such Anniversary Date as set forth below, the Escrow Agent
shall release and deliver such excess; PROVIDED, HOWEVER, that in
no event shall the Escrow Agent release Escrowed Property in an
amount such that the amount of Escrowed Property invested in the
Bissett mutual funds and remaining in escrow hereunder thereafter
would be less than 40% of the market value of the aggregate
account balance of Escrowed Property:
ANNIVERSARY DATE DETERMINATION AMOUNT
18 month Anniversary Sixty Percent (60%) of the
Escrowed Amount
Second Anniversary Eighty Percent (80%) of
Determination Amount in respect
of the 18 month Anniversary
Third Anniversary Sixty Percent (60%) of
Determination Amount in respect
of the Second Anniversary
Fourth Anniversary Forty Percent (40%) of
Determination Amount in respect
of the Third Anniversary
For purposes of this Section 10, the term "Determination Amount"
shall be calculated, as to any Anniversary Date, on the basis of the
account balance of Escrowed Property as of the close of business on
the date that was six (6) Business Days immediately preceding such
Anniversary Date (determined in accordance with Section 10(b) below).
(ii) On the earlier to occur of (x) the fifth anniversary of the date
of this Escrow Agreement (the "Payout Date") or (y) in the case
of death or permanent disability, as such terms are defined in
Templeton's benefit plans (each a "Disabling Event") of a person
hereafter named, the later of (A) such Disabling Event and (B)
the 18 month anniversary of the date of this Escrow Agreement,
the Escrow Agent shall, in the case of (x) above, release the
entire balance of the Escrowed Property then remaining in escrow
hereunder in excess of the sum of the amounts described in
Sections 10(a)(i)(A) and (B) above to the Principal Shareholders
(or to such other person as any Principal Shareholder may
designate in writing to the Escrow Agent in lieu of that
Principal Shareholder) and release thereafter, as any of such
amount described in Sections 10(a)(i)(A) and (B) ceases to be an
amount as so described, such amount (less any portion thereof
released and delivered to Templeton in accordance with Section 8)
and, in the case of (y) above, release the proportion of the
amount determined in respect of (x) above set forth opposite the
name of the person suffering the Disabling Event to the Principal
Shareholder listed opposite such person's name:
<PAGE>
5
NAME OF PERSON PRINCIPAL SHAREHOLDER PROPORTION
Kevin W. Wolfe 604478 Alberta Inc. .1241125
David A. Bissett Belmont Capital Management Ltd. .4828228
Nancy J. Grant 571770 Alberta Ltd. .1311873
Fred E. Pynn 571770 Alberta Ltd. .1241125
Michael A. Quinn 571770 Alberta Ltd. .1377649
--------
1.000000
(b) Not less than four (4) Business Days prior to each Anniversary Date
and the Payout Date, Templeton shall deliver to the Principal
Shareholder and the Escrow Agent a certificate signed by an authorized
officer of Templeton (signing in such capacity) certifying the total
amount of Escrowed Property, including the amount of the Escrowed
Property invested in the Designated Investments, as of the close of
business on the date that is six (6) Business Days immediately
preceding such Anniversary Date or the Payout Date, as the case may
be. If, within two (2) Business Days preceding any such Anniversary
Date, the Principal Shareholders shall notify Templeton and the Escrow
Agent in writing that it disputes the amounts set forth in such
certificate, then the Principal Shareholders and Templeton shall use
their best efforts to resolve such dispute and, pending any such
resolution, the Escrow Agent shall not release any Escrowed Property.
If such dispute is not resolved within ten (10) days after the
Principal Shareholders notify Templeton and the Escrow Agent thereof,
then such dispute shall be referred to arbitration pursuant to Section
11 hereof, and the Escrow Agent shall promptly release the Escrowed
Property based on such arbitrators' determination provided that the
Principal Shareholders and Templeton shall each bear one-half of the
fees and expenses of the arbitration.
(c) If any Anniversary Date, the Claims Bar Date, the Payout Date or the
date on which a Disabling Event occurs is not a Business Day, then the
escrow release otherwise to have been made on such day shall be made
on the next succeeding Business Day.
11. Disputes - Any disputes between the Principal Shareholders and FRI, FTI and
Templeton in respect of this Escrow Agreement (including without
limitation, as to the validity of any claim made pursuant to Section 7
hereof or the amount in respect of any claim made pursuant to Section 7
hereof payable pursuant thereto) will be referred to final and binding
arbitration in accordance with the provisions of the Alberta ARBITRATION
ACT. Subject to the Alberta ARBITRATION ACT, the parties hereto agree that
the dispute will be heard by a panel of three arbitrators. The Principal
Shareholders, on one hand, and FRI, FTI and Templeton, on the other hand,
shall each appoint one arbitrator, and the two arbitrators will
collectively appoint a third arbitrator. Only arbitrators who work and live
outside of Calgary and Toronto will be eligible for appointment, either by
the parties hereto themselves or by their respective nominees. The
arbitrators will have the ability (except where otherwise specified in this
Escrow Agreement) to determine the allocation of costs associated with the
arbitration and to include an award of interest on any amounts payable by
<PAGE>
6
any party to the other under this Agreement. All disputes under this Escrow
Agreement shall be kept confidential by the parties hereto.
12. Reliance - The Escrow Agent shall be entitled to rely upon, and shall be
fully protected (and indemnified pursuant to Section 18 hereof) from all
liability, loss, cost, damage or expense in acting or omitting to act
pursuant to, any instruction, order, judgment, certification, affidavit,
demand, notice, opinion, instrument or other writing delivered to it
hereunder (including, without limitation, as to the Principal Shareholder's
allocation of Designated Investments) without being required to determine
the authenticity of such document, the correctness of any fact stated
therein, the property of the service thereof or the capacity, identity or
authority of any party purporting to sign or deliver such document.
13. Duties of Escrow Agent - The duties of the Escrow Agent are only as herein
specifically provided, and are purely ministerial in nature, and the Escrow
Agent shall be required to act in respect of the Escrowed Property only as
provided in this Escrow Agreement. Subject to applicable laws and rules of
professional conduct, this Escrow Agreement sets forth all the obligations
of the Escrow Agent with respect to any and all matters pertinent to the
escrow contemplated hereunder, and no additional obligations of the Escrow
Agent shall be implied from the terms of this Escrow Agreement or any other
agreement. The Escrow Agent shall incur no liability in connection with the
discharge of its obligations under this Escrow Agreement or otherwise in
connection therewith, except such liability as may arise from the wilful
misconduct or gross negligence of the Escrow Agent. In furtherance of and
without limiting the generality of the foregoing, the Escrow Agent shall
incur no liability whatsoever in respect of the investment return achieved
on the Escrowed Property to the extent the same is invested and reinvested
in accordance with the provisions of Section 3 hereof.
14. Consultation - The Escrow Agent may consult with counsel of its choice, and
shall not be liable for any action taken or omitted to be taken by the
Escrow Agent in accordance with the advice of such counsel.
15. Binding Amendments - The Escrow Agent shall not be bound by any
modification, cancellation or rescission of this Escrow Agreement unless in
writing and signed by the Escrow Agent.
16. Taxes - Each of the Principal Shareholders shall pay all income,
withholding and any other taxes imposed on or measured by income which are
attributable to income from such Principal Shareholder's portion of the
Escrowed Property for the time it is held in escrow hereunder, and shall
file all tax and information returns applicable thereto.
17. Escrow Agent Protection - The Escrow Agent is acting as a stakeholder only
with respect to the Escrowed Property. If any dispute arises as to whether
the Escrow Agent is obligated to deliver the Escrowed Property or as to
whom the Escrowed Property is to be delivered or the amount thereof, the
Escrow Agent shall not be required to make any delivery, but in such event
the Escrow Agent may hold the Escrowed Property until receipt by the Escrow
Agent of instructions in writing, signed by all parties which have, or
<PAGE>
7
claim to have, an interest in the Escrowed Property, directing the
disposition of the Escrowed Property, or in the absence of such
authorization, the Escrow Agent may hold the Escrowed Property until
receipt of a certified copy of a final arbitration award providing for the
disposition of the Escrowed Property. The Escrow Agent may require, as a
condition to the disposition of the Escrowed Property pursuant to written
instructions, indemnification and/or opinions of counsel, in form and
substance satisfactory to the Escrow Agent, from each party providing such
instructions. If such written instructions, indemnification and opinions
are not received, or proceedings for such determination are not commenced,
within thirty (30) days after receipt by the Escrow Agent of notice of any
such dispute and diligently continued, or if the Escrow Agent is uncertain
as to which party or parties are entitled to the Escrowed Property, the
Escrow Agent may either (i) hold the Escrowed Property until receipt of (A)
such written instructions and indemnification or (B) a certified copy of a
final arbitration award providing for the disposition of the Escrowed
Property, or (ii) deposit the Escrowed Property in the registry of a court
of competent jurisdiction; PROVIDED, HOWEVER, that notwithstanding the
foregoing, the Escrow Agent may, but shall not be required to, institute
legal proceedings of any kind.
18. Fees and Reimbursement - The Principal Shareholders, jointly and severally,
on the one hand, and Templeton, on the other hand, each agree to pay the
fees of the Escrow Agent, as to the first $5,000 per year by Templeton and,
as to any excess, by each thereof as to one half thereof. The Principal
Shareholders, jointly and severally, and Templeton, on the other hand,
agree to reimburse the Escrow Agent on demand for, and to indemnify and
hold the Escrow Agent harmless against and with respect to, one-half of any
and all loss, liability, damage, or expense (including, without limitation,
reasonable attorneys' fees and expenses) that the Escrow Agent may suffer
or incur in connection with the entering into of this Escrow Agreement and
performance of its obligations under this Escrow Agreement or otherwise in
connection therewith, except to the extent such loss, liability, damage or
expense arises from the wilful misconduct or gross negligence of the Escrow
Agent. Without in any way limiting the foregoing, the Escrow Agent shall be
reimbursed by the Principal Shareholders, on the one hand, and Templeton,
one the other hand, each for one-half of the cost of all legal fees, costs
and disbursements incurred by it in acting as the Escrow Agent hereunder
(which may include fees and costs of legal services provided to the Escrow
Agreement), based on the normal hourly rates in effect at the time services
are rendered. The Escrow Agent shall have the right at any time and from
time to time charge, and reimburse itself from, the Escrowed Property for
all amounts to which it is entitled pursuant to this Escrow Agreement.
19. Escrow Agent Resignation - The Escrow Agent and any successor escrow agent
may at any time resign by delivering the Escrowed Property to either (i)
any successor escrow agent designated in writing by all the parties hereto
(other than the Escrow Agent), or (ii) any court having competent
jurisdiction. Upon its resignation and delivery of the Escrowed Property as
set forth in this Section 19, the Escrow Agent shall be discharged of, and
from, any and all further obligations arising in connection with the escrow
contemplated by this Escrow Agreement.
<PAGE>
8
20. Enurement - This Escrow Agreement shall inure to the benefit of, and be
binding upon, the parties hereto and their respective successors. Nothing
in this Escrow Agreement, express or implied, shall give to anyone, other
than the parties hereto and their respective successors any benefit, or any
legal or equitable right, remedy or claim, under or in respect of this
Escrow Agreement or the escrow contemplated hereby.
21. Notices - Any notice, direction or other instrument required or permitted
to be given hereunder shall be in writing and given by delivering or
sending it by facsimile or other similar electronic form of communication
addressed:
(i) If to the Principal Shareholders, to:
Belmont Capital Management Ltd.
Attention:_____________________
Telecopy: _____________________
- and -
571770 Alberta Ltd.
Attention:_____________________
Telecopy: _____________________
- and -
604478 Alberta Ltd.
Attention:_____________________
Telecopy: _____________________
(ii) If to the Escrow Agent, to:
_______________________________
Attention:_____________________
Telecopy: _____________________
(iii) If to FRI, FTI or Templeton, to:
1 Adelaide Street East
Suite 2101
Toronto, Ontario
M5C 3B8
Attention: Donald Reed, President & Chief
Executive Officer
Telephone No.: (416) 957-6000
Fax No.: (416) 360-0481
<PAGE>
9
and:
Osler, Hoskin & Harcourt LLP
P.O. Box 50
1 First Canadian Place
Toronto, Ontario
M5X 1B8
Attention: Deborah M. Alexander
Telephone No.: (416) 862-6573
Fax No.: (416) 862-6666
22. Time - Time shall be of the essence of this Escrow Agreement.
23. Currency - All sums of money referred to in this Escrow Agreement shall
mean Canadian funds.
24. Governing Law - This Escrow Agreement shall be governed by and construed in
accordance with the laws of the Province of Alberta and of Canada
applicable therein.
25. Entire Agreement - This Escrow Agreement constitutes the entire agreement
and understanding between and among the parties hereto with respect to the
subject matter hereof and supersedes any prior agreement, representation or
understanding with respect thereto.
26. Amendments - This Escrow Agreement may not be modified, amended, altered or
supplemented except upon the execution and delivery of a written agreement
executed by all of the parties hereto.
27. Counterparts - This Escrow Agreement may be executed in one or more
counterparts which together shall be deemed to constitute one valid and
binding agreement and delivery of the counterparts may be effected by means
of a telecopied transmission.
28. Severability - If any term or other provision of this Escrow Agreement is
invalid, illegal or incapable of being enforced by any rule of law, or
public policy, all other conditions and provisions of this Escrow Agreement
shall nevertheless remain in full force and effect so long as the economic
or legal substance of the transactions contemplated hereby is not affected
in any manner adverse to any party. Upon such determination that any term
or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Escrow
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that the transactions
contemplated hereby are fulfilled to the fullest extent possible.
29. Interpretation - All pronouns and any variations thereof shall be deemed to
refer to the masculine, feminine or neuter, singular or plural, as the
identity of the parties hereto taken within context may require.
<PAGE>
10
30. Survival - The rights of the Escrow Agent contained in this Escrow
Agreement, including without limitation the right to indemnification, shall
survive the resignation of the Escrow Agent and the termination of the
escrow contemplated hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement
to be duly executed as of the day and year first written above.
FRANKLIN RESOURCES, INC.
By:
------------------------------
Name:
Title:
TEMPLETON MANAGEMENT LIMITED
By:
------------------------------
Name:
Title:
FTI ACQUISITION INC.
By:
------------------------------
Name:
Title:
BELMONT CAPITAL MANAGEMENT LTD.
By:
------------------------------
Name: David A. Bissett
Title: President
571770 ALBERTA LTD.
By:
------------------------------
Name:
Title:
<PAGE>
11
604478 ALBERTA LTD.
By:
------------------------------
Name: Kevin W. Wolfe
Title: President
_______________ [ESCROW AGENT]
By:
------------------------------
Name:
Title:
<PAGE>
SCHEDULE "A"
CLAIMS NOTICE
[Name and Address of Escrow Agent]
[Name and Address of Principal Shareholders]
RE: ESCROW AGREEMENT, DATED _______________ 2000, (THE
"ESCROW AGREEMENT"), BY AND AMONG FRI FTI, TEMPLETON,
THE PRINCIPAL SHAREHOLDERS AND _____________________________ , AS
ESCROW AGENT
All capitalized terms used but not defined in this Notice have the
meanings given them in the Escrow Agreement.
Pursuant to Section 9 of the Escrow Agreement, (on its own behalf and on
behalf of FRI and FRI) hereby claim entitlement to indemnification under Section
7 of the same agreement in respect of the following circumstances: [SUMMARY OF
FACTS AS THEN KNOWN WHICH FORM BASIS FOR THE CLAIM]
Templeton's reasonable good faith estimate of the amount of the claim(s)
which are the subject of such demand for indemnification is $_______________ and
demands payment from the Escrowed Property of the amount of such claim(s).
TEMPLETON MANAGEMENT LIMITED
By:
Name:
Title:
