Execution Version
DEPOSIT ESCROW AGREEMENT
This
Deposit Escrow Agreement is entered into as of October 23, 2006, by
and among Platinum Diversified Mining USA, Inc., a Delaware
corporation (the “ PDM USA ”), NORD Resources
Corporation (“ NORD ”) and American Stock
Transfer & Trust Company (the “ Escrow Agent
”). Capitalized terms not otherwise defined herein shall have
the respective meanings ascribed to them in the Merger Agreement
(as defined below).
WHEREAS,
PDM USA, Platinum Diversified Mining, Inc., a Cayman Islands
corporation (“PDM”) and NORD have entered into an
Agreement and Plan of Merger dated as of October 23, 2006 (the
“ Merger Agreement ”) by and among NORD, PDM,
PDM USA and a subsidiary of PDM USA, pursuant to which such
subsidiary will be merged (the “ Merger ”) into
NORD which, as the surviving corporation (the “ Surviving
Corporation ”), will become a wholly-owned subsidiary of
PDM USA;
WHEREAS,
the Merger Agreement provides that a deposit of up to One Million
Dollars (US$1,000,000) (the “ Deposit Fund ”)
will be established to (i) provide NORD with Security in the event
that the holders of PDM Shares do not approve the Merger and (ii)
to the extent that the holders of PDM Shares do approve the Merger
and the Merger closes, act as a down payment of the Final Net
Merger Consideration under the Merger Agreement; and
WHEREAS,
the parties hereto desire to establish the terms and conditions
pursuant to which such Deposit Fund will be established and
maintained.
NOW,
THEREFORE, the parties hereto hereby agree as follows:
1.
Establishment of Deposit Fund . By virtue of the
execution of the Merger Agreement, the parties have agreed to
establish the Deposit Fund. The parties have further agreed that
the Deposit Fund will be distributed as follows: (a) to NORD if the
holders of PDM Shares do not approve the Merger, (b) to PDM if the
holders of PDM Shares do approve the Merger but the NORD
Stockholders do not approve the Merger and (c) into the Exchange
Fund for distribution to the holders of Securities of NORD at the
Effective Time.
2.
Escrow and Indemnification .
(a)
Deposit Fund Amount . At the date hereof, PDM USA
shall deposit with the Escrow Agent, by wire transfer, Five Hundred
Thousand Dollars (US$500,000). The Escrow Agent hereby acknowledges
receipt of such sum. On each of November 30, 2006 and December 27,
2006, PDM USA shall further deposit Two Hundred Fifty Thousand
Dollars (US$250,000) on each such date with the Escrow Agent, by
wire transfer. The amount actually deposited in the Deposit Fund on
the occurrence of any of the events in Section 1 above shall be
deemed to be the Deposit Fund. The Deposit Fund shall be held as a
trust fund and shall not be subject to any lien, attachment,
trustee process or any other judicial process of any creditor of
any party hereto. The Deposit Fund shall be invested in accordance
with Section 4 of this Agreement. The Escrow Agent agrees to hold
the Deposit Fund in an escrow account subject to the terms and
conditions of this Agreement.
Execution Version
(b)
Transferability . The respective interests of NORD
and PDM USA in the Deposit Fund ultimately available for
distribution shall not be assignable or transferable, other than by
operation of law. Notice of any such assignment or transfer by
operation of law shall he given to the Escrow Agent and the other
party, and no such assignment or transfer shall he valid until such
notice is given.
3.
Disbursement of Deposit Fund .
(a)
Disbursement by Escrow Agent . The Escrow Agent shall
disburse the Deposit Fund only in accordance with (i) a written
instrument delivered to the Escrow Agent that is executed by both
PDM USA and NORD and that instructs the Escrow Agent as to the
disbursement of some or all of the Deposit Fund, as the case may
be, (ii) an order of a court of competent jurisdiction, a copy of
which is delivered to the Escrow Agent by either PDM USA or NORD,
that instructs the Escrow Agent as to the disbursement of some or
all of the Deposit Fund, as the case maybe, or (iii) the provisions
of Section 3(b) and Section 4(b). In addition, upon delivery of an
officer’s certificate from PDM USA certifying that the
holders of PDM shares have not approved the Merger, the Escrow
Agent shall disburse the Deposit Fund to NORD. Further, upon
delivery of (i) an officer’s certificate from PDM USA
certifying that the holders of PDM shares have approved the Merger
and (ii) an officer’s certificate from NORD certifying that
the NORD Stockholders have not approved the Merger, the Escrow
Agent shall disburse the Deposit Fund to PDM USA. Finally, upon
delivery of a certified and filed copy of the Certificate of Merger
at the Effective Time by either PDM USA or NORD, the Escrow Agent
shall disburse the Deposit Fund to the Exchange Fund held by the
Escrow Agent as the Paying Agent.
(b)
Early Disbursement of Deposit Fund . At any time
after December 29, 2006, if either PDM USA or NORD has terminated
the Merger Agreement pursuant to Section 7.2(c) of the Merger
Agreement, NORD may deliver a notice to the Escrow Agent with a
copy to PDM USA that the Merger Agreement has been terminated
pursuant to such section of the Merger Agreement. Upon delivery of
such notice, the Escrow Agent shall distribute to NORD all of the
Deposit Fund then held in escrow.
(c)
Final Disbursement of Deposit Fund . At any time
after February 15, 2007, if the Merger has not closed in accordance
with the terms of the Agreement, PDM USA may deliver a notice to
the Escrow Agent with a copy to NORD that the Merger Agreement has
been terminated pursuant to Section 7.2(a) of the Merger Agreement.
Upon delivery of such notice, the Escrow Agent shall distribute to
PDM USA all of the Deposit Fund then held in escrow.
(d)
Method of Disbursement . Any distribution of all or a
portion of the Deposit Fund to NORD or PDM USA pursuant to Sections
3(a), (b) and (c) shall be made by wire transfer, as applicable and
shall be made ten (10) days after delivery of the proper notices or
certificates set forth in Section 3(a), (b) and (c). Any
distribution of all or a portion of the Deposit Fund to the
Exchange Fund shall be made in accordance with Section 2.2 of the
Merger Agreement.
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Execution Version
4.
Investment of Deposit Fund .
(a)
Permitted Investments . Any monies held in the
Deposit Fund shall be invested by the Escrow Agent, to the extent
permitted by law and as directed by PDM USA, in (i) obligations
issued or guaranteed by the United States of America or any agency
or instrumentality thereof; (ii) obligations (including
certificates of deposit and bankers’ acceptances) of domestic
commercial banks which at the date of their last public reporting
had total assets in excess of $500,000,000, (iii) commercial paper
rated at least A-1 or P-1 or, if not rated, issued by companies
having outstanding debt rated at least AA or Aa and (iv) money
market mutual funds invested exclusively in some or all of the
securities described in the foregoing clauses (i), (ii) and (iii).
Absent receipt of specific written investment instructions from PDM
USA, the Escrow Agent shall have no obligation or duty to invest
(or otherwise pay inte
