Form 16 - Escrow agreement (relating to performance shares) [F - Rescinded]

(APPENDIX A TO LOCAL POLICY STATEMENT 3-07)

FORM 16

Securities Act

Escrow Agreement

THIS AGREEMENT is dated for reference __________, 19____ and made

AMONG:

(the "Escrow Agent");

AND:

(the "Issuer");

AND: EACH SHAREHOLDER, as defined in this Agreement

(collectively, the "Parties").

WHEREAS the Shareholder has acquired or is about to acquire shares of the Issuer;

AND WHEREAS the Escrow Agent has agreed to act as escrow agent in respect of the shares upon the acquisition of the shares by the Shareholder;

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 as follows:

1. INTERPRETATION

In this agreement:

(a) "Ackno wledgement" means the acknowledgement and agreement to be bound in the form attached as Schedule A to this agreement;

(b) "Act" means the Securities Act, R.S.B.C. 1996, c. 418;

(c) "Exchange" means the Vancouver Stock Exchange;

(d) "Executive Director" means the Executive Director appointed under the Act; and

(e) "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.

(f) "IPO" means the initial public offering of common shares of the Issuer under a prospectus which has been filed with, and for which a receipt has been obtained from, the Executive Director under section 61 of the Act;

(g) "Local Policy Statement 3-07" means the Local Policy Statement 3-07 in effect as of the date of the reference of this agreement and attached as Schedule B to this agreement;

(h) "Shareholder" means a holder of shares of the Issuer who executes this agreement or an Acknowledgement;

(i) "Shares" means the shares of the Shareholder described in Schedule C to this agreement, as amended from time to time in accordance with section 9;

2. PLACEMENT OF SHARES IN ESCROW

The Shareholder places the Shares in escrow with the Escrow Agent and shall deliver the certificates representing the Shares to the Escrow Agent as soon as practicable.

3. VOTING OF SHARES IN ESCROW

Except as provided by section 4 (a), the Shareholder may exercise all voting rights attached to the Shares.

4. WAIVER OF SHAREHOLDER'S RIGHTS

The Shareholder waives the rights attached to the Shares

(a) to vote the Shares on a resolution to cancel any of the 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 Shareholder that is or becomes a director of the Issuer shall abstain from voting on a directors' resolution to cancel any of the Shares.

6. TRANSFER WITHIN ESCROW

7. RELEASE FROM ESCROW

8. SURRENDER FOR CANCELLATION

The Shareholder shall surrender the Shares for cancellation and the Escrow Agent shall deliver the certificates representing the 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 Shares and the date of the receipt for the Issuer's prospectus on its IPO, or

(d) where required by section 6 (4).

9. AMENDMENT OF AGREEMENT

(1) Subject to subsection (2), 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.

(2) Schedule C to this agreement shall be amended upon

(a) a transfer of Shares pursuant to section 6,

(b) a release of Shares from escrow pursuant to section 7, or

(c) a surrender of 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 Shareholders, 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

12. FURTHER ASSURANCES

The Parties shall execute and deliver any documents and perform any acts necessary to carry out the intent of this agreement.

13. TIME

Time is of the essence of this agreement.

14. 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.

15. COUNTERPARTS

This agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which shall constitute one agreement.

16. 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.

17. 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 Corporate/Common Seal of )
[Escrow Agent] was affixed in )
the presence of: )
)
)
______________________________ )
Authorized Signatory ) c/s

)
)
______________________________ )
Authorized Signatory )

The Corporate/Common Seal of )
[Issuer] was affixed in the )
presence of: )
)
)
______________________________ )

Authorized Signatory ) c/s
)
)
______________________________ )
Authorized Signatory )

Where the Shareholder is an individual:

Signed, sealed and delivered by )
[Shareholder] in the presence of: )
)
)
)
______________________________ )
Name )

)
___________________________ ) ________________________
Address ) [Shareholder]

)
______________________________ )
)
)
______________________________ )
Occupation )

Where the Shareholder is a company:

The Corporate/Common Seal of )
[Shareholder] was affixed in )
the presence of: )
)
______________________________ )

Authorized Signatory ) c/s

)
)
______________________________ )
Authorized Signatory )

SCHEDULE A TO ESCROW AGREEMENT

ACKNOWLEDGEMENT AND AGREEMENT TO BE BOUND

To: Executive Director                                                          or             Vancouver Stock Exchange
B.C. Securities Commission                                                              609 Granville Street
#1100 - 865 Hornby Street                                                                  Vancouver, B.C.
Vancouver, B.C.                                                                                     V7Y 1H1
V6Z 2H4

(if the shares are not listed                                                                (if the shares are listed on
on the Vancouver Stock                                                                       the Vancouver Stock
Exchange)                                                                                              Exchange)

I acknowledge that

In consideration of $1.00 and other good and valuable consideration (the receipt and sufficiency of which is acknowledged) I agree, effective upon receipt of regulatory approval of the transfer to me of the Shares, to be bound by the Escrow Agreement in respect of the Shares as if I were an original signatory to the Escrow Agreement.

Dated at ______________________ on _______________________ 19 ___.

Where the transferee is an individual:

Signed, sealed and delivered by )
[transferee] in the presence of: )
)
)
______________________________ )
Name )
)
__________________________ ) _________________________
Address ) [transferee]

)
______________________________ )
)
)
______________________________ )
Occupation )

Where the transferee is a company:

The Corporate/Common Seal of )
[transferee] was affixed )
in the presence of: )
)
______________________________ ) c/s
Authorized signatory )
)
)
______________________________ )
Authorized signatory )
 

SCHEDULE C TO ESCROW AGREEMENT

____________________________________________

NAME OF SHAREHOLDER                       NUMBER OF SHARES HELD IN ESCROW

____________________________________________