FORM 5D ESCROW AGREEMENT (SURPLUS SECURITY)
FORM 5D
ESCROW AGREEMENT
(SURPLUS SECURITY)
THIS AGREEMENT is made as of the 29 day of July, 2004.
AMONG:
(the “Issuer”)
AND:
COMPUTERSHARE INVESTOR SERVICES INC.
(the “Escrow Agent”)
AND:
EACH OF THE UNDERSIGNED SECURITYHOLDERS OF THE ISSUER
(a “Securityholder” or “you”)
(collectively, the “Parties”)
WHEREAS, the Parties hereto have entered into, or have agreed to be bound by, a performance escrow agreement made as of December 31, 1995 (the "Former Escrow Agreement") prepared pursuant to the former policies of the TSX Venture Exchange;
AND WHEREAS, the Parties hereto wish to terminate the Former Escrow Agreement and enter into this escrow agreement pursuant to the present policies of the TSX Venture Exchange;
AND WHEREAS, this Agreement is being entered into by the Parties under Exchange Policy 5.4 - Escrow, Vendor Consideration and Resale Restrictions (the Policy) and the Issuer is a Tier 2 Issuer as described in Policy 2.1 - Minimum Listing Requirements.
For good and valuable consideration, the Parties agree as follows:
| FORM 5D | ESCROW AGREEMENT | Page 1 |
| (as at August 2002) |
| PART 1 | ESCROW | |
| 1.1 | Appointment of Escrow Agent | |
The Issuer and the Securityholders
appoint the Escrow Agent to act as escrow agent under this Agreement.
The Escrow Agent accepts the appointment. |
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| 1.2 | Deposit of Escrow Securities in Escrow | |
| (1) | You are depositing the securities (escrow
securities) listed opposite your name in Schedule “A”
with the Escrow Agent to be held in escrow under this Agreement. You will
immediately deliver or cause to be delivered to the Escrow Agent any share
certificates or other evidence of these securities which you have or which
you may later receive. |
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| (2) | If you receive any other securities (additional
escrow securities): |
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| (a)
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as a dividend or other distribution on escrow securities;
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| (b) |
on the exercise of a right of purchase, conversion
or exchange attaching to escrow securities, including securities received
on conversion of special warrants; |
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| (c) |
on a subdivision, or compulsory or automatic conversion
or exchange of escrow securities; or |
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| (d) |
from a successor issuer in a business combination,
if Part 6 of this Agreement applies, |
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| you will deposit them in escrow with the
Escrow Agent. You will deliver or cause to be delivered to the Escrow
Agent any share certificates or other evidence of those additional escrow
securities. When this Agreement refers to escrow securities, it
includes additional escrow securities. |
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| (3) | You will immediately deliver to the Escrow
Agent any replacement share certificates or other evidence of additional
escrow securities issued to you. |
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| 1.3 | Direction to Escrow Agent | |
The Issuer and the Securityholders direct the Escrow Agent to hold the escrow securities in escrow until they are released from escrow under this Agreement.
| FORM 5D | ESCROW AGREEMENT | Page 2 |
| (as at August 2002) |
| PART 2 | RELEASE OF ESCROW SECURITIES | |
| 2.1 | Release Provisions | |
The provisions of Schedule(s) B(3) and B(4) are incorporated into and form part of this Agreement. |
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2.2 |
Additional escrow securities |
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If you acquire additional
escrow securities in connection with the transaction to which this agreement
relates, those securities will be added to the securities already in escrow,
to increase the number of remaining escrow securities. After that, all
of the escrow securities will be released in accordance with the applicable
release schedule. |
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2.3 |
Additional Requirements for Tier 2 Surplus Escrow Securities |
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Where securities are subject to a Tier 2 Surplus Security Escrow Agreement [Schedule B(4)], the following additional conditions apply: |
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| (1) | The escrow securities will be cancelled
if the asset, property, business or interest therein in consideration
of which the securities were issued, is lost, or abandoned, or the operations
or development of such asset, property or business is discontinued. |
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| (2) | The Escrow Agent will not release escrow
securities from escrow under schedule B(4) unless the Escrow Agent has
received, within the 15 days prior to the release date, a certificate
from the Issuer that: |
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| (a)
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is signed by two directors or officers of the Issuer;
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| (b) |
is dated not more than 30 days prior to the release
date; |
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| (c) |
states that the assets for which the escrow securities
were issued (the “Assets”) were included as assets on the
balance sheet of the Issuer in the most recent financial statements filed
by the Issuer with the Exchange; and |
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| (d) |
states that the Issuer has no reasonable knowledge
that the Assets will not be included as assets on the balance sheet of
the Issuer in the next financial statements to be filed by the Issuer
with the Exchange. |
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| (3) | If, at any time during the term of this
Agreement, the Escrow Agent is prohibited from releasing escrow securities
on a release date specified schedule B(4) as a result of section 2.3(2)
above, then the Escrow Agent will not release any further escrow securities
from escrow without the written consent of the Exchange. |
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| (4) | If as a result of this section 2.3, the
Escrow Agent does not release escrow securities from escrow for a period
of five years, then: |
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| FORM 5D | ESCROW AGREEMENT | Page 3 |
| (as at August 2002) |
| (a) |
the Escrow Agent will deliver a notice to the Issuer,
and will include with the notice any certificates that the Escrow Agent
holds which evidence the escrow securities; and |
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| (b)
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the Issuer and the Escrow Agent will take such action
as is necessary to cancel the escrow securities. |
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| (5) |
For the purposes of cancellation of escrow
securities under this section, each Securityholder irrevocably appoints
the Escrow Agent as his or her attorney, with authority to appoint substitute
attorneys, as necessary. |
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2.4 |
Delivery of Share Certificates for Escrow
Securities |
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The Escrow Agent will send to each Securityholder
any share certificates or other evidence of that Securityholder’s
escrow securities in the possession of the Escrow Agent released from
escrow as soon as reasonably practicable after the release. |
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2.5 |
Replacement Certificates |
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If, on the date a Securityholder’s
escrow securities are to be released, the Escrow Agent holds a share certificate
or other evidence representing more escrow securities than are to be released,
the Escrow Agent will deliver the share certificate or other evidence
to the Issuer or its transfer agent and request replacement share certificates
or other evidence. The Issuer will cause replacement share certificates
or other evidence to be prepared and delivered to the Escrow Agent. After
the Escrow Agent receives the replacement share certificates or other
evidence, the Escrow Agent will send to the Securityholder or at the Securityholder’s
direction, the replacement share certificate or other evidence of the
escrow securities released. The Escrow Agent and Issuer will act as soon
as reasonably practicable. |
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2.6 |
Release upon Death |
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| (1) | If a Securityholder dies, the Securityholder’s
escrow securities will be released from escrow. The Escrow Agent will
deliver any share certificates or other evidence of the escrow securities
in the possession of the Escrow Agent to the Securityholder’s legal
representative provided that: |
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| (a)
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the legal representative of the deceased Securityholder
provides written notice to the Exchange of the intent to release the escrow
securities as at a specified date which is at least 10 business days and
not more than 30 business days prior to the proposed release; and |
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| (b) |
the Exchange does not provide notice of its objection
to the Escrow Agent prior to 10:00 a.m. (Vancouver time) or 11:00 a.m.
(Calgary time) on such specified date. |
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| (2) | Prior to delivery the Escrow Agent must
receive: |
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| (a) |
a certified copy of the death certificate; and |
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| FORM 5D | ESCROW AGREEMENT | Page 4 |
| (as at August 2002) |
| (b)
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any evidence of the legal representative’s
status that the Escrow Agent may reasonably require. |
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| 2.7 | Exchange Discretion to Terminate |
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If the Escrow Agent receives a request
from the Exchange to halt or terminate the release of escrow securities
from escrow, then the Escrow Agent will comply with that request, and
will not release any escrow securities from escrow until it receives the
written consent of the Exchange. |
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| 2.8 | Discretionary Applications |
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The Exchange may consent to the release
from escrow of escrow securities in other circumstances and on terms and
on conditions it deems appropriate. Securities may be released from escrow
provided that the Escrow Agent receives written notice from the Exchange.
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| PART 3 | EARLY RELEASE ON CHANGE OF ISSUER STATUS |
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| 3.1 | Early Release – Graduation to Tier 1 |
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| (1) | When a Tier 2 Issuer becomes a Tier 1
Issuer, the release schedule for its escrow securities changes. |
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| (2) | If the Issuer reasonably believes that
it meets the Minimum Listing Requirements of a Tier 1 Issuer as described
in Policy 2.1 – Minimum Listing Requirements, the Issuer
may make application to the Exchange to be listed as a Tier 1 Issuer.
The Issuer must also concurrently provide notice to the Escrow Agent that
it is making such an application. |
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| (3) | If the graduation to Tier 1 is accepted
by the Exchange, the Exchange will issue an Exchange Bulletin confirming
final acceptance for listing of the Issuer on Tier 1. Upon issuance of
this Bulletin the Issuer must immediately: |
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| (a) |
issue a news release: |
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| (i)
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disclosing that it has been accepted for graduation
to Tier 1; and |
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| (ii) |
disclosing the number of escrow securities to be
released and the dates of release under the new schedule; and |
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| (b) |
provide the news release, together with
a copy of the Exchange Bulletin, to the Escrow Agent. |
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| FORM 5D | ESCROW AGREEMENT | Page 5 |
| (as at August 2002) |
| (4) | Upon completion of the steps in section 3.1(3) above, the Issuer’s release schedule will be replaced as follows: |
| Applicable Schedule Pre-Graduation | Applicable Schedule Post-Graduation |
| Schedule B (2) | Schedule B (1) |
| Schedule B (4) | Schedule B (3) |
| (5)
|
Within 10 days of the Exchange
Bulletin confirming the Issuer’s listing on Tier 1, the Escrow Agent
must release any escrow securities from escrow securities which under
the new release schedule would have been releasable at a date prior to
the Exchange Bulletin. |
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PART 4 |
DEALING WITH ESCROW SECURITIES |
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4.1 |
Restriction on Transfer, etc. |
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Unless it is expressly permitted in this
Agreement, you will not sell, transfer, assign, mortgage, enter into a
derivative transaction concerning, or otherwise deal in any way with your
escrow securities or any related share certificates or other evidence
of the escrow securities. If a Securityholder is a private company controlled
by one or more Principals of the Issuer, the Securityholder may not participate
in a transaction that results in a change of its control or a change in
the economic exposure of the Principals to the risks of holding escrow
securities. |
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4.2 |
Pledge, Mortgage or Charge as Collateral for a Loan |
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Subject to Exchange acceptance, you may
pledge, mortgage or charge your escrow securities to a financial institution
as collateral for a loan, provided that no escrow securities or any share
certificates or other evidence of escrow securities will be transferred
or delivered by the Escrow Agent to the financial institution for this
purpose. The loan agreement must provide that the escrow securities will
remain in escrow if the lender realizes on the escrow securities to satisfy
the loan. |
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4.3 |
Voting of Escrow Securities |
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Although you may exercise voting rights
attached to your escrow securities, you may not, while your securities
are held in escrow, exercise voting rights attached to any securities
(whether in escrow or not) in support of one or more arrangements that
would result in the repayment of capital being made on the escrow securities
prior to a winding up of the Issuer. |
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4.4 |
Dividends on Escrow Securities |
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You may receive a dividend or other distribution
on your escrow securities, and elect the manner of payment from the standard
options offered by the Issuer. If the Escrow Agent receives a dividend
or other distribution on your escrow securities, other than additional
escrow securities, the Escrow Agent will pay the dividend or other distribution
to you on receipt. |
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| FORM 5D | ESCROW AGREEMENT | Page 6 |
| (as at August 2002) |
| 4.5 | Exercise of Other Rights Attaching to Escrow Securities |
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You may exercise your rights to exchange or convert your escrow securities in accordance with this agreement. |
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| PART 5 | PERMITTED TRANSFERS WITHIN ESCROW |
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| 5.1 | Transfer to Directors and Senior Officers |
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| (1) | You may transfer
escrow securities within escrow to existing or, upon their appointment,
incoming directors or senior officers of the Issuer or any of its material
operating subsidiaries, if the Issuer’s board of directors has approved
the transfer and provided that: |
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| (a) |
you make application
to transfer under the Policy at least 10 business days and not more than
30 business days prior to the date of the proposed transfer; and
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| (b) |
the Exchange does
not provide notice of its objection to the Escrow Agent prior to 10:00
a.m. (Vancouver time) or 11:00 a.m. (Calgary time) on such specified date.
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| (2) | Prior to the transfer
the Escrow Agent must receive: |
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| (a) |
a certified copy
of the resolution of the board of directors of the Issuer approving the
transfer; |
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| (b) |
a certificate
signed by a director or officer of the Issuer authorized to sign, stating
that the transfer is to a director or senior officer of the Issuer or
a material operating subsidiary and that any required acceptance from
the Exchange the Issuer is listed on has been received; |
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| (c) |
an acknowledgment
in the form of Form 5E signed by the transferee; and |
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| (d) |
a transfer power
of attorney, completed and executed by the transferor in accordance with
the requirements of the Issuer’s transfer agent. |
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| 5.2 | Transfer to
Other Principals |
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| (1) | You may transfer
escrow securities within escrow: |
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| (a) |
to a person or
company that before the proposed transfer holds more than 20% of the
voting rights attached to the Issuer’s outstanding securities; or
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| (b) |
to a person or company that
after the proposed transfer |
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| (i) |
will hold more than 10%
of the voting rights attached to the Issuer’s outstanding securities,
and |
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| FORM 5D | ESCROW AGREEMENT | Page 7 |
| (as at August 2002) |
| (ii) |
has the right to elect or appoint one
or more directors or senior officers of the Issuer or any of its
material operating subsidiaries, |
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| provided that: |
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| (c) |
you make an application to transfer under
the Policy at least 10 business days and not more than 30 business days
prior to the date of the proposed transfer; and |
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| (d) |
the Exchange does not provide notice of
its objection to the Escrow Agent prior to 10:00 a.m. (Vancouver time)
or 11:00 a.m. (Calgary time) on such specified date. |
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| (2) | Prior to the transfer the Escrow Agent
must receive: |
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| (a) |
a certificate signed by a director or
officer of the Issuer authorized to sign, stating that: |
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| (i) |
the transfer is to a person or company
that the officer believes, after reasonable investigation, holds
more than 20% of the voting rights attached to the Issuer’s
outstanding securities before the proposed transfer; or |
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| (ii) |
the transfer is to a person or company
that: |
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| (A) |
the officer believes, after reasonable investigation,
will hold more than 10% of the voting rights attached to the Issuer’s
outstanding securities; and |
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| (B) |
has the right to elect or appoint one or more directors
or senior officers of the Issuer or any of its material operating subsidiaries
after the proposed transfer; and |
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| (iii) |
any required approval from the Exchange
or any other exchange on which the Issuer is listed has been received;
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| (b) |
an acknowledgment in the form of Form
5E signed by the transferee; and |
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| (c) |
a transfer power of attorney, completed
and executed by the transferor in accordance with the requirements of
the Issuer’s transfer agent. |
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| 5.3 | Transfer Upon Bankruptcy
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| (1) | You may transfer escrow securities within
escrow to a trustee in bankruptcy or another person or company entitled
to escrow securities on bankruptcy provided that: |
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| FORM 5D | ESCROW AGREEMENT | Page 8 |
| (as at August 2002) |
| (a) |
you make application
to transfer under the Policy at least 10 business days and not more than
30 business days prior to the date of the proposed transfer; and
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| (b) |
the Exchange does
not provide notice of its objection to the Escrow Agent prior to 10:00
a.m. (Vancouver time) or 11:00 a.m. (Calgary time) on such specified date.
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| (2) |
Prior to the transfer,
the Escrow Agent must receive: |
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| (a) |
a certified copy
of either |
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| (i) |
the assignment in bankruptcy
filed with the Superintendent of Bankruptcy, or |
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| (ii) |
the receiving order adjudging
the Securityholder bankrupt; |
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| (b) |
a certified copy
of a certificate of appointment of the trustee in bankruptcy; |
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| (c) |
a transfer power
of attorney, duly completed and executed by the transferor in accordance
with the requirements of the Issuer’s transfer agent; and |
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| (d) |
an acknowledgment
in the form of Form 5E signed by |
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| (i) |
the trustee in bankruptcy
or |
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| (ii) |
on direction from the trustee,
with evidence of that direction attached to the acknowledgement form,
another person or company legally entitled to the escrow securities. |
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| 5.4 |
Transfer Upon
Realization of Pledged, Mortgaged or Charged Escrow Securities
|
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| (1) |
You may transfer
escrow securities you have pledged, mortgaged or charged under section
4.2 to a financial institution as collateral for a loan within escrow
to the lender on realization provided that: |
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| (a) |
you make application
to transfer under the Policy at least 10 business days and not more than
30 business days prior to the date of the proposed transfer; and
|
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| (b) |
the Exchange does
not provide notice of its objection to the Escrow Agent prior to 10:00
a.m. (Vancouver time) or 11:00 a.m. (Calgary time) on such specified date.
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| (2) |
Prior to the transfer
the Escrow Agent must receive: |
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| (a) |
a statutory declaration
of an officer of the financial institution that the financial institution
is legally entitled to the escrow securities; |
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| (b) |
evidence that
the Exchange has accepted the pledge, mortgage or charge of escrow securities
to the financial institution; |
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| FORM 5D | ESCROW AGREEMENT | Page 9 |
| (as at August 2002) |
| (c) |
a transfer power of attorney, executed
by the transferor in accordance with the requirements of the Issuer’s
transfer agent; and |
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| (d) |
an acknowledgement in the form of Form
5E signed by the financial institution. |
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| 5.5 |
Transfer to
Certain Plans and Funds |
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| (1) |
You may transfer
escrow securities within escrow to or between a registered retirement
savings plan (RRSP), registered retirement income fund (RRIF) or other
similar registered plan or fund with a trustee, where the beneficiaries
of the plan or fund are limited to you and your spouse, children and parents
provided that: |
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| (a) |
you make application to transfer under
the Policy at least 10 business days and not more than 30 business days
prior to the date of the proposed transfer; and |
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| (b) |
the Exchange does not provide notice
of its objection to the Escrow Agent prior to 10:00 a.m. (Vancouver time)
or 11:00 a.m. (Calgary time) on such specified date. |
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| (2) |
Prior to the transfer
the Escrow Agent must receive: |
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| (a) |
evidence from the trustee of the transferee
plan or fund, or the trustee’s agent, stating that, to the best
of the trustee’s knowledge, the annuitant of the RRSP or RRIF or
the beneficiaries of the other registered plan or fund do not include
any person or company other than you and your spouse, children and parents; |
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| (b) |
a transfer power of attorney, executed
by the transferor in accordance with the requirements of the Issuer’s
transfer agent; and |
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| (c) |
an acknowledgement in the form of Form
5E signed by the trustee of the plan or fund. |
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| 5.6 |
Effect of Transfer
Within Escrow |
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| After the transfer
of escrow securities within escrow, the escrow securities will remain
in escrow and released from escrow under this Agreement as if no transfer
has occurred, on the same terms that applied before the transfer. The
Escrow Agent will not deliver any share certificates or other evidence
of the escrow securities to transferees under this Part 5. |
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| 5.7 |
Discretionary
Applications |
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| The Exchange may
consent to the transfer within escrow of escrow securities in other circumstances
and on such terms and conditions as it deems appropriate. |
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| FORM 5D | ESCROW AGREEMENT | Page 10 |
| (as at August 2002) |
| PART 6 | BUSINESS COMBINATIONS | |
| 6.1 | Business Combinations | |
| This Part applies to the following
(business combinations): |
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| (a) | a formal take-over bid for all outstanding securities
of the Issuer or which, if successful, would result in a change of control
of the Issuer |
| (b) | a formal issuer bid for all outstanding equity securities
of the Issuer |
| (c) | a statutory arrangement |
| (d) | an amalgamation |
| (e) | a merger |
| (f) | a reorganization that has an effect similar to an
amalgamation or merger |
| 6.2 |
Delivery to
Escrow Agent |
|
| (1) |
You may tender
your escrow securities to a person or company in a business combination.
At least five business days prior to the date the escrow securities must
be tendered under the business combination, you must deliver to the Escrow
Agent |
|
| (a) |
a written direction signed by you that
directs the Escrow Agent to deliver to the depositary under the business
combination any share certificates or other evidence of the escrow securities
and a completed and executed cover letter or similar document and, where
required, transfer power of attorney completed and executed for transfer
in accordance with the requirements of the Issuer’s depository,
and any other documentation specified or provided by you and required
to be delivered to the depositary under the business combination; |
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| (b) |
written consent of the Exchange; and
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| (c) |
any other information concerning the
business combination as the Escrow Agent may reasonably require.
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| 6.3 |
Delivery to
Depositary |
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| (1) |
As soon as reasonably
practicable, and in any event no later than three business days after
the Escrow Agent receives the documents and information required under
section 6.2, the Escrow Agent will deliver to the depositary, in accordance
with the direction, any share certificates or other evidence of the escrow
securities, and a letter addressed to the depositary that |
|
| (a) |
identifies the escrow securities that
are being tendered; |
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| FORM 5D | ESCROW AGREEMENT | Page 11 |
| (as at August 2002) |
| (b) |
states that the
escrow securities are held in escrow; |
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| (c) |
states that the
escrow securities are delivered only for the purposes of the business
combination and that they will be released from escrow only after the
Escrow Agent receives the information described in section 6.4; |
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| (d) |
if any share certificates
or other evidence of the escrow securities have been delivered to the
depositary, requires the depositary to return to the Escrow Agent, as
soon as practicable, the share certificates or other evidence of escrow
securities that are not released from escrow into the business combination;
and |
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| (e) |
where applicable,
requires the depositary to deliver or cause to be delivered to the Escrow
Agent, as soon as practicable, share certificates or other evidence of
additional escrow securities that you acquire under the business combination. |
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| 6.4 | Release of
Escrow Securities to Depositary |
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| (1) | The Escrow Agent
will release from escrow the tendered escrow securities provided that: |
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| (a) |
you or the Issuer
make application to release the tendered securities under the Policy on
a date at least 10 business days and not more than 30 business days prior
to the date of the proposed release date; and |
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| (b) |
the Exchange does
not provide notice of its objection to the Escrow Agent prior to 10:00
a.m. (Vancouver time) or 11:00 a.m. (Calgary time) on such specified date; |
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| (c) |
the Escrow Agent
receives a declaration signed by the depositary or, if the direction identifies
the depositary as acting on behalf of another person or company in respect
of the business combination, by that other person or company, that |
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| (i) |
the terms and conditions of the business
combination have been met or waived; and |
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| (ii) |
the escrow securities have either been
taken up and paid for or are subject to an unconditional obligation to
be taken up and paid for under the business combination. |
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| 6.5 | Escrow of New
Securities |
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| (1) | If you receive
securities (new securities) of another issuer (successor issuer)
in exchange for your escrow securities, the new securities will be
subject to escrow in substitution for the tendered escrow securities,
unless, immediately after completion of the business combination, |
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| (a) |
the successor
issuer is an exempt issuer as defined in the National Policy; |
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| FORM 5D | ESCROW AGREEMENT | Page 12 |
| (as at August 2002) |
| (b) |
the escrow holder
was subject to a Value Security Escrow Agreement and is not a Principal
of the successor issuer; and |
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| (c) |
the escrow holder
holds less than 1% of the voting rights attached to the successor issuer’s
outstanding securities. (In calculating this percentage, include securities
that may be issued to the escrow holder under outstanding convertible
securities in both the escrow holders securities and the total securities
outstanding.) |
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| 6.6 | Release from
Escrow of New Securities |
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| (1) | The Escrow Agent
will send to a Securityholder share certificates or other evidence of
the Securityholder’s new securities as soon as reasonably practicable
after the Escrow Agent receives. |
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| (a) |
a certificate
from the successor issuer signed by a director or officer of the successor
issuer authorized to sign |
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| (i) |
stating that it is a successor
issuer to the Issuer as a result of a business combination; |
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| (ii) |
containing a list of the
securityholders whose new securities are subject to escrow under section
6.5; |
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| (iii) |
containing a list of the
securityholders whose new securities are not subject to escrow under section
6.5; |
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| (b) |
written confirmation
from the Exchange that it has accepted the list of Securityholders whose
new securities are not subject to escrow under section 6.5; and
|
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| (2) | The escrow securities
of the Securityholders whose securities are not subject to escrow under
section 6.5, will be released, and the Escrow Agent will send any share
certificates or other evidence of the escrow securities in the possession
of the Escrow Agent in accordance with section 2.4. |
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| (3) | If your new securities
are subject to escrow, unless subsection (4) applies, the Escrow Agent
will hold your new securities in escrow on the same terms and conditions,
including release dates, as applied to the escrow securities that you
exchanged. |
||
| (4) | If the Issuer
is a Tier 2 Issuer and the successor issuer is a Tier 1 Issuer, the release
provisions in section 3.1(4) relating to graduation will apply. |
||
| FORM 5D | ESCROW AGREEMENT | Page 13 |
| (as at August 2002) |
| PART 7 | RESIGNATION OF ESCROW AGENT |
| 7.1 | Resignation of Escrow
Agent |
| (1) | If the Escrow Agent wishes
to resign as escrow agent, the Escrow Agent will give written notice to
the Issuer and the Exchange. |
| (2) | If the Issuer wishes to
terminate the Escrow Agent as escrow agent, the Issuer will give written
notice to the Escrow Agent and the Exchange. |
| (3) | If the Escrow Agent resigns
or is terminated, the Issuer will be responsible for ensuring that the
Escrow Agent is replaced not later than the resignation or termination
date by another escrow agent that is acceptable to the Exchange and that
has accepted such appointment, which appointment will be binding on the
Issuer and the Securityholders. |
| (4) | The resignation or termination
of the Escrow Agent will be effective, and the Escrow Agent will cease
to be bound by this Agreement, on the date that is 60 days after the date
of receipt of the notices referred to above by the Escrow Agent or Issuer,
as applicable, or on such other date as the Escrow Agent and the Issuer
may agree upon (the “resignation or termination date”), provided
that the resignation or termination date will not be less than 10 business
days before a release date. |
| (5) | If the Issuer has not appointed
a successor escrow agent within 60 days of the resignation or termination
date, the Escrow Agent will apply, at the Issuer’s expense, to a
court of competent jurisdiction for the appointment of a successor escrow
agent, and the duties and responsibilities of the Escrow Agent will cease
immediately upon such appointment. |
| (6) | On any new appointment under
this section, the successor Escrow Agent will be vested with the same
powers, rights, duties and obligations as if it had been originally named
herein as Escrow Agent, without any further assurance, conveyance, act
or deed. The predecessor Escrow Agent, upon receipt of payment for any
outstanding account for its services and expenses then unpaid, will transfer,
deliver and pay over to the successor Escrow Agent, who will be entitled
to receive, all securities, records or other property on deposit with
the predecessor Escrow Agent in relation to this Agreement and the predecessor
Escrow Agent will thereupon be discharged as Escrow Agent. |
| (7) | If any changes are made
to Part 8 of this Agreement as a result of the appointment of the successor
Escrow Agent, those changes must not be inconsistent with the Policy and
the terms of this Agreement and the Issuer to this Agreement will fie
a copy of the new Agreement with the Exchange. |
| FORM 5D | ESCROW AGREEMENT | Page 14 |
| (as at August 2002) |
PART 8 |
OTHER CONTRACTUAL ARRANGEMENTS |
|
8.1 |
Escrow Agent Not a Trustee |
|
The Escrow Agent accepts
duties and responsibilities under this Agreement, and the escrow securities
and any share certificates or other evidence of these securities, solely
as a custodian, bailee and agent. No trust is intended to be, or is or
will be, created hereby and the Escrow Agent shall owe no duties hereunder
as a trustee. |
||
8.2 |
Escrow Agent Not Responsible for Genuineness |
|
The Escrow Agent will not
be responsible or liable in any manner whatever for the sufficiency, correctness,
genuineness or validity of any escrow security deposited with it. |
||
8.3 |
Escrow Agent Not Responsible for Furnished Information |
|
The Escrow Agent will have
no responsibility for seeking, obtaining, compiling, preparing or determining
the accuracy of any information or document, including the representative
capacity in which a party purports to act, that the Escrow Agent receives
as a condition to a release from escrow or a transfer of escrow securities
within escrow under this Agreement. |
||
8.4 |
Escrow Agent Not Responsible after Release |
|
The Escrow Agent will have
no responsibility for escrow securities that it has released to a Securityholder
or at a Securityholder’s direction according to this Agreement. |
||
8.5 |
Indemnification of Escrow
Agent |
|
The Issuer and each Securityholder
hereby jointly and severally agree to indemnify and hold harmless the
Escrow Agent, its affiliates, and their current and former directors,
officers, employees and agents from and against any and all claims, demands,
losses, penalties, costs, expenses, fees and liabilities, including, without
limitation, legal fees and expenses, directly or indirectly arising out
of, in connection with, or in respect of, this Agreement, except where
same result directly and principally from gross negligence, wilful misconduct
or bad faith on the part of the Escrow Agent. This indemnity survives
the release of the escrow securities, the resignation or termination of
the Escrow Agreement and the termination of this Agreement. |
||
8.6 |
Additional Provisions |
|
(1) The Escrow Agent will
be protected in acting and relying reasonably upon any notice, direction,
instruction, order, certificate, confirmation, request, waiver, consent,
receipt, statutory declaration or other paper or document (collectively
referred to as “Documents”) furnished to it and purportedly
signed by any officer or person required to or entitled to execute and
deliver to the Escrow Agent any such Document in connection with this
Agreement, not only as to its due execution and the validity and effectiveness
of its provisions, but also as to the truth or accuracy of any information
therein contained, which it in good faith believes to be genuine. |
||
| FORM 5D | ESCROW AGREEMENT | Page 15 |
| (as at August 2002) |
(2) The Escrow Agent will not be bound by any notice of a claim or demand with respect thereto, or any waiver, modification, amendment, termination or rescission of this Agreement unless received by it in writing, and signed by the other Parties and approved by the Exchange, and, if the duties or indemnification of the Escrow Agent in this Agreement are affected, unless it has given its prior written consent. (3) The Escrow Agent may consult with or retain such legal counsel and advisors as it may reasonably require for the purpose of discharging its duties or determining its rights under this Agreement and may rely and act upon the advice of such counsel or advisor. The Escrow Agent will give written notice to the Issuer as soon as practicable that it has retained legal counsel or other advisors. The Issuer will pay or reimburse the Escrow Agent for any reasonable fees, expenses and disbursements of such counsel or advisors. (4) In the event of any disagreement arising under the terms of this Agreement, the Escrow Agent will be entitled, at its option, to refuse to comply with any and all demands whatsoever until the dispute is settled either by a written agreement among the Parties or by a court of competent jurisdiction. (5) The Escrow Agent will have no duties or responsibilities except as expressly provided in this Agreement and will have no duty or responsibility under the Policy or arising under any other agreement, including any agreement referred to in this Agreement, to which the Escrow Agent is not a party. (6) The Escrow Agent will have the right not to act and will not be liable for refusing to act unless it has received clear and reasonable documentation that complies with the terms of this Agreement. Such documentation must not require the exercise of any discretion or independent judgment. (7) The Escrow Agent is authorized to cancel any share certificate delivered to it and hold such Securityholder’s escrow securities in electronic, or uncertificated form only, pending release of such securities from escrow. (8) The Escrow Agent will have no responsibility with respect to any escrow securities in respect of which no share certificate or other evidence or electronic or uncertificated form of these securities has been delivered to it, or otherwise received by it. |
|
| 8.7 | Limitation of Liability of Escrow Agent |
The Escrow Agent will not be liable to any of the Parties hereunder for any action taken or omitted to be taken by it under or in connection with this Agreement, except for losses directly, principally and immediately caused by its bad faith, wilful misconduct or gross negligence. Under no circumstances will the Escrow Agent be liable for any special, indirect, incidental, consequential, exemplary, aggravated or punitive losses or damages hereunder, including any loss of profits, whether foreseeable or unforeseeable. Notwithstanding the foregoing or any other provision of this Agreement, in no event will the collective liability of the Escrow Agent under |
|
| FORM 5D | ESCROW AGREEMENT | Page 16 |
| (as at August 2002) |
| or in connection with this
Agreement to any one or more Parties, except for losses directly caused
by its bad faith or willful misconduct, exceed the amount of its annual
fees under this Agreement or the amount of three thousand dollars ($3,000.00),
whichever amount shall be greater. |
||
8.8 |
Remuneration of Escrow Agent |
|
The Issuer will pay the
Escrow Agent reasonable remuneration for its services under this Agreement,
which fees are subject to revision from time to time on 30 days' written
notice. The Issuer will reimburse the Escrow Agent for its expenses and
disbursements. Any amount due under this section and unpaid 30 days after
request for such payment, will bear interest from the expiration of such
period at a rate per annum equal to the then current rate charged by the
Escrow Agent, payable on demand. |
||
PART 9 |
INDEMNIFICATION OF THE EXCHANGE |
|
9.1 |
Indemnification |
|
| (1) |
The Issuer and each Securityholder jointly
and severally: |
|
| (a)
|
release, indemnify and save harmless the Exchange
from all costs (including legal cost, expenses and disbursements), charges,
claims, demands, damages, liabilities, losses and expenses incurred by
the Exchange; |
|
| (b) |
agree not to make or bring a claim or demand, or
commence any action, against the Exchange; and |
|
| (c) |
agree to indemnify and save harmless the Exchange
from all costs (including legal costs) and damages that the Exchange incurs
or is required by law to pay as a result of any person’s claim,
demand or action, |
|
| arising from any and every act or omission
committed or omitted by the Exchange, in connection with this Agreement,
even if said act or omission was negligent, or constituted a breach of
the terms of this Agreement. |
||
| (2) |
This indemnity survives the release of
the escrow securities and the termination of this Agreement. |
|
PART 10 |
NOTICES | |
10.1 |
Notice to Escrow Agent |
|
Documents will be considered to have been
delivered to the Escrow Agent on the next business day following the date
of transmission, if delivered by fax, the date of delivery, if delivered
by hand during normal business hours or by prepaid courier, or 5 business
days after the date of mailing, if delivered by mail, to the following: |
||
| FORM 5D | ESCROW AGREEMENT | Page 17 |
| (as at August 2002) |
Computershare Investor Services Inc. |
|
10.2 |
Notice to Issuer |
Documents will be considered
to have been delivered to the Issuer on the next business day following
the date of transmission, if delivered by fax, the date of delivery, if
delivered by hand or by prepaid courier, or 5 business days after the
date of mailing, if delivered by mail, to the following: |
|
Response Biomedical Corp. |
|
10.3 |
Deliveries to Securityholders |
Documents will be considered to have been delivered to a Securityholder on the date of delivery, if delivered by hand or by prepaid courier, or 5 business days after the date of mailing, if delivered by mail, to the address on the Issuer’s share register. Any share certificates or other evidence of a Securityholder’s escrow securities will be sent to the Securityholder’s address on the Issuer’s share register unless the Securityholder has advised the Escrow Agent in writing otherwise at least ten business days before the escrow securities are released from escrow. The Issuer will provide the Escrow Agent with each Securityholder’s address as listed on the Issuer’s share register. |
|
10.4 |
Change of Address |
| (1) | The Escrow Agent may change its address for delivery
by delivering notice of the change of address to the Issuer and to each
Securityholder. |
| (2) | The Issuer may change its address for delivery by
delivering notice of the change of address to the Escrow Agent and to
each Securityholder. |
| (3) | A Securityholder may change that Securityholder’s
address for delivery by delivering notice of the change of address to
the Issuer and to the Escrow Agent. |
| 10.5 | Postal Interruption |
A party to this Agreement will not mail a Document if the party is aware of an actual or impending disruption of postal service. |
|
| FORM 5D | ESCROW AGREEMENT | Page 18 |
| (as at August 2002) |
PART 11 |
GENERAL |
|
11.1 |
Interpretation – “holding securities” |
|
Unless the context otherwise requires, all capitalized terms that are not otherwise defined in this Agreement, shall have the meanings as defined in Policy 1.1 - Interpretation or in Policy 5.4 - Escrow, Vendor Consideration and Resale Restrictions. When this Agreement refers to securities that a Securityholder “holds”, it means that the Securityholder has direct or indirect beneficial ownership of or control or direction over the securities. |
||
11.2 |
Enforcement by Third
Parties |
|
The Issuer enters this Agreement
both on its own behalf and as trustee for the Exchange and the Securityholders
of the Issuer, and this Agreement may be enforced by either the Exchange,
or the Securityholders of the Issuer, or both. |
||
11.3 |
Termination, Amendment, and Waiver of Agreement |
|
| (1) | Subject to subsection 11.3(3), this Agreement
shall only terminate: |
||
| (a) |
with respect to all the Parties: |
||
| (i) |
as specifically provided in this Agreement; |
||
| (ii)
|
subject to subsection 11.3(2), upon the agreement
of all Parties; or |
||
| (iii) |
when the Securities of all Securityholders have
been released from escrow pursuant to this Agreement; and |
||
| (b) |
with respect to a Party: |
||
| (i) |
as specifically provided in this Agreement; or |
||
| (ii) |
if the Party is a Securityholder, when all of the
Securityholder’s Securities have been released from escrow pursuant
to this Agreement. |
||
| (2) | An agreement to terminate this Agreement
pursuant to section 11.3(1)(a)(ii) shall not be effective unless and until
the agreement to terminate |
||
| (a) |
is evidenced by a memorandum in writing
signed by all Parties; |
||
| (b) |
has been consented to in writing by the
Exchange; and |
||
| FORM 5D | ESCROW AGREEMENT | Page 19 |
| (as at August 2002) |
| (c) |
has been approved by a majority of securityholders
of the Issuer who are not Securityholders. |
|
| (3) |
Notwithstanding any other provision in
this Agreement, the obligations set forth in section 9.1 shall survive
the termination of this Agreement and the resignation or removal of the
Escrow Agent. |
|
| (4) |
No amendment or waiver of this Agreement
or any part of this Agreement shall be effective unless the amendment
or waiver: |
|
| (a)
|
is evidenced by a memorandum in writing signed by
all Parties; |
|
| (b) |
has been approved in writing by the Exchange; and
|
|
| (c) |
has been approved by a majority of securityholders
of the Issuer who are not Securityholders. |
|
| (5) |
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. |
|
11.4 |
Severance of Illegal Provision |
|
Any provision or part of a provision 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 upon the parties hereto as though
the said illegal and/or unenforceable provision or part thereof had never
been included in this Agreement. |
||
11.5 |
Further Assurances |
|
The Parties will execute and deliver any
further documents and perform any further acts reasonably requested by
any of the Parties to this agreement which are necessary to carry out
the intent of this Agreement. |
||
11.6 |
Time |
|
Time is of the essence of this Agreement. |
||
11.7 |
Consent of Exchange to Amendment |
|
The Exchange must approve any amendment to this Agreement. |
||
| FORM 5D | ESCROW AGREEMENT | Page 20 |
| (as at August 2002) |
11.8 |
Additional Escrow Requirements |
A Canadian exchange may impose escrow terms or conditions in addition to those set out in this Agreement. |
|
11.9 |
Governing Laws |
The laws of the province of British Columbia and the applicable laws of Canada will govern this Agreement. |
|
11.10 |
Counterparts |
The Parties may execute
this Agreement by fax and in counterparts, each of which will be considered
an original and all of which will be one agreement. |
|
11.11 |
Singular and Plural |
Wherever a singular expression
is used in this Agreement, that expression is considered as including
the plural or the body corporate where required by the context. |
|
11.12 |
Language |
This Agreement has been
drawn up in the English language at the request of all parties. Cet acte
a été rédigé en anglais à la demande
de toutes les parties. |
|
11.13 |
Benefit and Binding Effect |
This Agreement will benefit
and bind the Parties and their heirs, executors, administrators, successors
and permitted assigns and all persons claiming through them as if they
had been a Party to this Agreement. |
|
11.14 |
Entire Agreement |
This is the entire agreement
among the Parties concerning the subject matter set out in this Agreement
and supersedes any and all prior understandings and agreements. For greater
certainty, the Parties agree that the Former Escrow Agreement is terminated
and of no further force and effect as of the date of this Agreement. |
|
| FORM 5D | ESCROW AGREEMENT | Page 21 |
| (as at August 2002) |
| 11.15 | Successor to Escrow Agent |
Any corporation with which the Escrow Agent may be amalgamated, merged or consolidated, or any corporation succeeding to the business of the Escrow Agent will be the successor of the Escrow Agent under this Agreement without any further act on its part or on the part or any of the Parties, provided that the successor is recognized by the Exchange. The Parties have executed and delivered this Agreement as of the date set out above. |
|
Computershare Investor Services Inc.
| “Xxx Xxxx” | . | |
| Authorized signatory | ||
| Xxx Xxxx | . | |
| Print name of authorized signatory | ||
| “Xxxxxxxx Au | . | |
| Authorized signatory | ||
| Xxxxxxxx Au | . | |
| Print name of authorized signatory | ||
| Response Biomedical Corp. | ||
| ”Xxxxx Xxxxxxxx” | . | |
| Authorized signatory | ||
| Signed, sealed and delivered by Xxxxxxx X. Xxxxxx | ) | |
| in the presence of: | ) | |
| ) | ||
| ”Xxxxxx Xxxxxx | ) | |
| Name | ) | |
| ) | ||
| #1003 – 0000 Xxxxxxxx Xx. | ) | ”Xxxxxxx X. Xxxxxx” |
| Address | ) | XXXXXXX X. XXXXXX |
| ) | ||
| Xxxxxxxxx XX X0X 0X0 | ) | |
| ) | ||
| ) | ||
| Office Administration | ) | |
| Occupation | ) |
| FORM 5D | ESCROW AGREEMENT | Page 22 |
| (as at August 2002) |
| Signed, sealed and delivered by Xxxxx Xxxxxxxx | ) | |
| in the presence of: | ) | |
| ) | ||
| ”Xxxxxx Xxxxxx | ) | |
| Name | ) | |
| ) | ||
| #1003 – 0000 Xxxxxxxx Xx. | ) | ”Xxxxx Xxxxxxxx” |
| Address | ) | XXXXX XXXXXXXX |
| ) | ||
| Xxxxxxxxx XX X0X 0X0 | ) | |
| ) | ||
| Office Administration | ) | |
| Occupation | ) | |
| Xxxxxx Engineering Ltd. | ||
| ”Xxxxxx Xxxxxx” | ||
| Authorized signatory |
| FORM 5D | ESCROW AGREEMENT | Page 23 |
| (as at August 2002) |
Schedule “A” to Escrow Agreement
Securityholder
| Name: | Xxxxxxx X. Xxxxxx | |
| Signature: | ”Xxxxxxx X. Xxxxxx” |
Address for Notice:
0000 Xxxxxxx Xxxxx
Xxxxx Xxxxxxxxx, XX X0X 0X0
| Class and Type (i.e. Value Securities or Surplus Securities |
Number | Certificate(s) (if applicable) |
| Surplus Securities Common Shares |
275,000 |
| FORM 5D | ESCROW AGREEMENT | Page 24 |
| (as at August 2002) |
Schedule “A” to Escrow Agreement
Securityholder
| Name: | Xxxxx Xxxxxxxx | |
| Signature: | ”Xxxxx Xxxxxxxx” |
| Address for Notice: |
| 0000 Xxxxxxx Xxxxx |
| Xxxxx Xxxxxxxxx, XX X0X 0X0 |
| Securities: |
| Class and Type (i.e. Value Securities or Surplus Securities |
Number | Certificate(s) (if applicable) |
| Surplus Securities Common Shares |
275,000 |
| FORM 5D | ESCROW AGREEMENT | Page 25 |
| (as at August 2002) |
Schedule “A” to Escrow Agreement
Securityholder
| Name: | Xxxxxx Engineering Ltd. | |
| Signature: | ”Xxxxxx Xxxxxx” |
Address for Notice:
Xxxxx 0000, 000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX X0X 0X0
| Class and Type (i.e. Value Securities or Surplus Securities |
Number | Certificate(s) (if applicable) |
| Surplus Securities Common Shares |
275,000 |
| FORM 5D | ESCROW AGREEMENT | Page 26 |
| (as at August 2002) |
SCHEDULE B(3) – TIER 1 SURPLUS SECURITY ESCROW AGREEMENT
RELEASE OF SECURITIES
Timed Release
| Release Dates | Percentage of Total Escrowed Securities to be Released |
Total Number of Escrowed Securities to be Released |
| [Insert date of Exchange Bulletin] | 1/10 of your escrow securities | 82,500 Common shares |
| [Insert date 6 months following Exchange Bulletin] | 1/6 of your remaining escrow securities | 123,750 Common shares |
| [Insert date 12 months following Exchange Bulletin] | 1/5 of your remaining escrow securities | 123,750 Common shares |
| [Insert date 18 months following Exchange Bulletin] | 1/4 of your remaining escrow securities | 123,750 Common shares |
| [Insert date 24 months following Exchange Bulletin] | 1/3 of your remaining escrow securities | 123,750 Common shares |
| [Insert date 30 months following Exchange Bulletin] | 1/2 of your remaining escrow securities | 123,750 Common shares |
| [Insert date 36 months following Exchange Bulletin] | all of your remaining escrow securities | 123,750 Common shares |
| TOTAL | 100% | 825,000 Common shares |
*In the simplest case where there are no changes to the escrow securities initially deposited and no additional escrow securities, the release schedule outlined above results in the escrow securities being released in equal tranches of 15% after completion of the release on the date of the Exchange Bulletin.
| FORM 5D | ESCROW AGREEMENT | Page 27 |
| (as at August 2002) |
SCHEDULE B(4) – TIER 2 SURPLUS SECURITY ESCROW AGREEMENT
RELEASE OF SECURITIES
Timed Release
| Release Dates | Percentage of Total Escrowed Securities to be Released |
Total Number of Escrowed Securities to be Released |
| [Insert date of Exchange Bulletin] | no release | nil |
| [Insert date 6 months following Exchange Bulletin] | 1/20 of your escrow securities | 41,250 Common shares |
| [Insert date 12 months following Exchange Bulletin] | 1/19 of your remaining escrow securities | 41,250 Common shares |
| [Insert date 18 months following Exchange Bulletin] | 1/18 of your remaining escrow securities | 41,250 Common shares |
| [Insert date 24 months following Exchange Bulletin] | 1/17 of your remaining escrow securities | 41,250 Common shares |
| [Insert date 30 months following Exchange Bulletin] | 1/8 of your remaining escrow securities | 82,500 Common shares |
| [Insert date 36 months following Exchange Bulletin] | 1/7 of your remaining escrow securities | 82,500 Common shares |
| [Insert date 42 months following Exchange Bulletin] | 1/6 of your remaining escrow securities | 82,500 Common shares |
| [Insert date 48 months following Exchange Bulletin] | 1/5 of your remaining escrow securities | 82,500 Common shares |
| [Insert date 54 months following Exchange Bulletin] | 1/4 of your remaining escrow securities | 82,500 Common shares |
| [Insert date 60 months following Exchange Bulletin] | 1/3 of your remaining escrow securities | 82,500 Common shares |
| Insert date 66 months following Exchange Bulletin] | 1/2 of your remaining escrow securities | 82,500 Common shares |
| [Insert date 72 months following Exchange Bulletin] | all of your remaining escrow securities | 82,500 Common shares |
| TOTAL | 100% | 825,000 Common shares |
| FORM 5D | ESCROW AGREEMENT | Page 28 |
| (as at August 2002) |
