Security Devices International Inc.: Exhibit 10.18 - Filed by newsfilecorp.com






Exhibit 10.18



FORM 5D 

ESCROW AGREEMENT 
(Select: VALUE SECURITY/SURPLUS SECURITY) 


THIS AGREEMENT is made as of the ______day of
______________, ______

AMONG: 

(the “Issuer”) 

AND: 

(the “Escrow Agent”) 

AND: 

EACH OF THE UNDERSIGNED
SECURITYHOLDERS OF THE ISSUER 

(a “Securityholder” or “you”)


(collectively, the “Parties”) 

This Agreement is being entered into by the Parties
under Exchange Policy 5.4 - Escrow, Vendor Consideration and Resale
Restrictions (the Policy) in connection with a [Reverse
Takeover, Change of Business, Qualifying Transaction, or other transaction
(please describe)]. The Issuer is a [Tier 1/Tier 2 Issuer] as described in
Policy 2.1 - Initial Listing Requirements. 

For good and valuable consideration, the Parties agree
as follows: 

	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. 

	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):

	 	 	 
		(a) 	
      as a dividend or other distribution on escrow
      securities;

	 	 	 
		(b) 	
      on the exercise of a right of purchase, conversion or
      exchange attaching to escrow securities, including securities received on
      conversion of special warrants;

	 	 	 
		(c) 	
      on a subdivision, or compulsory or automatic conversion
      or exchange of escrow securities; or

	 	 	 
		(d) 	
      from a successor issuer in a business combination, if
      Part 6 of this Agreement applies,

	 	 	 
		
      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.

	 	 	 
	(3) 	
      You will immediately deliver to the Escrow Agent any
      replacement share certificates or other evidence of additional escrow
      securities issued to you.




	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. 

	PART 2 	RELEASE OF ESCROW SECURITIES
  



	2.1 	
      Release Provisions



The provisions of Schedule(s) [Insert schedule reference(s)]
are incorporated into and form part of this Agreement. 

Select applicable schedule(s) 

[          
Value Security Escrow Agreement for Tier 1 Issuer – attach schedule B(1)]

[           Value
Security Escrow Agreement for Tier 2 Issuer – attach schedule B(2)]

[           Surplus
Security Escrow Agreement for Tier 1 Issuer – attach schedule B(3)]

[           Surplus
Security Escrow Agreement for Tier 2 Issuer – attach schedule B(4)] 


	FORM 5D 	ESCROW AGREEMENT 	Page
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	2.2 	
      Additional escrow
securities



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. 

	2.3 	
      Additional Requirements for Tier 2 Surplus Escrow
      Securities



Where securities are subject to a Tier 2 Surplus Security
Escrow Agreement [Schedule B(4)], the following additional conditions apply:


	(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.

	 	 	 
	(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:

	 	 	 
		(a) 	
      is signed by two directors or officers of the
    Issuer;

	 	 	 
		(b) 	
      is dated not more than 30 days prior to the release
      date;

	 	 	 
		(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

	 	 	 
		(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.

	 	 	 
	(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.

	 	 	 
	(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:

	 	 	 
		(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

	 	 	 
		(b) 	
      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.




	2.4 	
      Delivery of Share Certificates for Escrow
      Securities



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. 

	2.5 	
      Replacement Certificates



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. 

	2.6 	
      Release upon Death




	(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:

	 	 	 
		(a) 	
      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

	 	 	 
		(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.

	 	 	 
	(2) 	
      Prior to delivery the Escrow Agent must
receive:

	 	 	 
		(a) 	
      a certified copy of the death certificate; and

	 	 	 
		(b) 	
      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



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. 

	2.8 	
      Discretionary Applications



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. 

	PART 3 	EARLY RELEASE ON CHANGE OF ISSUER STATUS
    



	3.1 	
      Early Release – Graduation to Tier
  1




	(1) 	
      When a Tier 2 Issuer becomes a Tier 1 Issuer, the release
      schedule for its escrow securities changes.

	 	 	 	 
	(2) 	
      If the Issuer reasonably believes that it meets the
      Initial Listing Requirements of a Tier 1 Issuer as described in Policy 2.1
      – Initial 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.

	 	 	 	 
	(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:

	 	 	 	 
		(a) 	
      issue a news release:

	 	 	 	 
			(i) 	
      disclosing that it has been accepted for graduation to
      Tier 1; and

	 	 	 	 
			(ii) 	
      disclosing the number of escrow securities to be released
      and the dates of release under the new schedule; and

	 	 	 	 
		(b) 	
      provide the news release, together with a copy of the
      Exchange Bulletin, to the Escrow Agent.

	 	 	 	 
	(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) 




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	(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.




	PART 4 	DEALING WITH ESCROW SECURITIES
  



	4.1 	
      Restriction on Transfer,
etc.



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. 

	4.2 	
      Pledge, Mortgage or Charge as Collateral for a
      Loan



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. 

	4.3 	
      Voting of Escrow
Securities



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. 

	4.4 	
      Dividends on Escrow
Securities



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. 

	4.5 	
      Exercise of Other Rights Attaching to Escrow
      Securities



You may exercise your rights to exchange or convert your escrow
securities in accordance with this agreement. 

	FORM 5D 	ESCROW AGREEMENT 	Page
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	PART 5 	PERMITTED TRANSFERS WITHIN ESCROW
  



	5.1 	
      Transfer to Directors and Senior
  Officers




	(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:

	 	 	 
		(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

	 	 	 
		(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.

	 	 	 
	(2) 	
      Prior to the transfer the Escrow Agent must
    receive:

	 	 	 
		(a) 	
      a certified copy of the resolution of the board of
      directors of the Issuer approving the transfer;

	 	 	 
		(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;

	 	 	 
		(c) 	
      an acknowledgment in the form of Form 5E signed by the
      transferee; and

	 	 	 
		(d) 	
      a transfer power of attorney, completed and executed by
      the transferor in accordance with the requirements of the Issuer’s
      transfer agent.




	5.2 	
      Transfer to Other
Principals




	(1) 	
      You may transfer escrow securities within
  escrow:

	 	 	 	 
		(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

	 	 	 	 
		(b) 	
      to a person or company that after the proposed
      transfer

	 	 	 	 
			(i) 	
      will hold more than 10% of the voting rights attached to
      the Issuer’s outstanding securities, and

	 	 	 	 
			(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,

	 	 	 	 
				
      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

	 	 	 	 	 
		(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.

	 	 	 	 	 
	(2) 	
      Prior to the transfer the Escrow Agent must
    receive:

	 	 	 	 	 
		(a) 	
      a certificate signed by a director or officer of the
      Issuer authorized to sign, stating that:

	 	 	 	 	 
			(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

	 	 	 	 	 
			(ii) 	
      the transfer is to a person or company that:

	 	 	 	 	 
				(A) 	
      the officer believes, after reasonable investigation,
      will hold more than 10% of the voting rights attached to the Issuer’s
      outstanding securities; and

	 	 	 	 	 
				(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

	 	 	 	 	 
			(iii) 	
      any required approval from the Exchange or any other
      exchange on which the Issuer is listed has been received;

	 	 	 	 	 
		(b) 	
      an acknowledgment in the form of Form 5E signed by the
      transferee; and

	 	 	 	 	 
		(c) 	
      a transfer power of attorney, completed and executed by
      the transferor in accordance with the requirements of the Issuer’s
      transfer agent.




	5.3 	
      Transfer upon
Bankruptcy




	(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:

	 	 	 
		(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

	 	 	 
		(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:

	 	 	 	 
		(a) 	
      a certified copy of either

	 	 	 	 
			(i) 	
      the assignment in bankruptcy filed with the
      Superintendent of Bankruptcy, or

	 	 	 	 
			(ii) 	
      the receiving order adjudging the Securityholder
      bankrupt;

	 	 	 	 
		(b) 	
      a certified copy of a certificate of appointment of the
      trustee in bankruptcy;

	 	 	 	 
		(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

	 	 	 	 
		(d) 	
      an acknowledgment in the form of Form 5E signed
  by

	 	 	 	 
			(i) 	
      the trustee in bankruptcy or

	 	 	 	 
			(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.




	5.4 	
      Transfer Upon Realization of Pledged, Mortgaged or
      Charged Escrow Securities




	(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:

	 	 	 
		(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

	 	 	 
		(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.

	 	 	 
	(2) 	
      Prior to the transfer the Escrow Agent must
    receive:

	 	 	 
		(a) 	
      a statutory declaration of an officer of the financial
      institution that the financial institution is legally entitled to the
      escrow securities;

	 	 	 
		(b) 	
      evidence that the Exchange has accepted the pledge,
      mortgage or charge of escrow securities to the financial
    institution;

	 	 	 
		(c) 	
      a transfer power of attorney, executed by the transferor
      in accordance with the requirements of the Issuer’s transfer agent;
    and

	 	 	 
		(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




	(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:

	 	 	 
		(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

	 	 	 
		(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.

	 	 	 
	(2) 	
      Prior to the transfer the Escrow Agent must
    receive:

	 	 	 
		(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;

	 	 	 
		(b) 	
      a transfer power of attorney, executed by the transferor
      in accordance with the requirements of the Issuer’s transfer agent;
    and

	 	 	 
		(c) 	
      an acknowledgement in the form of Form 5E signed by the
      trustee of the plan or fund.




	5.6 	
      Effect of Transfer Within
Escrow



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. 

	5.7 	
      Discretionary Applications



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. 

	FORM 5D 	ESCROW AGREEMENT 	Page
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	PART 6 	BUSINESS COMBINATIONS




	6.1 	
      Business Combinations



This Part applies to the following (business
combinations): 

	(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;

	 	 	 
		(b) 	
      written consent of the Exchange; and

	 	 	 
		(c) 	
      any other information concerning the business combination
      as the Escrow Agent may reasonably require.




	6.3 	
      Delivery to Depositary




	(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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	 	(b) 	
      states that the escrow securities are held in
    escrow;

	 	 	 
	 	(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;

	 	 	 
	 	(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

	 	 	 
	 	(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.




	6.4 	
      Release of Escrow Securities to
  Depositary




	(1) 	
      The Escrow Agent will release from escrow the tendered
      escrow securities provided that:

	 	 	 	 
		(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

	 	 	 	 
		(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;

	 	 	 	 
		(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

	 	 	 	 
			(i) 	
      the terms and conditions of the business combination have
      been met or waived; and

	 	 	 	 
			(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.




	6.5 	
      Escrow of New
Securities




	(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,

	 	 	 
		(a)	
      the successor issuer is an exempt issuer as defined in
      the National Policy;




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	 	(b) 	
      the escrow holder was subject to a Value Security Escrow
      Agreement and is not a Principal of the successor issuer; and

	 	 	 
	 	(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
      holder’s securities and the total securities
  outstanding.)




	6.6 	
      Release from Escrow of New
  Securities




	(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:

	 	 	 	 
		(a) 	
      a certificate from the successor issuer signed by a
      director or officer of the successor issuer authorized to sign

	 	 	 	 
			(i) 	
      stating that it is a successor issuer to the Issuer as a
      result of a business combination;

	 	 	 	 
			(ii) 	
      containing a list of the securityholders whose new
      securities are subject to escrow under section 6.5;

	 	 	 	 
			(iii) 	
      containing a list of the securityholders whose new
      securities are not subject to escrow under section 6.5;

	 	 	 	 
		(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.

	 	 	 	 
	(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.

	 	 	 	 
	(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 June 14, 2010) 		  







	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 June 14, 2010) 		  







	PART 8 	OTHER CONTRACTUAL ARRANGEMENTS
  


[You may insert any other contractual arrangements the Parties
to this Agreement wish to provide to govern the responsibilities, remuneration,
liabilities, and indemnities for the duties of the Escrow Agent or any other
matter which the Parties wish to include in this Agreement provided that the
terms are not inconsistent with the applicable Exchange Policies and the terms
of this Agreement.] 

	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: 

[Name, address, contact person, fax number] 

	FORM 5D 	ESCROW AGREEMENT 	Page
      15 
	(as at June 14, 2010) 		  







	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:


[Name, address, contact person, fax number] 

	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. 

	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. 

	FORM 5D 	 ESCROW AGREEMENT 	Page
      16 
	(as at June 14, 2010) 		  






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) 	
      if the Issuer is listed on the Exchange, the termination
      of this Agreement has been consented to in writing by the Exchange;
    and

	 	 	 	 
		(c) 	
      has been approved by a majority vote of securityholders
      of the Issuer excluding in each case, 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.




	FORM 5D 	ESCROW AGREEMENT 	Page
      17 
	(as at June 14, 2010) 		  







	(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) 	
      if the Issuer is listed on the Exchange, the amendment or
      waiver of this Agreement has been approved in writing by the Exchange;
      and

	 	 	 
		(c) 	
      has been approved by a majority vote of securityholders
      of the Issuer excluding in each case, 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 if
the Issuer is listed on the Exchange at the time of the proposed amendment. 

	11.8 	
      Additional Escrow
Requirements



A Canadian exchange may impose escrow terms or conditions in
addition to those set out in this Agreement. 

	FORM 5D 	ESCROW AGREEMENT 	Page
      18 
	(as at June 14, 2010) 		  







	11.9 	
      Governing Laws



The laws of {insert principal jurisdiction} 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/French]
language at the request of all parties. Cet acte a été rédigé en
[anglais/français] 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. 

	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. 

[Escrow Agent] 

_________________________________________
Authorized
signatory 

_________________________________________
Authorized
signatory 

	FORM 5D 	ESCROW AGREEMENT 	Page
      19 
	(as at June 14, 2010) 		  






[Issuer] 

____________________________________________
Authorized
signatory 

____________________________________________
Authorized
signatory 

If the Securityholder is an individual: 

	Signed, sealed and delivered by	)	 
	[Securityholder] in the presence of: 	)	 
		)	 
		)	 
	Name 	)	 
		)	 
		)  	 
	Address 	)	[Securityholder] 
		) 	 
		) 	 
		) 	 
		) 	 
		) 	 
	Occupation 	)	 


If the Securityholder is not an individual: 

[Securityholder] 

_____________________________________________
Authorized
signatory 

_____________________________________________
Authorized
signatory 

	FORM 5D 	ESCROW AGREEMENT 	Page
      20 
	(as at June 14, 2010) 		  






Schedule “A” to Escrow Agreement 

Securityholder 

Name: 

Signature: 

Address for Notice:

	 
	   


Securities: 


	Class and
      Type 
(i.e. Value Securities or
      
Surplus Securities) 	Number 	Certificate(s) (if applicable)
  
	 	   	 
	 	   	 
		  	









	FORM 5D 	ESCROW AGREEMENT 	Page
      21 
	(as at June 14, 2010) 		  






SCHEDULE B(1) – TIER 1 VALUE SECURITY ESCROW AGREEMENT


RELEASE OF SECURITIES 

Timed Release 


	  	Percentage of Total 	Total Number of Escrowed 
	Release Dates 	Escrowed Securities to be 	Securities to be Released 
	  	Released 	  
	[Insert date of Exchange 	25% 	  
	Bulletin] 	  	  
	[Insert date 6 months 	25% 	  
	following Exchange 	  	  
	Bulletin] 	  	  
	[Insert date 12 months 	25% 	  
	following Exchange 	  	  
	Bulletin] 	  	  
	[Insert date 18 months 	25% 	  
	following Exchange 	  	  
	Bulletin] 	  	  
	TOTAL 	100% 	  



*In the simplest case where there are no changes to the escrow
securities initially deposited and no additional escrow securities, then the
release schedule outlined above results in the escrow securities being released
in equal tranches of 25%. 

	FORM 5D 	ESCROW AGREEMENT 	Page
      22 
	(as at June 14, 2010) 		  






SCHEDULE B(2) – TIER 2 VALUE SECURITY ESCROW AGREEMENT


RELEASE OF SECURITIES 

Timed Release 

	  	Percentage of Total Escrowed 	Total Number of Escrowed 
	Release Dates 	Securities to be Released 	Securities to be Released 
	[Insert date of Exchange 	10% 	  
	Bulletin] 	  	  
	[Insert date 6 months 	15% 	  
	following Exchange 	  	  
	Bulletin] 	  	  
	[Insert date 12 months 	15% 	  
	following Exchange 	  	  
	Bulletin] 	  	  
	[Insert date 18 months 	15% 	  
	following Exchange 	  	  
	Bulletin] 	  	  
	[Insert date 24 months 	15% 	  
	following Exchange 	  	  
	Bulletin] 	  	  
	[Insert date 30 months 	15% 	  
	following Exchange 	  	  
	Bulletin] 	  	  
	[Insert date 36 months 	15% 	  
	following Exchange 	  	  
	Bulletin] 	  	  
	TOTAL 	100% 	  


*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
      23 
	(as at June 14, 2010) 		  






SCHEDULE B(3) – TIER 1 SURPLUS SECURITY ESCROW AGREEMENT


RELEASE OF SECURITIES 

Timed Release 

	  	Percentage of Total Escrowed 	Total Number of Escrowed 
	Release Dates 	Securities to be Released 	Securities to be Released 
	[Insert date of Exchange 	10% 	  
	Bulletin] 	  	  
	[Insert date 6 months 	20% 	  
	following Exchange 	  	  
	Bulletin] 	  	  
	[Insert date 12 months 	30% 	  
	following Exchange 	  	  
	Bulletin] 	  	  
	[Insert date 18 months 	40% 	  
	following Exchange 	  	  
	Bulletin] 	  	  
	TOTAL 	100% 	  



	FORM 5D
    	ESCROW AGREEMENT 	Page 24 
	(as at June 14, 2010) 		  






SCHEDULE B(4) – TIER 2 SURPLUS SECURITY ESCROW AGREEMENT


RELEASE OF SECURITIES 

Timed Release 

	  	Percentage of Total 	Total Number of 
	Release Dates 	Escrowed Securities to be 	Escrowed Securities to be 
	  	Released 	Released 
	[Insert date of Exchange 	5% 	  
	Bulletin] 	  	  
	[Insert date 6 months following 	5% 	  
	Exchange Bulletin] 	  	  
	[Insert date 12 months 	10% 	  
	following Exchange Bulletin] 	  	  
	[Insert date 18 months 	10% 	  
	following Exchange Bulletin] 	  	  
	[Insert date 24 months 	15% 	  
	following Exchange Bulletin] 	  	  
	[Insert date 30 months 	15% 	  
	following Exchange Bulletin] 	  	  
	[Insert date 36 months 	40% 	  
	following Exchange Bulletin] 	  	  
	TOTAL 	100% 	  



	FORM 5D 	ESCROW AGREEMENT 	Page
      25 
	(as at June 14, 2010) 		  






SCHEDULE B(5) 

UNDERTAKING OF HOLDING COMPANY 

TO: THE TSX VENTURE EXCHANGE 

● (the "Securityholder") has subscribed for and agreed
to purchase, as principal, ● Common Shares of
● (the "Escrowed Securities"). The
Escrowed Securities will be held in escrow as detailed in the escrow agreement
entered into between ● (the “Issuer”),
● and the Securityholder. 

The undersigned Securityholder undertakes that, to the extent
reasonably possible, it will not permit or authorize its securities to be issued
or transferred, nor will it otherwise authorize any transaction involving any of
its securities that could reasonably result in a change of its control without
the prior consent of the TSX Venture Exchange, as long as any Escrowed
Securities remain held or are required to be held in escrow. 

DATED this ● day of
●. 

	 	  
	 	(Name of Securityholder - please print) 
	 	  
	 	  
	 	(Authorized Signature) 
	 	  
	 	  
	 	(Official Capacity - please print) 
	 	  
	 	  
		(Please print here name of individual whose
      signature appears above) 



	FORM 5D 	ESCROW AGREEMENT 	Page
      26 
	(as at June 14, 2010) 		  






The Securityholder is directly controlled by the undersigned
who undertakes that, to the extent reasonably possible, he will not permit or
authorize securities of the Securityholder to be issued or transferred, nor
otherwise carry out any transaction that could reasonably result in a change of
control of the Securityholder without the prior consent of the TSX Venture
Exchange, as long as any Escrowed Securities remain held or are required to be
held in escrow. 

DATED this ● day of
●. 

	 	  
	 	(Signature) 
	 	  
	 	  
	 	(Name of Controlling Securityholder – please
      print) 
	 	  
	 	  
	 	(Signature) 
	 	  
	 	  
	 	(Name of Controlling Securityholder – please
      print) 



	FORM 5D 	ESCROW AGREEMENT 	Page
      27 
	(as at June 14, 2010)