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TSX VENTURE
EXCHANGE
FORM 5D
ESCROW AGREEMENT
VALUE SECURITY
THIS AGREEMENT is made as of the 1st day of April, 2004
AMONG: LMS MEDICAL SYSTEMS INC.
(the "ISSUER")
AND: NATIONAL BANK TRUST INC.
(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 Qualifying Transaction. The Issuer is a Tier 1 Issuer as described in
Policy 2.1 - Minimum 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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FORM 5D ESCROW AGREEMENT PAGE 1
(AS AT AUGUST 2002)
(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 Schedules "B(1)" and "B(2)" are incorporated into and form
part of this Agreement.
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FORM 5D ESCROW AGREEMENT PAGE 2
(AS AT AUGUST 2002)
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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FORM 5D ESCROW AGREEMENT PAGE 3
(AS AT AUGUST 2002)
(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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FORM 5D ESCROW AGREEMENT PAGE 4
(AS AT AUGUST 2002)
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 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.
(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:
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APPLICABLE SCHEDULE PRE-GRADUATION APPLICABLE SCHEDULE POST-GRADUATION
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Schedule B(2) Schedule B(1)
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Schedule B(4) Schedule B(3)
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FORM 5D ESCROW AGREEMENT PAGE 5
(AS AT AUGUST 2002)
(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.
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FORM 5D ESCROW AGREEMENT PAGE 6
(AS AT AUGUST 2002)
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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FORM 5D ESCROW AGREEMENT PAGE 7
(AS AT AUGUST 2002)
(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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FORM 5D ESCROW AGREEMENT PAGE 8
(AS AT AUGUST 2002)
(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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FORM 5D ESCROW AGREEMENT PAGE 9
(AS AT AUGUST 2002)
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.
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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):
(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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FORM 5D ESCROW AGREEMENT PAGE 11
(AS AT AUGUST 2002)
(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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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
(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.)
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; and
(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.
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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.
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FORM 5D ESCROW AGREEMENT PAGE 14
(AS AT AUGUST 2002)
PART 8 OTHER CONTRACTUAL ARRANGEMENTS
Not Applicable.
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:
National Bank Trust Inc.
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▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Share Ownership Management
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
FORM 5D ESCROW AGREEMENT PAGE 15
(AS AT AUGUST 2002)
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:
LMS Medical Systems Ltd.
▇▇▇▇ ▇▇▇▇. ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: Chief Financial Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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 16
(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
(c) has been approved by a majority of securityholders of the
Issuer who are not Securityholders.
--------------------------------------------------------------------------------
FORM 5D ESCROW AGREEMENT PAGE 17
(AS AT AUGUST 2002)
(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.
11.8 ADDITIONAL ESCROW REQUIREMENTS
A Canadian exchange may impose escrow terms or conditions in addition to those
set out in this Agreement.
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FORM 5D ESCROW AGREEMENT PAGE 18
(AS AT AUGUST 2002)
11.9 GOVERNING LAWS
The laws of Ontario 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 ete redige en anglais a 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.
NATIONAL BANK TRUST INC.
-----------------------------------------
Authorized signatory
---------------------------------------------
Authorized signatory
--------------------------------------------------------------------------------
FORM 5D ESCROW AGREEMENT PAGE 19
(AS AT AUGUST 2002)
LMS MEDICAL SYSTEMS INC.
--------------------------------------------
Authorized signatory
---------------------------------------------
Authorized signatory
--------------------------------------------------------------------------------
FORM 5D ESCROW AGREEMENT PAGE 20
(AS AT AUGUST 2002)
If the Securityholder is an individual:
Signed, sealed and delivered by )
o in the presence of: )
)
------------------------------------------)
Name )
)
------------------------------------------) ------------------------
Address )
)
------------------------------------------)
)
)
------------------------------------------)
Occupation )
--------------------------------------------------------------------------------
FORM 5D ESCROW AGREEMENT PAGE 21
(AS AT AUGUST 2002)
If the Securityholder is not an individual:
o
Per:
--------------------------------------
Authorized signatory
--------------------------------------------------------------------------------
FORM 5D ESCROW AGREEMENT PAGE 22
(AS AT AUGUST 2002)
SCHEDULE "A" TO ESCROW AGREEMENT
SECURITYHOLDER
NAME:
SIGNATURE:
-----------------------------------
ADDRESS FOR NOTICE:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
----------------------------------------------------------------
SECURITIES:
-----------------------------------------------------------------------------------------------------------------
CLASS AND TYPE NUMBER CERTIFICATE(S) (IF APPLICABLE)
(I.E. VALUE SECURITIES OR SURPLUS
SECURITIES
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FORM 5D ESCROW AGREEMENT PAGE 23
(AS AT AUGUST 2002)
SCHEDULE B(1) - TIER 1 VALUE SECURITY ESCROW AGREEMENT
RELEASE OF SECURITIES
---------------------------
Name of Shareholder
TIMED RELEASE
-------------------------------------------------------------------------------------------------------------------
PERCENTAGE OF TOTAL ESCROWED TOTAL NUMBER OF ESCROWED SECURITIES TO
RELEASE DATES SECURITIES TO BE RELEASED BE RELEASED
-------------------------------------------------------------------------------------------------------------------
DATE OF FINAL EXCHANGE BULLETIN IN 1/4 OF YOUR ESCROW SECURITIES
RESPECT OF THE QUALIFYING
TRANSACTION
-------------------------------------------------------------------------------------------------------------------
DATE THAT IS 6 MONTHS FOLLOWING THE 1/3 OF YOUR REMAINING ESCROW
FINAL EXCHANGE BULLETIN SECURITIES
-------------------------------------------------------------------------------------------------------------------
DATE THAT IS 12 MONTHS FOLLOWING 1/2 OF YOUR REMAINING ESCROW
THE FINAL EXCHANGE BULLETIN SECURITIES
-------------------------------------------------------------------------------------------------------------------
DATE THAT IS 18 MONTHS FOLLOWING ALL OF YOUR REMAINING ESCROW
THE FINAL EXCHANGE BULLETIN SECURITIES
-------------------------------------------------------------------------------------------------------------------
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 24
(AS AT AUGUST 2002)
SCHEDULE B(2) - TIER 2 VALUE SECURITY ESCROW AGREEMENT
RELEASE OF SECURITIES
TIMED RELEASE
-------------------------------------------------------------------------------------------------------------------
PERCENTAGE OF TOTAL ESCROWED TOTAL NUMBER OF ESCROWED SECURITIES
RELEASE DATES SECURITIES TO BE RELEASED TO BE RELEASED
-------------------------------------------------------------------------------------------------------------------
[INSERT DATE OF EXCHANGE BULLETIN] 1/10 OF YOUR ESCROWED SECURITIES
-------------------------------------------------------------------------------------------------------------------
[INSERT DATE 6 MONTHS FOLLOWING 1/6 OF YOUR REMAINING ESCROW
EXCHANGE BULLETIN] SECURITIES
-------------------------------------------------------------------------------------------------------------------
[INSERT DATE 12 MONTHS FOLLOWING 1/5 OF YOUR REMAINING ESCROW
EXCHANGE BULLETIN] SECURITIES
-------------------------------------------------------------------------------------------------------------------
[INSERT DATE 18 MONTHS FOLLOWING 1/4 OF YOUR REMAINING ESCROW
EXCHANGE BULLETIN] SECURITIES
-------------------------------------------------------------------------------------------------------------------
[INSERT DATE 24 MONTHS FOLLOWING 1/3 OF YOUR REMAINING ESCROW
EXCHANGE BULLETIN] SECURITIES
-------------------------------------------------------------------------------------------------------------------
[INSERT DATE 30 MONTHS FOLLOWING 1/2 OF YOUR REMAINING ESCROW
EXCHANGE BULLETIN] SECURITIES
-------------------------------------------------------------------------------------------------------------------
[INSERT DATE 36 MONTHS FOLLOWING ALL OF YOUR REMAINING ESCROW
EXCHANGE BULLETIN] SECURITIES
-------------------------------------------------------------------------------------------------------------------
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 25
(AS AT AUGUST 2002)