Escrow Agreement

THIS AGREEMENT made as of [Date of Agreement]

A M O N G:

[NAME OF SELLER], of [Address of Seller]

(the “Buyer”)

- and -

[NAME OF BUYER], of [Address of Buyer]

(the "Seller")

- and -

[NAME OF ESCROW AGENT], [Address of

Escrow Agent]

(the "Escrow Agent")

WHEREAS:

(A) Concurrently with the execution and delivery of this Agreement, the Buyer is acquiring
from the Seller all of the issued and outstanding shares in the capital of [Name of
Corporation's Shares Being Acquired] (the "Corporation”) pursuant to a Share Purchase
Agreement (the “Purchase Agreement”) dated concurrently herewith made among the
Seller, the Buyer and the Corporation;

(B) Pursuant to the terms of the Purchase Agreement, the sum of (US) $[Amount to be held
in Escrow (ie. $500,000)] is to be delivered to the Escrow Agent and held in accordance
with the terms of the Escrow Agreement; and

(C) The Escrow Agent has agreed to act as escrow agent for the purpose of holding and
disbursing the Escrow Funds (as hereinafter defined) pursuant to the terms of this
Agreement.

NOW THEREFORE in consideration of the entering into of the Purchase Agreement, the
mutual covenants and agreements herein contained and other good and valuable consideration
(the receipt and sufficiency of which are hereby acknowledged), the parties agree as follows:
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Article 1 - Interpretation

1.1 Definitions. For the purposes of this Agreement, capitalized terms used in this Agreement
and not otherwise defined have the meanings specified in the Purchase Agreement, and
the following words and phrases shall have the following respective meanings:

(a) “Business Day” means any day of the year, other than a Saturday, Sunday or any
day on which banks are required or authorized to close in [City of Corporation's
Main Office (ie. Los Angeles)], [State of Corporation's Main Office (ie.
California)];

(b) “Term” has the meaning given to it in section 4.1.

Article 2 - Receipt of Escrow Funds

2.1 Delivery of Escrow Funds. The Escrow Agent acknowledges receipt from the Buyer of a
certified cheque payable to it or a wire transfer in the sum of (US) $[Amount to be held in
Escrow (ie. $500,000)] (the “Escrow Funds”) which amount, together with all interest
earned thereon, shall be held and dealt with by the Escrow Agent in accordance with the
terms of this Agreement.

2.2 Investment of Escrow Funds. Until such time as the Escrow Funds are distributed by
the Escrow Agent as provided herein, the Escrow Agent shall invest the Escrow Funds in
an interest bearing account (or other interest bearing instruments or deposits) of a
federally-insured state or national bank selected in writing by the Seller, and in default of
such selection, the [Name of Default Bank]. The interest earned on the investment of the
Escrow Funds shall be held and reinvested from time to time in accordance with the
forgoing provisions, and a separate account shall be maintained by the Escrow Agent in
its books for the Escrow Funds.

2.3 Additional Instructions. The Seller and the Buyer shall, promptly upon request by the
Escrow Agent, execute such additional escrow instructions as may be reasonably required
by the Escrow Agent, including the Escrow Agent’s standard printed conditions and
stipulations with respect to escrows concerning the disbursement of funds; provided,
however, that if there is any conflict between the provisions of this Agreement and the
provisions of any such additional instructions, the provisions of this Agreement shall
control and prevail.

Article 3 - Disbursement of Escrow Funds

3.1 Disbursement to Buyer at the Direction of Seller. Upon receipt of a written irrevocable
direction in the form of Schedule “A” hereto (a “Seller’s Direction”), signed by the
Seller, the Escrow Agent shall, within five (5) Business Days after receipt of the Seller’s
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Direction, deliver to the Buyer the amount from the Escrow Funds specifically referred to
in the Seller’s Direction.

3.2 Disbursement at Joint Direction of Seller and Buyer. Upon receipt of a written
irrevocable direction in the form of Schedule “B” hereto (a “Joint Direction”), signed by
all the Seller and the Buyer, the Escrow Agent shall, within five (5) Business Days after
receipt of the Joint Direction, deliver the amount from the Escrow Funds specifically
referred to in the Joint Direction as per the instructions on the Joint Direction.

3.3 Disbursement at Request of Buyer. Upon receipt of a written request in the form of
Schedule “C” hereto (an “Escrow Release Request”) at any time prior to the first (1st)
anniversary date of the date of this Agreement, signed by the Buyer, certifying that the
Buyer is making a claim for indemnification pursuant to the Purchase Agreement and
briefly describing the nature of the claim for indemnification, the Escrow Agent shall,
within five (5) Business Days after receipt of the Escrow Release Request, send by
certified mail to the Seller a photostatic copy of the Escrow Release Request. The Seller
shall have fifteen (15) days from the date on which Seller receive the Escrow Release
Request (the “Objection Period”) to notify the Escrow Agent of their objection (an
“Objection Notice”) to the release of the Escrow Funds referred to in the Escrow Release
Request to the Buyer and to request that the issue of Buyer’s entitlement to the said
Escrow Funds be submitted to arbitration in accordance with the following provisions:

(a) If Seller shall send an Objection Notice to the Escrow Agent during the Objection
Period, the matter shall be submitted to, and settled by arbitration under the
Commercial Rules of the American Arbitration Association. One arbitrator shall
be selected by mutual agreement of the parties. If the parties are unable to
mutually agree upon the sole arbitrator within fifteen (15) days after the end of the
Objection Period, then three (3) arbitrators shall be selected, and the Buyer and
Seller shall each select one arbitrator and the two chosen arbitrators shall select
the third arbitrator, or failing agreement on the selection of the third arbitrator, the
American Arbitration Association shall select the third arbitrator. Unless
otherwise agreed by the Buyer and the Seller, arbitration will take place in [City
of Corporation's Main Office (ie. Los Angeles)], [State of Corporation's Main
Office (ie. California)], U.S.A. Any court having jurisdiction over the matter may
enter judgment on the award of the arbitrator(s). Service of a petition to confirm
the arbitration award may be made by First Class mail or by commercial express
mail, to the attorney for the party or, if unrepresented, to the party at the last
known business address. The decision of the arbitrator(s) shall be binding and
conclusive on all parties involved, and judgment upon their decision may be
entered in a court of competent jurisdiction. All costs of the arbitration incurred
by the Escrow Agent, including reasonable attorney's fees and costs, shall be paid
as directed by the arbitrator(s), provided however that if the arbitration is settled
prior to a decision by the arbitrators, the Seller and the Buyer shall each pay 50%
of all such costs.
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(b) The Seller may, at any time prior to the commencement of arbitration
proceedings, notify the Escrow Agent that the Seller has withdrawn the Objection
Notice. Upon receipt of any such notice from the Seller, the Escrow Agent shall
reasonably promptly deliver the Escrow Funds referred to in the Escrow Release
Request to the Buyer in accordance with the instructions specified in the Escrow
Release Request.

If, at the end of the Objection Period, the Escrow Agent has not received
an Objection Notice from Seller, then the Escrow Agent shall reasonably
promptly deliver the Escrow Funds to the Buyer in accordance with the
instructions specified in the Escrow Release Request.

3.4 Disbursement following First Anniversary Date. If, on the first (1st) anniversary date of
the date of this Agreement, the Escrow Funds (inclusive of interest thereon) have not
been fully disbursed by the Escrow Agent, then the Escrow Agent shall, following
settlement of any outstanding Escrow Release Request in accordance with the procedures
outlined in section 3.3, and after payment of any amount from the Escrow Funds which is
required to satisfy any Escrow Release Request in accordance with the procedures
outlined in section 3.3, remit the balance of the Escrow Funds (inclusive of interest
thereon), if any, to the Seller.

3.5 Reporting. The Escrow Agent shall, from time to time, at the request of the Seller or the
Buyer, advise the requesting party as to the balance of the Escrow Funds then being held
by the Escrow Agent (inclusive of interest). Upon the close of escrow, the Escrow Agent
shall prepare an accounting or settlement setting forth, among other things, the
disbursement of the Escrow Funds and interest thereon and the payment of the Escrow
Agent’s fees and costs.

3.6 No Limitation on Liability. Nothing in this Agreement will be construed as limiting the
liability of the Seller under the Purchase Agreement to the amount of the Escrow Funds,
nor will that amount be considered as liquidated damages for any breach by the Seller
under the Purchase Agreement.

Article 4 - Term

4.1 Term of Agreement. This Agreement shall commence on the date first above written and
shall continue thereafter until all Escrow Funds have been disbursed by the Escrow Agent
in accordance with the terms and conditions hereof (the “Term”).

Article 5 - Escrow Agent

5.1 Duties and Responsibilities. The Escrow Agent shall have no duties or responsibilities
other than those expressly set forth in this Agreement, and no implied duties or
obligations shall be read into this Agreement against the Escrow Agent. The Escrow
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Agent shall have no duty to enforce any obligation of any person, other than as provided
herein.

5.2 No Liability. The Escrow Agent shall not be liable for any action taken or omitted by it,
or any action suffered by it to be taken or omitted, in good faith, and in the exercise of its
own best judgment, and shall not be held liable for any error in judgment made in good
faith, unless it shall be proved that the Escrow Agent was negligent in ascertaining the
pertinent facts or acted intentionally in bad faith.

5.3 Reliance. The Escrow Agent may rely, and shall be protected in acting, upon any
judgment, order, notice, demand, direction, certificate, or other instrument, paper or
document which may be submitted to it in connection with its duties hereunder and which
is believed by the Escrow Agent to be genuine and signed or presented by the proper
person(s), and may accept the same as sufficient evidence of the facts stated therein. The
Escrow Agent shall in no way be bound to call for further evidence (whether as to due
execution, validity or effectiveness, or the jurisdiction of any court, or as to the truth of
any fact), and shall not be responsible for any loss that may be occasioned by its failing to
do so.

5.4 Compliance with Judgments and Orders. In the event that the Escrow Agent shall
become involved in any arbitration or litigation relating to the Escrowed Funds, the
Escrow Agent is authorized to comply with any decision reached through such arbitration
or litigation.

5.5 Non-Action. If the Escrow Agent shall be uncertain as to its duties or rights hereunder or
shall receive instructions, claims or demands from any party hereto or from a third person
with respect to any matter arising pursuant to this Agreement which, in its opinion, are in
conflict with any provision of this Agreement, it shall be entitled to refrain from taking
any action authorized and directed hereunder until it shall be authorized or directed
otherwise in writing by both the Seller and the Buyer, or by an order of a court of
competent jurisdiction from which no further appeal may be taken.

5.6 Escrow Agent's Fees, Costs and Expenses. The Seller and the Buyer hereby irrevocably
authorize and direct the Escrow Agent to withhold and pay to itself, from the Escrow
Funds, the Escrow Agent’s reasonable fees, expenses and disbursements incurred by it in
connection with the performance of its obligations hereunder, prior to any disbursement
made under this Agreement.

5.7 Indemnification. The Seller and the Buyer will jointly and severally keep the Escrow
Agent indemnified at all times against all actions, proceedings, losses, liabilities, costs,
claims and demands incurred or sustained by the Escrow Agent in respect of any matter
or thing done by it under, pursuant to or in connection with this Agreement, or otherwise
arising in connection with its office as Escrow Agent hereunder, except in so far as the
same arose through the negligence or wilful misconduct on the part of the Escrow Agent
or otherwise arose from any breach by it of its obligations under this Agreement. Without
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limiting the generality of the foregoing, the Seller and the Buyer will indemnify the
Escrow Agent against all legal or other fees arising out of or in connection with its
entering into this Agreement and carrying out its duties hereunder, including without
limitation the costs and expenses of defending itself against any claim of liability or any
action for interpleader. This indemnity shall survive the termination or discharge of this
Agreement or resignation of the Escrow Agent.

5.8 Resignation, Removal. The Escrow Agent may resign its trust and be discharged from
all further duties and liabilities hereunder after giving sixty (60) days' written notice to
the Seller and the Buyer or such shorter notice as the Seller and the Buyer may accept as
sufficient, and may be removed from its office as such Escrow Agent by the Seller and
the Buyer jointly at any time by written notice given to the Escrow Agent.

5.9 Appointment of Successor Escrow Agent. In the event of the resignation of the Escrow
Agent or its removal from office, the Seller and the Buyer shall jointly and in good faith
appoint a successor, which shall be another escrow company having an office in the City
of [City of Corporation's Main Office (ie. Los Angeles)], [State of Corporation's Main
Office (ie. California)].

5.10 Further Assurances. The Escrow Agent which resigns or is removed shall execute such
further assurances or documents as, in the opinion of the Seller and the Buyer, may be
necessary or desirable to vest in the new Escrow Agent the same powers, rights, duties
and responsibilities as if the new Escrow Agent had been originally named as Escrow
Agent.

Article 6 - General

6.1 Notices. Any notice, direction or other communication to be given under this Agreement
shall be in writing and given by delivering it or sending it by facsimile or other similar
form of recorded communication addressed:

to the Buyer at: [Address of Buyer]

to the Seller at: [Address of Seller]

to the Escrow Agent at: [Address of Escrow Agent]

Any such communication shall be deemed to have been validly and effectively given (i)
if personally delivered, on the date of such delivery, if such date is a Business Day and
such delivery was made prior to 4:00 p.m. ([City of Corporation's Main Office (ie. Los
Angeles)] time), otherwise on the next Business Day, and (ii) if transmitted by facsimile
or similar means of recorded communication, on the Business Day following the date of
transmission (provided that any communication sent by facsimile is followed up with a
copy sent by registered mail with acknowledgement of receipt no later than the fifth (5th)
day thereafter). Any party may change its address for service from time to time by notice
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given in accordance with the foregoing, and any subsequent notice shall be sent to such
party at its changed address.

6.2 Entire Agreement. This Agreement, together with the Purchase Agreement, set forth the
entire agreement among the parties hereto with respect to the matters contained herein. In
the event of any conflict, the provisions of this Agreement shall prevail.

6.3 Enurement and Assignment. This Agreement shall enure to the benefit of and be
binding upon the parties hereto and their respective heirs, executors, administrators,
successors and assigns, provided that neither of the Seller and the Buyer may assign its
rights under this Agreement without the prior written consent of the other parties. Subject
to the foregoing, this Agreement shall inure to the benefit of and be binding upon the
Parties and their respective successors and permitted assigns.

6.4 Severability. If any provision of this Agreement is deemed by any court of competent
jurisdiction to be invalid or void, the remaining provisions shall remain in full force and
effect.

6.5 Waiver. No failure or delay of the Escrow Agent in exercising any right, power or
remedy may be, or may be deemed to be, a waiver thereof; nor may any single or partial
exercise of any right, power or remedy preclude any other or further exercise of any right,
power or remedy.

6.6 Further Assurance. Each of the parties shall, at the request of the other party, deliver to
the requesting party all further documents or other assurances as may reasonably be
necessary or desirable to give effect to this Agreement.

6.7 Time. Time shall be of the essence in respect of this Agreement.

6.8 Governing Law. This Agreement shall be governed by and interpreted and enforced in
accordance with the laws of the State of [State of Corporation's Main Office (ie.
California)], without regard to its conflict of law provisions. All of the Parties to this
Agreement hereby irrevocably attorn to the jurisdiction of the courts of [State of
Corporation's Main Office (ie. California)].

6.9 Attorneys’ Fees. In the event of any dispute, arbitration or litigation related to this
Agreement, or any of the matters contained herein, the prevailing party in any such
dispute, arbitration or litigation shall be entitled to recover from the other party its
attorneys’ fees and costs incurred.
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6.10 Counterparts. This Agreement may be executed in several counterparts, each of which
so executed shall be deemed an original, and all of which shall constitute one and the
same instrument.

IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the date first
above written.

Witness [NAME OF SELLER]

Witness [NAME OF BUYER]

Witness [NAME OF ESCROW AGENT]

 Schedule “A”
Form of Seller’s Direction

Direction

TO: [Name of Escrow Agent]

Reference is made to the Escrow Agreement among [Name of Seller], [Name of Purchaser] and
[Name of Escrow Agent] dated as of [Date of Escrow Agreement] (the “Escrow Agreement”).
All capitalized words and phrases used herein shall have the same meaning as in the Escrow
Agreement unless the context otherwise requires.

In accordance with the terms of the Escrow Agreement, you are hereby irrevocably authorized
and directed to pay to [Name of Purchaser] the sum of $_____________ from the Escrow Funds.

Let this be your good and sufficient authority for so doing.

This Direction is made in accordance with section 3.1 of the Escrow Agreement.

Dated:

Witness [NAME OF SELLER]

 Schedule “B”
Form of Joint Direction

Direction

TO: [Name of Escrow Agent]

Reference is made to the Escrow Agreement among [Name of Seller], [Name of Purchaser] and
[Name of Escrow Agent] dated as of [Date of Escrow Agreement] (the “Escrow Agreement”).
All capitalized words and phrases used herein shall have the same meaning as in the Escrow
Agreement unless the context otherwise requires.

In accordance with the terms of the Escrow Agreement, you are hereby irrevocably authorized
and directed to pay to [Name of Recipient of Escrow Funds] the sum of $______________ from
the Escrow Funds.

Let this be your good and sufficient authority for so doing.

This Direction is made in accordance with section 3.2 of the Escrow Agreement.

Dated:

Witness [NAME OF SELLER]

Witness [NAME OF BUYER]

 Schedule “C”
Form of Escrow Release Request

Escrow Release Request

TO: [Name of Escrow Agent]

Reference is made to the Escrow Agreement among [Name of Seller], [Name of Purchaser] and
[Name of Escrow Agent] dated as of [Date of Escrow Agreement] (the “Escrow Agreement”).
All capitalized words and phrases used herein shall have the same meaning as in the Escrow
Agreement unless the context otherwise requires.

In accordance with the terms of the Escrow Agreement, you are hereby irrevocably authorized
and directed to pay to [Name of Purchaser] the sum of $________________ from the Escrow
Funds.

Let this be your good and sufficient authority for so doing.

This Direction is made in accordance with section 3.3 of the Escrow Agreement. The
undersigned hereby certifies that this Escrow Release Request relates specifically to a claim for
indemnification made by the Buyer pursuant to the terms and conditions of the Purchase
Agreement the brief particulars of which are set out below:

[Set out brief particulars of Indemnification Claim. If space is insufficient, attache a schedule]

Dated:

Witness [NAME OF BUYER]