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ROLLOVER AGREEMENT



This Rollover Agreement (the Agreement) is effective [DATE],


BETWEEN:  [FIRST PARTY NAME] (the "Vendor"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at:

      [YOUR COMPLETE ADDRESS]


AND:  [SECOND PARTY NAME] (the "Purchaser"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at:

      [COMPLETE ADDRESS]


WHEREAS the Vendor represents that there are [SPECIFY] common shares issued and outstanding in the capital stock of [COMPANY NAME] (the Corporation), a corporation incorporated under the [YOUR COUNTRY LAW] of [NUMBER], and that the Vendor is the owner of [NUMBER] Class A shares (the Shares);

[A.  To be used where value has not been determined as of date of sale]

WHEREAS [NUMBER], chartered accountants, have undertaken to determine the fair market value of the Shares and to provide a written evaluation report within a reasonable delay (the Valuation Report);

OR

[B.  To be used where a valuation report has been obtained]

WHEREAS [NUMBER], chartered accountants, by letter dated [DATE], a copy of which is attached hereto, have determined that the fair market value of the Shares is [AMOUNT] or [AMOUNT] per share;

OR

[C.  To be used where parties have determined FMV]

WHEREAS the parties hereto have determined that the fair market value of the Shares is [AMOUNT] or [AMOUNT] per share;

WHEREAS the Shares have an aggregate stated capital of [NUMBER];

WHEREAS the Purchaser desires to purchase and the Vendor desires to sell the Shares;

NOW THEREFORE, IT IS AGREED AS FOLLOWS:


SHARES SOLD AND PURCHASE PRICE

Subject to the terms and conditions set forth in this Agreement, the Vendor hereby sells the Shares to the Purchaser, hereto present and accepting, and delivers to the Purchaser certificates representing the Shares duly endorsed to the Purchaser for transfer.

[A.  To be used where value has not been determined as of date of sale]

The aggregate purchase price for the Shares is the amount determined in the Valuation Report to be the fair market value of the Shares (the Purchase Price) payable as set forth at Article [NUMBER] hereof.

OR

[B.  To be used where a valuation report has been obtained]

The aggregate purchase price for the Shares is [AMOUNT] (the Purchase Price), which, based on the aforementioned evaluation, the parties consider to be the fair market value of the Shares, payable as set forth at Article [NUMBER] hereof.

OR

[C.  To be used where parties have determined FMV]

The aggregate purchase price for the Shares is [AMOUNT] (the Purchase Price), which the parties consider to be the fair market value of the Shares, payable as set forth as Article [NUMBER] hereof.

The Purchase Price for the Shares may be adjusted as provided in Article [NUMBER] hereof.


PAYMENT OF THE PURCHASE PRICE

The Vendor acknowledges that he has received certificates representing [NUMBER] common shares (the Common Shares) of the Purchaser in full payment of the Purchase Price. The parties hereto determine that the Common Shares have a fair market value of and are, in all circumstances of the transaction, the fair equivalent of a consideration payable in cash equal to the fair market value of the Shares.


VENDORS REPRESENTATIONS AND WARRANTIES

The Vendor represents and warrants to the Purchaser that:

the Corporation is incorporated under the [YOUR COUNTRY LAW] of [NUMBER] and is duly organized and validly existing thereunder;

the Shares are owned by the Vendor by good and marketable title;

the Shares have been duly issued and are outstanding as fully paid and non-assessable shares;

the Vendor is a resident of [COUNTRY] for the purposes of the Income Tax Act ([COUNTRY]) (the Federal Act) and the Taxation Act ([STATE/PROVINCE]) (the [STATE/PROVINCE] Act);

the sale and delivery of the Shares as provided for in this Agreement shall not conflict with or result in or cause the occurrence of an event or condition which, immediately or after notice or lapse of time or both, constitutes a breach of or default under the Corporations articles or by-laws or under any agreement, instrument, order, judgment or decree to which the Vendor or the Corporation is subject; and

this Agreement constitutes a valid and binding obligation of the Vendor enforceable against the Vendor in accordance with its terms, provided that enforcement may be limited by bankruptcy, insolvency, liquidation, reorganization, reconstruction and other similar [YOUR COUNTRY LAW] generally affecting enforceability of creditors rights.


PURCHASERS REPRESENTATIONS AND WARRANTIES

The Purchaser represents and warrants to the Vendor that:

the Purchaser is a corporation incorporated under the laws of [SPECIFY] and is duly organized and validly existing thereunder;

all necessary corporate action and proceedings have been taken to permit the execution of this Agreement. No approval or consent of any public or private authority is required to enter into this Agreement or to consummate the transaction provided for herein;

the aforementioned actions do not conflict with or result in or cause the occurrence so an event or condition which, immediately or after notice or lapse of time or both constitutes a breach of or default under the articles or by-laws of the Purchaser or under any agreement, instrument, order, judgment or decree to which the Purchaser is subject;

the Common Shares have been validly allotted and issued and are registered in the name of the Vendor;

the Purchaser is a taxable [COUNTRY] corporation within the meaning of the Federal Act and the [STATE/PROVINCE] Act; and

this Agreement constitutes a valid and binding obligation of the Purchaser enforceable against it in accordance with its terms, provided that enforcement may be limited by bankruptcy, insolvency, liquidation, reorganization, reconstruction and other similar [YOUR COUNTRY LAW] generally affecting enforceability of creditors rights.


STATED CAPITAL ACCOUNT AND CONTRIBUTED SURPLUS ACCOUNT

[A. Paragraphs 5.1 and 5.2 to be used where the Vendor is an individual.]

The Vendor and the Purchaser agree that the Purchaser shall, in accordance with [Subsection 26(1.2) of the [COUNTRY] Business Corporations [ACT/LAW/RULE], add [AMOUNT] to its stated capital account in respect of the Common Shares, being an amount equal to the greater of (i) the paid-up capital of the Shares for the purposes of the Federal Act and the [STATE/PROVINCE] Act, immediately before the purchase and sale of the Shares pursuant to this Agreement; and (ii) the adjusted cost base to the Vendor of the Shares for the purposes of [SPECIFY] of the Federal Act (or, where such amount is less, the adjusted cost base of the Shares as determined under the equivalent provisions of the [STATE/PROVINCE] Act) immediately before the purchase and sale of the Shares pursuant to this Agreement. The difference, if any, between the Purchase Price and the amount added to the stated capital account in respect of the Common Shares shall be added to the contributed surplus account of the Purchaser in respect of the Common Shares.

In the event that the greater of the amounts referred to in subparagraph 5.1(i) and (ii) hereof is determined by final determination of the [COMPANY NAME] or the [COMPANY NAME] for the Province of [STATE/PROVINCE] (hereinafter collectively referred to as the Minister) or otherwise to be other than the amount added to the stated capital account in respect of the Common Shares as aforesaid, then the Purchaser shall forthwith take all action as may be necessary or advisable to adjust such stated capital account nunc pro tunc to reflect any such determination and the contributed surplus account shall, ipso facto, be deemed to be amended accordingly.

[B. Paragraphs 5.1 and 5.2 to be used in other cases a) where the vendor is a corporation that does not deal at arms length with Purchaser, b) where Vendor is an individual who does not deal at arms length with Purchaser and Purchaser owns (after transfer) less than [PERCENTAGE %] of the Shares of the Corporation, c) where Vendor (individual or corporation) deals at arms length with the Purchaser and Purchaser owns (before or after transfer) more than [PERCENTAGE %] of the Shares of the Corporation]

The Vendor and the Purchaser agree that the Purchaser shall, in accordance with [Subsection [SPECIFY] of the [COUNTRY] Business Corporations Act OR Section [SPECIFY] of the [STATE/PROVINCE] Companies Act], add [AMOUNT] to its stated capital account in respect of the Common Shares, being an amount equal to the cost to the Purchaser of the Shares for the purposes of the Federal Act (or, where such amount is less, an amount equal to the cost to the Purchaser of the Shares for purposes of the [STATE/PROVINCE] Act). The difference, if any, between the Purchase Price and the amount added to the stated capital account in respect of the Common Shares shall be added to the contributed surplus account of the Purchaser in respect of the Common Shares.

In the event that the amount referred to in paragraph 5.1 hereof is determined by final determination of the [COMPANY NAME] or the [COMPANY NAME] for the Province of [STATE/PROVINCE] (hereinafter collectively referred to as the Minister) or otherwise to be other than the amount added to the stated capital account in respect of the Common Shares as aforesaid, then the Purchaser shall forthwith take all action as may be necessary or advisable to adjust such stated capital account nunc pro tunc to reflect any such determination and the contributed surplus account shall, ipso facto, be deemed to be amended accordingly.

The parties hereto confirm that it is their intention that the Purchase Price shall represent the fair market value of the Shares. The parties hereto agree that in the event the Minister shall assert, directly or indirectly, assess or reassess either or both of the parties hereto or otherwise make a final determination (collectively referred to herein as the Final Determination) on the basis that the fair market value (the Ministerial Fair Market Value) of the Shares as of their date of disposition is greater or less than the Purchase Price, the Purchase Price shall be adjusted by an amount equal to the difference between the Purchase Price and the Ministerial Fair Market Value (the Price Difference) and an amount equal to the Price Difference shall be added or subtracted, as the case may be, to or from the Purchase Price and the contributed surplus account maintained in respect of the Common Shares of the Purchaser shall ipso facto be deemed to be amended accordingly.

In the event that the Vendor and the Purchaser do not agree with the Ministerial Fair Market Value, the Purchase Price shall be adjusted to equal the determined by final adjustment of a competent court (the Judicial Fair Market Value) and the provisions of paragraph 5.3 apply mutatis mutandis to such adjustment.


ELECTIONS

After the Closing Date (as hereinafter defined), the Vendor and the Purchaser shall, within the prescribed time periods, execute and deliver elections in the forms prescribed by the [YOUR COUNTRY] Federal Act and the [STATE/PROVINCE] Act and prepared and filed by [NUMBER], [accountants of the Vendor OR auditors of the Corporation] to have the provisions of Section [SPECIFY] of the [YOUR COUNTRY] Federal Act and any other relevant provisions thereof and the provisions of Section [SPECIFY] of the [STATE/PROVINCE] Act and any other relevant provisions thereof apply to the sale and transfer of the Shares to the Purchaser and for the purposes of such elections the parties shall elect [the Vendors Cost Amount of the Shares for tax purposes, as defined in Subsection [SPECIFY] of the [YOUR COUNTRY] Federal Act and Section [SPECIFY] of the [STATE/PROVINCE] Act] OR [[AMOUNT]] as the Vendors proceeds of disposition and the Purchasers cost of acquisition of the Shares. [In the event that the Vendors Cost Amount of the Shares is determined by the [COMPANY NAME] or the [COMPANY NAME] for the Province of [STATE/PROVINCE] to be greater or less than the amount elected by the parties hereto, amended elections will be filed by the parties so as to reflect the Vendors Cost Amount of the Shares as determined by the [COMPANY NAME] or the [COMPANY NAME] for the Province of [STATE/PROVINCE].


MISCELLANEOUS

This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective heirs, legatees, executors, legal representatives, successors and assigns.

This Agreement contains the entire agreement between the parties with respect to the transactions contemplate herein and supersedes all prior negotiations, agreements and understandings, if any.

The representations and warranties set forth in Articles [NUMBER] and [NUMBER] hereof shall survive the purchase and sale of the Shares hereunder.

Each of the parties hereto covenants and agrees that it will from time to time hereafter execute and deliver such additional documents and instruments and do such acts and things as may be reasonably necessary fully and effectually to sell, assign and transfer the Shares to the Purchaser pursuant to this Agreement and to otherwise carry out the intent and purpose of this Agreement.

This Agreement shall be governed by and construed in accordance with the [YOUR COUNTRY LAW] of the Province of [STATE/PROVINCE] and the applicable [YOUR COUNTRY LAW] of [COUNTRY]. The courts of [STATE/PROVINCE] shall have non-exclusive jurisdiction with respect to any matter arising hereunder or related hereto.

All notices, requests, demands and other communications in connection herewith shall be in writing with specific reference to this Agreement and shall be deemed to have been duly delivered when

Personally delivered to a responsible officer of such party; or

Except during a period of strike, lockout or other postal disruption, sent by registered mail, postage prepaid; or

sent by telex, telegraph, telecopier or other form of recorded communication, charges prepaid, confirmed by prepaid registered mail; as follows:

if to the Vendor:

If the Purchaser:

or such other address as either party may from time to time specify by notice to be given to the other party for such purpose in writing at least [NUMBER] days in advance.


The effective date and closing date for the sale of the Shares herein provided for shall be at [HOUR]. on the [DATE] (the Closing Date).


IN WITNESS WHEREOF, each party to this agreement has caused it to be executed at [PLACE OF EXECUTION] on the date indicated above.


VENDOR             PURCHASER


                          
Authorized Signature          Authorized Signature


                          
Print Name and Title          Print Name and Title

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