ESCROW AGREEMENT
THIS
ESCROW AGREEMENT (this “Agreement”)
is
made as of March 26, 2007, by and among Med-Tech Solutions, Inc., a Nevada
corporation (the “Company”),
the
purchasers signatories hereto (each a “Purchaser”
and
together the “Purchasers”),
and
Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP, with an address at 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the “Escrow
Agent”).
Capitalized
terms used but not defined herein shall have the meanings set forth in the
Subscription Agreement and the Confidential Private Placement Memorandum
referred to in the first recital.
W
I T N E
S S E T H:
WHEREAS,
the Purchasers will be purchasing from the Company in a private placement
transaction, severally and not jointly with the other Purchasers, in the
aggregate, up to $2,300,000.00 of Shares of Common Stock of the Company on
the
Closing Date as set forth in the Subscription Agreement (the “Subscription
Agreement”)
dated
the date hereof between the Purchasers and the Company and the Confidential
Private Placement Memorandum dated February 16, 2007, which securities will
be
issued under the terms contained herein and in the Subscription Agreement;
and
WHEREAS,
the Offering is being made to “accredited investors”, as defined in Regulation D
under the Securities Act of 1933, as amended (the “1933 Act”), in accordance
with Regulation S of the 1933 Act on a “best efforts”, no minimum, $2,300,000
maximum offering basis;
WHEREAS,
the minimum subscription amount that will be accepted from any investor is
$25,000;
WHEREAS,
the closing of the Offering is conditioned on the receipt of acceptable
subscriptions for the Shares (the requirement for the receipt of acceptable
subscription, together with certain other conditions to closing, are
collectively referred to as the “Closing Conditions”);
WHEREAS,
the Offering will commence on or about February 16, 2007 and will close only
after the satisfaction of all Closing Conditions, but must lose on or prior
to
April 30, 2007, which date may be extended for up to an additional 30 days
at
the sole discretion of the Company (the “Closing Date”);
WHEREAS,
the Company and the Purchasers have requested that the Escrow Agent hold the
Subscription Amounts in escrow upon the terms set forth herein;
NOW,
THEREFORE, in consideration of the covenants and mutual promises contained
herein and other good and valuable consideration, the receipt and legal
sufficiency of which are hereby acknowledged and intending to be legally bound
hereby, the parties agree as follows:
ARTICLE
1
TERMS
OF
THE ESCROW
1.1. The
parties hereby agree to establish an escrow account with the Escrow Agent
whereby the Escrow Agent shall hold the funds for the purchase of up to
$2,300,000.00 in the aggregate, of Shares as contemplated by the Subscription
Agreement.
1.2. Upon
the
Escrow Agent’s receipt of the aggregate Subscription Amounts for the Closing
into its master escrow account, together with executed counterparts of this
Agreement, the Subscription Agreement and the completed Confidential Prospective
Purchaser Questionnaire, it shall within one business day telephonically advise
the Company, or the Company’s designated attorney or agent and counsel of the
Purchasers, of the amount of funds it has received into its master escrow
account.
1.3. Wire
transfers to the Escrow Agent shall be made as follows:
BANK:
Citibank
New
York,
NY
A/C
of
Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP, XXXX
ABA:
ACCOUNT:
SWIFT
Code: XXXXXX00
REFERENCE:
“Med-Tech
Solutions, Inc. - [insert Purchaser’s name]”
Sichenzia
Xxxx Xxxxxxxx Xxxxxxx LLP Accounting Contact: Xxxx Xxxxx; telephone: (000)
000-0000; email: xxxxxx@xxxx.xxx.
1.4 The
Company, promptly following being advised by the Escrow Agent that the Escrow
Agent has received the Subscription Amounts for the Closing along with facsimile
copies of counterpart signature pages of the Subscription Agreement,
Confidential Prospective Purchaser Questionnaire and this Agreement from each
Purchaser, and 4Rivers’ executed counterpart of the Acquisition Agreement, shall
deliver to the Escrow Agent for the Closing the Shares to be issued to each
Purchaser at the Closing together with:
(a) the
Company’s executed counterpart of the Subscription Agreement;
(b) the
Company’s original executed counterpart of this Escrow Agreement;
(c) the
Company’s original executed counterpart of the Acquisition Agreement;
(d) the
deliverables as per the Subscription Agreement.
1.5 In
the
event that the foregoing items are not in the Escrow Agent’s possession within
five (5) Business Days of the Escrow Agent notifying the Company that the
Escrow
2
Agent
has
custody of the Subscription Amount for the Closing, then the Escrow Agent will
telephonically notify each Purchaser and each Purchaser shall at all times
thereafter until the Closing have the right to demand the return of their
portion of the Subscription Amount.
1.6 Once
the
Escrow Agent receives a Release Notice in the form attached hereto as
Exhibit
X
(the
“Release
Notice”)
executed by the Company and each Purchaser it shall wire 100% of the aggregate
Purchase Price amounts per the joint written instructions of the Company, net
of
$80,000 to cover legal and escrow agent fees to SRFF per the written
instructions of SRFF.
1.7
Wire
transfers to the Company shall be made pursuant to written instructions from
the
Company provided to the Escrow Agent on the Closing Date.
1.8 Upon
receipt by the Escrow Agent of the Release Notice from each of the Purchasers
and the Company, the Escrow Agent shall deliver the Subscription Agreement,
the
certificates evidencing the Shares,
the
Escrow Agreement, and the opinion of counsel to the appropriate parties.
1.9
In
the
event the Company reasonably determines it is necessary or appropriate to reject
the subscription of any Purchaser for whom the Escrow Agent has received
escrowed funds and Offering Documents, the Company shall deliver written notice
of such event to the Escrow Agent which notice shall include the reason for
such
rejection and the time, place and method of delivery for the return to such
Purchaser of the escrow funds and Offering Documents delivered by such
Subscriber. The Escrow Agent shall deliver such funds (without interest or
deduction) and documents pursuant to such written notice.
1.10 In
the
event the Closing Conditions, as set forth in the Memorandum and the
Subscription Agreement, are not satisfied during the Offering Period (subject
to
applicable extensions), the Company shall deliver written notice executed by
its
duly authorized executive officer indicating that this Offering has been
terminated and designating a termination date, and the Escrow Agent shall return
to each Purchaser, all funds received from such Purchaser, pursuant to this
Offering (without interest or deduction) and all documents delivered by such
Subscriber to the Escrow Agent.
ARTICLE
II
MISCELLANEOUS
2.1 No
waiver
or any breach of any covenant or provision herein contained shall be deemed a
waiver of any preceding or succeeding breach thereof, or of any other covenant
or provision herein contained. No extension of time for performance of any
obligation or act shall be deemed an extension of the time for performance
of
any other obligation or act.
2.2
All
notices or other communications required or permitted hereunder shall be in
writing, and shall be sent as set forth in the Subscription
Agreement.
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2.3
This
Escrow Agreement shall be binding upon and shall inure to the benefit of the
permitted successors and permitted assigns of the parties hereto.
2.4
This
Escrow Agreement is the final expression of, and contains the entire agreement
between, the parties with respect to the subject matter hereof and supersedes
all prior understandings with respect thereto. This Escrow Agreement may not
be
modified, changed, supplemented or terminated, nor may any obligations hereunder
be waived, except by written instrument signed by the parties to be charged
or
by its agent duly authorized in writing or as otherwise expressly permitted
herein.
2.5
Whenever
required by the context of this Escrow Agreement, the singular shall include
the
plural and masculine shall include the feminine. This Escrow Agreement shall
not
be construed as if it had been prepared by one of the parties, but rather as
if
all parties had prepared the same. Unless otherwise indicated, all references
to
Articles are to this Escrow Agreement.
2.6
The
parties hereto expressly agree that this Escrow Agreement shall be governed
by,
interpreted under and construed and enforced in accordance with the laws of
the
State of New York. Any action to enforce, arising out of, or relating in any
way
to, any provisions of this Escrow Agreement shall only be brought in a state
or
Federal court sitting in New York City.
2.7
The
Escrow Agent’s duties hereunder may be altered, amended, modified or revoked
only by a writing signed by the Company, each Purchaser and the Escrow
Agent.
2.8
The
Escrow Agent shall be obligated only for the performance of such duties as
are
specifically set forth herein and may rely and shall be protected in relying
or
refraining from acting on any instrument reasonably believed by the Escrow
Agent
to be genuine and to have been signed or presented by the proper party or
parties. The Escrow Agent shall not be personally liable for any act the Escrow
Agent may do or omit to do hereunder as the Escrow Agent while acting in good
faith and in the absence of gross negligence, fraud and willful misconduct,
and
any act done or omitted by the Escrow Agent pursuant to the advice of the Escrow
Agent’s attorneys-at-law shall be conclusive evidence of such good faith, in the
absence of gross negligence, fraud and willful misconduct.
2.9
The
Escrow Agent is hereby expressly authorized to disregard any and all warnings
given by any of the parties hereto or by any other person or corporation,
excepting only orders or process of courts of law and is hereby expressly
authorized to comply with and obey orders, judgments or decrees of any court.
In
case the Escrow Agent obeys or complies with any such order, judgment or decree,
the Escrow Agent shall not be liable to any of the parties hereto or to any
other person, firm or corporation by reason of such decree being subsequently
reversed, modified, annulled, set aside, vacated or found to have been entered
without jurisdiction.
2.10 The
Escrow Agent shall not be liable in any respect on account of the identity,
authorization or rights of the parties executing or delivering or purporting
to
execute or deliver the Subscription Agreement or any documents or papers
deposited or called for thereunder in the absence of gross negligence, fraud
and
willful misconduct.
2.11 The
Escrow Agent shall be entitled to employ such legal counsel and other experts
as
the Escrow Agent may deem necessary properly to advise the Escrow Agent in
connection with the Escrow Agent’s duties hereunder, may rely upon the advice of
such counsel, and may pay such counsel reasonable compensation; provided that
the costs of such compensation shall be borne by the Escrow Agent.
4
2.12 The
Escrow Agent’s responsibilities as escrow agent hereunder shall terminate if the
Escrow Agent shall resign by giving written notice to the Company and the
Purchasers. In the event of any such resignation, the Purchasers and the Company
shall appoint a successor Escrow Agent and the Escrow Agent shall deliver to
such successor Escrow Agent any escrow funds and other documents held by the
Escrow Agent.
2.13 If
the
Escrow Agent reasonably requires other or further instruments in connection
with
this Escrow Agreement or obligations in respect hereto, the necessary parties
hereto shall join in furnishing such instruments.
2.14 It
is
understood and agreed that should any dispute arise with respect to the delivery
and/or ownership or right of possession of the documents or the escrow funds
held by the Escrow Agent hereunder, the Escrow Agent is authorized and directed
in the Escrow Agent’s sole discretion (1) to retain in the Escrow Agent’s
possession without liability to anyone all or any part of said documents or
the
escrow funds until such disputes shall have been settled either by mutual
written agreement of the parties concerned by a final order, decree or judgment
or a court of competent jurisdiction after the time for appeal has expired
and
no appeal has been perfected, but the Escrow Agent shall be under no duty
whatsoever to institute or defend any such proceedings or (2) to deliver the
escrow funds and any other property and documents held by the Escrow Agent
hereunder to a state or Federal court having competent subject matter
jurisdiction and located in the City of New York in accordance with the
applicable procedure therefore
2.15 The
Company and each Purchaser agree jointly and severally to indemnify and hold
harmless the Escrow Agent and its partners, employees, agents and
representatives from any and all claims, liabilities, costs or expenses in
any
way arising from or relating to the duties or performance of the Escrow Agent
hereunder or the transactions contemplated hereby or by the Subscription
Agreement other than any such claim, liability, cost or expense to the extent
the same shall have been determined by final, unappealable judgment of a court
of competent jurisdiction to have resulted from the gross negligence, fraud
or
willful misconduct of the Escrow Agent.
************************
IN
WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement as
of
date first written above.
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By:
/s/
Xxxx X. XxXxxxx
Name:
Xxxx X. XxXxxxx
Title:
Chief Executive Officer
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With
a copy to (which shall not constitute notice):
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ESCROW
AGENT:
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SICHENZIA
XXXX XXXXXXXX XXXXXXX LLP
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By:
/s/
Sichenzia
Xxxx Xxxxxxxx Xxxxxxx LLP
Name: Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP Title:
Managing Partner
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[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGES FOR PURCHASERS FOLLOW]
5
[SIGNATURE
PAGE OF PURCHASERS TO MDTU ESCROW]
Name
of
Purchaser: __________________________
Signature
of Authorized Signatory of Purchaser:
__________________________
Name
of
Authorized Signatory: _________________________
Title
of
Authorized Signatory: __________________________
[SIGNATURE
PAGE OF PURCHASERS FOLLOWS]
6
Exhibit
X
to
Escrow
Agreement
RELEASE
NOTICE
The
UNDERSIGNED, pursuant to the Escrow Agreement, dated as of March 26, 2007,
among
Med-Tech Solutions, Inc., the Purchasers signatories thereto and Sichenzia
Xxxx
Xxxxxxxx Xxxxxxx LLP, as Escrow Agent (the “Escrow
Agreement”;
capitalized terms used herein and not defined shall have the meaning ascribed
to
such terms in the Escrow Agreement), hereby notify the Escrow Agent that each
of
the conditions precedent to the purchase and sale of the Securities set forth
in
the Subscription Agreement (the “Subscription Agreement”) have been satisfied.
The Company and the undersigned Purchaser hereby confirm that all of their
respective representations and warranties contained in the Subscription
Agreement remain true and correct and authorize the release by the Escrow Agent
of the funds and documents to be released at the Closing as described in the
Escrow Agreement. This Release Notice shall not be effective until executed
by
the Company and the Purchaser.
This
Release Notice may be signed in one or more counterparts, each of which shall
be
deemed an original.
IN
WITNESS WHEREOF, the undersigned have caused this Release Notice to be duly
executed and delivered as of this 26th
day of
March 2007.
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By:
/s/
Xxxx X. XxXxxxx
Name:
Xxxx X. XxXxxxx
Title:
Chief Executive Officer
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[SIGNATURE
PAGE OF PURCHASERS FOLLOWS]
7
[SIGNATURE
PAGE OF PURCHASERS TO MDTU RELEASE]
Name
of
Purchaser: __________________________
Signature
of Authorized Signatory of Purchaser:
__________________________
Name
of
Authorized Signatory: _________________________
Title
of
Authorized Signatory: __________________________
[SIGNATURE
PAGE OF PURCHASERS FOLLOWS]
