ESCROW AGREEMENT
THIS
ESCROW AGREEMENT (this “Agreement”)
is
made as of June 26, 2007, by and among TechnoConcepts Inc., a Colorado
corporation (the “Company”),
Vision Opportunity Master Fund, Ltd. (“Vision”)
and
Dynamic
Decisions Growth Premium (collectively with Vision, the “Purchasers”),
and
Xxxxxx Xxxxx 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 Purchase Agreement (as defined below).
W
I T N E S S E T H:
WHEREAS,
the Purchasers will be purchasing from the Company secured promissory notes
(the
“Notes”)
pursuant to a Note and Warrant Purchase Agreement dated as of the date hereof
by
and among the Company and the Purchasers (the “Purchase
Agreement”);
WHEREAS,
the Company and the Purchasers have requested that the Escrow Agent hold the
subscription amounts with respect to the purchase of the Notes in escrow until
the Escrow Agent has received all closing documents and deliveries required
under Article IV of the Purchase Agreement with respect to each Closing;
and
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
I
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 the
Notes as
contemplated by the Purchase Agreement.
1.2. Upon
the
Escrow Agent’s receipt of the aggregate subscription amounts into its master
escrow account, together with copies of counterpart signature pages of the
Transaction Documents from each Purchaser and the Company and all other closing
documents and deliveries required under Article IV of the Purchase Agreement,
it
shall advise the Company and the Purchasers, or their designated attorney or
agent, of the amount of funds it has received into its master escrow
account.
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1.3. Wire
transfers to the Escrow Agent shall be made as follows:
| Bank: | **** | ||
| ABA No.: | **** | ||
| Account Name: | **** | ||
| Account No.: | **** | ||
| Reference: | **** |
1.4. The
Company and Purchasers, promptly after being advised by the Escrow Agent that
it
has received the subscription amounts for the Closing, copies of counterpart
signature pages of the Transaction Documents from each Purchaser and the Company
and all other closing documents and deliveries required under Article IV of
the
Purchase Agreement, shall deliver to the Escrow Agent a Release Notice, in
the
form attached hereto as Exhibit
A
(the
“Release
Notice”).
1.5. Once
the
Escrow Agent receives the Release Notice executed by the Company and Purchasers,
the Escrow Agent shall wire the subscription proceeds per the written
instructions of the Company and Vision, net of fees, expenses and any other
disbursements as set forth in the Release Notice.
1.6. Wire
transfers to the Company shall be made pursuant to written instructions from
the
Company provided to the Escrow Agent.
1.7. Upon
the
written request from a Purchaser to the Escrow Agent, the Escrow Agent shall
promptly return the subscription proceeds to each Purchaser pursuant to written
wire instructions to be delivered by such Purchaser 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 Purchase Agreement.
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
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
both 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, without regard to conflicts of law principles that would
result in the application of the substantive laws of another jurisdiction.
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, Borough of Manhattan.
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 Purchase 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 therefor which
shall be paid by the Escrow Agreement unless otherwise provided for in Section
2.14. The
Escrow Agent has acted as legal counsel for one of the Purchasers and may
continue to act as legal counsel for such Purchaser from time to time,
notwithstanding its duties as the Escrow Agent hereunder. The Company and the
Purchasers consent to the Escrow Agent in such capacity as legal counsel for
one
of the Purchasers and waives any claim that such representation represents
a
conflict of interest on the part of the Escrow Agent. The Company and the
Purchasers understand that the Escrow Agent is relying explicitly on the
foregoing provision in entering into this Escrow Agreement.
3
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, Borough of Manhattan, in
accordance with the applicable procedure therefor.
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 Purchase 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.
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[SIGNATURE
PAGE TO ESCROW AGREEMENT]
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first written above.
|
TechnoConcepts
Inc.
|
|
| By: | |
|
Name:
|
|
|
Title:
|
|
|
ESCROW
AGENT:
|
|
|
Xxxxxx
Xxxxx Xxxxxxxx & Xxxxxxx LLP
|
|
|
By:
|
|
|
Name
|
|
|
Title:
|
[PURCHASERS’
SIGNATURE PAGE FOLLOWS]
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[PURCHASER’S
SIGNATURE PAGE TO ESCROW AGREEMENT]
Name
of
Investing Entity: __________________________
Signature
of Authorized Signatory of Investing Entity:
__________________________
Name
of
Authorized Signatory: _________________________
Title
of
Authorized Signatory: __________________________
Name
of
Investing Entity: __________________________
Signature
of Authorized Signatory of Investing Entity:
__________________________
Name
of
Authorized Signatory: _________________________
Title
of
Authorized Signatory: __________________________
6
Exhibit
A to
Escrow
Agreement
RELEASE
NOTICE
The
UNDERSIGNED, pursuant to the Escrow Agreement dated as of June 29, 2007 among
the Company, the Purchasers signatory thereto and Xxxxxx Xxxxx Xxxxxxxx &
Xxxxxxx LLP, as Escrow Agent (the “Escrow
Agreement”),
hereby notify the Escrow Agent that each of the conditions precedent to the
purchase and sale of the Notes have
been
satisfied or waived in accordance with Article IV of the Purchase Agreement.
The
Company hereby confirms that all of its respective representations and
warranties contained in the Purchase Agreement remain true and correct and
authorize the release by the Escrow Agent of the funds to be released as
described in the Escrow Agreement and as set forth below. This Release Notice
shall not be effective until executed by the Company and Vision.
Capitalized
terms used herein and not defined shall have the meaning ascribed to such terms
in the Escrow Agreement.
This
Release Notice may be signed in one or more counterparts, each of which shall
be
deemed an original.
Please
release the $2,000,000.00 that has been deposited in the escrow account pursuant
to the Escrow Agreement according to the following instructions:
****
7
IN
WITNESS WHEREOF, the undersigned have caused this Release Notice to be duly
executed and delivered as of the day first written above.
|
TechnoConcepts
Inc.
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
Vision
Opportunity Master Fund, Ltd.
|
|
| By: | |
|
Name:
|
|
|
Title:
|
|
|
Dynamic
Decisions Growth Premium
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
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