ESCROW AGREEMENT
THIS
ESCROW AGREEMENT (this “Agreement”)
is
made as of August 23, 2006, by and among Xxxxxx Partners LP, a Delaware limited
liability company (the “Purchaser”),
Science Dynamics Corporation, a Delaware corporation (the “Company”),
and
Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP, with an address at 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the “Escrow
Agent”).
WITNESSETH:
WHEREAS,
Purchaser proposes to purchase shares of its series A preferred stock and common
stock purchase warrants (the “Securities”) pursuant to a proposed securities
purchase agreement (the “Agreement”)
between the Purchaser and the Company; and
WHEREAS,
the Company and the Purchaser have requested that the Escrow Agent hold the
purchase price of the Securities 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
Purchaser intends to purchase the Securities for a purchase price of $4,500,000.
Payment shall be made to the Escrow Agent by wire
transfers to the Escrow Agent shall be made as follows:
HSBC
Bank
USA
000
Xxxxx
Xxxxxx
Xxx
Xxxx,
XX 00000
A/C
of
Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP, XXXX
A/C#
629034125
ABA#
000000000
Remark:
XXXXXX
—
SIDY
1.2. The
Escrow Agent shall advise the Company upon its receipt of such
funds.
1.3. The
funds
are being delivered to the Escrow Agent in anticipation of the execution of
the
Agreement and the closing of the sale of the Securities on the terms set forth
I
the Agreement. At of prior to the Closing, the Purchaser and the Company shall
complete Exhibit A to this Agreement.
1.4. The
Company agrees that, if, for any reason, the Agreement is not signed and the
Closing under the Agreement is not consummated, for any reason, by 5:00 P.M.,
New York City time on August 31, 2006, the funds held in escrow shall, at any
time thereafter on demand of Purchaser, be promptly wired to the Purchaser,
at
which time the obligations of the Escrow Agent shall terminate, and the prior
approval of the Company shall not be required. The Company acknowledges that
the
Purchaser is putting the funds in escrow prior to execution of a definitive
agreement in order to enable the Company to negotiate certain of the closing
conditions set forth in the proposed Agreement, and neither the execution of
this Escrow Agreement nor the wiring of funds to the Escrow Agent shall be
construed as an agreement to purchase the Securities. The Purchaser shall have
no obligation to enter into the Agreement and no obligation to purchase the
Securities except on such terms as are set forth in the Agreement, if and when
executed by the Company and the Purchaser. The failure of the Purchaser to
execute an Agreement shall not be a breach of any obligation of the Purchaser
to
the Company.
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 to the addresses set forth on the signature page of this
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.
2.5 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 (who may be attorneys who are partners or members of,
of counsel to or employed by the Escrow Agent) 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 this Agreement or any documents or papers deposited
or
called for hereunder in the absence of gross negligence, fraud and willful
misconduct.
2.11 The
Escrow Agent shall be entitled to employ such legal counsel (including attorneys
who are partners or members of, of counsel to or employed by the Escrow Agent)
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.
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
Purchaser. In the event of any such resignation, the Purchaser 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 stock certificates or other
documents or the escrow funds held by the Escrow Agent hereunder or in the
event
that the Escrow Agent shall, for any reason, be uncertain as to its obligations
under this Agreement, 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 stock certificates and other
documents and the escrow funds and certificates for the Shares 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
stock certificates or other documents held by the Escrow Agent hereunder to
a
state or Federal court having competent subject matter jurisdiction and located
in the City, County and State of New York in accordance with the applicable
procedure therefore
2.15 The
Company and Purchaser agree jointly and severally to indemnify and hold harmless
the Escrow Agent and its partners, employees, agents, counsel 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.
[Signatures
on following page]
IN
WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement as
of
date first written above.
Purchaser: | 000
Xxxxx Xxxxxx, 00xx
xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
|
|||
XXXXXX PARTNERS, LP | ||||
By: | Xxxxxx Capital Advisors, LLC, its General Partner | |||
By: | ||||
Xxxxxx
Xxxxxx Xxxxxx
President
Science
Dynamics Corporation
|
0000
Xxxxx Xxxx Xx,
Xxxxx
000
Xxxxxxxxxx,
XX 00000
|
By: | ||||
Xxxx
Xxxxxxx, CEO
|
||||
SICHENZIA XXXX XXXXXXXX XXXXXXX LLP |
By: | ||||
Name:
Title:
|
Schedule
A
Name
|
Payment
|
|
Schedule
A
Name
and Wire Instructions
|
Payment
|
|
Dragonfly
Capital Partners, LLC:
Wachovia
Bank
0000
Xxxxxxxxxx Xxxx
Xxxxxxxxx,
XX 00000
Acct
# 2000015184281
R/T
# 000000000
(For
brokers commissions or fees)
|
$134,000
|
|
Colebrooke
Capital: Chase Manhattan Bank
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx, XX 00000
Account
#000-000000-000
Routing
#000000000
(For
brokers commissions or fees)
|
$76,000
|
|
Sichenzia
Xxxx Xxxxxxxx Xxxxxxx LLP
General
Operating Account
HSBC
Bank USA
000
Xxxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
A/C
of Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP
A/C#
629735158
ABA#
000000000
(For
fees and disbursements)
|
$79,851.52
|
|
North
Fork Bank
000
0xx Xxx
Xxx
Xxxx, XX 00000
ABA
# 000000000
Laurus
Master Fund P&I
Account
# 000-000-0000
Re:
Science Dynamics Corporation
|
$541,562.5
|
|
Xxxxxxx
Technologies Inc.
Wachovia
ABA:
000000000
ACCT:
1010140075751
(For
Acquisition)
|
$3,150,000
|
|
Shaiman,
Drucker, Beckman, Sobel& Xxxxxxx, LLP Escrow Account
Account
No. 8615759167
ABA
Number: 000000000
Contact:
Xxxxxxxx Xxxxx
PNC
Bank
0000
Xxxxxx Xxxxxx
Xxxxxxxxxxxx,
XX 00000
215)
585-8276
(For
Acquisition; held in escrow pursuant to purchase
agreement)
|
$350,000
|
Xxxxxx
Partners LP (By Check)
000,
Xxxxx Xxxxxx
00
Xxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attn:
Xxxxxx Xxxxxx
(For
due diligence Fees)
|
$50,000
|
|
Watergate
Holdings LLC
Wachovia
Bank, N.A.
0000
Xxxx X.X. Xxxxxx
Xxxxxxxxx,
XX 00000
Routing
Number: 000000000
Account
Number 2000021828081
(For
payment of brokers commission due)
|
$115,000
|
|
Science
Dynamics Corporation
Silicon
Valley Bank
Santa
Xxxxx
0000
Xxxxxx Xxxxx
Xxxxx
Xxxxx Xxxxxxxxxx 00000
FRB
SF ABA 000000000
For
Credit to Science Dynamics Corporation
Account
# 3300394469
|
$3,585.98
|
|
Total:
$4,500,000
|