INVESTOR ESCROW AGREEMENT

This Escrow Agreement (Agreement), dated and effective as of [Date], 200_, is made by and
among [Company] (the Company), the investors listed on Schedule A (Investors), and [Name] as escrow agent
(Escrow Agent).
The Company is currently engaged in a securing equity financing through the offering (the Offering) of [Series X]
preferred stock of the Company (the [Series X] Preferred Stock). Pursuant to the terms of the Offering, funds
tendered by the Investors (the Escrowed Funds) are to be placed in escrow until such time as the Escrow Agent
receives notification of the Company reaching certain milestones.
The parties, intending to be legally bound, hereby agree as follows:
1.

Establishment Of Escrow

2.

(a) Simultaneous with the closing of the Stock Purchase Agreement (the Closing), the Investors are
depositing with Escrow Agent the amounts set forth on Exhibit A (the Escrow Fund) in consideration for the
acquisition of the shares of the Companys [Series X] Preferred Stock and warrants to purchase shares of the
Companys [Series X] Preferred Stock set forth on Schedule A (the Escrow Stock). Simultaneous with the
closing, the Company is depositing with the Escrow Agent stock certificate(s), registered in the Companys
name, representing the Escrow Stock (the Certificates).

3.

(b) Escrow Agent hereby agrees to act as escrow agent and to hold, safeguard, disburse, release and deliver
the Escrow Fund and Certificates pursuant to the terms and conditions hereof. The Escrow Agent is hereby
appointed and hereby agrees to accept the Escrowed Funds (including the Escrowed Interest (as defined in
Section 2(a)) and the Certificates and hold the same in escrow pursuant to the terms of this Agreement. The
Company and the Investors expressly agree (i) that the Escrow Agent is acting as their joint agent for the
purposes of carrying out the terms of this Agreement,(ii) to execute and deliver such instruments as the
Escrow Agent may from time to time reasonably request for the purpose of carrying out the terms of this
Agreement and (iii)that the Escrowed Funds may not be transferred, conveyed, sold or otherwise disposed of
except pursuant to this Agreement.

4.

Investment Of Funds

5.

(a) The Escrow Agent shall deposit the Escrowed Funds in an interest-bearing account to be established for
such purpose (the Escrow Account). The term Escrowed Interest means any interest earned by the
Escrowed Funds while on deposit in the Escrow Account.

6.

(b) Any interest, or other earnings and gains earned on the Escrow Fund shall be credited to the Investors, on
a pro rata basis, notwithstanding anything herein to the contrary and further notwithstanding the termination or
expiration of this Escrow Agreement for any reason whatsoever. Upon the release of the Certificates and
Escrow Fund from the Escrow pursuant the terms and conditions herein, Escrow Agent shall promptly remit
such interest or other such earnings pro rata to the Investors.

7.

Release of Escrow Fund

8.

(a) If on or before [Date] (the Release Date) the Escrow Agent receives a written notice, substantially in the
form of the attached Exhibit A, signed by the Company, confirming, that the Company has met the milestone
requirements, Escrow Agent shall (a) release and deliver the Certificates, which shall then be registered and
issued in the relevant Investors name, and the interest, earnings and gains on the Escrow Fund to the

Investors, and (b) disburse the Escrow Fund to the Company, less amounts owed to [Escrow Agent] for legal
services rendered to the Company as of the Release Date.

1.

(b) If the Escrow Agent has not received a notice to release the Escrow Fund to the Investors by the close of
business on the Release Date, the Escrow Agent shall transfer the Escrow Fund to the Investors in the
respective amounts tendered by each Investor, together with that portion of the Escrowed Interest allocable to
each respective Investor.

2.

(c) The Investors holding a majority of the Escrow Stock may extend the Release Date, by providing written
notice to the Escrow Agent by the close of business on the Release Date.

3.

Duties Of Escrow Agent

4.

(a) Escrow Agent shall not be under any duty to give the Certificates or the Escrow Fund held by it hereunder
any greater degree of care than it gives its own similar property and shall not be required to invest any funds
held hereunder except as directed in this Agreement.

5.

(b) Escrow Agent shall not be liable, except for its own gross negligence or willful misconduct and, except with
respect to claims based upon such gross negligence or willful misconduct that are successfully asserted
against Escrow Agent, the Investors and the Company shall indemnify and hold harmless Escrow Agent (and
any successor Escrow Agent) from and against any and all losses, liabilities, claims, actions, damages and
expenses, including reasonable attorneys fees and disbursements, arising out of and in connection with this
Agreement. Without limiting the foregoing, Escrow Agent shall in no event be liable in connection with its
investment or reinvestment of any cash held by it hereunder in good faith, in accordance with the terms hereof,
including, without limitation, any liability for any delays (not resulting from its gross negligence or willful
misconduct) in the investment or reinvestment of the Escrow Fund, or any loss of interest incident to any such
delays.

6.

(c) Escrow Agent shall be entitled to rely upon any order, judgment, certification, demand, notice, instrument or
other writing delivered to it hereunder without being required to determine the authenticity or the correctness of
any fact stated therein or the propriety or validity of the service thereof. Escrow Agent may act in reliance upon
any instrument or signature believed by it to be genuine and may assume that the person purporting to give
receipt or advice or make any statement or execute any document in connection with the provisions hereof has
been duly authorized to do so. Escrow Agent may conclusively presume that the undersigned representative
of each Investor and the Company has full power and authority to instruct Escrow Agent on such Investors
and the Companys behalf unless written notice to the contrary is delivered to Escrow Agent.

7.

(d) Escrow Agent may act pursuant to the advice of counsel with respect to any matter relating to this
Agreement and shall not be liable for any action taken or omitted by it in good faith in accordance with such
advice.

8.

(e) Escrow Agent makes no representation as to the validity, value, genuineness or the collectability of any
security or other document or instrument held by or delivered to it.

9.

(f) Escrow Agent shall not be called upon to advise any party as to the wisdom in selling or retaining or taking
or refraining from any action with respect to any securities or other property deposited hereunder.

10. (g) Escrow Agent (and any successor Escrow Agent) may at any time resign as such by delivering the
Certificates and the Escrow Fund to any successor Escrow Agent designated by the Investors holding a
majority of the Escrowed Stock and the Company in writing, or to any court of competent jurisdiction,
whereupon Escrow Agent shall be discharged of and from any and all further obligations arising in connection
with this Agreement. The resignation of Escrow Agent will take effect on the earlier of (i) the appointment of a
successor (including a court of competent jurisdiction) or (ii) the day which is 30 days after the date of delivery
of its written notice of resignation to the Investors and the Company. If at that time Escrow Agent has not
received a designation of a successor Escrow Agent, Escrow Agents sole responsibility after that time shall be
to retain and safeguard the Certificates and the Escrow Fund until receipt of a designation of successor
Escrow Agent or a written disposition instruction by the Investors holding a majority of the Escrowed Stock and
the Company or a final non-appealable order of a court of competent jurisdiction.
11. Limited Responsibility
This Agreement expressly sets forth all the duties of Escrow Agent with respect to any and all matters pertinent
hereto. No implied duties or obligations shall be read into this agreement against Escrow Agent. Escrow Agent shall
not be bound by the provisions of any agreement among the other parties hereto except this Agreement.
1.

Notices

Except as otherwise specifically set forth in this Agreement, all notices, consents, waivers and other communications
under this Agreement must be in writing and will be deemed to have been duly given when (i) delivered by hand (with
written confirmation of receipt), (ii) sent by telecopier (with written confirmation of receipt) provided that a copy is
mailed by registered mail, return receipt requested, or (iii) when received by the addressee, if sent by a nationally
recognized overnight delivery service (receipt requested), in each case to the appropriate addresses and telecopier
numbers of the Investors as set forth on the signature pages to this Agreement and of the Escrow Agent and the
Company as set forth below (or to such other addresses and telecopier numbers as a party may designate by notice
to the other parties):

Company:

with a copy to: [Law Firm]

Escrow Agent: [Escrow Agent]

1.

Ownership For Tax Purposes

The parties agree that, for purposes of federal and other taxes based on income, the Company shall be treated as
the owner of the Certificates, and the Investors shall be treated as owners of their pro rata portion of the Escrow
Fund.
1.

Governing Law; Jurisdiction; Service Of Process

This Agreement shall be governed by and construed in accordance with the laws of the State of Washington without
regard to its principles of conflicts of laws. Any action or proceeding seeking to enforce any provision of, or based on
any right arising out of, this Agreement may be brought against any of the parties in the federal and state courts of
the State of Washington, County of King, and each of the parties consents to the jurisdiction of such courts (and of
the appropriate appellate courts) in any such action or proceeding and waives any objection to venue laid
therein. Process in any action or proceeding referred to in the preceding sentence may be served on any party
anywhere in the world.
1.

Counterparts

This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original and all
of which, when taken together, will be deemed to constitute one and the same.
10. Section Headings
The headings of sections in this Agreement are provided for convenience only and will not affect its construction or
interpretation.
11. Waiver
The rights and remedies of the parties to this Agreement are cumulative and not alternative. Neither the failure nor
any delay by any party in exercising any right, power, or privilege under this Agreement or the documents referred to
in this Agreement will operate as a waiver of such right, power, or privilege, and no single or partial exercise of any
such right, power, or privilege will preclude any other or further exercise of such right, power, or privilege or the
exercise of any other right, power, or privilege. To the maximum extent permitted by applicable law, (i) no claim or
right arising out of this Agreement or the documents referred to in this Agreement can be discharged by one party, in
whole or in part, by a waiver or renunciation of the claim or right unless in writing signed by the other party; (ii) no
waiver that may be given by a party will be applicable except in the specific instance for which it is given; and (iii) no
notice to or demand on one party will be deemed to be a waiver of any obligation of such party or of the right of the
party giving such notice or demand to take further action without notice or demand as provided in this Agreement or
the documents referred to in this Agreement.
12. Exclusive Agreement And Modification
This Agreement supersedes all prior agreements among the parties with respect to its subject matter and constitutes
(along with the documents referred to in this Agreement) a complete and exclusive statement of the terms of the
agreement between the parties with respect to its subject matter. This Agreement may not be amended except by a
written agreement executed by Investors holding a majority of the Escrowed Stock, the Company and the Escrow
Agent.
In Witness Whereof, the parties have executed and delivered this Agreement as of the date first written above.
[ESCROW AGENT]
________________________________

[COMPANY]
________________________________

In Witness Whereof, the parties have executed and delivered this Escrow Agreement as of the date first written
above
INVESTOR

By:________________________
Name: _____________________
Title: _______________________
Address: ____________________
____________________

Signature Page to the Escrow Agreement

SCHEDULE A

Investor

Shares of [Series X] Preferred Stock

EXHIBIT A

Warrants

[Escrow Agent]

Re:

[Company] (the Company)

Escrow Agreement dated ________

Ladies and Gentlemen:

Pursuant to Section 3 of the above Escrow Agreement, we hereby notify you that the Company has fulfilled its
requirements to break escrow. Please release the certificates of the Companys [Series X] Preferred Stock and the
interest on the escrowed funds to the Investors and the escrowed funds to the Company pursuant to the terms and
conditions of the Escrow Agreement.

Dated: _____________

[COMPANY]
By:____________________________
President