Document:

Exhibit 10.1

                             SALES AGENCY AGREEMENT

                                 MEMS USA, INC.

                                                                 August 22, 2005

S.W. Bach & Company.
6 Harbor Park Drive
Port Washington, New York 11050

                       Private placement of up to $3,000,000 of units, each unit
                       consisting of one share of common stock and one warrant
                       to acquire one share of common stock (hereafter
             Re:       referred to as a "Unit")

Ladies and Gentleman:

      MEMS USA, Inc., a corporation organized under the laws of Nevada (the
"Company"), pursuant to the terms and conditions set forth below, hereby engages
S.W. Bach & Company (the "Placement Agent") to undertake to use its "reasonable
best efforts" to offer and sell up to $3,000,000 of Units at $1.50 per Unit (the
"Offering"). Each Unit shall consist of one share of the Company's common stock
(a "Share"), and a warrant with a five year term ("Warrant") to acquire an
additional Share at $2.25 per Share. The minimum number of Units for which the
Placement Agent shall attempt to sell hereunder shall be $412,500 of Units (the
"Minimum Number of Units"), and the maximum number of Units to be sold hereunder
shall be $3,000,000 of Units (the "Maximum Number of Units"). The Company
desires to offer and sell the Units only to accredited investors as such term is
defined in Regulation D under the Securities Act of 1933, as amended
("Regulation D under the Securities Act"), and Rule 501 promulgated by the
Securities and Exchange Commission (the "Commission") thereunder. The Company
understands that, in soliciting purchasers of Units and in assuming its other
obligations hereunder, the Placement Agent will be acting solely as agent for
the Company, and not as principal, and that the Placement Agent's responsibility
is limited to acting on a "reasonable best efforts" basis under the
circumstances in attempting to arrange the sale of Units, with no understanding,
expressed or implied, of a commitment on the Placement Agent's part to
underwrite or purchase the Units.

      1. Representation, Warranties and Covenants of the Company. The Company
hereby represents and warrants as follows:

            (a) The Company will be solely responsible for the preparation and
contents of a private placement memorandum (the "Offering Memorandum") and any
and all other written or oral communications provided by or on behalf of the
Company to any actual or prospective purchaser of the Units, and the Company
represents and warrants that, on preparation and at each Closing Date (as such
term is defined below) the Offering Memorandum and such other communications
will not, as of the date of the offer or sale of the Units, contain any untrue
statement of a material fact or omit to state of material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading provided, however,
that the representation and warranty in this subparagraph shall not apply to
statements in, or omissions from, the Offering Memorandum made in reliance upon
and in conformity with information specifically furnished in writing to the
Company by or on behalf of the Placement Agent for use in the Offering
Memorandum.

                                      -1-
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      With respect to the financial projections to be contained in the Offering
Memorandum (the "Projections"), the Company represents and warrants that the
Projections will be made by the Company with a reasonable basis and in good
faith and that the Projections will represent the Company's best then available
estimate and judgment as to the future financial performance of the Company
based on the assumptions to be disclosed therein, which assumptions will be all
the assumptions that are material in forecasting the financial results of the
Company and which will reflect the Company's best then available estimate of the
events, contingencies and circumstances described therein. The Company
authorizes the Placement Agent to provide the Offering Memorandum to prospective
purchasers of the Units. If at any time prior to the completion of the offer and
sale of the Units an event occurs that would cause the Offering Memorandum (as
supplemented or amended) to contain an untrue statement of a material fact or to
omit to state a material fact necessary in order to make statements therein, in
light of the circumstances under which they were made, not misleading, or that
would cause a material change in the Company's view of the likelihood of
achievement of the Projections or the reasonableness of the underlying
assumptions, then the Company will immediately notify the Placement Agent of
such event and will suspend solicitations of the prospective purchasers of the
Units until such time as the Company shall prepare a supplement or amendment to
the Offering Memorandum that corrects such statement or omission or revises the
Projections or such assumptions. The Company shall also prepare forms of
necessary and appropriate purchase, subscription and other agreements and
documents, containing terms and conditions customary for private placements, to
be entered into by the Company and purchasers of Units, which forms shall be
provided to prospective purchasers only upon the review and approval of both the
Company and the Placement Agent.

            The Offering Memorandum shall consist of, among other documents, a
copy of the Company's Annual Report on Form 10-KSB for the year ended September
30, 2004 (the "Form 10-KSB").

            (b) The financial statements and schedules included in the Offering
Memorandum will upon preparation and on each Closing Date present fairly the
financial condition, results of operations and changes in financial condition of
the Company on the dates thereof and for the periods indicated and have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods indicated, except that the financial
statements included in the Form 10-QSB that is part of the Offering Memorandum
are subject to normal year-end adjustments and lack footnotes and other
presentation items.

            (c) The Company is current on any and all of its filings with the
Commission and the Form 10-KSB and each Form 10-QSB, when they were filed with
or provided to the Commission, conformed in all material respects to the
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations of the Commission thereunder, and, when
they were filed with or provided to the Commission, none of such documents
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.

                                      -2-
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            (d) On each Closing Date, the Company will be deemed to represent
that since the respective dates as of which information is given in the Offering
Memorandum, there has not been any material adverse change in the business,
properties, financial condition or results of operations of the Company, whether
or not arising from transactions in the ordinary course of business, other than
as set forth in the Offering Memorandum, and since such dates, the Company has
not entered into any material transaction not referred to in the Offering
Memorandum.

            (e) The Company has been duly incorporated and validly exists as a
corporation in good standing under the laws of its jurisdiction of
incorporation, has full corporate power and authority to own or lease its
properties and conduct its business as described in the Offering Memorandum and
as being conducted. The Company is duly registered and qualified as a foreign
corporation for the transaction of business in each jurisdiction where such
qualification is required by reason of the owning or leasing of property or the
conducting of business and in which the failure to be so qualified would have a
material adverse effect upon the Company.

            (f) As of August 15, 2005, the Company had 100,000,000 and
17,404,198 Shares authorized and issued, respectively. The Company is not a
party to or bound by any, instrument, agreement or other arrangement providing
for the Company to issue any capital stock, rights, warrants, options or other
securities, except for this Agreement and as described in the Offering
Memorandum. Since July 18, 2005, the Company has not issued any shares of
capital stock or rights, warrants or options to acquire shares of its capital
stock, other than options granted to or shares issued pursuant to the exercise
of outstanding options held by employees, consultants or directors of, or
service providers to, the Company. The outstanding shares of the Company's
Common Stock (the "Outstanding Shares") have been duly authorized and are
validly issued, fully paid and nonassessable. The Outstanding Shares have been
issued in compliance with all applicable securities laws.

            (g) The Shares and the Shares issuable upon the exercise of the
Warrant ("Warrant Shares") have been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein and in the
Warrants, respectively, will be validly issued, fully paid and nonassessable.
The Warrants have been duly and validly authorized and, when issued and
delivered as provided herein, will constitute valid and binding obligations of
the Company. A sufficient number of Warrant Shares have been reserved for
issuance upon exercise of the Warrants. No preemptive rights or other rights to
subscribe for or purchase exist with respect to the issuance and sale of the
Shares, the Warrants or the Warrant Shares.

            (h) This Agreement has been duly authorized, executed and delivered
by the Company and, assuming the due authorization, execution and delivery by
the Placement Agent, constitutes a valid and legally binding agreement of the
Company enforceable against the Company in accordance with its terms, except as
enforceability may be limited by general equitable principles, or bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors' rights
generally, and except as rights to indemnity or contribution for liabilities
arising under the Securities Act may be limited by applicable law.

                                      -3-
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            (i) The Company is not, or with the giving of notice or lapse of
time would be, in violation of or in default under, nor will the execution or
delivery of this Agreement, or the issuance and sale of the Shares, Warrants or
the Warrant Shares or the consummation of the transactions contemplated hereby,
result in a violation of or constitute a default under, the certificate of
incorporation, bylaws or other governing documents of the Company or any
agreement to which the Company is a party or by which it is bound, or to which
any of its respective properties is subject, except where such violation or
default would not have a material adverse effect on the business condition of
the Company. The performance by the Company of its obligations hereunder will
not violate any law, rule, administrative regulation or decree of any court, or
any governmental agency or body having jurisdiction over the Company, or any of
its respective properties, or result in the creation or imposition of any lien,
charge, claim or encumbrance upon any property or asset of the Company, except
where such violation or lien, charge, claim or encumbrance would not have a
material adverse effect on the business condition of the Company. No consent,
approval, authorization or order of any court, governmental agency or body, or
other third party, is required in connection with the issuance of the Shares,
Warrants or the Warrant Shares and the consummation of the transactions
contemplated by this Agreement, except such as may be required under applicable
state securities laws. .

            (j) The Company owns, or has valid rights to use, all items of real
and personal property which are material to the business of the Company, free
and clear of all liens, encumbrances and claims which materially interfere with
the business, properties, financial condition or results of operations of the
Company.

            (k) The Company has no knowledge of any material infringement by it
of any trademark, trade name, service mark, service name, copyright, license,
patent, trade secret or other similar right of others (collectively, the
"Intellectual Property Rights"), and, except as shall be described in the
Offering Memorandum, there has been no claim made relating to such Intellectual
Property Rights against the Company which is reasonably likely to have a
material adverse effect on the condition, business, or results of operations of
the Company.

            (l) Except as shall be described in the Offering Memorandum, there
is no litigation or governmental proceeding to which the Company is a party or
which any property of the Company is subject or which is pending, or to the
knowledge of the Company, contemplated against the Company which is reasonably
likely to result in any material adverse change in the business, properties,
financial condition, or results of operations of the Company.

            (m) The Company has not been advised and has no reason to believe it
is in violation of any applicable law, statute, ordinance, rule, regulation,
order or decree of any court, governmental body or regulatory authority or
administrative agency having jurisdiction over the Company or any of the
property or assets of the Company (including, without limitation, any such law,
statute, ordinance, rule, regulation, order or decree with respect to
environmental protection or the release, handling, treatment, storage or
disposal of hazardous substances or toxic wastes) which violation, individually
or in the aggregate, would have a material adverse effect on the general
affairs, business, financial condition, stockholders' equity, or results of
operations of the Company. Neither the Company, its officers nor its directors
have taken any action relating directly to the Offering which would constitute a
material violation of federal, foreign or, to its knowledge, state securities
laws or regulations.

                                      -4-
<PAGE>

            (n) Except as the Company has previously disclosed in writing to the
Placement Agent, neither the execution of this Agreement nor the consummation of
the transactions contemplated hereby will result in the Company owing a fee or a
commission to anyone other than the Placement Agent.

            (o) The Company has filed all material federal, state and foreign
income and franchise tax returns or extensions for filing thereof required to be
filed as of the date hereof, and has paid or accrued all taxes shown as due
thereon; and the Company has no knowledge of any tax deficiency which has been
or might be asserted or threatened against the Company which would materially
and adversely affect the business, operations or properties of the Company.

            (p) All material transactions between the Company and the officers,
directors and beneficial holders of 5% or more of the outstanding Shares of the
Company will be accurately disclosed in the Offering Memorandum and the terms of
each such transaction are fair to the Company and no less favorable to the
Company than the terms that could have been obtained from unrelated parties,
except as disclosed in the Offering Memorandum.

            (q) The Company maintains insurance of the types and in the amounts
which it deems adequate for its business, including, but not limited to, general
liability insurance and insurance covering all material interests in real and
personal property owned or leased by the Company against theft, damage,
destruction, acts of vandalism and all other risks customarily insured against,
all of which insurance is in full force and effect.

            (r) The Company has not distributed and during the Offering Period
(as such term is defined below) will not distribute any offering material in
connection with the offer and sale of the Units other than the Offering
Memorandum and any other materials permitted by state Blue Sky laws and
delivered to the Placement Agent in advance. During the Offering Period, the
Company shall not, and shall not permit its affiliates or its or their officers,
directors, employees or representatives to, directly or indirectly, (i) offer
any Units or other securities for sale to, or solicit any offer to purchase any
Units or other securities from, or otherwise contact, discuss or negotiate with
respect to any offer or sale of any Units or other securities with, any person,
(ii) authorize anyone other than the Placement Agent to act on behalf of the
Company to place any Units or other securities or (iii) have any discussions or
negotiations with any person other than the Placement Agent with respect to
engaging such person as a finder, broker, dealer, agent or financial advisor in
connection with any sale of securities. The Company shall, and shall cause its
affiliates and its and their officers, directors, employees and representatives
to, promptly refer to the Placement Agent any and all offers, inquiries and
proposals relating to any securities received at any time during the term of
this Agreement.

            (s) Assuming that each purchaser of Units in the Offering is an
"accredited investor" as that term is defined in Regulation D and that the
Placement Agent and participating selected dealers do not engage in any "general
solicitation" as that term is defined under Regulation D, the offer and sale of
the Shares, Warrants and Warrant Shares making up the Units are exempt from
registration pursuant to Section 4(2) and Regulation D under the Securities Act.

                                      -5-
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            (t) The Company will fully cooperate with the Placement Agent in any
due diligence investigation reasonably requested by it with respect to the
proposed offer and sale of the Units and will furnish the Placement Agent with
all such information, including financial statements, with respect to the
business, operations, assets, liabilities, financial condition and prospects of
the Company as the Placement Agent may reasonably request in order to make a
final determination as to whether to proceed with the Offering and, if the
Offering proceeds, for use in connection with the offering of the Units. The
Placement Agent and its agents may each rely upon the accuracy and completeness
of all such information and the Company acknowledges that neither the Placement
Agent nor any of its officers, directors, employees, representatives or agents
has been retained to independently verify any of such information. In connection
with the diligence to be performed by the Placement Agent, the Company will
provide the Placement Agent with complete access to the officers, directors,
employees, agents and representatives of the Company.

      2. Appointment of Placement Agent; Offer and Sale of the Units.

            (a) The Company hereby appoints you as the exclusive Placement Agent
to offer and sell the Units on the terms and conditions set forth herein and to
be set forth in the Offering Memorandum. Subject to your agreement to proceed
after completion of your due diligence your appointment as Placement Agent
hereunder shall terminate upon the completion or termination of the Offering, as
more fully described below.

      As Placement Agent, upon your written acceptance of the Offering
Memorandum and further agreement to proceed hereunder utilizing such, you shall
offer and sell the Units for the Company upon the terms and conditions set forth
in the Offering Memorandum and the Subscription Agreement (as such term is
defined below).

      For purposes of this Agreement, the Offering will be deemed to have
commenced upon your agreement to proceed after completion of due diligence and
delivery to you of copies of the Offering Memorandum in form acceptable to you
and will terminate upon the first to occur (the "Termination Date") of: (i) the
failure of the Company to meet the conditions of the Initial Closing (as such
term is defined below); (ii) the sale of the Maximum Number of Units; or (iii)
November 22, 2005; provided, however, that the Company and the Placement Agent
may mutually agree to extend the Offering through December 22, 2005 to a date to
be agred upon. The period beginning the date on which the Offering was deemed to
have commenced and ending on the Termination Date shall be referred to herein as
the "Offering Period."

      Subject to the performance by the Company of all of its material
obligations to be performed hereunder, your acceptance of the Offering
Memorandum and to the completeness and accuracy of all representations,
warranties and covenants of the Company contained herein, you hereby accept such
agency and agree on the terms and conditions herein set forth: (i) in your sole
discretion to form and manage a group of securities broker-dealers (the
"Selected Dealers") selected by you, each of which shall be a member of the
National Association of Securities Dealers, Inc., and to cause each Selected
Dealer to enter into a Selected Dealer Agreement in a customary form; and (ii)
in conjunction with such Selected Dealers, if any, to use your best efforts
during the Offering Period to find subscribers for the Units.

                                      -6-
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      In carrying out the transactions contemplated by this Agreement, you have
observed and will observe and comply with: (A) all applicable securities laws,
regulations, rules and ordinances in any jurisdiction in which the Units may be
offered, sold or delivered (including those rules and regulations imposed by
Regulation D and Rule 506 thereunder); and (B) all applicable regulations and
rules of the National Association of Securities Dealers, Inc.; provided,
however, that except as specifically provided in this Agreement and except for
information as may be provided by you without prior review and approval by the
Company, you assume no responsibility for the accuracy or completeness of the
information contained in the Offering Memorandum or provided to subscribers in
connection with their investment decisions. In addition, in connection with the
Offering, you have not engaged in any form of general solicitation or general
advertising within the meaning of Rule 502(c) under the Securities Act,
including, but not limited to, any advertisement, notice or other communication
published in any newspaper, magazine or similar media or broadcast over
television or radio or any seminar or meeting whose attendees had been invited
by a general solicitation or general advertising.

      Subject to earlier termination as provided herein, your agency hereunder
shall continue until the termination of the Offering Period. In the event that
the Offering is commenced and subscriptions for at least the Minimum Number of
Units are not received and accepted by the Company on or before November 22,
2005, which date may be extended by the Company and the Placement Agent through
December 22, 2005, all funds received from subscribers shall be returned in
full, without interest earned thereon, and your agency and this Agreement shall
terminate without obligations on your part or on the part of the Company, except
as provided in Section 9 of this Agreement.

            (b) Each subscriber for Units will be required to complete and
execute a Subscription Agreement in the form attached hereto as Exhibit B (the
"Subscription Agreement"). All Subscription Agreements received by the Placement
Agent promptly shall be transmitted to the Company at the address set forth in
Section 11 hereof, or at such other place as shall be agreed upon between the
Company and the Placement Agent. Each Subscription Agreement must be accompanied
by payment in full for the Units subscribed for. All payments for Units in the
form of a check, draft or money order must be made payable to "MEMS, Inc. Escrow
Account" and all payments for Units in the form of a wire transfer must be made
in accordance with the wire transfer instructions attached to or included as
part of the Escrow Agreement, (as such term is defined below), until otherwise
directed by the Placement Agent.

            (c) Except as otherwise agreed in writing by you and the Company,
all funds for subscriptions for Units received by the Placement Agent or any
Selected Dealer shall be deposited in an escrow account maintained with U.S.
Bank National Association or such other escrow agent agreed upon by the
Placement Agent (the "Escrow Agent") and held by the Escrow Agent upon the terms
and conditions of the Escrow Agreement to be entered into among the Company, the
Escrow Agent and the Placement Agent (the "Escrow Agreement"). Except as
otherwise agreed in writing by you and the Company, you will transmit to the
Escrow Agent for deposit in the escrow account all subscribers' payments for
Units payable as provided in Section 2(b) above by noon on the next business day
after your receipt thereof. You agree that any subscriber's payment received by
you which is payable other than as is provided in Section 2(b) above will be
returned by you directly to the subscriber not later than the end of the next
business day following your receipt thereof with instructions as to the proper
party to whom said payment should be made. The Company shall be responsible for
any and all fees and expenses of the Escrow Agent.

                                      -7-
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            (d) All sales of Units are conditioned upon the receipt and
acceptance by the Company of subscriptions for the Minimum Number of Units on or
before November 22, 2005, which date may be extended by mutual agreement of the
Company and the Placement Agent through December 22, 2005. Subject to the
satisfaction of the foregoing, and the other terms and conditions of this
Agreement, as soon as practicable after notice from the Escrow Agent to the
Company and you that it has funds deposited in the escrow account which have
cleared the collection process representing the proceeds from the sale of at
least the Minimum Number of Units, unless delayed by agreement of the Company
and you until receipt and acceptance of subscriptions for up to the Maximum
Number of Units, delivery of the Units (as described in Section 2(f) hereof)
against payment therefor ("Initial Closing") shall take place at the offices of
Ziegler, Ziegler & Associates LLP, 570 Lexington Avenue, 44th Floor, New York,
New York (or such other place as may be designated by agreement between the
Company and you) at 10:00 a.m., local time (the "Initial Closing Date"). On the
Initial Closing Date, the Shares and the Warrant will be issued and delivered
(as described in Section 2(f) hereof) by the Company for distribution to the
purchasers thereof against payment of the purchase price by the Escrow Agent by
wire transfer in same day funds, payable to the order of the Company. Interest
earned on subscription funds while in the escrow account shall also be remitted
to the Company by the Escrow Agent on the Initial Closing Date.

            (e) Subject to the terms and conditions of this Agreement, following
the Initial Closing Date (if less than the Maximum Number of Shares were issued
on such date), periodically at such dates and times as agreed to by the Company
and you, additional closings ("Additional Closing Dates") shall be held at the
offices of Ziegler, Ziegler & Associates LLP, 570 Lexington Avenue, 44th Floor,
New York, New York (or such other place as may be designated by agreement
between the Company and you), at which delivery of the Shares and the Warrants
(as described in Section 2(f) hereof) will be issued against payment thereof or,
all as provided in Section 2(d) above. In no event shall the final Additional
Closing Date occur later than the first to occur of: (i) the sale of the Maximum
Amount of Shares; or (ii) November 22, 2005, which date may be extended by
mutual agreement of the Company and the Placement Agent through December 22,
2005. The Initial Closing Date and the Additional Closing Dates may be referred
to individually as a "Closing Date" or collectively as the "Closing Dates."

            (f) All actions to be taken on a Closing Date shall be deemed to
take place simultaneously and no actions shall be deemed complete, no payment
deemed made and no document or certificate deemed delivered until all actions
are complete, all payments made and all documents and certificates have been
delivered, including all actions, payments and deliveries required by any other
section of this Agreement to be made on a Closing Date. For purposes of this
Agreement, certificates for Shares shall be deemed delivered upon confirmation
by the Company's transfer agent that such certificates shall be mailed via
courier to the purchasers of Shares in accordance with the Subscription
Agreement.

                                      -8-
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            (g) The Company acknowledges that it has retained the Placement
Agent in connection with the Offering and that, in such capacity, only personnel
employed by the Placement Agent and such other personnel as are assigned for the
specific purposes of services contemplated by this Agreement to be performed by
the Placement Agent will be involved in providing the services described herein.

      3. Information Furnished by the Placement Agent. The information to be set
forth in the Offering Memorandum under the caption "Plan of Distribution -
Placement Agent" (insofar as such information relates to the Placement Agent)
shall constitute the only information furnished by you to the Company for
inclusion in the Offering Memorandum, and you warrant to the Company that the
statements made therein will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.

      4. Further Agreements of the Company. The Company covenants and agrees as
follows:

            (a) The Company will use its best efforts to qualify the Shares,
Warrants and Warrant Shares for sale under (or obtain exemptions from the
application of) the securities laws of such jurisdictions as you reasonably
designate and to continue such qualifications in effect so long as required for
the lawful distribution of the Shares and the lawful issuance of the Warrant
Shares, except that the Company shall not be required in connection therewith to
qualify as a foreign corporation or to execute a general consent to service of
process in any jurisdiction. The Company will immediately advise you by
telephone, confirming such advice in writing, of any order or communication
suspending or preventing, or threatening to suspend or prevent, the offer and
sale of any of the Units, or of any proceedings or examinations which may lead
to such an order or communication, by any governmental authority, as soon as the
Company is advised thereof. The Company will use its best efforts to prevent the
issuance of an order suspending such offer or sale or prohibiting the use of the
Offering Memorandum and, if any such order is issued, to obtain its withdrawal
as soon as possible.

            (b) From time to time prior to the final Closing Date, at your
reasonable request, the Company will deliver to you such number of copies of the
Offering Memorandum as you may reasonably request.

            (c) During the Offering Period, the Company will: (i) promptly
notify you of any material events or developments relating to its financial
condition, business operations or prospects which have not been previously
disclosed to you; and (ii) not file with any securities regulators, or deliver
to any prospective investor, any documents other than the Offering Memorandum,
issue any press releases, or amend or supplement the Offering Memorandum, unless
such documents, press releases, amendments and supplements shall first have been
delivered to you and your counsel.

                                      -9-
<PAGE>

            (d) If at any time during the Offering Period any event affecting
the Company, or of which the Company shall be advised in writing by you, shall
occur which, in your reasonable opinion, should be set forth in a supplement to
or an amendment of the Offering Memorandum, the Company will forthwith, at its
own expense, or at your expense if such event is only a change in the
information originally furnished by you for inclusion in the Offering
Memorandum, prepare and furnish to you a reasonable number of copies of a
supplement to or amendment of the Offering Memorandum so that the Offering
Memorandum, as so supplemented or amended, will not contain any untrue statement
of a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they are
made, not misleading.

            (e) The Company will pay its expenses in connection with this
Offering and the transactions contemplated herein, including, but not limited
to: the costs of preparing and printing (or otherwise duplicating) this
Agreement; all expenses incident to the issuance and delivery of the Shares,
Warrant and Warrant Shares, fees and expenses of legal counsel and independent
accountants for the Company relating to opinions of counsel, audits, review of
unaudited financials, or otherwise; the cost and expenses in connection with
Blue Sky or other securities filings (which will be handled by counsel to the
Placement Agent and paid for in advance by the Company), and the costs and
expenses incident to the preparation, printing and distribution of the Offering
Memorandum (including exhibits and schedules thereto).

            (f) The Company will further pay or reimburse all costs and expenses
incurred by the Placement Agent in connection with the Offering no later than on
each Closing Date. In addition: (i) the Company agrees to pay you a due
diligence fee of $25,000 to cover your time and expenses incurred in conducting
your due diligence hereunder, (ii) if the Company elects to cancel the Offering
subsequent to the distribution of the Offering Memorandum, and prior to the
Initial Closing Date, the Company shall promptly reimburse the Placement Agent
for all your reasonable itemized out-of-pocket expenses incurred in connection
with the Offering and pay a cancellation fee of $25,000; (iii) if you terminate
this Agreement because of a material inaccuracy in any representation or
warranty of the Company or the failure of any of the conditions to your
obligations contained herein, the Company will promptly reimburse you for all
your reasonable itemized out-of-pocket expenses incurred in connection with the
Offering and pay you a termination fee of $25,000; and (iv) regardless of
whether any Units are sold, the Company shall promptly after the termination of
the Offering or on each Closing Date, as the case may be, reimburse you (by
delivery of a certified or bank cashier's check or payment by wire transfer to
your counsel) for all of the reasonable legal fees and disbursements of your
counsel paid or payable by you for services rendered through such date in
connection with the transactions contemplated by this Agreement, whose
reimbursable legal fees shall not exceed $35,000 in the aggregate, with respect
to all Closings.

            (g) In consideration for the services rendered to the Company in
connection with the Offering, the Company will pay to you, on the Initial
Closing Date, and each Additional Closing Date, (i) a cash commission in an
amount equal to ten percent (10.0%) of the aggregate sales price of all Units
sold at such Closing Date and (ii) a non-accountable expense allowance equal to
2% of the capital raised on each such Closing Date. In addition to the
foregoing, the Company will issue and grant to you, on the final Closing Date,
warrants (the "Placement Agent Warrants") to purchase at any time, for a period
of five years following such Closing Date, ten percent (10%) of the number of
Units ("Placement Agent Warrant Securities") sold in the Offering. The exercise
price of the Placement Agent Warrants Securities shall be equal to the price at
which the Units are sold. The Placement Agent Warrants shall be in a form, and
contain the additional terms and conditions, substantially as set forth in
Exhibit C attached hereto. The Company shall also pay the Placement Agent all
compensation described in this paragraph (g) with respect to all securities sold
to a purchaser or purchasers in the Offering at any time prior to the expiration
of twenty four months after last Closing Date if (i) such purchaser or
purchasers, or prospective purchasers, were identified to the Company by the
Placement Agent or otherwise participated in the Offering, (ii) the Placement
Agent advised the Company with respect to such purchaser, purchasers or
prospective purchasers during the Term hereof or (iii) the Placement Agent had
discussions with such purchaser, purchasers or prospective purchasers during the
Term hereof and so notified the Company during the Term.

                                      -10-
<PAGE>

            (h) Within 90 days of the final closing date, the Company shall use
its best efforts to file a registration statement (the "Registration Statement")
on Form S-3, or, if unavailable, Form S-1 or Form SB-2, to register all of the
Shares sold to investors in the Offering as well as all of the Warrant Shares
issuable upon the exercise of the Warrants and the Placement Agent Warrant
Securities (including the component parts thereof) issuable upon the exercise of
the Placement Agent Warrant. The Company shall use its best efforts to cause the
Registration Statement to be declared effective as soon as possible after
filing, and shall keep the Registration Statement effective for the period
specified in the Subscription Agreement. The Registration Statement will be
subject to those blackout provisions and other restrictions contained in the
Subscription Agreement. All costs associated with the preparation, filing,
printing and maintaining the effectiveness of the Registration Statement, as
more fully described in the Subscription Agreement, shall be borne by the
Company.

            (i) The Company will apply the net proceeds from the sale of the
Units in a manner consistent with the Offering Memorandum.

            (j) During the Offering Period, the Company will maintain
appropriate arrangements with the Escrow Agent for depositing funds received
from subscribers for the Units, as more fully described in Section 2 hereof. The
Company will use its best efforts to cause the Escrow Agent to make appropriate
refunds of such funds in the event that such refunds are required to be made in
accordance with the Offering as described in the Offering Memorandum.

            (k) The Company will comply with all registration, filing and
reporting requirements which may from time to time be applicable to the Company
under the Securities Act, any applicable Blue Sky laws, and any other applicable
securities laws

            (l) The Company will use commercially reasonable efforts to perform
all things required or necessary to be done and performed under this Agreement
by the Company prior to the Closing Date and to satisfy all conditions precedent
to delivery of the Shares and Warrants.

                                      -11-
<PAGE>

            (m) Provided that the Placement Agent is able to place, and the
            Company closes upon, the Minimum Number of Units, for a period of
            twenty four calendar months from the last Closing Date, the Company
            (and not CanAm nor any other joint venture of in which the Company
            is a partner) grants the Placement Agent a twenty one (21) day right
            of first refusal superseding all others to act as placement agent
            and/or underwriter for any further public and/or private placements
            of debt or equity by the Company;. The Company agrees that if the
            Placement Agent is able to place, and the Company closes upon, the
            Minimum Number of Units, the Placement Agent shall have an
            irrevocable preferential right for a period of two years from the
            last Closing Date to purchase for its account or to sell for the
            account of the Company, or any subsidiary of or successor to the
            Company, any securities of the Company or any such subsidiary or
            successor which the Company, any such subsidiary or successor may
            seek to sell through an underwriter, placement agent or
            broker-dealer whether pursuant to registration under the Act or
            otherwise. The Company, any such subsidiary or successor will
            consult the Placement Agent with regard to any such offering and
            will offer the Placement Agent the opportunity to purchase or sell
            any such securities on terms not more favorable to the Company, any
            such subsidiary or successor than it or they can secure elsewhere.
            If the Placement Agent fails to accept such offer within 21 days
            after the mailing of a notice containing such offer by registered
            mail addressed to the Placement Agent, then the Placement Agent
            shall have no further claim or right with respect to the financing
            proposal contained in such notice. If, however, the terms of such
            proposal are subsequently modified in any material respect, the
            preferential right referred to herein shall apply to such modified
            proposal as if the original proposal had not been made. The
            Placement Agents failure to exercise its preferential right with
            respect to any particular proposal shall not affect its preferential
            rights relative to future proposals.

      5. Indemnification and Contribution

            (a) The Company shall indemnify and hold harmless the Placement
Agent and each Selected Dealer and their respective employees, officers and
directors and each person (including each partner or officer thereof) who
controls the Placement Agent or a Selected Dealer within the meaning of Section
15 of the Securities Act from and against any and all losses, claims, damages or
liabilities, joint or several, to which such indemnified parties or any of them
may become subject under the Securities Act, the Exchange Act, any applicable
Blue Sky laws or the common law or otherwise, and shall reimburse the Placement
Agent and each Selected Dealer and their respective employees and controlling
persons for any legal or other expenses (including, except as otherwise
hereinafter provided, reasonable fees and disbursements of counsel) incurred by
the respective indemnified parties in connection with defending against any such
losses, claims, damages or liabilities or in connection with any investigation
or inquiry of, or other proceeding which may be brought against, the respective
indemnified parties, in each case arising out of or based upon: (i) any breach
by the Company of any of the representations, warranties or agreements of the
Company contained in this Agreement; (ii) acts or omissions of the Company or
its employees or authorized agents in connection with the transactions
contemplated hereunder (except to the extent that such losses, claims, damages,
liabilities or expenses are found in a final judgment by a court of competent
jurisdiction to have resulted from the willful misconduct or negligence of the
Placement Agent or any other party entitled to indemnification under this
Section 5(a)); or (iii) any untrue statement or alleged untrue statement of a
material fact contained in the Offering Memorandum or the omission or alleged
omission to state therein a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the indemnity agreements of the
Company contained in this paragraph (a) shall not apply to any such losses,
claims, damages, liabilities or expenses if such statement or omission was made
in reliance upon and in conformity with information furnished to the Company by
or on behalf of the Placement Agent or any Selected Dealer for use in the
Offering Memorandum. The indemnity agreements of the Company contained in this
paragraph (a) and the representations and warranties of the Company contained in
Section 1 hereof shall remain operative and in full force and effect regardless
of any investigation made by or on behalf of any indemnified party and shall
survive the delivery of and payment for the Units.

                                      -12-
<PAGE>

            (b) The Placement Agent shall indemnify and hold harmless the
Company, each of its directors and officers, and each person (including each
partner or officer thereof) who controls the Company within the meaning of
Section 15 of the Securities Act, from and against any and all losses, claims,
damages or liabilities, joint or several, to which such indemnified parties or
any of them may become subject under the Securities Act, the Exchange Act, any
applicable Blue Sky laws or the common law or otherwise, and shall reimburse
each of them for any legal or other expenses (including, except as otherwise
hereinafter provided, reasonable fees and disbursements of counsel) incurred by
the respective indemnified parties in connection with defending against any such
losses, claims, damages or liabilities or in connection with any investigation
or inquiry of, or other proceeding which may be brought against, the respective
indemnified parties, in each case arising out of or based upon: (i) the
Placement Agent's use of the Offering Memorandum other than for purposes of
consummating the transactions contemplated by this Agreement; (ii) the Placement
Agent's release of the Offering Memorandum without the prior approval of the
Company; (iii) the willful misconduct or gross negligence of the Placement
Agent; and (iv) any untrue statement or alleged untrue statement of a material
fact contained in the Offering Memorandum or the omission or alleged omission to
state therein a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading, in
each case to the extent, but only to the extent, that such statement or omission
was made in reliance upon and in conformity with information furnished to the
Company by or on behalf of the Placement Agent specifically for use in the
Offering Memorandum. The indemnity agreement of the Placement Agent contained in
this paragraph (b) shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any indemnified party
and shall survive the delivery of and payment for the Units.

            (c) Each party indemnified under the provisions of paragraphs (a)
and (b) of this Section 5 shall, upon the service of a summons or other initial
legal process upon it in any action or suit instituted against it or upon its
receipt of written notification of the commencement of any investigation or
inquiry of, or proceeding against, it in respect of which indemnity may be
sought on account of any indemnity agreement contained in such paragraphs,
promptly give written notice (the "Notice") of such service or notification to
the party or parties from whom indemnification may be sought hereunder. No
indemnification provided for in such paragraphs shall be available to any party
who shall fail so to give the Notice if the party to whom such Notice was not
given was unaware of the action, suit, investigation, inquiry or proceeding to
which the Notice would have related and was prejudiced by the failure to give
the Notice, but the omission so to notify such indemnifying party or parties of
any such service or notification shall not relieve such indemnifying party or
parties from any liability which it or they may have to the indemnified party
for contribution or otherwise than on account of such indemnity agreement. Any
indemnifying party shall be entitled at its own expense to participate in the
defense of any action, suit or proceeding against, or investigation or inquiry
of, an indemnified party. Any indemnifying party shall be entitled, if it so
elects within a reasonable time after receipt of the Notice by giving written
notice (the "Notice of Defense") to the indemnified party, to assume (alone or
in conjunction with any other indemnifying party or parties) the entire defense
of such action, suit, investigation, inquiry or proceeding, in which event such
defense shall be conducted, at the expense of the indemnifying party or parties,
by counsel chosen by such indemnifying party or parties and reasonably
satisfactory to the indemnified party or parties; provided, however, that: (i)
if the indemnified party or parties reasonably determine that there is
reasonably likely to be a conflict between the positions of the indemnifying
party or parties and of the indemnified party or parties in conducting the
defense of such action, suit, investigation, inquiry or proceeding or that there
may be legal defenses available to such indemnified party or parties different
from or in addition to those available to the indemnifying party or parties that
could not reasonably be pursued by the use of the same counsel, then counsel for
the indemnified party or parties shall be entitled to conduct the defense to the
extent reasonably determined by such counsel to be necessary to protect the
interests of the indemnified party or parties; and (ii) in any event, the
indemnified party or parties shall be entitled to have counsel chosen by such
indemnified party or parties participate in, but not conduct, the defense. If,
within a reasonable time after receipt of the Notice, an indemnifying party
gives a Notice of Defense and the counsel chosen by the indemnifying party or
parties is reasonably satisfactory to the indemnified party or parties, the
indemnifying party or parties will not be liable under paragraphs (a) through
(c) of this Section 5 for any legal or other expenses subsequently incurred by
the indemnified party or parties in connection with the defense of the action,
suit, investigation, inquiry or proceeding, except that: (A) the indemnifying
party or parties shall bear the legal and other expenses incurred in connection
with the conduct of the defense as referred to in clause (i) of the proviso to
the preceding sentence; and (B) the indemnifying party or parties shall bear
such other expense as it or they have authorized to be incurred by the
indemnified party or parties. If, within a reasonable time after receipt of the
Notice, no Notice of Defense has been given, the indemnifying party or parties
shall be responsible for any legal or other expenses incurred by the indemnified
party or parties in connection with the defense of the action, suit,
investigation, inquiry or proceeding.

                                      -13-
<PAGE>

            (d) If the indemnification provided for in this Section 5 is
unavailable or insufficient to hold harmless an indemnified party under
paragraph (a) or (b) of this Section 5, then each indemnifying party shall, in
lieu of indemnifying such indemnified party, contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in paragraph (a) or (b) of this Section 5 in such
proportion as is appropriate to reflect not only the relative benefits received
by each indemnifying party from the Offering, but also the relative fault of
each indemnifying party in connection with such losses, claims, damages or
liabilities, or actions in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Placement Agent shall be deemed to be in the same respective proportion as the
total net proceeds from the Offering received by the Company and the total
commission received by the Placement Agent bear to the aggregate offering price
of the Units. Relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by each indemnifying party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission.

                                      -14-
<PAGE>

      The parties agree that it would not be just and equitable if contributions
pursuant to this paragraph (d) were to be determined by pro rata allocation or
by any other method of allocation which does not take into account the equitable
considerations referred to in the first sentence of this paragraph (d). The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities, or actions in respect thereof, referred to in the first sentence
of this paragraph (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigation,
preparing to defend or defending against any action or claim which is the
subject of this paragraph (d). No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.

      Each party entitled to contribution shall upon the service of a summons or
other initial legal process upon it in any action instituted against it in
respect of which contribution may be sought, promptly give written notice of
such service to the party or parties from whom contribution may be sought, but
the omission to so notify such party or parties of any such service shall not
relieve the party from whom contribution may be sought from any obligation it
may have hereunder or otherwise (except as specifically provided in paragraph
(c) of this Section 5).

            (e) An indemnifying party shall not be liable for any settlement of
any action, suit, proceeding or claim effected without its written consent.
Neither the Company nor the Placement Agent will, without the prior written
consent of the other, which consent will not be unreasonably withheld, settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action, suit or proceeding in respect of which indemnification has been
sought hereunder unless such settlement, compromise or consent includes an
unconditional release of the other party and any person who controls such party
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act from all liability arising out of such claim, action, suit or
proceeding.

      6. Termination. This Agreement and your appointment as Placement Agent in
connection with the Offering may be terminated by you at any time upon notice to
the Company or by the Company at any time upon notice to you. Such appointment
shall terminate automatically when the Maximum Number of Units has been sold.
Notwithstanding the foregoing, if either you or the Company terminates this
Agreement, Sections 4(e), 4(f), 4(g), 4(h), 4(i), 4(k), 4(l) and 4(m), 5, 9, 10,
11, 12, 13, 14 and 15 hereof shall remain in full force and effect.

      7. Conditions of Closing and Placement Agent's Obligations. The release of
funds by the Escrow Agent and your obligation to act as Placement Agent in
connection with the Offering shall be subject to the accuracy as of each Closing
Date of the representations and warranties of the Company in this Agreement, to
the performance by the Company of its obligations in this Agreement and to the
following conditions:

            (a) (i) The Units shall have been qualified for sale in applicable
states of the United States, or an exemption from qualification shall have been
perfected or available; and (ii) no stop order suspending such qualification or
prohibiting the use of the Offering Memorandum or purporting to prevent the
offer and sale of the Units shall have been issued, and no proceedings therefor
shall be pending or to the best knowledge of the Company, threatened, by any
governmental body or authority.

                                      -15-
<PAGE>

            (b) On the Initial Closing Date, no less than the Minimum Number of
Units shall have been subscribed for and accepted by the Company in accordance
with the Offering Memorandum. On each Closing Date, the Company and the
Placement Agent shall have delivered joint instructions to the Escrow Agent
which direct the Escrow Agent to release such funds to the Company.

            (c) On each Closing Date, you shall have received such certificates,
in form and substance reasonably satisfactory to you and your counsel, as you
may have requested, from such officers of the Company as you may reasonably
request, as to: (i) the absence of any material misstatement or omission in the
statements in the Offering Memorandum; (ii) the absence of any material adverse
change in the business, management, financial position, stockholders' equity, or
results of operations of the Company and its subsidiaries (considered as a
whole) since the date of the Offering Memorandum; (iii) the accuracy as of such
Closing Date of the representations and warranties of the Company contained in
Section 1 of this Agreement; (iv) the performance by the Company of its
obligations required in this Agreement to be performed at or prior to such
Closing Date; (v) the fulfillment by the Company of the conditions to your
obligations contained in this Agreement; and (vi) such other matters as you may
reasonably request.

            (d) On each Closing Date, there shall be addressed and delivered to
you and the Selected Dealers, dated as of such Closing Date, the opinion of
Preston Gates & Ellis, LLP, counsel for the Company, in such form as shall be
agreed by the Placement Agent and its counsel.

            (e) On behalf of the Selected Dealers and yourself, you shall have
received such opinion or opinions of Ziegler, Ziegler & Associates LLP, counsel
for you, with respect to such matters as you may reasonably request; and the
Company shall have furnished to such counsel such documents as they may
reasonably request for the purpose of enabling them to pass upon such matters.

            (f) (i) Since the date of the latest audited financial statements
included in the Offering Memorandum, neither the Company nor any of its
subsidiaries shall have sustained any loss or interference with its business
from fire, explosion, flood, earthquake or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the Offering
Memorandum, and which interferes materially with the conduct of the Company's
business and operations; (ii) since the respective date as of which information
is given in the Offering Memorandum, there shall not have been any material
adverse change in the general affairs, business, management, financial position,
stockholders' equity, or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Offering
Memorandum; and (iii) there must not have occurred any event that makes untrue
or incorrect in any material respect any statement or information contained in
the Offering Memorandum or that is not reflected in the Offering Memorandum but
should be reflected in it in order to make the statements or information in it
not misleading in any material respect.

                                      -16-
<PAGE>

            (g) Subsequent to the date hereof there shall not have occurred any
of the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange, AMEX or the Nasdaq Stock
Market, or the fixing of maximum ranges for prices of securities on the New York
Stock Exchange or by order of the Commission or any other governmental authority
having jurisdiction; or (ii) the engagement by the United States in hostilities
which have resulted in the declaration, on or after the date hereof, of a
national emergency or war, if the effect of any such event specified in this
clause (ii) in your reasonable judgment is so material and so adverse as to make
it impracticable or inadvisable to proceed with the Offering or the delivery of
the Units on the terms and in the manner contemplated in this Agreement and in
the Offering Memorandum.

      8. Effective Date of Agreement. This Agreement shall become effective at
the time this Agreement is fully executed by both parties.

      9. Reimbursement of Certain Expenses. In addition to the Company's
obligations under Section 4(f) of this Agreement, the Company and the Placement
Agent agree to reimburse each other on a quarterly basis for all reasonable
legal and other expenses incurred in connection with investigating or defending
any claim, action, investigation, inquiry or other proceeding arising out of or
based upon any statement or omission, or any alleged statement or omission,
described in paragraph (a) or (b) of Section 5 of this Agreement,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the obligations under this Section 9 and the possibility that
such payments might later be held to be improper; provided, however, that: (i)
to the extent any such payment is ultimately held to be improper, the persons
receiving such payments shall promptly refund them; and (ii) such persons shall
provide to the Company or the Placement Agent, as the case may be, upon request,
reasonable assurances of their ability to effect any refund, when and if due.

      10. Persons Entitled to Benefit of Agreement. This Agreement shall inure
to the benefit of the Company, the Placement Agent and the Selected Dealers, if
any, and their respective employees, controlling persons, directors, officers,
personal representatives, agents, associated persons, successors and assigns.
Nothing in this Agreement is intended or shall be construed to give to any other
person, firm or corporation (including, without limitation, any subscriber or
potential subscriber) any legal or equitable remedy or claim under or in respect
of this Agreement or any provision herein contained.

      11. Notices. All communications hereunder will be in writing and, except
as otherwise expressly provided herein, if sent to the Placement Agent, will be
mailed, delivered or telecopied and confirmed to you at S.W. Bach & Company, 6
Harbor Park Drive, Port Washington, New York 11050, Attention: Gregg Lerman,
Fax: (516) 621-7100, with a copy to Ziegler, Ziegler & Associates LLP, 570
Lexington Avenue, 44th Floor, , New York, New York 10022, Attention: Scott A.
Ziegler, Esq., Fax: (212) 319-7605, or if to the Company, at MEMS USA, Inc.,
5701 Lindero Canyon Road, Building 2-100, Westlake Village, CA 91362, Attention:
James Latty, FAX: (818) 735-4753, with a copy to: PMB Securities Corp, 450
Newport Center Drive, Suite 110, Newport Beach, CA 92660, Attention: Gary Cohee,
Fax: (562) 901-0572.

                                      -17-
<PAGE>

      12. Confidential Information. The Placement Agent will treat all
information which it receives from the Company in a confidential manner (other
than information that is or becomes publicly available other than as a result of
the wrongful or unlawful disclosure by the Placement Agent or its agents) and
will use the same degree of care to prevent inappropriate dissemination of such
information as it would employ in the protection and preservation of
confidential information about its own business. The Placement Agent will not:
(i) use any such confidential information other than in connection with the
Offering; and (ii) except as required by applicable law, regulation or legal
process, (and upon written advice of its legal counsel as to the applicability
and necessity thereof) disclose to any third party any information received from
the Company which is confidential and is not publicly available. The Placement
Agent further agrees that monetary damages would not be an adequate remedy for
breach of the covenants contained in this paragraph and that the Company will be
entitled to injunctive relief for any such breach. If this Agreement is
terminated, the Placement Agent, upon written request of the Company, will
return to the Company all confidential information concerning the Company
received by the Placement Agent.

      13. Miscellaneous. The representations and warranties contained in this
Agreement shall remain in full force and effect regardless of: (a) any
investigation made by or on behalf of the Placement Agent or controlling person
thereof, or by or on behalf of the Company or their respective directors or
officers; and (b) delivery and payment for the Units, and Warrant Shares. It is
understood that the relationship between the Placement Agent and the Company is
that of independent contractors, and, except to the extent provided for herein,
neither party hereto shall be considered the agent of the other party for any
purposes whatsoever. Neither of the parties hereto is granted any right or
authority to assume or create any obligation or liability, express or implied,
on behalf of the other party, or to bind the other party in any manner or thing
whatsoever. The Company agrees that, subject to applicable law, the Placement
Agent may assign any and all of the compensation payable hereunder to persons
employed or otherwise associated with the Placement Agent and that such persons
shall have the rights of the Placement Agent hereunder with respect to such
compensation. This Agreement constitutes the complete agreement and
understanding among the parties and supersedes and preempts any prior
understandings, agreements or representations by or among the parties, written
or oral, which may have related to the subject matter hereof in any way. There
are no understandings or representations, express or implied, related to the
subject matter hereof that are not expressly set forth in this Agreement. The
provisions of this Agreement may be amended, modified, waived or terminated only
with the prior written consent of the parties, and no course of conduct or
failure or delay in enforcing the provisions of this Agreement shall affect the
validity, binding effect or enforceability of this Agreement. By signature below
and execution of this Agreement, each of the parties hereto, separately and
individually, and their representatives, associates and agents confirm that any
corporation, organization, firm, company, partnership or individual of which the
signee is a party to, member of, shareholder, officer or director in, principal
agent of, employee or otherwise would benefit financially from an association,
is bound by this Agreement. If any provision of this Agreement is determined to
be invalid or unenforceable in any respect, such determination will not effect
such provision in any other respect or any other provision of this Agreement.

      14. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

                                      -18-
<PAGE>

      15. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to conflict
of law principles.

      In the event any of the parties to this Agreement resorts to legal action
against the other in connection with this Agreement, such action shall only be
instituted and maintained in the courts of the County of New York, State of New
York; provided, however, that the Company may enforce its rights under Section
12 hereof with respect to persons other than employees, officers and directors
of the Placement Agent in any court of competent jurisdiction. The prevailing
party shall be entitled to receive reimbursement from the non-prevailing party
for all reasonable attorneys' fees and other costs incurred in connection with
such action.

      Please sign and return to the Company the enclosed duplicates of this
letter, whereupon this letter will become a binding agreement between the
Company and the Placement Agent in accordance with its terms.

                                         Very truly yours,

                                         MEMS USA, INC.

                                         By: ___________________________________
                                             Name:  James A. Latty
                                             Title: Chairman and Chief Executive
                                                    Officer

The foregoing Agreement
is hereby confirmed and
accepted as of the date
first above written.

S.W. BACH & COMPANY

By: _____________________________
    Name:  Gregg Lerman
    Title: President

                                      -19-WARRANT AGENT AGREEMENT

 

WARRANT AGENT AGREEMENT (the “Agreement”) dated as of ___________, 2006, by and between ECHO HEALTHCARE ACQUISITION CORP., a Delaware corporation, with offices at 8000 Towers Crescent Drive, Suite 1300, Vienna, VA 22182 (the “Company”), and Corporate Stock Transfer, Inc. a Colorado corporation, with offices at 320 Cherry Creek Drive South, Suite 430, Denver, Colorado  80209 (“CST” or the “Warrant Agent”).

 

WHEREAS, the Company is engaged in a public offering (a “Public Offering”) of Units (the “Units”) and, in connection therewith, has determined to issue and deliver up to (i) 6,250,000 Warrants (the “Public Warrants”) to public investors, with each of such Public Warrants  evidencing the right of the holder thereof to purchase one share of common stock, par value $.0001 per share, of the Company’s Common Stock (the “Common Stock”) for $6.00, subject to adjustment as described herein, and (ii) 312,500 Warrants to Morgan Joseph & Co. Inc. (“Morgan Joseph”) and Roth Capital Partners, LLC.  (“Roth Capital” and
together with Morgan Joseph, the “Underwriters”) or their designees (the “Underwriters’ Warrants” and, together with the Public Warrants, the “Warrants”), with each of such Underwriters’ Warrants evidencing the right of the holder thereof to purchase one share of Common Stock for $6.00, subject to adjustment as described herein; and

 

WHEREAS, the Company has filed with the Securities and Exchange Commission a Registration Statement, No. 333-126650 on Form S-1 (as the same may be amended from time to time, the “Registration Statement”) for the registration, under the Securities Act of 1933, as amended (the “Act”), of, among other securities, the Warrants and the Common Stock issuable upon exercise of the Warrants; and

 

WHEREAS, the Company desires that CST act as the Warrant Agent for the Company in connection with the issuance, registration, transfer, exchange, redemption and exercise of the Warrants, and CST is willing to so act as the Warrant Agent; and

 

WHEREAS, the Company desires to provide for the form and provisions of the Warrants, the terms upon which they shall be issued and exercised, and the respective rights, limitation of rights, and immunities of the Company, the Warrant Agent, and the holders of the Warrants; and

 

WHEREAS, all acts and things have been done and performed necessary to make the Warrants, when executed on behalf of the Company and countersigned by or on behalf of the Warrant Agent, as provided herein, the valid, binding and legal obligations of the Company, and to authorize the execution and delivery of this Agreement.

 

NOW, THEREFORE, for the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.          Appointment of Warrant Agent. The Company hereby
appoints CST to act as Warrant Agent for the Company in accordance with the
provisions hereinafter set forth, and CST hereby accepts such
appointment.

 

2.          Warrants

 

2.1.       Form of Warrant.  Each Warrant shall be issued in registered form only, shall be in substantially the form of Exhibit A hereto, the provisions of which are incorporated herein and shall be signed by, or bear the facsimile signature of, the Chief Executive Officer or President and Treasurer, Secretary or Assistant Secretary of the Company and shall bear a facsimile of the Company’s seal.  In the event the person whose facsimile signature has been placed upon any Warrant shall have ceased to serve in the capacity in which such person signed the Warrant before such Warrant is issued, it may be issued with the same effect as if he or she had not ceased to be such at the date of issuance.

 

2.2.       Effect of Countersignature.  Unless and until countersigned by the Warrant Agent pursuant to this Agreement, a Warrant shall be invalid and of no effect and may not be exercised by the holder thereof.

 

2.3.       Registration

 

2.3.1.    Warrant Register.  The Warrant Agent shall maintain books (the “Warrant Register”), for the registration of original issuance and the registration of transfer of the Warrants.  Upon the initial issuance of the Warrants, the Warrant Agent shall issue and register the Warrants in the names of the respective holders thereof in such denominations and otherwise in accordance with instructions delivered to the Warrant Agent by the Company.

 

2.3.2. Registered Holder.  Prior to due presentment for registration of transfer of any Warrant, the Company and the Warrant Agent may deem and treat the person in whose name such Warrant shall be registered upon the Warrant Register (the “registered holder”), as the absolute owner of such Warrant and of each Warrant represented thereby (notwithstanding any notation of ownership or other writing on the Warrant certificate made by anyone other than the Company or the Warrant Agent), for the purpose of any exercise thereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.

 

2.4.       Detachability of Warrants.  The securities comprising the Units will not be detachable and separately transferable until 90 days after the date hereof, unless Morgan Joseph informs the Company of its decision to allow earlier separate trading (the “Separation Date”), but in no event will Morgan Joseph allow separate trading of the securities comprising the Units until the Company files a Current Report on Form 8-K which includes an audited balance sheet reflecting the receipt by the Company of the gross proceeds of the Public Offering, including the proceeds received by the Company from the exercise of the Underwriter’s over-allotment option, if the over-allotment option is exercised prior to the filing of the Form 8-K.  The Company shall
file a separate Current Report on Form 8-K if the over-allotment option is
exercised in whole or in part after the consummation of the offering and shall
include in this Form 8-K, or amendment

2

thereto, or in a subsequent Form 8-K,
information indicating if the representative has allowed separate trading of
common stock and warrants prior to the 90th day after the date of this
prospectus.

 

2.5.       Warrants and Underwriters’ Warrants.  The Underwriters’ Warrants shall have the same terms and be in the same form as the Public Warrants except with respect to the Warrant Price as set forth below in Section 3.1.

 

3.          Terms and Exercise of Warrants.

 

3.1.       Warrant Price.  Each Warrant shall, when countersigned by the Warrant Agent, entitle the registered holder thereof, subject to the provisions of such Warrant and of this Warrant Agreement, to purchase from the Company the number of shares of Common Stock stated therein, at the price of $6.00 per whole share, subject to the adjustments provided in Section 4 hereof and in the last sentence of this Section 3.1.  Each of the Underwriters’ Warrants shall, when countersigned by the Warrant Agent, entitle the registered holder thereof, subject to the provisions of such Underwriters’ Warrants and of this Warrant Agreement, to purchase from the Company the number of shares of Common Stock stated therein, at the price of $6.00 per whole share, subject to the adjustments provided in Section 4 hereof.
  The term “Warrant Price” as used in this Warrant Agreement refers to the price per share at which Common Stock may be purchased at the time a Warrant is exercised.  The Company in its sole discretion may lower the Warrant Price at any time prior to the Expiration Date, provided that any such reduction shall be identical in percentage terms among all of the Warrants, except that any amendment to the terms of the Underwriters’ Warrants shall be subject to any limitations and conditions that may be imposed by NASD Corporate Financing Rule 2710.

 

3.2.       Duration of Warrants.  A Warrant may be exercised only during the period (the “Exercise Period”) commencing on the later of (i) the consummation by the Company of a merger, capital stock exchange, asset acquisition or other similar business combination (a “Business Combination”) (as described more fully in the Company’s Registration Statement) and (ii) _________, 2007, and terminating at 5:00 p.m., New York City time on the earlier to occur of (i) ____________, 2010 or (ii) the date fixed for redemption of the Warrants as provided in Section 6 of this Agreement (the “Expiration Date”).  Except with respect to the right to
receive the Redemption Price (as set forth in Section 6 hereunder), each Warrant not exercised on or before the Expiration Date shall become void, and all rights thereunder and all rights in respect thereof under this Agreement shall cease at the close of business on the Expiration Date.  The Company in its sole discretion may extend the duration of the Warrants by delaying the Expiration Date, provided that any such extension shall be identical in duration among all of the Warrants, except that any amendment to the terms of the Underwriters’ Warrants shall be subject to any limitations and conditions that may be imposed by NASD Corporate Financing Rule 2710.

 

3.3.       Exercise of Warrants.

 

3.3.1.    Payment. Subject to the provisions of the Warrant
and this Warrant Agreement, a Warrant, when countersigned by the Warrant Agent,
may be exercised by

3

the registered holder thereof by surrendering it, at the
office of the Warrant Agent, or at the office of its successor as Warrant Agent,
with the subscription form, as set forth in the Warrant, duly executed, and by
paying in full, in lawful money of the United States, in cash, good certified
check or good bank draft payable to the order of the Company (or as otherwise
agreed to by the Company), the Warrant Price for each full share of Common Stock
as to which the Warrant is exercised and any and all applicable taxes due in
connection with the exercise of the Warrant, the exchange of the Warrant for the
Common Stock, and the issuance of the Common Stock.

 

3.3.2.    Issuance of Certificates.  As soon as practicable after the exercise of any Warrant and the clearance of the funds in payment of the Warrant Price, the Company shall issue to the registered holder of such Warrant a certificate or certificates for the number of full shares of Common Stock to which he is entitled, registered in such name or names as may be directed by him, her or it, and if such Warrant shall not have been exercised in full, a new countersigned Warrant for the number of shares as to which such Warrant shall not have been exercised.  Notwithstanding the foregoing, the Company shall not be obligated to deliver any securities pursuant to the exercise of a Warrant unless a registration statement under the Act with respect to the Common Stock is effective.  Warrants may not be exercised by, or
securities issued to, any registered holder in any state in which such exercise would be unlawful.

 

3.3.3.    Valid Issuance.  All shares of Common Stock issued upon the proper exercise of a Warrant in conformity with this Agreement shall be validly issued, fully paid and nonassessable.

 

3.3.4.    Date of Issuance.  Each person in whose name any such certificate for shares of Common Stock is issued shall for all purposes be deemed to have become the holder of record of such shares on the date on which the Warrant was surrendered and payment of the Warrant Price was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open.

 

3.4       Disposition of Proceeds on Exercise of Warrants.  The Warrant Agent shall promptly forward to the Company all monies received by the Warrant Agent for the purchase of shares of Common Stock through the exercise of Warrants.  The Warrant Agent shall keep copies of this Agreement available for inspection by holders of Warrants during normal business hours.

 

4.          Adjustments.

 

4.1.       
Stock Dividends - Split-Ups.  If after the date hereof,
and  subject  to the  provisions  of  Section  4.6  below,  the  number  of
outstanding  shares  of  Common  Stock  is  increased  by a  stock  dividend  or
distribution  payable in shares of Common Stock, or by a split-up or subdivision
of shares of  outstanding  Common Stock,  or other similar  event,  then, on the
effective date of such stock dividend,  split-up or similar event, the number of
shares of Common Stock

4

issuable on exercise of each Warrant  shall be increased
in proportion to such increase in outstanding shares of Common Stock.

 

4.2.       Aggregation of Shares.  If after the date hereof, and subject to the provisions of Section 4.6, the number of outstanding shares of Common Stock is decreased by a consolidation, combination, reverse stock split or reclassification of shares of Common Stock, or other similar event, then, on the effective date of such consolidation, combination, reverse stock split, reclassification or similar event, the number of shares of Common Stock issuable on exercise of each Warrant shall be decreased in proportion to such decrease in outstanding shares of Common Stock.

 

4.3        Adjustments in Exercise Price.  Whenever the number of shares of Common Stock purchasable upon the exercise of the Warrants is adjusted, as provided in Section 4.1 and 4.2 above, then upon such adjustment the Warrant Price in effect immediately prior to such adjustment shall be adjusted (to the nearest cent) by multiplying such Warrant Price immediately prior to such adjustment by a fraction (x) the numerator of which shall be the number of shares of Common Stock purchasable upon the exercise of the Warrants immediately prior to such adjustment, and (y) the denominator of which shall be the number of shares of Common Stock so purchasable immediately thereafter.

 

For the purposes of any computation to be made in accordance with the provisions of Section 4.3, Common Stock issuable by way of dividend or other distribution on any stock of the Company shall be deemed to have been issued immediately after the opening of business on the date following the date fixed for the determination of stockholders entitled to receive such dividend or other distribution. 

 

4.4.       Replacement of Securities upon Reorganization, etc.  In case of any reclassification or reorganization of the outstanding shares of Common Stock (other than a change covered by Section 4.1 or 4.2 hereof or that solely affects the par value of such shares of Common Stock), or in the case of any consolidation of the Company with or merger of the Company into, another corporation (other than a consolidation or merger in which the Company is the continuing corporation and that does not result in any reclassification or reorganization of the outstanding shares of Common Stock), or in the case of any sale or conveyance to another corporation or entity of the assets or other property of the Company as an entirety or substantially as an entirety in connection with which the Company is dissolved, the Warrant
holders shall thereafter have the right to purchase and receive, upon the basis
and upon the terms and conditions specified in the
Warrants  and  in  lieu  of the  shares  of  Common  Stock  of the  Company
immediately  theretofore  purchasable  and  receivable  upon the exercise of the
rights  represented  thereby,  the kind and  amount  of shares of stock or other
securities or property  (including cash) receivable upon such  reclassification,
reorganization,  merger or  consolidation,  or upon a dissolution  following any
such sale or  transfer,  that the  Warrant  holder  would have  received if such
Warrant holder had exercised his, her or its Warrant(s) immediately prior to the
consummation of such event; and if any reclassification also results in a change
in shares of Common Stock  covered by Section 4.1 or 4.2,  then such  adjustment
shall be made  pursuant to Sections  4.1,  4.2,  4.3 and this  Section  4.4. The
provisions   of  this   Section  4.4  shall   similarly

5

apply  to   successive
reclassifications,  reorganizations,  mergers or consolidations,  sales or other
transfers.

 

4.5.       Notices of Changes in Warrant.  Upon any adjustment of the Warrant Price or the number of shares of Common Stock issuable upon exercise of a Warrant, the Company shall give written notice thereof to the Warrant Agent, which notice shall state the Warrant Price resulting from such adjustment and the increase or decrease, if any, in the number of shares purchasable at such price upon the exercise of a Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based.  Upon the occurrence of any event specified in Sections 4.1, 4.2, 4.3 or 4.4, then, in any such event, the Company shall give written notice to the Warrant holder, at the last address set forth for such holder in the warrant register, of the record date or the effective date of the
event.  Failure to give such notice, or any defect therein, shall not affect the legality or validity of such event. 

 

4.6.       No Fractional Shares.  Notwithstanding any provision contained in this Warrant Agreement to the contrary, the Company shall not issue fractional shares of Common Stock upon exercise of Warrants.  If, by reason of any adjustment made pursuant to this Section 4, the holder of any Warrant would be entitled, upon the exercise of such Warrant, to receive a fractional interest in a share, the Company shall, upon such exercise and in lieu of the issuance of any fractional share otherwise issuable, round up to the nearest whole number the number of the shares of Common Stock to be issued to the Warrant holder.

 

4.7.       Form of Warrant.  The form of Warrant need not be changed because of any adjustment pursuant to this Section 4, and Warrants issued after such adjustment may state the same Warrant Price and the same number of shares as is stated in the Warrants initially issued pursuant to this Agreement.  However, the Company may at any time in its sole discretion make any change in the form of Warrant that the Company may deem appropriate and that does not affect the substance thereof, and any Warrant thereafter issued or countersigned, whether in exchange or substitution for an outstanding Warrant or otherwise, may be in the form as so changed.

 

5.          Transfer and Exchange of Warrants.

 

5.1.       Registration of Transfer.  Until the Separation Date, the Common Stock and the Warrants that comprise each Unit shall be transferable or exchangeable only as a single Unit.  After the Separation Date, the Warrants shall be transferable separate from the Common Stock issued as a Unit, and the Warrant Agent shall register the transfer, from time to time, of any outstanding Warrant upon the Warrant Register, upon surrender of such Warrant for transfer at the office of the Warrant Agent, properly endorsed with signatures properly guaranteed and accompanied by appropriate instructions for transfer.  Upon any such transfer, a new Warrant representing an equal aggregate number of Warrants shall be issued to the transferee and the surrendered Warrant shall be cancelled by the Warrant Agent.  The Warrants so
cancelled shall be delivered by the Warrant Agent to the Company from time to time upon request.

 

5.2.       Procedure for Surrender
of  Warrants.  Warrants may be  surrendered to the
Warrant Agent in accordance  with Section 5.1,  together with a written  request
for  exchange  or

6

transfer,  and  thereupon  the  Warrant  Agent shall issue in
exchange therefor one or more new Warrants as requested by the registered holder
of the  Warrants  so  surrendered,  representing  an equal  aggregate  number of
Warrants;     provided,
however, that in the event that a
Warrant  surrendered for transfer bears a restrictive  legend, the Warrant Agent
shall not cancel such Warrant and issue new Warrants in exchange  therefor until
the Warrant  Agent has  received  an opinion of counsel for the Company  stating
that such transfer may be made and indicating whether the new Warrants must also
bear a restrictive legend.

 

5.3.       Fractional Warrants.  The Warrant Agent shall not be required to effect any registration of transfer or exchange which will result in the issuance of a Warrant certificate for a fraction of a warrant.

 

5.4.       Service Charges.  No service charge shall be made for any exchange or registration of transfer of Warrants.

 

5.5.       Warrant Execution and Countersignature.  The Warrant Agent is hereby authorized to countersign and to deliver, in accordance with the terms of this Agreement, the Warrants required to be issued pursuant to the provisions of this Section 5, and the Company, whenever required by the Warrant Agent, will supply the Warrant Agent with Warrants duly executed on behalf of the Company for such purpose.

 

6.          Redemption.

 

6.1.       Redemption.  Subject to Section 6.4 hereof, not less than all of the outstanding Warrants may be redeemed, at the option of the Company, at any time after they become exercisable and prior to their expiration, at the office of the Warrant Agent, upon the notice referred to in Section 6.2, at the price of $.01 per Warrant (the “Redemption Price”), provided that the last sales price of the Common Stock has been at least $11.50 per share, on each of 20 trading days within any 30 trading day period ending on the third business day prior to the date on which notice of redemption is given.  The provisions of this Section 6.1 may not be modified, amended or deleted without the prior written consent of Morgan Joseph.

 

6.2.       Date Fixed for, and Notice of, Redemption.  In the event the Company shall elect to redeem all of the Warrants, the Company shall fix a date for the redemption.  Notice of redemption shall be mailed by first class mail, postage prepaid, by the Company not less than 30 days prior to the date fixed for redemption to the registered holders of the Warrants to be redeemed at their last addresses as they shall appear on the registration books.  Any notice mailed in the manner herein provided shall be conclusively presumed to have been duly given whether or not the registered holder received such notice.

 

6.3.       Exercise After Notice of Redemption.  The Warrants may be exercised, for cash in accordance with Section 3 of this Agreement at any time after notice of redemption shall have been given by the Company pursuant to Section 6.2 hereof and prior to the time and date fixed for redemption.  On and after the redemption date, the record holder of the Warrants shall have no further rights except to receive, upon surrender of the Warrants, the Redemption Price.

 

7

6.4.       Outstanding Warrants Only.  The Company understands that the redemption rights provided for by this Section 6 apply only to outstanding Warrants.  To the extent a person holds rights to purchase Warrants, such purchase rights shall not be extinguished by redemption.  However, once such purchase rights are exercised, the Company may redeem the Warrants issued upon such exercise provided that the criteria for redemption described herein is met.  The provisions of this Section 6.4 may not be modified, amended or deleted without the prior written consent of Morgan Joseph.

 

7.          Other Provisions Relating to Rights of Holders of Warrants.

 

7.1.       No Rights as Stockholder.  A Warrant does not entitle the registered holder thereof to any of the rights of a stockholder of the Company, including, without limitation, the right to receive dividends, or other distributions, exercise any preemptive rights to vote or to consent or to receive notice as stockholders in respect of the meetings of stockholders or the election of directors of the Company or any other matter.

 

7.2.       Lost, Stolen, Mutilated, or Destroyed Warrants.  In case any of the Warrants shall be mutilated, lost, stolen or destroyed, the Company may issue, and the Warrant Agent shall countersign and deliver in exchange and substitution for and upon cancellation of the mutilated Warrant, or in lieu of and in substitution for the Warrant lost, stolen or destroyed, on such terms as to indemnity or otherwise as the Company and the Warrant Agent may in their discretion impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), a new Warrant of like denomination, tenor, and date, and representing an equivalent right or interest, as the Warrant so lost, stolen, mutilated, or destroyed, but only upon receipt of evidence satisfactory to the Company and the Warrant Agent of such loss,
theft or destruction and, in case of a lost, stolen or destroyed Warrant, indemnity from the Warrant holder, if requested, also satisfactory to them.  Applicants for such substitute Warrants shall also comply with such other reasonable regulations and pay such reasonable charges as the Company or the Warrant Agent may prescribe.  Any such new Warrant shall constitute a substitute contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated, or destroyed Warrant shall be at any time enforceable by anyone.

 

7.3.       Reservation of Common Stock.  The Company shall at all times reserve and keep available a number of its authorized but unissued shares of Common Stock that will be sufficient to permit the exercise in full of all outstanding Warrants issued pursuant to this Agreement.

 

7.4.       Registration of
Common Stock. The Company agrees that prior to the
commencement of the Exercise Period, it shall file with the Securities and
Exchange Commission a post-effective amendment to the Registration Statement, or
a new registration statement, for the registration, under the Act, of, and it
shall take such action as is necessary to qualify for sale, in those states in
which the Warrants were initially offered by the Company, the Common Stock
issuable upon exercise of the Warrants. In either case, the Company will use its
best efforts to cause the same to become effective and to maintain the
effectiveness of such registration statement until the expiration of the
Warrants in accordance with the provisions of

8

this Agreement. The provisions of
this Section 7.4 may not be modified, amended or deleted without the prior
written consent of Morgan Joseph.

9

 

             8.         Concerning the Warrant Agent and Other Matters.

 

8.1.       Payment of Taxes.  The Company will pay any documentary stamp taxes attributable to the initial issuance of shares of Common Stock upon the exercise of Warrants; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the issue or delivery of any certificates for Common Stock issued upon the exercise of Warrant(s) in a name other than that of the registered holder of Warrants in respect of which such shares are issued, and in such case, neither the Company nor the Warrant Agent shall be required to issue or deliver any certificate for shares of Common Stock issued upon the exercise of Warrant(s) or any Warrant until the person
requesting the same has paid to the Company the amount of such tax or has established to the Company’s satisfaction that such tax has been paid.

 

8.2.       Resignation, Consolidation, or Merger of Warrant Agent.

 

8.2.1.    Appointment of Successor Warrant Agent.  The Warrant Agent, or any successor to it hereafter appointed, may resign its duties and be discharged from all further duties and liabilities hereunder after giving 60 days’ prior written notice to the Company.  The Warrant Agent may be removed by the Company by written notice to the Warrant Agent and the holders of the Warrants.  If the Warrant Agent shall resign or be removed or shall otherwise become incapable of acting as Warrant Agent, the Company shall appoint a successor to the Warrant Agent.  If the Company shall fail to make such appointment within a period of 30 days after it has been notified in writing of such resignation or incapacity by the Warrant Agent or by the holder of the Warrant (who shall, with such notice, submit his Warrant for inspection by
the Company), then the holder of any Warrant may apply to the Supreme Court of the State of New York for the County of New York for the appointment of a successor Warrant Agent at the Company’s cost.  Any successor Warrant Agent, whether appointed by the Company or by such court, shall be a corporation organized and existing under the laws of the State of New York, in good standing and having its principal office in the Borough of Manhattan, City and State of New York, and authorized under such laws to exercise corporate trust powers and subject to supervision or examination by federal or state authority.  After appointment, any successor Warrant Agent shall be vested with all the authority, powers, rights, immunities, duties, and obligations of its predecessor Warrant Agent with like effect as if originally named as Warrant Agent hereunder, without any further act or deed; but if for any reason it becomes necessary or appropriate, the predecessor Warrant Agent shall execute and
deliver, at the expense of the Company, an instrument transferring to such successor Warrant Agent all the records, property, authority, powers, and rights of such predecessor Warrant Agent hereunder; and upon request of any successor Warrant Agent the Company shall make, execute, acknowledge, and deliver any and all instruments in writing for more fully and effectually vesting in and confirming to such successor Warrant Agent all such authority, powers, rights, immunities, duties, and obligations.  Failure to file or mail any notice provided for in this Section, however, or any defect therein, shall not affect the validity of the resignation or removal of the Warrant Agent or the appointment of the successor Warrant Agent, as the case may be.

 

8.2.2.    Notice of
Successor Warrant Agent. In the event a successor
Warrant Agent shall be appointed, the Company shall give notice thereof to the
predecessor

10

Warrant Agent and the transfer agent for the Common Stock not later
than the effective date of any such appointment.

 

8.2.3.    Merger or Consolidation of Warrant Agent.  Any corporation into which the Warrant Agent may be merged or with which it may be consolidated or any corporation resulting from any merger or consolidation to which the Warrant Agent shall be a party shall be the successor Warrant Agent under this Agreement without any further act.

 

8.2.4.    Change of Name of Warrant Agent.  In case at any time the name of the Warrant Agent shall be changed and at such time any of the Warrants shall have been countersigned but not delivered, the Warrant Agent may adopt the countersignature under its prior name and deliver Warrants so countersigned.  In all such cases such Warrants shall have the full force provided in the Warrants and in the Agreement.

 

8.3.       Fees and Expenses of Warrant Agent.

 

8.3.1.    Remuneration.  The Company agrees to pay the Warrant Agent reasonable remuneration for its services as such Warrant Agent hereunder and will reimburse the Warrant Agent upon demand for all expenditures that the Warrant Agent may reasonably incur in the execution of its duties hereunder.

 

8.3.2.    Further Assurances.  The Company agrees to perform, execute, acknowledge, and deliver or cause to be performed, executed, acknowledged, and delivered all such further and other acts, instruments, and assurances as may reasonably be required by the Warrant Agent for the carrying out or performing of the provisions of this Agreement.

 

8.4.       Liability of Warrant Agent.

 

8.4.1.    Reliance on Company Statement.  Whenever in the performance of its duties under this Warrant Agreement, the Warrant Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a statement signed by the President or Chairman of the Board of the Company and delivered to the Warrant Agent.  The Warrant Agent may rely upon such statement for any action taken or suffered in good faith by it pursuant to the provisions of this Agreement.

 

8.4.2.    Indemnity.  The Warrant Agent shall be liable hereunder only for its own negligence, willful misconduct or bad faith.  The Company agrees to indemnify the Warrant Agent and save it harmless against any and all liabilities, including judgments, costs and reasonable counsel fees, for anything done or omitted by the Warrant Agent in the execution of this Agreement except as a result of the Warrant Agent’s negligence, willful misconduct, or bad faith.

 

8.4.3.    Exclusions.  The Warrant Agent
shall have no responsibility with respect to the validity of this Agreement
or with respect to the validity or execution of any

11

Warrant (except its
countersignature thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Warrant; nor shall it be responsible to make any adjustments required under the
provisions of Section 4 hereof or responsible for the manner, method, or amount
of any such adjustment or the ascertaining of the existence of facts that would
require any such adjustment; nor shall it by any act hereunder be deemed to make
any representation or warranty as to the authorization or reservation of any
shares of Common Stock to be issued pursuant to this Agreement or any Warrant or
as to whether any shares of Common Stock will when issued be valid and fully
paid and nonassessable.

 

8.5.       Acceptance of Agency.  The Warrant Agent hereby accepts the agency established by this Agreement and agrees to perform the same upon the terms and conditions herein set forth and among other things, shall account promptly to the Company with respect to Warrants exercised and concurrently account for, and pay to the Company, all moneys received by the Warrant Agent for the purchase of shares of the Company’s Common Stock through the exercise of Warrants.

 

9.          Miscellaneous Provisions.

 

9.1.       Successors.  All the covenants and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit of their respective successors and assigns.

 

9.2.       Notices.  Unless provided for differently elsewhere in this Agreement, any notice, statement or demand authorized by this Warrant Agreement to be given or made by the Warrant Agent or by the holder of any Warrant to or on the Company shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five days after deposit of such notice, postage prepaid, or sent by facsimile transmission (with confirmation of receipt), addressed (until another address is filed in writing by the Company with the Warrant Agent), as follows:

 

Echo Healthcare Acquisition Corp. 

8000 Towers Crescent Drive, Suite 1300

Vienna, Virginia 22182

Attention:  Joel Kanter, President

 

	
            with copy to:
 

 

Powell Goldstein LLP

One Atlantic Center, Fourteenth Floor 

1201 W. Peachtree Street, NW

Atlanta, Georgia  30309-3488

Attention:  Richard H. Miller, Esq.

 

Unless
provided for differently elsewhere in this Agreement, any notice, statement
or demand authorized by this Agreement to be given or made by the holder of any
Warrant or by the

12

Company to or on the Warrant Agent shall be sufficiently given
when so delivered if by hand or overnight delivery or if sent by certified mail
or private courier service within five days after deposit of such notice,
postage prepaid, or sent by facsimile transmission (with confirmation of
receipt) addressed (until another address is filed in writing by the Warrant
Agent with the Company), as follows:

 

Corporate Stock Transfer, Inc.

320 Cherry Creek Drive South 

Suite 430

Denver, Colorado  80209

Attn:  Carolyn Bell

Fax No.:

 

with a copy to:

 

Powell Goldstein LLP

One Atlantic Center, Fourteenth Floor 

1201 W. Peachtree Street, NW

Atlanta, Georgia  30309-3488

Attention:  Richard H. Miller, Esq.

Fax No.: (404) 572-6999

 

and

 

Ellenoff Grossman & Schole LLP

370 Lexington Avenue

New York, New York 10017

Attn: Douglas S. Ellenoff, Esq.

Fax No.: (212) 370-7889

 

and

 

Morgan Joseph & Co. Inc.

600 Fifth Avenue, 19th Floor (HQ)

New York, NY 10020

Attn:  May Lou Malanoski

Fax No.: (212) 218-3718 

 

9.3.       Applicable Law.  The validity, interpretation, and
performance of this Agreement and of the Warrants shall be governed in all
respects by the laws of the State of New York, without giving effect to
conflicts of law principles that would result in the application of the
substantive laws of another jurisdiction. The Company hereby agrees that any
action, proceeding or claim against it arising out of or relating in any way to
this Agreement shall be brought and enforced in the courts of the State of New
York or the United States District Court for the Southern District of New York,
and irrevocably submits to such jurisdiction, which jurisdiction shall be
exclusive. The Company hereby waives any objection to such exclusive
jurisdiction and

13

that such courts represent an inconvenience forum. Any such
process or summons to be served upon the Company may be served by transmitting a
copy thereof by registered or certified mail, return receipt requested, postage
prepaid, addressed to it at the address set forth in Section 9.2 hereof. Such
mailing shall be deemed personal service and shall be legal and binding upon the
Company in any action, proceeding or claim.

 

9.4.       Persons Having Rights under this Agreement.  Nothing in this Agreement expressed and nothing that may be implied from any of the provisions hereof is intended, or shall be construed, to confer upon, or give to, any person or entity other than the parties hereto and the registered holders of the Warrants (who shall, for all purposes hereunder, be deemed third party beneficiaries of this Agreement) and, for the purposes of Sections 6.1, 6.4, 7.4 and 9.2 hereof, Morgan Joseph, any right, remedy, or claim under or by reason of this Warrant Agreement or of any covenant, condition, stipulation, promise, or agreement hereof.  Morgan Joseph shall be deemed to be a third-party beneficiary of this Agreement with respect to Sections 6.1, 6.4, 7.4 and 9.2 hereof.  All covenants, conditions, stipulations,
promises, and agreements contained in this Warrant Agreement shall be for the sole and exclusive benefit of the parties hereto (and Morgan Joseph with respect to the Sections 6.1, 6.4, 7.4  and 9.2 hereof) and their successors and assigns and of the registered holders of the Warrants.

 

9.5.       Examination of the Warrant Agreement.  A copy of this Agreement shall be available at all reasonable times at the office of the Warrant Agent in Denver, Colorado, for inspection by the registered holder of any Warrant.  The Warrant Agent may require any such holder to submit his Warrant for inspection by it.

 

9.6.       Counterparts.  This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

 

9.7.       Effect of Headings.  The Section headings herein are for convenience only and are not part of this Warrant Agreement and shall not affect the interpretation thereof.

 

 

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as of the day and year first above written.

 

 

	
             
 	
             
 	
             
 
	
             
 	
            ECHO HEALTHCARE ACQUISITION CORP.
 
	
            
  
 	
            
  
 	
            
  
 
	
             
 	
            By:  
 	
             
 
	
             
 	
            _______________________________

Name:  Joel Kanter
 
	
             
 	
            Title:  President
 

 

	
             
 	
             
 	
             
 
	
             
 	
            CORPORATE STOCK TRANSFER, INC.
 
	
            
  
 	
            
  
 	
            
  
 
	
             
 	
            By:  
 	
             
 
	
             
 	
            _______________________________

Name:  Carolyn Bell
 
	
             
 	
            Title:  President
 

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Exhibit A

 

Form of Warrant

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00096-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00096-of-00352.parquet"}]]