ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is made as of June 7, 2005, by,
between, and among IPEX, Inc. a corporation organized and existing under the
laws of the State of Nevada ("Purchaser"); B Tech Ltd., a corporation organized
and existing under the laws of the British Virgin Islands ("B Tech"); Xxxxxxx
Xxxxxxxxx ("Xxxxxxxxx"); Xxxxxxxx Xxxx ("Xxxx" and together with B Tech and
Xxxxxxxxx, the "Sellers"); Xxxxxxxx Xxxxxxx ("Xxxxxxx"); and Sichenzia Xxxx
Xxxxxxxx Xxxxxxx LLP, a limited liability partnership organized and existing
under the laws of the State of New York (the "Escrow Agent");
W I T N E S S E T H T H A T:
WHEREAS, the Purchaser and the Sellers have, as of this date, entered into
an agreement (the "Xxxxxxxxx Purchase Agreement"), which, among other matters,
provides for the purchase by the Purchaser of certain specified assets of the
Sellers;
WHEREAS, the Purchaser, RGB Channel SRL and Sellers (as the shareholders
of RGB Channel SRL) have, as of this date, entered into an agreement (the "RGB
Purchase Agreement"), which, among other matters, provides for the purchase by
the Purchaser of certain specified assets of RGB Channel SRL;
WHEREAS, the assets acquired by the Purchaser pursuant to the Xxxxxxxxx
Purchase Agreement and the RGB Purchase Agreement are herein referred to as the
"Assets";
WHEREAS, this Agreement is entered into pursuant to and in connection with
the Xxxxxxxxx Purchase Agreement; and
WHEREAS, Xxxxxxx has agreed to escrow certain shares of common stock of
Purchaser, $.001 par value per share (the "Common Stock") which are owned by
Xxxxxxx, in favor of Purchaser until such time as the Assets acquired by the
Purchaser from RGB Channel SRL and Sellers have been validated in accordance
with the terms hereof;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, and in consideration of the parties thereto
entering into the Xxxxxxxxx Purchase Agreement, the parties hereto covenant and
agree as follows:
I. Deposit of Stock
Concurrently with the execution and delivery of this Agreement, Xxxxxxx
shall deliver to the Escrow Agent such number of shares of Common Stock he owns
in the Purchaser ("Escrowed Stock"), together with a stock power separate from
the certificate ("Stock Power") in a form attached hereto as Exhibit A, executed
in blank and medallion guaranteed, valued at six million two hundred seventy
five thousand dollars ($6,275,000), at the price per share computed based on the
average of the closing bid and asked prices of the Common Stock as quoted on the
OTC Bulletin Board for the five (5) trading days prior to the Closing Date (as
defined in the Xxxxxxxxx Purchase Agreement). On the date ninety (90) days after
the Closing Date (the "Valuation Date"), the Purchaser shall compute the price
per share based on the average of the closing bid and asked prices of the Common
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Stock quoted on the OTC Bulletin Board for the five (5) trading days prior to
the Valuation Date (the "Valuation Price Per Share"). The number of shares of
the Escrowed Stock shall be adjusted by dividing six million two hundred seventy
five thousand dollars ($6,275,000) by the Valuation Price Per Share. Immediately
after the Valuation Date, either (a) Xxxxxxx shall either deposit additional
shares of Common Stock, or (b) the Purchaser shall instruct the Escrow Agent to
return a specified number of shares of the Escrowed Stock to Xxxxxxx, based upon
the adjustment of the number of shares of Escrowed Stock on the Valuation Date.
The Escrow Agent shall hold and dispose of the Escrowed Stock in accordance with
the terms of this Agreement.
II. Release of Escrowed Stock
A. Release upon Satisfaction or Waiver of Conditions. Upon receipt by the
Escrow Agent of a Notice of Satisfaction of Conditions signed by the Purchaser
(in the sole discretion of its board of directors) stating that all of the
conditions as set forth in Section II.B. of this Agreement have been satisfied
within one hundred eighty (180) days of the date of this Agreement, the Escrow
Agent shall release the Escrowed Stock to Xxxxxxx, after which this Agreement
shall be deemed terminated and the Escrow Agent shall be deemed released and
discharged from further obligations hereunder. In the event that only one (1) of
the conditions set forth in Section II.B. have been satisfied in such one
hundred eighty (180) day period, such period shall be extended an additional
ninety (90) days.
B. Conditions. The conditions (the "Conditions") for the release of the
Escrowed Stock subject to Section II.A. of this Agreement are as follows:
1. The Purchaser shall have received two written reports, prepared
by an independent third party chosen in the sole discretion of the Chief
Executive Officer of the Purchaser, the first such written report
validating the Assets (as determined by the board of directors of the
Purchaser) as transferred to the Purchaser, and the second such written
report validating the Assets (as determined by the board of directors of
the Purchaser) as thereafter enhanced by the Purchaser; and
2. The Purchaser shall have received a written report, prepared by
an intellectual property attorney (Fish & Xxxxxxxxxx, LLP or a firm that
is equally qualified as determined by the board of directors of the
Purchaser) chosen by the board of directors of the Purchaser, validating
the software portion of the Assets (as determined by the board of
directors of the Purchaser) as transferred to the Purchaser.
Upon the satisfaction of the above Conditions, the Purchaser shall forward to
the Escrow Agent a Notice of Satisfaction of Conditions instructing the Escrow
Agent to release the Escrowed Stock to Xxxxxxx. If the Conditions are not met
during the periods set forth in Section II.A. above, the Purchaser shall forward
to Escrow Agent a Notice of Dissatisfaction of Conditions, instructing the
Escrow Agent to release the Escrowed Stock to the Purchaser to be cancelled and
returned to the Purchaser's treasury stock as described in Section II.C.
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C. Release if Conditions Are Not Satisfied. If the Conditions to the
release of the Escrowed Stock as set forth in Section II.B. of this Agreement
are not satisfied or waived within either one hundred eighty (180) days of the
date of this Agreement, or two hundred seventy (270) days of the date of this
Agreement (in the event the escrow period is extended pursuant to Section
II.A.), as the case may be, the Purchaser shall deliver a Notice of
Dissatisfaction of Conditions signed by Purchaser to the Escrow Agent, and
simultaneously deliver a copy of such Notice of Dissatisfaction of Conditions to
Xxxxxxx in accordance with Section XII hereof, instructing the Escrow Agent to
distribute the Escrowed Stock to the Purchaser after which the Escrowed Stock
shall be cancelled on the books and records of the Purchaser. Immediately upon
receipt of the Notice of Dissatisfaction of Conditions signed by the Purchaser,
the Escrow Agent forward a copy of the Notice of Dissatisfaction of Conditions
to Xxxxxxx in accordance with Section XII hereof. Subject to Section II.D.
hereof, ten (10) business days after receipt of the Notice of Dissatisfaction of
Conditions signed by the Purchaser, the Escrow Agent shall distribute the
Escrowed Stock, in accordance with instructions accompanying the Notice of
Dissatisfaction of Conditions, to the Purchaser after which this Agreement shall
be deemed terminated and the Escrow Agent shall be released and discharged from
all further obligations hereunder.
D. Release of Escrowed Stock if there is a Dispute. If a Notice of
Dissatisfaction of Conditions is delivered on or before one hundred eighty (180)
days of the date of this Agreement, or two hundred seventy (270) days of the
date of this Agreement (in the event the escrow period is extended pursuant to
Section II.A.), as the case may be, and if Xxxxxxx disputes the findings set
forth in such Notice of Dissatisfaction, then Xxxxxxx shall, within ten (10)
business days thereafter deliver notice of such dispute ("Notice of Dispute") to
the Escrow Agent, and simultaneously deliver a copy of such Notice of Dispute to
the Purchaser in accordance with Section XII hereof. If a Notice of Dispute is
received or if no Notice of Dissatisfaction of Conditions is received pursuant
to Section II.C. hereof, the Escrow Agent shall retain custody of the Escrowed
Stock until the first to occur of the following:
(1) Receipt by the Escrow Agent of a notice signed by the Purchaser and
Xxxxxxx containing instructions to the Escrow Agent as to the
delivery of the Escrowed Stock, or
(2) Receipt by the Escrow Agent of a final order of a court of competent
jurisdiction resolving the dispute from which no appeal is or can be
taken,
after which the Escrow Agent shall promptly deliver the Escrowed Stock in
accordance with the notice from the parties or decision of the court, as the
case may be. Upon delivery thereof, this Agreement shall be deemed to be
terminated, and the Escrow Agent shall be released and discharged from all
further obligations hereunder.
III. Termination by the Parties
If at any time the Escrow Agent shall receive a notice signed by or on
behalf of the Purchaser and Xxxxxxx that this Agreement has been terminated and
instructing the Escrow Agent with respect to the disposition of the Escrowed
Stock, the Escrow Agent shall release the Escrowed Stock in accordance with the
instructions contained in such notice, and upon such release this Agreement
shall be deemed terminated, and the Escrow Agent shall be released and
discharged from all further obligations hereunder.
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IV. Nature of Duties; No Conflict; Liability
It is understood and agreed that the duties of the Escrow Agent hereunder
are purely ministerial in nature and do not represent a conflict of interest for
the Escrow Agent to act, or continue to act, as counsel for any party to this
Agreement with respect to any litigation or other matters arising out of this
Agreement or otherwise. The Escrow Agent shall not be liable for any error of
judgment, fact, or law, or any act done or omitted to be done, except for its
own willful misconduct or gross negligence or that of its partners, employees,
and agents. The Escrow Agent's determination as to whether an event or condition
has occurred, or been met or satisfied, or as to whether a provision of this
Agreement has been complied with, or as to whether sufficient evidence of the
event or condition or compliance with the provision has been furnished to it,
shall not subject the Escrow Agent to any claim, liability, or obligation
whatsoever, even if it shall be found that such determination was improper and
incorrect; provided that the Escrow Agent and its partners, employees, and
agents shall not have been guilty of willful misconduct or gross negligence in
making such determination.
V. Indemnification
The Purchaser and Xxxxxxx jointly and severally agree to indemnify the
Escrow Agent for, and to hold it harmless against, any loss, liability, or
expense ("Cost") incurred without gross negligence or willful misconduct on the
part of the Escrow Agent, arising out of or in connection with its entering into
this Agreement and carrying out its duties hereunder, including costs and
expenses of defending itself against any claim of liability in connection
herewith or therewith. The right to indemnification set forth in the preceding
sentence shall include the right to be paid by the Purchaser and Xxxxxxx in
respect of Costs as they are incurred (including Costs incurred in connection
with defending itself against any claim of liability in connection herewith).
The Escrow Agent shall repay any amounts so paid if it shall ultimately be
determined by a final order of a court of competent jurisdiction from which no
appeal is or can be taken that the Escrow Agent is not entitled to such
indemnification.
VI. Documents and Instructions
The Escrow Agent may act in reliance upon any notice, instruction,
certificate, statement, request, consent, confirmation, agreement or other
instrument which it believes to be genuine and to have been signed by a proper
person or persons, and may assume that any of the officers of Purchaser
purporting to act on behalf of Purchaser in giving any such notice or other
instrument in connection with the provisions hereof has been duly authorized to
do so. The Escrow Agent acts hereunder as a depository only and shall not be
responsible or liable in any manner whatsoever for the genuineness, sufficiency,
correctness, or validity of any agreement, document, certificate, instrument, or
item deposited with it or any notice, consent, approval, direction, or
instruction given to it, and the Escrow Agent shall be fully protected, under
Sections IV and V above, for all acts taken in accordance with any written
instruction or instrument given to it hereunder, and reasonably believed by the
Escrow Agent to be genuine and what it purports to be.
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VII. Conflicting Notices, Claims, Demands, or Instructions
If at any time the Escrow Agent shall receive conflicting notices, claims,
demands, or instructions with respect to the Escrowed Stock, or if for any other
reason it shall in good faith be unable to determine the party or parties
entitled to receive the Escrowed Stock, or any part thereof, the Escrow Agent
may refuse to make any distribution or payment and may retain the Escrowed Stock
in its possession until it shall have received instructions in writing concurred
in by all parties in interest, or until directed by a final order or judgment of
a court of competent jurisdiction from which no appeal is or can be taken,
whereupon the Escrow Agent shall make such disposition in accordance with such
instructions or such order. The Escrow Agent shall also be entitled to commence
as interpleader action in any court of competent jurisdiction to seek an
adjudication of the rights of the Purchaser and Xxxxxxx.
VIII. Advice of Counsel
The Escrow Agent may consult with, and obtain advice from, legal counsel
in the event of any dispute or question as to the construction of any of the
provisions hereof or its duties hereunder, and it shall incur no liability and
shall be fully protected and indemnified under Section V above for all acts
taken, in the absence of gross negligence or willful misconduct, in accordance
with the advice and instructions of such counsel. In the event that the Escrow
Agent retains counsel or otherwise incurs any legal fees by virtue of any
provision of this Agreement, the reasonable fees and disbursements of such
counsel and any other liability, loss or expense which the Escrow Agent may
thereafter suffer or incur in connection with this Agreement or the performance
or attempted performance in good faith of its duties hereunder shall be paid (or
reimbursed to it) by the Purchaser and Xxxxxxx, jointly and severally. In the
event that the Escrow Agent shall become a party to any litigation in connection
with its functions as Escrow Agent pursuant to this Agreement, whether such
litigation shall be brought by or against it, the reasonable fees and
disbursements of counsel to the Escrow Agent including the amounts attributable
to services rendered by partners or associates of Escrow Agent at the then
prevailing hourly rate charged by them and disbursements incurred by them,
together with any other liability, loss or expense which it may suffer or incur
in connection therewith, shall be paid (or reimbursed to it) by the Purchaser
and Xxxxxxx, jointly and severally, unless such loss, liability or expense is
due to the willful breach by the Escrow Agent of its duties hereunder.
IX. Compensation and Expenses
The Escrow Agent agrees to serve without compensation for its services.
All expenses of the Escrow Agent incurred in the performance of its duties
hereunder shall be paid by Purchaser.
X. Resignation of Escrow Agent
The Escrow Agent may resign at any time upon giving the other parties
hereto thirty (30) days' notice to that effect. In that event the successor
Escrow Agent shall be such person, firm, or corporation as Purchaser and Xxxxxxx
shall mutually select. It is understood and agreed that the Escrow Agent's
resignation shall not be effective until a successor Escrow Agent agrees to act
hereunder; provided, however, that in the event no successor Escrow Agent is
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appointed and acting hereunder within thirty (30) days of such notice, the
Escrow Agent may deliver the Escrowed Stock to a court of competent
jurisdiction; and provided, further, that the Escrow Agent may appoint a
successor escrow agent hereunder at any time so long as such successor shall
accept and agree to be bound by the terms of this Agreement (except that any
such successor escrow agent shall be entitled to customary fees which shall be
payable by the Purchaser) and shall be a bank or trust company insured by the
Federal Deposit Insurance Corporation.
XI. Escrow Agent as Counsel to the Purchaser
Xxxxxxx hereby acknowledges that the Escrow Agent is counsel to the
Purchaser and agrees that he will not seek to disqualify the Escrow Agent from
acting and continuing to act as counsel to the Purchaser in the event of a
dispute hereunder or in the course of the defense or prosecution of any claim
relating to the transactions contemplated hereby or by the Xxxxxxxxx Purchase
Agreement or RGB Purchaser Agreement.
XII. Notices
All notices, consents, approvals, directions, and instructions required or
permitted under this Agreement shall be effective when received and shall be
given in writing and delivered either by hand or by registered or certified
mail, postage prepaid, or by telecopier, and addressed as follows:
A. If to the Purchaser, to it at the address and facsimile number
set forth in or furnished pursuant to the provisions of the
Xxxxxxxxx Purchase Agreement;
B. If to Xxxxxxx, to
----------------------------------
----------------------------------
Facsimile:
------------------------; and
C. If to the Escrow Agent, to it at:
Xxxx X. Xxxx, Esq.
Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
or to such other persons or addresses as any party may have furnished in writing
to the other parties. Copies of all communications hereunder shall be sent to
the Escrow Agent.
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XIII. Entire Agreement, Etc.
This Agreement contains the entire agreement among the parties with
respect to the subject matter hereof. This Agreement may not be amended,
supplemented, or discharged, and no provision hereof may be modified or waived,
except by an instrument in writing signed by all of the parties hereto. No
waiver of any provision hereof by any party shall be deemed a continuing waiver
of any matter by such party. If a conflict between the terms and provisions
hereof and of either the Xxxxxxxxx Purchase Agreement or the RGB Purchase
Agreement occurs, the terms and provisions hereof shall govern the rights,
obligations, and liabilities of the Escrow Agent.
XIV. Successors and Assigns
This Agreement shall be binding upon and shall inure to the benefit of
each of the parties hereto, and their respective heirs, successors, assigns,
distributees, and legal representatives.
XV. Counterparts
This Agreement may be executed in several counterparts, each of which
shall be deemed original, but such counterparts together shall constitute one
and the same instrument.
XVI. Governing Law
This Agreement shall be governed by and construed and enforced in
accordance with the law (other than the law governing conflict of law questions)
of the State of New York. Any action to enforce, arising out of, or relating in
any way to any of the provisions of this Agreement may be brought and prosecuted
in such court or courts located within New York County, New York as is provided
by law; and the parties hereto consent to the jurisdiction of the court or
courts located within New York, New York and to service of process by registered
or certified mail, return receipt requested, or by any other manner provided by
law.
XVII. Additional Documents and Act
The Purchaser and Xxxxxxx shall, from time to time, execute such
documents and perform such acts as Escrow Agent may reasonably request and as
may be necessary to enable Escrow Agent to perform its duties hereunder or
effectuate the transactions contemplated by thus Escrow Agreement.
[Signature page follows.]
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IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be duly executed as a sealed instrument as of the day and year
first above written.
IPEX, Inc
By: /s/ Xxxxxx Xxxx
---------------------------------------
Name: Xxxxxx "Xxxx" Xxxx III
Title: Chief Executive Officer
B Tech, Ltd.
By: /s/ Xxxxxxx Xxxxxxxxx
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Name: Xxxxxxx Xxxxxxxxx
-------------------------------------
Title: Director
------------------------------------
/s/ Xxxxxxx Xxxxxxxxx
---------------------------------------
Xxxxxxx Xxxxxxxxx
/s/ Xxxxxxxx Xxxx
------------------------------------------
Xxxxxxxx Xxxx
/s/ Xxxxxxxx Xxxxxxx
------------------------------------------
Xxxxxxxx Xxxxxxx
Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP
By: /s/ Xxxx X. Xxxx
---------------------------------------
Name: Xxxx X. Xxxx, Esq.
Title: Partner
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