ESCROW AGREEMENT
THIS
ESCROW AGREEMENT (this “Agreement”)
is
made as of May 8, 2008, by and among ROO Group Inc., a Delaware corporation
d/b/a KIT digital (the “Company”),
the
purchasers signatory hereto (each a “Purchaser”
and
together the “Purchasers”)
and
Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP, with an address at 00 Xxxxxxxx, Xxx Xxxx,
Xxx Xxxx 00000 (the “Escrow
Agent”).
Capitalized terms used but not defined herein shall have the meanings set forth
in the Securities Purchase Agreement referred to in the first
recital.
WITNESSETH:
WHEREAS,
the Purchasers will be purchasing from the Company, severally and not jointly
with the other Purchasers, in the aggregate, up to 75,000,000 of Units (the
“Units”), each unit consisting of one share of common stock, par value $0.0001
per share, of the Company, and a five-year warrant to purchase one share of
the
Company’s common stock as set forth in the Securities Purchase Agreement (the
“Purchase
Agreement”)
dated
the date hereof between the Purchasers and the Company, which securities will
be
issued under the terms contained herein and in the Purchase Agreement; and
WHEREAS,
it is intended that the purchase of the securities be consummated in accordance
with the requirements set forth in Regulation D promulgated under the Securities
Act of 1933, as amended; and
WHEREAS,
the Company and the Purchasers have requested that the Escrow Agent hold the
subscription amounts with respect to the purchase of the Units in escrow upon
the terms set forth herein; and
NOW,
THEREFORE, in consideration of the covenants and mutual promises contained
herein and other good and valuable consideration, the receipt and legal
sufficiency of which are hereby acknowledged and intending to be legally bound
hereby, the parties agree as follows:
ARTICLE
1
TERMS
OF
THE ESCROW
1.1. The
parties hereby agree to establish an escrow account with the Escrow Agent
whereby the Escrow Agent shall hold the funds for the purchase of the
Units
as contemplated by the Purchase Agreement.
1.2. Upon
the
Escrow Agent’s receipt of each Purchaser’s subscription amount into its master
escrow account, together with executed counterpart signature pages of the
Purchase Agreement and this Agreement from each Purchaser and all other closing
documents required under Section 7 of the Purchase Agreement, it
shall
advise the Company of the amount of funds it has received into its master escrow
account.
1.3. Wire
transfers to the Escrow Agent shall be made as follows:
Citibank
New
York,
NY
A/C
of
Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP, XXXX
A/C#:
92883436
ABA#:
021000089
SWIFT
Code: XXXXXX00
REMARK:
ROO Group, Inc.
1.4 The
Company promptly following being advised by the Escrow Agent that the Escrow
Agent has received the subscription amounts from each Purchaser, copies of
counterpart signature pages of the Purchase Agreement from each Purchaser and
the Company and all other closing documents required under Section 7 of the
Purchase Agreement, shall deliver to the Escrow Agent a Release Notice, in
the
form attached hereto as Exhibit
A
(the
“Release
Notice”).
1.5 Once
the
Escrow Agent receives the Release Notice executed by the Company, it shall
wire
the Subscription Amount for the Units delivered by each Purchaser per the
disbursement instructions of the Company, it being understood that the Escrow
Agent may transfer the aggregate subscription amount in multiple increments
as
the Subscription Amounts for each Purchaser are being delivered to it; provided,
however, that the Escrow Agent shall have no obligation to wire funds in an
amount of less than $100,000.
1.6 If
the
Closing shall not have occurred or the Release Notice shall not have been
delivered by the Company, in either case, on or before May 31, 2008, then the
Escrow Agent shall immediately, and in any event, no later than June 15, 2008,
return by wire transfer in immediately available funds, the Subscription Amounts
then held by the Escrow Agent to the Purchaser who delivered each such
Subscription Amount to the Escrow Agent.
1.7 Wire
transfers to the Company shall be made pursuant to written instructions from
the
Company provided to the Escrow Agent on the Closing Date.
ARTICLE
II
MISCELLANEOUS
2.1 No
waiver
or any breach of any covenant or provision herein contained shall be deemed
a
waiver of any preceding or succeeding breach thereof, or of any other covenant
or provision herein contained. No extension of time for performance of any
obligation or act shall be deemed an extension of the time for performance
of
any other obligation or act.
2.2
All
notices or other communications required or permitted hereunder shall be in
writing, and shall be sent as set forth in the Purchase Agreement.
2.3
This
Escrow Agreement shall be binding upon and shall inure to the benefit of the
permitted successors and permitted assigns of the parties hereto.
2.4
This
Escrow Agreement is the final expression of, and contains the entire agreement
between, the parties with respect to the subject matter hereof and supersedes
all prior understandings with respect thereto. This Escrow Agreement may not
be
modified, changed, supplemented or terminated, nor may any obligations hereunder
be waived, except by written instrument signed by the parties to be charged
or
by its agent duly authorized in writing or as otherwise expressly permitted
herein.
2.5
Whenever
required by the context of this Escrow Agreement, the singular shall include
the
plural and masculine shall include the feminine. This Escrow Agreement shall
not
be construed as if it had been prepared by one of the parties, but rather as
if
all parties had prepared the same. Unless otherwise indicated, all references
to
Articles are to this Escrow Agreement.
2.6
The
parties hereto expressly agree that this Escrow Agreement shall be governed
by,
interpreted under and construed and enforced in accordance with the laws of
the
State of New York. Any action to enforce, arising out of, or relating in any
way
to, any provisions of this Escrow Agreement shall only be brought in a state
or
Federal court sitting in New York City.
2.7
The
Escrow Agent’s duties hereunder may be altered, amended, modified or revoked
only by a writing signed by the Company, each Purchaser and the Escrow
Agent.
2.8
The
Escrow Agent shall be obligated only for the performance of such duties as
are
specifically set forth herein and may rely and shall be protected in relying
or
refraining from acting on any instrument reasonably believed by the Escrow
Agent
to be genuine and to have been signed or presented by the party or parties
hereto. The Escrow Agent shall not be personally liable for any act the Escrow
Agent may do or omit to do hereunder as the Escrow Agent while acting in good
faith and in the absence of gross negligence, fraud and willful misconduct,
and
any act done or omitted by the Escrow Agent pursuant to the advice of the Escrow
Agent’s attorneys-at-law shall be conclusive evidence of such good faith, in the
absence of gross negligence, fraud and willful misconduct.
2.9
The
Escrow Agent is hereby expressly authorized to disregard any and all warnings
given by any of the parties hereto or by any other person or corporation,
excepting only orders or process of courts of law and is hereby expressly
authorized to comply with and obey orders, judgments or decrees of any court.
In
case the Escrow Agent obeys or complies with any such order, judgment or decree,
the Escrow Agent shall not be liable to any of the parties hereto or to any
other person, firm or corporation by reason of such decree being subsequently
reversed, modified, annulled, set aside, vacated or found to have been entered
without jurisdiction.
2.10 The
Escrow Agent shall not be liable in any respect on account of the identity,
authorization or rights of the parties executing or delivering or purporting
to
execute or deliver the Purchase Agreement or any documents or papers deposited
or called for thereunder in the absence of gross negligence, fraud and willful
misconduct.
2.11 The
Escrow Agent shall be entitled to employ such legal counsel and other experts
as
the Escrow Agent may deem necessary properly to advise the Escrow Agent in
connection with the Escrow Agent’s duties hereunder, may rely upon the advice of
such counsel, and may pay such counsel reasonable compensation; provided that
the costs of such compensation shall be borne by the Escrow Agent.
2.12 The
Escrow Agent’s responsibilities as escrow agent hereunder shall terminate if the
Escrow Agent shall resign by giving written notice to the Company and the
Purchasers. In the event of any such resignation, the Purchasers and the Company
shall appoint a successor Escrow Agent and the Escrow Agent shall deliver to
such successor Escrow Agent any escrow funds and other documents held by the
Escrow Agent.
2.13 If
the
Escrow Agent reasonably requires other or further instruments in connection
with
this Escrow Agreement or obligations in respect hereto, the necessary parties
hereto shall join in furnishing such instruments.
2.14 It
is
understood and agreed that should any dispute arise with respect to the delivery
and/or ownership or right of possession of the documents or the escrow funds
held by the Escrow Agent hereunder, the Escrow Agent is authorized and directed
in the Escrow Agent’s sole discretion (1) to retain in the Escrow Agent’s
possession without liability to anyone at all or any part of said documents
or
the escrow funds until such disputes shall have been settled either by mutual
written agreement of the parties concerned by a final order, decree or judgment
or a court of competent jurisdiction after the time for appeal has expired
and
no appeal has been perfected, but the Escrow Agent shall be under no duty
whatsoever to institute or defend any such proceedings or (2) to deliver the
escrow funds and any other property and documents held by the Escrow Agent
hereunder to a state or Federal court having competent subject matter
jurisdiction and located in the City of New York in accordance with the
applicable procedure therefore
2.15 The
Company and each Purchaser agree severally, and only to the extent and dollar
amount of such Purchaser’s investment in the Company,
to
indemnify and hold harmless the Escrow Agent and its partners, employees, agents
and representatives from any and all claims, liabilities, costs or expenses
in
any way arising from or relating to the duties or performance of the Escrow
Agent hereunder or the transactions contemplated hereby or by the Purchase
Agreement other than any such claim, liability, cost or expense to the extent
the same shall have been determined by final, unappealable judgment of a court
of competent jurisdiction to have resulted from the gross negligence, fraud
or
willful misconduct of the Escrow Agent.
************************
IN
WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement as
of
date first written above.
|
ROO
GROUP, INC.
d/b/a
KIT digital
|
|
|
By:
/s/
Kaleil Xxxxx
Xxxxxx
Name: Kaleil Xxxxx Tuzman
Title:
Chief Executive Officer
|
|
|
With
a copy to (which shall not constitute notice):
|
|
|
ESCROW
AGENT:
|
|
|
SICHENZIA
XXXX XXXXXXXX XXXXXXX LLP
|
|
|
By:
/s/
Xxxxxxx X.
Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: Partner
|
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGES FOR PURCHASERS FOLLOW]
[SIGNATURE
PAGE OF PURCHASERS TO ESCROW AGREEMENT]
Name
of
Purchaser:
Signature
of Authorized Signatory of Purchaser:
__________________________
Name
of
Authorized Signatory: _________________________
Title
of
Authorized Signatory: __________________________
Exhibit
A
RELEASE
NOTICE
The
UNDERSIGNED, pursuant to the Escrow Agreement, dated as of May____, 2008, among
ROO Group, Inc. d/b/a KIT digital, the Purchasers signatory thereto, and
Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP, as Escrow Agent (the “Escrow
Agreement”;
capitalized terms used herein and not defined shall have the meaning ascribed
to
such terms in the Escrow Agreement), hereby notify the Escrow Agent that each
of
the conditions precedent to the purchase and sale of the Shares set forth in
the
Securities Purchase Agreement have been satisfied. The
Company and the undersigned Purchaser hereby confirm that all of their
respective representations and warranties contained in the Purchase Agreement
remain true and correct and authorize the release by the Escrow Agent of the
funds and documents to be released at the Closing as described in the Escrow
Agreement. This Release Notice shall not be effective until executed by the
Company and the Purchaser.
This
Release Notice shall not be effective until executed by the Company and the
Purchasers.
This
Release Notice may be signed in one or more counterparts, each of which shall
be
deemed an original.
IN
WITNESS WHEREOF, the undersigned have caused this Release Notice to be duly
executed and delivered as of this ____day of May 2008.
|
ROO
GROUP, INC.
|
|
By:_________________________________________
Name: Kaleil Xxxxx Xxxxxx
Title: Chief Executive Officer
|
[SIGNATURE
PAGE OF PURCHASERS FOLLOWS]
Name
of
Purchaser:
Signature
of Authorized Signatory of Purchaser:
__________________________
Name
of
Authorized Signatory: _________________________
Title
of
Authorized Signatory: __________________________
