ESCROW AGREEMENT
THROUGHOUT
THIS AGREEMENT, WHERE INFORMATION HAS BEEN REPLACED BY AN ASTERISK (*), THAT
INFORMATION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE OMITTED
INFORMATION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.
ESCROW
AGREEMENT (the “Escrow
Agreement”)
made
as of the 27th day of July, 2006, by and among IGIA, Inc., a Delaware
corporation
(the
“Company”),
the
Purchasers listed on Schedule A attached hereto (each a “Purchaser”
and
collectively, the “Purchasers”)
and
Xxxx Xxxxxxxxx, Esquire (the “Escrow
Agent”).
WITNESSETH:
WHEREAS,
the Company desires to raise capital in order to finance the growth of its
business operations and for other general corporate purposes;
WHEREAS,
the Company and the Purchasers have agreed that, in order to raise capital,
the
Company shall issue and sell to the Purchasers debentures (the “Debentures”),
convertible into shares of the Company’s common stock, par value $.001 per share
(the “Common
Stock”),
and
Warrants to purchase shares of Common Stock (the “Warrants”) for an aggregate
purchase price of $500,000;
WHEREAS,
the Company has entered into a Securities Purchase Agreement dated as of July
27, 2006 (the “Purchase
Agreement”)
with
the Purchasers;
WHEREAS,
the parties have agreed that all funds shall be paid into escrow for the benefit
of the Company and the Escrow Agent has agreed to receive, hold and pay such
funds, upon the terms and subject to the conditions hereinafter set
forth.
NOW,
THEREFORE, in consideration of the mutual covenants herein contained, and for
other good and valuable consideration, the receipt and legal sufficiency of
which is hereby acknowledged, the parties to this Escrow Agreement hereby agree
as follows:
1. Defined
Terms.
Capitalized terms used and not otherwise defined herein shall have the meanings
respectively assigned to them in the Purchase Agreement.
2. Escrow
of Funds.
On or
prior to the Closing Date, the following shall occur: the Purchasers shall
remit
by wire transfer $395,000 of the Purchase Price to the Escrow Agent pursuant
to
this Escrow Agreement (the “Escrow
Amount”).
The
Escrow Agent shall hold the Escrow Amount only in accordance with the terms
and
conditions of this Escrow Agreement.
3. Investment
of Funds.
The
Escrow Agent shall invest the monies in the Escrow Amount in an interest bearing
bank account with, or certificates of deposit or time deposits with, maturities
of no more than thirty (30) days issued by, a domestic commercial bank or such
other bank or other financial institution as it normally holds such
funds.
4. Release
of Funds.
The
Escrow Agent shall release the Escrow Amount in accordance with the disbursement
instructions on
Schedule B attached hereto.
5. Further
Assurances.
The
Company and the Purchasers agree to do such further acts and to execute and
deliver such statements, assignments, agreements, instruments and other
documents as the Escrow Agent from time to time reasonably may request in
connection with the administration, maintenance, enforcement or adjudication
of
this Escrow Agreement in order (a) to give the Escrow Agent confirmation
and assurance of the Escrow Agent’s rights, powers, privileges, remedies and
interests under this Escrow Agreement and applicable law, (b) to better
enable the Escrow Agent to exercise any such right, power, privilege, remedy
or
interest, or (c) to otherwise effectuate the purpose and the terms and
provisions of this Escrow Agreement, each in such form and substance as may
be
reasonably acceptable to the Escrow Agent.
6. Conflicting
Demands.
If
conflicting or adverse claims or demands are made or notices served upon the
Escrow Agent with respect to the escrow provided for herein, the Company and
the
Purchasers agree that the Escrow Agent shall refuse to comply with any such
claim or demand and withhold and stop all further performance of this escrow
so
long as such disagreement shall continue. In so doing, the Escrow Agent shall
not be or become liable for damages, losses, costs, expenses or interest to
any
or any other person for its failure to comply with such conflicting or adverse
demands. The Escrow Agent shall be entitled to continue to so refrain and refuse
to so act until such conflicting claims or demands shall have been finally
determined by a court or arbitrator of competent jurisdiction or shall have
been
settled by agreement of the parties to such controversy, in which case the
Escrow Agent shall be notified thereof in a notice signed by such parties.
The
Escrow Agent may also elect to commence an interpleader or other action for
declaratory judgment for the purpose of having the respective rights of the
claimants adjudicated, and may deposit with the court all funds held hereunder
pursuant to this Escrow Agreement; and if it so commences and deposits, the
Escrow Agent shall be relieved and discharged from any further duties and
obligations under this Escrow Agreement.
7. Disputes.
Each of
the parties hereto hereby covenants and agrees that the Federal or state courts
located in the Borough of Manhattan, State of New York shall have jurisdiction
over any dispute with the Escrow Agent or relating to this Escrow
Agreement.
8. Expenses
of the Escrow Agent.
The
Company agrees to pay any and all out-of-pocket costs and expenses incurred
by
the Escrow Agent in connection with all waivers, releases, discharges,
satisfactions, modifications and amendments of this Escrow Agreement, the
administration and holding of the Escrow Amount and the investment of such
funds, and the enforcement, protection and adjudication of the Escrow Agent’s
rights hereunder by the Escrow Agent, including, without limitation, the
out-of-pocket disbursements of the Escrow Agent itself and expenses and costs
of
other attorneys it may retain, if any. The Company shall be liable to the Escrow
Agent for any expenses payable by the Escrow Agent.
9. Reliance
on Documents and Experts.
The
Escrow Agent shall be entitled to rely upon any notice, consent, certificate,
affidavit, statement, paper, document, writing or communication (which to the
extent permitted hereunder may be by telegram, cable, telex, telecopier, or
telephone) reasonably believed by it to be genuine and to have been signed,
sent
or made by the proper person or persons, and upon opinions and advice of legal
counsel (including itself or counsel for any party hereto), independent public
accountants and other experts selected by the Escrow Agent and mutually
acceptable to each of the Company and the Purchasers. The Escrow Agent shall
not
be responsible to review the Certificate other than to confirm that it has
been
signed or to determine the clearance of checks received for the Escrow
Amount.
10. Status
of the Escrow Agent, Etc.
The
Escrow Agent is acting under this Escrow Agreement as a stakeholder only. No
term or provision of this Escrow Agreement is intended to create, nor shall
any
such term or provision be deemed to have created, any joint venture, partnership
or attorney-client relationship between or among the Escrow Agent and the
Company or the Purchasers. This Escrow Agreement shall not be deemed to prohibit
or in any way restrict the Escrow Agent’s representation of the Company, who may
be advised by the Escrow Agent on any and all matters pertaining to this Escrow
Agreement. To the extent the Purchasers have been represented by the Escrow
Agent, the Purchasers hereby waive any conflict of interest and irrevocably
authorize and direct the Escrow Agent to carry out the terms and provisions
of
this Escrow Agreement fairly as to all parties, without regard to any such
representation and irrespective of the impact upon the Purchasers. The Escrow
Agent’s only duties are those expressly set forth in this Escrow Agreement, and
each of the Company and the Purchasers authorize the Escrow Agent to perform
those duties in accordance with its usual practices in holding funds of its
own
or those of other escrows. The Escrow Agent may exercise or otherwise enforce
any of its rights, powers, privileges, remedies and interests under this Escrow
Agreement and applicable law or perform any of its duties under this Escrow
Agreement by or through its partners, employees, attorneys, agents or
designees.
-2-
11. Exculpation.
The
Escrow Agent and its designees, and their respective partners, employees,
attorneys and agents, shall not incur any liability whatsoever for the
investment or disposition of funds or the taking of any other action in
accordance with the terms and provisions of this Escrow Agreement, for any
mistake or error in judgment, for compliance with any applicable law or any
attachment, order or other directive of any court or other authority
(irrespective of any conflicting term or provision of this Escrow Agreement),
or
for any act or omission of any other person selected with reasonable care and
engaged by the Escrow Agent in connection with this Escrow Agreement (other
than
for such Escrow Agent’s or such person’s own acts or omissions breaching a duty
owed to the claimant under this Escrow Agreement and amounting to gross
negligence or willful misconduct as finally determined pursuant to applicable
law by a governmental authority having jurisdiction); and each of the Company
and the Purchasers hereby waive any and all claims and actions whatsoever
against the Escrow Agent and its designees, and their respective partners,
employees, attorneys and agents, arising out of or related directly or
indirectly to any and all of the foregoing acts, omissions and circumstances.
Furthermore, the Escrow Agent and its designees, and their respective partners,
employees, attorneys and agents, shall not incur any liability (other than
for a
person’s own acts or omissions breaching a duty owed to the claimant under this
Escrow Agreement and amounting to willful misconduct as finally determined
pursuant to applicable law by a governmental authority having jurisdiction)
for
other acts and omissions arising out of or related directly or indirectly to
this Escrow Agreement or the Escrow Amount; and each of the Company and the
Purchasers hereby expressly waive any and all claims and actions (other than
those attributable to a person’s own acts or omissions breaching a duty owed to
the claimant and amounting to gross negligence or willful misconduct as finally
determined pursuant to applicable law by a governmental authority having
jurisdiction) against the Escrow Agent and its designees, and their respective
partners, employees, attorneys and agents, arising out of or related directly
or
indirectly to any and all of the foregoing acts, omissions and circumstances.
The Escrow Agent’s designees excludes the Purchasers for purposes
hereof.
12. Indemnification.
The
Escrow Agent and its designees (excluding the Purchasers), and their respective
partners, employees, attorneys and agents, shall be indemnified, reimbursed,
held harmless and, at the request of the Escrow Agent, defended, by the Company
from and against any and all claims, liabilities, losses and expenses
(including, without limitation, the reasonable disbursements, expenses and
fees
of their respective attorneys) that may be imposed upon, incurred by, or
asserted against any of them, arising out of or related directly or indirectly
to this Escrow Agreement or the Escrow Amount, except such as are occasioned
by
the indemnified person’s own acts and omissions breaching a duty owed to the
claimant under this Escrow Agreement and amounting to willful misconduct as
finally determined pursuant to applicable law by a governmental authority having
jurisdiction.
-3-
13. Notices.
Any
notice, request, demand or other communication permitted or required to be
given
hereunder shall be in writing, shall be sent by one of the following means
to
the addressee at the address set forth below (or at such other address as shall
be designated hereunder by notice to the other parties and persons receiving
copies, effective upon actual receipt) and shall be deemed conclusively to
have
been given: (a) on the first business day following the day timely
deposited with Federal Express (or other equivalent national overnight courier)
or United States Express Mail, with the cost of delivery prepaid; (b) on the
fifth business day following the day duly sent by certified or registered United
States mail, postage prepaid and return receipt requested; or (c) when otherwise
actually delivered to the addressee.
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If
to the Company:
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000
0xx
Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx, XX 00000
Attention:
President
Telephone: (000)
000-0000
Facsimile:
(000)
000-0000
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|
with
a copy to:
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Sichenzia
Xxxx Xxxxxxxx Xxxxxxx LLP
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx
Xxxx, XX 00000
Attention:
Xxxxxxx Xxxxxxxxx, Esq.
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
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If
to any Purchaser:
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At
the address of such Purchaser set forth on the signature pages to
the
Purchase Agreement, with copies to such Purchaser’s counsel as set forth
in the Purchase Agreement.
|
|
If
to the Escrow Agent:
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Xxxx
Xxxxxxxxx, Esq.
Xxxxxxxxx
& Associates
00000
Xxx Xxxxxx Xxx., Xxxxx 000
Xxxxxx,
XX 00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
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14. Section
and Other Headings.
The
section and other headings contained in this Escrow Agreement are for
convenience only, shall not be deemed a part of this Escrow Agreement and shall
not affect the meaning or interpretation of this Escrow Agreement.
15. Governing
Law.
This
Escrow Agreement shall be governed by, and construed and enforced in accordance
with, the laws of the State of New York, without regard to principles of
conflicts of law. Each of the Company and the Purchasers (i) hereby irrevocably
submit to the jurisdiction of the United States District Court sitting in the
Southern District of New York for the purposes of any suit, action or proceeding
arising out of or relating to this Agreement or the Purchase Agreement and
(ii)
hereby waive, and agree not to assert in any such suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of such court,
that the suit, action or proceeding is brought in an inconvenient forum or
that
the venue of the suit, action or proceeding is improper. Each of the Company
and
the Purchasers consent to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address in effect
for
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing in this
Section 15 shall affect or limit any right to serve process in any other manner
permitted by law.
-4-
16. Counterparts.
This
Escrow Agreement may be executed by the parties hereto in separate counterparts,
each of which when so executed and delivered shall be an original but all such
counterparts shall together constitute one and the same agreement.
17. Resignation
of Escrow Agent.
The
Escrow Agent may, at any time, at its option, elect to resign its duties as
Escrow Agent under this Escrow Agreement by providing notice thereof to each
of
the Company and the Purchasers. In such event, the Escrow Agent shall deposit
the Escrow Amount with a successor independent escrow agent to be appointed
by
(a) the Company and the Purchasers within thirty (30) days following the receipt
of notice of resignation from the Escrow Agent, or (b) the Escrow Agent if
the
Company and the Purchasers shall have not agreed on a successor escrow agent
within the aforesaid 30-day period, upon which appointment and delivery of
the
Escrow Amount the Escrow Agent shall be released of and from all liability
under
this Escrow Agreement.
18. Successors
and Assigns; Assignment.
Whenever in this Escrow Agreement reference is made to any party, such reference
shall be deemed to include the successors, assigns and legal representatives
of
such party, and, without limiting the generality of the foregoing, all
representations, warranties, covenants and other agreements made by or on behalf
of each of the Company and the Purchasers in this Escrow Agreement shall inure
to the benefit of any successor escrow agent hereunder; provided,
however,
that
nothing herein shall be deemed to authorize or permit the Company or the
Purchasers to assign any of its rights or obligations hereunder to any other
person (whether or not an affiliate of the Company or the Purchasers) without
the written consent of each of the other parties nor to authorize or permit
the
Escrow Agent to assign any of its duties or obligations hereunder except as
provided in Section 17 hereof.
19. No
Third Party Rights.
The
representations, warranties and other terms and provisions of this Escrow
Agreement are for the exclusive benefit of the parties hereto, and no other
person, including the creditors of the Company or the Purchasers, shall have
any
right or claim against any party by reason of any of those terms and provisions
or be entitled to enforce any of those terms and provisions against any
party.
20. No
Waiver by Action, Etc.
Any
waiver or consent respecting any representation, warranty, covenant or other
term or provision of this Escrow Agreement shall be effective only in the
specific instance and for the specific purpose for which given and shall not
be
deemed, regardless of frequency given, to be a further or continuing waiver
or
consent. The failure or delay of a party at any time or times to require
performance of, or to exercise its rights with respect to, any representation,
warranty, covenant or other term or provision of this Escrow Agreement in no
manner (except as otherwise expressly provided herein) shall affect its right
at
a later time to enforce any such term or provision. No notice to or demand
on
either the Company or the Purchasers in any case shall entitle such party to
any
other or further notice or demand in the same, similar or other circumstances.
All rights, powers, privileges, remedies and interests of the parties under
this
Escrow Agreement are cumulative and not alternatives, and they are in addition
to and shall not limit (except as otherwise expressly provided herein) any
other
right, power, privilege, remedy or interest of the parties under this Escrow
Agreement or applicable law.
-5-
21. Modification,
Amendment, Etc.
Each
and every modification and amendment of this Escrow Agreement shall be in
writing and signed by all of the parties hereto, and each and every waiver
of,
or consent to any departure from, any covenant, representation, warranty or
other provision of this Escrow Agreement shall be in writing and signed by
the
party granting such waiver or consent.
22. Entire
Agreement.
This
Escrow Agreement contains the entire agreement of the parties with respect
to
the matters contained herein and supersedes all prior representations,
agreements and understandings, oral or otherwise, among the parties with respect
to the matters contained herein.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
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IN
WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement on
the
date first written above.
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By:
/s/ Avi
Sivan
|
|
|
Name: Avi Sivan
Chief Executive Officer
|
|
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By:
/s/ Xxxx
Xxxxxxxxx
|
|
|
Xxxx Xxxxxxxxx, Esq., as escrow agent
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|
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AJW
PARTNERS, LLC
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By:
SMS Group, LLC
|
|
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By:
/s/ Xxxxx X.
Xxxxxxxx
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|
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Xxxxx X. Xxxxxxxx
Manager
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AJW
OFFSHORE, LTD.
By:
First Street Manager II, LLC
By:
/s/ Xxxxx X.
Xxxxxxxx
Xxxxx X. Xxxxxxxx
Manager
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AJW
QUALIFIED PARTNERS, LLC
By:
AJW Manager, LLC
By:
/s/ Xxxxx X.
Xxxxxxxx
Xxxxx
X. Xxxxxxxx
Manager
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NEW
MILLENNIUM CAPITAL PARTNERS II, LLC
By:
First Street Manager II, LLC
By:
/s/ Xxxxx X.
Xxxxxxxx
Xxxxx X. Xxxxxxxx
Manager
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-7-
SCHEDULE
A
Purchasers:
| · |
AJW
Partners, LLC
|
| · |
AJW
Offshore, Ltd.
|
| · |
AJW
Qualified Partners, LLC
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| · |
New
Millennium Capital Partners II, LLC
|
8
SCHEDULE
B
On
August 15, 2006
1. $88,750.00
to Igia, Inc. in accordance with the wire transfer instructions attached as
Exhibit
A
hereto;
and
2. $10,000.00
to Sichenzia Xxxx Xxxxxxxx & Xxxxxxx LLP in accordance with the wire
transfer instructions attached as Exhibit
B
hereto
(which represents $5,000 for the second of three payments for services provided
in connection with the Purchase Agreement and $5,000 for general monthly
corporate representation).
On
September 15, 2006
3. $88,750.00
to Igia, Inc. in accordance with the wire transfer instructions attached as
Exhibit
A
hereto;
and
4. $10,000.00
to Sichenzia Xxxx Xxxxxxxx & Xxxxxxx LLP in accordance with the wire
transfer instructions attached as Exhibit
B
hereto
(which represents $5,000 for the third of three payments for services provided
in connection with the Purchase Agreement and $5,000 for general monthly
corporate representation).
On
October 15, 2006
5. $93,750.00
to Igia, Inc. in accordance with the wire transfer instructions attached as
Exhibit
A
hereto;
and
6. $5,000.00
to Sichenzia Xxxx Xxxxxxxx & Xxxxxxx LLP in accordance with the wire
transfer instructions attached as Exhibit
B
hereto
(which represents $5,000 for general monthly corporate
representation).
On
November 15, 2006
7. $93,750.00
to Igia, Inc. in accordance with the wire transfer instructions attached as
Exhibit
A
hereto;
and
8. $5,000.00
to Sichenzia Xxxx Xxxxxxxx & Xxxxxxx LLP in accordance with the wire
transfer instructions attached as Exhibit
B
hereto
(which represents $5,000 for general monthly corporate
representation).
9
Exhibit
A
Company: IGIA,
Inc.
Account
Name: *
Account
Number: *
Bank:
Bank
of
America
ABA:
000000000
Branch
Address: 000
Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000
Exhibit
B
Bank: HSBC
Bank
USA
Branch
Address: 000
Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
Account
Name: *
Account
No.:
*
ABA
No.:
021001088
