ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this “Agreement”) is made and entered into as of April 8, 2013
by and among IGX GLOBAL INC., a New Jersey corporation (“IGX NJ”), XXXXXX XXXXX,
(“Xxxxx”), IGXGLOBAL CORP., a Delaware corporation (“IGX DE”), IGAMBIT INC., a Delaware
corporation (“iGambit”), and XXXXXXX & XXXXXXX, a legal professional association (the “Escrow
Agent”). Capitalized terms used in this Agreement and not otherwise defined in this Agreement
shall have the meanings for such terms set forth in the Rescission Agreement (as defined below).
W I T N E S S E T H:
WHEREAS, IGX NJ, Xxxxx, IGX DE and iGambit are parties to a certain Asset and Stock
Purchase Agreement dated as of December 28, 2012 (as amended and in effect, the “Purchase
Agreement”) pursuant to which (a) IGX DE purchased from IGX NJ substantially all of the assets of
IGX NJ (the assets so purchased being the “IGX NJ Assets”) and (b) IGX DE purchased from Xxxxx
the entire issued share capital of IGXGlobal UK Limited (“IGX UK”), being 1 ordinary share of
£1.00 (the “IGX UK Shares”); and
WHEREAS, IGX NJ, Xxxxx, IGX DE and iGambit are parties to that certain Rescission
Agreement dated as of April 8, 2013 (as amended and in effect, the “Rescission Agreement”),
pursuant to which the Purchase Agreement, and all other documents, instruments, securities and
other certificates executed or delivered in connection with the transactions described by the Purchase
Agreement shall be canceled, rescinded and rendered null and void, ab initio (the “Rescission”); and
WHEREAS, the Rescission Agreement requires that $200,000 of the Initial iGambit Payment
be deposited into an escrow account with Escrow Agent (the “Escrow Funds”) to be released upon
the terms and conditions set forth herein;
WHEREAS, the Rescission Agreement further requires that the applicable parties execute (i)
the Rescission Xxxx of Sale, (ii) the Rescission Assignment-Assumption Agreement, (iii) the
Rescission Assignment-Assumption of Lease, (iv) the Mayo Assignment-Assumption Agreement
and (v) the IGX UK Share Transfer Documents (collectively, the “Escrow Documents”) and deposit
them with the Escrow Agent to be released upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the covenants and agreements contained herein, the
Rescission Agreement and the Rescission contemplated by the Rescission Agreement, the parties
hereto promise and agree as follows:
1.
Escrow.
(a)
On the date hereof, the applicable parties hereto shall deliver to the Escrow Agent the
Escrow Documents to be held in escrow pursuant to this Agreement.
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(b)
On or before April 2, 2013, IGX NJ and/or Xxxxx shall deposit the Escrow Funds with
Escrow Agent to be held in escrow pursuant to this Agreement. The parties hereto agree that, for tax
reporting purposes, if applicable, all interest or other income earned on or from the Escrow Funds
(the “Income”) shall be allocated by Escrow Agent to iGambit. iGambit shall simultaneously
herewith provide to the Escrow Agent a certified tax identification number on Form W-9. Such
Income shall be held by the Escrow Agent as Escrow Funds hereunder until released pursuant to the
terms of this Agreement applicable to the release of Escrow Funds (including Section 2). All Income
earned under this Agreement shall be allocated and paid as provided herein and reported by the
recipient to the Internal Revenue Service as having been so allocated and paid.
2.
Release of Escrow Documents.
(a)
The Escrow Funds (including any Income) and Escrow Documents are to be released
upon either clause (i) or (ii) below occurring (each of the events set forth in clause (i) and (ii) below
being a “Release Event”):
(i)
iGambit shall be entitled to receive the Escrow Funds (including any Income),
and IGX NJ shall be entitled to receive the Escrow Documents upon all of the following conditions
to Rescission being met:
(A)
IGX NJ and/or Xxxxx shall have secured adequate financing in an
aggregate amount equal or exceeding the sum of: (1) the Initial iGambit Payment;
(2) the amount necessary to fully repay the indebtedness (the “Keltic Debt”) of
iGambit and IGX DE to Keltic Financial Partners II, LP (“Keltic”) under the Loan
and Security Agreement dated December 31, 2012 by and between Keltic Financial
Services II LLP and IGXGLOBAL Corp. (collectively with all other documents,
instruments, securities and other certificates executed or delivered in connection with
the Keltic Debt, the “Keltic Debt Documents”); (3) any outstanding audit fees due
and owing from iGambit to Xxxxxxxxx, Xxxxxx & XxXxxxxxxx LLP relating to IGX NJ,
which the Parties hereby acknowledge to be $75,000.00; (4) up to $95,000 of fees
due and owing from iGambit to Frontrunner; and (5) up to $10,500 of fees due and
owing from iGambit to MK Appraisal Group for appraisal services; and
(B)
A payoff letter in a form reasonably acceptable to IGX NJ and Xxxxx
pursuant to which (x) Keltic provides amount to repay, in full, the Keltic Debt (and
per diem), and (y) upon such repayment, (1) all of IGX NJ, Xxxxx, IGX DE and
iGambit shall be released from any obligations under the Keltic Debt Documents, (2)
all Keltic Debt Documents shall be terminated and no force or effect and (3) any and
all liens, encumbrances and security interests held by Keltic against any IGX NJ
Assets or IGX UK Shares shall be terminated and released, and all of IGX NJ, Xxxxx,
IGX DE and iGambit shall be authorized to file such necessary UCC termination
statements to effect the same; or
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(ii)
iGambit shall be entitled to receive the Escrow Documents, and IGX NJ and
Xxxxx shall be entitled to receive the Escrow Funds (including any Income) upon the Rescission
Agreement being terminated pursuant to the terms thereof prior to the Rescission.
(b)
The Escrow Agent shall release the Escrow Funds (including any Income) and Escrow
Documents to the applicable parties hereto as follows:
(i)
in accordance with the joint written instructions of iGambit and Xxxxx; or
(ii)
subject to the below provisions of this Section 2(b)(ii) and to Section 4 below,
pursuant to written instructions from Xxxxx to the Escrow Agent (the “Xxxxx Instructions”), which
Xxxxx Instructions shall set forth the applicable Release Event and be consistent with the release
entitlements associated with such Release Event pursuant to Section 2(a) above. The Escrow Agent
in turn shall give notice to iGambit of receipt of the Xxxxx Instructions (together with a copy of the
Xxxxx Instructions) within two (2) business days after receipt of the Xxxxx Instructions; and the
Escrow Agent shall release the Escrow Funds and Escrow Documents as instructed by Xxxxx in the
Xxxxx Instructions no earlier than three (3) business days after the date that the Escrow Agent gives
such notice to iGambit, and only if the Escrow Agent shall not have received a written notice from
iGambit prior to such third (3rd) business day that iGambit disputes Xxxxx’x claim as to appropriate
release of Escrow Funds and Escrow Documents. If, however, the Escrow Agent shall have received
a written notice from iGambit prior to such third (3rd) business day that iGambit disputes Xxxxx’x
claim as to appropriate release of Escrow Funds and Escrow Documents, then the Escrow Agent
shall not release any Escrow Funds or Escrow Documents except in accordance with joint written
instructions of iGambit and Xxxxx or with Section 4 below; or
(iii) subject to the below provisions of this Section 2(b)(iii) and to Section 4
below, pursuant to written instructions from iGambit to the Escrow Agent (the “iGambit
Instructions”), which iGambit Instructions shall set forth the applicable Release Event and be
consistent with the release entitlements associated with such Release Event pursuant to Section 2(a)
above. The Escrow Agent in turn shall give notice to Xxxxx of receipt of the iGambit Instructions
(together with a copy of the iGambit Instructions) within two (2) business days after receipt of the
iGambit Instructions; and the Escrow Agent shall release the Escrow Funds and Escrow Documents
as instructed by iGambit in the iGambit Instructions no earlier than three (3) business days after the
date that the Escrow Agent gives such notice to Xxxxx, and only if the Escrow Agent shall not have
received a written notice from Xxxxx prior to such third (3rd) business day that Xxxxx disputes
iGambit’s claim as to appropriate release of Escrow Funds and Escrow Documents. If, however, the
Escrow Agent shall have received a written notice from Xxxxx prior to such third (3rd) business day
that Xxxxx disputes iGambit’s claim as to appropriate release of Escrow Funds and Escrow
Documents, then the Escrow Agent shall not release any Escrow Funds or Escrow Documents except
in accordance with joint written instructions of iGambit and Xxxxx or with Section 4 below.
3.
Termination of Agreement. This Agreement shall terminate upon release of the Escrow
Documents and Escrow Funds in the manner described herein.
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4.
Disputes. If there is any dispute among any parties as to the disposition of the Escrow
Documents and/or Escrow Funds, the Escrow Agent shall continue to hold the Escrow Documents
and Escrow Funds subject to the order of a court of competent jurisdiction as to the disposition
thereof. Notwithstanding the foregoing, at the option of the Escrow Agent, at any time after the
Escrow Agent becomes aware of any dispute between any parties as to the disposition of the Escrow
Documents and/or Escrow Funds, the Escrow Agent may deposit the Escrow Documents and Escrow
Funds with the clerk of a court of competent jurisdiction and commence an action in the nature of an
interpleader for a determination of the respective rights of the parties hereto in the Escrow
Documents and Escrow Funds, and, in any such case, recover the Escrow Agent’s costs and expenses
incurred in its role as the escrow agent hereunder, including reasonable attorney’s fees. In the event
that any court of competent jurisdiction shall render any judgment or enter any order as to the
disposition of the Escrow Documents and/or Escrow Funds, then the Escrow Agent shall release the
Escrow Documents and Escrow Funds in accordance with such judgment or order.
5.
Duties. The sole duty of Escrow Agent shall be to act in accordance with the terms of this
Agreement. Escrow Agent may act in reliance upon any instruments or other writings or signatures
believed by it in good faith to be genuine and may assume that any person or entity purporting to
give any writing, notice, advice or instruction in connection with the provisions herein has been duly
authorized to do so. Escrow Agent shall have no responsibility for the contents of any writing or
other instrument delivered to it hereunder and may rely without any liability upon the contents
thereof and assume the truth thereof. Escrow Agent may consult with counsel selected by it in its
sole discretion and may rely fully and without liability of any kind upon any opinion of such counsel
in respect of any action taken or permitted by Escrow Agent hereunder in good faith and in reliance
upon such opinion. Escrow Agent shall not be liable for any mistake of fact or error of judgment or
for any acts or omissions of any kind unless caused by its gross negligence, recklessness or willful
misconduct. Each of IGX NJ, Xxxxx, IGX DE and iGambit, jointly and severally, shall indemnify
and hold the Escrow Agent harmless from and against any and all losses, damages, costs and
expenses that may be incurred by the Escrow Agent in its role as escrow agent hereunder by reason
of its compliance in good faith with the terms of this Agreement. All risk of loss of value in the
Escrow Documents and Escrow Funds shall be borne equally by the parties other than the Escrow
Agent.
6.
Conflicts.
(a)
Notwithstanding that the Escrow Agent is the attorney for IGX DE and iGambit in the
transaction to which the escrow arrangement under this Agreement relates or otherwise, the Escrow
Agent is not acting in its role as escrow agent under this Agreement as the attorney or agent of any
party; rather, the Escrow Agent is acting in such role in an independent capacity. Notwithstanding
anything else, solely in connection with its role as escrow agent under this Agreement, the Escrow
Agent at all times shall act reasonably and in good faith (subject to Section 5 above) to fulfill its
duties and obligations under this Agreement and to comply with all applicable laws pertaining to
escrow agents.
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(b)
Each of IGX DE and iGambit expressly consents and agrees that the Escrow Agent’s
legal representation of IGX DE and iGambit shall be limited to those circumstances where the
Escrow Agent is not obligated to take any action that is inconsistent with or in contravention of the
Escrow Agent’s duties under this Agreement. Each of IGX DE and iGambit acknowledges that the
foregoing limitation is voluntarily given after consultation with the Escrow Agent in its role as the
attorney to IGX DE and iGambit and not in its role as escrow agent hereunder regarding the
consequences of such limitation. Further, each of IGX DE and iGambit acknowledges that it has had
reasonable opportunity to consult with an attorney of its choice (i.e., an attorney other than the
Escrow Agent in its role as the attorney to IGX DE and iGambit hereunder) regarding the
consequences of such limitation.
(c)
Each of Xxxxx and IGX NJ consents and agrees, after having the opportunity to
consult with legal counsel of its/his choosing, that, subject at all times to the Escrow Agent’s
compliance with this Agreement (including, without limitation, Sections 5 and 6(a) above) and all
applicable laws pertaining to escrow agents, the Escrow Agent may continue to represent and act as
legal counsel to IGX DE and iGambit notwithstanding the Escrow Agent’s status as escrow agent
under this Agreement. Further, subject at all times to the Escrow Agent’s compliance with this
Agreement (including, without limitation, Sections 5 and 6(a) above) and all applicable laws
pertaining to escrow agents, each of IGX NJ and Xxxxx waives any conflicts of interest that may arise
from the Escrow Agent’s concurrent roles as the escrow agent under this Agreement and the attorney
for IGX DE and iGambit (including without limitation in connection with the Escrow Agent’s legal
representation of IGX DE and/or iGambit in any dispute or litigation under this Agreement or the
Rescission Agreement (including any interpleader action that may be brought with regard to any of
the Escrow Documents or Escrow Funds)).
7.
Notices. All notices, demands or other communications to be given or delivered under or by
reason of the provisions of this Agreement shall be in writing and shall be deemed to have been
given (a) when delivered personally to the recipient, (b) when sent to the recipient by facsimile or
electronic mail (receipt electronically confirmed by sender’s facsimile machine or electronic mail
service) if during normal business hours of the recipient, otherwise on the next business day, or (c)
one (1) business day after the date when sent to the recipient by reputable express courier/delivery
service (charges prepaid), or by certified or registered mail, return receipt requested and postage
prepaid. Such notices, demands and other communications shall be sent to the parties at the
respective addresses indicated below or to such other address as any party hereto may, from time to
time, designate in writing delivered pursuant to the terms of this Section 7:
If to IGX NJ or Xxxxx:
With a copy to:
Xxxxxx Xxxxx
Xxxxxx, Xxxxx & Xxxxxxxx, P.C.
00 Xxxx Xxxxx
000 Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Xxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx
Fax: (000) 000-0000
Email: xxxxxxxx@xxx.xxx
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If to IGX DE or iGambit:
With a copy to:
iGambit Inc.
Xxxxxxx & Xxxxxxx
0000 X. Xxxxxxx Xxxx, Xxxxx X
000 Xxxx Xxx Xxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
Las Olas Centre II, Suite 1150
Attn: Xxxxx Xxxxxx, Esquire
Xxxx Xxxxxxxxxx, XX 00000-0000
Fax: (000) 000-0000
Attn: Xxxx Xxxxxxxxx
Email: xxxxx@xxxxxxx.xxx
Email: XXxxxxxxxx@xxxxx.xxx
If to Escrow Agent:
Xxxxxxx & Xxxxxxx
000 Xxxx Xxx Xxxx Xxxxxxxxx
Las Olas Centre II, Suite 1150
Xxxx Xxxxxxxxxx, XX 00000-0000
Attn: Xxxx Xxxxxxxxx
Email: XXxxxxxxxx@xxxxx.xxx
8.
This Agreement may not be altered or amended in any manner without the written agreement
of all parties hereto. However, iGambit and Xxxxx may by mutual written agreement remove the
then acting Escrow Agent by joint written notice to the then acting Escrow Agent (the “Removal
Notice”) identifying the successor escrow agent hereunder; and Escrow Agent, at its option, may, at
any time after that date which is one (1) month after the date of this Agreement, voluntarily withdraw
as the escrow agent hereunder by written notice to the parties (the “Withdrawal Notice”) given ten
(10) business days prior to the effective withdrawal date indicated therein (the “Withdrawal Date”).
(a)
Within three (3) business days after its receipt of any Removal Notice, the then acting
Escrow Agent shall deliver the Escrow Documents and Escrow Funds, as such are then constituted,
to the successor escrow agent indicated in the Removal Notice, and upon delivery of such Escrow
Documents and Escrow Funds to such successor escrow agent, the then acting Escrow Agent shall
be, and hereby is, released of all further obligations hereunder.
(b)
On or before that date which is three (3) business days before the Withdrawal Date,
iGambit and Xxxxx shall by joint written notice to withdrawing Escrow Agent identify the successor
escrow agent hereunder; and upon the Withdrawal Date the withdrawing Escrow Agent shall deliver
the Escrow Documents and Escrow Funds, as such are then constituted, to the successor escrow
agent indicated in such joint written notice from iGambit and Xxxxx, and upon delivery of such
Escrow Documents and Escrow Funds to such successor escrow agent, the withdrawing Escrow
Agent shall be, and hereby is, released of all further obligations hereunder. Notwithstanding the
foregoing, if iGambit and Xxxxx fail to deliver joint instructions to the withdrawing Escrow Agent on
or before that date which is three (3) business days before the Withdrawal Date, then Escrow Agent,
at its option, at any time thereafter, may deposit the Escrow Documents and Escrow Funds with the
clerk of a court of competent jurisdiction and commence an action in the nature of an interpleader for
a determination of the respective rights of the parties hereto in the Escrow Documents and Escrow
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Funds, and, in any such case, recover the Escrow Agent’s costs and expenses, including reasonable
attorney’s fees, incurred in its role as escrow agent hereunder.
(c)
Effective upon the effective time of the withdrawal or removal of the Escrow Agent
as escrow agent hereunder, any successor escrow agent appointed by iGambit and Xxxxx (which
appointment shall be made in writing by iGambit and Xxxxx and accepted in writing by such
successor escrow agent) shall succeed to all of Escrow Agent’s rights and obligations as escrow
agent hereunder and from and after such time shall be the “Escrow Agent” hereunder for all
purposes hereunder (provided that, notwithstanding anything else, no successor escrow agent shall
act in concurrent roles as the attorney for any party hereunder and as the escrow agent hereunder
unless iGambit and Xxxxx agree in writing to such concurrent roles).
9.
Successors and Assigns. This Agreement and the rights of the parties hereunder shall be
binding upon and shall inure to the benefit of the parties hereto, and their heirs, personal
representatives, successors and assigns.
10.
Electronic Signatures; Counterparts. Facsimile transmissions or scanned and then emailed
transmissions of any executed original document or retransmission of any executed facsimile or
scanned and emailed transmission shall be deemed to be the same as the delivery of an executed
original (collectively, “Electronic Signatures”). At the request of any party hereto, the other parties
hereto shall confirm transmissions of the Electronic Signatures by executing duplicate original
documents and delivering the same to the requesting party or parties. This Agreement may be
executed in any number of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
11.
Governing Law. This Agreement shall be governed by and construed in accordance with the
internal laws of the State of Flordia, without giving effect to any choice or conflict of law provision
or rule (whether of the State of Florida or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Florida.
12.
Severability. In case any provision of this Agreement shall be invalid, illegal or
unenforceable, it shall, to the extent possible, be modified in such manner as to be valid, legal and
enforceable but so as most nearly to retain the intent of the parties. If such modification is not
possible, such provision shall be severed from this Agreement. In either case the validity, legality
and enforceability of the remaining provisions of this Agreement shall not in any way be affected or
impaired thereby.
[Intentionally Left Blank – Signature Page(s) Follows]
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[Signature Page to the Escrow Agreement]
IN WITNESS WHEREOF, this Agreement has been executed as of the day, month and year first
above written.
IGX GLOBAL INC.
By:________________________
Name:
Title:
________________________
Xxxxxx Xxxxx
IGXGLOBAL CORP.
By:________________________
Name:
Title:
IGAMBIT INC.
By:________________________
Name:
Title:
XXXXXXX & XXXXXXX
By:________________________
Name:
Title:
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