EXHIBIT 10.4
ESCROW AGREEMENT
SBS Interactive, Co., a Florida corporation ("Issuer"), Richardson & Patel
LLP ("Escrow Agent") and Trilogy Capital Partners, Inc., a California
corporation ("Trilogy"), mutually agree as follows:
RECITALS
On November 19, 2004 Issuer and Trilogy entered into that certain Letter of
Engagement whereby Issuer agreed to issue to Trilogy warrants to purchase a
total of 450,000 shares of Issuer's common stock. The warrants are (i)
exercisable as to 225,000 shares so long as Issuer's share price reaches $0.75
per share and maintains such average price threshold for no fewer than ten
consecutive trading days, and (ii) exercisable as to an additional 225,000
shares so long as Issuer's share price reaches $1.00 per share and maintains
such average price threshold for no fewer than ten consecutive trading days, as
further described in the Warrant attached hereto as Exhibit A (the "Warrant").
For purposes of this Agreement, the milestones described in sections (i) and
(ii) herein shall be referred to individually as a "Milestone" and collectively
as the "Milestones" and the certificate for the shares to be received upon
Trilogy's exercise of warrants and achievement of a Milestone shall be referred
to as the "Milestone Shares".
Therefore, Issuer, Trilogy and the Escrow Agent agree as follows:
AGREEMENT
1. Purpose. The purpose of this Agreement is to provide an arrangement
whereby Trilogy can, upon the achievement of a Milestone, exercise the Warrant
and receive a certificate for the Milestone Shares.
2. Appointment. Issuer and Trilogy hereby appoint the Escrow Agent to serve
as Escrow Agent for the purposes set forth herein and the Escrow Agent hereby
accepts the appointment. Within five days from the execution of this Agreement,
Issuer shall deposit with the Escrow Holder two certificates, each representing
225,000 shares of Issuer's Common Stock, registered in the name of Trilogy. If
at any time the warrants become exercisable for additional shares of common
stock of the Issuer as a result of a stock dividend, stock split, other
combination or reclassification or for other securities or property, as provided
in Section 2 of the Warrant, the Issuer hereby agrees to deposit, within three
business day of such event, with the Escrow Agent certificates representing such
number of additional shares of common stock or other securities or property.
3. Delivery of Exercise Price. If Trilogy desires to exercise warrants
after the achievement of a Milestone, Trilogy shall deliver to the Escrow Agent
(a) the exercise price for the Milestone Shares, in immediately available funds,
which shall be in the form of a cashier's check, money order or wire transfer,
(b) confirmation that the Milestone was achieved and (c) the certification
attached hereto as Exhibit B, duly signed by Trilogy (the "Certification").
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4. Release of Certificates. Upon receipt of the exercise price,
confirmation from the Issuer that the Milestone was achieved and the duly signed
Certification, the Escrow Agent shall release a certificate representing the
Milestone Shares to Trilogy against a receipt signed by Trilogy for the
certificate, and shall transmit the exercise price to Issuer.
5. Nature of Account. If the exercise price is deposited or wired into an
account, Issuer understands that such account will not be an interest-bearing
deposit account and that the funds shall be transmitted to Issuer without
interest. If for any reason the exercise price is returned to Trilogy, Trilogy
understands that the exercise price shall not have earned interest and no
interest shall be paid to Trilogy.
6. Term. The term of this Agreement shall continue until the certificates
for the Milestone Shares are released to Trilogy and the exercise price is
transferred to Issuer but in no event shall the term of this Agreement extend
beyond the Termination Date set forth in the Warrant.
7. Escrow Agent's Responsibility. The parties agree to provide to the
Escrow Agent all information necessary to facilitate the administration of this
Agreement and the Escrow Agent may rely upon any representation so made. Nothing
contained in this Agreement shall constitute the Escrow Agent as trustee for any
party hereto or impose on the Escrow Agent any duties or obligations other than
those for which there is an express provision herein. Except as provided herein,
the Escrow Agent shall have no responsibility or liability for delivery of the
Milestone Shares to Trilogy. For all purposes connected herewith the Escrow
Agent shall be entitled to assume that the parties hereto are fully authorized
and empowered, without obtaining the rights of any third parties, to appoint the
Escrow Agent as the Escrow Agent in accordance with the terms and provisions
hereof.
8. Limitations on Liability. It is understood that the Escrow Agent shall
incur no liability, except for acts of gross negligence or willful misconduct.
None of the provisions hereof shall be construed so as to require the Escrow
Agent to expend or risk any of its own funds or otherwise incur any liability in
the performance of it duties under this Agreement. The Escrow Agent shall incur
no liability if it becomes illegal or impossible to carry out any of the
provisions herein. The Escrow Agent shall not be required to take or be bound by
notice of default of any person, or to take any action with respect to such
default involving any expense or liability, unless written notice of such
default is given to the Escrow Agent by the undersigned or any of them, and
unless the Escrow Agent is indemnified in a manner satisfactory to it against
such expense or liability. The Escrow Agent shall not be liable to any party
hereto in acting upon any written notice, request, waiver, consent, receipt or
other paper or document believed by the Escrow Agent to be signed by the proper
party or parties. The Escrow Agent will be entitled to treat as genuine and as
the document it purports to be any letter, paper, fax or other document
furnished or caused to be furnished to the Escrow Agent. The Escrow Agent shall
have no liability with respect to any good faith action taken or allowed by it
hereunder, except for acts of gross negligence or willful misconduct. The Escrow
Agent shall not be liable for any error or judgment or for any act done or step
taken or omitted by it in good faith or for any mistake or fact or law, except
for acts of gross negligence or willful misconduct, or for anything which it may
do or refrain from doing in connection herewith, and the Escrow Agent shall have
no duties to anyone except those signing this Agreement. The Escrow Agent may
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consult with legal counsel in the event of any dispute or questions as the
interpretation or construction of this Agreement or the Escrow Agent's duties
hereunder. In addition, the Escrow Agent shall incur no liability and shall be
fully protected in acting in accordance with the opinion and instructions of
counsel, except for acts of gross negligence or willful misconduct. In the event
of any disagreement between the undersigned or any person or persons named in
this Agreement, and any other person, resulting in adverse claims and demands
being made in connection with or for any money involved herein or effected
hereby, the Escrow Agent shall be entitled at its option to refuse to comply
with any such claims or demands, so long as such disagreement shall continue,
and in so doing the Escrow Agent shall not be or become liable for damages or
interest to the undersigned or any of them, or to any person named in this
Agreement, for its refusal to comply with such conflicting or adverse demands
and the Escrow Agent shall be entitled to continue so to refrain and refrain and
refuse so to act until (i) the rights of the adverse claimants have been finally
adjudicated in a court or by arbitration as set forth below assuming and having
jurisdiction of the parties and the property involved herein and affected
hereby; or (ii) all differences have been adjudicated by agreement and the
Escrow Agent has been notified thereof in writing by all of the persons
interested.
9. Indemnification. In consideration of Escrow Agent agreeing to act as an
escrow agent pursuant to the terms and conditions of the Escrow Agreement,
Trilogy and Issuer do hereby agree to indemnify Escrow Agent, its officers,
directors, agents, and employees, defend and hold the same harmless for and
against any and all claims, liability, actions, losses, costs, damages or
expenses, including attorneys' fees and expenses, which Escrow Agent may sustain
or incur, directly or indirectly, by reason of, or in consequence of, Escrow
Agent's acting or failing to act as escrow agent.
10. Resignation of the Escrow Agent. The Escrow Agent reserves the right to
resign as the Escrow Agent at any time by giving 30 business days written notice
thereof to all parties at the last known address. Upon notice or resignation by
the Escrow Agent, the undersigned agree that the Escrow Agent may deliver any
property or documents that it holds to the replacement escrow agent. If no
notice is promptly received from the undersigned and the replacement Escrow
Agent, the Escrow Agent may petition any court of competent jurisdiction for
disposition of the property or documents and the Escrow Agent shall thereby be
released from any and all responsibility and liability to the parties hereto.
11. Disputes. If at any time a dispute shall exist as to the duty of the
Escrow Agent under the terms hereof or if the property or documents deposited
hereunder are not withdrawn on or before the termination or expiration of this
Agreement, the Escrow Agent may deposit the property or documents with the Clerk
of the Superior Court of the County of Los Angeles, State of California, and may
interplead the parties hereto. Upon so depositing such property or documents and
filing its complaint in interpleader, the Escrow Agent shall be released from
all liability, under the terms hereof, as to the property or documents so
deposited. The parties hereto for themselves consent and agree to the
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jurisdiction of said Court, and do hereby appoint the Clerk of the said Court as
their agent for the service of all process in connection with the proceedings
mentioned in this paragraph.
12. Governing Law and Captions. This Agreement shall be governed and
interpreted by the laws of the State of California. The captions in this
Agreement are included for convenience of reference only and in no way define or
limit any of the provisions hereof or otherwise affect the construction or
effect of this Agreement.
13. 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.
14. Amendments, Modifications, etc. This Agreement may be amended,
modified, superseded or canceled only by a written instrument executed by Issuer
and Trilogy and consented to in writing by the Escrow Agent. Any of the terms
and conditions hereof may be waived only by a written instrument executed by the
party waiving compliance therewith. The failure of any party at any time or
times to require performance of any provision hereof shall in no manner affect
such party's right at a later time to enforce the same. No waiver by any party
of any condition or of the breach of any terms of this Agreement, whether by
conduct or otherwise, in any one or more instances shall be deemed to be or
construed as a further or continuing waiver of any such condition or breach or a
waiver of any other condition or breach of any other term of this Agreement.
15. Notices. All notices hereunder shall be made in writing to the parties
at the addresses listed below (or at such other address as shall be provided
pursuant to a written notice given in compliance with this paragraph 15) by mail
with postage paid and certified or registered or by facsimile or delivery via
courier to the respective parties. Mailed notices shall be deemed to be
delivered seven days following the date of such mailing. Facsimile transmissions
shall be deemed to be delivered on the date of the transmission, so long as a
receipt confirming that the transmission was successful is received. Notices
delivered by courier shall be deemed to be received on the date of delivery by
the courier service.
Issuer:
SBS Interactive, Co.
4211 Yonge Street, Suite 235
Toronto, Ontario, Canada M2P 2A9
Attn.: Todd Gotlieb, President
Facsimile: (416) 223-9293
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Trilogy:
Trilogy Capital Partners, Inc.
1901 Avenue of the Stars, Suite 1060
Los Angeles, California 90067
Attn.: A.J. Cervantes
Facsimile: (509) 694-8692
(signature page follows)
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Dated: November 19, 2004
SBS INTERACTIVE, INC.
(Issuer)
By: /s/ Todd Gotlieb
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Todd Gotlieb, President
TRILOGY CAPITAL PARTNERS, INC.
(Trilogy)
By: /s/ A.J. Cervantes
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A.J. Cervantes, President
RICHARDSON & PATEL LLP
(Escrow Agent)
By:
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Its:
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Signature Page to Escrow Agreement
EXHIBIT A
WARRANT
(see attached)
EXHIBIT B
CERTIFICATION
I, A.J. Cervantes, President of Trilogy Capital Partners, Inc., hereby
certify under penalty of perjury under the laws of the State of California that
(i) neither I nor Trilogy Capital Partners, Inc. have purchased common
stock of SBS Interactive, Co. through the OTCBB during the ten consecutive
trading days immediately prior to the achievement of the Milestone, as that
period is described in that certain Escrow Agreement among Trilogy Capital
Partners, Inc., SBS Interactive, Co. and Richardson & Patel LLP; and
(ii) no agent or affiliate of mine or of Trilogy Capital Partners, Inc.
has, at the instruction, request or urging of me or Trilogy Capital Partners,
Inc., purchased common stock of SBS Interactive, Co. through the OTCBB during
the ten consecutive trading days immediately prior to the achievement of the
Milestone.
Dated: _____________________
Trilogy Capital Partners, Inc.
By: /s/ A. J. Cervantes
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A.J. Cervantes
A.J. Cervantes, an individual
/s/ A.J. Cervantes
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