ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is made as of November 14, 2006,
by and among ROO Group Corporation, a Delaware corporation (the "Company"), the
purchasers signatory hereto (each a "Purchaser" and together the "Purchasers")
and Sichenzia Ross Friedman Ference LLP, with an address at 1065 Avenue of the
Americas, New York, New York 10036 (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.
W I T N E S S E T H:
WHEREAS, the Purchasers will be purchasing from the Company, severally and
not jointly with the other Purchasers, in the aggregate, up to 9,000,000 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
three-tenths of 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.
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1.3. Wire transfers to the Escrow Agent shall be made as follows:
HSBC Bank USA
950 Third Avenue
New York, NY 10022
A/C of Sichenzia Ross Friedman Ference LLP, IOLA
A/C# 629034125
ABA# 021001088
REMARK: ROO Group
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 November 15,
2006, then the Escrow Agent shall immediately, and in any event, no later than
November 25, 2006, 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.
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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.
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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.
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IN WITNESS WHEREOF, the parties hereto have executed this
Escrow Agreement as of date first written above.
ROO GROUP, INC.
By: /s/_______________________________________
Name: Robert Petty
Title: Chief Executive Officer
With a copy to (which shall not constitute notice):
ESCROW AGENT:
SICHENZIA ROSS FRIEDMAN FERENCE LLP
By: /s/_______________________________________
Name: Richard Friedman
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 November
14, 2006, among ROO Group, Inc., the Purchasers signatory thereto, and Sichenzia
Ross Friedman Ference 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 Units 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 14th day of November 2006.
ROO GROUP, INC.
By:_____________________________________
Name:
Title:
[SIGNATURE PAGE OF PURCHASERS FOLLOWS]
[SIGNATURE PAGE OF PURCHASERS TO ESCROW RELEASE]
Name of Purchaser:
Signature of Authorized Signatory of Purchaser: __________________________
Name of Authorized Signatory: _________________________
Title of Authorized Signatory: ________________________