EXHIBIT 99.5
ESCROW AGREEMENT
THIS ESCROW AGREEMENT ("Agreement") is made as of March 23, 2005 by and
between IceWEB, Inc., a Delaware corporation (the "Company"); Barron Partners
L.P. ("Barron"); and IRA S. SAUL, PLC, a Virginia professional limited liability
company (the "Escrow Agent").
WHEREAS, Barron is purchasing from the Company One Million Dollars
($1,000,000) worth of Series A Preferred Stock of the Company, with such
purchase price of $1,000,000 (the "Funds") to be utilized by the Company as part
of the money needed by the Company for working capital; and
WHEREAS, the Company and Barron desire to enter into this Agreement to
provide that (i) the Company and Barron shall provide the executed Transaction
Documents (as defined below) to the Escrow Agent as of the date of this
Agreement, (ii) Barron shall provide the Funds to the Escrow Agent as of the
date of this Agreement, (iii) the Escrow Agent shall thereafter hold the Funds
and the Transaction Documents pending the closing or the termination of the
issuance of Preferred Stock in accordance with the terms and provisions of the
Preferred Stock Purchase Agreement by and between the Company and Barron (iv)
the Escrow Agent shall either release the Funds to the Company upon the
satisfaction of the items listed in Sections 3.2 of the Preferred Stock Purchase
Agreement or the Escrow Agent shall return the Funds to Barron upon the failure
of Company, Barron and Escrow Agent to receive the confirmation of receipt by
the Transfer Agent of instructions for the issuance of Preferred Stock, and (v)
the Escrow Agent shall either release to the Company and Barron the fully
executed Transaction Documents in the event the Escrow Agent provides the Funds
to the Company, or the Escrow Agent shall destroy the Transaction Documents in
the event the Escrow Agent returns the Funds to Barron.
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 have the law firm of IRA S. SAUL, PLC
act as Escrow Agent whereby the Escrow Agent shall receive the Funds in escrow
and distribute the same as set forth in this Agreement. Any capitalized terms
not defined herein shall have the meaning ascribed to them in the Preferred
Stock Purchase Agreement, dated on even date herewith between the Company and
Barron (the "Preferred Stock Purchase Agreement"), and the documents related
thereto, with this Agreement being an exhibit to such Preferred Stock Purchase
Agreement. The various documents and instruments to be delivered to the Escrow
Agent and thereby to the parties in order to close the transaction are set forth
in Section 3.2 and 3.3 of the Purchase Agreement (collectively, the "Transaction
Documents"). The Escrow Agent hereby acknowledges that it is familiar with the
terms and provisions of the Purchase Agreement.
1
1.2 Upon the execution of this Agreement, the Company and Barron shall
deliver the executed Transaction Documents to the Escrow Agent as of the date of
this Agreement and Barron shall submit a check in the amount of the Funds to the
Escrow Agent. The Escrow Agent shall thereafter hold the Funds and the
Transaction Documents until the first to occur of (a) such time that Company's
transfer agent delivers to the Company, Barron and the Escrow Agent confirmation
that it has received instruction from Company to issue the Preferred Stock in
accordance with the terms of the Preferred Stock Purchase Agreement ("Transfer
Instructions") or (b) Upon delivery of confirmation of the Transfer
Instructions, the Escrow Agent shall deliver signed counterparts of the
Transaction Documents to Barron and the Company and disburse the Funds to the
Company. If confirmation of the Transfer Instruction is not delivered within
fifteen (15) business days following the date of this Agreement, upon delivery
thereon or thereafter to the Escrow Agent of written notice from Barron, the
Escrow Agent shall immediately return the Funds and the Transaction Documents
signed by Barron to Barron and return to the Company the Transaction Documents
signed by the Company.
1.3 Upon the completion by the Escrow Agent of its obligations under
Section 1.2, this Agreement shall terminate and the Escrow Agent shall have no
further liability hereunder.
1.4 This Agreement may be altered or amended only with the written
consent of all of the parties hereto. In the event the Company or Barron
attempts to change this Agreement in a manner, which, in the Escrow Agent's
discretion, shall be undesirable, the Escrow Agent may resign as Escrow Agent by
notifying the Company and Barron in writing. In the case of the Escrow Agent's
resignation, the only duty of the Escrow Agent, until receipt of a joint written
notice from the Company and Barron (the "Transfer Instructions") that a
successor escrow agent has been appointed, shall be to hold and preserve the
Funds and the Transaction Documents that are in its possession. Upon receipt by
the Escrow Agent of said notice from the Company and Barron of the appointment
of a successor escrow agent, the name of a successor escrow account and a
direction to transfer the Funds to such successor escrow account to be
thereafter held by such successor escrow agent, the Escrow Agent shall promptly
thereafter transfer the Funds and deliver the Transaction Documents to said
successor escrow agent. Immediately after said transfer of the Funds and
delivery of the Transaction Documents to said successor escrow agent, the Escrow
Agent shall furnish the Company and Barron with proof of such transfer. The
Escrow Agent is authorized to disregard any notices, requests, instructions or
demands received by it from the Company and Barron after notice of resignation
has been given, except only for the Transfer Instructions.
1.5 The Escrow Agent shall be reimbursed by the Company for any
reasonable expenses incurred in the event there is a conflict between the
parties and the Escrow Agent shall deem it necessary to retain counsel, upon
whose advice the Escrow Agent may rely. The Escrow Agent shall not be liable for
any action taken or omitted by the Escrow Agent in good faith and in no event
shall the Escrow Agent be liable or responsible except for the Escrow Agent's
own gross negligence or willful misconduct. The Escrow Agent has made no
representations or warranties to the Company or Barron in connection with this
transaction. The Escrow Agent has no liability hereunder to either party other
2
than to hold the Funds received from Barron and to deliver the Funds under the
terms hereof. The Company and Barron each agrees to indemnify and hold harmless
the Escrow Agent from and with respect to any suits, claims, actions or
liabilities arising in any way out of this transaction, including the obligation
to defend any legal action brought which in any way arises out of or is related
to this Agreement. The parties each and all acknowledge and recognize that the
Escrow Agent has also served and shall continue to serve as the legal counsel to
the Company and the parties each and all waive any claim of any conflict of
interest as a result thereof.
1.6 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 proper party or parties. 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 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.
1.7 The Escrow Agent is hereby expressly authorized to disregard any
and all warnings or orders given by any of the parties hereto or by any other
person or corporation, excepting only the Transfer Instructions, the termination
notice of Barron provided for in Section 1.2 above and/or 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, including but not limited to the
Transfer Instructions, then 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 or orders being subsequently reversed, modified, annulled, set aside,
vacated or found to have been entered without jurisdiction.
1.8 The Escrow Agent shall not be liable in any respect on account of
the identity, authorities or rights of the parties executing or delivering or
purporting to execute or deliver the Agreement or any documents or papers
deposited or called for hereunder.
1.9 If the Escrow Agent reasonably requires other or further documents
in connection with this Agreement, the necessary parties hereto shall join in
furnishing such documents.
1.10 It is understood and agreed that should any dispute arise with
respect to the delivery and/or ownership or right of possession of the Funds
and/or the Transaction Documents held by the Escrow Agent hereunder, the Escrow
Agent is authorized and directed in the Escrow Agent's sole discretion (a) to
retain the Funds and the Transaction Documents in the Escrow Agent's possession,
without liability to anyone, until such disputes shall have been settled either
by mutual written agreement of the parties concerned or by a final order, decree
or judgment of 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 (b) to deliver
the Funds and the Transaction Documents held by the Escrow Agent hereunder to a
3
state or federal court having competent subject matter jurisdiction and located
in the Commonwealth of Virginia in accordance with the applicable procedure
therefor.
ARTICLE 2
MISCELLANEOUS
2.1 No waiver of 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 any extension of
the time for performance of any other obligation or act.
2.2 This Agreement shall be binding upon and shall inure to the benefit
of the permitted successors and assigns of the parties hereto.
2.3 This 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 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.
2.4 Whenever required by the context of this Agreement, the singular
shall include the plural and masculine shall include the feminine. This
Agreement may be executed in two or more counterparts, all of which taken
together shall constitute one instrument. Execution and delivery of this
Agreement by exchange of facsimile copies bearing the facsimile signature of a
party shall constitute a valid and binding execution and delivery of this
Agreement by such party. Such facsimile copies shall constitute enforceable
original documents.
2.5 (a) This Agreement shall be governed and construed in
accordance with the laws of the State of New York without regard to any
applicable principles of conflicts of law.
(b) ANY ACTION OR PROCEEDING SEEKING TO ENFORCE ANY PROVISION
OF, OR BASED ON ANY RIGHT ARISING OUT OF, THIS AGREEMENT SHALL BE BROUGHT
AGAINST ANY OF THE PARTIES HERETO IN THE APPROPRIATE FEDERAL OR STATE COURT
LOCATED IN THE STATE OF NEW YORK, WITH EACH PARTY HERETO AGREEING TO SUBJECT
MATTER JURISDICTION, PERSONAL JURISDICTION AND VENUE IN SUCH COURT. EACH OF THE
PARTIES HERETO CONSENTS TO THIS JURISDICTION PROVISION IN ANY SUCH ACTION OR
PROCEEDING AND WAIVES ANY OBJECTION TO VENUE LAID THEREIN. PROCESS IN ANY ACTION
OR PROCEEDING REFERRED TO IN THE PRECEDING SENTENCE MAY BE SERVED ON ANY PARTY
HERETO ANYWHERE IN THE WORLD. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ITS
RIGHTS TO TRIAL BY JURY.
4
2.6 All notices and other communications hereunder shall be in writing
(and shall be deemed given upon receipt) if delivered personally, telecopied
(which is confirmed), mailed by registered or certified mail (return receipt
requested), or delivered by a national overnight delivery service (e.g., Federal
Express) to the parties at the following addresses (or at such other address for
a party as shall be specified by like notice):
If to the Company, to: If to Barron, to:
IceWEB, Inc. Barron Partners L.P.
205 Van Buren Street c/o Barron Capital Advisors LLC
Suite 420 730 Fifth Avenue
Herndon, VA 20170 9th Floor
Attn: John R. Signorello New York, New York
Attn: Andrew Barron Worden
If to the Escrow Agent:
Ira S. Saul, PLC
4126 Leonard Drive
Fairfax, VA 22030
Attn: Ira S. Saul, Esq.
2.7 By signing this Agreement, the Escrow Agent becomes a party hereto
only for the purpose of this Agreement; the Escrow Agent does not become a party
to the Transaction Documents.
2.8 Each party acknowledges and agrees that this Agreement shall not be
deemed prepared or drafted by any one party. In the event of any dispute between
the parties concerning this Agreement, the parties agree that any rule of
construction, to the effect that any ambiguity in the language of the Agreement
is to be resolved against the drafting party, shall not apply.
2.9 This Agreement may be executed in counterparts, each one of which
will constitute an original and all of which taken together will constitute one
document. This Agreement may be executed by delivery of a signed signature page
by fax to the other parties hereto and such fax execution and delivery will be
valid in all respects.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
5
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
ATTEST: ICEWEB, INC.
MyLe Phuong By:/s/ John Signorello [SEAL]
----------- -------------------
MyLe Phuong, Secretary John Signorello,
Chief Executive Officer
BARRON PARTNERS L.P.
By: Barron Capital Advisors LLC,
General Partner
By: /s/ Andrew Barron Worden [SEAL]
-------------------------- ------------------------
Name: Andrew Barron Worden
Witness Managing Member
ESCROW AGENT:
IRA S. SAUL, PLC
By:/s/ IRA S. SAUL, ESQ.
---------------------
IRA S. SAUL, ESQ., President & Manager
6