Exhibit 10.24


 


BRIDGE LOAN ESCROW AGREEMENT


 


This Escrow
Agreement is made as of this 29th day of July, 2005, by and among DEVELOPMENT
CAPITAL VENTURES, LP (the “Lender”), DPAC TECHNOLOGIES CORP. (the “Borrower”),
and BUCHANAN INGERSOLL PC (the “Escrow Agent”).


 


STATEMENT OF FACTS


 


A.                                   The
Borrower and the Lender have been negotiating the terms of that certain Loan
Agreement pursuant to which the Lender has agreed to lend to the Borrower the
sum of $500,000 (the “Loan Transaction”).


 


B.                                     The
Loan Transaction is expected to close on or about August 5, 2005, and in
any event prior to August 21, 2005 (the “Drop Dead Date”).


 


C.                                     The
Borrower and the Lender have agreed that the Lender is to place the sum of
$500,000 in escrow pursuant to the terms of this Agreement, which amount is to
be distributed to the Borrower at the closing of the Loan Transaction, if such
closing takes place prior to the Drop Dead Date, or such funds will be returned
to the Lender promptly after the Drop Dead Date if the Closing has not occurred
prior to such date.


 


D.                                    The
Escrow Agent has agreed to act as the escrow agent for such purposes upon the
terms set forth herein.


 


NOW,
THEREFORE, in consideration of the Statement of Facts and the mutual covenants
and agreements contained herein, the parties, intending to be legally bound,
covenant and agree as follows:


 


1.                                       Establishment of Escrow Fund.


 


Simultaneously with the execution and
delivery of this Agreement, the Lender will deposit the sum of Five Hundred
Thousand Dollars ($500,000) (the “Escrow Amount”) with the Escrow Agent.  The Escrow Amount, together with interest
accrued thereon, is herein referred to as the “Escrow Fund”.


 


2.                                       Appointment of Escrow Agent.


 


2.1                                 The Lender and the
Borrower appoint the Escrow Agent to serve as escrow agent under the terms of
this Agreement, and the Escrow Agent accepts such appointment.


 


2.2                                 The Escrow Agent
agrees to place the Escrow Amount in an interest bearing account in the name of
the Escrow Agent at Citizens Bank, located in Pittsburgh, Pennsylvania.  The Escrow Funds shall be invested in one or
more “Permitted Investments” as that term is


 





















 


defined on Exhibit A hereto.  The Escrow Agent is not responsible for
monitoring the interest paid on the Escrow Fund nor the deposit insurance
thereon.


 


2.3                                 The Escrow Agent
further agrees to carry out the provisions of this Agreement on its part to be
performed, but the Borrower and the Lender acknowledge and agree that the
duties of Escrow Agent are purely ministerial in nature.


 


3.                                       Purpose of the Escrow Fund.


 


The purpose of the Escrow Fund is to provide
a source for the funding of the Lender’s obligations under the Loan
Transaction.


 


4.                                       Distribution of the Escrow Fund.


 


4.1                                 Prior to the Drop Dead
Date, the Escrow Agent will disburse the Escrow Fund upon receipt of joint
written instructions executed on behalf of both the Borrower and the Lender
certifying that the closing of the Loan Transaction is taking place and
directing the Escrow Agent as to how to distribute the Escrow Fund (the “Closing
Notice”).  If no Closing Notice has been
received by the Escrow Agent as of the close of business on the day immediately
preceding the Drop Dead Date, then on or promptly after the Drop Dead Date the
Escrow Agent will disburse the Escrow Fund to the Lender in accordance with the
written instructions of the Lender. The Escrow Agent shall have no discretion
in determining when or to whom to release the Escrow Fund.


 


4.2                                 The Escrow Agent may,
at any time, deposit the Escrow Fund with a court of competent jurisdiction
and, upon such deposit, the Escrow Agent will be relieved of any further
liability or responsibility with respect thereto.


 


5.                                       Limited Duties of Escrow Agent.


 


5.1                                 The Escrow Agent will
not in any way be bound or affected by a notice of modification or cancellation
of this Agreement unless notice thereof is given to the Escrow Agent executed
on behalf of both the Borrower and the Lender, nor will the Escrow Agent be
bound by any modification of its obligations hereunder unless the same will be
consented to by the Escrow Agent in writing. 
The Escrow Agent will be entitled to rely upon any judgment,
certification, demand or other writing delivered to it hereunder without being
required to determine the authenticity or the correctness of any facts stated
therein, the propriety or validity of the service thereof, or the jurisdiction
issuing any judgment.


 


5.2                                 The Escrow Agent will
not be under any duty to give the property held by it hereunder any greater
care than it gives its own similar property.


 


5.3                                 The Escrow Agent may
act in reliance upon any instrument or signature believed by it to be genuine,
and it may assume that any person purporting to give any notice or make any
statement in connection with the provisions hereof has been duly authorized to
do so.


 


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5.4                                 The Escrow Agent may
act in reliance upon advice of counsel in reference to any matter connected
herewith, and will not be liable for any mistake of fact or error of judgment,
or for any act or omission of any kind except as such act or omission
constitutes willful misconduct, gross negligence or fraud.


 


5.5                                 The Escrow Agent will
not have any responsibility for the payment of taxes except with funds
furnished to the Escrow Agent for that purpose.


 


5.6                                 This Agreement sets
forth exclusively the duties of the Escrow Agent with respect to any and all
matters pertinent hereto.  Except as
otherwise expressly provided herein, the Escrow Agent will not refer to, and
will not be bound by, the provisions of any other agreement.


 


5.7                                 Except with respect to
claims based upon the Escrow Agent’s willful misconduct, gross negligence or
fraud, the Borrower will indemnify and hold harmless the Escrow Agent from any
claims made against the Escrow Agent by the Lender arising out of or relating
to this Agreement, and the Lender will indemnify and hold the Escrow Agent
harmless from any claims made against the Escrow Agent by the Borrower arising
out of or relating to this Agreement. 
The Borrower and the Lender jointly and severally will indemnify and
hold the Escrow Agent harmless from any claim made by any third party arising
out of or relating to this Agreement, such indemnification to include all costs
and expenses incurred by the Escrow Agent, including reasonable attorneys’ fees.


 


5.8                                 The Escrow Agent will
not be required to institute or defend any action involving any matters
referred to herein or which affect it or its duties or liability hereunder,
unless or until requested to do so by any party to this Agreement and then only
upon receiving full indemnity, in character satisfactory to the Escrow Agent,
against any and all claims, liabilities and expenses, including reasonable
attorneys’ fees, in relation thereto.


 


5.9                                 Upon termination of
this Agreement, the Escrow Agent may request from the Borrower and the Lender
such additional assurances, certificates, satisfactions, releases and/or other
documents as it may deem appropriate to evidence the termination of this
Agreement.


 


5.10                           The Lender acknowledges that
it is necessary, for federal income tax purposes, for the Escrow Agent to know
its employer identification numbers (“EIN”). 
The Lender represents that its EIN is 54-1953766.


 


5.11                           The Borrower and the Lender
acknowledge that the Escrow Agent is merely serving as a depository hereunder
and that the Escrow Agent currently is serving and will continue to serve as
counsel for the Lender with respect to various matters including, but not
limited to, the Loan Transaction.  The
Borrower agrees, on its own behalf and for any party affiliated with it, that
it will not assert that a conflict of interest is presented by the Escrow Agent
serving as legal counsel to the Lender in any current or future matter because
of the Escrow Agent’s service hereunder and the Borrower agrees that it will
not attempt to disqualify the Escrow Agent from acting as counsel to the Lender
because of its service hereunder.


 


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6.                                       Notices.


 


All notices or other communications required
or permitted hereunder will be in writing and will be deemed given when
delivered: (i) personally, (ii) by registered or certified mail
(postage prepaid), (iii) by legible facsimile transmission or (iv) by
overnight courier (fare prepaid), in all cases addressed as follows:


 


	
  If to the Borrower, to:

  	
   

  	
  with a copy to:

  
	
   

  	
   

  	
   

  
	
  DPAC Technologies Corp.

  	
   

  	
  Nicholas Yocca, Esq.

  
	
  7321 Lincoln Corp.

  	
   

  	
  The Yocca Law Firm, LLP

  
	
  Garden Grove, CA 92841

  	
   

  	
  19900 MacArthur Blvd., Suite #650

  
	
  Telecopy: (714) 899-7557

  	
   

  	
  Irvine, CA 92612

  
	
   

  	
   

  	
  Telecopy: (949) 253-0870

  
	
   

  	
   

  	
   

  
	
  If to the Lender, to:

  	
   

  	
  with a copy to:

  
	
   

  	
   

  	
   

  
	
  Development Capital Ventures, LP

  	
   

  	
  Richard D. Rose, Esq.

  
	
  4443 Brookfield Corporate Drive, Suite 110

  	
   

  	
  Buchanan Ingersoll PC

  
	
  Chantilly, VA 20151

  	
   

  	
  One Oxford Centre

  
	
  Telecopy: (703) 961-0154

  	
   

  	
  301 Grant Street, 20th Floor

  
	
   

  	
   

  	
  Pittsburgh, PA 15219-1410

  
	
   

  	
   

  	
  Telecopy: (412) 562-1041

  



 


If to the
Escrow Agent, to:


 


Thomas G.
Buchanan, Esq.

Buchanan Ingersoll PC

One Oxford Centre

301 Grant Street, 20th Floor

Pittsburgh, PA 15219-1410

Telecopy:  412-562-1041


 


or to such
address as such party may indicate by a notice delivered to the other
parties.  Notice will be deemed received
the same day (when delivered personally), 5 days after mailing (when sent by
registered or certified mail), or the next business day (when sent by facsimile
transmission or when delivered by overnight courier).  Any party to this Agreement may change its
address to which all communications and notices may be sent hereunder by
addressing notices of such change in the manner provided.


 


7.                                       Miscellaneous.


 


7.1                                 This Agreement and the
rights and the obligations of the parties will be governed by and construed and
enforced in accordance with the laws of the Commonwealth of Pennsylvania,
without regard to its conflicts of law provisions.


 


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7.2                                 The parties:  (i) agree that any legal action
concerning any and all claims, disputes, or controversies arising out of or
relating to this Agreement will only be commenced in Pittsburgh, Pennsylvania
and that such location is the most convenient forum for the parties; (ii) consent
to the jurisdiction of the state and federal courts located in Allegheny
County, Pennsylvania; and (iii) agree to accept service of any pleadings
(and such service will be valid), if made by certified or registered mail,
return receipt requested, to the respective parties at the addresses set forth
in Section 6 of this Agreement.  IN THE EVENT OF ANY COURT PROCEEDING HEREUNDER, THE
PARTIES WAIVE THEIR RIGHT TO A TRIAL BY JURY.


 


7.3                                 The parties agree to
execute and deliver any and all documents and to take such further action as
will be reasonably required to effectuate the provisions of this Agreement.


 


7.4                                 This Agreement
contains the entire understandings of the parties with respect to the subject
matter herein contained and will not be modified except by a writing signed by
all the parties.  Any and all recitals,
statements (including the Statement of Facts), reports, certificates or other
documents or instruments referred to or attached to this Agreement are
incorporated by reference into this Agreement. 
The word “including” means “including without limitation.”


 


7.5                                 This Agreement will
inure to the benefit of and be binding upon the parties and their respective
successors and assigns.  The Borrower,
the Lender and, except as provided in Section 4.2, the Escrow Agent cannot
assign this Agreement, without the consent of all the other parties, which
consent cannot be unreasonably withheld, conditioned or delayed.


 


7.6                                 There will be no presumption
against any party on the ground that such party was responsible for preparing
this Agreement or any part of it.


 


7.7                                 This Agreement may be
executed in one or more counterparts, each of which when taken together will
comprise one instrument.  Delivery of
executed signature pages by facsimile transmission will constitute
effective and binding execution and delivery.


 


Signatures
on Following Page


 


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IN WITNESS
WHEREOF, the parties have caused this Agreement to be executed and delivered as
of the date first written above.


 


	
  BUCHANAN INGERSOLL PC

  	
   

  	
  DPAC TECHNOLOGIES CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  DEVELOPMENT CAPITAL VENTURES, LP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  DCC
  Operating, Inc.

  
	
   

  	
   

  	
  Its:

  	
  General
  Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
												



 


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Exhibit A


 


Permitted Investments


 


(1)                                  Direct
obligations of, or obligations guaranteed as to principal and interest by, the
United States, which mature within 15 months from the date of the investment;
or


 


(2)                                  Repurchase
agreements with federally insured institutions, with a maturity of seven days
or less.  The securities underlying the
repurchase agreements must be direct obligations of, or obligations guaranteed
as to principal and interest by, the United States.  The securities must be maintained in a
custodial account at a federally insured institution; or


 


(3)                                  Certificates
of deposit with a maturity of one year or less, issued by a federally insured
institution; or


 


(4)                                  A
deposit account in a federally insured institution, subject to a withdrawal
restriction of one year or less; or


 


(5)                                  A
checking account in a federally insured institution.