<PAGE>   1
                                                                   Exhibit 10.37


                             FUNDS ESCROW AGREEMENT

         This Agreement is dated as of the 30th day of October, 2000 among iBIZ
Technology, Corp., a Florida corporation (the "Company"), the Subscribers
identified on Schedule A hereto ("Subscriber" or "Subscribers"), and Grushko &
Mittman, P.C. (the "Escrow Agent"):

                              W I T N E S S E T H:
                               - - - - - - - - - -

         WHEREAS, the Company and Subscriber have entered into a Subscription
Agreement ("Subscription Agreement") calling for the sale by the Company to the
Subscribers of Convertible Notes ("Notes") and issuance of Common Stock Purchase
Warrants ("Warrants") to certain Warrant Recipients, in the aggregate principal
amounts and in the denominations set forth on Schedule A hereto; and

         WHEREAS, the parties hereto require the Company to deliver the Notes
against payment therefor, with such Notes and payment to be delivered to the
Escrow Agent to be held in escrow and released by the Escrow Agent in accordance
with the terms and conditions of this Agreement; and

         WHEREAS, the Escrow Agent is willing to serve as escrow agent pursuant
to the terms and conditions of this Agreement;

         NOW THEREFORE, the parties agree as follows:

                                    ARTICLE I

                                 INTERPRETATION

         1.1. Definitions. Whenever used in this Agreement, the following terms
shall have the following respective meanings:

                  (a) "Agreement" means this Agreement and all amendments made
hereto and thereto by written agreement between the parties;

                  (b) "Notes" means convertible Notes of the Company issued to
the Subscribers in the aggregate amount of up to $1,000,000 in the form of
Exhibit A annexed to the Subscription Agreement.

                  (c) "Escrowed Payment" means the sums set forth on Schedule A
hereto.

                  (d) "Subscription Agreement" means the Subscription Agreement
to be entered into by the parties in reference to the Notes and the exhibits
thereto.

                  (e) "Legal Opinion" means the original signed legal opinion
referred to in Section 3 of the Subscription Agreement.

                  (f) "Warrants" means the common stock purchase warrants of the
Company described in Section 6 of the Subscription Agreement and set forth on
Schedule A hereto.

                  (g) "Finder's Fee" means the fees to be paid to the Finders as
described in Section 6 of the Subscription Agreement and set forth on Schedule A
hereto.

<PAGE>   2
                  (h) "Non-Accountable Expense Allowance" means the $2,500
Non-Accountable Expense Allowance to be paid to the entity identified on
Schedule A hereto.

                  (i) Collectively, the Subscription Agreement, Legal Opinion,
Warrants and Finder's Fee are referred to as "Company Documents."

                  (j) Collectively, the Escrowed Payment and Subscription
Agreement without exhibits thereto are referred to as "Subscriber Documents."

         1.2. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto pertaining to the Company Documents and Subscriber
Documents and supersedes all prior agreements, understandings, negotiations and
discussions, whether oral or written, of the parties. There are no warranties,
representations and other agreements made by the parties in connection with the
subject matter hereof except as specifically set forth in this Agreement.

         1.3. Extended Meanings. In this Agreement words importing the singular
number include the plural and vice versa; words importing the masculine gender
include the feminine and neuter genders. The word "person" includes an
individual, body corporate, partnership, trustee or trust or unincorporated
association, executor, administrator or legal representative.

         1.4. Waivers and Amendments. This Agreement may be amended, modified,
superseded, cancelled, renewed or extended, and the terms and conditions hereof
may be waived, only by a written instrument signed by all parties, or, in the
case of a waiver, by the party waiving compliance. Except as expressly stated
herein, no delay on the part of any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any waiver on
the part of any party of any right, power or privilege hereunder preclude any
other or future exercise of any other right, power or privilege hereunder.

         1.5. Headings. The division of this Agreement into articles, sections,
subsections and paragraphs and the insertion of headings are for convenience of
reference only and shall not affect the construction or interpretation of this
Agreement.

         1.6. Law Governing this Agreement. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York without
regard to principles of conflicts of laws. Any action brought by either party
against the other concerning the transactions contemplated by this Agreement
shall be brought only in the state courts of New York or in the federal courts
located in the state of New York. Both parties and the individuals executing
this Agreement and other agreements on behalf of the Company agree to submit to
the jurisdiction of such courts and waive trial by jury. The prevailing party
(which shall be the party which receives an award most closely resembling the
remedy or action sought) shall be entitled to recover from the other party its
reasonable attorney's fees and costs. In the event that any provision of this
Agreement or any other agreement delivered in connection herewith is invalid or
unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform with such statute or rule of law. Any such
provision which may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision of any agreement.

         1.7. Specific Enforcement, Consent to Jurisdiction. The Company and
Subscriber acknowledge and agree that irreparable damage would occur in the
event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent or cure

                                       2
<PAGE>   3
breaches of the provisions of this Agreement and to enforce specifically the
terms and provisions hereof or thereof, this being in addition to any other
remedy to which any of them may be entitled by law or equity. Subject to Section
1.6 hereof, each of the Company and Subscriber hereby waives, and agrees not to
assert in any such suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of such court, that the suit, action or
proceeding is brought in an inconvenient forum or that the venue of the suit,
action or proceeding is improper. Nothing in this Section shall affect or limit
any right to serve process in any other manner permitted by law.

         1.8. Fees. The Company shall pay the Escrow Agent the fee described in
Section 6 of the Subscription Agreement. This fee shall be payable by
proportionate deduction from the Escrowed Payment, but only if the corresponding
balance of the Escrowed Payment is to be released to or on behalf of the Company
pursuant to this Agreement.

                                   ARTICLE II

                         DELIVERIES TO THE ESCROW AGENT

         2.1. Delivery of Company Documents to Escrow Agent. On or about the
date hereof, the Company shall deliver to the Escrow Agent the Company
Documents.

         2.2 Delivery of Subscriber Documents to Escrow Agent. On or about the
date hereof, the Subscriber shall deliver to the Escrow Agent the Subscriber
Documents. The Escrowed Payment will be delivered pursuant to the following wire
transfer instructions:

                           Citibank, N.A.
                           ABA Number: 0210-00089
                           For Credit to:   Grushko & Mittman
                                            IOLA Trust Account
                                            Account Number: 45208884

         2.3. Intention to Create Escrow Over Company Documents and Subscriber
Documents. The Subscriber and Company intend that the Company Documents and
Subscriber Documents shall be held in escrow by the Escrow Agent pursuant to
this Agreement for their benefit as set forth herein.

         2.4. Escrow Agent to Deliver Company Documents and Subscriber
Documents. The Escrow Agent shall hold and release the Company Documents and
Subscriber Documents only in accordance with the terms and conditions of this
Agreement.

                                   ARTICLE III

              RELEASE OF COMPANY DOCUMENTS AND SUBSCRIBER DOCUMENTS

         3.1. Release of Escrow. Subject to the provisions of Section 4.2, the
Escrow Agent shall release the Company Documents and Subscriber Documents as
follows:

                  (a) Upon receipt by the Escrow Agent of the Company Documents
and the corresponding Subscriber Documents, the Escrow Agent will simultaneously
release the Company Documents to the Subscribers and Warrant Recipients and
release the corresponding Subscriber Documents to the Company except that (i)
the Finder's Fee will be delivered to the finders; (ii) the Non-Accountable
Expense Allowance will be released to the entity identified on Schedule A
hereto; and (iii)

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<PAGE>   4
the fee described in Section 1.8 above will be released to the Escrow Agent. At
the request of the Escrow Agent, the Company will provide written facsimile or
original instructions to the Escrow Agent as to the disposition of all funds
releasable to the Company.

                  (b) In the event the Escrow Agent does not receive Company
Documents and the corresponding Subscriber Documents prior to October 31, 2000,
then the Escrow Agent will promptly return the Company Documents to the Company,
and promptly return the Subscriber Documents to the Subscribers.

                  (c) Upon receipt by the Escrow Agent of joint written
instructions ("Joint Instructions") signed by the Company and the Subscriber, it
shall deliver the Company Documents and Subscriber Documents in accordance with
the terms of the Joint Instructions.

                  (d) Upon receipt by the Escrow Agent of a final and
non-appealable judgment, order, decree or award of a court of competent
jurisdiction (a "Court Order"), the Escrow Agent shall deliver the Company
Documents and Subscriber Documents in accordance with the Court Order. Any Court
Order shall be accompanied by an opinion of counsel for the party presenting the
Court Order to the Escrow Agent (which opinion shall be satisfactory to the
Escrow Agent) to the effect that the court issuing the Court Order has competent
jurisdiction and that the Court Order is final and non-appealable.

         3.2. Acknowledgement of Company and Subscriber; Disputes. The Company
and the Subscriber acknowledge that the only terms and conditions upon which the
Company Documents and Subscriber Documents are to be released are set forth in
Sections 3 and 4 of this Agreement. The Company and the Subscriber reaffirm
their agreement to abide by the terms and conditions of this Agreement with
respect to the release of the Notes and Escrowed Payment. Any dispute with
respect to the release of the Notes and Escrowed Payment shall be resolved
pursuant to Section 4.2 or by agreement between the Company and Subscriber.

                                   ARTICLE IV

                           CONCERNING THE ESCROW AGENT

         4.1. Duties and Responsibilities of the Escrow Agent. The Escrow
Agent's duties and responsibilities shall be subject to the following terms and
conditions:

                  (a) The Subscriber and Company acknowledge and agree that the
Escrow Agent (i) shall not be responsible for or bound by, and shall not be
required to inquire into whether either the Subscriber or Company is entitled to
receipt of the Company Documents and Subscriber Documents pursuant to, any other
agreement or otherwise; (ii) shall be obligated only for the performance of such
duties as are specifically assumed by the Escrow Agent pursuant to this
Agreement; (iii) may rely on and shall be protected in acting or refraining from
acting upon any written notice, instruction, instrument, statement, request or
document furnished to it hereunder and believed by the Escrow Agent in good
faith to be genuine and to have been signed or presented by the proper person or
party, without being required to determine the authenticity or correctness of
any fact stated therein or the propriety or validity or the service thereof;
(iv) may assume that any person purporting to give notice or make any statement
or execute any document in connection with the provisions hereof has been duly
authorized to do so; (v) shall not be under any duty to give the property held
by Escrow Agent hereunder any greater degree of care than Escrow Agent gives its
own similar property; and (vi) may consult counsel satisfactory to Escrow Agent,
the opinion of such counsel to be full and complete authorization and protection
in

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<PAGE>   5
respect of any action taken, suffered or omitted by Escrow Agent hereunder in
good faith and in accordance with the opinion of such counsel.

                  (b) The Subscriber and Company acknowledge that the Escrow
Agent is acting solely as a stakeholder at their request and that the Escrow
Agent shall not be liable for any action taken by Escrow Agent in good faith and
believed by Escrow Agent to be authorized or within the rights or powers
conferred upon Escrow Agent by this Agreement. The Subscriber and Company,
jointly and severally, agree to indemnify and hold harmless the Escrow Agent and
any of Escrow Agent's partners, employees, agents and representatives for any
action taken or omitted to be taken by Escrow Agent or any of them hereunder,
including the fees of outside counsel and other costs and expenses of defending
itself against any claim or liability under this Agreement, except in the case
of gross negligence or willful misconduct on Escrow Agent's part committed in
its capacity as Escrow Agent under this Agreement. The Escrow Agent shall owe a
duty only to the Subscriber and Company under this Agreement and to no other
person.

                  (c) The Subscriber and Company jointly and severally agree to
reimburse the Escrow Agent for its reasonable out-of-pocket expenses (including
outside counsel fees, to the extent authorized hereunder) incurred in connection
with the performance of its duties and responsibilities hereunder.

                  (d) The Escrow Agent may at any time resign as Escrow Agent
hereunder by giving five (5) days prior written notice of resignation to the
Subscriber and the Company. Prior to the effective date of the resignation as
specified in such notice, the Subscriber and Company will issue to the Escrow
Agent a Joint Instruction authorizing delivery of the Company Documents and
Subscriber Documents to a substitute Escrow Agent selected by the Subscriber and
Company. If no successor Escrow Agent is named by the Subscriber and Company,
the Escrow Agent may apply to a court of competent jurisdiction in the State of
New York for appointment of a successor Escrow Agent, and to deposit the Company
Documents and Subscriber Documents with the clerk of any such court.

                  (e) The Escrow Agent does not have and will not have any
interest in the Company Documents and Subscriber Documents, but is serving only
as escrow agent, having only possession thereof. The Escrow Agent shall not be
liable for any loss resulting from the making or retention of any investment in
accordance with this Escrow Agreement.

                  (f) This Agreement sets forth exclusively the duties of the
Escrow Agent with respect to any and all matters pertinent thereto and no
implied duties or obligations shall be read into this Agreement.

                  (g) The Escrow Agent shall be permitted to act as counsel for
the Subscriber or the Company, as the case may be, in any dispute as to the
disposition of the Company Documents and Subscriber Documents, in any other
dispute between the Subscriber and Company, whether or not the Escrow Agent is
then holding the Company Documents and Subscriber Documents and continues to act
as the Escrow Agent hereunder.

                  (h) The provisions of this Section 4.1 shall survive the
resignation of the Escrow Agent or the termination of this Agreement.

         4.2. Dispute Resolution: Judgments. Resolution of disputes arising
under this Agreement shall be subject to the following terms and conditions:

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<PAGE>   6
                  (a) If any dispute shall arise with respect to the delivery,
ownership, right of possession or disposition of the Company Documents and
Subscriber Documents, or if the Escrow Agent shall in good faith be uncertain as
to its duties or rights hereunder, the Escrow Agent shall be authorized, without
liability to anyone, to (i) refrain from taking any action other than to
continue to hold the Company Documents and Subscriber Documents pending receipt
of a Joint Instruction from the Subscriber and Company, or (ii) deposit the
Company Documents and Subscriber Documents with any court of competent
jurisdiction in the State of New York, in which event the Escrow Agent shall
give written notice thereof to the Subscriber and the Company and shall
thereupon be relieved and discharged from all further obligations pursuant to
this Agreement. The Escrow Agent may, but shall be under no duty to, institute
or defend any legal proceedings which relate to the Company Documents and
Subscriber Documents. The Escrow Agent shall have the right to retain counsel if
it becomes involved in any disagreement, dispute or litigation on account of
this Agreement or otherwise determines that it is necessary to consult counsel.

                  (b) The Escrow Agent is hereby expressly authorized to comply
with and obey any Court Order. In case the Escrow Agent obeys or complies with a
Court Order, the Escrow Agent shall not be liable to the Subscriber and Company
or to any other person, firm, corporation or entity by reason of such
compliance.

                                    ARTICLE V

                                 GENERAL MATTERS

         5.1. Termination. This escrow shall terminate upon the release of all
of the Company Documents and Subscriber Documents or at any time upon the
agreement in writing of the Subscriber and Company.

         5.2. Notices. All notices, request, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given one (1) day after being sent by telecopy (with copy delivered by
overnight courier, regular or certified mail):

(a)      If to the Company, to:

                           iBIZ Technology, Corp.
                           1919 West Lone Cactus
                           Phoenix, AZ 85021
                           (623) 492-9921 (Telecopier)
                           Attn: President

         With a copy to:

                           Gammage & Burnham
                           2 North Central, 18th Floor
                           Phoenix, AZ 85021
                           Attn: Stephen Boatwright, Esq.
                           (602) 256-4475 (Telecopier)
(b)      If to the Subscriber, to: the addresses and fax numbers set forth on
         Schedule A hereto.


(c)      If to the Escrow Agent, to:

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<PAGE>   7
                           Grushko & Mittman, P.C.
                           Attorneys at Law
                           551 Fifth Avenue, Suite 1601
                           New York, New York 10176
                           (212) 697-3575 (telecopier)

or to such other address as any of them shall give to the others by notice made
pursuant to this Section 5.2.

         5.3. Interest. The Escrowed Payment shall not be held in an interest
bearing account nor will interest be payable in connection therewith.

         5.4. Assignment; Binding Agreement. Neither this Agreement nor any
right or obligation hereunder shall be assignable by any party without the prior
written consent of the other parties hereto. This Agreement shall enure to the
benefit of and be binding upon the parties hereto and their respective legal
representatives, successors and assigns.

         5.5. Invalidity. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal, or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.

         5.6. Counterparts/Execution. This Agreement may be executed in any
number of counterparts and by different signatories hereto on separate
counterparts, each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute but one and the same instrument. This
Agreement may be executed by facsimile transmission.


                      [THIS SPACE INTENTIONALLY LEFT BLANK]

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<PAGE>   8
         5.7. Agreement. Each of the undersigned states that he has read the
foregoing Funds Escrow Agreement and understands and agrees to it.

                                    IBIZ TECHNOLOGY, CORP. - the "Company"


                                    By:
                                       -----------------------------------



                                    --------------------------------------
                                    CELESTE TRUST REG. - "Subscriber"



                                    --------------------------------------
                                    ESQUIRE TRADE & FINANCE INC. - "Subscriber"



                                    --------------------------------------
                                    THE KESHET FUND, L.P. - "Subscriber"



                                    --------------------------------------
                                    KESHET, L.P. - "Subscriber"



                                    --------------------------------------
                                    TALBIYA B. INVESTMENTS LTD. - "Subscriber"



                                    ESCROW AGENT:


                                    -----------------------------------
                                    GRUSHKO & MITTMAN, P.C.

                                       8
<PAGE>   9
                      SCHEDULE A TO FUNDS ESCROW AGREEMENT

<TABLE>
<CAPTION>
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SUBSCRIBER                                                   PRINCIPAL NOTE AMOUNT
------------------------------------------------------------------------------------------------------------
<S>                                                          <C>
CELESTE TRUST REG.                                           $125,000.00
C/o Trevisa-Treuhand-Anstalt
Landstrasse 8
Furstentums 9496
Balzers, Liechtenstein
Fax: 011-431-534-532895
------------------------------------------------------------------------------------------------------------
ESQUIRE TRADE & FINANCE, INC.                                $175,000.00
Trident Chambers
P.O. Box 146
Road Town, Tortola, B.V.I.
Fax: 011-41-41-760-1031
------------------------------------------------------------------------------------------------------------
THE KESHET FUND, L.P.                                        $115,000.00
135 West 50th Street, Suite 1700
New York, New York 10020
Fax: 212-541-4434
------------------------------------------------------------------------------------------------------------
KESHET L.P.                                                  $460,000.00
Ragnall House, 18 Peel Road
Douglas, Isle of Man
1M1 4L2, United Kingdom
Fax: 011-44-1624-661594
------------------------------------------------------------------------------------------------------------
TALBIYA B. INVESTMENTS LTD.                                  $125,000.00
Ragnall House, 18 Peel Road
Douglas, Isle of Man
1M1 4L2, United Kingdom
Fax: 011-44-1624-661594
------------------------------------------------------------------------------------------------------------
TOTAL                                                        $1,000,000.00
------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
FINDERS                                                      FINDER'S FEES
------------------------------------------------------------------------------------------------------------
<S>                                                          <C>
ALON ENTERPRISES LTD.                                        $85,000.00
Ragnall House, 18 Peel Road
Douglas, Isle of Man
1M1 4L2, United Kingdom
Fax: 011-44-1624-661594
------------------------------------------------------------------------------------------------------------
LIBRA FINANCE S.A.                                           $15,000.00
P.O. Box 4603
Zurich, Switzerland
Fax: 011-411-201-6262
------------------------------------------------------------------------------------------------------------
TOTALS                                                       $100,000.00
------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
WARRANT RECIPIENTS                                           NUMBER OF WARRANTS
------------------------------------------------------------------------------------------------------------
<S>                                                          <C>
TALBIYA B. INVESTMENTS LTD.                                  175,000
Ragnall House, 18 Peel Road
Douglas, Isle of Man
1M1 4L2, United Kingdom
Fax: 011-44-1624-661594
------------------------------------------------------------------------------------------------------------
LIBRA FINANCE S.A.                                           75,000
P.O. Box 4603
Zurich, Switzerland
Fax: 011-411-201-6262
------------------------------------------------------------------------------------------------------------
TOTAL                                                        250,000
------------------------------------------------------------------------------------------------------------
</TABLE>

NON-ACCOUNTABLE EXPENSE ALLOWANCE RECIPIENT: KCM LLC