Exhibit 10.9


 


Execution Version


 


INDEMNITY ESCROW AGREEMENT


 


THIS INDEMNITY ESCROW
AGREEMENT (the “Agreement”) is entered into this 9th day of November 2005,
by and among IT&E International Group, a Nevada corporation, (“IT&E” or
the “Buyer”) and Gene Resnick, M.D., an individual (the “Shareholder”), and
Union Bank of California, N.A. (the “Escrow Agent”) with respect to the
following facts:


 


WHEREAS, pursuant to Section 3.2(c) of
that certain Asset Purchase Agreement dated November 9, 2005 (the “Asset
Purchase Agreement”) entered into by and among IT&E, the Shareholder and Millennix, Inc.,
a New York corporation, IT&E is required to deliver the sum of One Hundred Ten
Thousand Dollars ($110,000.00) to the Escrow Agent via wire transfer of
immediately available funds at Closing, to be escrowed and disbursed by the
Escrow Agent pursuant to the terms hereof.


 


NOW, THEREFORE, for and
in consideration of the mutual covenants contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:


 


1.             Incorporation;
Definitions.  Capitalized terms not
expressly defined in this Agreement shall have the respective meanings given to
them in the Asset Purchase Agreement.


 


2.             Appointment of
Escrow Agent.  IT&E and the Shareholder
hereby appoint and designate the Escrow Agent as escrow agent for the purposes
set forth herein, and the Escrow Agent hereby accepts such appointment.  All references to the “Escrow Agent,” as that
term is used herein, shall refer to the Escrow Agent solely in its capacity as
escrow agent hereunder.


 


3.             Establishment of
Escrow.  IT&E is depositing with
the Escrow Agent an amount equal to One Hundred Ten Thousand Dollars ($110,000.00)
(collectively, together with any investment earnings pursuant to Section 4
below, the “Escrow Amount”) via wire transfer of immediately available funds.


 


4.             Investment of
Escrow Account.  The Escrow Amount
shall be invested in a money market mutual fund account with the Escrow Agent as
directed by IT&E; provided, further, that the Escrow Amount shall only be
invested in the following types of investments: (i) marketable direct
obligations issued or unconditionally guaranteed by the government of the
United States of America or issued by an agency thereof and backed by the full
faith and credit of the United States of America; (ii) marketable direct
obligations issued by any state of the United States of America or any
political subdivision of any such state or any public instrumentality thereof
which, at the time of acquisition, have the highest rating obtainable from
either S&P or Moody’s; (iii) commercial paper which, at the time of
acquisition, has the highest obtainable rating from either S&P or Moody’s;
and (iv) certificates of deposit, repurchase agreements or bankers’
acceptances issued by any bank organized under the laws of the United States of
America or any state thereof.  In no
instance shall the Escrow Agent have any liability for the performance of any
such investment (including, without limitation, any loss incurred on any
investment liquidated prior to maturity when necessary to make a payment under
this Agreement), and the Escrow Agent shall be under no obligation to give
investment advice.  In


 





















 


the absence of written instructions, Escrow Agent will invest funds in
the BlackRock Provident Cash Management Shares T-Fund, and the parties
acknowledge that the Escrow Agent may render administrative services and
receive additional fees from the administrator or distributor of said Fund.


 


5.             Claims.  From time to time on or before the first anniversary
of the Closing Date (the “Survival Period”), IT&E may give written notice
(a “Notice”) to the Shareholder and the Escrow Agent specifying in reasonable
detail the nature and dollar amount of any Claim it may have under Article XII
of the Asset Purchase Agreement.  IT&E
may make more than one Claim with respect to any underlying state of
facts.  If the Shareholder gives written
notice to IT&E and the Escrow Agent disputing any Claim (a “Counter Notice”)
within seven (7) days following the date of the Notice regarding such
Claim, such Claim shall be resolved as provided below.  If no Counter Notice is delivered by the Shareholder
to IT&E and the Escrow Agent within such seven (7) day period, then
the dollar amount of any Claim, as set forth in the Notice, shall be deemed
established and the Escrow Agent shall promptly assign, pay, transfer and
convey to IT&E an amount equal to each such Claim from the Escrow Account.  If a Counter Notice is given with respect to
a Claim, the Escrow Agent shall make payment of all or a portion with respect
thereto only (i) to the extent a Claim is not disputed by a Counter Notice;
(ii) in accordance with joint written instructions of IT&E and the Shareholder;
or (iii) in accordance with a final non-appealable order of a court of
competent jurisdiction pursuant to Section 10 below.  Any court order shall be accompanied by a
legal opinion by counsel for the presenting party to the effect that the order
is final and non-appealable.  The Escrow
Agent shall act on such court order and legal opinion without further question.


 


6.             Termination of
Escrow.  The termination of this escrow
shall occur on the date that is twelve (12) months after the Closing Date (the “Release
Date”).  The Escrow Amount shall only be
used to satisfy Claims, if any, that are the subject of a Notice delivered
prior to Release Date (each a “Valid Claim”). 
Therefore, if a Valid Claim is pending and/or in dispute as of the
Release Date, the Escrow Amount shall remain in the Escrow Account until
resolution of such Valid Claim at which time the Escrow Amount will be
disbursed by the Escrow Agent in accordance with this Agreement.  Any amounts of the Escrow Amount remaining
after satisfaction or termination of all valid Claims shall be delivered by the
Escrow Agent to the Shareholder within fifteen (15) days pursuant to joint
written instructions from the parties hereto.


 


7.             Escrow Agent’s
Duties.


 


(a)           All parties understand and agree that
the Escrow Agent is not a principal, participant or beneficiary of the
underlying transaction which necessitates this Agreement.  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 acting or refraining from acting on any
instrument believed by it in good faith to be and to have been signed or
presented by the proper party or parties, their officers, representatives or
agents.  The Escrow Agent and its
directors, officers and employees shall not be liable, except for their own
gross negligence or willful misconduct and, except with respect to claims based
upon such gross negligence or willful misconduct that are successfully asserted
against the Escrow Agent, the other parties hereto shall jointly and severally


 





















 


indemnify and hold harmless the
Escrow Agent from and against any and all losses, liabilities, claims, actions,
damages and expenses, including reasonable out-of-pocket attorney’s fees and
disbursements, arising out of and in connection with this Agreement (solely
from the funds in the Escrow Account, in the case of the Shareholder).  Except as set forth in this Agreement, the
Escrow Agent shall not be responsible for or chargeable with knowledge of any terms
and conditions contained in any other agreement among the parties hereto,
including, without limitation, the Asset Purchase Agreement.


 


(b)           The Escrow Agent, and any successor
escrow agent, may resign at any time as escrow agent hereunder by giving at
least thirty (30) days prior written notice to IT&E and the Shareholder.  Upon such resignation and the appointment of
a successor escrow agent, the resigning escrow agent shall be absolved from any
and all liability in connection with the exercise of its powers and duties as
escrow agent hereunder except for liability arising in connection with its own
gross negligence or willful misconduct. 
Upon their receipt of notice of resignation from the Escrow Agent, IT&E
and the Shareholder shall use reasonable efforts jointly to designate a
successor escrow agent.  In the event IT&E
and the Shareholder do not agree upon a successor escrow agent within thirty
(30) days after the receipt of such notice, the escrow agent so resigning may
petition any court of competent jurisdiction for the appointment of a successor
escrow agent or other appropriate relief and any such resulting appointment
shall be binding upon all parties hereto. 
By mutual agreement, IT&E and the Shareholder shall have the right
at any time upon not less than ten (10) days prior written notice to the
Escrow Agent to terminate their appointment of the Escrow Agent, or successor
escrow agent, as escrow agent hereunder. 
The Escrow Agent or successor escrow agent shall continue to act as
escrow agent until a successor is appointed and qualified to act as escrow
agent.


 


8.             Interpleader.  Should any controversy arise between the
parties hereto with respect to this Agreement or with respect to the right to
receive the Escrow Account, the Escrow Agent shall have the right, at the sole
discretion of the Escrow Agent, to consult counsel and/or to institute a bill
of interpleader as the exclusive forum for any such action to determine the
rights of the parties.  Should such
actions be necessary, or should the Escrow Agent become involved in litigation
in any manner whatsoever on account of this Agreement or the Escrow Account, IT&E,
on the one hand, and the Shareholder, on the other hand, hereby bind and
obligate themselves, their heirs, successors and assigns to each pay one-half
(1/2) of the reasonable out-of-pocket attorney’s fees incurred by the Escrow
Agent, and any other disbursements, expenses, losses, costs and damages in
connection with or resulting from such actions.


 


9.             Fees.  IT&E shall pay the fees of the Escrow
Agent for the services rendered pursuant to the provisions of this
Agreement.  The Escrow Agent hereby
agrees that such fees shall be in the amounts set forth on the Schedule of
Fees attached hereto as Exhibit A. 
In the event that any fees, costs or expenses shall remain unpaid for
thirty (30) days after written notice from the Escrow Agent to IT&E, the
Escrow Agent may withdraw such fees, costs or expenses from the income of the
Escrow Account; provided, however, that in such an event, IT&E shall be
obligated to promptly replace any funds so withdrawn.  Except where otherwise noted, this fee covers
account acceptance, set up and termination expenses, plus usual and customary
related administrative services such as safekeeping, investment and payment of
funds


 





















 


specified herein.  Activities
requiring excessive administrator time or out-of-pocket expenses such as
optional substitution of collateral or securities shall be deemed extraordinary
expenses for which related costs, transaction charges and additional fees will
be billed at the Escrow Agent’s standard charges for such items.


 


10.           Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of California without regard
to the conflicts of laws principles.  The
exclusive forum for any action or preceding seeking to enforce any provision
of, or based on any right arising out of this Agreement against any of the
parties shall be the United States District court located in San Diego, California,
or if such court does not have jurisdiction, a state court located in San Diego,
California.


 


11.           Notices.  All notices and instructions provided for or
permitted hereunder shall be in writing and shall be deemed given if delivered
personally (including delivery by an express delivery service or by facsimile
transmission during the recipient’s regular business hours) or mailed, by
certified or registered mail, return receipt requested, with postage prepaid,
and addressed to the parties hereto as follows:


 


	
  If to IT&E:

  	
   

  	
  IT&E
  International Group

  Attention: Peter Sollenne, Chief Executive Officer

  and Dave Vandertie, Chief Financial Officer

  505 Lomas Santa Fe Drive, Suite 200

  Solana Beach, California 92075

  Telephone: (858) 777-1644

  Facsimile: (858) 366-0961

  
	
   

  	
   

  	
   

  
	
  with a required
  copy to:

  	
   

  	
  Foley &
  Lardner LLP

  Attention: Kenneth D. Polin, Esq.

  402 West Broadway, Suite 2300

  San Diego, California 92101

  Telephone: (619) 234-6655

  Facsimile: (619) 234-3510

  
	
   

  	
   

  	
   

  
	
  If to the Escrow
  Agent:

  	
   

  	
  Union Bank of
  California, N.A.

  Attention: Lorraine McIntire

  Vice President

  Corporate Trust Department

  120 South Pedro Street, Suite 400

  Los Angeles, California 90012

  Telephone: (213) 972-5675

  Facsimile: (213) 972-5694

  
	
   

  	
   

  	
   

  
	
  If to Gene
  Resnick:

  	
   

  	
  Gene Resnick,
  M.D.

  3020 Westchester Avenue, Suite 202

  Purchase, New York 10577

  Attention: Gene Resnick, M.D.

  Facsimile (914) 694-3293

  



 





















 


	
  with a required copy to:

  	
   

  	
  Herrick, Feinstein LLP

  2 Park Avenue

  New York, New York 10016

  Attention: John Goldman, Esq.

  Facsimile: (212) 592-1500

  



 


Any such notice or instruction shall be effective upon
receipt.  Any party may change its
address and facsimile number for the purpose of notice by giving notice in
accordance with the provisions of this Section 11.


 


12.           Assignment,
Successors and No Third-Party Rights. 
No party may assign any of its rights under this Agreement without the
prior consent of the other parties, which will not be unreasonably withheld or
delayed, except that IT&E may assign any of its rights under this Agreement
to any third party who acquires all or substantially all of the business of
IT&E to which this Agreement relates, provided that such third party agrees
to be bound by this Agreement.  Subject
to the preceding sentence, this Agreement will apply to, be binding in all
respects upon and inure to the benefit of the successors and permitted assigns
of the parties.  Nothing expressed or
referred to in this Agreement will be construed to give any Person other than
the parties to this Agreement any legal or equitable right, remedy or claim
under or with respect to this Agreement or any provision of this
Agreement.  This Agreement and all of its
provisions and conditions are for the sole and exclusive benefit of the parties
to this Agreement and their successors and assigns.


 


13.           Entire Agreement;
Amendment.  This Agreement, as among
the parties hereto, and this Agreement and the Asset Purchase Agreement, as
between the Buyer and the Shareholder, contain the entire understanding between
the parties hereto concerning the subject matter addressed in this Agreement
and this Agreement may not be changed, modified, altered or terminated except
by an agreement in writing executed by the parties hereto.  Any waiver, failure or delay in exercise by the
parties to this Agreement of any of their rights under this Agreement or of any
breach of this Agreement shall not constitute a waiver of any other rights or
of any other future breach.


 


14.           Attorney’s Fees.  If any legal action or other proceeding is
brought for the enforcement of this Agreement, or because of an alleged
dispute, breach or default relating to this Agreement, the successful or
prevailing party shall be entitled to recover reasonable out-of-pocket attorney’s
fees and other costs incurred in such dispute, action or proceeding, in
addition to any other relief to which it or they may be entitled.  The Escrow Agent shall be entitled to deduct
any reasonable attorney’s fees incurred pursuant to this Section 14 from
the Escrow Account; provided, however, that in the event such attorney’s fees
are chargeable to IT&E, IT&E shall be obligated to promptly replace any
funds so deducted.


 


15.           Counterparts;  Facsimile.  This Agreement may be executed in one or more
counterparts, all of which when fully-executed and delivered by all parties
hereto and taken together shall constitute a single agreement, binding against
each of the parties.  To the


 





















 


maximum extent permitted by law or by any applicable governmental
authority, any document may be signed and transmitted by facsimile with the
same validity as if it were an ink-signed document.  Each signatory below represents and warrants
by his or her signature that he or she is duly authorized (on behalf of the
respective entity for which the signatory has acted) to execute and deliver
this instrument and any other document related to this transaction, thereby
fully binding each such respective entity.


 


16.           Severability.  If any one or more of the provisions
contained in this Agreement shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision hereof, and such
provision shall be so modified such that the provision shall be legal, valid or
enforceable, or if such provision cannot be modified, as if such provision had
never been included in this Agreement, and this Agreement shall be construed as
if such invalid, illegal or unenforceable provision had been drafted as
modified or had never been contained herein.


 


[Remainder of Page Intentionally Left Blank]


 





















 


IN WITNESS WHEREOF, the
parties hereto have executed and delivered this Indemnity Escrow Agreement as
of the date first written above.


 


	
  “IT&E”

  	
  IT&E
  INTERNATIONAL GROUP,

  a Nevada corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter Sollenne

  	
   

  
	
   

  	
   

  	
  Peter Sollenne,
  Chairman and Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Shareholder”

  	
  /s/ Gene Resnick

  	
   

  
	
   

  	
  GENE RESNICK,
  M.D., an individual

  
	
   

  	
   

  
	
   

  	
   

  
	
  “Escrow
  Agent”

  	
  UNION BANK OF
  CALIFORNIA, N.A.,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lorraine
  McIntire

  	
   

  
	
   

  	
  Name:

  	
  Lorraine
  McIntire

  	
   

  
	
   

  	
  Its:

  	
  Vice President

  	
   

  
								



 


[Signature Page to Indemnity Escrow Agreement]


 





















 


EXHIBIT A

SCHEDULE OF FEES


 


UNION BANK OF CALIFORNIA, N.A.


CORPORATE TRUST SERVICES


 


Schedule of Fees


for


Escrow Agent Services


 


	
  Acceptance
  and Set-up Fee:

  	
   

  	
  WAIVED

  	
   

  
	
  (Due and payable on the closing date.)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Annual Escrow Administration Fee:

  	
   

  	
  $  2,500.00

  	
   

  
	
  (First year’s fee is due and payable in advance
  on the closing date)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Legal Counsel Fee:

  	
   

  	
  No
  Charge

  	
   

  
	
  (use of Union Bank in-house legal counsel)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Out-of-Pocket Expenses:

  	
   

  	
  As
  Invoiced

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Extraordinary Services:

  	
   

  	
  By
  Appraisal

  	
   

  



 


Fees
subject to acceptance and review by Union Bank of California, N.A. of all
documents pertaining to this transaction.