EXHIBIT 10.
ESCROW AGREEMENT
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ESCROW AGREEMENT (the "Escrow Agreement") made as of the 18th day of June
2001, by and among The Nationwide companies, Inc., a Florida corporation, with
offices at 0000 Xxxxx Xxxx, Xxxxx 000, Xxxxx Xxxxxxx 00000 (the "Company"), and
Mintmire & Associates with offices at 000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxx Xxxxx,
Xxxxxxx 00000, as escrow agent (the "Escrow Agent").
W I T N E S S E T H:
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WHEREAS, the Company on June 18, 2001 filed with the Securities and
Exchange Commission a Form SB-2 Registration Statement with the desire to raise
capital in order to finance the growth of its business operations and for other
general corporate purposes;
WHEREAS, the Investor will from time to time pursuant to the aforementioned
Registration Statement, and Subscription Agreement ("Agreement") attached
thereto and made a part thereof, purchase shares of the Company's common stock,
$.001 par value per share (the "Common Stock"), from the Company and will be
issued shares of common stock in conjunction with the purchase of such shares of
Common Stock as set forth in that certain Agreement between the Investor and the
Company, which shares will be issued pursuant to the terms and conditions
contained in the Agreement and herein; and
WHEREAS, pursuant to the Agreement, the Company and the Investor have
requested that the Escrow Agent receive from the Company, hold in escrow and
ultimately deliver, as applicable, the shares of Common Stock, and have further
requested that upon receipt of each Agreement, the Escrow Agent receive, hold,
and ultimately deliver, upon reaching the stated minimum offering as identified
in the SB-2 Registration Statement the relevant number of Common Stock Shares.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties to this Escrow Agreement hereby agree
as follows:
1. Defined Terms. Capitalized terms used and not otherwise defined herein
shall have the meanings respectively assigned to them in the Subscription
Agreement.
2. (a) Escrow of Common Stock. On achieving the minimum offering of
100,000 shares of common stock, the Company shall issue and deliver or cause to
be delivered to the Escrow Agent such number of Common Stock shares as required
by the investor's Subscription Agreement. The Escrow Agent shall hold the Common
Stock and shall deliver them or redeliver them to the Investor or to the
Company, as applicable, only in accordance with the terms and conditions of this
Escrow Agreement.
(b) Escrow of Common Stock Shares. Each time the Company issues a
Common Stock Certificate, the Company shall cause to be delivered to the Escrow
Agent such Common Stock Certificate. The Escrow Agent shall hold the Common
Stock Certificate and shall
deliver or redeliver them to the Investor or the Company, as applicable, only in
accordance with the terms and conditions of this Escrow Agreement.
3. Holding of Shares. The Escrow Agent shall hold the Shares in a
segregated escrow account (the "Escrow Account") in a securities brokerage firm
where it normally holds such Shares or shall hold the Shares in certificated
form, in the discretion of the Escrow Agent.
4. Release of Shares.
(a) Upon the receipt of (i) a notice from the Company stipulating that
it has received Subscription Agreements for the minimum offering amount of
100,000 shares of Common Stock , and (ii) evidence of payment and the clearing
of all proceeds in the Escrow Agent's Trust Account for the Company of the full
purchase price for such shares of Common Stock being purchased, the Escrow Agent
shall release from the Escrow Account and transfer to the Investor that number
of shares of Common Stock stipulated in the Investor's Subscription Agreement.
This Escrow Agreement shall serve as irrevocable authorization and
direction to make Transfer(s) to the Investor pursuant to this Section 4(b).
(b) Except as provided in Sections 4(a) and 4(b), the Escrow Agent
shall release the Shares upon receipt, at any time, of joint written
instructions from the Company and the Investor directing the manner in which the
return or other distribution of the Shares is to be made.
(c) This Escrow Agreement shall terminate upon the expiration of the
Offering Period and/or upon such expiration as determined by the Escrow Agent
that the minimum offering amount has not been achieved whereupon the Escrow
Agent will have up to six months to return all Shares in the Escrow Account to
the Company. All proceeds deposited into its Escrow Account on behalf of an
Investor shall be returned to the original investor as evidenced by its
Subscription Agreement.
5. Further Assurances. The Company and the Investor agree to do such
further acts and to execute and deliver such statements, assignments,
agreements, instruments and other documents as the Escrow Agent, from time to
time, may reasonably request in connection with the administration, maintenance,
enforcement or adjudication of this Escrow Agreement in order (a) to give the
Escrow Agent confirmation and assurance of the Escrow Agent's rights, powers,
privileges, remedies and interests under this Escrow Agreement and applicable
law, (b) to better enable the Escrow Agent to exercise any such right, power,
privilege, remedy or interest, or (c) to otherwise effectuate the purpose and
the terms and provisions of this Escrow Agreement, each in such form and
substance as may be reasonably acceptable to the Escrow Agent.
6. Conflicting Demands. If conflicting or adverse claims or demands are
made or notices served upon the Escrow Agent with respect to the escrow provided
for herein, the Company and the Investor agree that the Escrow Agent shall
refuse to comply with any such claim or demand and withhold and stop all further
performance of this escrow so long as such disagreement shall continue. In so
doing, the Escrow Agent shall not be or become liable for damages, losses,
costs, expenses or interest to any or any other person for its failure to comply
with such conflicting or adverse demands. The Escrow Agent shall be entitled to
continue to so
refrain and refuse to so act until such conflicting claims or demands shall have
been finally determined by a court or arbitrator of competent jurisdiction or
shall have been settled by agreement of the parties to such controversy, in
which case the Escrow Agent shall be notified thereof in a notice signed by such
parties. The Escrow Agent may also elect to commence an inter-pleader or other
action for declaratory judgment for the purpose of having the respective rights
of the claimants adjudicated, and may deposit with the court all Shares and/or
proceeds held hereunder pursuant to this Escrow Agreement; and if it so
commences and deposits, the Escrow Agent shall be relieved and discharged from
any further duties and obligations under this Escrow Agreement.
7. Disputes. Each of the parties hereto hereby covenants and agrees that
the Federal or state courts located in the County of Palm Beach, State of
Florida, shall have jurisdiction over any dispute with the Escrow Agent or
relating to this Escrow Agreement.
8. Reliance on Documents and Experts. The Escrow Agent shall be entitled to
rely upon any notice, consent, certificate, affidavit, statement, paper,
document, writing or communication (which to the extent permitted hereunder may
be by telegram, cable, telex, telecopier, or telephone) reasonably believed by
it to be genuine and to have been signed, sent or made by the proper person or
persons, and upon opinions and advice of legal counsel (including itself or
counsel for any party hereto), independent public accountants and other experts
selected by the Escrow Agent and mutually acceptable to each of the Company and
the Investor. If the Shares are evidenced by stock certificates, the Escrow
Agent shall not be responsible to review the stock certificates representing the
Shares other than to confirm that it has been signed.
9. Status of the Escrow Agent, Etc. The Escrow Agent is acting under this
Escrow Agreement as a stakeholder only. No term or provision of this Escrow
Agreement is intended to create, nor shall any such term or provision be deemed
to have created, any joint venture, partnership or attorney-client relationship
between or among the Escrow Agent and the Company or the Investor. This Escrow
Agreement shall not be deemed to prohibit or in any way restrict the Escrow
Agent's representation of the Investor, who may be advised by the Escrow Agent
on any and all matters pertaining to this Escrow Agreement. To the extent the
Investor has been represented by the Escrow Agent, the Investor hereby waives
any conflict of interest and irrevocably authorizes and directs the Escrow Agent
to carry out the terms and provisions of this Escrow Agreement fairly as to all
parties, without regard to any such representation and irrespective of the
impact upon such Investor. The Escrow Agent's only duties are those expressly
set forth in this Escrow Agreement, and each of the Company and the Investor
authorizes the Escrow Agent to perform those duties in accordance with its usual
practices in holding property of its own or those of other escrows. The Escrow
Agent may exercise or other-wise enforce any of its rights, powers, privileges,
remedies and interests under this Escrow Agreement and applicable law or perform
any of its duties under this Escrow Agreement by or through its partners,
employees, attorneys, agents or designees.
10. Exculpation. The Escrow Agent and its designees, and their respective
partners, employees, attorneys and agents, shall not incur any liability
whatsoever for the disposition of the Shares or the taking of any other action
in accordance with the terms and provisions of this Escrow Agreement, for any
mistake or error in judgment, for compliance with any applicable
law or any attachment, order or other directive of any court or other authority
(irrespective of any conflicting term or provision of this Escrow Agreement), or
for any act or omission of any other person selected with reasonable care and
engaged by the Escrow Agent in connection with this Escrow Agreement (other than
for such Escrow Agent's or such person's own acts or omissions breaching a duty
owed to the claimant under this Escrow Agreement and amounting to gross
negligence or willful misconduct as finally determined pursuant to applicable
law by a governmental authority having jurisdiction); and each of the Company
and the Investor hereby waives any and all claims and actions whatsoever against
the Escrow Agent and its designees, and their respective partners, employees,
attorneys and agents, arising out of or related directly or indirectly to any
and all of the foregoing acts, omissions and circumstances. Furthermore, the
Escrow Agent and its designees, and their respective partners, employees,
attorneys and agents, shall not incur any liability (other than for a person's
own acts or omissions breaching a duty owed to the claimant under this Escrow
Agreement and amounting to gross negligence or willful misconduct as finally
determined pursuant to applicable law by a governmental authority having
jurisdiction) for other acts and omissions arising out of or related directly or
indirectly to this Escrow Agreement or the Shares; and each of the Company and
the Investor hereby expressly waives any and all claims and actions (other than
the Escrow Agent's or such person's own acts or omissions breaching a duty owed
to the claimant and amounting to gross negligence or willful misconduct as
finally determined pursuant to applicable law by a governmental authority having
jurisdiction) against the Escrow Agent and its designees, and their respective
partners, employees, attorneys and agents, arising out of or related directly or
indirectly to any and all of the foregoing acts, omissions and circumstances.
11. Indemnification. The Escrow Agent and its designees, and their
respective partners, employees, attorneys and agents, shall be indemnified,
reimbursed, held harmless and, at the request of the Escrow Agent, defended, by
the Company from and against any and all claims, liabilities, losses and
expenses (including, without limitation, the reasonable disbursements, expenses
and fees of their respective attorneys) that may be imposed upon, incurred by,
or asserted against any of them, arising out of or related directly or
indirectly to this Escrow Agreement or the Shares, except such as are occasioned
by the indemnified person's own acts and omissions breaching a duty owed to the
claimant under this Escrow Agreement and amounting to willful misconduct or
gross negligence as finally determined pursuant to applicable law by a
governmental authority having jurisdiction.
12. Notices. Any notice, request, demand or other communication permitted
or required to be given hereunder shall be in writing, shall be sent by one of
the following means to the addressee at the address set forth below (or at such
other address as shall be designated hereunder by notice to the other parties
and persons receiving copies, effective upon actual receipt) and shall be deemed
conclusively to have been given: (a) on the first business day following the day
timely deposited with Federal Express (or other equivalent national overnight
courier) or United States Express Mail, with the cost of delivery prepaid; (b)
on the fifth business day following the day duly sent by certified or registered
United States mail, postage prepaid and return receipt requested; or (c) when
otherwise actually delivered to the addressee.
If to the Company:
The Nationwide Companies, Inc.
0000 Xxxxx Xxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx Xxxxx
Facsimile No.: (000) 000-0000
If to the Investor:
At the address of such Investor as set forth in its executed Subscription
Agreement.
If to the Escrow Agent:
Mintmire & Associates
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx: Xxxxxx X. Xxxxxxxx, Esq.
Telecopier: (000) 000-0000
13. Section and Other Headings. The section and other headings contained in
this Escrow Agreement are for convenience only, shall not be deemed a part of
this Escrow Agreement and shall not affect the meaning or interpretation of this
Escrow Agreement.
14. Governing Law. This Escrow Agreement shall be governed by and construed
in accordance with the laws of the State of Florida without regard to principles
of conflicts of laws. Any controversy or claim arising out of or related to this
Escrow Agreement or the breach thereof, shall be settled by binding arbitration
in West Palm Beach, Florida in accordance with the rules of the Judicial
Arbitration & Mediation Services' Office located in West Palm Beach, Florida
("JAMS"). A proceeding shall be commenced upon written demand by Company or the
Investor to the other. The arbitrator(s) shall enter a judgment by default
against any party which fails or refuses to appear in any properly noticed
arbitration proceeding. The proceeding shall be conducted by one (1) arbitrator,
unless the amount alleged to be in dispute exceeds two hundred fifty thousand
dollars ($250,000), in which case three (3) arbitrators shall preside. The
arbitrator(s) will be chosen by the parties from a list provided by JAMS, and if
they are unable to agree within ten (10) days, JAMS shall select the
arbitrator(s). The arbitrators must be experts in securities law and financial
transactions. The arbitrators shall assess costs and expenses of the
arbitration, including all attorneys' and experts' fees, as the arbitrators
believe is appropriate in light of the merits of parties' respective positions
in the issues in dispute. The award of the arbitrator(s) shall be final and
binding upon the parties and may be enforced in any court having jurisdiction.
Nothing in this section 14 shall preclude the parties from seeking extraordinary
relief in the event that a claim of irreparable harm arises, provided however,
that such application shall be made in the United States District Court for the
Southern District of Florida, or in the Supreme Court of the State of Florida,
Xxxx County. In the event that any provision of this Escrow 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.
15. Counterparts. This Escrow Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original but all such counterparts shall together constitute one and
the same agreement.
16. Resignation of Escrow Agent. The Escrow Agent may, at any time, at its
option, elect to resign its duties as Escrow Agent under this Escrow Agreement
by providing notice thereof to each of the Company and the Investor. In such
event, the Escrow Agent shall transfer the Shares to a successor independent
escrow agent to be appointed by (a) the Company and the Investor within thirty
(30) days following the receipt of notice of resignation from the Escrow Agent,
or (b) the Escrow Agent if the Company and the Investor shall have not agreed on
a successor escrow agent within the aforesaid 30-day period, upon which
appointment and delivery of the Shares and/or Investor proceeds, the Escrow
Agent shall be released of and from all liability under this Escrow Agreement.
17. Successors and Assigns; Assignment. Whenever in this Escrow Agreement
reference is made to any party, such reference shall be deemed to include the
successors, assigns and legal representatives of such party, and, without
limiting the generality of the foregoing, all representations, warranties,
covenants and other agreements made by or on behalf of each of the Company and
the Investor in this Escrow Agreement shall inure to the benefit of any
successor escrow agent hereunder; provided, however, that nothing herein shall
be deemed to authorize or permit the Company or the Investor to assign any of
its rights or obligations hereunder to any other person (whether or not an
affiliate of the Company or the Investor) without the written consent of each of
the other parties nor to authorize or permit the Escrow Agent to assign any of
its duties or obligations hereunder except as provided in Section 17 hereof.
18. No Third Party Rights. The representations, warranties and other terms
and provisions of this Escrow Agreement are for the exclusive benefit of the
parties hereto, and no other per-son, including the creditors of the Company or
the Investor, shall have any right or claim against any party by reason of any
of those terms and provisions or be entitled to enforce any of those terms and
provisions against any party.
19. No Waiver by Action, Etc. Any waiver or consent respecting any
representation, warranty, covenant or other term or provision of this Escrow
Agreement shall be effective only in the specific instance and for the specific
purpose for which given and shall not be deemed, regardless of frequency given,
to be a further or continuing waiver or consent. The failure or delay of a party
at any time or times to require performance of, or to exercise its rights with
respect to, any representation, warranty, covenant or other term or provision of
this Escrow Agreement in no manner (except as otherwise expressly provided
herein) shall affect its right at a later time to enforce any such term or
provision. No notice to or demand on either the Company or the Investor in any
case shall entitle such party to any other or further notice or demand in the
same, similar or other circumstances. All rights, powers, privileges, remedies
and interests of the parties under this Escrow Agreement are cumulative and not
alternatives, and they are in
addition to and shall not limit (except as otherwise expressly provided herein)
any other right, power, privilege, remedy or interest of the parties under this
Escrow Agreement or applicable law.
20. Modification, Amendment, Etc. Each and every modification and amendment
of this Escrow Agreement shall be in writing and signed by all of the parties
hereto, and each and every waiver of, or consent to any departure from, any
covenant, representation, warranty or other provision of this Escrow Agreement
shall be in writing and signed by the party granting such waiver or consent.
21. Entire Agreement. This Escrow Agreement contains the entire agreement
of the parties with respect to the matters contained herein and supersedes all
prior representations, agreements and understandings, oral or otherwise, among
the parties with respect to the matters contained herein.
22. Fees. The Escrow Agent shall receive as its fee 2% of each gross
Investment Amount as set forth in each Subscription Agreement which shall be
paid directly by the Company and not be deducted from the Investor's Proceeds
paid to the Company by the Investor and which is subsequently paid directly to
the Escrow Agent.
IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement
on the date first written above.
THE NATIONWIDE COMPANIES, INC.
By: /s/ Xxxxxxx Xxxxx
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Name: Xxxxxxx Xxxxx
Title: Chairman and Chief Executive Officer
MINTMIRE & ASSOCIATES
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx, Esq.
Title: Managing Partner
