10.5
ESCROW AGREEMENT
ESCROW AGREEMENT dated as of April 30, 2003, among XXXXXX & XXXXXXXXX
LLP, a limited liability partnership, as escrow agent ("Escrow Agent"), HUMANA
TRANS SERVICES HOLDING CORP., its subsidiaries, affiliates, successors and
assigns ("Corporate Pledgor"), a Delaware corporation whose office address is
000 Xxxxxxxxx Xxxx, Xxxxx Xxxxxxx, Xxxxxxxxxxxx 00000, XXXXX X. XXXXXXX, an
individual whose principal address is 000 Xxxxxxxxx Xxxx, Xxxxx Xxxxxxx,
Xxxxxxxxxxxx 00000 ("Pledgor" and collectively with the Corporate Pledgor, the
"Pledgors") and NATIONAL MANAGEMENT CONSULTING INC., a Delaware corporation
whose office address is 000 Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 10022
(the Pledgee").
WHEREAS, Humana Trans Services Group, Ltd., a New York corporation (the
"Company") is presently engaged in the business of providing transportation
related services to a range of companies and the Company is a wholly-owned
subsidiary of Pledgee; and
WHEREAS, the Corporate Pledgor wishes to purchase all the shares of the
Company (the "Humana Shares") from Pledgee; and
WHEREAS, the Pledgee desires to sell its Humana Shares to the Corporate
Pledgor for a purchase price of $255,000 and other consideration of which
$25,000 will be paid at the closing and the balance of $230,000 shall be paid
pursuant to the terms of that certain secured promissory note (the "Note"); and
WHEREAS, the Corporate Pledgor and the Pledgor who is the principal
officer and shareholder of the Corporate Pledgor, have agreed to pledge
securities owned by each of them to the Pledgee to be held in escrow pursuant to
the terms of that certain Pledge Agreement among the Corporate Pledgor, the
Pledgor and the Pledgee (the "Pledge Agreement") as security for the repayment
of the Note; and
WHEREAS, the Pledgor is presently employed by the Company pursuant to
that certain employment agreement dated as of March 1, 2003 (the "JWZ Employment
Agreement") and presently owns 2,250,000 shares of common stock of Pledgee; and
WHEREAS, Pledgor will terminate the JWZ Employment Agreement and will
return 1,750,000 shares of common stock of Pledgee owned by Pledgor to Pledgee,
waive any right to proceeds of shares of Pledgee common stock or other
securities held by Xxxxxxx Xxxxx on JWZ or Sentry Capital Management, Inc.'s
behalf, procure the release of Pledgee from any obligation to deliver any shares
of the Pledgee's common stock to Company employees (the "Settlement Agreement");
and
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WHEREAS, in conjunction with the termination of the JWZ Employment
Agreement, the Pledgor will enter into a consulting agreement with the Pledgee
to provide introductions on a non-exclusive basis to Pledgee with regard to a
variety of potential corporate transactions with compensation to be set forth in
such consulting agreement (the "Consulting Agreement") (the Settlement
Agreement, Stock Purchase Agreement, Pledge Agreement, Note and Consulting
Agreement shall be referred to collectively as the "Ancillary Agreements").
NOW, THEREFORE, for good and valuable consideration, the adequacy and
receipt of which are hereby acknowledged, the parties do hereby agree as
follows;
1. DEFINITIONS. All capitalized terms not otherwise defined
herein shall have the meanings ascribed to them in the Pledge
Agreement.
2. APPOINTMENT. The Escrow Agent shall act as the escrow agent as
set forth herein, and as such shall receive, acknowledge
receipt, retain, release and deliver the Escrow Documents (as
defined in Section 4(b)) on the terms, and subject to the
conditions, set forth herein.
3. RIGHTS, DUTIES AND IMMUNITIES.
(a) The duties and obligations of the Escrow Agent shall be
determined solely by the express provisions of this
Agreement. The Escrow Agent shall not be liable except
for the performance of such duties and obligations as
are specifically set out in this Agreement and the
Escrow Agent shall not be deemed to have any knowledge
of, or responsibility for, the terms of any other
agreement, instrument or document.
(b) The Escrow Agent shall not be responsible in any manner
whatsoever for any failure or inability of any party
hereto, or of any one else, to deliver documents to the
Escrow Agent or otherwise to honor any of the
provisions of this Agreement or otherwise.
(c) Except as provided in Section 7(b) below, the Corporate
Pledgor, the Pledgor and the Pledgee will indemnify the
Escrow Agent for, and defend and hold it harmless
against, any loss, liability or expense (including but
not limited to attorneys' fees and disbursements)
arising out of or in connection with, its acceptance of
or the performance of its duties and obligations under
or the interpretation of this Agreement; provided,
however, that this Section 3(c) shall not apply to
losses, liabilities and expenses caused by the bad
faith, willful misconduct or gross negligence of the
Escrow Agent.
(d) The Escrow Agent shall be entitled to rely upon any
judgment, certification, demand, notice, instrument or
other writing delivered to it hereunder without being
required to determine the authenticity or the
correctness of any fact stated therein or the propriety
or validity or the service thereof. The Escrow Agent
shall be fully protected in acting on and relying upon
any written notice, direction, request, waiver,
consent, receipt or other paper or document which the
Escrow Agent believes to be genuine. The Escrow Agent
may act in reliance upon any instrument or signature it
reasonably believes to be genuine and the Escrow Agent
may assume that any person purporting to give any
advice or make any statement in connection with the
provisions hereof has been duly authorized to do so.
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(e) The Escrow Agent shall not be liable for any error of
judgment, or for any act done or step taken or omitted
by it in good faith, or for any mistake of fact or law,
or for anything which it may do or refrain from doing
in connection herewith, except its own bad faith,
willful misconduct or gross negligence.
(f) The Escrow Agent may seek the advice of legal counsel
as to any question arising from or relating to the
construction of any of the provisions of this Agreement
or its duties or obligations hereunder or otherwise,
and it shall incur no liability and shall be fully
protected in respect of any action taken, omitted or
suffered by it in good faith in accordance with the
advice of such counsel.
(g) The Escrow Agent does not make and will not be required
or deemed to make any representation as to the validity
or genuineness of any agreement, document or other
instrument held by or delivered to it.
(h) If a dispute arises between one or more of the parties
hereto, or between any of the parties hereto and any
person not a party hereto, as to whether or not or to
whom the Escrow Agent shall deliver any of the Escrow
Documents or as to any other matter arising from or
relating to the Escrow Documents or this Agreement, the
Escrow Agent shall not be required to determine such
dispute and need not make any delivery of any of the
Escrow Documents, but will retain the same until the
rights of the parties to the dispute shall have finally
been determined by written agreement among the parties
to the dispute or by final non-appealable order of a
court of competent jurisdiction. In the event that the
Escrow Agent has received notice of such order or any
such agreement, the Escrow Agent shall cause the Escrow
Documents to be released and delivered in accordance
with such agreement or order and in accordance with
Section 5 below.
(i) The Escrow Agent shall be entitled to assume that no
dispute of the type referred to in Section 3(h) has
arisen unless it has received a written notice that
such a dispute has arisen, which written notice refers
specifically to this Agreement and identifies by name
and address the adverse claimants in such dispute. Any
party delivering written notice of a dispute pursuant
to this Section 3(i) shall simultaneously therewith
deliver a copy of such notice to all parties hereto in
accordance with Section 10 hereof, with such copies to
such persons as are specified therein. For purposes of
this Section 3(i), the Escrow Agent shall not be deemed
to have received a written notice until all parties to
this Agreement have received such written notice. If a
dispute of the type referred to in Section 3(h) arises,
the Escrow Agent may, in its sole discretion (but shall
not be obligated to), commence interpleader or similar
actions or proceedings for determination of such
dispute.
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4. DELIVERY TO ESCROW.
(a) Simultaneously herewith, Corporate Pledgor will deposit a
certificate or certificates for 1000 shares of common stock of
the Company, [] shares of common stock of Dominix, Inc.,
23,250 shares of series A preferred stock of XXXxxx.xxx, Inc.
plus an additional 11,500 shares of series A preferred stock
of XXXxxx.xxx, Inc. which is already held in escrow by the
Escrow Agent and 500,000 shares of common stock of Pledgee,
all to be placed in escrow with the Escrow Agent
(collectively, the "Pledged Stock").
(b) Simultaneously herewith, Corporate Pledgor and Pledgor
will deliver to the Escrow Agent stock powers in blank, duly
executed by Corporate Pledgor or Pledgor, relating to the
Pledged Stock, with signatures guaranteed by a national bank
or a member of the National Association of Securities Dealers
(the "Stock Powers" and together with the Pledged Stock, the
"Escrow Documents").
5. RELEASE OF ESCROW. The Escrow Agent shall hold, release and
deliver the Escrow Documents as follows:
(a) If at any time, Pledgee shall give the Escrow Agent
notice of an Event of Default ("Default Notice") and
does not receive an objection from Corporate Pledgor
or Pledgor within three business days of the Escrow
Agent giving Corporate Pledgor or Pledgor notice of
its receipt of the Default Notice in the manner
contemplated in Section 5(d), the Escrow Agent shall
transmit the Escrow Documents then in it's possession
to Pledgee with instructions to liquidate the Pledged
Stock as provided for in Section 8 of the Pledge
Agreement.
(b) In the event either the Corporate Pledgor or the
Pledgor raises an objection to the release of any of
the Escrow Documents, the Escrow Agent shall release
such of the Escrow Documents as are not in
controversy and shall continue to hold the remaining
Escrow Documents until it receives the joint written
instructions of Corporate Pledgor, Pledgor and
Pledgee.
(c) Any party delivering written instructions or objections
pursuant to Sections 5(a) or (b) above to the Escrow
Agent shall, simultaneously therewith, deliver a copy
of such instructions to all other parties at their
respective addresses set forth in Section 10 below,
with such copies to such persons as are specified
therein. For purposes of Sections 5(a) or (b), written
instructions or objections shall not be deemed to have
been received by the Escrow Agent until such time as a
copy thereof has been received by each party hereto
other than the party delivering such instructions. In
addition, the Escrow Agent shall deliver a copy of each
such instructions and objections to the other parties.
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(d) The parties hereby agree that any of the Escrow
Documents as are undated or incomplete shall, if
necessary when and if released from escrow hereunder,
be dated as of the date of such release and delivery
and/or completed by the Escrow Agent, and each of the
parties hereto hereby appoints the Escrow Agent as its
attorney-in-fact for the purpose of dating and
completing such documents.
(e) Upon receipt of written instructions from all of the
Pledgor, the Corporate Pledgor and the Pledgee stating
that the principal and interest on the Note have been
paid in full, the Escrow Agent shall promptly transmit
the Escrow Documents then in its possession to the
Corporate Pledgor and the escrow account shall be
terminated with no further action required by any party
hereto.
6. SUCCESSOR ESCROW AGENT.
(a) The Escrow Agent may, at any time, resign as such with
or without the prior written consent of all the parties
hereto, in which case the Escrow Agent (and any
successor escrow agent) shall deliver the Escrow
Documents to any successor escrow agent jointly
designated by Corporate Pledgor, Pledgor and Pledgee in
writing, or to any court of competent jurisdiction,
whereupon the Escrow Agent shall be discharged of and
from any and all further duties and obligations arising
in connection with this Agreement. The resignation of
the Escrow Agent shall take effect on the earlier of
(i) the appointment of a successor escrow agent, or
(ii) the day which is 30 days after the date of the
delivery of the Escrow Documents and a copy of this
Agreement to any court of competent jurisdiction. In
the event that a successor escrow agent has not been
appointed at the expiration of such 30-day period, the
Escrow Agent's sole responsibilities hereunder shall
be: (i) to maintain the safekeeping of the Escrow
Documents and any other documents delivered to it
hereunder, if any, and (ii) to release and deliver the
Escrow Documents and any such documents in accordance
with Section 5 of this Agreement.
(b) If the Escrow Agent receives a written notice signed by
Corporate Pledgor, Pledgor, and Pledgee stating that
they have selected a successor escrow agent, the Escrow
Agent shall deliver the Escrow Documents (and any other
documents then held by it hereunder, if any) to the
successor escrow agent named in the aforesaid notice
within 15 days after receipt of such written notice.
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7. FEES AND COSTS OF THE ESCROW AGENT.
(a) The Escrow Agent shall be entitled to the reimbursement
of any reasonable expenses (including but not limited
to attorneys' fee and disbursements) actually incurred
by it in the performance of its duties hereunder.
Without limiting any other provision of this Agreement,
the amount of such reimbursements will be borne by
Pledgor, except as provided in paragraph 7(b) below.
(b) Notwithstanding any provision in this Agreement to the
contrary, if Corporate Pledgor, Pledgor or Pledgee is
determined to be in breach of or default under any of
the provisions hereof, or has been determined by a
court of competent jurisdiction to have delivered any
written notice or instructions in bad faith or
containing untrue statements, then such party shall
bear: (i) all the costs and expenses of the Escrow
Agent required to be paid by any party hereunder, and
(ii) all costs and expenses (including but not limited
to attorneys' fees and disbursements) incurred by each
other party as a result of, or in connection with, such
breach, default or dispute, or written notice or
instruction; provided, however, that the foregoing
shall not affect the Escrow Agent's right to seek
payment from any party hereunder.
8. VOTING RIGHTS AND/OR DIVIDENDS. Notwithstanding any provision
to the contrary in this Agreement or elsewhere, during the
time that the Pledged Stock is held in escrow by the Escrow
Agent in accordance with this Agreement, Corporate Pledgor or
Pledgor, as the case may be or their designees shall be
entitled to exercise any and all voting and/or other
consensual rights accruing to the owner thereof and to receive
all dividends and other distributions made thereupon.
9. CONSTRUCTION. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the
State of New York, without regard to such State's principles
of conflicts of law.
10. NOTICES. All notices, demands, requests, consents, approvals,
reports or other communications required or permitted to be
given pursuant to this Agreement shall be in writing and if
such notice is given pursuant to Section 5 hereof, such notice
shall be accompanied by an affidavit of service and shall be
delivered to the following addresses (or such other address as
the recipient party may hereafter specify in the same manner):
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To Pledgee: National Management Consultants, Inc.
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx X. Xxxxxxxx, President
Facsimile: (000) 000-0000
With a Copy To: Moritt Xxxx Hamroff & Xxxxxxxx LLP
000 Xxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
To Corporate Pledgor and
Pledgor: Xxxxx X. Xxxxxxx
000 Xxxxxxxxx Xxxx
Xxxxx Xxxxxxx, Xx. 00000
Facsimile: (000) 000-0000
To Escrow Agent: Xxxxxx & Xxxxxxxxx LLP
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
Except as otherwise provided in Sections 3(i) and 5(c) hereof, all such
instructions, objections, notices, requests, consents and other communications,
if sent via facsimile shall be deemed to have been given when received, if sent
by overnight courier shall be deemed to have been given one (1) business day
after deposit with such overnight courier and if sent via U.S. mail, shall be
deemed to have been given three (3) business days after deposit in a U.S. postal
depository, certified mail, return receipt requested.
11. XXXXXX & XXXXXXXXX LLP.
(a) Each party acknowledges that Xxxxxx & Xxxxxxxxx LLP
has acted as legal counsel to and representative of
Pledgee and its respective affiliates and the Company
in the past (including, without limitation, in
connection with the Settlement Agreement and other
related transactions), and agrees that such counsel
and representation do not and will not constitute a
grounds for disqualifying Xxxxxx & Xxxxxxxxx LLP from
acting as Escrow Agent hereunder.
(b) Notwithstanding anything to contrary contained
herein, it is expressly understood by the parties
hereto that the Escrow Agent, in that capacity, at
any time that it is required or permitted to seek
legal counsel under this Agreement, may seek such
legal counsel from Xxxxxx & Xxxxxxxxx LLP, and that
Pledgor will be liable (as provided in Sections 3(c),
7(a) and 7(b)) to Xxxxxx & Xxxxxxxxx LLP for any
services performed and billed to the Escrow Agent by
at its customary hourly rates and all of Xxxxxx &
Xxxxxxxxx LLP disbursements in connection with the
provision of such services.
12. HEADINGS. The headings of the sections of this Agreement are
inserted as a matter of convenience and for reference purposes
only, are of no binding effect, and in no respect define,
limit or describe the scope of this Agreement or the instant
of any section.
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13. COUNTERPARTS. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures to each
were upon the same instrument.
14. ENTIRE AGREEMENT. This Agreement represents the entire
understanding and agreement between the parties with respect
to the subject matter hereof, supersedes all prior
negotiations between the parties, and can be amended,
modified, supplemented, extended, terminated, discharged or
changed only by an agreement in writing which makes specific
reference to this Agreement and which is signed by all
parties.
15. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure solely to the benefit of the parties and their
respective permitted successors and assigns and shall not be
enforceable by or create or evidence any right of any third
party.
Pledgee shall be entitled to assign this Escrow Agreement and
all of its rights, privileges, interests, and remedies
hereunder to any other person, firm, entity, bank, or
corporation whatsoever without notice to or consent by the
Corporate Pledgor or the Pledgor and such assignee shall be
entitled to the benefits of this Escrow Agreement and to
exercise all such rights, interests, and remedies as fully as
Pledgee. Corporate Pledgor and Pledgor may not assign this
Escrow Agreement without the express written consent of the
Pledgee which may be withheld in its sole discretion.
16. SEVERABILITY. Any provision of this Agreement that may
be determined by a court of competent jurisdiction to be
prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other
jurisdiction. It is expressly understood, however, that the
parties intend each and every provision of this Agreement to
be valid and enforceable and hereby knowingly waive all
rights to object to any provision of this Agreement.
17. FURTHER ASSURANCES. Each of the parties agrees that it shall
use its good faith efforts to take, or cause to be taken, all
action and to do, or cause to be done, all things necessary to
consummate and make effective this Agreement.
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[SIGNATURE PAGE TO ESCROW AGREEMENT]
IN WITNESS WHEREOF, the parties have caused this Escrow Agreement to be
executed as of the date first above written.
XXXXXX & XXXXXXXXX LLP
As Escrow Agent
By:______________________________
Xxxxxxx X. Xxxxxx, Partner
NATIONAL
MANAGEMENT CONSULTANTS, INC.
By: _______________________________
Name: Xxxxxx X. Xxxxxxxx
Title: President
HUMANA TRANS SERVICES HOLDING CORP.
By:________________________________
Name: Xxxxx X. Xxxxxxx
Title: Chairman and President
XXXXX X. XXXXXXX
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