ESCROW AGREEMENT
ESCROW AGREEMENT, dated as of November 22, 2002, by and between Xxxxxxx X.
Xxxxx, an individual ("Xxxxx"), Xxxx Xxxxxxx, an individual ("Xxxxxxx"), and
Broad and Xxxxxx (the "Agent"). Each of Xxxxx, Xxxxxxx, and Agent shall be
referred to as a "Party" and collectively as the "Parties."
I. Escrow
1.01 Appointment and Acknowledgment of Escrow Agent.
Xxxxx and Xxxxxxx hereby appoint the Agent, and the Agent hereby agrees to
serve, as Escrow Agent pursuant to the terms of this Agreement. The Agent
acknowledges receipt of the following from Xxxxx:
(a) upon the execution of this Agreement, Xxxxx will deposit with
the Agent the shares of stock set forth on Schedule A annexed to the Stock
Pledge Agreement (the "Pledge Agreement") executed on the date hereof between
Xxxxx and Xxxxxxx (the "Pledged Shares").
The properties described above are referred to as the "Escrowed Property."
If the Escrowed Property includes property on which dividends are paid, on which
interest is earned, or to which other accretions are added, then the Escrowed
Property shall include such dividends, interest, or accretions. If the Escrowed
Property consists of stock, the Agent shall exercise all rights and privileges
of a stockholder with respect to the shares deposited and held pursuant to this
Agreement.
1.02 Operation of Escrow.
The Parties hereto agree that the escrow created by this Agreement (the
"Escrow") shall operate as follows:
(a) This Escrow shall remain in existence until February 24, 2003
(the "Escrow Period").
(b) Upon receipt by the Agent at any time after the date of this
Agreement and on or before the termination of the Escrow Period, of a
certificate signed by Xxxxxxx (the "Certificate") (i) stating that there has
occurred or exists a breach by Xxxxx under the Pledge Agreement, (ii)
specifying, in reasonable detail, the circumstances of the breach (the "Claim")
and (iii) specifying the portion of the Escrowed Property to be delivered to
Xxxxxxx, the Agent shall deliver to Xxxxxxx, the Escrowed Property specified in
the Certificate, provided, however, that the Waiting Period has expired without
receipt of an Objection as hereinafter provided.
(c) At the time of delivery of a Certificate to the Agent (a
"Delivery"), a duplicate copy of the Certificate shall be delivered by Xxxxxxx
to Xxxxx. Xxxxx shall have a period of ten (10) calendar days following each
such delivery (the "Waiting Period") within which to object in a written
statement (an "Objection") to the Claim made in the Certificate. The Objection
shall state in reasonable detail the factual and/or legal basis for such
Objection and shall be delivered to the Agent, with a copy of such Objection to
Xxxxxxx, prior to the expiration of the Waiting Period.
If Xxxxx makes an Objection within the Waiting Period, the Agent shall
note release any Escrowed Property in respect of such Claim unless the
Claim is resolved finally pursuant to sections 1.02(d) and/or 1.02(e) hereof.
Conversely, absent a timely Objection by Xxxxx, the Agent, after the expiration
of the Waiting Period, shall release and deliver the Escrowed Property specified
in the Certificate to Xxxxxxx as set forth in section 1.02(b) above.
Nothing herein shall be construed to permit the Agent to determine the
sufficiency or legitimacy of either a Certificate or an Objection.
(d) If Xxxxx objects to any Claim made in any Certificate in
accordance with section 1.02(c) above, Xxxxxxx and Xxxxx shall attempt in good
faith for a period of ten (10) calendar days thereafter (the "Negotiation
Period") to agree upon the respective rights of the parties with respect to the
Claim or with respect to the Escrowed Property, as the case may be. If Xxxxxxx
and Xxxxx should so agree, a memorandum setting forth such accord shall be
prepared and signed by each of the parties and furnished to the Agent. The Agent
shall be entitled to rely on any such memorandum and to distribute or deliver
the Escrowed Property in accordance with the terms thereof.
(e) In the event Xxxxxxx and Xxxxx are unable to reach an accord
with regard to tall of the Claims asserted in the Certificate by the end of the
Negotiation Period, then either party may institute such actions or proceedings
as they deem appropriate in any of the Courts provided in the Pledge Agreement
to resolve the dispute. The Agent shall be entitled to act in accordance with
any judgment made and entered by such courts and to authorize the making or
withholding of the Escrowed Property in accordance therewith.
1.03 Further Provisions Relating to the Escrow.
(a) Distributions by the Agent in accordance with the terms of
this Agreement shall operate to divest all right, title, interest, claim, and
demand, either at law or in equity, of any party to this Agreement (other than
the distributee) in and to the Escrowed Property distributed and shall be a
perpetual bar both at law and in equity with respect to such distributed
Escrowed Property against the parties to this Agreement and against any person
claiming or attempting to claim such distributed escrowed property from,
through, or under such party.
(b) Xxxxx (as to half) and Xxxxxxx (as to half) agree to reimburse
the Agent for the Agent's reasonable fees and other expenses (including legal
fees and expenses) incurred by the Agent in connection with its duties
hereunder.
(c) Xxxxx and Xxxxxxx, jointly and severally, agree to indemnify
and hold harmless the Agent against and in respect of any and all claims,
suites, actions, proceedings (formal or informal), investigations, judgments,
deficiencies, damages, settlements, liabilities, and legal and other expenses
(including legal counsel fees and expenses of attorneys chosen by the Agent) as
and when incurred and whether or not involving a third party arising out of or
based upon any act, omissions, alleged act, or alleged omission by the Agent or
any other cause, in any case in connection with the acceptance of, or the
performance or nonperformance by the Agent of, any of the Agent's duties under
this Agreement, except as a result of the Agent's bad faith or gross negligence.
The Agent shall be fully protected by acting in reliance upon any notice,
advice, direction, other document, or signature believed by the Agent to be
genuine, by assuming that any person purporting to give the Agent any notice,
advice, direction, or other document in accordance with the provisions hereof,
in connection with this Agreement, or in connection with the Agent's duties
under this Agreement, has been duly authorized so to do, or by acting or failing
to act in good faith on the advice of any counsel retained by the Agent, which
may be Broad and Xxxxxx. Xxxxx acknowledges that the Agent acts as counsel to
Xxxxxxx and may continue to serve in that capacity, and neither anything
contained herein, the execution or delivery hereof by the Agent, nor the
performance by the Agent of its duties hereunder shall in any way affect or
require termination of such relationship with Xxxxxxx. The agent shall not be
liable for any mistake of fact or of law or any error of judgment, or for
any act or any omission, except as a result of the Agent's bad faith or
gross negligence. If any of the Escrowed Property is represented by stock
certificates, the Agent shall not be liable if the Agent submits all or a
portion of the Escrowed Property to be broken into smaller denominations to the
appropriate transfer agent, and such transfer agent fails to return properly
that portion of the Escrowed Property to the Agent which such transfer agent was
instructed to return.
(d) The Agent makes no representation as to the validity, value,
genuineness, or the collectibility of any security or other document or
instrument held by or delivered to the Agent.
(e) The Agent shall have no duties or responsibilities except
those expressly set forth herein. The Parties hereto agree that the Agent will
not be called upon to construe any contract or instrument. The Agent shall not
be bound by any notice of a claim, or demand with respect thereto, or any
waiver, modification, amendment, termination, cancellation, or revision of this
Agreement, unless in writing and signed by the other Parties hereto and received
by the Agent and, if the Agent's duties as Escrow Agent hereunder are affected,
unless the Agent shall have given its prior written consent thereto. The Agent
shall not be bound by any assignment by Xxxxx or by Xxxxxxx of its rights
hereunder unless the Agent shall have received written notice thereof from the
assignor. The Agent is authorized to comply with and obey laws, rules,
regulations, orders, judgments, and decrees of any governmental authority,
court, or other tribunal. If the Agent complies with any such law, rule,
regulation, order, judgment, or decree, the Agent shall not be liable to any of
the Parties hereto or to any other person even if such law, rule, order,
regulation, judgment, or decree is subsequently reversed, modified, annulled,
set aside, vacated, found to have been entered without jurisdiction, or found to
be in violation of or beyond the scope of a constitution or a law.
(f) If the Agent shall be uncertain as to the Agent's duties or
rights hereunder, shall receive any notice, advice, direction, or other document
from any other party with respect to the Escrowed Property which, in the Agent's
opinion, is in conflict with any of the provisions of this Agreement, or should
be advised that a dispute has arisen with respect to the payment, ownership, or
right of possession of the Escrowed Property or any part thereof, or the
property to be exchanged for the Escrowed Property (or as to the delivery,
non-delivery, or content of any notice, advice, direction, or other document),
the Agent shall be entitled, without liability to anyone, to refrain from taking
any action other than to use the Agent's reasonable efforts to keep safely the
Escrowed Property until the Agent shall be directed otherwise in writing by both
other parties hereto or by an order, decree, or judgment of a court of competent
jurisdiction which has been finally affirmed on appeal or which by lapse of time
or otherwise is no longer subject to appeal (a "Final Judgment"), but the Agent
shall be under no duty to institute or to defend any proceeding, although the
Agent may, in the Agent's discretion and at the expense of Xxxxx and Xxxxxxx as
provided in Section 1.03(c), institute or defend such proceedings.
(g) The Agent (and any successor escrow agent or agents) reserves
the right to resign as the Escrow Agent at any time, provided fifteen (15) day
prior written notice is given to the other parties hereto, and provided further
that a mutually acceptable successor Escrow Agent(s) is named within such
fifteen (15) day period. The Agent may, but is not obligated to, petition any
court in the State of Florida having jurisdiction to designate a successor
Escrow Agent. The resignation of the Agent (and any successor escrow agent or
agents) shall be effective only upon delivery of the Escrowed Property to the
successor escrow agent(s). The Parties reserve the right to jointly remove the
Escrow Agent at any time, provided fifteen (15) days prior written notice is
given to the Escrow Agent. If no successor Escrow Agent has been appointed and
has accepted the Escrowed Property within fifteen (15) days after the Notice is
sent, all responsibilities of the Agent hereunder shall, nevertheless, case. The
Agent's sole responsibility thereafter shall be to use the Agent's reasonable
efforts to keep safely the Escrowed Property and to deliver the Escrowed
Property as may be directed in writing by both of the other parties hereto or by
a Final Judgment. Except as set forth in this Section 1.03(g), this Agreement
shall not otherwise be assignable by the Agent without the prior written consent
of the other parties hereto.
(h) Xxxxx and Xxxxxxx authorize the Agent, if the Agent is
threatened with litigation or is sued, to interplead all interested parties in
any court of competent jurisdiction and to deposit the Escrowed Property with
the clerk of that court.
(i) The Agent's responsibilities and liabilities hereunder, except
as a result of the Agent's own bad faith or gross negligence, will terminate
upon the delivery by the Agent of al the Escrowed Property under any provision
of this Agreement.
(j) As consideration for acting as escrow agent hereunder, Xxxxx
and Xxxxxxx shall pay, in advance and as a condition precedent to the
establishment of the Escrow pursuant to the terms of this Agreement, a fee to
the Agent of $1,250. This fee shall be deemed to have been earned in full by the
Agent upon establishment of the Escrow, and shall not be subject to pro-ration
or other setoff in the event the Escrow is terminated by any party.
II. Miscellaneous
2.01 Further Action.
At any time and from time to time, Xxxxx and Xxxxxxx each agrees, at its
own expense, to take such actions and to execute and deliver such documents as
may be reasonably necessary to effectuate the purposes of this Agreement. If
any portion of the Escrowed Property consists of stock certificates, Xxxxx shall
pay any transfer tax arising out of the placing of the Escrowed Property into
the Escrow, the delivery of the Escrowed Property out of the Escrow, or the
transfer of the Escrowed Property into the name of any person or entity pursuant
to the terms of this Agreement. The Agent shall have no liability regarding
transfer taxes even if one or both of the Parties hereto fails to comply with
the obligations set forth in the prior sentence.
2.02 Survival.
Subject to Section 1.03(i), the covenants, agreements, representations, and
warranties contained in or made pursuant to this Agreement shall survive
the delivery by the Agent of the Escrowed Property, irrespective of any
investigation made by or on behalf of any party.
2.03 Modification.
This Agreement sets forth the entire understanding of the parties with
respect to the subject matter hereof, supersedes all existing agreements among
them concerning such subject matter, and (subject to Section 1.03(e)) may be
modified only by a written instrument duly executed by each party.
2.04 Notices.
Any notice, advice, direction, or other document or communication required
or permitted to be given hereunder shall be in writing and shall be mailed by
certified mail, return receipt requested, or by Federal Express, Express Mail,
or similar overnight delivery or courier service or delivered (in person or by
facsimile) against receipt to the party to whom it is to be given at address of
such party set forth below (or to such other address as the party shall have
furnished in writing in accordance with the provisions of this Section 2.04)
with a copy to each of the other parties hereto:
If to Xxxxx: 0000 Xxxxxxx Xxx
Xxxxxxx Xxxxx, XX 00000
If to Xxxxxxx: 0000 X. Xxxxxxxxxx Xxxxx Xxxx.
Xxxxxxxxxx, XX 00000
If to Agent: Broad and Xxxxxx
000 X. Xxxxxxxx Xxxx.
Xxxxx, XX 00000
Attn: Xxxx X. Xxxxxxx, Esq.
Facsimile (000) 000-0000
Any notice, advice, direction, or other document or communication given by
certified mail shall be deemed given at the time of receipt thereof. Any notice
given by other means permitted by this Section 2.04 shall be deemed given at the
time of receipt thereof.
2.05 Waiver.
Any waiver by any party of a breach of any provision of this Agreement
shall not operate as or be construed to be a waiver of any other breach of that
provision or of any breach of any other provision of this Agreement. The
failure of a party to insist upon strict adherence to any term of this Agreement
on one or more occasions shall not be considered a waiver or deprive that party
of the right thereafter to insist upon strict adherence to that term or any
other term of this Agreement. Any waiver must be in writing.
2.06 Binding Effect.
Subject to Section 1.03(g), the provisions of this Agreement shall be
binding upon and inure to the benefit of Xxxxx and Xxxxxxx and their respective
assigns, heirs, and personal representatives, and shall be binding upon and
insure to the benefit of the Agent and the Agent's successors and assigns.
2.07 No Third Douglaseneficiaries.
This Agreement does not create, and shall not be construed as creating, any
rights enforceable by any person not a party to this Agreement (except as
provided in Section 2.06).
2.08 Separability.
This entire Agreement shall be void if any provision of this Agreement
other than the second and third sentences of Section 2.11 is invalid, illegal,
unenforceable, or inapplicable to any person or circumstance to which it is
intended to be applicable, except that the provisions of Section 1.03 shall
survive.
2.09 Headings.
The headings in this Agreement are solely for convenience of reference and
shall be given no effect in the construction or interpretation of this
Agreement.
2.10 Counterparts; Governing Law.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument. It shall be governed by and construed in accordance with
the laws of the State of Florida without giving effect to conflict of laws. Any
action, suit, or proceeding arising out of, based on, or in connection with this
Agreement , any document or instrument delivered pursuant to, in connection
with, or simultaneously with this Agreement, any breach of this Agreement or any
such document or instrument, or any transaction contemplated hereby or thereby
may be brought only in the appropriate court in Broward County, Florida, each
party covenants and agrees not to assert, by way of motion, as a defense, or
otherwise, in any such action, suit, or proceeding, any claim that such party is
not subject personally to the jurisdiction of such court, that such party's
property is exempt or immune from attachment or execution, that the action,
suit, or proceeding is brought in an inconvenient forum, that the venue of the
action, suit, or proceeding is improper, or that this Agreement or the subject
matter hereof may not be enforced in or by such court.
IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the
date first written above.
"Xxxxx" "Xxxxxxx"
/s/ Xxxxxxx X. Xxxxx /s/ Xxxx Xxxxxxx
-------------------- -------------------
Xxxxxxx X. Xxxxx Xxxx Xxxxxxx
"Agent"
Broad and Xxxxxx
By: Xxxx X. Xxxxxxx, P. A., partner
/s/ Xxxx X. Xxxxxxx
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By: Xxxx X. Xxxxxxx
Its: President
