ESCROW AGREEMENT
Exhibit 10.5
THIS
ESCROW AGREEMENT (this “Agreement”) dated June 10, 2008 made by and among GMS
Capital Corp. and Xxxxxx X. Emas Esq. (the “Escrow Agent”).
The
Company has filed a registration statement on Form S-1 with the Securities &
Exchange Commission pursuant to which it intends to conduct a public offering
(the “Offering”) of its shares of common stock.
The
completion of the Offering is subject to the Company receiving minimum aggregate
subscriptions for 500,000 shares of common stock in the capital of the Company
at a price of $0.20 (the “Minimum Offering”).
NOW,
THEREFORE, in consideration of the agreements and understandings contemplated in
the Stock Purchase Agreement, the parties hereto agree as follows:
1. Escrow
Deposit. Upon the Effective Date, the Company may accept subscriptions
for its shares of common stock from qualified investors. The Company
and the subscription agreement that it provides to prospective investors shall
instruct all subscribers (each a “Subscriber”) to make their checks, bank drafts
or money orders for the purchase of such shares payable to the Escrow Agent in
trust and to deliver such payment, along with an executed subscription agreement
to the Escrow Agent. The Escrow Agent shall deposit all subscription
funds received into a non-interest bearing attorney’s trust account in
accordance with the requirements of the Florida Bar.
2. Release
of Funds to Subscribers. If the Company does not complete the Minimum
Offering within 180 days from the Effective Date, the Escrow Agent shall
forthwith return each subscriber’s respective subscription funds.
3. Release
of Funds to Company. If the Company completes the Minimum
Offering within 180 days from the Effective Date and provides the Escrow Agent
with certificates representing the shares of common stock subscribed for by the
Subscribers, the Escrow Agent shall forthwith release the subscription funds to
the Company.
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4. Provisions
with Respect to the Escrow Agent.
(a) Protection of the Escrow
Agent. The Escrow Agent and the Company agree that: (i) the
Escrow Agent’s duties and responsibilities shall be limited to those expressly
set forth in this Agreement, and the Escrow Agent shall not be subject to, nor
obliged to recognize, any other agreement between, or direction or instruction
of, any or all of the parties hereto; provided, however, that this Agreement may
be amended at any time or times in accordance with this Agreement; (ii) no
assignment of the interest of either the Company or a Subscriber shall be
permitted, nor shall any purported assignment be binding upon the Escrow
Agent; (iii) if the Escrow Deposit is attached, garnished, or levied
upon under the order of any court, or the delivery thereof shall be stayed or
enjoined by the order of any court, or any other order, judgment or decree shall
be made or entered by any court affecting the subscription funds, the Escrow
Agent is hereby expressly authorized to obey and comply with all writs, orders
or decrees so entered or issued, whether with or without jurisdiction; the
Escrow Agent shall not be liable to any of the parties hereto or their
successors by reason of compliance with any such writ, order or decree
notwithstanding such writ, order or decree being subsequently reversed,
modified, annulled, set aside or vacated; (iv) in case the Escrow Agent becomes
involved in litigation in connection with this Agreement, it shall have the
right to retain counsel, and shall be indemnified by the Company for all
reasonable and necessary costs, attorneys’ fees, charges, disbursements and
expenses in connection with such litigation.
(b) New Escrow
Agent. The Escrow Agent reserves the right to resign at any
time by giving at least 30-days advance written notice of resignation to the
Company and each Subscriber, specifying the effective date thereof. Within 30
days after receiving the aforesaid notice, the Company agrees to appoint a
successor escrow agent. If a successor escrow agent has not been appointed and
has not accepted such appointment by the end of the 30-day period commencing
upon the receipt of the notice of resignation by the Company and the
Subscribers, the Escrow Agent may apply to a court of competent jurisdiction for
the appointment of a successor escrow agent, and the costs, expenses and
reasonable attorneys’ fees which the Escrow Agent incurs in connection with such
a proceeding shall be the responsibility of the Company.
(c) Indemnification. Without
limiting any protection or indemnity of the Escrow Agent under any other
provision hereof, or otherwise at law, the Company hereby agrees to indemnify
and hold harmless the Escrow Agent from and against any and all liabilities,
losses, damages, penalties, claims, actions, suits, costs, expenses and
disbursements, including reasonable legal or advisor fees and disbursements, of
whatever kind and nature which may at any time be imposed on, incurred by or
asserted against the Escrow Agent in connection with the performance of its
duties and obligations hereunder, other than such liabilities, losses, damages,
penalties, claims, actions, suits, costs, expenses and disbursements arising by
reason of the gross negligence or fraud of the Escrow Agent. This provision
shall survive the resignation or removal of the Escrow Agent, or the termination
of this Agreement. The Escrow Agent shall not be under any obligation to
prosecute or to defend any action or suit in respect of the relationship which,
in the opinion of its counsel, may involve its expense or liability, unless the
Company shall, so often as required, furnish the Escrow Agent with satisfactory
indemnity and funding against such expense or liability.
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5. Miscellaneous.
(a) Notices. All
notices, requests, demands and other communications required or permitted under
this Agreement shall be in writing, and shall be deemed to have been duly given
(1) on the date of delivery, if delivered personally, or sent by facsimile by
3:00 p.m. local time at the place of delivery on such date, followed by an
original delivered by first class mail, registered or certified, return receipt
requested, postage prepaid, to the party to whom notice is to be given, (2)
within 72 hours after mailing, if mailed to the party to whom notice is to be
given, by first class mail, registered or certified mail, return receipt
requested, postage prepaid, or (3) on the following day if sent by a nationally
recognized overnight delivery services, in each case, properly addressed to the
party at his address set forth on the signature page of this Agreement or any
other address that any party may designate by written notice to the
others.
(b) Counterparts. This
Agreement may be executed on two or more separate counterparts, each of which
will be an original and all of which taken together will constitute one and the
same agreement.
(c) Specific Performance.
The obligations of the parties hereto (including the Escrow Agent) are unique in
that time is of the essence, and any delay in performance hereunder by any party
will result in irreparable harm to the other parties hereto. Accordingly, any
party may seek specific performance and/or injunctive relief before any court of
competent jurisdiction in order to enforce this Agreement or to prevent
violations of the provisions hereof, and no party shall object to specific
performance or injunctive relief as an appropriate remedy. The Escrow Agent
acknowledges that its obligations, as well as the obligations of the Company
hereunder, are subject to the equitable remedy of specific performance and/or
injunctive relief.
(d) Amendment, Waiver,
etc. This Agreement shall not be amended, modified, altered or
revoked without the prior written consent of each of the Company, the Escrow
Agent and any Subscriber that has delivered funds to the Escrow Agent at the
time of amendment. No failure or delay by a party hereto in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, and no
single or partial exercise thereof shall preclude any right of further exercise
or the exercise of any other right, power or privilege.
(e) Headings. Section
headings used herein are for convenience of reference only and shall not be
deemed to constitute a part of this Agreement for any other purpose, or to
limit, characterize or in any way affect any provision of this Agreement, and
all provisions of this Agreement will be enforced as if such headings had not
been included herein.
(f) Complete Agreement.
This Agreement constitutes the entire agreement among the parties with respect
to the subject matter hereof, and amends and supersedes any prior understandings
and agreements with respect thereto.
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(g) Delivery by
Facsimile. This Agreement, and any amendments hereto, to the
extent signed and delivered by means of a facsimile machine, shall be treated in
all manner and respects as an original contract and shall be considered to have
the same binding legal effects as if it were the original signed version thereof
delivered in person. At the request of any party hereto, each other party hereto
shall re-execute original forms thereof and deliver them to all other parties.
No party hereto shall raise the use of a facsimile machine to deliver a
signature or the fact that this Agreement or any signature was transmitted or
communicated through the use of facsimile machine as a defense to the formation
of a contract and each such party forever waives any such defense.
(h) Severability. The
parties agree that (i) the provisions of this Agreement shall be severable in
the event that for any reason whatsoever any of the provisions hereof are
invalid, void or otherwise unenforceable, (ii) such invalid, void or otherwise
unenforceable provisions shall be automatically replaced by other provisions
which are as similar as possible in terms to such invalid, void or otherwise
unenforceable provisions but are valid and enforceable and (iii) the remaining
provisions shall remain enforceable to the fullest extent permitted by
law.
(i) Expenses. The
Company shall be solely responsible for providing renumeration to the Escrow
Agent in consideration of it acting as escrow agent pursuant to this
Agreement.
(j) Termination. This
Agreement shall continue in force until the Escrow Agent’s final distribution of
subscription funds hereunder.
IN
WITNESS WHEREOF, the parties have executed this Escrow Agreement on the date
first written above.
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per:
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Authorized
Signatory
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ESCROW
AGENT:
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| Xxxxxx X. Emas | ||||
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per:
/s/ Xxxxxx X. Emas
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Xxxxxx
X. Emas
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