ESCROW AGREEMENT
Exhibit 99.1
THIS ESCROW AGREEMENT (this “Agreement”) is made as of March 10, 2006, by and among Empire Financial Holding Corp., a Florida corporation (the “Company”), the purchasers signatory hereto (each a “Purchaser” and together the “Purchasers”), and Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP, with an address at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the “Escrow Agent”). Capitalized terms used but not defined herein shall have the meanings set forth in the Securities Purchase Agreement referred to in the first recital.
W I T N E S S E T H:
WHEREAS, the Purchasers will be purchasing from the Company, severally and not jointly with the other Purchasers, in the aggregate, up to $2,805,000 of Units as set forth in the Securities Purchase Agreement (the “Purchase Agreement”) dated the date hereof by and among the Company and the Purchasers, which securities will be issued under the terms contained herein and in the Purchase Agreement;
WHEREAS, it is intended that the purchase of the securities be consummated in accordance with the requirements set forth in Regulation D promulgated under the Securities Act of 1933, as amended; and
WHEREAS, the Company and the Purchasers have requested that the Escrow Agent hold the Purchase Price in escrow upon the terms set forth herein.
NOW, THEREFORE, in consideration of the covenants and mutual promises contained herein and other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged and intending to be legally bound hereby, the parties agree as follows:
ARTICLE 1
TERMS OF THE ESCROW
1.1. The parties hereby agree to establish an escrow account with the Escrow Agent whereby the Escrow Agent shall hold the funds for the purchase of up to $2,805,000 in the aggregate, of Units as contemplated by the Purchase Agreement.
1.2. Upon the Escrow Agent’s receipt of the aggregate Purchase Price for the Closing into its master escrow account, together with executed counterparts of this Agreement, the Purchase Agreement and the Investor Questionnaire Certification, it shall telephonically advise the Company, or the Company’s designated attorney or agent, of the amount of funds it has received into its master escrow account.
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1.3. |
Wire transfers to the Escrow Agent shall be made as follows: |
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HSBC Bank USA
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
A/C of Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP, XXXX
A/C# 629034125
ABA# 000000000
REMARK: EMPIRE FINANCIAL HOLDING COMPANY
1.4 The Company, promptly following being advised by the Escrow Agent that the Escrow Agent has received the Purchase Price for the Closing along with facsimile copies of counterpart signature pages of this Agreement, the Purchase Agreement and the Investor Questionnaire Certification from each Purchaser, shall deliver to the Escrow Agent:
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(a) |
the Company’s original executed counterpart of this Agreement; |
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(b) |
the Company’s executed counterpart of the Purchase Agreement; and |
(c) the Certificate of Designation for the Preferred Stock certified by the Secretary of State of Florida.
1.5 In the event that the foregoing items are not in the Escrow Agent’s possession within five (5) Business Days of the Escrow Agent notifying the Company that the Escrow Agent has custody of the Purchase Price for the Closing, then each Purchaser shall have the right to demand the return of their portion of the Purchase Price.
1.6 Once the Escrow Agent receives a Release Notice, in the form attached hereto as Exhibit A, (the “Release Notice”) executed by the Company and each Purchaser, it shall wire the aggregate Purchase Price for the Units per the wire instructions of the Company, net of $15,000 to cover legal and escrow agent fees.
1.7 Wire transfers to the Company shall be made pursuant to written instructions from the Company provided to the Escrow Agent on the Closing Date.
ARTICLE II
MISCELLANEOUS
2.1 No waiver or any breach of any covenant or provision herein contained shall be deemed a waiver of any preceding or succeeding breach thereof, or of any other covenant or provision herein contained. No extension of time for performance of any obligation or act shall be deemed an extension of the time for performance of any other obligation or act.
2.2 All notices or other communications required or permitted hereunder shall be in writing, and shall be sent as set forth in the Purchase Agreement.
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2.3 This Escrow Agreement shall be binding upon and shall inure to the benefit of the permitted successors and permitted assigns of the parties hereto.
2.4 This Escrow Agreement is the final expression of, and contains the entire agreement between, the parties with respect to the subject matter hereof and supersedes all prior understandings with respect thereto. This Escrow Agreement may not be modified, changed, supplemented or terminated, nor may any obligations hereunder be waived, except by written instrument signed by the parties to be charged or by its agent duly authorized in writing or as otherwise expressly permitted herein.
2.5 Whenever required by the context of this Escrow Agreement, the singular shall include the plural and masculine shall include the feminine. This Escrow Agreement shall not be construed as if it had been prepared by one of the parties, but rather as if all parties had prepared the same. Unless otherwise indicated, all references to Articles are to this Escrow Agreement.
2.6 The parties hereto expressly agree that this Escrow Agreement shall be governed by, interpreted under and construed and enforced in accordance with the laws of the State of New York. Any action to enforce, arising out of, or relating in any way to, any provisions of this Escrow Agreement shall only be brought in a state or federal court sitting in New York City.
2.7 The Escrow Agent’s duties hereunder may be altered, amended, modified or revoked only by a writing signed by the Company, each Purchaser and the Escrow Agent.
2.8 It is understood and agreed that the duties of the Escrow Agent hereunder are purely ministerial in nature and do not represent a conflict of interest for the Escrow Agent to act, or continue to act, as counsel for any party to this Agreement with respect to any litigation or other matters arising out of this Agreement or otherwise. The Escrow Agent shall not be liable for any error of judgment, fact, or law, or any act done or omitted to be done, except for its own willful misconduct or gross negligence or that of its partners, employees, and agents. The Escrow Agent’s determination as to whether an event or condition has occurred, or been met or satisfied, or as to whether a provision of this Agreement has been complied with, or as to whether sufficient evidence of the event or condition or compliance with the provision has been furnished to it, shall not subject the Escrow Agent to any claim, liability, or obligation whatsoever, even if it shall be found that such determination was improper and incorrect; provided that the Escrow Agent and its partners, employees, and agents shall not have been guilty of willful misconduct or gross negligence in making such determination.
2.9 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 relying or refraining from acting on any instrument reasonably believed by the Escrow Agent to be genuine and to have been signed or presented by the proper party or parties. The Escrow Agent shall not be personally liable for any act the Escrow Agent may do or omit to do hereunder as the Escrow Agent while acting in good faith and in the absence of gross negligence, fraud and willful misconduct, and any act done or omitted by the Escrow Agent pursuant to the advice of the Escrow Agent’s attorneys-at-law shall be conclusive evidence of such good faith, in the absence of gross negligence, fraud and willful misconduct.
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2.10 The Escrow Agent is hereby expressly authorized to disregard any and all warnings given by any of the parties hereto or by any other person or corporation, excepting only orders or process of courts of law and is hereby expressly authorized to comply with and obey orders, judgments or decrees of any court. In case the Escrow Agent obeys or complies with any such order, judgment or decree, the Escrow Agent shall not be liable to any of the parties hereto or to any other person, firm or corporation by reason of such decree being subsequently reversed, modified, annulled, set aside, vacated or found to have been entered without jurisdiction.
2.11 The Escrow Agent shall not be liable in any respect on account of the identity, authorization or rights of the parties executing or delivering or purporting to execute or deliver the Purchase Agreement or any documents or papers deposited or called for thereunder in the absence of gross negligence, fraud and willful misconduct.
2.12 The Escrow Agent shall be entitled to employ such legal counsel and other experts as the Escrow Agent may deem necessary properly to advise the Escrow Agent in connection with the Escrow Agent’s duties hereunder, may rely upon the advice of such counsel, and may pay such counsel reasonable compensation; provided that the costs of such compensation shall be borne by the Escrow Agent.
2.13 The Escrow Agent’s responsibilities as escrow agent hereunder shall terminate if the Escrow Agent shall resign by giving written notice to the Company and the Purchasers. In the event of any such resignation, the Purchasers and the Company shall appoint a successor Escrow Agent and the Escrow Agent shall deliver to such successor Escrow Agent any escrow funds and other documents held by the Escrow Agent.
2.14 If the Escrow Agent reasonably requires other or further instruments in connection with this Escrow Agreement or obligations in respect hereto, the necessary parties hereto shall join in furnishing such instruments.
2.15 It is understood and agreed that should any dispute arise with respect to the delivery and/or ownership or right of possession of the documents or the escrow funds held by the Escrow Agent hereunder, the Escrow Agent is authorized and directed in the Escrow Agent’s sole discretion (a) to retain in the Escrow Agent’s possession without liability to anyone all or any part of said documents or the escrow funds until such disputes shall have been settled either by mutual written agreement of the parties concerned by a final order, decree or judgment or a court of competent jurisdiction after the time for appeal has expired and no appeal has been perfected, but the Escrow Agent shall be under no duty whatsoever to institute or defend any such proceedings or (b) to deliver the escrow funds and any other property and documents held by the Escrow Agent hereunder to a state or federal court having competent subject matter jurisdiction and located in the City of New York in accordance with the applicable procedure therefore.
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2.16 The Company and each Purchaser agree jointly and severally to indemnify and hold harmless the Escrow Agent and its partners, employees, agents and representatives from any and all claims, liabilities, costs or expenses in any way arising from or relating to the duties or performance of the Escrow Agent hereunder or the transactions contemplated hereby or by the Purchase Agreement other than any such claim, liability, cost or expense to the extent the same shall have been determined by final, unappealable judgment of a court of competent jurisdiction to have resulted from the gross negligence, fraud or willful misconduct of the Escrow Agent.
2.17 This Agreement may be executed in several counterparts, each of which shall be deemed original, but such counterparts together shall constitute one and the same instrument.
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[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement as of date first written above.
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COMPANY:
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EMPIRE FINANCIAL HOLDING COMPANY
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By:__________________________________________ Name: Title:
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ESCROW AGENT:
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SICHENZIA XXXX XXXXXXXX XXXXXXX LLP
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By:__________________________________________ Name: Title:
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[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;
SIGNATURE PAGES FOR PURCHASERS FOLLOW]
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[SIGNATURE PAGE OF PURCHASERS]
Name of Purchaser: ___________________________________________
Signature of Authorized Signatory of Purchaser: ____________________
Name of Authorized Signatory: _________________________________
Title of Authorized Signatory: __________________________________
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Exhibit A to
Escrow Agreement
RELEASE NOTICE
The UNDERSIGNED, pursuant to the Escrow Agreement, dated as of March 10, 2006, among Empire Financial Holding Company, the Purchasers signatory thereto and Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP, as Escrow Agent (the “Escrow Agreement” capitalized terms used herein and not defined shall have the meaning ascribed to such terms in the Escrow Agreement), hereby notify the Escrow Agent that each of the conditions precedent to the purchase and sale of the Units set forth in the Purchase Agreement have been satisfied. The Company and the undersigned Purchaser hereby confirm that all of their respective representations and warranties contained in the Purchase Agreement remain true and correct and authorize the release by the Escrow Agent of the funds and documents to be released at the Closing as described in the Escrow Agreement. This Release Notice shall not be effective until executed by the Company and the Purchaser.
This Release Notice may be signed in one or more counterparts, each of which shall be deemed an original.
IN WITNESS WHEREOF, the undersigned have caused this Release Notice to be duly executed and delivered as of this ___ day of March 2006.
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EMPIRE FINANCIAL HOLDING COMPANY
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By:__________________________________________ Name: Title:
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[SIGNATURE PAGE OF PURCHASER FOLLOWS]
[SIGNATURE PAGE OF PURCHASERS TO RELEASE NOTICE]
Name of Purchaser: ___________________________________________
Signature of Authorized Signatory of Purchaser: ____________________
Name of Authorized Signatory: _________________________________
Title of Authorized Signatory: __________________________________
