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Exhibit 10.2
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") dated as of May 31, 1998, is
made by and among MARKETING PROJECTS, INC., a California corporation ("Seller"),
FLORAFAX INTERNATIONAL, INC., a Delaware corporation ("Buyer"), and FIRST UNION
NATIONAL BANK OF FLORIDA, a national banking association (the "Escrow Agent").
RECITALS
A. Seller and Buyer have entered into that certain Asset Purchase and
Sale Agreement dated effective May 1, 1998 (the "Asset Purchase Agreement"),
relating to the proposed acquisition by Buyer from Seller of the Acquired Assets
(as defined in the Asset Purchase Agreement).
B. Pursuant to the Asset Purchase Agreement, Buyer is required to
deliver to the Escrow Agent cash in the amount of $3,700,000 (the "Escrow
Amount").
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants hereinafter set forth, the parties hereto agree as follows:
1. RECITALS. The parties acknowledge and agree that the recitals set
forth above are true and correct.
2. APPOINTMENT OF ESCROW AGENT. Buyer and Seller do hereby appoint and
designate Escrow Agent as escrow agent for the purposes set forth herein, and
Escrow Agent does hereby accept such appointment under the terms and conditions
set forth herein.
3. ESTABLISHMENT OF THE ESCROW. Simultaneously with the execution
hereof, Buyer shall deliver the Escrow Amount to Escrow Agent. Upon receipt of
the Escrow Amount, Escrow Agent shall immediately notify Seller it has been
received.
4. INVESTMENT OF FUNDS. Escrow Agent shall place the Escrow Amount in a
separate or segregated interest-bearing account.
5. DELIVERY OF THE ESCROW AMOUNT.
Escrow Agent shall retain control over the Escrow Amount and shall not deliver
any of the Escrow Amount unless and until:
(i) it receives a written notice from Buyer on or before June
30, 1998, which notice specifies that Buyer has elected to cancel the
transaction in accordance with the provisions of Section 7 of the Asset
Purchase Agreement, in which event Escrow Agent shall disburse to Buyer
Three Million Seven Hundred Thousand Dollars ($3,700,000.00) less the
Commissions (as such term is defined in the Asset Purchase Agreement),
that would otherwise have been earned by Seller if not for termination
of Commissions as described in Section 8 of the Asset Purchase
Agreement, from May 1, 1998 through June 30, 1998, as
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agreed by the parties. Escrow Agent shall disburse to Seller the
remaining Escrow Amount; or
(ii) it does not receive a written notice of cancellation from
Buyer on or before June 30, 1998, in which event Escrow Agent shall
disburse to Seller Three Million Seven Hundred Thousand Dollars
($3,700,000.00) no earlier than 3:00 p.m., June 30, 1998, and Escrow
Agent shall disburse to Buyer the remaining Escrow Amount, including
any and all interest accrued thereon; or
(iii) a final and nonappealable judgment, decree or order of a
court of competent jurisdiction, whereupon Escrow Agent shall promptly
deliver the Escrow Amount as instructed in such judgment.
6. RESIGNATION AND REMOVAL OF ESCROW AGENT. Escrow Agent may resign
from the performance of its duties hereunder at any time by giving ten (10)
days' prior written notice to Buyer and Seller, or may be removed, with or
without cause, by Buyer and Seller acting jointly by furnishing a joint written
direction signed on behalf of each of them to Escrow Agent, at any time by the
giving of ten (10) days' prior written notice to Escrow Agent. Such resignation
or removal shall take effect upon the appointment of a successor Escrow Agent as
provided hereinbelow. Upon any such notice of resignation or removal, Buyer and
Seller shall jointly appoint a successor Escrow Agent hereunder, which shall be
a commercial bank, trust company or other financial institution with a combined
capital and surplus in excess of $100,000,000. Upon the acceptance in writing of
any appointment as Escrow Agent hereunder by a successor Escrow Agent, such
successor Escrow Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Escrow Agent, and the
retiring Escrow Agent shall be discharged from its duties and obligations under
this Escrow Agreement, but shall not be discharged from any liability for
actions taken as Escrow Agent hereunder prior to such succession. After any
retiring Escrow Agent's resignation or removal, the provisions of this Escrow
Agreement shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Escrow Agent under this Escrow Agreement.
7. LIABILITY OF ESCROW AGENT. Escrow Agent shall have no liability or
obligation with respect to the Escrow Amount except for Escrow Agent's willful
misconduct or gross negligence. Escrow Agent's sole responsibility shall be for
the safekeeping and delivery of the Escrow Amount in accordance with the terms
of this Escrow Agreement. Escrow Agent shall have no implied duties or
obligations and shall not be charged with knowledge or notice of any fact or
circumstance not specifically set forth herein or in any written notice
delivered as provided herein. Escrow Agent may rely upon any instrument, not
only as to its due execution, validity and effectiveness, but also as to the
truth and accuracy of any information contained therein, which Escrow Agent in
good faith believes to be genuine, to have been signed or presented by the
person or parties purporting to sign the same and to conform to the provisions
of this Agreement. In no event shall Escrow Agent be liable for incidental,
indirect, special, consequential or punitive damages. Escrow Agent shall not be
obligated to take any legal action or commence any proceeding in connection with
the Escrow Amount, any account in which the Escrow Amount is deposited, this
Agreement or the Asset Purchase Agreement, or to appear in, prosecute or defend
any such legal action or proceeding. Escrow Agent
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may consult legal counsel selected by it in the event of any dispute or
question as to the construction of any of the provisions hereof or of any other
agreement or of its duties hereunder, and shall incur no liability and shall be
fully protected from any liability whatsoever in acting in accordance with the
opinion or instruction of such counsel. Buyer shall promptly pay, upon demand,
the reasonable fees and expenses of any such counsel.
8. INDEMNIFICATION OF ESCROW AGENT. From and at all times after the
date of this Agreement, Buyer and Seller, jointly and severally, shall, to the
fullest extent permitted by law and to the extent provided herein, indemnify and
hold harmless Escrow Agent and each director, officer, employee, attorney, agent
and affiliate of Escrow Agent (collectively, the "Indemnified Parties") against
any and all actions, claims (whether or not valid), losses, damages,
liabilities, costs and expenses of any kind or nature whatsoever (including
without limitation reasonable attorneys' fees, costs and expenses) incurred by
or asserted against any of the Indemnified Parties from and after the date
hereof, whether direct, indirect, or consequential, as a result of or arising
from or in any way relating to any claim, demand, suit, action or proceeding
(including any inquiry or investigation) by any person, whether threatened or
initiated, asserting a claim for any legal or equitable remedy against any
person under any statute or regulation, including, but not limited to, any
federal or state securities laws, or under any common law or equitable cause or
otherwise, arising from or in connection with the negotiation, preparation,
execution, performance or failure of performance of this Agreement or any
transactions contemplated herein, whether or not any such Indemnified Party is a
party to any such action, proceeding, suit or the target of any such inquiry or
investigation; provided, however, that no Indemnified Party shall have the right
to be indemnified hereunder for any liability finally determined by a court of
competent jurisdiction, subject to no further appeal, to have resulted solely
from the gross negligence or willful misconduct of such Indemnified Party. If
any such action or claim shall be brought or asserted against any Indemnified
Party, such Indemnified Party shall promptly notify Buyer and Seller in writing,
and Buyer and Seller shall assume the defense thereof, including the employment
of counsel and the payment of all expenses. Such Indemnified Party shall, in its
sole discretion, have the right to employ separate counsel in any such action
and to participate in the defense thereof, and the fees and expenses of such
counsel shall be paid by such Indemnified Party unless (a) Buyer and/or Seller
agree to pay such fees and expenses, or (b) Buyer and/or Seller shall fail to
assume the defense of such action or proceeding or shall fail, in the reasonable
discretion of such Indemnified Party, to employ counsel satisfactory to the
Indemnified Party in any such action or proceeding, or (c) the named parties to
such action or proceeding (including any impleaded parties) include both
Indemnified Party and Buyer and/or Seller, and Indemnified Party shall have been
advised by counsel that there may be one or more legal defenses available to it
which are different from or additional to those available to Buyer or Seller.
All such fees and expenses payable by Buyer and/or Seller pursuant to the
foregoing sentence shall be paid from time to time as incurred, both in advance
of and after the final disposition of such action or claim. All of the foregoing
losses, damages, costs and expenses of the Indemnified Parties shall be payable
by Buyer and Seller, jointly and severally, upon demand by such Indemnified
Party. The obligations of Buyer and Seller under this Section shall survive any
termination of this Agreement and the resignation or removal of Escrow Agent.
The parties agree that neither the payment by Buyer or Seller of any claim by
Escrow Agent for indemnification hereunder nor the disbursement of any amounts
to Escrow Agent from the Escrow Amount in respect of a
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claim by Escrow Agent for indemnification shall impair, limit, modify, or
affect, as among Buyer and Seller, the respective rights and obligations of
Buyer, on the one hand, and Seller, on the other hand, under the Asset Purchase
Agreement.
9. COMPENSATION OF ESCROW AGENT. Buyer agrees to (i) pay Escrow Agent
upon execution of this Agreement reasonable compensation for the services to be
rendered hereunder, and (ii) pay or reimburse Escrow Agent upon receipt of a
written request from Escrow Agent (including relevant supporting documentation)
for all expenses, disbursement and advances, including reasonable attorneys'
fees, incurred or made by it in connection with the performance or termination
of this Agreement.
10. CONFLICT WITH TERMS OF AGREEMENT. In the event that Escrow Agent
receives instructions, claims or demands from Buyer or Seller that, in its
opinion, conflict with any provision of this Agreement, or is otherwise
uncertain of its rights and duties hereunder, it shall without liability of any
kind, be entitled to refrain from taking any action, and its sole obligation in
such instances shall be to keep safely the Escrow Amount until it shall be
directed otherwise in writing by all of the other parties hereto or by a final
and nonappealable judgment, decree or order of a court of competent
jurisdiction. Escrow Agent may deposit the Escrow Amount into a court of
competent jurisdiction and upon such deposit, Escrow Agent shall be relieved of
any further liability or responsibility with respect thereto.
11. TAX IDENTIFICATION NUMBERS. Buyer and Seller shall each provide
Escrow Agent with its Tax Identification Number (TIN) as assigned by the
Internal Revenue Service. All interest or other income earned under this
Agreement shall be reported by Buyer and Seller to the Internal Revenue Service
to the extent so allocated. Escrow Agent shall have no responsibility for tax
reporting.
12. TERMINATION. This Agreement shall be terminated (i) upon
disbursement or release of all of the Escrow Amount by Escrow Agent, (ii) by
written mutual consent signed by Buyer and Seller; (iii) by Escrow Agent,
pursuant to Section 7 hereof; or (iv) by deposit of the Escrow Amount into a
court of competent jurisdiction in accordance with Section 11 hereof. This
Agreement shall not be otherwise terminated.
13. NOTICES.
(a) All notices and communications hereunder shall be in
writing and shall be deemed to have been given (i) when delivered if delivered
in person; (ii) the next business day after being sent via a nationally
recognized overnight courier service or telecopier, provided that the notifying
party receives electronic confirmation of the notified party's receipt of the
telecopied notice; or (iii) three (3) business days after being sent by
certified or registered mail, postage prepaid and return receipt requested, to
the appropriate party at the address specified below:
If to Escrow Agent, to:
First Union National Bank of Florida
0000 00xx Xxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxxxx
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Fax No.: (000) 000-0000
If to Buyer, to:
Florafax International, Inc.
0000 00xx Xxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxx
Fax No.: (000) 000-0000
With a copy to:
Xxxx X. Xxxxxx, Xx.
Xxxxxxxx Xxxx Xxxxxxxxxx
Xxxxxx Xxxxxxx & Xxxxxx, Inc.
000 Xxxxx Xx. Xxxx'x Xx., Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
If to Seller, to:
Marketing Projects, Inc.
0000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx
Fax No: (000) 000-0000
With a copy to:
Xxxxx Xxxxxxxx
Xxxx & Xxxxx
0000 Xxxxxxx Xxxx Xxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Fax No.: (000) 000-0000
or at such other address as any of the above may have furnished to the other
parties in writing by registered mail, return receipt requested. In the event
that Escrow Agent, in its sole discretion, determines that an emergency exists,
Escrow Agent may use such other means of communicating with Buyer and/or Seller
as Escrow Agent reasonably deems advisable.
(b) All notices sent by Escrow Agent to Buyer shall be copied
to Seller and all notices sent by Escrow Agent to Seller shall be copied to
Buyer. All notices sent by Seller to Escrow Agent shall be copied to Buyer and
all notices sent by Buyer to Escrow Agent shall be copied to Seller. In each
case, all copied notices shall be sent to the addresses described in Section
14(a) above and delivered in the same manner as the notice.
14. RELIANCE ON INSTRUCTIONS. In the event funds transfer instructions
are given, whether in writing, by telecopier or otherwise, Escrow Agent is
authorized to seek confirmation of such instructions by telephone call-back to
the representatives of Buyer and Seller designated on Schedule I hereto, and
Escrow Agent may rely upon the confirmation of anyone purporting to be a
representative so designated. The persons and telephone numbers for callbacks
may be changed only in a writing actually received
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and acknowledged by Escrow Agent. Buyer and Seller acknowledge that such
security procedure is commercially reasonable.
15. WAIVER OR AMENDMENT. The provisions of this Agreement may be
waived, altered, amended or supplemented, in whole or in part, only by a writing
signed by all of the parties hereto.
16. ASSIGNMENT. This Agreement shall be binding upon and inure solely
to the benefit of the parties hereto and their respective successors and
assigns. Neither this Agreement nor any right or interest hereunder may be
assigned in whole or in part by any party without the prior consent of the other
parties.
17. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
18. MERGER OR CONSOLIDATION OF ESCROW AGENT. Any corporation into which
Escrow Agent in its individual capacity may be merged or converted or with which
it may be consolidated, or any corporation resulting from any merger, conversion
or consolidation to which Escrow Agent in its individual capacity shall be a
party, or any corporation to which substantially all of the corporate trust
business of Escrow Agent in its individual capacity may be transferred, shall be
Escrow Agent under this Agreement without further act.
19. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida, without regard to its policies
and principles of conflicts of laws. Each party hereto irrevocably waives any
objection on the grounds of venue, forum non conveniens, or any similar grounds
and irrevocably consents to the jurisdiction of said courts and the service of
process from such courts by mail or by any other means permitted by applicable
law.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
SELLER: MARKETING PROJECTS, INC.,
A CALIFORNIA CORPORATION
BY:
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XXXXX XXXXXX, PRESIDENT
BUYER: FLORAFAX INTERNATIONAL, INC.
BY:
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XXXXX X. XXXX, PRESIDENT
ESCROW AGENT: FIRST UNION NATIONAL BANK OF FLORIDA
BY:
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NAME:
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TITLE:
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SCHEDULE I
Telephone Number(s) for Call-Backs and
Person(s) Designated to Confirm Funds Transfer Instructions
If to Seller:
Name Telephone Number
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Xxxxx Xxxxxx (000) 000-0000
If to Buyer:
Name Telephone Number
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Xxxxx X. Xxxx (000) 000-0000
Telephone call-backs shall be made to each of Buyer and Seller if joint
instructions are required pursuant to the Agreement.
