ESCROW AGREEMENT
THIS AGREEMENT (the "Escrow Agreement") is made as of this 19th day of
December, 2001 by and between Method Products Corp., a Florida corporation (the
"Company"), Xxxxxxx Xxxxxxxx ("Xxxxxxxx") and Xxxx Xxxxxxxxx ("Xxxxxxxxx")
(collectively, the "Parties") and Xxxxxx Xxxxxxx Xxxxxxx & Xxxxxxxx, P.A., (the
"Escrow Agent").
W I T N E S S E T H
WHEREAS, the Company, formerly known as The Arielle Corp., which had
been a Delaware corporation prior to its reincorporation in the State of
Florida, entered into an Agreement and Plan of Merger ("Agreement") dated
January 12, 2000 with a then private Florida corporation, Method Products Corp,
("Method"), a copy of which is attached hereto as Exhibit "A" and made a part
hereof (the "Agreement"), which Agreement provided that an aggregate of 779,152
shares of the Company's common stock (the "Shares") were to be deposited into an
escrow account by Company shareholders and that such shares would be released
from escrow if the Company (which was required to, and adopted, Method's June
30th fiscal year end) achieves sales of a minimum of $5,000,000 in the first
complete fiscal year following the merger by and between the Company and Method;
and
WHEREAS, in consideration of the Company entering into the Agreement
with Method, Xxxxxxxx and Xxxxxxxxx, each being Director/Executive Vice
President and Director/Chief Executive Officer, respectively, of Method, and
subsequent to the merger having the same position with the Company, have agreed
to each place 389,576 of their shares of the Company's common stock in escrow in
performance of such escrow provision of the Agreement;
WHEREAS, the Parties desire to have the Escrow Agent act as the escrow
agent for purpose of receiving the Shares and disbursing same in accordance with
the terms hereof, and such law firm desires to act as Escrow Agent in accordance
with the terms hereof;
NOW THEREFORE, in consideration of the mutual promises herein
contained, and other good and lawful consideration, the receipt and sufficiency
of which is acknowledged by all parties hereto, all parties hereto agree as
follows:
1. Establishment of Escrow Account. The Escrow Agent has established an
escrow account (the "Escrow Account") for the purposes described herein at the
offices of the Escrow Agent.
2. Deposit of Escrow Shares by the Company. Concurrent with its
execution hereof, the Company is depositing the Shares (the "Escrow Shares") to
the Escrow Account.
3. Release of Escrow Shares by Escrow Agent. The Escrow Agent will
release the Escrow Shares promptly subsequent to its receipt of the written
instructions of each of the Company, Xxxxxxxx and Xxxxxxxxx concerning the
disbursement of the Escrow Shares stating and directing the Escrow Agent to
either (a) disburse the Escrow Shares to each of Xxxxxxxx and Xxxxxxxxx because
the Company has achieved sales of a minimum of $5,000,000 in the first complete
fiscal year following the merger, which ends June 30, 2002, per the terms of the
Agreement; or (b) disburse the Escrow Shares to the Company for cancellation and
return to the Company's treasury if the Company does not achieve $5,000,000 in
the first complete fiscal year following the merger, which ends June 30, 2002.
4. Rights, Duties and Responsibilities of the Escrow Agent. It is
understood and agreed that the duties of the Escrow Agent are purely ministerial
in nature. The Escrow Agent undertakes to perform only such duties as are
expressly set forth herein and no implied duties or obligations shall be
construed by the terms of this Escrow Agreement as against the Escrow Agent. It
is further agreed that:
(a) The Escrow Agent shall not be responsible for the
performance or lack thereof by the Company and/or Xxxxxxxx and/or Xxxxxxxxx of
their respective obligations under the Agreement or this Escrow Agreement. The
Escrow Agent shall not be liable in any manner for the sufficiency or
correctness as to form, manner of execution, or validity of any written
instructions delivered to it, nor as to the identity, authority or right of any
person executing same. The Escrow Agent may assume that any notice or
instruction received by it hereunder is authentic and has been duly and validly
given, pursuant to due authorization by or on behalf of the person by which or
on behalf of which it purports to be given, and the Escrow Agent shall have no
duty to inquire with respect thereto.
(b) Upon the disbursement of the Escrow Shares in accordance
with Section 3 hereof, the Escrow Agent shall have no further responsibility
with respect to the Escrow Shares so disbursed and will have no further
responsibility under this Escrow Agreement.
(c) Each of Xxxxxxxx and Xxxxxxxxx acknowledge and agree that
(1) nothing in this Escrow Agreement shall prohibit Escrow Agent from acting in
the capacity of attorney for one or more of the parties hereto in connection
with any other matter and (2) that the Escrow Agent is acting as counsel to the
Company in connection with the matters that are the subject of the Agreement and
the Escrow Agreement.
(d) In the event that the Escrow Agent shall be uncertain as
to its duties or rights hereunder or shall receive instructions with respect to
the Escrow Shares which, in its sole opinion, are in conflict with either other
instructions received by it or any provision of this Escrow Agreement, it shall
be entitled to hold the Escrow Shares, together with any interest thereon, or
any portion thereof, in the Escrow Account pending the resolution of such
uncertainty to the Escrow Agent's sole satisfaction, by final judgment of a
court of competent jurisdiction or otherwise; or the Escrow Agent, at its
option, and in its sole discretion, may deposit the Escrow Shares, or any
portion thereof, in the registry of a court of competent jurisdiction in a
proceeding to which all parties in interest are joined. Upon so depositing the
Escrow Shares, or any portion thereof, and filing its complaint and
interpleader, the Escrow Agent shall be completely discharged and released by
all of the parties hereto from any liability. The parties hereto hereby submit
themselves to the jurisdiction of said court(s). The Escrow Agent shall be
indemnified jointly and severally by each of the Company, Xxxxxxxx and Xxxxxxxxx
for all costs, including reasonable attorney's fees, in connection with the
aforesaid interpleader action, in addition to the indemnity provisions otherwise
provided for herein.
5. Indemnification of Escrow Agent. Each of the Company, Xxxxxxxx and
Xxxxxxxxx hereby agree to jointly and severally indemnify the Escrow Agent and
its officers, directors, employees, agents, and stockholders (collectively, the
"Indemnitees") from and hold the Indemnitees harmless against any loss,
liability, damage, claim, expense, action, suit or proceeding, at law or in
equity (including the reasonable fees, expenses and disbursements of its
attorneys in investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever) incurred by or asserted
against any of them, arising out of or in connection with the Escrow Agent
entering into this Escrow Agreement, the performance of its duties hereunder and
otherwise in respect hereof, except that the Company, Xxxxxxxx and Xxxxxxxxx
shall not be liable hereunder as to matters in respect of which the Escrow Agent
is determined by a court of competent jurisdiction to have acted with gross
negligence or willful misconduct. The Escrow Agent shall have no liability to
either the Company, Xxxxxxxx and Xxxxxxxxx or to any other person in respect to
any action taken or any failure to act in respect of this Escrow Agreement if
such action was taken or omitted to be taken in good faith, and the Escrow Agent
shall be entitled to rely in this regard on the advice of counsel.
6. No Lien, Claim or Security Interest in Escrow Account or Escrow
Shares; No Dispositive Rights Pertaining to Shares While in Escrow. Each of the
Company, Xxxxxxxx and Xxxxxxxxx warrants to the Escrow Agent that there exists
no lien, claim or security interest in the Escrow Account or in the Escrow
Shares or any part thereof, that there is not on file in any jurisdiction any
financing statement under the Uniform Commercial Code claiming a security
interest in or describing (whether by indication or type of description of
items) the Escrow Account or the Escrow Shares or any part thereof and that none
of the Parties will cause or permit a lien, claim or security interest in the
Escrow Account or Escrow Shares during the term of this Escrow Agreement. The
Escrow Agent shall have no responsibility at any time for the ascertainment of
the existence or non-existence of any security interest granted by any of the
Parties in the Escrow Account or any of the Escrow Shares or any part thereof in
any respect whatsoever in connection therewith.
Until such time as the Shares which are deposited in the
Escrow Account may be released by the Escrow Agent from the Escrow Account
pursuant to the terms and conditions hereof, neither Xxxxxxxx or Xxxxxxxxx shall
have any dispositive rights pertaining thereto. Each of Xxxxxxxx and Xxxxxxxxx
shall, however, have the right to vote such Shares while in escrow.
7. Notices. All notices that are required or may be otherwise given
hereunder, shall be by registered or certified mail, postage prepaid, return
receipt requested or via telecopier or via overnight delivery service by a
nationally recognized carrier and shall be effective only when actually
received. Notices shall be addressed to the parties hereto as follows:
if to the Company: Method Products Corp.
0000 XX 00xx Xxxxxx,
Xxxxx 000X Xxxxxxx Xxxxx, XX 00000
Telecopier No. (000)000-0000
with a copy to: Xxxxxx Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxxxxxxx, XX 00000
Attention: Xxx Xxxxxxxx, Esq.
Telecopier No. 000-000-0000
if to Xxxxxxx Xxxxxxxx: c/o Method Products Corp.
0000 XX 00xx Xxxxxx, Xxxxx 000X
Xxxxxxx Xxxxx, XX 00000
Telecopier No. (000) 000-0000
if to Xxxx Xxxxxxxxx: c/o Method Products Corp.
0000 XX 00xx Xxxxxx, Xxxxx 000X
Xxxxxxx Xxxxx, XX 00000
Telecopier No. (000)000-0000
if to the Escrow Agent: Xxxxxx Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxxxxxxx, XX 00000
Attention: Xxx Xxxxxxxx, Esq.
Telecopier No. 000-000-0000
8. Resignation of Escrow Agent. The Escrow Agent may resign upon thirty
(30) days prior written notice to each of the Parties. If a successor escrow
agent (the "Successor Escrow Agent") is not appointed by the Parties within such
thirty (30) day period, then the Escrow Agent may petition a court of competent
jurisdiction located in Broward County, Florida to name a successor. Any
Successor Escrow Agent shall have the same rights and obligations under this
Escrow Agreement as the Escrow Agent; provided, however, that any Successor
Escrow Agent shall not be liable for any act or omission of the Escrow Agent or
of any prior Successor Escrow Agent.
9. Severability. If any provision of this Escrow Agreement or the
application thereof to any person or circumstance shall be determined to be
invalid or unenforceable by a court of competent jurisdiction, the remaining
provisions of the Escrow Agreement or the application of such provisions to
persons or circumstances other than those to which it is held invalid or
unenforceable shall not be affected thereby and shall be valid and enforceable
to the fullest extent permitted by law.
10. Execution In Several Counterparts; Facsimile Copies. This Escrow
Agreement may be executed in several counterparts, and all of such counterparts
shall constitute one agreement, binding on all of the parties hereto. Further,
an executed copy of this Escrow Agreement received by way of facsimile
transmission shall be deemed to be an original, enforceable and admissible for
all purposes as may be necessary under the terms hereof.
11. Escrow Agent Fee. No Escrow Agent fee is to be paid in connection
herewith.
12. Pronouns; Captions. All pronouns and any variations thereof shall
be deemed to refer to the masculine, feminine, neuter, singular or plural as the
context may require. All captions are for convenience only and shall not limit
or define the text hereof.
13. Applicable Law; Jurisdiction and Venue; Service of Process; Waiver
of Trial by Jury; Attorney's Fees. Nothing in this Escrow Agreement is intended
to or shall confer upon anyone other than the parties hereto any legal or
equitable right, remedy or claim. This Escrow Agreement shall be deemed made in,
governed by, and construed in accordance with, the substantive laws of the State
of Florida, without giving effect to the principles of conflict of laws thereof.
Jurisdiction and venue for any action or proceeding brought by or between the
Parties relating to this Escrow Agreement, shall be solely in the federal and/or
state courts located in Broward County, Florida. Each of the Parties hereby
consent to the jurisdiction and venue of such courts, and agree that they shall
not contest or challenge the jurisdiction or venue of such courts. Each of the
Parties agrees that service of any process, summons, notice or document, by
United States registered or certified mail, to its address as set forth herein
or as may otherwise be changed pursuant to the notice provisions hereof, shall
be effective service of process for any action, suit or proceeding brought
against it in any such court. In recognition of the fact that the issues which
would arise under this Agreement are of such a complex nature that they could
not be properly tried before a jury, each of the Parties waive trial by jury.
The prevailing party/parties shall be entitled to recover from the other
party/parties its/his reasonable attorneys' fees and costs.
14. Assignments and Transfers. No assignment or transfer may be made by
any of the Parties of their respective rights or obligations under this Escrow
Agreement.
15. Entire Agreement. This Escrow Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersedes all prior
agreements and understandings (written or oral) of the parties in connection
herewith. The provisions of this Escrow Agreement shall control in the event of
any conflict between the provisions hereof and the provisions of the Agreement.
16. Rule of Construction That Ambiguities are to be Construed Against
the Drafter Not Applicable. This Agreement is to be construed fairly and simply
and not strictly for or against any of the parties hereto. The Parties to this
Agreement acknowledge that they have each carefully read and reviewed this
Escrow Agreement with their respective counsel, and therefore, agree that the
rule of construction that ambiguities shall be construed against the drafter
shall not be applicable.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the day and year first above written.
METHOD PRODUCTS CORP.
By:/s/ Xxxx Xxxxxxxxx
------------------
Xxxx Xxxxxxxxx, Chief Executive Officer
STATE OF FLORIDA )
)SS:
COUNTY OF BROWARD )
The foregoing instrument was acknowledged before me this 19th day of
December, 2001 by Xxxx Xxxxxxxxx, as Chief Executive Officer of Method Products
Corp., a Delaware corporation, on behalf of the corporation. He is personally
known to me or has produced __________ as identification and did/did not take an
oath.
Notary Public:
sign /s/ Xxxxx Xxxxx
---------------
print Xxxxx Xxxxx
-----------
State of Florida at Large (Seal)
My Commission Expires:
/s/ Xxxxxxx Xxxxxxxx
--------------------
Xxxxxxx Xxxxxxxx
STATE OF FLORIDA )
)SS:
COUNTY OF BROWARD )
The foregoing instrument was acknowledged before me this 19th day of
December, 2001 by Xxxxxxx Xxxxxxxx, who is personally known to me or who has
produced _____________________ as identification and did/did not take an oath.
sign /s/ Xxxxx Xxxxx
---------------
print Xxxxx Xxxxx
-----------
State of Florida at Large (Seal)
My Commission Expires:
/s/ Xxxx Xxxxxxxxx
--------------------
Xxxx Xxxxxxxxx
STATE OF FLORIDA )
)SS:
COUNTY OF BROWARD )
The foregoing instrument was acknowledged before me this 19th day of
December, 2001 by Xxxx Xxxxxxxxx, who is personally known to me or who has
produced _____________________ as identification and did/did not take an oath.
Notary Public:
sign /s/ Xxxxx Xxxxx
---------------
print Xxxxx Xxxxx
-----------
State of Florida at Large (Seal)
My Commission Expires:
XXXXXX XXXXXXX XXXXXXX & XXXXXXXX
By: /s/ Xxx Xxxxxxxx
----------------
Xxx Xxxxxxxx, Vice President
STATE OF FLORIDA )
)SS:
COUNTY OF BROWARD )
The foregoing instrument was acknowledged before me this 19th day of
December, 2001 by Xxx Xxxxxxxx, as Vice President of Xxxxxx Xxxxxxx Xxxxxxx &
Xxxxxxxx, P.A.., a Florida corporation, on behalf of the corporation. He is
personally known to me or has produced __________ as identification and did/did
not take an oath.
Notary Public:
sign /s/ Xxxxx X. Xxxxxxx
------------------------------------
print Xxxxx X. Xxxxxxx
State of Florida at Large (Seal)
My Commission Expires:
