EXHIBIT 10.8
FORM OF ESCROW AGREEMENT
This Escrow Agreement, dated as of August ___ , 1999 (the "Closing Date"), among
Xxxxxxxxxxxxxx.xxx Corporation, a Nevada corporation ("Buyer"), and Dynamic
Health Products, Inc., a Florida corporation ("Seller"), and ....(NAME OF
ORGANIZATION)....., a ....(NATURE OF THE BUSINESS OF THE ORGANIZATION)...., as
escrow agent ("Escrow Agent").
This is the Escrow Agreement referred to in the Stock Purchase Agreement
dated August ___ , 1999 (the "Purchase Agreement") by and between Buyer and
Seller. Capitalized terms used in this agreement without definition shall have
the respective meanings given to them in the Purchase Agreement.
The parties, intending to be legally bound, hereby agree as follows:
1. ESTABLISHMENT OF ESCROW
(a) Buyer is depositing with Escrow Agent 1,000,000 shares ("Shares") of
the common stock, par value $.001 per share, of Buyer (the "Escrow Fund").
Escrow Agent acknowledges receipt thereof.
(b) Escrow Agent hereby agrees to act as escrow agent and to hold,
safeguard and disburse the Escrow Fund pursuant to the terms and conditions
hereof.
2. PROCEDURE FOR DETERMINATION OF ADDITIONAL CONSIDERATION
(a) Buyer will prepare and will cause the Company's certified public
accountants to audit financial statements of the Company as of the fiscal years
ending March 31, 2000 and March 31, 2001, including a computation of the
Company's net revenues and gross margin (the "Financial Statements"). Buyer will
deliver the Financial Statements to Seller within sixty (60) days after each
such fiscal year end. If within thirty (30) days following delivery of the
Financial Statements, Seller has not given Buyer notice of its objec tion to the
Financial Statements (such notice must contain a statement of the basis of
Seller's objection), then the Company's net revenues and gross margin reflected
in the Financial Statements will be used in computing the amount of Additional
Consideration. If Seller gives such notice of objection, then the issues in
dispute will be submitted to .....(NAME)..... , certified public accountants
(the "Accountants"), for resolution. If issues in dispute are submitted to the
Accountants for resolution, (i) each party will furnish to the Accountants such
workpapers and other documents and information relating to the disputed issues
as the Accountants may request and are available to that party or its
Subsidiaries (or its independent public accountants), and will be afforded the
opportunity to present to the Accountants any material relating to the
determination and to discuss the determination with the Accountants; (ii) the
determination by the Accountants, as set forth in a notice delivered to both
parties by the Accountants, will be binding and conclusive on the parties; and
(iii) Buyer and Sellers will each bear 50% of the fees of the Accountants for
such determination.
(b) If the Company has a gross margin of at least 2.6% for the fiscal year
ending March 31, 2000 and 2.7% for the fiscal year ending March 31, 2001, then
the Additional Consideration shall be computed as follows:
(i) For the fiscal year ending March 31, 2000, the Additional
Consideration shall be that number of shares which is the
product 500,000 multiplied by the quotient obtained from an
equation in which the numerator shall be equal to the
positive difference between the
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Minimum Net Revenues (as defined below) and the Company's
actual net revenues for the fiscal year ended March 31,
2000, and the denominator shall be $31.5 million.
(ii) For the fiscal year ending March 31, 2001, the Additional
Consideration shall be that number of shares which is the
product 500,000 multiplied by the quotient obtained from an
equation in which the numerator shall be equal to the
positive difference between the Minimum Net Revenues (as
defined below) and the Company's actual net revenues for the
fiscal year ended March 31, 2001, and the denominator shall
be $27.5 million.
(iii) Minimum Net Revenues shall be $31 million and $ 62.5 million
for the fiscal years ending March 31, 2000 and March 31,
2001, respectively.
(c) No later than the third business day after the final determination of
the Additional Consideration, the Buyer shall give notice to Seller and Escrow
Agent stating that the Additional Consideration has been determined in
accordance with this Section 2, and specifying the number of Shares to be
disbursed to the Seller pursuant to Section 3 of this Agreement as a result of
such determination ("Notice").
3. DISTRIBUTION OF ESCROW FUND; TERMINATION OF ESCROW
(a) On the tenth business day following Escrow Agent's receipt of the
Notice specified in Section 2(c), Escrow Agent shall deliver to Seller, from the
Escrow Fund, the number of Shares specified in the Notice. Escrow Agent shall
not inquire into or consider whether the Additional Consideration has been
determined in accordance with Section 2(b).
(b) On the tenth business day after Escrow Agent makes the final delivery
of the Additional Consideration as determined in accordance with Section 2(b) of
this Agreement, all Shares remaining in the Escrow Fund, if any, shall be
returned to Buyer, and this Agreement shall terminate.
4. DUTIES OF ESCROW AGENT
(a) Escrow Agent shall not be under any duty to give the Escrow Fund held
by it hereunder any greater degree of care than it gives its own similar
property.
(b) Escrow Agent shall not be liable, except for its own gross negligence
or willful misconduct and, except with respect to claims based upon such gross
negligence or willful misconduct that are successfully asserted against Escrow
Agent, the other parties hereto shall jointly and severally indemnify and hold
harmless Escrow Agent (and any successor Escrow Agent) from and against any and
all losses, liabilities, claims, actions, damages and expenses, including
reasonable attorney's fees and disbursements, arising out of and in connection
with this Agreement.
(c) Escrow Agent shall be entitled to rely upon any order, judgement,
certification, demand, notice, instrument or other writing delivered to it
hereunder without being required to determine the authenticity or the
correctness of any fact stated therein or the propriety or validity of the
service thereof. Escrow Agent may act in reliance upon any instrument or
signature believed by it to be genuine and may assume that the person purporting
to give receipt or advise or make any statement or execute any document in
connection with the provisions hereof has been duly authorized to do so. Escrow
Agent may conclusively presume that the undersigned representative of any party
hereto which is an entity other than a natural person has full power and
authority to instruct Escrow Agent on behalf of that party unless written notice
to the contrary is delivered to Escrow Agent.
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(d) Escrow Agent may act pursuant to the advice of counsel with respect to
any matter relating to this Agreement and shall not be liable for any action
taken or omitted by it in good faith in accordance with such advice.
(e) Escrow Agent does not have any interest in the Escrow Fund deposited
hereunder but is serving as escrow holder only and having only possession
thereof. This Section 4(e) and Section 4(b) shall survive notwithstanding any
termination of this Agreement or the resignation of the Escrow Agent.
(f) Escrow Agent makes no representation as to the validity, value,
genuineness or the collectability of any security or other document or
instrument held by it or delivered to it.
(g) Escrow Agent shall not be called upon to advise any party as to the
wisdom in selling or retaining or taking or refraining from any action with
respect to any securities or other property deposited hereunder.
(h) Escrow Agent (and any successor Escrow Agent) may at any time resign as
such by delivering the Escrow Fund to any successor Escrow Agent jointly
designated by the other parties hereto in writing, or to any court of competent
jurisdiction, whereupon Escrow Agent shall be discharged of and from any and all
further obligations arising in connection with this Agreement. The resignation
of Escrow Agent will take effect on the earlier of (a) the appointment of a
successor (including a court of competent jurisdiction) or (b) the day which is
30 days after the date of delivery of its written notice of resignation to the
other parties hereto. If at that time Escrow Agent has not received a
designation of a successor Escrow Agent, Escrow Agent's sole responsibility
after that time shall be to retain and safeguard the Escrow Fund until receipt
of a designation of successor Escrow Agent or a joint written disposition
instruction by the other parties hereto or a final non-appealable order of a
court of competent jurisdiction.
(i) In the event of any disagreement between the other parties hereto
resulting in adverse claims or demands being made in connection with the Escrow
Fund or in the event that Escrow Agent is in doubt as to what action it should
take hereunder, Escrow Agent shall be entitled to retain the Escrow Fund until
Escrow Agent shall have received (i) a final non-appealable order of a court of
competent jurisdiction directing delivery of the Escrow Fund or (ii) a written
agreement executed by the other parties hereto directing delivery of the Escrow
Fund, in which event Escrow Agent shall disburse the Escrow Fund in accordance
with such order or agreement. Any court order shall be accompanied by a legal
opinion by counsel for the presenting party satisfactory to Escrow Agent to the
effect that the order is final and non-appealable. Escrow Agent shall act on
such court order and legal opinion without further question.
(j) Buyer and Seller shall pay Escrow Agent compensation (as payment in
full) for the services to be rendered by Escrow Agent hereunder in the amount of
$ ___________ at the time of execution of this Agreement and $ _________
annually thereafter, and agree to reimburse Escrow Agent for all reasonable
expenses, disbursements and advances incurred or made by Escrow Agent in
performance of its duties hereunder (including reasonable fees, expenses and
disbursements of its counsel). Any such compensation and reimbursement to which
Escrow Agent is entitled shall be borne 50% by Buyer and 50% by Seller. Any fees
or expenses of Escrow Agent or its counsel that are not paid as provided for
herein may be taken from any property held by Escrow Agent hereunder.
(k) No printed or other matter in any language (including, without
limitation, prospectuses, notices, reports and promotional material) that
mentions Escrow Agent's name or the rights, powers, or duties of Escrow Agent
shall be issued by the other parties hereto or on such parties' behalf unless
Escrow Agent shall first have given its specific written consent thereto.
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(l) The other parties hereto authorize Escrow Agent, for any
securities held hereunder, to use the services of any United States central
securities depository it reasonably deems appropriate, including, without
limitation, the Depositary Trust Company and the Federal Reserve Book Entry
System.
5. LIMITED RESPONSIBILITY
This Agreement expressly sets forth all the duties of Escrow Agent with respect
to any and all matters pertinent hereto. No implied duties or obligations shall
be read into this agreement against Escrow Agent. Escrow Agent shall not be
bound by the provisions of any agreement among the other parties hereto except
this Agreement.
6. NOTICES
All notices, consents, waivers and other communications under this Agreement
must be in writing and will be deemed to have been duly given when (a) delivered
by hand (with written confirmation of receipt), (b) sent by telecopier (with
written confirmation of receipt) provided that a copy is mailed by registered
mail, return receipt requested, or (c) when received by the addressee, if sent
by a nationally recognized overnight delivery service (receipt requested), in
each case to the appropriate addresses and telecopier numbers set forth below
(or to such other addresses and telecopier numbers as a party may designate by
notice to the other parties):
Seller: Dynamic Health Products, Inc.
0000 Xxxxx Xxxxx Xxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Facsimile No.: 000-000-0000
with a copy to: Johnson, Blakely, Pope, Bokor, Xxxxxx & Xxxxx, P.A.
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
X.X. Xxx 0000
Xxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxxx
Facsimile No.: 813-223-7118
Buyer: Xxxxxxxxxxxxxx.xxx Corporation
0000 Xxxxx Xxxxx Xxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Facsimile No.: 000-000-0000
with a copy to: Schifino & Xxxxxxxxx, P.A.
One Tampa City Center
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Facsimile No.: 000-000-0000
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Escrow Agent: .....(NAME).....
.....(ADDRESS).....
Attention:
Facsimile No.:
with a copy to: .....(NAME).....
.....(ADDRESS).....
Attention:
Facsimile No.:
7. JURISDICTION; SERVICE OF PROCESS
Any action or proceeding seeking to enforce any provision of, or based on any
right arising out of, this Agreement may be brought against any of the parties
in the courts of the State of Florida, County of Pinellas, or, if it has or can
acquire jurisdiction, in the United States District Court for the Middle
District of Florida, and each of the parties consents to the jurisdiction of
such courts (and of the appropriate appellate courts) in any such action or
proceeding and waives any objection to venue laid therein. Process in any action
or proceeding referred to in the preceding sentence may be served on any party
anywhere in the world.
8. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which will
be deemed to be an original and all of which, when taken together, will be
deemed to constitute one and the same.
9. SECTION HEADINGS
The headings of sections in this Agreement are provided for convenience only and
will not affect its construction or interpretation.
10. WAIVER
The rights and remedies of the parties to this Agreement are cumulative and not
alternative. Neither the failure nor any delay by any party in exercising any
right, power, or privilege under this Agreement or the documents referred to in
this Agreement will operate as a waiver of such right, power, or privilege, and
no single or partial exercise of any such right, power, or privilege will
preclude any other or further exercise of such right, power, or privilege or the
exercise of any other right, power, or privilege. To the maximum extent
permitted by applicable law, (a) no claim or right arising out of this Agreement
or the documents referred to in this Agreement can be discharged by one party,
in whole or in part, by a waiver or renunciation of the claim or right unless in
writing signed by the other party; (b) no waiver that may be given by a party
will be applicable except in the specific instance for which it is given; and
(c) no notice to or demand on one party will be deemed to be a waiver of any
obligation of such party or of the right of the party giving such notice or
demand to take further action without notice or demand as provided in this
Agreement or the documents referred to in this Agreement.
11. EXCLUSIVE AGREEMENT AND MODIFICATION
This Agreement supersedes all prior agreements among the parties with respect to
its subject matter and constitutes (along with the documents referred to in this
Agreement) a complete and exclusive statement of
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the terms of the agreement between the parties with respect to its subject
matter. This Agreement may not be amended except by a written agreement executed
by the Buyer, the Seller and the Escrow Agent.
12. GOVERNING LAW
This Agreement shall be governed by the laws of the State of Florida without
regard to conflicts of law principles.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date first written above.
BUYER: SELLER:
XXXXXXXXXXXXXX.XXX CORPORATION DYNAMIC HEALTH PRODUCTS, INC.
By: By:
--------------------------------- -----------------------------------
Xxxxxxx X. Xxxxxxx, CEO Xxxxx X. Xxxxxx, CEO
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