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Exhibit 10.5
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (the "Escrow Agreement") is made and entered into
this 22nd day of November, 2000 (the "Effective Date") by and between PETMED
EXPRESS, INC. (the "Company"), TRICON HOLDINGS, LLC (the "Investor") and ATLAS
PEARLMAN, P.A. (the "Escrow Agent"), pursuant to the Subscription Agreement
dated November 22, 2000 (the "Subscription Agreement").
1. ESTABLISHMENT OF ESCROW. Concurrently with the execution and
delivery of this Escrow Agreement, the Investor is delivering to the Escrow
Agent certificates representing an aggregate of Seven Million Five Hundred
Thousand (7,500,000) shares of the Company's common stock (the "Escrowed
Shares"), issued in the name of the Investor, which represents the property
required to be placed in an escrow account subject to the terms and conditions
of the Subscription Agreement. Such property is hereinafter referred to as the
"Escrow Fund." The Escrow Agent shall hold and distribute the Escrow Fund in
accordance with the terms of this Escrow Agreement.
2. ADJUSTMENTS TO ESCROW SHARES. In the event, during any time at which
the Escrow Agent is holding any portion of the Escrow Fund, the Company shall
pay any stock dividend, or shall effect any re-classification, re-adjustment,
stock split or combination or other change in the Company's capital structure or
the Escrowed Shares shall become convertible into or exchangeable for any other
securities (whether securities of the Company or any other entity), the Company
or its successor shall immediately deliver on behalf of the Investor to the
Escrow Agent such certificates or other documents as may then represent such new
or additional securities and the foregoing shall be held and distributed
pursuant to the terms of this Escrow Agreement in the same manner as the Escrow
Fund.
3. RELEASE FROM ESCROWED SHARES. Upon the Investor's satisfaction of
its obligations to the Company with respect to the installment payments of the
principal and interest of the Promissory Note (the "Promissory Note"), attached
as Exhibit A to the Subscription Agreement, the Escrow Agent shall promptly
release and deliver to the Investor the portion of the Escrow Fund set forth
opposite the corresponding installment payment below:
Installment Portion of Escrow Fund
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1 1/3
2 1/3
3 1/3
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4. ENFORCEMENT. Should it become necessary for any party to institute
legal action to enforce the terms and conditions of this Escrow Agreement, the
successful party shall be awarded reasonable attorneys' fees at all trial and
appellate levels, expenses and costs. Venue for any such action, in addition to
any other venue permitted by statute, shall be Broward County, Florida. All
parties to this Escrow Agreement hereby waive trial by jury.
5. RIGHTS, DUTIES AND RESPONSIBILITIES OF THE ESCROW AGENT. It is
understood and agreed that the Escrow Agent is an agent of the Company and the
Investor and that the duties of the Escrow Agent are purely ministerial in
nature. It is further agreed that:
(a) In consideration of its acceptance of the appointment as the Escrow
Agent, the Company and the Investor jointly and severally agree to indemnify and
hold the Escrow Agent harmless as to any liability incurred by it to any person,
firm or corporation by reason of the Escrow Agent's having accepted the same or
in carrying out any of the terms hereof in accordance with such terms. Each
party hereto agrees that the Escrow Agent shall not be liable to either of them
for any actions taken by the Escrow Agent pursuant to the terms hereof except
for actual damages incurred for acts of gross negligence, fraud or willful
misconduct by the Escrow Agent. Escrow Agent shall charge no fees to the
Investor for Escrow Agent's services hereunder.
(b) Notwithstanding anything to the contrary contained in this Escrow
Agreement, the Escrow Agent shall in no case or event be liable for the failure
of any of the conditions of this Escrow Agreement or for any other reason except
for its own gross negligence, fraud or willful misconduct, and the Escrow Agent
shall not be liable or responsible for its failure to ascertain the terms or
conditions, or to comply with any of the provisions of any agreement, contract
or other document filed herewith or referred to herein other than this Escrow
Agreement.
(c) If any controversy should arise among the parties hereto or with,
between or among any third person(s) with respect to the subject matter of this
Escrow Agreement, or its terms or conditions, the Escrow Agent shall not be
required to determine the same or take any action in the matter (unless any such
controversy alleges the gross negligence, fraud or willful misconduct of the
Escrow Agent), but rather, the Escrow Agent may await the settlement of any such
controversy by a court of competent jurisdiction or otherwise among the parties.
(d) The Escrow Agent's duties hereunder are only such as are herein
specifically provided, and as provided by applicable laws, are purely
ministerial in nature and the Escrow Agent is not charged with knowledge of any
duties or responsibilities in connection with any other document or agreement.
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(e) The Escrow Agent shall have no responsibility for the genuineness
or validity of any document or other item deposited with it, and the Escrow
Agent shall be fully protected in acting in accordance with any notice or
written instruction given to it hereunder and reasonably believed by it to have
been signed or given by the proper party. If in doubt as to its duties and
responsibilities hereunder, the Escrow Agent may consult with counsel of its
choice and shall be protected in any action taken or omitted in reliance upon
the advice or opinion of such counsel; provided, however, the Escrow Agent shall
have advised the Company and the Investor as to such advice or opinion.
(f) The Escrow Agent may execute any of its powers or responsibilities
hereunder and exercise any rights hereunder either directly or by or through its
agents or attorneys. Nothing in this Escrow Agreement shall be deemed to impose
upon the Escrow Agent any duty to qualify to do business or to act as fiduciary
or otherwise in any jurisdiction other than the State of Florida.
(g) The Escrow Agent may resign on 10 days prior written notice to the
Investor and the Company; provided, however, that such resignation shall not be
effective unless and until a new escrow agent shall be appointed hereunder. In
the case of the Escrow Agent's resignation, the Company and the Investor shall
appoint a new escrow agent and the retiring Escrow Agent's only duty, until a
successor escrow agent shall have been appointed and shall have accepted the
appointment, shall be to hold and distribute the Escrow Fund in accordance with
the provisions contained in this Escrow Agreement. Upon direction from the
Company and the Investor, the Escrow Agent shall transfer the entire Escrow Fund
to the successor escrow agent appointed by it and shall be discharged from all
duties and responsibilities hereunder as to any events that shall occur
thereafter.
(h) In the event that any litigation is brought against the Escrow
Agent by any person or corporation with respect to this Escrow Agreement, the
Company shall reimburse the Escrow Agent for the reasonable fees and expenses of
counsel.
6. INTERPLEADER BY ESCROW AGENT. At any time, the Escrow Agent, in its
sole discretion, may commence an action in the nature of interpleader in an
appropriate court to determine ownership or disposition of the Escrow Fund or it
may deposit the Escrow Fund with the clerk of any appropriate court or it may
retain the Escrow Fund pending receipt of a final, non-appealable order of a
court having jurisdiction over all of the parties hereto directing to whom and
under what circumstances the Escrow Fund is to be disbursed and delivered.
7. NOTICES, ETC. All notices and other communications hereunder shall
be in writing and shall be deemed to have been given when delivered or mailed by
registered or certified mail, postage prepaid, and addressed as follows:
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(a) If to the Escrow Agent, at 350 East Las Olas Boulevard, Suite 1700,
Fort Lauderdale, Florida 33301, Attention: Roxanne K. Beilly, Esq.; and
(b) If to the Company, at 1441 SW 29 Avenue, Pompano Beach, Florida
33069, Attention: Marc A. Puleo, M.D.; and
(c) If to the Investor, at 1020 NW 163 Drive, Miami, Florida 33169.
8. ENTIRE AGREEMENT. The parties hereto agree that this Escrow
Agreement contains the entire agreement among the parties with respect to the
subject matter hereof and supersedes all other prior agreements and
understandings between them as to such subject matter; and there are no
restrictions, agreements, arrangements, oral or written, between any or all of
the parties relating to the subject matter hereof which are not fully expressed
or referred to herein.
9. WAIVERS AND FURTHER AGREEMENTS. Any waiver of any terms or
conditions of this Escrow Agreement shall not operate as a continuing waiver of
any other breach of such terms or conditions or any other term or condition, nor
shall any failure to enforce any provision hereof operate as a waiver of such
provision or any other provision hereof. Each of the parties hereto agrees to
execute all such further instruments and documents and to take all such further
action as any other party may reasonably require in order to effectuate the
terms and purposes of this Escrow Agreement.
10. AMENDMENTS. This Escrow Agreement may not be amended, nor shall any
waiver, change, modification, consent or discharge be effected except by an
instrument in writing executed by or on behalf of the party or parties against
whom enforcement of any amendment, waiver, change, modification, consent or
discharge is sought.
11. ASSIGNMENT; SUCCESSORS AND ASSIGNS. This Escrow Agreement shall not
be assignable by any party without the written consent of the others. This
Escrow Agreement shall be binding upon and shall insure to the benefit of the
parties hereto and their respective heirs, executors, legal representatives,
successors and permitted assigns.
12. GOVERNING LAW. This Escrow Agreement shall be governed by and
construed and enforced in accordance with the law (other than the law governing
conflict of law questions) of the State of Florida. Venue shall be Broward
County, Florida.
13. COUNTERPARTS. This Escrow Agreement may be executed in one or more
counterparts, each of which when taken together shall constitute one and the
same agreement.
14. EQUITABLE RELIEF. It is possible that remedies at law may be
inadequate and, therefore, the parties hereto shall be entitled to equitable
relief including, without limitation,
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injunctive relief, specific performance or other equitable remedies in addition
to all other remedies provided hereunder or available to the parties hereto at
law or in equity.
IN WITNESS WHEREOF, the parties have executed this agreement on the day
and year first above written.
ESCROW AGENT:
ATLAS PEARLMAN, P.A.
By: /s/ Roxanne Beilly
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Name: Roxanne Beilly
PETMED EXPRESS, INC.
By: /s/ Marc Puleo, M.D.
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Marc A. Puleo, M.D.,
Chief Executive Officer
TRICON HOLDINGS, LLC
By: /s/ Kenneth Jacobi
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Name: Kenneth Jacobi, Manager
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