Exhibit 10.31
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is made and entered into as of
September 5th, 2000, by and The May Davis Group, a Maryland corporation (the
"Placement Agents"), TCPI, Inc., a Florida Corporation (the "Company"), and
First Union National Bank, a national banking association, as Escrow Agent
hereunder (the "Escrow Agent").
BACKGROUND
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WHEREAS, the Company and the Placement Agents have entered
into a Placement Agency Agreement (the "Placement Agency Agreement"), dated as
of September 1, 2000, pursuant to which the Company proposes to offer for sale
to investors ("Investors"), from time to time, through the Placement Agent up to
Ten Million Dollars ($10,000,000) of Debentures for a total purchase price of up
to Ten Million Dollars ($10,000,000). (the "Proceeds") The Securities will be
sold to Buyer(s) pursuant to a Line of Credit Agreement (the "Credit Agreement")
between the Company and each Buyer listed on Schedule I thereto. The Credit
Agreement provides that the Buyer(s) shall deposit the purchase price of the
Debentures purchased pursuant to the Credit Agreement in a segregated escrow
account to be held by Escrow Agent in order to effectuate a disbursement of the
Proceeds to the Company at closings to be held as set forth in the Credit
Agreement. (collectively the "Closings")
WHEREAS, the Placement Agents intend to sell, from time to
time, the Debentures as the Company's agent on a "best efforts, basis (the
"Offering" collectively the "Offerings").
WHEREAS, Escrow Agent has agreed to accept, hold, and disburse
the funds deposited with it in accordance with the terms of this agreement.
WHEREAS, in order to establish the escrow of funds and to
effect the provisions of the Credit Agreement, the parties hereto have entered
into this Agreement.
NOW THEREFORE, in consideration of the foregoing, it is hereby agreed
as follows:
1. Definitions. The following terms shall have the following meanings when used
herein:
a. "Escrow Funds" shall mean the funds deposited with the Escrow Agent
pursuant to this Agreement, which funds shall include, without limitation, the
sum of up to $10,000,000.
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b. "Joint Written Direction" shall mean a written direction executed by
the Placement Agents and the Company directing Escrow Agent to disburse all or a
portion of the Escrow Funds or to take or refrain from taking any action
pursuant to this Agreement.
c. "Escrow Period" shall begin upon receipt of each Advance Notice as
specified in the Credit Agreement and shall terminate upon the earlier to occur
of the following dates:
(i) The receipt by the Company of the funds specified in the Advance
Notice applicable to such Advance or the date upon which a determination is made
by the Company and the Placement Agents to terminate the particular Advance
Notice.
During the Escrow Period, the Company and the Placement Agents are aware that
they are not entitled to any funds received into escrow and no amounts deposited
in the Escrow Account shall become the property of the Company or the Placement
Agents or any other entity, or be subject to the debts of the Company or the
Placement Agents or any other entity.
2. Appointment of and Acceptance by Escrow Agent. The Placement Agent and the
Company hereby appoint Escrow Agent to serve as Escrow Agent hereunder. Escrow
Agent hereby accepts such appointment and, upon receipt by wire transfer of the
Escrow Funds in accordance with Section 3 below, agrees to hold, invest and
disburse the Escrow Funds in accordance with this Agreement.
3. Creation of Escrow Funds. On or prior to the date of the commencement of the
particular Escrow Period, the parties shall establish an escrow account with the
Escrow Agent, which escrow account shall be entitled as follows: TCPI, Inc./May
Davis Group, Inc. Escrow Account for the deposit of the Escrow Funds. The
Placement Agents will instruct subscribers to wire funds to the account of the
Escrow Agent as follows:
Bank: First Union National Bank of New Jersey
Routing # [intentionally ommitted]
Account # [intentionally ommitted]
Name on Account: Butler Gonzalez, LLP/First Union Escrow Account
Name on Sub-Account: TCPI, Inc./May Davis Group, Inc.
Line of Credit Escrow account
Reference Sub-Account # [intentionally ommitted]
Attn: Robert Mercado (732) 452-3005
Carmela Agugliaro (732) 452-3005
Only wire transfers shall be accepted.
4. Deposits into the Escrow Account. The Placement Agents agree that
they shall promptly deliver all monies received from subscribers for the payment
of the Securities to the Escrow Agent for deposit in the Escrow Account.
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5. Disbursements from the Escrow Account.
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(a) At such time as Escrow Agent has collected and deposited
instruments of payment in the total amount of the Proceeds, Escrow Agent shall
notify the Company and the Placement Agents. The Escrow Agent will continue to
hold such funds until Placement Agents and Company execute a Joint Written
Direction directing the Escrow Agent to disburse the Proceeds pursuant to a
closing statement signed by the Company (the "Closing Statement"). In disbursing
such funds, Escrow Agent is authorized to rely upon such Closing Statement from
Company and may accept any signatory from the Company listed on the signature
page to this Agreement and any signature from the Placement Agents that Escrow
Agent already has on file.
For purposes of this Agreement, the term "collected funds" shall mean
all funds received by the Escrow Agent which have cleared normal banking
channels and are in the form of cash.
6. Collection Procedure. The Escrow Agent is hereby authorized to
forward each wire for collection and, upon collection of the proceeds of each
wire deposit the collected proceeds in the Escrow Account.
Any wires returned unpaid to the Escrow Agent shall be returned to the
Placement Agents. In such cases, the Escrow Agent will promptly notify the
Company of such return.
7. Suspension of Performance: Disbursement Into Court. If at any time,
there shall exist any dispute between the Company and the Placement Agents with
respect to holding or disposition of any portion of the Escrow Funds or any
other obligations of Escrow Agent hereunder, or if at any time Escrow Agent is
unable to determine, to Escrow Agent's sole satisfaction, the proper disposition
of any portion of the Escrow Funds or Escrow Agent's proper actions with respect
to its obligations hereunder, or if the parties have not within 30 days of the
furnishing by Escrow Agent of a notice of resignation pursuant to Section 9
hereof, appointed a successor Escrow Agent to act hereunder, then Escrow Agent
may, in its sole discretion, take either or both of the following actions:
a. suspend the performance of any of its obligations (including
without limitation any disbursement obligations) under this
Escrow Agreement until such dispute or uncertainty shall be
resolved to the sole satisfaction of Escrow Agent or until a
successor Escrow Agent shall be appointed (as the case may
be); provided however, Escrow Agent shall continue to invest
the Escrow Funds in accordance with Section 8 hereof; and/or
b. petition (by means of an interpleader action or any other
appropriate method) any court of competent jurisdiction in any
venue convenient to Escrow Agent, for instructions with
respect to such dispute or uncertainty, and to the extent
required by law, pay into such court, for holding and
disposition in accordance with the instructions of such
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court, all funds held by it in the Escrow Funds, after
deduction and payment to Escrow Agent of all fees and expenses
(including court costs and attorneys' fees) payable to,
incurred by, or expected to be incurred by Escrow Agent in
connection with performance of its duties and the exercise of
its rights hereunder.
c. Escrow Agent shall have no liability to the Company, the
Placement Agent, or any person with respect to any such
suspension of performance or disbursement into court,
specifically including any liability or claimed liability that
may arise, or be alleged to have arisen, our of or as a result
of any delay in the disbursement of funds held in the Escrow
Funds or any delay in with respect to any other action
required or requested of Escrow Agent.
8. Investment of Escrow Funds. The Escrow Agent shall deposit the
Escrow Funds in an insured non-interest bearing money market account.
If Escrow Agent has not received a Joint Written Direction at any time
that an investment decision must be made, Escrow Agent shall invest the Escrow
Fund, or such portion thereof, as to which no Joint Written Direction has been
received, in investments described above. The foregoing investments shall be
made by the Escrow Agent. Notwithstanding anything to the contrary contained,
Escrow Agent may, without notice to the parties, sell or liquidate any of the
foregoing investments at any time if the proceeds thereof are required for any
release of funds permitted or required hereunder, and Escrow Agent shall not be
liable or responsible for any loss, cost or penalty resulting from any such sale
or liquidation. With respect to any funds received by Escrow Agent for deposit
into the Escrow Funds or any Joint Written Direction received by Escrow Agent
with respect to investment of any funds in the Escrow Funds after ten o'clock,
a.m., New Jersey time, Escrow Agent shall not be required to invest such funds
or to effect such investment instruction until the next day upon which banks in
New Jersey are open for business.
9. 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 the parties or may be removed, with or without
cause, by the parties, acting jointly, by furnishing a Joint Written Direction
to Escrow Agent, at any time by the giving of ten (10) days' prior written
notice to Escrow Agent as provided herein below. Upon any such notice of
resignation or removal, the representatives of the Placement Agents and the
Company identified in Sections 13a. (iv) and 13b. (iv), below, jointly shall
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 $10,000,000.00. Upon the acceptance in writing of any appointment
of 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
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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. The retiring
Escrow Agent shall transmit all records pertaining to the Escrow Funds and shall
pay all funds held by it in the Escrow Funds to the successor Escrow Agent,
after making copies of such records as the retiring Escrow Agent deems advisable
and after deduction and payment to the retiring Escrow Agent of all fees and
expenses (including court costs and attorneys' fees) payable to, incurred by, or
expected to be incurred by the retiring Escrow Agent in connection with the
performance of its duties and the exercise of its rights hereunder.
10. Liability of Escrow Agent.
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a. Escrow Agent shall have no liability or obligation with respect to
the Escrow Funds except for Escrow Agent's willful misconduct or gross
negligence. Escrow Agent's sole responsibility shall be for the safekeeping,
investment, disbursement and accounting of the Escrow Funds in accordance with
the terms of this Agreement. Escrow Agent shall have no implied duties or
obligations and shall not be charged with knowledge or notice o any fact or
circumstance not specifically set forth 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 shall in good faith believe to be genuine, to have been signed or
presented by the person or parties purporting to sign the same and conform to
the provisions of this Agreement. In no event shall Escrow Agent be liable for
incidental, indirect, special, and consequential or punitive damages. Escrow
Agent shall not be obligated to take any legal action or commence any proceeding
in connection with the Escrow Funds, any account in which Escrow Funds are
deposited, this Agreement or the Credit Agreement, or to appear in, prosecute or
defend any such legal action or proceeding. Escrow Agent may consult legal
counsel selected by it in any event of any dispute or question as to
construction of any of the provisions hereof or of any other agreement or its
duties hereunder, or relating to any dispute involving any party hereto, and
shall incur no liability and shall be fully indemnified from any liability
whatsoever in acting in accordance with the opinion or instructions of such
counsel. The Company and the Placement Agent jointly and severally shall
promptly pay, upon demand, the reasonable fees and expenses of any such counsel.
b. The Escrow Agent is hereby authorized, in its sole discretion, to
comply with orders issued or process entered by any court with respect to the
Escrow Funds, without determination by the Escrow Agent of such court's
jurisdiction in the matter. If any portion of the Escrow Funds is at any time
attached, garnished or levied upon under any court order, or in case the
payment, assignment, transfer, conveyance or delivery of any such property shall
be stayed or enjoined by any court order, or in any case any order judgment or
decree shall be made or entered by any court affecting such property or ay part
thereof, then and in any such event, the Escrow Agent is authorized, in its sole
discretion, to rely upon and comply with any such order, writ judgment or
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decree which it is advised by legal counsel selected by its binding upon without
the need for appeal or other action; and if the Escrow Agent complies with any
such order, writ, judgment or decree, it shall not be liable to any of the
parties hereto or to any other person or entity by reason of such compliance
even though such order, writ judgment or decree may be subsequently reversed,
modified, annulled, set aside or vacated.
11. Indemnification of Escrow Agent. From and at all times after the
date of this Agreement, the parties 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 attorney's 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, including without limitation the
parties to this Agreement, 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 transaction contemplated herein, whether
or not any such Indemnified Party is a party to any such action or 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
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 the Company and the Placement Agent hereunder in writing, and
the Placement Agents and the Company 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
(who may be selected by such Indemnified Party in its sole discretion) in any
such action and to participate and to participate in the defense thereof, and
the fees and expenses of such counsel shall be paid by such Indemnified Party,
except that the Placement Agents and/or the Company shall be required to pay
such fees and expense if (a) the Placement Agents or the Company agree to pay
such fees and expenses, or (b) the Placement Agents and/or the Company shall
fail to assume the defense of such action or proceeding or shall fail, in the
sole discretion of such Indemnified Party, to employ counsel satisfactory to the
Indemnified Party in any such action or proceeding, (c) the Placement Agents and
the Company is the plaintiff in any such action or proceeding or (d) the named
or potential parties to any such action or proceeding (including any potentially
impleaded parties) include both Indemnified Party the Company and/or the
Placement Agents 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 the Company or the Placement Agents. The
Placement Agents and the Company shall be jointly and severally liable to pay
fees and expenses of counsel pursuant to the preceding sentence, except that any
obligation to pay under clause (a) shall apply only to the party so agreeing.
All such fees
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and expenses payable by the Company and/or the Placement Agents 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. The obligations of
the parties under this section shall survive any termination of this Agreement,
and resignation or removal of the Escrow Agent shall be independent of any
obligation of Escrow Agent.
The parties agree that neither payment by the Company or the Placement
Agents of any claim by Escrow Agent for indemnification hereunder shall impair,
limit, modify, or affect, as between the Placement Agents and the Company, the
respective rights and obligations of Placement Agents, on the one hand, and the
Company, on the other hand, under the Placement Agency Agreements.
13. Warranties.
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a. Placement Agents makes the following representations and warranties
to Escrow Agent:
(i) Placement Agents have full power and authority to execute
and deliver this Escrow Agreement and to perform its
obligations hereunder.
(ii) This Escrow Agreement has been duly approved by all
necessary corporate action of Placement Agents, including any
necessary shareholder approval, has been executed by duly
authorized officers of the Placement Agents, enforceable in
accordance with its terms.
(iii) The execution, delivery, and performance of the
Placement Agents of this Agreement will not violate, conflict
with, or cause a default under the certificate of
incorporation or bylaws of Placement Agents, any applicable
law or regulation, any court order or administrative ruling or
degree to which the Placement Agents is a party or any of its
property is subject, or any agreement, contract, indenture, or
other binding arrangement.
(iv) Michael Jacobs has been duly appointed to act as the
representative of The May Davis Group, Inc., hereunder and has
full power and authority to execute, deliver, and perform this
Escrow Agreement, to execute and deliver any Joint Written
Direction, to amend, modify, or waive any provision of this
Agreement, and to take any and all other actions as the
Placement Agent's representative under this Agreement, all
without further consent or direction form, or notice to, the
Placement Agent or any other party.
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(v) No party other than the parties hereto and the Investors
have, or shall have, any lien, claim or security interest in
the Escrow Funds or any part thereof. No financing statement
under the Uniform Commercial Code is on file in any
jurisdiction claiming a security interest in or describing
(whether specifically or generally) the Escrow Funds or any
part thereof.
(vi) All of the representations and warranties of the
Placement Agents contained herein are true and complete as of
the date hereof and will be true and complete at the time of
any disbursement from the Escrow Funds.
b. The Company makes the following representations and warranties to
Escrow Agent:
(i) The Company is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
Florida, and has full power and authority to execute and
deliver this Escrow Agreement and to perform its obligations
hereunder.
(ii) This Escrow Agreement has been duly approved by all
necessary corporate action of the Company, including any
necessary shareholder approval, has been executed by duly
authorized officers of the Company, enforceable in accordance
with its terms.
(iii) The execution, delivery, and performance by the Company
of this Escrow Agreement is in accordance with the Credit
Agreement and will not violate, conflict with, or cause a
default under the certificate of incorporation or bylaws of
the Company, any applicable law or regulation, any court order
or administrative ruling or decree to which the Company is a
party or any of its property is subject, or any agreement,
contract, indenture, or other binding arrangement, including
without limitation to the Credit Agreement, to which the
Company is a party or any of its land is subject.
(iv) Walter V. Usinowicz, Jr. and Elliot Block each acting
individually, has been duly appointed to act as the
representatives of the Company hereunder and has full power
and authority to execute, deliver, and perform this Escrow
Agreement, to execute and deliver any Joint Written Direction,
to amend, modify or waive any provision of this Agreement and
to take all other actions as the Company's Representative
under this Agreement, all without
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further consent or direction from, or notice to, the Company
or any other party.
(v) No party other than the parties hereto and the Investors
have, or shall have, any lien, claim or security interest in
the Escrow Funds or any part thereof. No financing statement
under the Uniform Commercial Code is on file in any
jurisdiction claiming a security interest in or describing
(whether specifically or generally) the Escrow Funds or any
part thereof.
(vi) All of the representations and warranties of the Company
contained herein are true and complete as of the date hereof
and will be true and complete at the time of any disbursement
from the Escrow Funds.
14. Consent to Jurisdiction and Venue. In the event that any party
hereto commences a lawsuit or other proceeding relating to or arising from this
Agreement, the parties hereto agree that the United States District Court for
the District of New Jersey shall have the sole and exclusive jurisdiction over
any such proceeding. If all such courts lack federal subject matter
jurisdiction, the parties agree that the Superior Court Division of New Jersey,
Chancery Division of Essex County shall have sole and exclusive jurisdiction.
Any of these courts shall be proper venue for any such lawsuit or judicial
proceeding and the parties hereto waive any objection to such venue. The parties
hereto consent to and agree to submit to the jurisdiction of any of the courts
specified herein and agree to accept the service of process to vest personal
jurisdiction over them in any of these courts.
15. Notice. All notices and other communications hereunder shall be in
writing and shall be deemed to have been validly served, given or delivered five
(5) days after deposit in the United States mails, by certified mail with return
receipt requested and postage prepaid, when delivered personally, one (1) day
delivered to any overnight courier, or when transmitted by facsimile
transmission and addressed to the party to be notified as follows:
If to Placement Agents, to:
The May Davis Group, Inc.
One World Trade Center
New York, NY 10048
Attention: Michael Jacobs
Facsimile: (212) 775-8166
With Copy to:
Butler Gonzalez, LLP
1000 Stuyvesant Avenue
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Suite #6
Union, NJ 07083
Attention: David Gonzalez, Esq.
Facsimile: (908) 810-0973
If to Company, to:
TCPI, Inc.
3341 S.W. 15th Street
Pompano Beach, FL 33069
Attention: Chief Executive Officer
Telephone: (954) 979-0400
Facsimile: (954) 979-6125
With Copy to:
TCPI, Inc.
3341 S.W. 15th Street
Pompano Beach, FL 33069
Attention: General Counsel
Telephone: (954) 979-0400
Facsimile: (954) 979-6125
and
Teddy D. Klinghoffer, Esq.
Akerman, Senterfitt & Edison, P.A.
SunTrust International Center, 26th Floor
One S.E. 3rd Avenue
Telephone: (305) 374-5600
Facsimile: (305) 374-5095
If to Escrow Agent, to:
First Union National Bank,
407 Main Street
Metuchen, NJ 08840
Attention: Robert Mercado
Carmela Agugliaro
Facsimile: (732) 452-3005
Or to such other address as each party may designate for itself by like
notice.
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16. Amendments or Waiver. This Agreement may be changed, waived,
discharged or terminated only by a writing signed by the parties and the Escrow
Agent. No delay or omission by any party in exercising any right with respect
hereto shall operate as waiver. A waiver on any one occasion shall not be
construed as a bar to, or waiver of, any right or remedy on any future occasion.
17. Severability. To the extent any provision of this Agreement is
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition, or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
18. Governing Law. This Agreement shall be construed and interpreted in
accordance with the internal laws of the State of New Jersey without giving
effect to the conflict of laws principles thereof.
19. Entire Agreement. This Agreement constitutes the entire Agreement
between the parties relating to the holding, investment, and disbursement of the
Escrow Funds and sets forth in their entirety the obligations and duties of the
Escrow Agent with respect to the Escrow Funds.
20. Binding Effect. All of the terms of this Agreement, as amended from
time to time, shall be binding upon, inure to the benefit of and be enforceable
by the respective heirs, successors and assigns of the Placement Agent, the
Company, or the Escrow Agent.
21. Execution of Counterparts. This Agreement and any Joint Written
Direction may be executed in counter parts, which when so executed shall
constitute one and same agreement or direction.
22. Termination. Upon the first to occur of the disbursement of all
amounts in the Escrow Funds pursuant to Joint Written Directions or the
disbursement of all amounts in the Escrow Funds into court pursuant to Section 7
hereof, this Agreement shall terminate and Escrow Agent shall have no further
obligation or liability whatsoever with respect to this Agreement or the Escrow
Funds.
23. Line of Credit Agreement. Nothing contained in this Agreement shall
effect the rights and obligations of the parties to the Line of Credit
Agreement.
NO FURTHER TEXT FOLLOWS
THE SIGNATURE PAGE IS THE NEXT PAGE
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IN WITNESS WHEREOF the parties have hereunto set their hands and seals
the day and year above set forth.
ATTEST: COMPANY:
TCPI, INC.
/s/ Jay E. Eckhaus By: /s/ Walter V. Usinowicz, Jr.
-------------------- ----------------------------
Name: Jay E. Eckhaus Name: Walter V. Usinowicz, Jr.
Title: Secretary Title: Chief Financial Officer
ESCROW AGENT:
FIRST UNION NATIONAL BANK
By: /s/ Robert Mercado
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Name: Robert Mercado
Title: As Escrow Agent
PLACEMENT AGENT:
THE MAY DAVIS GROUP, INC.
By: /s/ Michael Jacobs
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Name: Michael Jacobs
Title: Managing Director
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