EXECUTION VERSION
DEPOSIT ESCROW AGREEMENT
THIS
DEPOSIT ESCROW AGREEMENT (this "Escrow Agreement") is made and
entered into as of November 1, 2005, by and
among NATIONAL
INVESTMENT
MANAGERS
INC., a Florida corporation ("Buyer"), JPMORGAN CHASE BANK, N.A., as escrow
agent (the "Escrow Agent"), and AMERICAN
BENEFIT RESOURCES,
INC., a Connecticut
corporation (the "Seller").
RECITALS
A. Buyer
and Seller have entered into an Asset Purchase Agreement, dated
as of November 1, 2005 (the "Asset Purchase
Agreement"), pursuant to which Buyer
is acquiring substantially all of the
assets of Seller.
B. The
Asset Purchase
Agreement contemplates the establishment of an
escrow arrangement to provide for the deposit and release of the Deposit
(as
defined in Section 2.4(c) of the Asset Purchase Agreement) consisting of
$1,000,000 in cash.
C. The Asset Purchase Agreement provides that (i) the Deposit will be
deposited into the escrow arrangement
contemplated hereby on the date hereof and
(ii) on the date of the closing of the
transactions
contemplated
by the Asset
Purchase Agreement (the "Closing Date"),
(y) an escrow agreement will be entered
into by the parties hereto (or, in lieu of the Escrow
Agent, by another
escrow
agent reasonably satisfactory to the other
parties hereto) (the "Indemnification
Escrow Agreement") to provide for the payment of any Adjustment Amount (as
defined in the Indemnification Escrow Agreement) and to cover the matters
contemplated by Article VIII of the Asset
Purchase Agreement,
and (z) an escrow
agreement will be entered into by the
parties hereto (or, in lieu of the Escrow
Agent, by another escrow agent reasonably satisfactory to the other parties
hereto) (the "A/R Escrow Agreement") to provide for the payment of any
Overdue
A/R (as defined in the Asset Purchase
Agreement) collected by Buyer.
AGREEMENT
The
parties, intending to be legally bound, agree as follows:
1. Defined Terms. Capitalized terms used in this Escrow Agreement and not
otherwise defined shall have the meanings
given to them in the
Asset Purchase
Agreement.
2. Accounts.
2.1.
Deposit Account. On the date hereof, Buyer is depositing with the
Escrow Agent (the "Deposit Account") One Million Dollars
($1,000,000.00)
(the
"Deposit Amount") pursuant to Section 2.4(c) of the
Asset Purchase
Agreement.
The Escrow Agent agrees to accept delivery
of the Deposit Amount and to hold the
Deposit Amount subject to the terms and
conditions of this Escrow Agreement and
the Asset Purchase Agreement (but the Escrow Agent
shall have no responsibility
with respect to the Asset Purchase Agreement other than to perform its
obligations as provided in this Escrow
Agreement and, if it
is the escrow agent
thereunder, the Indemnification Escrow
Agreement and the A/R Escrow Agreement).
Escrow Agent agrees to hold the Deposit
Amount in a segregated
escrow account
that will bear interest.
<PAGE>
2.2.
Investment.
During the term of
this Escrow
Agreement,
the Escrow
Agent shall invest and reinvest the Deposit Amount in one of the following
investments: (a) the JPMorgan 100% U.S.
Treasuries Securities Money Market Fund
- Premier Share Class, (b) JPMorgan Chase Bank, N.A.
Money Market Account,
(c)
certificates of deposit of the Escrow Agent or (d) treasury bills or other
investments backed by the full faith and
credit of the United States of America
("Treasuries"), in any such case with a remaining maturity at the time of
investment not exceeding 30 days, or such other instruments as are mutually
acceptable to Buyer, Seller and the Escrow Agent. In the absence of written
instructions from Buyer and Seller, the Escrow Funds will be invested in a
JPMorgan Chase Bank, N.A. Money Market
Account.
All
investment orders
involving Treasuries, commercial paper and other
direct obligations will be executed through JPMorgan Fleming Asset
Management
("JPMFAM"), in the investment management division of JPMorgan Chase Bank.
Subject to the principles of best
execution,
transactions shall be
effected on
behalf of the Deposit Account through
broker-dealers selected by JPMFAM. In this
regard, JPMFAM seeks to attain the best
overall result for the Deposit Account,
taking into consideration quality of
service and reliability. An agency fee will
be assessed in connection with each
transaction, which fee will be a basis point
charge in the interest rate paid on the
respective investment, which will be net
of such charge. The Escrow Agent shall provide to Buyer and Seller a
notification providing transaction details for the
Deposit Account within five
days of any securities transaction in that account.
This notification
shall be
provided without any additional cost to
Buyer and Seller.
The Escrow
Agent shall have the right to liquidate any investments held,
in order to provide funds necessary to make
required payments
under this Escrow
Agreement. The Escrow Agent in its capacity
as escrow agent hereunder shall not
have any liability for any loss sustained as a result of any
investment
made
pursuant to the instructions of the parties hereto or as a result of any
liquidation of any investment prior to its maturity or for the
failure of Buyer
and Seller to provide the Escrow Agent with
investment instructions.
2.3.
Transferability. The
interests of Seller in the Deposit Amount shall
not be assignable or transferable, except to IBF Fund Liquidating LLC
("IBF").
The assignment or transfer of any of such
interests shall not be recognized or
given effect until Buyer and the Escrow
Agent shall have received written notice
of such assignment or transfer.
2.4. Trust
Fund. The Deposit
Amount held in the Deposit Account shall be
held as a trust fund and shall not be
subject to any lien,
attachment,
trustee
process or any other judicial process of any creditor of Seller
or of any party
hereto. The Escrow Agent shall hold and
safeguard the Deposit Account until the
Deposit Amount is released in accordance
with this Escrow Agreement.
3. Release of Deposit Amount.
3.1. Upon
receipt of a written
notice from Buyer stating that the Closing
Date has occurred, the Escrow Agent shall release (i) the Deposit
Amount to
Seller by wire transfer of immediately
available funds to an account or accounts
specified in writing by Seller and (ii) all
earnings, interest and
gains on the
investment of the Deposit Amount (the "Earnings") to Buyer by wire
transfer of
immediately available funds to an account or accounts
specified in writing
by
Buyer.
2
<PAGE>
3.2. In
the event that the Asset Purchase Agreement is terminated prior
to
the Closing Date at the election of Seller
under Section 9.1(c) of the Asset
Purchase Agreement, Seller shall give written notice to Buyer and the Escrow
Agent of such termination and that such termination is pursuant to and in
compliance with Section 9.1(c) of the Asset
Purchase Agreement.
If the Escrow
Agent receives no written objection (a "Dispute Notice") from the Buyer within
five (5) Business Days of Buyer's receipt
of such notice (the "Dispute Period"),
the Escrow Agent shall deliver the entire Deposit Amount (including any
Earnings) to Seller by wire transfer of immediately available funds to an
account or accounts specified in writing by
Seller. If the Escrow Agent receives
a Dispute Notice from the Buyer before
expiration of the
Dispute Period,
the
Escrow Agent shall (1) promptly
forward a copy of the
Dispute Notice to
Seller
and (2) continue to hold the Deposit
Amount (including any Earnings) in the
Deposit Account, and the Escrow Agent shall not
disburse the Deposit Amount
unless, until and only to the extent that the Escrow Agent (i) receives a
certificate signed by Buyer and Seller
regarding the disbursement of the Deposit
Amount (including any Earnings) from the
Deposit Account or (ii) is directed to
make such disbursement by a court
adjudicating such
dispute. To the extent
any
party wishes to submit any dispute to
adjudication, it shall do so in accordance
with Section 8.5 hereof. The Escrow Agent shall not be liable for any
action
taken or omitted by it in good faith except to the extent that a court of
competent jurisdiction determines that the Escrow Agent's
gross negligence
or
willful misconduct was the primary cause
of any loss to the Buyer or Seller. In
the event that the Escrow Agent shall be uncertain as to its duties or rights
hereunder or shall receive instructions,
claims or demands from any party hereto
which, in its opinion, conflict with any of the provisions of this Escrow
Agreement, it shall be entitled to refrain
from taking any action
and its sole
obligation shall be to keep safely all
property held in escrow until it shall be
directed otherwise in writing by all of the
other parties hereto
or by a final
order or judgment of a court of competent
jurisdiction.
3.3.
In the event that the
Asset Purchase
Agreement is terminated by
either Seller or Buyer for any reason other
than the reason set forth in Section
3.2 above, Seller or Buyer, as applicable, shall give written notice to the
Escrow Agent of such termination and the basis of such termination under the
Asset Purchase Agreement and the Escrow Agent
shall deliver the entire Deposit
Amount (including any Earnings) to Buyer by wire transfer of immediately
available funds to an account or accounts
specified in writing by Buyer.
3
<PAGE>
4. Fees and Expenses. The Buyer and Seller agree
jointly and severally
to (i)
pay the Escrow Agent upon execution of this Escrow
Agreement and from time to
time thereafter reasonable compensation for the services to be rendered
hereunder, which unless otherwise agreed in writing shall be as described in
Schedule 1 attached hereto, and (ii) pay or reimburse the Escrow Agent upon
request for all expenses, disbursements and advances, including reasonable
attorney's fees and expenses, incurred or made by it in
connection
with the
preparation, execution, performance,
delivery, modification
and termination of
this Escrow Agreement. Buyer, on the one hand, and
Seller, on the other
hand,
shall each pay 50% of the fees of the
Escrow Agent.
5. Limitation of Escrow Agent's
Liability.
5.1.
The Escrow Agent undertakes to perform such duties as are
specifically set forth in this Escrow Agreement only and shall have no duty
under any other agreement or document,
and no implied
covenants or
obligations
shall be read into this Escrow Agreement against the Escrow Agent.
The Escrow
Agent may rely upon and shall not be liable
for acting or refraining from acting
upon any written notice, instruction or request
furnished to it
hereunder and
believed by it to be genuine and to have
been signed or
presented by the proper
party or parties. The Escrow Agent shall be under no duty to inquire
into or
investigate the validity, accuracy or content of any such
document. In all
questions arising under this Escrow
Agreement, the Escrow
Agent may rely on the
advice of counsel, and for anything done,
omitted or suffered in
good faith by
the Escrow Agent based upon such advice the
Escrow Agent shall not be liable to
anyone. Anything in this Escrow Agreement
to the contrary notwithstanding, in no
event shall the Escrow Agent be liable for special,
indirect or
consequential
losses or damages of any kind whatsoever (including but not limited to lost
profits), even if the Escrow Agent has been
advised of the
likelihood of such
loss or damage and regardless of the form
of action.
5.2.
The Buyer and the Seller (collectively referred to as the
"Indemnitors") shall jointly and severally
indemnify,
defend and save
harmless
the Escrow Agent and its directors, officers, agents and employees (the
"Indemnitees") from all loss, liability or expense (including the fees and
expenses of in house or outside
counsel) arising out of or in connection
with
(i) the Escrow Agent's execution and performance of this Escrow Agreement,
except in the case of any indemnitee to the
extent that such loss,
liability or
expense is due to the gross negligence or
willful misconduct of such indemnitee,
or (ii) its following any instructions or
other directions from the Buyer or the
Seller, except to the extent that its following any such instruction or
direction is expressly forbidden by the terms hereof. The parties hereto
acknowledge that the foregoing indemnities shall survive the resignation or
removal of the Escrow Agent or the
termination
of this Escrow
Agreement.
The
parties hereby grant the Escrow
Agent a lien on, right
of set-off against
and
security interest in the Escrow Fund for the payment of any claim for
indemnification, compensation, expenses and
amounts due hereunder
6. Account Opening Information/TINs.
6.1.
IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW
ACCOUNT
4
<PAGE>
For accounts opened in the US:
To help the government fight the funding of terrorism and money laundering
activities, Federal law requires all financial
institutions to
obtain, verify,
and record information that identifies each
person who opens an account. When an
account is opened, Escrow Agent will ask for
information that will
allow it to
identify relevant parties.
For non-US accounts:
To help in the fight against the funding of terrorism and money laundering
acti
