REDEMPTION AGREEMENT
Exhibit
10.1
This
Agreement (the “Agreement”) is made as of the 14th
day of
November, 2007 by and between Verbena Pharmaceuticals Inc., a Delaware
corporation having its offices at 000 Xxxxxxxxxxxx Xxxxx, Xxxxxxxxxx, XX 00000
(the “Issuer”) and Xxxxx Xxxxx, with an address at 000 Xxxxxxxxxxxx Xxxxx,
Xxxxxxxxxx, XX 00000 (the “Seller”).
WI
TNESSETH:
WHEREAS,
the Seller is the owner of 2,500,000 shares (the “Shares”) of the Issuer’s
common stock, par value $.0001 per share (“Common Stock”); and
WHEREAS,
the Seller desires to sell to the Issuer, and the Issuer desires to purchase
from the Seller, all 2,500,000 Shares owned by the Seller, on and subject to
the
terms of this Agreement;
WHEREFORE,
the parties hereto hereby agree as follows:
1. Sale
of the Shares.
Subject
to the terms and conditions of this Agreement, and in reliance upon the
representations, warranties, covenants and agreements contained in this
Agreement, the Seller shall sell the Shares to the Issuer, and the Issuer shall
purchase the Shares from the Seller for an aggregate purchase price (the
“Purchase Price”) equal to fifty thousand dollars ($50,000), to be paid as
follows: (a) $16,700 upon the execution and delivery of this Agreement (the
“Cash Portion of the Purchase Price”) and (b) a promissory note, in the form
annexed hereto as Exhibit A (the “Note”) for $33,300 shall be delivered to
Seller upon the execution and delivery hereof. The Note shall provide that
the
principal amount therein shall be paid no later than two business days after
the
Issuer has (i) completed a transaction pursuant to which the Issuer is no longer
a “shell company” as defined in Rule 12b-2 promulgated under the Securities
Exchange Act of 1934, as amended and (ii) has received approval to commence
the
trading of its securities on the Pink Sheets LLC, the Nasdaq Over-the-Counter
Bulletin Board or other established trading market. The sale of the Shares
shall
be subject to the other terms and conditions described and set forth in the
Note
such as the redemption terms stated therein.
2. Closing.
The
purchase and sale of the Shares shall take place upon execution and delivery
of
this Agreement (the “Closing”), to be held at such time and place as shall be
determined by the parties. At the Closing, the Seller shall deliver to the
Issuer certificates for the Shares, duly endorsed in form for transfer to the
Issuer and the Issuer shall pay the Cash Portion of the Purchase Price and
deliver the Note to Seller. At Closing, the Shares, as well as appropriate
blank
stock powers from the Issuer, shall be placed in escrow with Xxxxxxx Xxxxxxxxx
& Xxxxx LLP, as escrow agent, pursuant to an escrow agreement in the form of
Exhibit B hereto (the “Escrow Agreement”). In addition, Genesis Holdings, Inc.
shall have placed all shares of Common Stock owned by it, as well as appropriate
blank stock powers, in escrow pursuant to the Escrow Agreement.
3. Representations
of Seller.
(a) Seller
has all necessary power and authority to enter into and to perform her
obligations hereunder. This Agreement constitutes the valid and binding
obligation of Seller, enforceable against her in accordance with its terms,
subject to: (i) laws of general application relating to bankruptcy, insolvency
and the relief of debtors; and (ii) rules of law governing specific performance,
injunctive relief and other equitable remedies.
(b) Seller
owns all rights, titles and interests in and to, and has the rights to transfer
to the Issuer, in connection with the redemption provided for herein, all of
the
Shares being redeemed by the Issuer, pursuant to the terms of this Agreement,
free and clear of all liens, security interests, charges and other
encumbrances.
4. Representations
of Issuer
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(a) The
Issuer is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware.
(b) The
Issuer has all necessary corporate power and authority to enter into and to
perform its obligations under this Agreement, and the execution, delivery and
performance by the Issuer of this Agreement have been duly authorized by all
necessary action on the part of the Issuer and its board of directors. This
Agreement constitutes the valid and binding obligation of the Issuer,
enforceable against the Issuer in accordance with its terms, subject to: (i)
laws of general application relating to bankruptcy, insolvency and the relief
of
debtors; and (ii) rules of law governing specific performance, injunctive relief
and other equitable remedies.
5. Miscellaneous.
This
Agreement constitutes the entire agreement of the parties, superseding and
terminating any and all prior or contemporaneous oral and written agreements,
understandings or letters of intent between or among the parties with respect
to
the subject matter of this Agreement. No part of this Agreement may be modified
or amended, nor may any right be waived, except by a written instrument which
expressly refers to this Agreement, states that it is a modification or
amendment of this Agreement and is signed by the parties to this Agreement,
or,
in the case of waiver, by the party granting the waiver. If any section, term
or
provision of this Agreement shall to any extent be held or determined to be
invalid or unenforceable, the remaining sections, terms and provisions shall
nevertheless continue in full force and effect. This Agreement shall be governed
and construed in accordance with the laws of the State of Delaware applicable
to
agreements executed and to be performed wholly within such State, without regard
to any principles of conflicts of law. This Agreement shall be binding upon
the
parties and their respective heirs, executors, administrators, legal
representatives, successors and assigns; provided, however, that neither party
may assign this Agreement or any of its rights under this Agreement without
the
prior written consent of the other party. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same
instrument.
IN
WITNESS WHEREOF,
the
parties hereto have caused this Agreement to be duly executed as of the date
first above written.
|
/s/
Xxxxx Xxxxx
XXXXX
XXXXX
|
|
|
By: /s/
Xxxxx Xxxxx
Xxxxx
Xxxxx, President
|
29
EXHIBIT
A
PROMISSORY
NOTE
Loan
Amount: $33,300 (Thirty Three Thousand Three Hundred Dollars: U.S. Dollars)
(the
“Loan Amount”)
Date:
_______________________ __, 2007
This
Promissory Note (the “Note”) is executed as of this date first written above by
Verbena Pharmaceuticals Inc., a Delaware corporation having its offices at
000
Xxxxxxxxxxxx Xxxxx, Xxxxxxxxxx, XX 00000 (the “Borrower”), in
favor
of Xxxxx Xxxxx, at 000 Xxxxxxxxxxxx Xxxxx, Xxxxxxxxxx, XX 00000 (the “Lender”).
FOR
VALUE RECEIVED,
the
receipt and sufficiency of which are hereby acknowledged by the delivery of
two
million five hundred thousand (2,500,000) shares of common stock, par value
$.0001 per share (the “Common Stock”) of Verbena Pharmaceuticals Inc., the
undersigned Borrower hereby promises to pay to the order of the Lender at 000
Xxxxxxxxxxxx Xxxxx, Xxxxxxxxxx, XX 00000, or such other place as Lender may
designate in writing, the principal sum of $33,300, with interest thereon at
an
annual rate equal to nine and one-quarter percent (9.25%). The payments shall
be
by wire transfer of funds to an account designated by Lender in writing to
Borrower.
The
entire outstanding unpaid principal balance of and accrued interest on this
Note
shall, if not previously paid, be finally due and payable (the “Maturity Date”)
in cash within two business days after the Borrower has (i) completed a
transaction (a “Shell Merger”) pursuant to which the Borrower is no longer a
“shell company” as defined in Rule 12b-2 promulgated under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) and (ii) has received
approval to commence the trading of its securities on the Pink Sheets LLC,
the
Nasdaq Over-the-Counter Bulletin Board or other established trading market
(the
“Market Approval”). If Borrower shall fail to pay the outstanding principal
balance of this Note when required, or any other Event of Default (as
hereinafter defined) shall occur, interest shall accrue at the Default Rate
(as
herein defined).
The
Borrower, in its discretion, may prepay the principal sum, in full or in part,
with accrued interest thereon, at any time without any pre-payment penalty.
Any
payment made by Borrower, via the mail, shall be deemed received by Lender
when
actually received by Lender. All payments must be made promptly on the due
date
of each payment as required herein, time being of the essence. Borrower hereby
expressly assumes all risks of loss or liability resulting from non-delivery
of
any payments transmitted by mail or in any other manner.
No
delay
or failure of Lender in exercising any right, remedy, power or privilege under
this Note or pursuant to any applicable law shall be deemed to constitute a
course of conduct inconsistent with Lender’s right at any time, before or after
any default hereunder to demand strict adherence to the terms of this Note.
The
failure of the Borrower to pay principal on the Note when due hereunder or
any
other breach by the Borrower of its obligations under this Note shall constitute
an “Event of Default” under this Note. It also shall be deemed an Event of
Default hereunder if Borrower shall fail to timely make any required filings
with the Securities and Exchange Commission under the Exchange Act, unless
an
extension of time is permitted and claimed under Rule 12b-25 promulgated under
the Exchange Act.
The
following also shall be deemed Events of Default hereunder:
(i)
Borrower shall fail to observe or perform any obligation or shall breach any
term or provision of this Note and such failure or breach shall not have been
remedied within five days after the date on which notice of such failure or
breach shall have been delivered;
30
(ii)
Borrower shall fail to observe or perform any of their respective obligations
owed to Lender or any other covenant, agreement, representation or warranty
contained in, or otherwise commit any breach hereunder, under the Redemption
Agreement between Borrower and Lender of even date herewith or in any other
agreement executed in connection herewith or therewith;
(iii)
Borrower or any of its subsidiaries shall commence, or there shall be commenced
against Borrower or any subsidiary a case under any applicable bankruptcy or
insolvency laws as now or hereafter in effect or any successor thereto, or
Borrower or any subsidiary commences any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now or
hereafter in effect relating to Borrower or any subsidiary, or there is
commenced against Borrower or any subsidiary any such bankruptcy, insolvency
or
other proceeding which remains undismissed for a period of 60 days; or Borrower
or any subsidiary is adjudicated insolvent or bankrupt; or any order of relief
or other order approving any such case or proceeding is entered; or Borrower
or
any subsidiary suffers any appointment of any custodian or the like for it
or
any substantial part of its property which continues undischarged or unstayed
for a period of 60 days; or Borrower or any subsidiary makes a general
assignment for the benefit of creditors; or Borrower or any subsidiary shall
fail to pay, or shall state that it is unable to pay, or shall be unable to
pay,
its debts generally as they become due; or Borrower or any subsidiary shall
call
a meeting of its creditors with a view to arranging a composition, adjustment
or
restructuring of its debts; or Borrower or any subsidiary shall by any act
or
failure to act expressly indicate its consent to, approval of or acquiescence
in
any of the foregoing; or any corporate or other action is taken by Borrower
or
any subsidiary for the purpose of effecting any of the foregoing;
or
(iv)
Borrower or any subsidiary shall default or an event of default shall exist
in
any of its respective obligations under any other note or any mortgage, credit
agreement or other facility, indenture agreement, factoring agreement or other
instrument under which there may be issued, or by which there may be secured
or
evidenced any indebtedness for borrowed money or money due under any long term
leasing or factoring arrangement of Borrower or any subsidiary, whether such
indebtedness now exists or shall hereafter be created and such default shall
result in such indebtedness becoming or being declared due and payable prior
to
the date on which it would otherwise become due and payable, including without
limitation, any other notes of the Borrower in favor of the Lender
hereunder.
If
an
Event of Default shall occur hereunder, unless another remedy is expressly
provided for herein, the entire unpaid principal balance and all accrued
interest under this Note shall become immediately due and payable together
with
(to the extent permitted under applicable law) any and all costs and attorneys
fees incurred by Lender in collecting or enforcing the payment.
If
a
Shell Merger has not been completed within one year of the date of this Note,
then, at anytime thereafter, unless all principal and interest outstanding
on
this Note shall have previously been paid, upon written notice from Lender
to
Borrower, upon written notice to the escrow agent under the Escrow Agreement,
Borrower immediately shall reissue to Lender the two million five hundred
thousand (2,500,000) shares (the “Xxxxx Shares”) of Common Stock then held in
escrow in exchange for the cancellation of this Note, and Borrower shall receive
from the escrow agent and redeem, for a nominal purchase price equal to the
par
value thereof, two million five hundred thousand (2,500,000) shares of Common
Stock owned by Genesis Holdings, Inc. Such Xxxxx Shares shall represent all
then
outstanding shares of capital stock of the Borrower, on a fully diluted basis.
The parties shall take such action and effect such filings as may be necessary,
at the expense of Borrower, applicable securities laws to ensure that the
actions described herein are in compliance therewith. Borrower’s failure to take
any action described herein shall be deemed an Event of Default
hereunder.
If
a
Shell Merger has been completed within one year of the date of this Note, but
as
of the one year anniversary of this Note Borrower has not received Market
Approval, then notwithstanding failure to receive Market Approval, all then
outstanding principal and interest hereon shall become immediately due and
payable without demand by Lender. Borrower’s failure to take any action
described herein shall be deemed an Event of Default hereunder.
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If
a
Shell Merger and Market Approval have not been obtained within one year of
the
date of this Note, in addition to interest accruing at the Default Rate (as
hereinafter defined), from and after the Maturity Date the Borrower shall issue,
for no additional consideration, to Lender 2,500 shares of Common Stock (subject
to adjustment to reflect forward and reverse stock splits, recapitalizations,
reorganizations and the like) on the Maturity Date and an additional 2,500
shares of Common Stock (adjusted as described above) on each one month
anniversary of such Maturity Date until all outstanding principal and interest
hereon shall have been paid in full. The failure to issue any of the shares
of
Common Stock described in this paragraph shall be deemed an Event of Default
hereunder.
Until
this Note is paid in full, Borrower shall not issue any shares of its Common
Stock nor any direct or indirect rights to receive or acquire shares of Common
Stock other than in connection with a Shell Merger and thereafter, and Borrower
shall not effect any forward or reverse stock split, recapitalization,
reorganization or the like prior to completion of a Shell Merger without
Lender’s prior written consent.
If
there
is any Event of Default hereunder the entire balance of principal of the Loan
Amount then outstanding shall bear interest at 25% per annum (“Default Rate”)
thereafter. Such interest shall accrue from the date of this Note until paid.
If
there
is any Event of Default hereunder, all payments hereunder shall be applied
first
to the payment of accrued and unpaid interest on the principal of this Note,
accrued at the Default Rate as hereinafter provided; and second, to the
reduction of principal of this Note.
Borrower
hereby waives presentment for payment, demand, protest, notice of non-payment,
notice of protest and diligence in collecting or bringing suit, and agrees
to
any extension of time and partial payment before, at or after maturity and
further agrees that, if this Note is not paid when due or suit is brought,
to
pay reasonable costs of collection including reasonable attorney’s fees. The
Borrower’s liabilities shall be with recourse and shall be absolute and
unconditional without regard to the liability of any other parties hereto.
Upon
the
occurrence of an Event of Default, the Lender shall have the right to exercise
any or all remedies it may have under applicable law. The Lender may designate
a
third party to enforce such remedies.
The
provisions of this Note and of all agreements between the Borrower and the
Lender are hereby expressly limited so that in no contingency or event
whatsoever shall the amount paid, or agreed to be paid, to the Lender for the
use, forbearance, or retention of the Loan Amount exceed the maximum amount
permissible under applicable law. If, from any circumstance whatsoever, the
performance or fulfillment of any provision hereof or of any other agreement
between the Borrower and the Lender shall, at the time performance or
fulfillment of such provision shall be due, exceed the limit for interest
prescribed by law, then, ipso facto, the obligation to be performed or fulfilled
shall be reduced to such limit, and if, from any circumstance whatsoever, the
Borrower should ever receive as interest an amount which would exceed the
highest lawful rate, the amount which would be excessive Interest shall be
applied to the reduction of the principal balance owing hereunder (or, at the
Lender’s option, or if no principal shall be outstanding, be paid over to the
Borrower) and not to the payment of interest.
If
any
provision hereof shall, for any reason and to any extent, be invalid or
unenforceable, then the remainder of the instrument in which such provision
is
contained, the application of the provision to other persons, entities or
circumstances, and any other instrument referred to herein shall not be affected
thereby but instead shall be enforceable to the maximum extent permitted by
law.
When
used
in this Note, the singular number shall include the plural, the plural shall
include the singular and the use of any gender shall include all genders. The
term “Borrower” as used herein shall include the original Borrower of this Note
and any party who may subsequently become primarily liable for the payment
hereof. This Note may be assigned or transferred by Borrower. The term “Lender”
as used herein shall mean the original payee of this Note or, if this Note
is
transferred, the then holder of this Note, provided that, until written notice
is given to the Borrower designating another party as the Lender, the Borrower
may consider the Lender to be the original Lender or the party last designated
as the Lender in a written notice to the Borrower. Notwithstanding the
foregoing, Borrower may not assign or transfer the Note or any of its
obligations hereunder without the prior written consent of Lender, in her sole
discretion, and in the event Borrower assigns or transfers the Note, it will
remain liable for any default by the assignee. The parties agree that time
is of
the essence under this Note with regard to all obligations to be performed
hereunder by the Borrower.
32
All
notices, consent or other instruments or communications provided for under
this
Note shall be in writing, signed by the party giving the same, and shall be
deemed properly given and received (i) the date delivered, if delivered by
personal delivery or overnight courier as against written receipt therefore
or
by confirmed facsimile transmission or (ii) three business days after mailed,
if
sent by registered or certified mail, postage prepaid, to the address set forth
above, or to such other address as a party may designate by written notice
to
the other party. Notwithstanding the foregoing, any payment of cash or Common
Stock by Borrower hereunder shall be deemed given only when actually received
by
Lender.
Regardless
of the place of its execution, this Note shall be construed and enforced in
accordance with the laws of the State of Delaware for contracts to be wholly
performed in such state and without giving effect to the principles thereof
regarding the conflict of laws.
AGREED
TO
AND ACCEPTED this ____ day of _________________ 2007:
Lender:
Xxxxx
Xxxxx
_______________________________________
By:
Xxxxx
Xxxxx
Borrower:
Verbena
Pharmaceuticals Inc.
________________________________________
By:
Xxxxx
Xxxxx, President
33
EXHIBIT
B
ESCROW
AGREEMENT
THIS
ESCROW AGREEMENT (this “Agreement”) is made as of ______________ __, 2007, by
and among Xxxxx Xxxxx, with an address at 000 Xxxxxxxxxxxx Xxxxx, Xxxxxxxxxx,
XX
00000 (“Xxxxx”), Genesis Holdings, Inc., a Texas corporation with an address at
00000 Xxx Xxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxx, XX 00000 (“Genesis”), Verbena
Pharmaceuticals Inc., a Delaware corporation with an address at 000 Xxxxxxxxxxxx
Xxxxx, Xxxxxxxxxx, XX 00000 (the “Company”) and Xxxxxxx Xxxxxxxxx & Xxxxx
LLP, having an address at 000 Xxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, XX 00000
(the “Escrow Agent”). Capitalized terms used but not defined herein shall have
the meanings set forth in the Promissory Notes, Common Stock Purchase Agreement
and Redemption Agreement referred to in the recitals. Hereinafter, Xxxxx,
Genesis and the Company shall be referred to as the “Parties”, each a
“Party.”
WHEREAS,
the Escrow Agent has been advised that the Company has sold an aggregate of
2,500,000 shares (the “Genesis Shares”) of its common stock, par value $.0001
per share (the “Common Stock”) to Genesis in consideration for $16,700 cash and
that certain promissory note in the principal amount of $33,300 issued by
Genesis in favor of the Company (the “Genesis Note”), pursuant to that certain
common stock purchase agreement, dated as of the date hereof, by and between
the
Company and Genesis (the “Common Stock Purchase Agreement”);
WHEREAS,
the Escrow Agent also has been advised that the Company has purchased an
aggregate of 2,500,000 shares (the “Xxxxx Shares” and together with the Genesis
Shares, the “Shares”) of Common Stock from Xxxxx in consideration for $16,700
cash and that certain promissory note in the principal amount of $33,300 issued
by the Company in favor of Xxxxx (the “Xxxxx Note” and together with the Genesis
Note, the “Notes”), pursuant to that certain redemption agreement, dated as of
the date hereof, by and between the Company and Xxxxx (the “Redemption
Agreement”);
WHEREAS,
the Parties have requested that the Escrow Agent hold in escrow and then
distribute the Shares to be released to certain Parties pursuant to this
Agreement.
NOW,
THEREFORE, in consideration of the covenants and mutual promises contained
herein and other good and valuable consideration, the receipt and legal
sufficiency of which are hereby acknowledged and intending to be legally bound
hereby, the parties agree as follows:
ARTICLE
I
TERMS
OF ESCROW
1.1
The
parties hereby agree to establish an escrow account with the Escrow Agent
whereby the Escrow Agent shall hold the Shares, as well as blank stock powers
with respect thereto, pursuant to the terms hereof. The Shares and blank stock
powers will be held by the Escrow Agent in a secured location.
1.2 The
Shares shall be issued to the Parties and released by the Escrow Agent as
follows:
(a)
If
under
the terms and conditions set forth in the Notes, the Common Stock Purchase
Agreement and Redemption Agreement, a Party believes that certain Shares may
be
released from the Escrow Agent, then such Party (the “Requesting Party”) shall
send written notice to the Escrow Agent via facsimile at (000) 000-0000 (the
“Request Notice”). Such Request Notice shall constitute irrevocable instructions
to the Escrow Agent to release and issue the Shares to the Party specified
in
the Request Notice.
(b) Upon
receipt of the Request Notice, the Escrow Agent shall send written notice (the
“Release Notice”) to all Parties except the Requesting Party (the “Remaining
Parties”), indicating that it received the Request Notice to release the Shares.
If the Remaining Parties each do not object in writing within three business
days of receiving the Release Notice, the Escrow Agent shall release the Shares
as provided for in the Request Notice.
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(c) In
the
event the Escrow Agent shall receive written objection from either or both
of
the Remaining Parties within three business days from such Party’s receipt of
the Release Notice, the Escrow Agent shall not release the Shares unless and
until all of the Parties have sent written instruction (the “Instruction”) to
the Escrow Agent by facsimile at (000) 000-0000 indicating that the Parties
have
reached an agreement concerning the Shares and instructing the Escrow Agent
as
to the disposition of the Shares. The Escrow Agent shall release the Shares
in
such manner as set forth in the Instruction. If the Escrow Agent does not
receive an Instruction within five business days from the receipt of a written
objection, Escrow Agent shall have the right, but not the obligation, to deposit
the Shares with the clerk of a court in New York County, New York State and
give
written notice of such deposit to the Parties. Upon such deposit or other
disbursement in accordance with the terms of this Agreement, Escrow Agent shall
be relieved and discharged from all further obligations and responsibilities
hereunder. The Escrow Agent shall not incur any liability whatsoever for acting
upon any notice, direction, waiver, receipt, consent, certificate,
authorization, power of attorney or other paper or document purporting and
believed by the Escrow Agent to be genuine and to be signed and presented by
the
proper person or persons.
1.3 The
parties acknowledge that, although the Escrow Agent is holding the Shares,
the
Escrow Agent is acting solely as a stakeholder at their request and for their
convenience and that Escrow Agent shall not be liable to either party for any
act or omission on its part unless taken or suffered in bad faith or in willful
disregard of this contract on the part of Escrow Agent.
ARTICLE
II
MISCELLANEOUS
2.1 No
waiver
of any breach of any covenant or provision herein contained shall be deemed
a
waiver of any preceding or succeeding breach thereof, or of any other covenant
or provision herein contained. No extension of time for performance of any
obligation or act shall be deemed an extension of the time for performance
of
any other obligation or act.
2.2 Unless
otherwise specified herein, all notices or other communications required or
permitted hereunder shall be in writing, and shall be sent by fax, overnight
courier, registered or certified mail, postage prepaid, return receipt
requested, and shall be deemed properly given and received as set forth in
the
Note.
2.3 This
Escrow Agreement shall be binding upon and shall inure to the benefit of the
permitted successors, assigns, heirs and legatees of the parties
hereto.
2.4 This
Escrow Agreement is the final expression of, and contains the entire agreement
between, the parties with respect to the subject matter hereof and supersedes
all prior understandings with respect thereto. This Escrow Agreement may not
be
modified, changed, supplemented or terminated, nor may any obligations hereunder
be waived, except by written instrument signed by the parties to be charged
or
by their respective agents duly authorized in writing or as otherwise expressly
permitted herein.
2.5 Whenever
required by the context of this Escrow Agreement, the singular shall include
the
plural and masculine shall include the feminine. This Escrow Agreement shall
not
be construed as if it had been prepared by one of the parties, but rather as
if
both parties had prepared the same. Unless otherwise indicated, all references
to Articles are to this Escrow Agreement.
35
2.6 The
parties hereto expressly agree that this Escrow Agreement shall be governed
by,
interpreted under and construed and enforced in accordance with the laws of
the
State of New York.
2.7 The
Escrow Agent’s duties hereunder may be altered, amended, modified or revoked
only by a writing signed by the Company, Genesis, Xxxxx and the Escrow
Agent.
2.8 The
Escrow Agent shall be obligated only for the performance of such duties as
are
specifically set forth herein and may rely and shall be protected in relying
or
refraining from acting on any instrument reasonably believed by the Escrow
Agent
to be genuine and to have been signed or presented by the proper party or
parties. The Escrow Agent shall not be personally liable for any act the Escrow
Agent may do or omit to do hereunder as the Escrow Agent while acting in good
faith, excepting only its own gross negligence or willful misconduct, and any
act done or omitted by the Escrow Agent pursuant to the advice of the Escrow
Agent’s attorneys-at-law (other than Escrow Agent itself) shall be conclusive
evidence of such good faith.
2.9 The
Escrow Agent is hereby expressly authorized to disregard any and all warnings
given by any of the parties hereto or by any other person or corporation,
excepting only orders or process of courts of law and is hereby expressly
authorized to comply with and obey orders, judgments or decrees of any court.
In
case the Escrow Agent obeys or complies with any such order, judgment or decree,
the Escrow Agent shall not be liable to any of the parties hereto or to any
other person, firm or corporation by reason of such decree being subsequently
reversed, modified, annulled, set aside, vacated or found to have been entered
without jurisdiction.
2.10 The
Escrow Agent shall not be liable in any respect on account of the identity,
authorization or rights of the parties executing or delivering or purporting
to
execute or deliver the Common Stock Purchase Agreement, Redemption Agreement
or
any documents or papers deposited or called for thereunder or
hereunder.
2.11 The
Escrow Agent shall be entitled to employ such legal counsel, and other experts
as the Escrow Agent may deem necessary properly to advise the Escrow Agent
in
connection with the Escrow Agent’s duties hereunder, may rely upon the advice of
such counsel, and may pay such counsel reasonable compensation therefor.
The
Escrow Agent has acted as legal counsel for the Company, and may continue to
act
as legal counsel for the Company from time to time, notwithstanding its duties
as the Escrow Agent hereunder. Each of the parties hereto consents to the Escrow
Agent in such capacity as legal counsel for the Company and waives any claim
that such representation represents a conflict of interest on the part of the
Escrow Agent. The Company understands that the Company and the Escrow Agent
are
relying explicitly on the foregoing provision in entering into this Escrow
Agreement.
2.12 The
Escrow Agent’s responsibilities as escrow agent hereunder shall terminate if the
Escrow Agent shall resign by written notice to the Company, Xxxxx and Genesis.
In the event of any such resignation, the Company, Xxxxx and Genesis shall
appoint a successor Escrow Agent.
2.13 If
the
Escrow Agent reasonably requires other or further instruments in connection
with
this Escrow Agreement or obligations in respect hereto, the necessary parties
hereto shall join in furnishing such instruments.
2.14 It
is
understood and agreed that should any dispute arise with respect to the delivery
and/or ownership or right of possession of the Shares held by the Escrow Agent
hereunder, the Escrow Agent is authorized and directed in the Escrow Agent’s
sole discretion (i) to retain in the Escrow Agent’s possession without liability
to anyone all or any part of said Shares until such disputes shall have been
settled either by mutual written agreement of the parties concerned by a final
order, decree or judgment of a board of arbitration or a court of competent
jurisdiction after the time for appeal has expired and no appeal has been
perfected, but the Escrow Agent shall be under no duty whatsoever to institute
or defend any such proceedings, or (ii) to deliver the Shares and any other
property and documents held by the Escrow Agent hereunder to a state or Federal
court having competent subject matter jurisdiction and located in the State
and
City of New York in accordance with the applicable procedure
therefor.
36
2.15 The
Company, Xxxxx and Genesis agree jointly and severally to indemnify and hold
harmless the Escrow Agent and its partners, employees, agents and
representatives from any and all claims, liabilities, costs or expenses
(including reasonable attorneys’ fees) in any way arising from or relating to
the duties or performance of the Escrow Agent hereunder or the transactions
contemplated hereby or by the Common Stock Purchase Agreement and Note other
than any such claim, liability, cost or expense to the extent the same shall
have been determined by final, nonappealable judgment of a court of competent
jurisdiction to have resulted from the willful misconduct of the Escrow
Agent.
2.16
This
Agreement and any amendment or modification of this Agreement may be executed
in
several counterparts or by separate instruments and all of such counterparts
and
instruments shall constitute one agreement, binding on all of the parties
hereto.
[Remainder
of Page Intentionally Left Blank]
37
IN
WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement as
of
this __ day of _________________________, 2007.
PARTIES:
XXXXX
XXXXX
By:
____________________________________
Xxxxx
Xxxxx
GENESIS
HOLDINGS, INC.
By:
______________________________________
Xxxxxx
Xxxxx, Acting Chief Executive Officer
By:
_______________________________________
Xxxxx
Xxxxx, President
ESCROW
AGENT:
XXXXXXX
XXXXXXXXX & XXXXX LLP
By:
________________________________________
Xxxxx X. Xxxxxxx, Partner
38
