AMENDED AND RESTATED ESCROW AGREEMENT
ESCROW AGREEMENT, dated as of July 30, 1999, by and among VACATION EMPORIUM
CORPORATION, a Nevada corporation (the "Company") with its address at 00 Xxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxx 00000, Xxxxx XxXxxxxx (the "Subscriber"), an individual
with his address listed opposite his signature below, and XXXXX XXXX LLP (the
"Escrow Agent"), with its address at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000-0000. The parties entered into an Escrow Agreement, dated July 30, 1999,
which, among other things, provided for the escrow of shares purchased by
Subscriber from the Company. The parties wish to correct certain errors
contained in the Escrow Agreement and, as so corrected, to restate in its
entirety the Escrow Agreement. Accordingly, the Subscriber, the Company and the
Escrow Agent hereby do amend and restate in its entirety the Escrow Agreement as
follows:
W I T N E S S E T H:
WHEREAS, the Company and the Subscriber are parties to a certain Amended
and Restated Subscription and Rights Agreement of even date herewith (the
"Subscription Agreement") pursuant to which the Subscriber is subscribing for
and purchasing from the Company 526,923 shares of the Company's common stock,
par value $.001 per share (the "Shares"), as more particularly set forth
therein;
WHEREAS, the Company has entered into a non-binding letter of intent with
Xxxxxxx X. Xxxxx ("Xxxxx") describing the intent of the parties that the Company
acquire from Xxxxx all of the issued and outstanding shares of capital stock of
Wall Street Strategies, Inc., a Delaware corporation ("WSS"; such acquisition
(or proposed acquisition) referred to herein as the "WSS Acquisition");
WHEREAS, the Subscriber and the Company are entering into an employment
agreement of even date herewith (the "Employment Agreement"), the Employment
Agreement to become effective, if at all, upon the completion, if any, of the
WSS Acquisition, and pursuant to which Employment Agreement the Subscriber is to
be employed by the Company on the terms and conditions set forth therein; and
WHEREAS, the Subscription Agreement provides, among other things, that,
simultaneously herewith, the Company, the Subscriber and the Escrow Agent shall
execute this Escrow Agreement and, simultaneously herewith or as soon hereafter
as practicable, the Company shall deposit into escrow with the Escrow Agent, to
be held in accordance with the terms hereof, stock certificates representing the
Shares, registered in the name of the Subscriber on the books and records of the
Company, duly endorsed in blank or accompanied by stock powers or other
instruments of transfer duly endorsed in blank, in either case with signature
guaranteed.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. DEPOSIT. (a) Simultaneously with the execution hereof or as soon
hereafter as practicable, the Company, on behalf of the Subscriber, is
delivering or will deliver to the Escrow Agent stock certificates evidencing the
Shares registered in the name of the Subscriber on the books and records of the
Company (which stock certificates are, or at the time of deposit will be more
fully described on the annexed Schedule I), duly endorsed in blank by the
Subscriber with signature guaranteed or accompanied by stock powers duly
endorsed in blank by the Subscriber (such stock certificates, as so endorsed or
accompanied by stock powers, are referred to herein, individually, as a "Stock
Certificate" and collectively, as the "Stock Certificates").
(b) The Escrow Agent, upon receipt of the Stock Certificates, will
execute the receipt therefor attached as Exhibit A and deliver copies of such
receipt to the Company and the Subscriber.
(c) The Escrow Agent agrees to hold the Stock Certificates in escrow
and to act with respect thereto and otherwise as hereinafter set forth.
2. DISPOSITION OF THE ESCROW. The Escrow Agent shall release the Stock
Certificates (and the Shares represented thereby) from escrow as follows and in
accordance with the following:
(a) (i) On or as soon as practicable following completion of the WSS
Acquisition (the date of such completion is referred to as the "Acquisition
Date"), the Company and the Subscriber will deliver to the Escrow Agent written
notice (the "Acquisition Notice"), signed by each, affirming the completion of
the WSS Acquisition, and specifying the Acquisition Date. Promptly upon receipt
of the Acquisition Notice, the Escrow Agent shall release from escrow and
deliver to the Subscriber 175,641 Shares.
(ii) The Company acknowledges that if the WSS Acquisition is
not completed within ninety (90) days after the date hereof, the Company has
agreed, pursuant to the terms of the Subscription Agreement, to repurchase the
Shares from the Subscriber on the terms specified therein. In such event, the
Company and the Subscriber will, on the date of such repurchase, provide the
Escrow Agent with written notice of such repurchase, signed by each, and the
Escrow Agent will, promptly upon receipt of such notice, release from escrow and
deliver to the Company all of the Stock Certificates (and the Shares represented
thereby).
(b) On the six month anniversary of the Acquisition Date (the
"Condition Date"), the Escrow Agent shall release from escrow and deliver to the
Subscriber Stock Certificates representing 175,641 Shares.
(c) The Escrow Agent will release from escrow and deliver to the
Subscriber Stock Certificates representing (i) 35,128 Shares on each of the six
month, nine month, twelve month and fifteen month anniversaries of the Condition
Date and (ii) the balance of 35,129 Shares on the eighteen month anniversary of
the Condition Date.
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(d) (i) If the Subscriber's employment by the Company is terminated
during the Escrow Period by reason of the Subscriber's death or Disability (as
defined in the Employment Agreement), the Company will deliver written notice of
such termination (a "Death/Disability Notice") to the Escrow Agent, with a copy
of the Death/Disability Notice to be delivered simultaneously to the Subscriber
or his estate or legal representative (as the case may be) and evidence of
delivery of such copy to be delivered simultaneously to the Escrow Agent. If, at
any time following such termination by reason of death or disability, the
Company has not delivered a Death/Disability Notice, the Subscriber, the
administrator of his estate or his legal representative (as the case may be) may
deliver a Death/Disability Notice to the Escrow Agent (together with evidence of
the administrator's or legal representative's legal authority ("Authority
Evidence"), as applicable). A copy of such Death/Disability Notice and Authority
Evidence shall be delivered simultaneously to the Company and evidence of
delivery of such copy shall be delivered to the Escrow Agent. Provided the
Escrow Agent has not received from the Company or the Subscriber or his estate
or legal representative, within twenty (20) days after receipt of the
Death/Disability Notice (the "Contest Period"), written notice contesting the
Death/Disability Notice (a "Contest Notice"), the Escrow Agent will release from
escrow and deliver to the Subscriber or his estate or legal representative, as
the case may be, all of the Stock Certificates (and the Shares represented
thereby) then held in escrow by the Escrow Agent.
(ii) If the Escrow Agent receives a Contest Notice during the
Contest Period, the Escrow Agent shall continue to hold all Stock Certificates
(and Shares represented thereby) then held by it in escrow pursuant to the terms
hereof, and shall make no further releases of Stock Certificates hereunder
unless and until it receives written instructions specifying disposition of the
Stock Certificates executed by the Company and the Subscriber, the administrator
of his estate or his legal representative, as the case may be. If the Escrow
Agent receives no such written instructions during the ninety (90) day period
following receipt of the Contest Notice, the Escrow Agent shall deposit all
Stock Certificates then held by it with a court of competent jurisdiction to be
held pending resolution of the dispute between the Company and the Subscriber or
his estate or legal representative, and thereafter, the Escrow Agent shall have
no further duties or obligations hereunder.
(e) (i) If the Subscriber's employment by the Company is terminated
during the Escrow Period other than by reason of the Subscriber's death or
Disability and without Cause (as defined in the Employment Agreement), either
the Subscriber or the Company may deliver written notice of such termination (a
"Non-Cause Notice") to the Escrow Agent, with a copy of the Non-Cause Notice to
be delivered simultaneously to the other party (the "Non-Cause Notice
Recipient") and evidence of delivery of such copy to be delivered simultaneously
to the Escrow Agent. Provided the Escrow Agent has not received from the
Non-Cause Notice Recipient, within twenty (20) days after receipt of the
Non-Cause Notice (the "Non-Cause Contest Period"), written notice contesting the
Non-Cause Notice (a "Non-Cause Contest Notice"), the Escrow Agent will release
from escrow and deliver to the Subscriber all of the Stock Certificates (and the
Shares represented thereby) then held in escrow by the Escrow Agent.
(ii) If the Escrow Agent receives a Non-Cause Contest Notice
during the Non-Cause Contest Period, the Escrow Agent shall continue to hold all
Stock Certificates (and Shares represented thereby) then held by it in escrow
pursuant to the terms hereof, and shall make no further releases of Stock
Certificates hereunder unless and until it receives written
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instructions specifying disposition of the Stock Certificates executed by the
Company and the Subscriber. If the Escrow Agent receives no such written
instructions during the ninety (90) day period following receipt of the
Non-Cause Contest Notice, the Escrow Agent shall deposit all Stock Certificates
then held by it with a court of competent jurisdiction to be held pending
resolution of the dispute between the Company and the Subscriber and thereafter,
the Escrow Agent shall have no further duties or obligations hereunder.
(f) (i) The Company and the Subscriber acknowledge that, pursuant to
the terms of the Subscription Agreement, if the Subscriber's employment with the
Company is terminated during the Escrow Period for Cause, the Company has agreed
to repurchase the Shares then held in escrow pursuant hereto from the Subscriber
on the terms specified in the Subscription Agreement. In such event, the Company
will, on the date of such repurchase, provide the Escrow Agent with written
notice of such repurchase (a "Termination Repurchase Notice"), and the Escrow
Agent will, promptly upon receipt of such notice, release from escrow and
deliver to the Company all of the Stock Certificates (and the Shares represented
thereby) then held by the Escrow Agent.
(ii) Notwithstanding the provisions of Section 2(f)(i) above,
upon termination of the Subscriber's employment with the Company during the
Escrow Period for Cause, either the Company or the Subscriber may, prior to the
delivery to the Escrow Agent of a Termination Repurchase Notice, deliver to the
Escrow Agent written notice (a "Termination Contest Notice") contesting the
termination of employment and/or the obligation under the Subscription Agreement
to sell and purchase the Shares then held in escrow. The party delivering the
Termination Contest Notice to the Escrow Agent shall simultaneously deliver a
copy of such notice to the other party hereto and evidence of delivery of such
copy shall be delivered simultaneously to the Escrow Agent. Upon receipt of a
Termination Contest Notice, the Escrow Agent shall thereafter continue to hold
all Stock Certificates (and Shares represented thereby) then held by it in
escrow pursuant to the terms hereof, and shall make no further releases of Stock
Certificates hereunder unless and until it receives a Termination Repurchase
Notice or other written instructions specifying disposition of the Stock
Certificates then held by it executed by the Company and the Subscriber. If the
Escrow Agent receives no Termination Repurchase Notice or other such written
instructions during the ninety (90) day period following receipt of the
Termination Contest Notice, the Escrow Agent shall deposit all Stock
Certificates then held by it with a court of competent jurisdiction to be held
pending resolution of the dispute between the Company and the Subscriber, and
thereafter, the Escrow Agent shall have no further duties or obligations
hereunder.
3. TERMINATION UPON FINAL DISPOSITION. This Escrow Agreement shall
terminate upon the final disposition of the Stock Certificates and may be
terminated at any time prior thereto by and upon receipt by the Escrow Agent of
written notice of termination signed by the Company and the Subscriber directing
the disposition of the Stock Certificates.
4. RIGHTS IN RESPECT OF SHARES HELD IN ESCROW. All rights in connection
with or incident to the ownership of the Shares, including without limitation,
the right to exercise any and all voting rights associated with the Shares and
the right to receive and retain any and all dividends or other distributions in
respect of the Shares, during the period such Shares are held in escrow pursuant
hereto, shall be vested solely in the Subscriber.
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5. ESCROW PROVISIONS. (a) The obligations and duties of the Escrow Agent
in connection herewith are confined to those specifically enumerated herein and
the Escrow Agent shall not be liable or responsible for any act or failure to
act on its part except for its own willful misconduct or gross negligence.
(b) The duties of the Escrow Agent hereunder shall be limited to the
safekeeping of the Stock Certificates and the disposition of the same solely in
accordance with the terms and conditions hereof and no implied duties or
obligations shall be read herein against the Escrow Agent.
(c) The Escrow Agent may act or refrain from acting with respect to
any matter referred to herein in full reliance upon the advice of counsel of its
choice, and shall be fully protected and released as to any matter with respect
to which it shall have acted or refrained from acting upon the advice of such
counsel.
(d) The Escrow Agent may rely or act upon orders or directions,
instruments or signatures believed by it to be genuine and may assume that any
person purporting to give any written notice, advice or instruction in
connection therewith has been fully authorized to do so.
(e) The Escrow Agent shall not be bound by any modification,
amendment, termination, cancellation, rescission or supercedence of the terms
and conditions contained herein unless the same shall be in writing and signed
by the other parties hereto. However, the Escrow Agent's duties as Escrow Agent
hereunder shall not be affected, unless the Escrow Agent shall have given its
prior written consent thereto.
(f) If the Escrow Agent shall be uncertain as to its duties or
rights hereunder, then Escrow Agent shall refrain from taking any action other
than to keep safely the Stock Certificates, until it shall be directed otherwise
in writing jointly by the Company and the Subscriber or by a final judgment or
order of a court of competent jurisdiction. Any such judgment shall be delivered
to the Escrow Agent with a written opinion of counsel setting forth that such
judgment is final and that such court is a court of competent jurisdiction and
that Escrow Agent shall be fully protected in relying thereon.
(g) The Escrow Agent shall not be required to institute or defend
any action or legal proceeding involving the terms and conditions contained
herein. For all payments and deliveries made by the Escrow Agent in accordance
with the provisions hereof, the Escrow Agent shall have full release, discharge
and acquittance and shall not be subject to any claim on the part of any persons
beneficially interested hereunder. It is expressly understood by the Company and
the Subscriber agree, jointly and severally, to indemnify and hold harmless the
Escrow Agent and its successors and assigns from and against any and all claims,
disputes or defenses which may arise between the Company and the Subscriber.
(h) The Company and the Subscriber shall reimburse and indemnify the
Escrow Agent for, and hold it harmless against, any and all loss, liability,
costs or expenses in connection herewith including reasonable attorneys' fees,
incurred on the part of the Escrow Agent or arising out of or in connection with
its acceptance of, or the performance of its duties and obligations under, this
Escrow Agreement, as well as the reasonable costs and expenses of defending
against
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any claim or liability arising out of or relating to this Escrow Agreement,
except for such loss, liability, costs or expenses resulting from Escrow Agent's
own gross negligence or willful misconduct. Such obligations shall be borne by
the Company.
(i) The Escrow Agent may at any time resign hereunder by giving
written notice of resignation to the other parties hereto at least ten days
prior to the date specified for such resignation to take effect, and upon the
effective date of such resignation, the Stock Certificates then held by the
Escrow Agent hereunder shall be turned over to a new escrow agent designated in
writing by the Escrow Agent who shall be reasonably acceptable to the Company
and the Subscriber and who shall have accepted all of the terms hereof,
whereupon all of the Escrow Agent's obligations hereunder shall cease and
terminate. If no such person shall have been approved by the Company and the
Subscriber by such date, the Escrow Agent shall be entitled to deposit the Stock
Certificates with a court of competent jurisdiction whereupon all of the Escrow
Agent's obligations hereunder shall cease and terminate.
6. NOTICES. Any notice or other communication required or permitted to be
given hereunder shall be in writing and shall be deemed to have been received
(a) upon hand delivery (receipt acknowledged) or delivery by telex (with correct
answer back received), telecopy or facsimile (with transmission confirmation
report) at the address or number designated below (if delivered on a business
day during normal business hours where such notice is to be received), or the
first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received)
or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur. The addresses for such
communications shall be:
If to the Company:
Vacation Emporium Corporation
00 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
If to the Subscriber:
To the address listed opposite the Subscriber's signature below
With a copy to:
Xxxxx Xxxxxx, P.C.
0000 Xxxxxxxx Xxxx Xxxxx
Xxxxx 0000
Xxxxx Xxxxxx, Xxxxxxxx 00000
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Telecopier: (000) 000-0000
Attn.: Xxxxxx Xxxxxxxxx, Xx., Esq.
If to the Escrow Agent to:
Xxxxx Xxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopier: (000) 000-0000
Attn.: Xxxxxx X. Xxxxx, Esq.
A copy of all notices and communications hereunder shall be sent to:
Xxxxx Xxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopier: (000) 000-0000
Attn.: Xxxxxx X. Xxxxx, Esq.
or such other address as may be designated in writing hereafter, in the same
manner, by such person.
7. WAIVER. No waiver by any party of any breach of any term contained in
this Escrow Agreement, in any one or more instances, shall be deemed to be or
construed as a further continuing waiver of any such breach or a waiver of any
breach of any other term contained in this Escrow Agreement.
8. COUNTERPARTS. This Escrow Agreement may be executed in counterparts,
each of which shall be deemed as original and which counterparts together shall
constitute one and the same instrument.
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9. APPLICABLE LAW. This Agreement is intended to be construed solely in
accordance with and governed solely by the laws of the State of New York
pertaining to contracts made and fully performed therein (without giving effect
to choice of law principles).
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
ESCROW AGENT:
XXXXX XXXX LLP
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Partner
THE COMPANY:
VACATION EMPORIUM CORPORATION
By: /s/ Xxx Xxxx
--------------------------------------
Name: Xxx Xxxx
Title: Chairman
THE SUBSCRIBER:
/s/ Xxxxx XxXxxxxx
--------------------------------------
Name: Xxxxx XxXxxxxx
Address: 000 Xxxxx Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
No. of Shares: 526,923
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Schedule I
Subscriber and Address Stock Certificate #(s) Number of Shares
---------------------- ---------------------- ----------------
Xxxxx XxXxxxxx 2001 175,641
000 Xxxxx Xxxxx Xxxxx Xxxxxx 0000 175,641
Xxxxxxxxxx, Xxxxxxxx 00000 2003 35,128
2004 35,128
2005 35,128
2006 35,128
2007 35,129
EXHIBIT A
RECEIPT
Reference is made to the Escrow Agreement (the "Escrow Agreement") dated
July 30, 1999 among Vacation Emporium Corporation (the "Company"), the
individual listed on Schedule I to the Escrow Agreement, a copy of which
Schedule is annexed hereto, and Xxxxx Xxxx LLP as escrow agent (the "Escrow
Agent"). Capitalized terms used herein and not otherwise defined have the
meanings set forth in the Escrow Agreement. By its signature below, the Escrow
Agent acknowledges receipt of the Stock Certificate listed on Schedule I to the
Escrow Agreement.
/s/ Xxxxx Xxxx LLP
--------------------------------------
XXXXX XXXX LLP
