AMENDED AND RESTATED ESCROW AGREEMENT
Exhibit
10.2
AMENDED
AND RESTATED ESCROW AGREEMENT
THIS
AMENDED AND RESTATED ESCROW AGREEMENT (the
“Agreement”),
is
entered into and effective as of December 29, 2006 by and among New World
Brands, Inc., a Delaware corporation (the “Company”),
P&S Spirit, LLC, a Nevada limited liability company (the “Purchaser”)
and
Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP, with an address at 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, XX 00000 (the “Escrow
Agent”).
Capitalized terms used but not defined herein shall have the meanings set
forth
in the Subscription Agreement (as defined below).
RECITALS
The
Company is a party to that certain Amended and Restated Stock Subscription
Agreement of even date herewith (the “Subscription
Agreement”),
a
copy of which is attached hereto as Annex
A,
pursuant to which the Company has agreed to issue and sell to the Purchaser,
and
the Purchaser has agreed to purchase (i) 11.160454 shares (the “Tranche
A Shares”)
of
Series A Convertible Preferred Stock, par value $0.01 per share (the
“Series
A Preferred Stock”)
on the
date hereof, (ii) upon the satisfaction of certain conditions set forth in
the
Subscription Agreement, an additional 3.720151 shares of Series A Preferred
Stock (the “Tranche
B-1 Shares”)
convertible into shares (the “Tranche
B-1 Common Shares”)
of
common stock, par value $0.01 per share, of the Company (the “Common
Stock”),
at
the
Tranche B-1 Closing, and (iii) upon the satisfaction of certain conditions
set
forth in the Subscription Agreement, an additional 3.720151 shares of Series
A
Preferred Stock (the “Tranche
B-2 Shares”,
convertible into shares of Common Stock, (the “Tranche
B-2 Common Shares”),
and,
together with the Tranche B-1 Shares and, to the extent issued hereunder,
the
Tranche B-1 Common Shares and/or the Tranche B-2 Common Shares, the
“Escrow
Shares”)
at the
Tranche B-2 Closing. The Tranche B-1 Closing and Tranche B-2 Closing are
each
referred to herein as a “Closing”.
In
connection with the execution and delivery of the Stock Subscription Agreement
dated as of December 29, 2009, which agreement is being amended and restated
in
its entirety by the Subscription Agreement referenced in the preceding Recital,
the parties entered into an Escrow Agreement dated December 29, 2006 (the
“Original
Escrow Agreement”).
In
connection with the execution and delivery of the Subscription Agreement
and the
consummation of the transactions contemplated thereby, the parties now desire
to
amend and restate the Original Escrow Agreement in its entirety, as provided
herein.
The
Company and the Purchaser desire that the Escrow Agent hold the Escrow Shares
as
required by the Subscription Agreement in escrow until each Closing has
occurred, or the Escrow Agent has received notice that a Closing will not
occur,
and the Escrow Agent has received a copy of the signed written instructions
from
the Company and the Purchaser (the “Release
Notice”).
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:
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ARTICLE
1
TERMS
OF
THE ESCROW
1.1. Designation
of Escrow Agent.
The
Escrow Agent is hereby appointed escrow agent to hold and dispose of the
Escrow
Shares provided for herein, in accordance with the terms and conditions set
forth in this Agreement, and the Escrow Agent accepts such designation and
agrees to hold and dispose of such Escrow Shares in accordance with the
provisions of this Agreement. Contemporaneously with the execution of this
Agreement, the Company has deposited with
the
Escrow Agent a stock certificate representing the Tranche B-1 Shares and
a stock
certificate representing the Tranche B-2 Shares, together with an undated,
signed assignment in blank for each certificate deposited. The Escrow Agent
hereby acknowledges receipt of the Escrow Shares.
1.2. Automatic
Conversion of Series A Preferred Stock.
In the
event, prior to the Tranche B-1 Closing or the Tranche B-2 Closing, the Company
files a certificate of amendment to its certificate of incorporation and
as a
result thereof, the Series A Preferred Stock is automatically converted into
shares of Common Stock of the Company (the “Conversion
Event”):
(a)
the Company, if the Conversion Event occurs before the Tranche B-1 Closing,
shall cause to be delivered to the Escrow Agent stock certificates representing
the Tranche B-1 Common Shares and the Tranche B-2 Common Shares, and the
Escrow
Agent shall, upon receipt thereof, return to the Company the stock certificates
representing the Tranche B-1 Shares and the Tranche B-2 Shares, which
certificates will be cancelled by the Company upon receipt; and (b) the Company,
if the Conversion Event occurs before the Tranche B-2 Closing, shall cause
to be
delivered to the Escrow Agent a stock certificate representing the Tranche
B-2
Common Shares, and the Escrow Agent shall, upon receipt thereof, return to
the
Company the stock certificate representing the Tranche B-2 Shares, which
certificate will be cancelled by the Company upon receipt.
1.3. Disbursement
Procedures.
(a) Tranche
B-1 Closing.
In the
event of the Tranche B-1 Closing Condition and the other conditions required
to
consummate the purchase and sale of the Tranche B-1 Shares at the Tranche
B-1
Closing have been satisfied and upon receipt by the Company of the Tranche
B-1
Purchase Price, the Company shall deliver to the Escrow Agent (with a copy
to
the Purchaser), a written notice (a “Release
Notice”),
instructing the Escrow Agent to release the certificate representing the
Tranche
B-1 Shares, or the Tranche B-1 Common Shares, if applicable, to the
Purchaser.
(b) Tranche
B-2 Closing.
In the
event of the Tranche B-2 Closing Condition and the other conditions required
to
consummate the purchase and sale of the Tranche B-2 Shares at the Tranche
B-2
Closing have been satisfied and upon receipt by the Company of the Tranche
B-2
Purchase Price, the Company shall deliver to the Escrow Agent (with a copy
to
the Purchaser), a Release Notice instructing the Escrow Agent to release
the
certificate representing the Tranche B-2 Shares, or the Tranche B-2 Common
Shares, if applicable, to the Purchaser; provided
that in
the event the Tranche B-1 Closing Condition was not achieved but the Tranche
B-2
Closing Condition and the other conditions required to consummate the purchase
and sale of the Tranche B-2 Shares at the Tranche B-2 Closing have been
satisfied and upon receipt by the
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Company
of the Aggregate Tranche B Purchase Price, the Company shall deliver to the
Escrow Agent (with a copy to the Purchaser), a Release Notice instructing
the
Escrow Agent to release the certificates representing the Tranche B-1 Shares
and
the Tranche B-2 Shares, or the Aggregate Tranche B Common Shares, if applicable,
to the Purchaser.
(c) Termination
Date.
If the
Tranche B-1 Closing and/or the Tranche B-2 Closing have not occurred, or
if the
purchase option pursuant to Section 1(e) of the Subscription Agreement has
not
been exercised, at the time(s) and manner required by the Subscription
Agreement, except to the extent (and for the period of time) delayed by a
breach
thereof by the Company, the Escrow Agent shall return to the Company for
cancellation any and all Escrow Shares then held by the Escrow Agent.
Upon
distribution of all the Escrow Shares pursuant to this Section
1.3,
this
Agreement and the escrow created hereunder shall terminate.
1.4. General
Terms and Standards Regarding the Escrow Agent. Notwithstanding
any terms of this Agreement to the contrary, each term of this Agreement,
including without limitation each of the stated duties and responsibilities
of
the Escrow Agent set forth herein, shall be subject to the following terms
and
conditions:
(a) The
duties, responsibilities and obligations of the Escrow Agent shall be limited
to
those expressly set forth in this Agreement (and the duty to exercise reasonable
care in the physical safekeeping of the Escrow Shares held in escrow hereunder),
and no implied duties, responsibilities or obligations shall be read into
this
Agreement against the Escrow Agent.
(b) The
Escrow Agent shall not be subject to, bound by, charged with notice of or
be
required to comply with or interpret any agreement or document (including
without limitation the Subscription Agreement) between or among the interested
parties (whether or not reference to any such other agreement or documents
is
expressed herein) other than this Agreement.
(c) The
Escrow Agent shall in no instance be under any duty to give the Escrow Shares
held by it hereunder any greater degree of care than it gives its own similar
property.
(d) The
Escrow Agent may rely upon, and shall be protected in acting or refraining
from
acting upon, any written notice, instruction, statement, request, waiver,
order,
judgment, certification, consent, receipt or other paper or document furnished
to it (not only as to genuineness, but also as to its due execution and
validity, the genuineness of signatures appearing thereon and as to the truth
and accuracy of any information therein contained), which it in good faith
believes to be genuine and signed or presented by the proper
person.
(e) Neither
the Escrow Agent nor any of its partners, managers, directors, officers or
employees, or any of its or their respective affiliates, shall be liable
to
anyone for any error of judgment, or for any act done or step taken or omitted
to be taken by it or any of its directors, officers or employees, or for
any
mistake of fact or law, or for anything which it, or any of its directors,
officers or employees, may do or refrain from doing in connection with or
in
the
administration of this Agreement, unless and except to the extent the same
constitutes gross negligence or willful misconduct on the part of the Escrow
Agent.
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(f) The
Escrow Agent shall not be deemed to have notice of any fact, claim or demand
with respect hereto unless actually known by an officer charged with
responsibility for administering this Agreement or unless in writing received
by
the Escrow Agent and making specific reference to this Agreement.
(g) No
provision of this Agreement shall require the Escrow Agent to expend or risk
its
own funds, or to take any legal or other action hereunder which might in
its
judgment involve it in, or require it to incur in connection with the
performance of its duties hereunder, any expense or any financial liability
unless it shall be furnished with indemnification acceptable to it.
(h) Nothing
in this Agreement shall obligate the Escrow Agent to qualify to do business
or
act in any jurisdiction in which it is not presently qualified to do business,
or be deemed to impose upon the Escrow Agent the duties of a trustee. The
duties
of the Escrow Agent under this Agreement are strictly ministerial in
nature.
(i) In
no
event shall the Escrow Agent have any liability for any failure or inability
of
any of the interested parties to perform or observe his or its duties under
the
Agreement, or by reason of a breach of this Agreement by either of the
interested parties. In no event shall the Escrow Agent be obligated to take
any
action against any of the interested parties to compel performance
hereunder.
(j) The
Escrow Agent shall in no instance be obligated to commence, prosecute or
defend
any legal proceedings in connection herewith. The Escrow Agent shall be
authorized and entitled, however, in any instance to commence, prosecute
or
defend any legal proceedings in connection herewith, including without
limitation any proceeding it may deem necessary to resolve any matter or
dispute, to obtain a necessary declaration of rights, or to appoint a successor
upon resignation.
(k) Whenever
the terms hereof call for any notice or other action on a day which is not
a
business day, such action may be taken, or such notice given, as the case
may
be, on the next succeeding business day. As used herein, “business day” shall
mean any day other than a Saturday or Sunday, or any other day on which the
Escrow Agent is closed for business.
(l) In
the
event of any ambiguity or uncertainty under this Agreement, or in any notice,
instruction, or other communication received by the Escrow Agent hereunder,
the
Escrow Agent may, in its reasonable discretion, refrain from taking action,
and
may retain the Escrow Shares, until and unless it receives written instruction
signed by all interested parties, or a decision by a court of competent
jurisdiction which eliminates such uncertainty or ambiguity.
(m) If
at any
time the Escrow Agent is served with any judicial or administrative order,
judgment, decree, writ or other form of judicial administrative process which
in
any way relates to or affects the Escrow Shares (including but not limited
to
orders of attachment or garnishment or other forms of levies or injunctions
or
stays relating to the Escrow Shares), the Escrow Agent is authorized to comply
therewith in any manner as it or its legal counsel
reasonably deems appropriate; and if the Escrow Agent complies with any such
judicial or administrative order, judgment, decree, writ or other form of
judicial or administrative
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process,
the Escrow Agent shall not be liable to any of the parties hereto or to any
other person or entity notwithstanding that though such order, judgment,
decree,
writ or process may be subsequently modified, annulled, set aside, vacated,
found to have been without proper jurisdiction, or otherwise determined to
have
been without legal force or effect.
(n) The
Escrow Agent shall have no liability for the actions or omissions of the
Escrow
Agent or any transfer agent, book-entry depository, nominee, correspondent,
subagent or subcustodian, except to the extent that such action or omission
of
any transfer agent, book-entry depository, nominee, correspondent, subagent
or
subcustodian was caused by the Escrow Agent’s own gross negligence, bad faith or
willful misconduct.
(o) The
parties understand that the Escrow Shares are not subject to an effective
registration statement at the time of this Agreement, and that the Escrow
Agent
shall not be responsible for fluctuations in the market in connection with
any
transfer of the shares
ARTICLE
2
MISCELLANEOUS
2.1. Voting
of Escrow Shares and Other Rights. All
voting rights with respect to Escrow Shares, until returned to the Company
pursuant to this Agreement, shall be exercised by the Escrow Agent solely
upon
the instruction of the Purchaser, and the Escrow Agent shall from time to
time
execute and deliver proxies, consents or other documents as instructed by
the
Company and as necessary to enable the Company to exercise such rights. In
the
absence of any instructions from the Company with respect to the voting of
the
Escrow Shares, the Escrow Agent shall not vote any of the Escrow
Shares.
2.2. Successor
Escrow Agent.
In the
event the Escrow Agent becomes unavailable or unwilling to continue in its
capacity herewith, the Escrow Agent may resign and be discharged from its
duties
or obligations hereunder by delivering a resignation to the parties, not
less
than 10 days prior to the date when such resignation shall take effect. The
Company may appoint a successor Escrow Agent with the consent of the Purchaser,
which shall not be unreasonably withheld, delayed or conditioned. If, within
such notice period, the Company provides to the Escrow Agent written
instructions with respect to the appointment of a successor Escrow Agent
and
directions for the transfer of any Escrow Shares then held by the Escrow
Agent
to such successor, the Escrow Agent shall act in accordance with such
instructions and promptly transfer such Escrow Shares to such designated
successor. If no successor is so appointed, the Escrow Agent may apply to
a
court of competent jurisdiction for such appointment.
2.3. Waivers.
No
waiver or 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.
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2.4. Notice.
All
notices, requests, demands, and other communications under this Agreement
shall
be in writing and shall be deemed to have been duly given on the date of
service
if served personally on the party to whom notice is to be given, on the first
business day following the date of transmittal of services via telecopy to
the
party to whom notice is to be given, or on the fifth day after mailing if
mailed
to the party to whom notice is to be given, by first class mail, registered
or
certified, postage prepaid, or by an internationally recognized courier service,
and properly addressed as follows (or at such other address for a party as
shall
be specified by like notice:
|
To
the Company:
|
New
World Brands, Inc.
|
|
000
Xxxx 0xx
Xxxxxx
|
|
Xxxxxx,
XX 00000
|
|
Attn:
Xxx X. Xxxxxxxxxx
|
|
Fax:
(000) 000-0000
|
|
With
a copy to:
|
|
Xxxxxx
Xxxxx Xxxxxxxx & Xxxxxxx LLP
|
|
0000
Xxxxxx xx xxx Xxxxxxxx
|
|
Xxx
Xxxx, XX 00000
|
|
Attn:
Xxxxx X. Xxxxxxxxx, Esq.
|
|
Fax:
(000) 000-0000
|
|
To
the Purchaser:
|
P&S
Spirit, LLC
|
|
0000
XX 00xx
Xxxxxx, Xxxxx 000
|
|
Xx.
Xxxxxxxxxx, XX 00000
|
|
Attn:
Xx. Xxxxxx Xxxxxx
|
Fax:
(000) 000-0000
|
With
a copy to:
|
|
Adelberg,
Rudow, Dorf & Xxxxxxx, LLC
|
|
0
Xxxxx Xxxx Xxxxxx, Xxxxx 000
|
| Xxxxxxxxx, Xxxxxxxx 00000 |
|
Attn: Xxxxx
X. Xxxxx, P.A.
Fax:
(000)
000-0000
|
|
To
the Escrow Agent:
|
Xxxxxx
Xxxxx Xxxxxxxx & Xxxxxxx LLP
|
|
0000
Xxxxxx xx xxx Xxxxxxxx
|
|
Xxx
Xxxx, XX 00000
|
|
Attn:
Xxxxx X. Xxxxxxxxx, Esq.
|
|
Fax:
(000) 000-0000
|
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Notwithstanding
anything herein to the contrary, any party may give any notice, request,
demand,
claim or other communication hereunder by personal delivery or telecopy,
but no
such notice, request, demand, claim or other communication shall be deemed
to
have been duly given unless and until it actually is received by the party
for
whom it is intended. Any party may change the address to which notices,
requests, demands, claims and other communications hereunder are to be delivered
by giving the other parties notice in the manner herein set forth. Copies
of any
notice, request, demand, claim or other communication hereunder by personal
delivery or telecopy given to the Escrow Agent by either party, shall be
delivered to the other party as soon thereafter as practicable.
2.5 Successors
and Assigns.
This
Agreement shall be binding upon and shall inure to the benefit of the permitted
successors and permitted assigns of the parties hereto.
2.6 Entire
Agreement.
Except
for the provisions of the Subscription Agreement referenced herein, this
Agreement constitutes the entire understanding and agreement of the parties
with
respect to the subject matter of this Agreement and supersedes all prior
agreements or understandings, written or oral, between the parties with respect
to the subject matter hereof, including, without limitation, the Original
Agreement.
2.7 Amendments.
This
Agreement may be amended only with the written consent of each party
hereto.
2.8 Construction.
Whenever required by the context of this Agreement, the singular shall include
the plural and masculine shall include the feminine. This 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 Agreement.
2.9 Governing
Law.
The
parties hereto expressly agree that this Agreement, and any disputes arising
hereunder, shall be governed by, interpreted under and construed and enforced
in
accordance with the laws of the State of New York, without regard to conflicts
of law principles that would result in the application of the substantive
laws
of another jurisdiction. Any action to enforce, arising out of, or relating
in
any way to, any provisions of this Agreement shall only be brought in a state
or
Federal court sitting in New York City, Borough of Manhattan.
2.10 Fees
and Expenses.
The
Company and the Purchaser shall equally be responsible for any reasonable
fees
and expenses incurred by the Escrow Agent in connection with performing its
duties pursuant to this Agreement.2.11 Indemnity.
The
Company and the Purchaser agree, jointly and severally, to indemnify and
hold
harmless the Escrow Agent and its partners,
employees, agents and representatives, and its and their respective affiliates,
from and against any and all losses, claims, liabilities, costs or expenses
(including attorney’s fees) in any way arising from or relating to (i) the
execution or performance of the Escrow Agent of its duties hereunder other
than
any such loss, claim, liability, cost or expense to the extent the same shall
have been determined by final, unappealable judgment of a court of competent
jurisdiction to have resulted directly as a result of the gross negligence
or
willful misconduct of the Escrow Agent; or (ii)
the
Escrow Agent’s following any joint instructions or other directions from both
Purchaser and the Company, or any notice given pursuant to Section
1.3,
any
other party hereunder, to the extent so permitted hereunder. The parties
hereto
acknowledge that the
7
foregoing
indemnities shall survive the resignation or removal of the Escrow Agent
or the
termination of this Agreement. The parties hereby grant the Escrow Agent
a lien
on, right of set-off against and security interest in the Escrow Shares for
the
payment of any claim for indemnification, compensation, expenses and amounts
due
hereunder, which remedy shall not be exclusive of any other remedy available
to
the Escrow Agent, whether at law, in equity or otherwise.
2.12 Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original.
2.13 Conflicts.
The
parties acknowledge and consent that the Escrow Agent has acted as counsel
to
the Company in connection with this
Agreement, the Subscription Agreement and other matters, and that in the
event
of any dispute with respect to this Agreement, the Escrow Agent shall be
entitled to continue to act as counsel to the Company including, without
limitation, with respect to any dispute arising under or related to the
Subscription Agreement or this Agreement or any of the transactions contemplated
thereby or hereby or under any of the instruments or agreements executed
or
delivered in connection therewith or herewith, regardless of any conflicts
which
this may present with respect to its acting as the Escrow Agent.
[SIGNATURE
PAGE FOLLOWS]
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[SIGNATURE
PAGE TO ESCROW AGREEMENT]
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement effective
as of
the date first set forth above.
NEW
WORLD BRANDS, INC.
By:
/s/ M. Xxxxx
Xxxxxx
Name: M.
Xxxxx Xxxxxx
Title: CEO
XXXXXX
XXXXX XXXXXXXX & XXXXXXX LLP, solely in its capacity as Escrow
Agent
By:______________________________
Name:____________________________
Title:_____________________________
P&S
SPIRIT, LLC
By:
/s/ Xxxxxx Xxxxxx,
M.D.
Name: Xxxxxx
Xxxxxx, M.D.
Title: Manager
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