PLEDGE ESCROW AGREEMENT
Exhibit 10.3
THIS PLEDGE ESCROW AGREEMENT
(the “Agreement”), dated
September 30, 2009, by and among Xxxxxxxx X. Xxxxx, as Trustee of the
Pak-It Members’ Trust, (the “Secured Party”), 310
Holdings, Inc., a Nevada corporation, (the “Company”), Xxxx
Xxxxxxxxx (the “Affiliate”) and
Xxxxxx & Xxxxxx, LLP the escrow agent for the Affiliate and Secured Party
(the “Escrow
Agent”).
WHEREAS:
A. The
Affiliate has pledged as security the Company’s common stock, $0.001 par value
per share (“Common
Stock”) and 100% of the membership units of Pak-It (as defined herein)
(the “Units”), in accordance with that certain Unit Purchase and Exchange
Agreement, dated as of the date hereof (the “Unit Purchase
Agreement”), by and among the Company, Pak-It, LLC (“Pak-It”) and the
Pak-It, LLC Unitholders (the “Pak-It Unitholders”),
and certain Note, Liability Note, other papers, agreements, documents,
instruments and certificates necessary to carry out the purposes thereof
(collectively, the “Transaction
Documents”).
B. As
an inducement to the Pak-It Unitholders to enter into the Unit Purchase
Agreement, the Affiliate desires to place the Escrow Property (as hereinafter
defined) into escrow for the benefit of the Secured Party in the event that the
Company fails to satisfy certain conditions in accordance with the Unit Purchase
Agreement.
C. Pursuant
to the requirements of the Unit Purchase Agreement the Affiliate and the Secured
Party have agreed to establish an escrow (the “Escrow”) on the terms
and conditions set forth in this Agreement and the Escrow Agent has agreed to
act as escrow agent pursuant to the terms and conditions of this
Agreement.
NOW, THEREFORE, the Affiliate,
the Secured Party and the Escrow Agent, hereby agree that, in consideration of
the mutual promises and covenants contained herein, the Escrow Agent shall hold
in escrow and shall distribute Escrow Property in accordance with, and subject
to, the provisions of this Agreement:
1. Appointment. The
Affiliate and Secured Party hereby appoint the Escrow Agent as each party’s
respective escrow agent for the purposes set forth herein, and the Escrow Agent
hereby accepts such appointment.
2. Escrow. Concurrently
with the closing of the Unit Purchase Agreement, the Affiliate shall deliver to
the Escrow Agent a total of 10,000,000 shares of Common Stock of the Company,
with the stock powers executed in blank, medallion signature guaranteed, or in
other form and substance acceptable for transfer and the Units in form and
substance acceptable for transfer. The Escrow Agent shall not be
under any duty or obligation to solicit the deposit of the Escrow Property to
the Escrow. The foregoing property plus all dividends and other
distributions and payments thereon, if any (collectively the “Distributions”)
received by the Escrow Agent, less any property distributed or paid in
accordance with this Agreement, are collectively referred to herein as the
“Escrow
Property.”
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3. Investment of Escrow
Property. During the term of this Agreement, the Escrow Agent
shall not invest or liquidate the Escrow Property and any distribution of all or
part of the Escrow Property shall be conducted in accordance with Section 4
below.
4. Distribution of Escrow
Property. The Escrow Agent shall release the Escrow Property
upon receipt of notice from the Secured Party and Affiliate of the satisfaction
of the terms of the Transaction Documents. Promptly upon delivery by
Secured Party to the Escrow Agent of notice that an Event of Default (as
defined in the Note and Liability Note) has occurred or that the conditions to
the Note and Liability Note have been met, the Escrow Agent shall disburse
the Escrow Property to the respective parties in accordance with the
instructions set forth in such notice.
(a) Upon receipt by the
Escrow Agent of a request for distribution of the Escrow Property by the Company
or the Affiliate, without the approval of the Secured Party, the Escrow Agent
shall provide notice to the Secured Party of such demand. The Secured Party
shall contest the release or provide approval of the release of the Escrow
Property within ten (10) business days. In the event the
Secured Party contests the release of the Escrow Property, the Escrow Agent
shall interplead the Escrow Property in a court of valid jurisdiction, unless
the parties agree to an extension to resolve the release of the Escrow
Property.
5. Termination. Unless
the Escrow Agent earlier resigns, this Agreement shall terminate, subject to the
provisions of Section 8 hereof,
upon final distribution of all property in the Escrow Property by the
Escrow Agent.
6. Escrow
Agent.
(a) The
Escrow Agent undertakes to perform only those duties expressly set forth herein
and no duties shall be implied.
(b) The
Escrow Agent shall have no liability under and no duty to inquire as to the
provisions of any agreement of the Affiliate and/or the Secured Party other than
this Agreement.
(c) 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.
(d) The
Escrow Agent shall be under no duty to inquire into or investigate the validity,
accuracy or content of any document.
(e) 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 Affiliate.
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(f) The
Escrow Agent may consult with legal counsel of its choosing as to any matter
relating to this Agreement and the Escrow Agent shall not incur any liability in
acting in good faith in accordance with advice from such counsel.
(g) Anything
in this Agreement to the contrary notwithstanding, in no event shall the Escrow
Agent be liable for special, indirect or consequential loss or damage of any
kind whatsoever (including but not limited to lost profits and/or savings), even
if the Escrow Agent has been advised of the likelihood of such loss or damage
and regardless of the form of action.
(h) The
Escrow Agent may resign at any time by giving the Affiliate and the Secured
Party thirty (30) calendar days’ prior written notice thereof.
(i) In
the event Escrow Agent shall be uncertain as to its duties or rights hereunder
or receive instructions, claims or demands which, in its opinion, are in
conflict with any of the provisions of this Agreement, it shall be entitled to
refrain from taking any action, other than keep safely the Escrow Shares, until
it shall be jointly directed otherwise by the parties hereto or by a
determination by a court of competent jurisdiction which order or decree is not
subject to appeal.
(j) The
Escrow Agent shall not be obligated to institute legal proceedings of any kind
and shall not be required to defend any legal proceeding instituted against it
or in respect to the Escrow Property.
7. Fees. The
Company agrees to (i) pay the Escrow Agent reasonable compensation for the
services to be rendered hereunder, which shall be as described in Schedule I attached
hereto, and (ii) pay or reimburse the Escrow Agent upon request for all
reasonable expenses, disbursements and advances, including reasonable attorneys’
fees and expenses, incurred or made by it in connection with the preparation
execution, delivery, performance, modification and/or termination of this
Agreement. This Section 7 shall
survive the termination of this Agreement and the resignation of the Escrow
Agent.
8. Indemnity. The
Company will indemnify and hold the Secured Party and their directors, officers,
shareholders, partners, employees and agents and the Escrow Agent (each, an
“Investor Party”)
harmless from any and all losses, liabilities, obligations, claims,
contingencies, damages, costs and expenses, including all judgments, amounts
paid in settlements, court costs and reasonable attorneys’ fees and costs of
investigation (collectively, “Losses”) that the Secured
Party may suffer or incur as a result of or relating to any misrepresentation,
breach or inaccuracy of any representation, warranty, covenant or agreement made
by the Company in any of the Transaction Documents. In addition to
the indemnity contained herein, the Company will reimburse the Secured Party for
its reasonable legal and other expenses (including the cost of any
investigation, preparation and travel in connection therewith) incurred in
connection therewith, as such expenses are incurred. In the event of
any litigation or dispute arising from this agreement, the parties agree that
the party who is awarded the most money shall be deemed the prevailing party for
all purposes and shall therefore be entitled to an additional award of the full
amount of the attorneys' fees and expenses paid by said prevailing party in
connection with the litigation and/or dispute without reduction or apportionment
based upon the individual claims or defenses giving rise to the fees and
expenses. Nothing herein shall restrict or impair a court's power to award
fees and expenses for frivolous or bad faith pleading.
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Conduct of Indemnification
Proceedings. Promptly
after receipt by any Person (the “Indemnified Person”) of
notice of any demand, claim or circumstances which would or might give rise to a
claim or the commencement of any action, proceeding or investigation in respect
of which indemnity may be sought, such Indemnified Person shall promptly notify
the Company in writing and the Company shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to such Indemnified
Person, and shall assume the payment of all fees and expenses; provided,
however, that the
failure of any Indemnified Person so to notify the Company shall not relieve the
Company of its obligations hereunder except to the extent that the Company is
materially prejudiced by such failure to notify. In any such
proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person unless: (i) the Company and the Indemnified Person shall
have mutually agreed to the retention of such counsel; or (ii) in the reasonable
judgment of counsel to such Indemnified Person representation of both parties by
the same counsel would be inappropriate due to actual or potential differing
interests between them. The Company shall not be liable for any
settlement of any proceeding effected without its written consent, which consent
shall not be unreasonably withheld, but if settled with such consent, or if
there be a final judgment for the plaintiff, the Company shall indemnify and
hold harmless such Indemnified Person from and against any loss or liability (to
the extent stated above) by reason of such settlement or
judgment. Without the prior written consent of the Indemnified
Person, which consent shall not be unreasonably withheld, the Company shall not
effect any settlement of any pending or threatened proceeding in respect of
which any Indemnified Person is or could have been a party and indemnity could
have been sought hereunder by such Indemnified Party, unless such settlement
includes an unconditional release of such Indemnified Person from all liability
arising out of such proceeding.
9. Taxes. It
is understood that the Escrow Agent shall be responsible for income reporting
only with respect to income earned on the Escrow Property and will not be
responsible for any other reporting.
10. Notices. Any
communication, notice or document required or permitted to be given under this
Agreement shall be given in writing and shall be deemed received (i) when
personally delivered to the relevant party at such party’s address as set forth
below, (ii) if sent by mail (which must be certified or registered mail,
postage prepaid) or overnight courier, when received or rejected by the relevant
party at such party’s address indicated below, or (iii) if sent by
facsimile, when confirmation of delivery is received by the sending
party:
If to the Affiliate or Company,
to:
Attn:
Xxxx Xxxxxxxxx
0000
Xxxxxxx Xxxx, Xxxxxxx Xxxxx
Xxxxxxx, Xxxxxx X0X 0X0
Phone: (000) 000-0000
with a copy to (which shall not
constitute notice):
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Xxxxxx & Jaclin, LLP
Attn: Xxxxxxxx Xxxxxxx,
Esq.
000 Xxxxx 0 Xxxxx, Xxxxx
000
Xxxxxxxxx, Xxx Xxxxxx
00000
Phone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Secured Party:
Pak-It, LLC
Attn:
Xxxxxxxx X. Xxxxx
000 Xxxxxx
Xxxxxx
Xxxxxxxxxx, XX
00000
Phone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to (which shall not
constitute notice):
Macfarlane,
Xxxxxxxx & XxXxxxxx, P.A.
000 Xxxxx
Xxxxxx, Xxxxx 000
Xxxxxxxxxx,
XX 00000
Attn: J.
Xxxx Xxxxxxx, Esq.
Phone:
(000) 000-0000
Facsimile:
(000) 000-0000
If to the
Escrow Agent:
Xxxxxx
& Xxxxxx, LLP
000 Xxxxx
0 Xxxxx, Xxxxx 000
Xxxxxxxxx,
XX 00000
tel.:(000)
000-0000
fax.:(000) 000-0000
11. Miscellaneous
(a) The
provisions of this Agreement may be waived, altered, amended or supplemented, in
whole or in part, only by a writing signed by all of the parties
hereto. This Agreement and the rights and obligations hereunder of
the parties may not be assigned except with the prior written consent of the
other parties hereto.
(b) The
covenants and provisions of this Agreement by or for the benefit of the
Affiliates, the Investor or the Escrow Agent shall bind and inure to the benefit
of their respective successors and permitted assigns hereunder.
(c) Governing
Law. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of New York, without reference
to the choice of law provisions thereof.
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(d) This
Agreement may be executed by each of the parties hereto by facsimile signature
and in any number of counterparts, each of which counterpart, when so executed
and delivered, shall be deemed to be an original and all such counterparts shall
together constitute one and the same agreement.
(e) The
headings contained in this Agreement are for convenience of reference only and
shall have no effect on the interpretation or operation hereof.
(f) The
Company shall be intended third party beneficiaries of this Agreement to the
same extent as if they were parties hereto, and shall be entitled to enforce the
provisions hereof.
(g) If
any term or other provision of this Agreement is invalid, illegal or incapable
of being enforced by any rule of law, or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of this Agreement is not affected in
any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the terms of this
Agreement remain as originally contemplated to the fullest extent
possible.
[The remainder of the page is
intentionally left blank]
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IN WITNESS WHEREOF, each of
the parties hereto has executed this Agreement by the authorized officer named
below.
SECURED
PARTY:
PAK-IT
MEMBERS’ TRUST
THE
COMPANY:
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By:
/s/ Xxxx Bordnuik
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Name:
Xxxx Bordnuik
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Its:
CEO
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Dated: 09/30/2009
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XXXX
XXXXXXXXX:
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/s/ Xxxx
Bordnuik
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Name: Xxxx
Bordnuik
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Dated: 09/30/09
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ESCROW
AGENT
XXXXXX
& XXXXXX, LLP
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By:
/s/ Xxxxx Xxxxxx
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Name:
Xxxxx Xxxxxx
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Title:
Partner
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Dated: 09/30/09
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SCHEDULE
I
Pledge
Escrow Agent Fees
The
Escrow Agent shall charge, exclusive of any expenses incurred as the Escrow
Agent, a total amount of $500 for the services provided in this Pledge Escrow
Agreement. This amount shall be paid upon the distribution of the
Escrow Property.
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