Exhibit 10.3
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WARRANT ESCROW AGREEMENT
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ESCROW AGREEMENT dated as of March 1, 2003, by and among GEM GLOBAL YIELD
FUND, a Nevis, West Indies entity ("GEM"), HERITAGE WORLDWIDE, INC., a Delaware
corporation ("HWWI"), MILO FINCANCE S.A., a Luxembourg limited liability entity
("MILO"), and Xxxxxxxx Xxxxx Singer & Xxxxxxxxx, LLP (the "Escrow Agent").
WHEREAS, GEM, HWWI and MILO are parties to an Acquisition Agreement dated
as of February 28, 2003, pursuant to which, among other things, HWWI has agreed
to issue warrants to purchase common stock of HWWI, part value $0.001 per share
("Common Stock"), to GEM on the terms and subject to the conditions set forth in
Section 12 of the Acquisition Agreement; and
WHEREAS, in accordance with the terms of the Acquisition Agreement, HWWI
has delivered the Warrants (as defined below) to the Escrow Agent, to be held in
escrow pursuant to this Agreement,
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, receipt of which is hereby acknowledged, the parties
hereby agree as follows:
1. Defined Terms. Capitalized terms used and not otherwise
defined in this Agreement shall have the meanings ascribed to such terms in the
Acquisition Agreement, but the Acquisition Agreement shall not be or be deemed
to be part of this Agreement.
2. Deposit of Warrants. Concurrently with the execution and delivery of
this Agreement, HWWI has deposited with the Escrow Agent ten (10) Warrants
("Warrants"), its Warrants Nos. W-01 to W-05 ("First Investment Warrants") and
its Warrants Nos. W-06 to W-10 ("Second Investment Warrants") (collectively the
"Warrants"). Each Warrant entitles the holder thereof to purchase 100,000 shares
of Common Stock of HWWI. The Escrow Agent hereby acknowledges receipt of the
Warrants.
3. Delivery of Warrants.
(a) Within five (5) business days following the First Expiration Date,
HWWI shall give notice to the Escrow Agent and to GEM, stating the aggregate
amount of investment made in HWWI on or before 5:00 p.m. of the First Expiration
Date ("First Investment").
(b) Within five (5) business days thereafter, the Escrow Agent shall
deliver to GEM, in numerical order, one Warrant for each full $100,000 of First
Investment.
(c) If the First Investment is equal to $500,000, then the Escrow
Agent shall deliver to GEM all the First Investment Warrants.
(d) If the First Investment exceeds $500,000, then the Escrow Agent
shall deliver to GEM all of the First Investment Warrants and, in numerical
order, one of the Second Investment Warrants for each additional full $100,000
of First Investment exceeding $500,000, retaining in the Escrow Agent's
possession the remaining Second Investment Warrants.
(e) If the First Investment is less than $500,000, then the Escrow
Agent shall deliver to GEM one of the First Investment Warrants for each full
$100,000 of First Investment and simultaneously shall deliver the balance of the
First Investment Warrants to HWWI.
(f) If there shall be no First Investment or a First Investment of
less than a full $100,000, then all the First Investment Warrants shall be
delivered to HWWI within five (5) business days following the First Expiration
Date.
(g) Within five (5) business days following the Second Expiration
Date, HWWI shall give notice to the Escrow Agent and to GEM stating the
aggregate investment amount made in HWWI between the First Expiration Date and
5:00 p.m. on the Second Expiration Date.
(h) Within five (5) business days thereafter the Escrow Agent shall
deliver to GEM one of the Second Investment Warrants for each full $100,000 of
Second Investment.
(i) If the Second Investment is equal to or exceeds $500,000, then the
Escrow Agent shall deliver to GEM all the Second Investment Warrants remaining
in the Escrow Agent's possession.
(j) If the Second Investment is less than $500,000, then the Escrow
Agent shall deliver to GEM, in numerical order, one of the Second Investment
Warrants for each full $100,000 of Second Investment and, simultaneously, shall
deliver the balance (if any) of the Second Investment Warrant to HWWI.
(k) If there shall be no Second Investment, or a Second Investment of
less than a full $100,000, then all the remaining Second Investment Warrants
shall be delivered to HWWI within five (5) business days following the Second
Expiration Date.
(l) Simultaneously with each delivery of Warrants, the Escrow Agent
shall give notice to HWWI and to GEM of the deliveries that it is making.
4. Terms and Conditions of the Escrow Agent's Duties.
(a) The duties and obligations of the Escrow Agent shall be determined
solely by the provisions of this Agreement and the Escrow Agent shall not be
liable except for the willfully wrongful or grossly negligent performance or
nonperformance of its duties as such are specifically set forth herein.
(b) HWWI and GEM, jointly and severally, shall (a) indemnify the
Escrow Agent for, and hold the Escrow Agent harmless against, any loss,
liability, cost or expense, including, but not limited to, reasonable attorney's
fees and disbursements except for the willfully wrongful or grossly negligent
acts or omissions on the part of the Escrow Agent in connection with such
performance; and (b) reimburse the Escrow Agent for all expenses incurred by the
Escrow Agent in the performance of its duties hereunder. Except for such
indemnity and reimbursement of costs and expenses, the Escrow Agent shall serve
without compensation.
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(c) The duties and obligations of the Escrow Agent shall be only such
as are herein specifically provided and are purely ministerial in nature. The
Escrow Agent shall be under no responsibility in respect of any of the Warrants
deposited with it other than to follow the express provisions of this Escrow
Agreement with respect thereto or as otherwise provided in subparagraph (h)
hereof. The Escrow Agent shall not be required to institute legal proceedings of
any kind.
(d) The Escrow Agent may rely on any notice, instruction, certificate,
request or other instrument which it believes to be genuine and to have been
signed or presented by a proper person or persons, and shall be fully protected
in acting in accordance therewith.
(e) In the event that the Escrow Agent shall be uncertain as to its
duties, or rights or obligations hereunder, or shall receive instructions from
any other party hereto with respect to the subject matter hereof, which, in its
opinion, are ambiguous or in conflict with any of the provisions of this
Agreement, the Escrow Agent shall be entitled to refrain from taking any action
(i) until it shall be directed otherwise in a writing jointly executed by HWWI
and GEM or (ii) until the Escrow Agent shall be directed otherwise by a judgment
or order of a court of competent jurisdiction.
(f) The Escrow Agent may seek the advice of legal counsel in the event
of any dispute or question as to (i) the construction of any of the provisions
of this Escrow Agreement or (ii) the Escrow Agent's duties hereunder and shall
incur no liability and shall be fully protected and indemnified in respect of
any action taken or omitted by the Escrow Agent in accordance with the opinion
of such counsel. For the sake of clarity, the fees and disbursements of such
counsel shall constitute a reimbursable expense under subparagraph 4(b) hereof.
(g) The parties acknowledge that the Escrow Agent in its capacity as a
law firm has acted as attorney for MILO, persons affiliated with MILO and their
respective shareholders, officers and directors, in connection with the
Acquisition Agreement and the transactions contemplated thereby, and will act as
counsel to HWWI, one or more of its subsidiaries and various officers and
directors of HWWI and such subsidiaries after the issuance of the Warrants and
their placement in escrow with the Escrow Agent. The appointment of the Escrow
Agent as such has been made notwithstanding such knowledge. The Escrow Agent, in
its capacity as a law firm, may continue to represent any or all of the
foregoing persons and entities for any and all purposes notwithstanding its
position as the Escrow Agent, including, without limitation, any disputes
between or among them, subject, in all cases to the Disciplinary Rules to which
it and the attorneys therein are subject, as attorneys, and to such other laws
as may (be) applicable.
(h) The Escrow Agent in its sole discretion may (a) resign as escrow
agent hereunder upon not less than thirty (30) days notice to the other parties
hereto, in which event the Escrow Agent's sole duty shall be to deliver the
Warrants then held by it to a substitute escrow agent jointly appointed by HWWI
and GEM, provided that such resignation shall not take effect until such a
substitute escrow agent has been so appointed; or (b) institute an interpleader
action in a court of competent jurisdiction and, in connection therewith,
deliver the Warrants then held by it to such court in accordance with the
procedures applicable therein.
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5. Termination. This Agreement shall terminate when the Escrow Agent
shall have delivered all the Warrants in accordance with the terms hereof, but
such termination shall not affect the Escrow Agent's right to indemnification as
provided herein.
6. Notices. All notices, requests, demands, consents, approvals and other
communications required or permitted to be given hereunder shall be in writing
and shall be given personally, sent by facsimile transmission or sent by prepaid
air courier to the party at its address or fax number given below its signature
to this Agreement. Any notice so given shall be deemed to have been given when
received. Any notice required to be given hereunder to a GEM may also be given
to the designated representative of GEM. A copy of any notice given hereunder
shall be simultaneously sent to counsel for the respective parties, as follows:
If to counsel for MILO and HWWI:
Xxxxxxxx Xxxxx Singer & Xxxxxxxxx, LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx X. Xxxxxx/Xxxxxxx Xxxxxxxx
Fax: (000) 000-0000
If to counsel for GEM:
Xxxxxx Gottbetter & Xxxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxx X. Xxxxxxxxxx, Esq.
Fax: (000) 000-0000
Any party hereto, or counsel for any party hereto, may change the address and/or
fax number for notices intended for it by giving a notice complying with this
paragraph to the parties hereto and to the other counsel, but such notice shall
not be effective until actually received.
7. Entire Agreement. This Agreement constitutes the entire agreement among
the parties with respect to the escrow of the Warrants, the terms and conditions
of the delivery thereof and the terms and conditions under which the Escrow
Agent shall act as escrow agent. No provision hereof may be amended, modified or
waived except in writing, executed by all parties hereto (including Escrow
Agent). This Agreement supercedes all prior negotiations, representations and
agreements made by and among the parties with respect to the subject matter
referred to above. The illegality of any provision of this Agreement shall not
render any other provision hereof illegal or otherwise effect the enforceability
of this Agreement.
8. Binding Effect; Benefits. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective heirs,
administrators, executors, successors and permitted assigns. Nothing in this
Agreement, express or implied, is intended to confer on any person other than
the parties hereto or their respective heirs, administrators, executors,
successors and permitted assigns, any rights, remedies, obligations or
liabilities.
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9. Governing Law and Jurisdiction. This Agreement shall be deemed to be a
contract made under the laws of the State of New York, and for all purposes
shall be governed by, and construed and enforced in accordance with, the laws of
the State of New York applicable to contracts to be made and performed entirely
within the state and no defense given or allowed by the laws of any other state
or country shall be interposed in any action or proceeding herein, unless such
defense is also given or allowed by the laws of the State of New York and not
waived hereby. The courts of the State of New York shall have exclusive
jurisdiction over all controversies or disputes relating to or arising out of
this Agreement, including without limitation, with respect to the
interpretation, performance or breach of this Agreement. The parties consent to
personal jurisdiction in the courts of such State and agree that process may be
served upon them in any such action by prepaid air courier with simultaneous
notice to such parties' counsel herein named, at the address set forth herein or
on the signature page hereto, or in any other manner permitted by New York law.
10. WAIVER OF TRIAL BY JURY. THE PARTIES HERETO, HAVING FULLY CONSIDERED
THE CONSEQUENCES THEREOF, DO HEREBY WAIVE TRIAL BY JURY IN ANY PROCEEDING,
CONTROVERSY OR DISPUTE RELATING TO OR ARISING OUT OF THIS AGREEMENT.
11. Assignment. Except as provided in paragraph 4(h) hereof, with respect
to the Escrow Agent, neither this Agreement nor any right hereunder or derived
herefrom, may be assigned by any party hereto without the prior written consent
of the other parties hereto (including, without limitation, the Escrow Agent).
12. No Delegation. Except as provided in paragraph 4(h) hereof with respect
to the Escrow Agent, no party hereto may delegate any duty or obligation arising
hereunder without the prior written consent of the other parties hereto.
13. Headings. Headings in this Agreement are for reference purposes only
and shall not be deemed to have any substantive effect.
14. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall be deemed to be one and the same instrument.
15. Facsimile Signatures. This Agreement may be signed by facsimile copy
and shall be valid and binding upon delivery by facsimile of a signed copy.
[Balance of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
HERITAGE WORLDWIDE, INC.
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Name:
Title:
Company Address:
Company Fax Number
MILO FINANCE S.A.
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Name:
Title:
Company Address:
Company Fax Number:
GEM GLOBAL YIELD FUND
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Name:
Title:
Company Address:
Company Fax Number:
XXXXXXXX XXXXX SINGER & XXXXXXXXX, LLP
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Name:
Firm Address: 000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Firm Fax Number: 0-000-000-0000
[SIGNATURE PAGE TO ESCROW AGREEMENT]
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