COMMON STOCK PURCHASE AGREEMENT
Exhibit
10.3
AGREEMENT
entered
into as of the 14th
day of
November, 2007, by and between Verbena
Pharmaceuticals, Inc., a Delaware corporation with an address at 000
Xxxxxxxxxxxx Xxxxx, Xxxxxxxxxx, XX 00000 (the “Company”) and Genesis Holdings,
Inc., a Texas corporation with an address at 00000 Xxx Xxxxx Xxxxxx, Xxxxx
000,
Xxx Xxxxxxx, XX 00000 (the “Purchaser”).
WHEREAS,
the Purchaser desires to purchase, and the Company desires to sell, an aggregate
of 2,500,000 shares (the “Shares”) of the Company’s common stock, par value
$.0001 per share (the “Common Stock”) upon the terms and conditions
hereof.
NOW,
THEREFORE, in consideration of the premises and the mutual agreements herein
contained, the Purchaser and the Company hereby agree as follows:
SECTION
1: SALE OF THE SHARES
1.1
Sale
of the Shares.
Subject
to the terms and conditions hereof, the Company will sell and deliver to the
Purchaser and the Purchaser will purchase from the Company, upon the execution
and delivery hereof, the Shares 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 the Company 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 Company 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.
Upon issuance the Shares, as well as blank stock powers with respect thereto,
will be deposited with Xxxxxxx Xxxxxxxxx & Xxxxx LLP, as escrow agent under
an Escrow Agreement in the form annexed hereto as Exhibit B, with the terms
and
conditions of such Escrow Agreement being incorporated by reference herein
as if
made a part hereof.
SECTION
2: CLOSING DATE; DELIVERY
2.1
Closing
Date.
The
closing of the purchase and sale of the Shares hereunder (the “Closing”) shall
be held immediately following the execution and delivery of this
Agreement.
2.2
Delivery
at Closing.
At the
Closing, the Company will deliver to the Purchaser a stock certificate
registered in the Purchaser’s name, representing the number of Shares to be
purchased by Purchaser hereunder, against payment of the purchase price therefor
as indicated above. At the Closing, the Purchaser shall pay the Cash Portion
of
the Purchase Price and deliver the Note. Prior to Closing, all outstanding
indebtedness of the Company to Xxxxx Xxxxx shall have been canceled or converted
to equity. Prior to Closing, Issuer shall have increased the size of its Board
of Directors to two, Xxxxxx Xxxxx shall have been elected to fill the vacancy
created thereby, and Purchaser shall have received the resignation of Xxxxx
Xxxxx as a director and received the resignation of Xxxxx Xxxxx as officer
effective upon the consummation of the sale of the Shares hereunder. Schedule
14F of the Securities and Exchange Commission shall have been duly filed and
mailed to the sole stockholder of the Company at least ten days prior to
Closing.
1
SECTION
3: REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER
The
undersigned Purchaser hereby represents, warrants to and covenants with the
Company as follows:
3.1
Transfer
of Shares.
The
Shares have not been registered under the Securities Act and cannot be sold
or
otherwise transferred without an effective registration or an exemption
therefrom, but may not be sold pursuant to the exemptions provided by Section
4(1) of the Securities Act or Rule 144 under the Securities Act, in accordance
with the letter from Xxxxxxx X. Xxxxx, Chief
of
the Office of Small Business Policy of the Securities and Exchange Commission’s
Division of Corporation Finance,
to Xxx
Worm of NASD Regulation, Inc., dated January 21, 2000. Purchaser agrees that
it
will not effect any direct or indirect transfer of the Shares, nor any right
or
option of any third party to acquire the Shares, until that certain Promissory
Note, of even date herewith, made by the Issuer in favor of Xxxxx Xxxxx, shall
be paid or canceled pursuant to the terms thereof.
3.2
Experience.
The
undersigned has such knowledge and experience in financial and business matters
that the undersigned is capable of evaluating the merits and risks of investment
in the Company and of making an informed investment decision. The undersigned
has adequate means of providing for the undersigned's current needs and possible
future contingencies and the undersigned has no need, and anticipates no need
in
the foreseeable future, to sell the Shares for which the undersigned subscribes.
The undersigned is able to bear the economic risks of this investment and,
consequently, without limiting the generality of the foregoing, the undersigned
is able to hold the Shares for an indefinite period of time and has sufficient
net worth to sustain a loss of the undersigned's entire investment in the
Company in the event such loss should occur. Except as otherwise indicated
herein, the undersigned is the sole party in interest as to its investment
in
the Company, and it is acquiring the Shares solely for investment for the
undersigned's own account and has no present agreement, understanding or
arrangement to subdivide, sell, assign, transfer or otherwise dispose of all
or
any part of the Shares subscribed for to any other person.
3.3
Investment;
Access to Data.
The
undersigned has carefully reviewed and understands the risks of, and other
considerations relating to, a purchase of the Common Stock and an investment
in
the Company. The undersigned has been furnished materials relating to the
Company, the private placement of the Common Stock or anything else that it
has
requested and has been afforded the opportunity to ask questions and receive
answers concerning the terms and conditions of the offering and obtain any
additional information which the Company possesses or can acquire without
unreasonable effort or expense. Representatives of the Company have answered
all
inquiries that the undersigned has made of them concerning the Company, or
any
other matters relating to the formation and operation of the Company and the
offering and sale of the Common Stock. The
undersigned has not been furnished any offering literature other than the
materials that the Company may have provided at the request of the undersigned;
and the undersigned has relied only on such information furnished or made
available to the undersigned by the Company as described in this Section. The
undersigned is acquiring the Shares for investment for the undersigned's own
account, not as a nominee or agent and not with the view to, or for resale
in
connection with, any distribution thereof. The undersigned acknowledges that
the
Company is a start-up company with no current operations, assets or operating
history, which may possibly cause a loss of Purchaser’s entire investment in the
Company.
3.4
Authorization.
(a)
This Agreement, upon execution and delivery thereof, will be a valid and binding
obligation of Purchaser, enforceable in accordance with its terms, subject
to
applicable bankruptcy, insolvency, reorganization and moratorium laws and other
laws of general application affecting enforcement of creditors' rights
generally.
(b)
The
execution, delivery and performance by Purchaser of this Agreement and
compliance therewith and the purchase and sale of the Shares will not result
in
a violation of and will not conflict with, or result in a breach of, any of
the
terms of, or constitute a default under, any provision of state or Federal
law
to which Purchaser is subject, or any mortgage, indenture, agreement,
instrument, judgment, decree, order, rule or regulation or other restriction
to
which the Purchaser is a party or by which the undersigned Purchaser is bound,
or result in the creation of any mortgage, pledge, lien, encumbrance or charge
upon any of the properties or assets of Purchaser pursuant to any such
term.
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3.5
Accredited
Investor.
Purchaser is an accredited investor as defined in Rule 501(a) of Regulation
D
under the Securities Act of 1933, as amended.
3.6
Proceedings
and Orders.
Neither
Purchaser, nor any director, officer, affiliate or 5% or greater shareowner
of
Purchaser, during the last ten years, was a party to a civil proceeding of
a
judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such laws,
or
has been convicted of fraud or felony charges or restricted in conducting any
business activity.
3.7
No
Binding Agreements or Other Commitments.
Purchaser has not entered into any binding letter of intent, agreement or any
other commitment with a third party involving, on behalf of or for the benefit
of the Company. Purchaser has made full disclosure to the Company with regard
to
any pending negotiations and understandings with third parties involving, on
behalf of or for the benefit of the Company.
SECTION
4: MISCELLANEOUS
4.1
Governing
Law.
This
Agreement shall be governed in all respects by the laws of the State of
Delaware, without regard to conflicts of laws principles thereof.
4.2
Survival.
The
terms, conditions and agreements made herein shall survive the Closing.
4.3
Successors
and Assigns.
Except
as otherwise expressly provided herein, the provisions hereof shall inure to
the
benefit of, and be binding upon, the successors, assigns, heirs, executors
and
administrators of the parties hereto.
4.4
Entire
Agreement; Amendment; Waiver.
This
Agreement constitutes the entire and full understanding and agreement between
the parties with regard to the subject matter hereof. Neither this Agreement
nor
any term hereof may be amended, waived, discharged or terminated, except by
a
written instrument signed by all the parties hereto.
4.5
Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall
be
an original, but all of which together, shall constitute one
instrument.
[Remainder
of Page Intentionally Left Blank]
3
IN
WITNESS WHEREOF,
the
undersigned have hereunto set their hands as of the day and year first above
written.
By:
/s/
Xxxxx
Xxxxx
Name:
Xxxxx Xxxxx
Title:
President
GENESIS
HOLDINGS, INC.
By:
/s/
Xxxxxx Xxxxx
Name:
Xxxxxx Xxxxx
Title:
Acting Chief Executive Officer
4
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
Genesis Holdings, Inc., a Texas corporation with an address at 00000 Xxx Xxxxx
Xxx., Xxx. 000, Xxx Xxxxxxx, Xxxxx 00000 (the “Borrower”), in
favor
of Verbena Pharmaceuticals Inc., a Delaware corporation having its offices
at
000 Xxxxxxxxxxxx Xxxxx, Xxxxxxxxxx, XX 00000 (the “Lender”).
FOR
VALUE RECEIVED,
the
receipt and sufficiency of which are hereby acknowledged by the delivery and
control 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 Lender has (i) completed a
transaction (a “Shell Merger”) pursuant to which the Lender 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 use its best efforts to cause the
Lender 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;
5
(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 Common Stock
Purchase 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,
and, at anytime thereafter, unless all principal and interest outstanding on
this Note shall have previously been paid, upon written notice from Xx. Xxxxx
Xxxxx to Lender, under the terms of that certain Promissory Note in favor of
Xx.
Xxxxx, dated as of the date hereof (the “Xxxxx Note”) and upon written notice to
the escrow agent under the Escrow Agreement, Borrower immediately shall return
to Lender the two million five hundred thousand (2,500,000) shares of Common
Stock then held in escrow in exchange for the cancellation of this Note, and
Lender shall receive from the escrow agent and issue, for a nominal purchase
price equal to the par value thereof, two million five hundred thousand
(2,500,000) shares of Common Stock to Xx. Xxxxx (“Xxxxx Shares”). 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.
6
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.
Until
this Note is paid in full, Lender 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 Lender shall
not effect any forward or reverse stock split, recapitalization, reorganization
or the like prior to completion of a Shell Merger without Borrower’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 its 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.
7
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:
Verbena
Pharmaceuticals Inc.
________________________________________________
By:
Xxxxx
Xxxxx, President
Borrower:
Genesis
Holdings, Inc.
_______________________________________________
By:
Xxxxxx Xxxxx, Acting Chief Executive Officer
8
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.
9
(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.
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.
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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.
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.
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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]
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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
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