ESCROW AGREEMENT
This
Escrow Agreement (the “Agreement”) is dated as of February 13, 2006, by and
between Bluestar Health, Inc.,
a
Colorado corporation (the
“Company” or “Bluestar”), Gold Leaf Homes, Inc., a Texas corporation (“Gold
Leaf”), Xxxxxx Xxxxxxx, an individual (“Xxxxxxx”), Xxx Xxxxxx, an individual and
the sole shareholder of Gold Leaf (“Xxxxxx”) and The Lebrecht Group, APLC (the
“Agent”). Each of the above may be referred to as a “Party” and collectively as
the “Parties.”
|
I.
|
Escrow
|
|
1.01
|
Appointment
and Acknowledgment of Escrow
Agent.
|
Bluestar,
Gold Leaf, Xxxxxxx and Xxxxxx hereby appoint the Agent, and the Agent hereby
agrees to serve, as Escrow Agent pursuant to the terms of this Agreement. The
Agent acknowledges, or upon its receipt will acknowledge, receipt of the
following:
(a) On
the
date hereof, Bluestar shall deliver to the Agent Thirty Seven Million
(37,000,000) shares of its common stock (the “Asset Purchase Shares”), issued in
the name of Gold Leaf and accompanied by an irrevocable stock power with
signature medallion guaranteed sufficient for the transfer thereof, pursuant
to
that certain Asset Purchase Agreement dated February 13, 2006 (the “Asset
Purchase Agreement”), a copy of which is attached hereto as Exhibit
A;
and
(b) On
or
before the date hereof, Xxxxxxx shall deliver to the Agent Two Hundred Fifty
Thousand (250,000)
shares
of common
stock of
Bluestar (the “Xxxxxxx Shares”),
issued
in the name of Gold Leaf and accompanied by an irrevocable stock power with
signature medallion guaranteed sufficient for the transfer thereof, pursuant
to
that certain Transitional Agreement dated February 13, 2006 (the “Transitional
Agreement”), a copy of which is attached hereto as Exhibit
B.
The
properties described in Sections 1.01(a) and 1.01(b) shall collectively be
referred to as the “Escrowed Property.” If the Escrowed Property includes
property on which dividends are paid, on which interest is earned, or to which
other accretions are added, then the dividends, interest, and/or accretions
will
be sent directly to the registered holder of the Escrowed Property. If the
Escrowed Property consists of stock, the registered holder shall exercise all
rights and privileges of a stockholder with respect to the shares deposited
and
held pursuant to this Agreement.
|
1.02
|
Operation
of Escrow.
|
The
Parties hereto agree that the escrow created by this Agreement (the “Escrow”)
shall operate as follows:
(a) on
or
after April 10, 2006, both Xxxxxxx and Gold Leaf will send written confirmations
and valid supporting documentation concerning and upon the fulfillment of each
of Gold Leaf’s obligations under the Asset Purchase Agreement, the Transitional
Agreement and the obligations set forth in Exhibit
C
(the
“Obligations”); and
Page
1
of 11
(b) if
the
Agent does not receive said written confirmations and valid supporting
documentation within 10 days following its due date, the Agent will send written
notice to Gold Leaf regarding its failure to perform. If Gold Leaf fails to
cure
its nonperformance or defective performance within 30 days following receipt
of
such notice, the Agent will deliver the Asset Purchase Shares to Xxxxxxx;
and
(c) upon
receipt by the Agent of all written confirmations and valid supporting
documentation demonstrating fulfillment of the Obligations, the Agent will
deliver the Asset Purchase Shares to Gold Leaf; and
(d) upon
receipt of the Initial Payment of the Purchase Price and each of the Subsequent
Payments of the Purchase Price, as those terms are defined in the Transitional
Agreement, the Agent will deliver to Gold Leaf the percentage of Xxxxxxx
Shares that corresponds to the percentage of the Purchase Price represented
by
such payment.
|
1.03
|
Further
Provisions Relating to the Escrow.
|
(a) Distributions
by the Agent in accordance with the terms of this Agreement shall operate to
divest all right, title, interest, claim, and demand, either at law or in
equity, of any party to this Agreement (other than the distributee) in and
to
the Escrowed Property distributed and shall be a perpetual bar both at law
and
in equity with respect to such distributed Escrowed Property against the parties
to this Agreement and against any person claiming or attempting to claim such
distributed escrowed property from, through, or under such party.
(b) Bluestar,
Gold Leaf, Xxxxxxx and Xxxxxx, jointly and severally, agree to reimburse the
Agent for the Agent’s reasonable fees and other expenses (including legal fees
and expenses) incurred by the Agent in connection with its duties
hereunder.
(c) Bluestar,
Gold Leaf, Xxxxxxx and Xxxxxx, jointly and severally, agree to indemnify and
hold harmless the Agent against and in respect of any and all claims, suits,
actions, proceedings (formal or informal), investigations, judgments,
deficiencies, damages, settlements, liabilities, and legal and other expenses
(including legal counsel fees and expenses of attorneys chosen by the Agent)
as
and when incurred and whether or not involving a third party arising out of
or
based upon any act, omissions, alleged act, or alleged omission by the Agent
or
any other cause, in any case in connection with the acceptance of, or the
performance or nonperformance by the Agent of, any of the Agent’s duties under
this Agreement, except as a result of the Agent’s bad faith or gross negligence.
The Agent shall be fully protected by acting in reliance upon any notice,
advice, direction, other document, or signature believed by the Agent to be
genuine, by assuming that any person purporting to give the Agent any notice,
advice, direction, or other document in accordance with the provisions hereof,
in connection with this Agreement, or in connection with the Agent’s duties
under this Agreement, has been duly authorized so to do, or by acting or failing
to act in good faith on the advice of any counsel retained by the Agent. The
Agent shall not be liable for any mistake of fact or of law or any error of
judgment, or for any act or any omission, except as a result of the Agent’s bad
faith or gross negligence. If any of the Escrowed Property is represented by
stock certificates, the Agent shall not be liable if the Agent submits all
or a
portion of the Escrowed Property to be broken into smaller denominations to
the
appropriate transfer agent, and such transfer agent fails to return properly
that portion of the Escrowed Property to the Agent which such transfer agent
was
instructed to return.
Page 2
of 11
(d) The
Agent
makes no representation as to the validity, value, genuineness, or the
collectibility of any security or other document or instrument held by or
delivered to the Agent.
(e) The
Agent
shall have no duties or responsibilities except those expressly set forth
herein. The Parties hereto agree that the Agent will not be called upon to
construe any contract or instrument. The Agent shall not be bound by any notice
of a claim, or demand with respect thereto, or any waiver, modification,
amendment, termination, cancellation, or revision of this Agreement, unless
in
writing and signed by the other Parties hereto and received by the Agent and,
if
the Agent’s duties as Escrow Agent hereunder are affected, unless the Agent
shall have given its prior written consent thereto. The Agent shall not be
bound
by any assignment by Bluestar, Gold Leaf, Xxxxxxx and Xxxxxx of their rights
hereunder unless the Agent shall have received written notice thereof from
the
assignor. The Agent is authorized to comply with and obey laws, rules,
regulations, orders, judgments, and decrees of any governmental authority,
court, or other tribunal. If the Agent complies with any such law, rule,
regulation, order, judgment, or decree, the Agent shall not be liable to any
of
the Parties hereto or to any other person even if such law, rule, order,
regulation, judgment, or decree is subsequently reversed, modified, annulled,
set aside, vacated, found to have been entered without jurisdiction, or found
to
be in violation of or beyond the scope of a constitution or a law.
(f) If
the
Agent shall be uncertain as to the Agent’s duties or rights hereunder, shall
receive any notice, advice, direction, or other document from any other party
with respect to the Escrowed Property which, in the Agent’s opinion, is in
conflict with any of the provisions of this Agreement, or should be advised
that
a dispute has arisen with respect to the payment, ownership, or right of
possession of the Escrowed Property or any part thereof, or the property to
be
exchanged for the Escrowed Property (or as to the delivery, non-delivery, or
content of any notice, advice, direction, or other document), the Agent shall
be
entitled, without liability to anyone, to refrain from taking any action other
than to use the Agent’s reasonable efforts to keep safely the Escrowed Property
until the Agent shall be directed otherwise in writing by both other parties
hereto or by an order, decree, or judgment of a court of competent jurisdiction
which has been finally affirmed on appeal or which by lapse of time or otherwise
is no longer subject to appeal (a “Final Judgment”), but the Agent shall be
under no duty to institute or to defend any proceeding, although the Agent
may,
in the Agent’s discretion and at the expense of Bluestar, Gold Leaf, Xxxxxxx and
Xxxxxx as provided in Section 1.03(c), institute or defend such
proceedings.
Page 3
of 11
(g) The
Agent
(and any successor escrow agent or agents) reserves the right to resign as
the
Escrow Agent at any time, provided fifteen (15) days’ prior written notice is
given to the other parties hereto, and provided further that a mutually
acceptable successor Escrow Agent(s) is named within such fifteen (15) day
period. The Agent may, but is not obligated to, petition any court in the State
of California having jurisdiction to designate a successor Escrow Agent. The
resignation of the Agent (and any successor escrow agent or agents) shall be
effective only upon delivery of the Escrowed Property to the successor escrow
agent(s). The Parties reserve the right to jointly remove the Escrow Agent
at
any time, provided fifteen (15) days’ prior written notice is given to the
Escrow Agent. If no successor Escrow Agent has been appointed and has accepted
the Escrowed Property within fifteen (15) days after the Notice is sent, all
responsibilities of the Agent hereunder shall, nevertheless, cease. The Agent’s
sole responsibility thereafter shall be to use the Agent’s reasonable efforts to
keep safely the Escrowed Property and to deliver the Escrowed Property as may
be
directed in writing by both of the other parties hereto or by a Final Judgment.
Except as set forth in this Section 1.03(g), this Agreement shall not otherwise
be assignable by the Agent without the prior written consent of the other
parties hereto.
(h) Bluestar,
Gold Leaf, Xxxxxxx and Redmon authorize the Agent, if the Agent is threatened
with litigation or is sued, to interplead all interested parties in any court
of
competent jurisdiction and to deposit the Escrowed Property with the clerk
of
that court.
(i)
The
Agent’s responsibilities and liabilities hereunder, except as a result of the
Agent’s own bad faith or gross negligence, will terminate upon the delivery by
the Agent of all the Escrowed Property under any provision of this
Agreement.
(j)
As
consideration for acting as escrow agent hereunder, Bluestar shall pay, in
advance and as a condition precedent to the establishment of the Escrow pursuant
to the terms of this Agreement, a fee of $10,000. This fee shall be deemed
to
have been earned in full by the Agent upon establishment of the Escrow, and
shall not be subject to pro-ration or other setoff in the event the Escrow
is
terminated by any party. In the event the term of the Escrow goes beyond 12
months then in such event Bluestar and Agent shall mutually agree upon what
additional amount shall be paid to Agent at the end of the 12 month period.
|
II.
|
Miscellaneous
|
|
2.01
|
Further
Action.
|
At
any
time and from time to time, Bluestar, Gold Leaf, Xxxxxxx and Xxxxxx each agrees,
at its own expense, to take such actions and to execute and deliver such
documents as may be reasonably necessary to effectuate the purposes of this
Agreement. If any portion of the Escrowed Property consists of stock
certificates, Bluestar shall pay any transfer tax arising out of the placing
of
the Escrowed Property into the Escrow, the delivery of the Escrowed Property
out
of the Escrow, or the transfer of the Escrowed Property into the name of any
person or entity pursuant to the terms of this Agreement. The Agent shall have
no liability regarding transfer taxes even if one or both of the Parties hereto
fails to comply with the obligations set forth in the prior
sentence.
Page
4 of
11
|
2.02
|
Survival.
|
Subject
to Section 1.03(i), the covenants, agreements, representations, and warranties
contained in or made pursuant to this Agreement shall survive the delivery
by
the Agent of the Escrowed Property, irrespective of any investigation made
by or
on behalf of any party.
|
2.03
|
Modification.
|
This
Agreement sets forth the entire understanding of the parties with respect to
the
subject matter hereof, supersedes all existing agreements among them concerning
such subject matter, and (subject to Section 1.03(e)) may be modified only
by a
written instrument duly executed by each party.
|
2.04
|
Notices.
|
Any
notice, advice, direction, or other document or communication required or
permitted to be given hereunder shall be in writing and shall be mailed by
Federal Express, Express Mail, or similar overnight delivery or courier service
or delivered (in person or by facsimile) against receipt to the party to whom
it
is to be given at address of such party set forth below (or to such other
address as the party shall have furnished in writing in accordance with the
provisions of this Section 2.04) with a copy to each of the other parties
hereto:
|
If
to Gold Leaf:
|
Gold
Leaf Homes, Inc.
|
|
|
0000
XX 0000
|
||
|
Xxxxxxxx,
XX 00000
|
||
|
Attn:
Xxx Xxxxxx
|
||
|
Facsimile:
(000) 000-0000
|
||
|
If
to
Bluestar:
|
||
|
00000
Xxxxxxxxx Xxxxxxx
|
||
|
Xxxxx
Xxxx, Xxxxx 00000
|
||
|
Attn:
Xxxxxx Xxxxxxx
|
||
|
Facsimile:
(281) 207- 5486
|
Page
5 of
11
|
If
to Xxxxxxx:
|
Xxxxxx
Xxxxxxx
|
||||
|
Facsimile:
(___)
|
|||||
|
|
|||||
|
If
to Xxxxxx:
|
Xxx
Xxxxxx
|
||||
|
Facsimile:
(___)
|
|||||
|
If
to Agent:
|
The
Lebrecht Group, APLC
|
||||
|
0000
Xxxxxxxx Xxxxx
|
|||||
|
Xxxxxx,
XX 00000
|
|||||
|
Attn:
Xxxxx X. Xxxxxxxx, Esq.
|
|||||
|
Facsimile
(000) 000-0000
|
|||||
Any
notice given by means permitted by this Section 2.04 shall be deemed given
at
the time of receipt thereof.
|
2.05
|
Waiver.
|
Any
waiver by any party of a breach of any provision of this Agreement shall not
operate as or be construed to be a waiver of any other breach of that provision
or of any breach of any other provision of this Agreement. The failure of a
party to insist upon strict adherence to any term of this Agreement on one
or
more occasions shall not be considered a waiver or deprive that party of the
right thereafter to insist upon strict adherence to that term or any other
term
of this Agreement. Any waiver must be in writing.
|
2.06
|
Binding
Effect.
|
Subject
to Section 1.03(g), the provisions of this Agreement shall be binding upon
and
inure to the benefit of Bluestar, Gold Leaf, Xxxxxxx and Xxxxxx and their
respective assigns, heirs, and personal representatives, and shall be binding
upon and insure to the benefit of the Agent and the Agent’s successors and
assigns.
|
2.07
|
No
Third Party Beneficiaries.
|
This
Agreement does not create, and shall not be construed as creating, any rights
enforceable by any person not a party to this Agreement (except as provided
in
Section 2.06).
|
2.08
|
Jurisdiction.
|
The
parties hereby irrevocably consent to the jurisdiction of the courts of the
State of California and of any federal court located in such State in connection
with any action or proceeding arising out of or relating to this Agreement,
and
document or instrument delivered pursuant to, in connection with, or
simultaneously with this Agreement, a breach of this Agreement or of any such
document or instrument, or the Escrowed Property.
Page
6 of
11
|
2.09
|
Separability.
|
This
entire Agreement shall be void if any provision of this Agreement other than
the
second and third sentences of Section 2.11 is invalid, illegal, unenforceable,
or inapplicable to any person or circumstance to which it is intended to be
applicable, except that the provisions of Section 1.03 shall
survive.
|
2.10
|
Headings.
|
The
headings in this Agreement are solely for convenience of reference and shall
be
given no effect in the construction or interpretation of this
Agreement.
|
2.11
|
Counterparts;
Governing Law.
|
This
Agreement may be executed in any number of counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument. An executed facsimile counterpart of this Agreement shall be
effective as an original. It shall be governed by and construed in accordance
with the laws of the State of California without giving effect to conflict
of
laws. Any action, suit, or proceeding arising out of, based on, or in connection
with this Agreement , any document or instrument delivered pursuant to, in
connection with, or simultaneously with this Agreement, any breach of this
Agreement or any such document or instrument, or any transaction contemplated
hereby or thereby may be brought only in the appropriate court in Orange County,
California, and each party covenants and agrees not to assert, by way of motion,
as a defense, or otherwise, in any such action, suit, or proceeding, any claim
that such party is not subject personally to the jurisdiction of such court,
that such party’s property is exempt or immune from attachment or execution,
that the action, suit, or proceeding is brought in an inconvenient forum, that
the venue of the action, suit, or proceeding is improper, or that this Agreement
or the subject matter hereof may not be enforced in or by such
court.
[signature
page to follow]
Page
7 of
11
IN
WITNESS WHEREOF, the Parties have duly executed this Agreement as of the date
first written above.
|
“Bluestar”
|
“Gold
Leaf”
|
|
|
Gold
Leaf Homes, Inc.,
|
||
|
a
Colorado corporation
|
a
Texas corporation
|
|
|
/s/
Xxxxxx Xxxxxxx
|
/s/
Xxx Xxxxxx
|
|
|
By: Xxxxxx
Xxxxxxx
|
By: Xxx
Xxxxxx
|
|
|
Its: President
|
Its: President
|
|
|
“Xxxxxxx”
|
“Xxxxxx”
|
|
|
/s/
Xxxxxx Xxxxxxx
|
/s/
Xxx Xxxxxx
|
|
|
Xxxxxx
Xxxxxxx, an individual
|
Xxx
Xxxxxx, an individual
|
|
|
“Agent”
|
||
|
The
Lebrecht Group, APLC
|
||
|
/s/
Xxxxx X. Xxxxxxxx
|
||
|
By: Xxxxx
X. Xxxxxxxx, Esq.
|
||
|
Its: President
|
||
Page
8 of
11
Exhibit
A
Asset
Purchase Agreement
Page
9 of
11
Exhibit
B
Transitional
Agreement
Page
10 of
11
Exhibit
C
The
Obligations
|
Obligation
|
Agreement
|
|
Xxxxxxx
shall receive a bonus of 3% of the revenues of each company or assets
acquired by the Company during the term of this Agreement, payable
quarterly in either (i) cash or (ii) common stock of the Company,
at
Consultant’s discretion. If paid in common stock of the Company, the stock
will be valued at the three (3) day average closing bid price of
the
Company’s common stock for the three (3) days immediately preceding the
end of the applicable quarter.
|
(1)
|
|
Xxxxxxx
will sell to Gold Leaf a total of two hundred fifty thousand (250,000)
shares of common stock of the Company (the “Shares”). As
consideration for the Shares, Gold Leaf shall pay the total purchase
price
of $150,000 (the “Purchase Price”). The
Purchase Price shall be paid $60,000 at the Closing (as defined in
the
Asset Purchase Agreement) (the “Initial Payment”), and the balance
payable, without interest, as follows: (a) $20,000 is due on the
first of
each month for four (4) consecutive months, beginning March 1, 2006,
and
(b) $10,000 is due on July 1, 2006 (the “Subsequent
Payments”).
|
(1)
|
|
The
Company will not issue shares
of its common stock that will be registered on a Form S-8 for a period
of
twelve (12) months without Xxxxxxx’x written consent.
|
(1)
|
|
The
Company will not issue preferred stock or effectuate a reverse stock
split
without Xxxxxxx written consent.
|
(1)
|
|
The
Company will increase revenues in 2006 by at least 10% over 2005
numbers.
|
(1)
|
|
The
Company will complete at least one acquisition of another company
in the
same or a related industry to the Company in 2006.
|
(1)
|
|
The
Company will remove the restrictive legend on any shares of Company
stock
owned by Xxxxxxx or his assigns as soon as possible in compliance
with
Federal and state securities laws and upon request by
Xxxxxxx.
|
(1)
|
|
The
Company will comply with the terms of that certain Convertible Promissory
Note dated February 13, 2006, issued to Xxxxxxx
|
(2)
|
|
(1)
|
Transitional
Agreement Dated February 13, 2006
|
|
(2)
|
Convertible
Promissory Note Dated February 13, 2006 in the Principal Amount of
$150,000
|
Page
11 of
11
