Exhibit 10.2

 

PLEDGE AND ESCROW AGREEMENT

 

THIS PLEDGE AND ESCROW AGREEMENT (this “Agreement”), dated as of December 3,
2015, by and among, Long Island Iced Tea Corp., a corporation duly organized and
validly existing under the laws of the State of Delaware (“Parent” or the
“Securing Party”); Brentwood LIIT Inc., a corporation duly organized and validly
existing under the laws of the State of Delaware (the “Lender”); and Graubard
Miller, as escrow agent (as defined below) (in such capacity, together with its
successors in such capacity, the “Escrow Agent,” and together with Securing
Party and the Secured Party (as defined below), the “Parties”).

 

A.           The Securing Party and the Lender are parties to a Credit and
Security Agreement dated as of November 23, 2015 (the “Credit Agreement”)
pursuant to which the Lender has agreed to lend to the Securing Party the sum of
up to $5,000,000 that is evidenced by a secured convertible promissory note (the
“Note”).

 

B.           To induce Lender (collectively, with any permitted assigns of the
Note, the “Secured Party”) to enter into the Credit Agreement, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Securing Party, the Secured Party and the Escrow Agent have
agreed as follows:

 

Section 1. Definitions. Terms used herein and not otherwise defined herein shall
have the meanings set forth in the Credit Agreement. The following terms have
the meanings ascribed to them below or in the Sections of this Agreement
indicated below:

 

“Collateral” shall have the meaning ascribed thereto in Section 3 hereof.

 

“Event of Default” shall have the meaning ascribed thereto in the Note.

 

“Pledged Stock” shall have the meaning ascribed thereto in Section 3(a) hereof.

 

“Secured Obligations” shall mean the “Obligations” as defined in the Credit
Agreement.

 

“Stock Collateral” shall mean, collectively, the Pledged Stock, together with
all other certificates, shares, securities, instruments, moneys, or other
property as may from time to time be pledged hereunder pursuant to Section 3(b)
hereof and the proceeds of and to any such property and, to the extent related
to any such property or such proceeds, all books, correspondence, credit files,
records, invoices and other papers.

 

Section 2. Representations and Warranties. The Securing Party represents and
warrants to the Secured Party and the Escrow Agent that:

 

2.01. It is the sole beneficial owner of the Collateral in which it granted a
security interest pursuant to the Credit Agreement, no lien exists or will exist
upon such Collateral at any time (and no right or option to acquire the same
exists in favor of any other person or entity).

 

2.02. The Pledged Stock represented by the certificates identified in Annex 1
hereto is, and all other Pledged Stock in which the Securing Party shall
hereafter grant a security interest pursuant to the Credit Agreement will be,
duly authorized, validly existing, fully paid and non-assessable and none of
such Pledged Stock is or will be subject to any contractual restriction, or any
restriction under the charter or by-laws of the issuer thereof upon the transfer
of such Pledged Stock.

 

   

 

 

2.03. The Pledged Stock identified in Annex 1 hereto, and the certificates, if
any, representing such capital stock or membership interests, constitute and
will continue to constitute all of the issued and outstanding shares of capital
stock or membership interests of any class of the issuer of such capital stock
or membership interests (all of which are registered in the name of the Securing
Party) and Annex 1 correctly identifies, as at the date hereof, the issuer, the
class and, if applicable, the par value of the shares or membership interests
comprising such Pledged Stock and the number of shares or amount of membership
interests represented by each such certificate. Upon the delivery to the Escrow
Agent of the Collateral and stock powers executed in blank by the Securing Party
and the execution and delivery by the Parties of this Agreement, the Secured
Party will have a first priority perfected security interest in the Collateral.

 

Section 3. Pledge and Transfer of Pledged Shares.

 

3.01. Pledge. The Securing Party, as collateral security for the prompt payment
in full when due (whether at stated maturity, by acceleration or otherwise) of
the Secured Obligations, has granted to Lender, pursuant to the Credit
Agreement, a security interest in all shares of capital stock, membership
interests, limited partnership interests and other equity securities of each of
its Subsidiaries, whether now owned or hereafter acquired (including, without
limitation, Parent’s membership interest, now owned or hereafter acquired, in
the Borrower) (the “Pledged Stock”), and all proceeds of the foregoing
(collectively, the “Collateral”). Simultaneously with the execution of this
Agreement, the Securing Party shall deliver to the Escrow Agent certificates
identified in Annex 1 hereto, accompanied by undated stock powers duly executed
in blank, and such stock certificates and Transfer Documents shall be held in
escrow by the Escrow Agent in accordance with this Agreement.

 

3.02. Special Provisions Relating to the Collateral.

 

(a) So long as no Event of Default shall have occurred and be continuing, the
Securing Party shall have the right to receive dividends and distributions in
accordance with Section 3.02(b), the right to exercise all voting and consensual
and all other rights and powers of ownership pertaining to the Stock Collateral
for all purposes not inconsistent with the terms of this Agreement, the Credit
Agreement, the Note or any other instrument or agreement referred to herein or
therein; and the Escrow Agent shall execute and deliver to the Securing Party or
cause to be executed and delivered to the Securing Party, as necessary, all such
proxies, powers of attorney, dividend and other orders, and all such
instruments, without recourse, as the Securing Party may reasonably request for
the purpose of enabling the Securing Party to exercise the rights and powers
that it is entitled to exercise pursuant to this Section 3.02(a).

 

(b) Unless and until an Event of Default has occurred and is continuing, the
Securing Party shall be entitled to receive, retain and use without limitation
all cash dividends on the Stock Collateral.

 

   

 

 

3.03. Delivery and Other Perfection. The Securing Party shall:

 

(a) if any of the shares, securities, moneys or properties required to be
pledged by the Securing Party under Section 3 hereof are received by the
Securing Party (other than any of such items the Securing Party is entitled to
retain and use pursuant to Section 3.02(b) hereof), the Securing Party shall
deliver to the Escrow Agent such shares, securities, moneys and properties so
received by the Securing Party (together with the certificates for any such
shares and securities duly endorsed in blank or accompanied by undated stock
powers duly executed in blank), all of which thereafter shall be held by the
Escrow Agent, pursuant to the terms of this Agreement, as part of the
Collateral;

 

(b) keep full and accurate books and records relating to the Collateral, and
stamp or otherwise mark such books and records in such manner as the Escrow
Agent may reasonably require in order to reflect the security interests granted
by the Credit Agreement; and

 

(c) permit representatives of the Escrow Agent, upon reasonable notice, at any
time during normal business hours to inspect and make abstracts from its books
and records pertaining to the Collateral and forward copies of any notices or
communications received by the Securing Party with respect to the Collateral,
all in such manner as the Escrow Agent may reasonably require.

 

Section 4. Release of Pledged Shares from Pledge. When all Secured Obligations
shall have been paid in full, the Securing Party shall give notice thereof to
the Escrow Agent, with copies to the Secured Party. This Agreement shall
terminate, and the Escrow Agent shall forthwith cause to be delivered, against
receipt but without any recourse, warranty or representation whatsoever, any
remaining Collateral and money received in respect thereof, together with any
stock powers, to the Securing Party, five business days after such notice has
been given; provided, however, that if the Secured Party, within such
five-business-day period, gives notice to the Escrow Agent (with copies to the
Securing Party) that it disputes that the Secured Obligations have been paid in
full, the Escrow Agent shall continue to retain the Collateral and money until
it receives a notice signed by the Secured Party and the Securing Party that
such dispute has been resolved and providing for the release of the Collateral
and money to the Securing Party. The Secured Party shall also execute and
deliver to the Securing Party upon such termination such other documentation as
shall be reasonably requested by the Securing Party to effect the termination
and release of the liens on the Collateral.

 

Section 5. Remedies. Upon and at any time after the occurrence of an Event of
Default, the Secured Party shall have the right to provide written notice of
such Event of Default (the “Default Notice”) to the Escrow Agent, with a copy to
the Securing Party. If, within five business days after the giving of such
notice by the Secured Party, Securing Party does not give notice to Escrow Agent
(with a copy to the Secured Party) that it objects to the Default Notice, this
Agreement shall terminate, and the Escrow Agent shall deliver to Secured Party
the Collateral held by the Escrow Agent hereunder, together with any stock
powers and any money received in respect thereof; provided, however, that if the
Securing Party, within such five-business-day period, gives notice to the Escrow
Agent (with a copy to the Secured Party) that it objects to the Default Notice,
the Escrow Agent shall continue to retain the Collateral and money until it
receives a notice signed by the Secured Party and the Securing Party that such
dispute has been resolved and providing for the release of the Collateral,
together with any stock powers and any money received in respect thereof, to the
Secured Party. Upon receipt of the Collateral, together with the stock powers
and any money received in respect thereof, the Secured Party shall have the
rights and remedies available to it under the Credit Agreement and the Note.

 

   

 

 

Section 6. Concerning the Escrow Agent.

 

6.01. The Escrow Agent undertakes to perform only such duties as are expressly
set forth herein and no implied duties or obligations shall be read into this
Agreement against the Escrow Agent. The Escrow Agent shall not be bound by any
modification, amendment, termination, cancellation, rescission or supersession
of this Agreement unless the same shall be in writing and signed jointly by the
Securing Party and Secured Party and agreed to by the Escrow Agent.

 

6.02. The Escrow Agent may act in reliance upon any writing or instrument or
signature which it, in good faith, believes to be genuine, may assume the
validity and accuracy of any statement or assertion contained in such a writing
or instrument, and may assume that any person purporting to give any writing,
notice, advice or instructions in connection with the provisions hereof has been
duly authorized to do so. The Escrow Agent shall not be liable in any manner for
the sufficiency or correctness as to form, manner, and execution, or validity of
any instrument deposited in this escrow, nor as to the identity, authority, or
right of any person executing the same; and its duties hereunder shall be
limited to the safekeeping of such certificates, monies, instruments, or other
document received by it as such escrow holder, and for the disposition of the
same in accordance with the written instruments accepted by it.

 

6.03. Escrow Agent’s duties are as a depositary only, and Escrow Agent shall not
be liable for any action taken or omitted by it in good faith and believed by it
to be authorized hereby, nor for action taken or omitted by it in accordance
with advice of counsel, and shall not be liable for any mistake of fact or error
of judgment or for any acts or omissions of any kind unless caused by wilful
misconduct or gross negligence. The Secured Party and the Securing Party hereby
agree, to defend and indemnify the Escrow Agent and hold it harmless from any
and all claims, liabilities, losses, actions, suits, or proceedings at law or in
equity, or any other expenses, fees, or charges of any character or nature which
it may incur or with which it may be threatened by reason of its acting as
Escrow Agent under this Agreement, and in connection therewith, to indemnify the
Escrow Agent against any and all expenses, including attorneys’ fees and costs
of defending any action, suit, or proceeding or resisting any claim (and any
costs incurred by the Escrow Agent pursuant to Sections 6.05 or 6.06 hereof),
except in either case for Escrow Agent’s own wilful misconduct or gross
negligence.

 

6.04. In the event of any disagreement hereunder resulting in adverse claims and
demands being made in connection with the Collateral held by the Escrow Agent,
the Escrow Agent shall be entitled, at its option, to refuse to comply with any
claims or demands on it as long as such disagreement shall continue, and in so
refusing, the Escrow Agent need make no delivery or other disposition of the
Collateral, and in so doing shall not be or become liable in any way or to any
person for its failure or refusal to comply with such conflicting or adverse
demands; and the Escrow Agent shall be entitled to continue to so refrain from
acting and to so refuse to act until: (i) it shall have received instructions
with respect to the disposition of the Collateral signed by the Secured Party
and Securing Party; or (ii) it shall have received appropriate evidence of the
resolution of such disagreement; or (iii) it shall have delivered the Collateral
into a court having jurisdiction of such claim.

 

   

 

 

6.05. If any of the parties shall be in disagreement about the interpretation of
this Agreement, or about the rights and obligations, or the propriety of any
action contemplated by the Escrow Agent hereunder, the Escrow Agent may, at its
sole discretion deposit the Collateral, together with any stock powers, with the
Clerk of the United States District Court of the Southern District of New York,
sitting in New York, New York, and, upon notifying all parties concerned of such
action, all liability on the part of the Escrow Agent shall fully cease and
terminate. The Escrow Agent shall be indemnified by the Securing Party and
Secured Party for all costs, including reasonable attorneys’ fees in connection
with the aforesaid proceeding, and shall be fully protected in suspending all or
a part of its activities under this Agreement until a final decision or other
settlement in the proceeding is received.

 

6.06. The Escrow Agent may consult with counsel of its own choice (and the
reasonable costs of such counsel shall be paid by the Securing Party and Secured
Party) and shall have full and complete authorization and protection for any
action taken or suffered by it hereunder in good faith and in accordance with
the opinion of such counsel. The Escrow Agent shall not be liable for any
mistakes of fact or error of judgment, or for any actions or omissions of any
kind, unless caused by its willful misconduct or gross negligence.

 

6.07. The Escrow Agent may resign upon ten (10) days’ written notice to the
parties in this Agreement. If a successor Escrow Agent is not appointed within
this ten (10) day period, the Escrow Agent may petition a court of competent
jurisdiction to name a successor.

 

6.08. The Secured Party hereby acknowledges that the Escrow Agent is counsel to
the Securing Party. The Secured Party agrees that in the event of any dispute
arising in connection with this Agreement or otherwise in connection with any
transaction or agreement contemplated and referred herein, the Escrow Agent
shall be permitted to continue to represent the Securing Party and the Secured
Party will not seek to disqualify such counsel and waives any objection Secured
Party might have with respect to the Escrow Agent acting as the Escrow Agent
pursuant to this Agreement. This Agreement shall not create any fiduciary duty
on Escrow Agent's part to the Secured Party or Securing Party.

 

6.09. This Section 6 shall survive any termination of this Agreement.

 

Section 7. Miscellaneous.

 

7.01. No Waiver. No failure on the part of the Escrow Agent or the Secured Party
to exercise, and no course of dealing with respect to, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise by the Escrow Agent or the
Secured Party of any right, power or remedy hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein are cumulative and are not exclusive of any remedies
provided by law.

 

   

 

 

7.02. Notices. All notices, requests, consents and demands hereunder shall be in
writing and telecopied, emailed or delivered by overnight delivery by a
nationally recognized express carrier to the intended recipient at its address
specified in Annex 2 and shall be deemed to be delivered on the date telecopied
or emailed or on the first business day following delivery to such express
carrier.

 

7.03. Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the respective successors and assigns of the Securing Party, the
Escrow Agent, the Secured Party and each holder of any of the Secured
Obligations.

 

7.04. Captions. The captions and section headings appearing herein are included
solely for convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.

 

7.05. Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart. Delivery by telecopier of an executed counterpart of this
Agreement shall be effective as delivery of an original executed counterpart
thereof.

 

7.06. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the law of the State of New York, without giving effect to
principles of conflicts of law.

 

7.07. Agents and Attorneys-in-Fact. The Escrow Agent may employ agents and
attorneys-in-fact in connection herewith and shall not be responsible for the
negligence or misconduct of any such agents or attorneys-in-fact selected by it
in good faith.

 

7.08. Severability. If any provision hereof is invalid and unenforceable in any
jurisdiction, then, to the fullest extent permitted by law, (a) the other
provisions hereof shall remain in full force and effect in such jurisdiction and
shall be liberally construed in favor of the Escrow Agent and the Secured Party
in order to carry out the intentions of the parties hereto as nearly as may be
possible and (b) the invalidity or unenforceability of any provision hereof in
any jurisdiction shall not affect the validity or enforceability of such
provision in any other jurisdiction.

 

   

 

 

7.09. Consent to Jurisdiction and Service of Process. The Secured Party hereby
irrevocably appoints the President of Brentwood LIIT Inc., at its office at
Level 2 Suite 9, 20 Augustus Terrace, Parnell, Auckland, New Zealand, and the
Securing Party hereby irrevocably appoint the Chief Executive Officer of Long
Island Iced Tea Corp., at its offices at 116 Charlotte Avenue, Hicksville, NY
11801, its lawful agent and attorney to accept and acknowledge service of any
and all process against it in any action, suit or proceeding arising out of or
relating to this Agreement or any of the transactions contemplated hereby and
upon whom such process may be served, with the same effect as if such Party were
a resident of the State of New York and had been lawfully served with such
process in such jurisdiction, and waives all claims of error by reason of such
service, provided that in the case of any service upon such agent and attorney,
the Party effecting such service shall also deliver a copy thereof to the other
Parties at the address and in the manner specified in Section 6.02. The Secured
Party and the Securing Party will enter into such agreements with such agents as
may be necessary to constitute and continue the appointment of such agents
hereunder. In the event that such agent and attorney resigns or otherwise
becomes incapable of acting as such, such Party will appoint a successor agent
and attorney in the City of New York, reasonably satisfactory to the other
Parties, with like powers. Each Party hereby irrevocably submits to the
exclusive jurisdiction of the United States District Court for the Southern
District of New York or any court of the State of New York located in the
Borough of Manhattan in the City of New York in any such action, suit or
proceeding arising out of or relating to this Agreement or any of the
transactions contemplated hereby, and agrees that any such action, suit or
proceeding shall be brought only in such court, provided, however, that such
consent to jurisdiction is solely for the purpose referred to in this Section
7.09 and shall not be deemed to be a general submission to the jurisdiction of
said courts or in the State of New York other than for such purpose. Each Party
hereby irrevocably waives, to the fullest extent permitted by law, any objection
that it may now or hereafter have to the laying of the venue of any such action,
suit or proceeding brought in such a court and any claim that any such action,
suit or proceeding brought in such a court has been brought in an inconvenient
forum. EACH PARTY HEREBY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF THIS AGREEMENT. As used in this
Section 7.09, the term “Party” includes the Escrow Agent, upon whom service of
process may be made by registered mail addressed to it at the address specified
in Section 7.02.

 

[Signature Page Follows]

 

   

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Pledge and Security
Agreement to be duly executed and delivered as of the day and year first above
written.

 

  LONG ISLAND ICED TEA CORP.       By: /s/ Philip Thomas     Name: Philip Thomas
    Title: CEO       BRENTWOOD LIIT INC.       By: /s/ Kerry Finnigan     Name:
Kerry Finnigan     Title: Director       GRAUBARD MILLER       By: /s/ Eric
Schwartz     Name: Eric Schwartz     Title: Partner

 

   

 

 

ANNEX 1

 

PLEDGED STOCK

 

Issuer*   Class   Certificate Nos.   Number of Shares Long Island Brand
Beverages LLC   Membership Interest   LIBBN001   100%               Cullen
Agricultural Holding Corp.   Common Stock   CAHCN001   100 shares

 

*The Securing Party hereby represent and warrant that the Subsidiaries of Cullen
Agricultural Holding Corp. do not, and will not during the term of the Credit
Agreement, conduct any business operations and do not, and will not during the
term of the Credit Agreement, hold any material assets or other property. The
Secured Party hereby waives the obligation of Securing Party to deposit
certificates representing equity interests of such Subsidiaries with the
Collateral Agent. If any such Subsidiary commences business operations or
holding any material assets or other property, the Securing Party will promptly,
and in any event with ten (10) business days, notify the Secured Party and
deposit certificates representing all of the equity interests of such Subsidiary
with the Collateral Agent.

 

   

 

 

ANNEX 2

 

NOTICE ADDRESSES

 

For the Securing Party and the Secured Party, as set forth in the Credit
Agreement.

 

For the Escrow Agent:

 

Graubard Miller
The Chrysler Builder
405 Lexington Avenue, 11th Floor
New York, New York 10174
Attention: Jeffrey M. Gallant, Esq.
Telephone: (212) 818-8800
Facsimile: (212) 818-8881
E-mail: jgallant@graubard.com