FUNDS ESCROW AGREEMENT

This Agreement (this “Agreement”) is dated as of the 7th day of July 2005 among
360 Global Wine Company, a Nevada corporation (the "Company"), Laurus Master
Fund, Ltd. (the "Purchaser"), and Loeb & Loeb LLP (the "Escrow Agent"):

W I T N E S S E T H:

WHEREAS, the Purchaser has advised the Escrow Agent that (a) the Company and the
Purchaser have entered into a Security and Purchase Agreement (the "Security
Agreement") for the sale by the Company to the Purchaser of a secured
convertible minimum borrowing note (the "Minimum Borrowing Note"), a secured
revolving note (the “Revolving Note”) and secured convertible term note (the
“Term Note”), (b) the Company has issued to the Purchaser a common stock
purchase warrant (the “Warrant”) in connection with the issuance of the Term
Note, the Minimum Borrowing Note and the Revolving Note, (c) the Company has
issued to the Purchaser an option (the “Option”) in connection with the issuance
of the Term Note, the Minimum Borrowing Note and the Revolving Note and (d) the
Company and the Purchaser have entered into a Registration Rights Agreement
covering the registration of the Company’s common stock underlying the Minimum
Borrowing Note, the Term Note and the Warrant (the “Registration Rights
Agreement”);

WHEREAS, the Company and the Purchaser wish the Purchaser to deliver to the
Escrow Agent copies of the Documents (as hereafter defined) and the Escrowed
Payment (as hereafter defined) to be held and released by Escrow Agent in
accordance with the terms and conditions of this Agreement; and

WHEREAS, the Escrow Agent is willing to serve as escrow agent pursuant to the
terms and conditions of this Agreement;

NOW THEREFORE, the parties agree as follows:

ARTICLE I

INTERPRETATION

1.1.

Definitions.  Whenever used in this Agreement, the following terms shall have
the meanings set forth below.

(a)

"Agreement" means this Agreement, as amended, modified and/or supplemented from
time to time by written agreement among the parties hereto.

(b)

"Closing Payment" means the closing payment to be paid to Laurus Capital
Management, LLC, the fund manager, as set forth on Schedule A hereto.

  

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(c)

“Disbursement Letter” means that certain letter delivered to the Escrow Agent by
each of the Purchaser and the Company setting forth wire instructions and
amounts to be funded at the Closing.

(d)

"Documents" means copies of the Disbursement Letter, the Security and Purchase
Agreement, the Term Note, the Minimum Borrowing Note, the Revolving Note, the
Warrant, the Option and the Registration Rights Agreement.

(e)

“Escrowed Payment" means $ 34,500,000 .

1.2.

Entire Agreement.  This Agreement constitutes the entire agreement among the
parties hereto with respect to the matters contained herein and supersedes all
prior agreements, understandings, negotiations and discussions of the parties,
whether oral or written.  There are no warranties, representations and other
agreements made by the parties in connection with the subject matter hereof
except as specifically set forth in this Agreement.

1.3.

Extended Meanings.  In this Agreement words importing the singular number
include the plural and vice versa; words importing the masculine gender include
the feminine and neuter genders.  The word "person" includes an individual, body
corporate, partnership, trustee or trust or unincorporated association,
executor, administrator or legal representative.

1.4.

Waivers and Amendments.  This Agreement may be amended, modified, superseded,
cancelled, renewed or extended, and the terms and conditions hereof may be
waived, in each case only by a written instrument signed by all parties hereto,
or, in the case of a waiver, by the party waiving compliance.  Except as
expressly stated herein, no delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any waiver on the part of any party of any right, power or privilege hereunder
preclude any other or future exercise of any other right, power or privilege
hereunder.

1.5.

Headings.  The division of this Agreement into articles, sections, subsections
and paragraphs and the insertion of headings are for convenience of reference
only and shall not affect the construction or interpretation of this Agreement.

1.6.

Law Governing this Agreement; Consent to Jurisdiction.  THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.  With respect to any suit,
action or proceeding relating to this Agreement or to the transactions
contemplated hereby (“Proceedings”), each party hereto irrevocably submits to
the exclusive jurisdiction of the courts of the County of New York, State of New
York and the United States District court located in the county of New York in
the State of New York.  Each party hereto hereby irrevocably and unconditionally
(a) waives trial by jury in any Proceeding relating

 

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to this Agreement and for any related counterclaim and (b) waives any objection
which it may have at any time to the laying of venue of any Proceeding brought
in any such court, waives any claim that such Proceedings have been brought in
an inconvenient forum and further waives the right to object, with respect to
such Proceedings, that such court does not have jurisdiction over such party.
 As between the Company and the Purchaser, the prevailing party shall be
entitled to recover from the other party its reasonable attorneys’ fees and
costs.  In the event that any provision of this Agreement is determined by a
court of competent jurisdiction to be invalid or unenforceable, then the
remainder of this Agreement shall not be affected and shall remain in full force
and effect.

1.7.

Construction.  Each party acknowledges that its legal counsel participated in
the preparation of this Agreement and, therefore, stipulates that the rule of
construction that ambiguities are to be resolved against the drafting party
shall not be applied in the interpretation of this Agreement to favor any party
against the other.

ARTICLE II

APPOINTMENT OF AND DELIVERIES TO THE ESCROW AGENT

2.1.

Appointment.  The Company and the Purchaser hereby irrevocably designate and
appoint the Escrow Agent as their escrow agent for the purposes set forth
herein, and the Escrow Agent by its execution and delivery of this Agreement
hereby accepts such appointment under the terms and conditions set forth herein.

2.2.

Copies of Documents to Escrow Agent.  On or about the date hereof, the Purchaser
shall deliver to the Escrow Agent copies of the Documents executed by the
Company to the extent it is a party thereto.

2.3.

Delivery of Escrowed Payment to Escrow Agent.  On or about the date hereof, the
Purchaser shall deliver to the Escrow Agent the Escrowed Payment.

2.4.

 Intention to Create Escrow Over the Escrowed Payment.  The Purchaser and the
Company intend that the Escrowed Payment shall be held in escrow by the Escrow
Agent and released from escrow by the Escrow Agent only in accordance with the
terms and conditions of this Agreement.

ARTICLE III

RELEASE OF ESCROW

3.1.

Release of Escrow.  Subject to the provisions of Section 4.2, the Escrow Agent
shall release the Escrowed Payment from escrow as follows:

(a)

Promptly following receipt by the Escrow Agent of (i) copies of the fully
executed Documents and this Agreement, (ii) the Escrowed Payment in immediately
available funds, (iii) joint written instructions ("Joint Instructions")
executed by the Company and the Purchaser setting forth the payment direction
instructions with respect to the Escrowed Payment and (iv) Escrow Agent’s verbal

 

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instructions from David Grin and/or Eugene Grin (each of whom is a director of
the Purchaser) indicating that all closing conditions relating to the Documents
have been satisfied and directing that the Escrowed Payment be disbursed by the
Escrow Agent in accordance with the Joint Instructions, then the Escrowed
Payment shall be deemed released from escrow and shall be promptly disbursed in
accordance with the Joint Instructions.  The Joint Instructions shall include,
without limitation, Escrow Agent’s authorization to retain from the Escrowed
Payment Escrow Agent’s fee for acting as Escrow Agent hereunder and the Closing
Payment for delivery to Laurus Capital Management, LLC in accordance with the
Joint Instructions.

(b)

Upon receipt by the Escrow Agent of a final and non-appealable judgment, order,
decree or award of a court of competent jurisdiction (a "Court Order") relating
to the Escrowed Payment, the Escrow Agent shall remit the Escrowed Payment in
accordance with the Court Order.  Any Court Order shall be accompanied by an
opinion of counsel for the party presenting the Court Order to the Escrow Agent
(which opinion shall be satisfactory to the Escrow Agent) to the effect that the
court issuing the Court Order is a court of competent jurisdiction and that the
Court Order is final and non-appealable.

3.2.

Acknowledgement of Company and Purchaser; Disputes.  The Company and the
Purchaser acknowledge that the only terms and conditions upon which the Escrowed
Payment are to be released from escrow are as set forth in Sections 3 and 4 of
this Agreement.  The Company and the Purchaser reaffirm their agreement to abide
by the terms and conditions of this Agreement with respect to the release of the
Escrowed Payment.  Any dispute with respect to the release of the Escrowed
Payment shall be resolved pursuant to Section 4.2 or by written agreement
between the Company and Purchaser.

ARTICLE IV

CONCERNING THE ESCROW AGENT

4.1.

Duties and Responsibilities of the Escrow Agent.  The Escrow Agent's duties and
responsibilities shall be subject to the following terms and conditions:

(a)

The Purchaser and the Company acknowledge and agree that the Escrow Agent (i)
shall not be required to inquire into whether the Purchaser, the Company or any
other party is entitled to receipt of any Document or all or any portion of the
Escrowed Payment; (ii) shall not be called upon to construe or review any
Document or any other document, instrument or agreement entered into in
connection therewith; (iii) shall be obligated only for the performance of such
duties as are specifically assumed by the Escrow Agent pursuant to this
Agreement; (iv) may rely on and shall be protected in acting or refraining from
acting upon any written notice, instruction, instrument, statement, request or
document furnished to it hereunder and believed by the Escrow Agent in good
faith to be genuine and to have been signed or presented by the proper person or
party, without being required to determine the authenticity or correctness of
any fact stated therein or the propriety or validity or the service thereof; (v)
may assume that

 

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any person purporting to give notice or make any statement or execute any
document in connection with the provisions hereof has been duly authorized to do
so; (vi) shall not be responsible for the identity, authority or rights of any
person, firm or company executing or delivering or purporting to execute or
deliver this Agreement or any Document or any funds deposited hereunder or any
endorsement thereon or assignment thereof; (vii) shall not be under any duty to
give the property held by Escrow Agent hereunder any greater degree of care than
Escrow Agent gives its own similar property; and (viii) may consult counsel
satisfactory to Escrow Agent (including, without limitation, Loeb & Loeb, LLP or
such other counsel of Escrow Agent’s choosing), the opinion of such counsel to
be full and complete authorization and protection in respect of any action
taken, suffered or omitted by Escrow Agent hereunder in good faith and in
accordance with the opinion of such counsel.

(b)

The Purchaser and the Company acknowledge that the Escrow Agent is acting solely
as a stakeholder at their request and that the Escrow Agent shall not be liable
for any action taken by Escrow Agent in good faith and believed by Escrow Agent
to be authorized or within the rights or powers conferred upon Escrow Agent by
this Agreement.  The Purchaser and the Company hereby, jointly and severally,
indemnify and hold harmless the Escrow Agent and any of Escrow Agent's partners,
employees, agents and representatives from and against any and all actions taken
or omitted to be taken by Escrow Agent or any of them hereunder and any and all
claims, losses, liabilities, costs, damages and expenses suffered and/or
incurred by the Escrow Agent arising in any manner whatsoever out of the
transactions contemplated by this Agreement and/or any transaction related in
any way hereto, including the fees of outside counsel and other costs and
expenses of defending itself against any claims, losses, liabilities, costs,
damages and expenses arising in any manner whatsoever out the transactions
contemplated by this Agreement and/or any transaction related in any way hereto,
except for such claims, losses, liabilities, costs, damages and expenses
incurred by reason of the Escrow Agent’s gross negligence or willful misconduct.
 The Escrow Agent shall owe a duty only to the Purchaser and the Company under
this Agreement and to no other person.  

(c)

The Purchaser and the Company shall jointly and severally reimburse the Escrow
Agent for its reasonable out-of-pocket expenses (including counsel fees (which
counsel may be Loeb & Loeb LLP or such other counsel of the Escrow Agent’s
choosing) incurred in connection with the performance of its duties and
responsibilities hereunder, which shall not (subject to Section 4.1(b)) exceed
$2,500.  

(d)

The Escrow Agent may at any time resign as Escrow Agent hereunder by giving five
(5) business days prior written notice of resignation to the Purchaser and the
Company.  Prior to the effective date of resignation as specified in such
notice, the Purchaser and Company will issue to the Escrow Agent a Joint
Instruction authorizing delivery of the Documents and the Escrowed Payment to a
substitute Escrow Agent selected by the Purchaser and the Company.  If no
successor Escrow Agent is named by the Purchaser and the Company, the Escrow
Agent may apply to a court of competent jurisdiction in the State of New York
for appointment of a successor Escrow

 

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Agent, and deposit the Documents and the Escrowed Payment with the clerk of any
such court and/or otherwise commence an interpleader or similar action for a
determination of where to deposit the same.

(e)

The Escrow Agent does not have and will not have any interest in the Documents
and the Escrowed Payment, but is serving only as escrow agent, having only
possession thereof.  

(f)

The Escrow Agent shall not be liable for any action taken or omitted by it in
good faith and reasonably believed by it to be authorized hereby or within the
rights or powers conferred upon it hereunder, nor for action taken or omitted by
it in good faith, and in accordance with advice of counsel (which counsel may be
Loeb & Loeb, LLP or such other counsel of the Escrow Agent’s choosing), and
shall not be liable for any mistake of fact or error of judgment or for any acts
or omissions of any kind except to the extent any such liability arose from its
own willful misconduct or gross negligence.

(g)

This Agreement sets forth exclusively the duties of the Escrow Agent with
respect to any and all matters pertinent thereto and no implied duties or
obligations shall be read into this Agreement.

(h)

The Escrow Agent shall be permitted to act as counsel for the Purchaser or the
Company, as the case may be, in any dispute as to the disposition of the
Documents and the Escrowed Payment, in any other dispute between the Purchaser
and the Company, whether or not the Escrow Agent is then holding the Documents
and/or the Escrowed Payment and continues to act as the Escrow Agent hereunder.
 

(i)

The provisions of this Section 4.1 shall survive the resignation of the Escrow
Agent or the termination of this Agreement.

4.2.

Dispute Resolution; Judgments.  Resolution of disputes arising under this
Agreement shall be subject to the following terms and conditions:

(a)

If any dispute shall arise with respect to the delivery, ownership, right of
possession or disposition of the Documents and/or the Escrowed Payment, or if
the Escrow Agent shall in good faith be uncertain as to its duties or rights
hereunder, the Escrow Agent shall be authorized, without liability to anyone, to
(i) refrain from taking any action other than to continue to hold the Documents
and the Escrowed Payment pending receipt of a Joint Instruction from the
Purchaser and the Company, (ii) commence an interpleader or similar action, suit
or proceeding for the resolution of any such dispute; and/or (iii) deposit the
Documents and the Escrowed Payment with any court of competent jurisdiction in
the State of New York, in which event the Escrow Agent shall give written notice
thereof to the Purchaser and the Company and shall thereupon be relieved and
discharged from all further obligations pursuant to this Agreement.  The Escrow
Agent may, but shall be under no duty to, institute or defend any legal
proceedings which relate to the Documents and the Escrowed Payment.  The Escrow
Agent shall have the right to retain counsel if it becomes involved in any

 

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disagreement, dispute or litigation on account of this Agreement or otherwise
determines that it is necessary to consult counsel which such counsel may be
Loeb & Loeb LLP or such other counsel of the Escrow Agent’s choosing.

(b)

The Escrow Agent is hereby expressly authorized to comply with and obey any
Court Order.  In case the Escrow Agent obeys or complies with a Court Order, the
Escrow Agent shall not be liable to the Purchaser and the Company or to any
other person, firm, company or entity by reason of such compliance.

ARTICLE V

GENERAL MATTERS

5.1.

Termination.  This escrow shall terminate upon disbursement of the Escrowed
Payment in accordance with the terms of this Agreement or earlier upon the
agreement in writing of the Purchaser and the Company or resignation of the
Escrow Agent in accordance with the terms hereof.

5.2.

Notices.  All notices, requests, demands and other communications required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given one (1) day after being sent by telecopy (with copy delivered by overnight
courier, regular or certified mail):

If to the Company, to:

 

360 Global Wine Company

One Kirkland Ranch Road

Napa, California, 94558

Facsimile:  (707) 254-7258

With a copy to:

Law Offices of Louis E. Taubman, P.C.
225 Broadway, Suite 1200
New York, New York 10007
Attention:Louis E. Taubman, Esq.
Facsimile:212-202-6380

(b)If to the Purchaser, to:

 

LAURUS MASTER FUND, LTD.
M&C Corporate Services Limited, P.O. Box 309 GT, Ugland

House, South Church Street, George Town, Grand Cayman,

Cayman Islands, Fax: 345-949-8080

 

(c)

If to the Escrow Agent, to:

 

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Loeb & Loeb LLP
345 Park Avenue
New York, New York 10154
Fax:  (212) 407-4990

Attention:  Scott J. Giordano, Esq.

or to such other address as any of them shall give to the others by notice made
pursuant to this Section 5.2.

5.3.

Interest.  The Escrowed Payment shall not be held in an interest bearing account
nor will interest be payable in connection therewith.

5.4.

Assignment; Binding Agreement.  Neither this Agreement nor any right or
obligation hereunder shall be assignable by any party without the prior written
consent of the other parties hereto.  This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective legal
representatives, successors and assigns.

5.5.

Invalidity.  In the event that any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid,
illegal, or unenforceable in any respect for any reason, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be in any way impaired thereby,
it being intended that all of the rights and privileges of the parties hereto
shall be enforceable to the fullest extent permitted by law.

5.6.

Counterparts/Execution.  This Agreement may be executed in any number of
counterparts and by different signatories hereto on separate counterparts, each
of which, when so executed, shall be deemed an original, but all such
counterparts shall constitute but one and the same agreement.  This Agreement
may be executed by facsimile transmission.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date and year first above written.

COMPANY:

360 GLOBAL WINE COMPANY

By:_________________________________

Name:

Title:

PURCHASER:

LAURUS MASTER FUND, LTD.

By:_________________________________
Name:
Title:

ESCROW AGENT:

LOEB & LOEB LLP

By:_________________________________
Name:
Title:

 

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SCHEDULE A TO FUNDS ESCROW AGREEMENT

PURCHASER

PRINCIPAL NOTE AMOUNT

LAURUS MASTER FUND, LTD.,
M&C Corporate Services Limited, P.O. Box 309 GT, Ugland House, South Church
Street, George Town, Grand Cayman, Cayman Islands, Fax: 345-949-8080

Term Note in an aggregate principal amount of $ 34,500,000

Minimum Borrowing Note in an aggregate principal amount of $ 500,000 ; and

Revolving Note in an aggregate principal amount of $3,000,000

TOTAL

$ 37,500,000

FUND MANAGER

CLOSING PAYMENT

LAURUS CAPITAL MANAGEMENT, L.L.C.

825 Third Avenue, 14th Floor

New York, New York 10022

Fax: 212-541-4434

Closing payment payable in connection with investment by Laurus Master Fund,
Ltd. for which Laurus Capital Management, L.L.C. is the Manager.

TOTAL

$ 1,242,000

WARRANTS

WARRANT RECIPIENT

WARRANTS IN CONNECTION WITH OFFERING

LAURUS MASTER FUND, LTD.

M&C Corporate Services Limited, P.O. Box 309 GT, Ugland House, South Church
Street, George Town, Grand Cayman, Cayman Islands, Fax: 345-949-8080

Warrant execisable into 25,000,000 shares of common stock of the Company
issuable in connection with the Minimum Borrowing Note, the Term Note and the
Revolving Note.

TOTAL

Warrants exercisable into 25,000,000 shares of common stock of the Company

OPTIONS

OPTION RECIPIENT

OPTIONS IN CONNECTION WITH OFFERING

LAURUS MASTER FUND, LTD.

M&C Corporate Services Limited, P.O. Box 309 GT, Ugland House, South Church
Street, George Town, Grand Cayman, Cayman Islands, Fax: 345-949-8080

Option execisable into 16,492,436 shares of common stock of the Company issuable
in connection with the Minimum Borrowing Note, the Term Note and the Revolving
Note.

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TOTAL

Options exercisable into 16,492,436 shares of common stock of the Company

 

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