Document:

f8k061009ex10i_iconicbrnds.htm

    Exhibit
10.1

     

    TERMINATION
AGREEMENT

    TO
THE DISCOUNT FACTORING AGREEMENT

    AND
RELATED DOCUMENTS

    

    This
TERMINATION AGREEMENT (this “Termination
Agreement”), dated as of June 5, 2009, is entered into by and between
Harbrew Imports, Ltd., a New York corporation (the “Company”), Capstone
Business Credit, LLC (“CBC”) and Capstone
Capital Group I, LLC (“CCG”, and together
with CBC, the “Factor”).

    RECITALS

    

    WHEREAS, the Company and the
Factor entered into a Discount Factoring Agreement, dated January 22, 2007 (the
“Factoring
Agreement”), pursuant to which the Factor provided certain financing to
the Company; and

    

    WHEREAS, the Company and the
Factor entered into a certain Purchase Order Financing Agreement dated as of
January 22, 2007 (the “PO Financing
Agreement”, and with the Factoring Agreement, the “Financing
Agreements”) pursuant to which the Factor provided certain financing to
the Company; and

    

    WHEREAS, the Company and the
Factor are parties to a Settlement Agreement dated as of August 21, 2008, as
amended by that certain First Amendment to the Settlement Agreement dated as of
November 7, 2008, and as further amended by that certain Second Amendment to the
Settlement Agreement dated as of December __, 2008 (as amended, restated,
modified or supplemented and in effect from time to time, the “Settlement
Agreement”); and

    

    WHEREAS, pursuant to certain
Guarantees dated January 22, 2007, as reaffirmed by the Reaffirmation of
Guarantor dated October 31, 2007, and further reaffirmed in the First Amendment
to the Settlement Agreement and in the Second Amendment to the Settlement
Agreement (the “Guarantees”), Richard
DeCicco (the “Guarantor”)
irrevocably and unconditionally guaranteed all of the obligations of the Company
under the Financing Agreements and related agreements; and

    

    WHEREAS, as of the date of
this Termination Agreement, the Company owes to the Factor $2,833,204.36 under
the Financing Agreements (the “Amount Owed”);
and

    

    WHEREAS, the Company and the
Factor desire to amend the Settlement Agreement and terminate the PO Financing
Agreement upon the terms and conditions of this Termination Agreement;
and

    

    WHEREAS, capitalized terms
which are used herein without definition and which are defined in the Settlement
Agreement shall have the same meanings herein as in the Settlement
Agreement;

     

    AGREEMENT

    

    NOW, THEREFORE, in
consideration of the premises, covenants and agreements hereinafter contained
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:

    

    1. Termination
of the Financing Agreements.  Subject to the provisions of this
Termination Agreement, the Company and the Factor shall hereby terminate the PO
Financing Agreement as of the date of this Agreement (the “PO Financing Termination
Date”).  Without limiting the generality or effect of the
immediately preceding sentence, from and after the PO Financing Termination
Date, the parties hereto shall have no further rights or obligations under the
PO Financing Agreements, except as specifically set forth
herein.  Subject to the provisions of this Termination Agreement, upon
the payment in full of the Promissory Note (as defined herein), the Company and
the Factor shall each be entitled to terminate the Factoring Agreement at any
time pursuant to the terms of that Factoring Agreement (the “Factoring Termination
Date”).

    

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    2. Settlement
Under the Financing Agreements. For and in consideration of the full
settlement of any and all claims that are, could have been or might in the
future be asserted by the Factor against the Company arising out of, or in
connection with, the PO Financing Agreement, the parties agree as
follows:

    

    
      	
              A.  

            	
              As
      payment under the PO Financing Agreement, and in full settlement of any
      outstanding claims, the Borrower shall deliver to the Factor $2,833,204.36
      in readily available funds and/or securities (the “Settlement
      Payment”), which shall be paid by Borrower to Capstone as
      follows:

            

    

    
      	
              i.  

            	
              $500,000
      shall be paid pursuant to the terms of an unsecured promissory note
      bearing interest at the rate of seven percent (7%) per annum to be
      delivered to the Factor on the date hereof (the “Promissory
      Note”).   The Promissory Note is attached hereto as
      Exhibit
      A.  The payment terms under that certain Promissory Note
      shall be as follows:

            

    

    
      	
              (a)  

            	
              A
      payment of $10,000 per month shall be made to the Factor, which payment
      shall be first due thirty (30) days from the Effective Date and continuing
      for a period of twenty four (24)
months,

            

    

    
      	
              (b)  

            	
              A
      payment of $100,000 shall be due on the thirteenth (13th)
      month following the Effective Date,

            

    

    
      	
              (c)  

            	
              The
      remaining amount due shall be paid in full on the date that is twenty five
      (25) months following the Effective Date,
and

            

    

    
      	
              (d)  

            	
              In
      the event the Company is successful in any financing, the Company shall
      pay fifty percent (50%) of any monies raised (up to the outstanding
      balance of the Promissory Note) to the Factor as a partial or full payoff
      of the Promissory Note.

            

    

    

    
      	
              ii.  

            	
              $500,000
      worth of common stock of the Company’s parent company, Iconic Brands, Inc.
      (formerly, Paw Spa, Inc.), (which is equal to 1,000,000 shares of Iconic
      Brands, Inc. (formerly, Paw Spa, Inc.) common stock) shall be issued to
      the Factor;

            

    

    

    
      	
              iii.  

            	
              $1,833,205
      worth of Series B Convertible Preferred Stock of the Company’s parent
      company, Iconic Brands, Inc. (formerly, Paw Spa, Inc.), (which is equal to
      916,603 shares of Class B Preferred Stock) shall be issued to the
      Factor.  The Class B Preferred Stock shall have a value of $2.00
      per share.  The Certificate of Designation for the Class B
      Preferred Stock is attached hereto as Exhibit B;
      and

            

    

    

    
      	
              iv.  

            	
              A
      warrant to purchase up to 1,000,000 shares of common stock at an exercise
      price of $0.50 per share with an expiration date of three (3) years from
      the date hereof.  A copy of the Warrant is attached hereto as
      Exhibit
      C.

            

    

    

    
      	
              B.  

            	
              Releases.

            

    

    
      	
              i.  

            	
              With
      no additional acts required by any party, at the date when there is only
      $400,000 remaining to be paid under the Promissory Note, Capstone, for
      itself and its predecessors, successors, subsidiaries and affiliates, and
      each of their respective members, stockholders, directors, managers,
      employees and agents (collectively, the “Capstone Releasing
      Parties”) hereby releases, waives and forever discharges the
      Company and its predecessors, successors, assigns, subsidiaries, and
      affiliates, and each of their respective members, stockholders, directors,
      managers, employees and agents (collectively, the “Borrower Released
      Parties”) from any and all actions, suits, damages, claims and
      demands which the Capstone Releasing Parties may have as of the date
      hereof against the Borrower Released Parties (whether known or unknown,
      liquidated or unliquidated, due or to become due, direct or derivative,
      and whether absolute, accrued, contingent or otherwise, and whether
      heretofore arising from tort, statute, fiduciary duties or contract),
      arising out of, under or in connection with the Financing Agreements,
      including but not limited to the Guarantees provided by the
      Guarantor.

            

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	
              ii.  

            	
              With
      no additional acts required by any party, at the date when there is only
      $400,000 remaining to be paid under the Promissory Note, the Company, for
      itself and its predecessors, successors, subsidiaries and affiliates, and
      each of their respective members, stockholders, directors, managers,
      employees and agents (collectively, the “Borrower Releasing
      Parties”) hereby release, waive and forever discharge the Factor
      and its predecessors, successors, assigns, subsidiaries, and affiliates,
      and each of their respective members, stockholders, directors, managers,
      employees and agents as well as the Guarantor (collectively, the “Capstone Released
      Parties”) from any and all actions, suits, damages, claims and
      demands which the Borrower Releasing Parties may have as of the date
      hereof against the Capstone Released Parties (whether known or unknown,
      liquidated or unliquidated, due or to become due, direct or derivative,
      and whether absolute, accrued, contingent or otherwise, and whether
      heretofore arising from tort, statute, fiduciary duties or contract),
      arising our of, under or in connection with the Financing
      Agreements.

            

    

    
      	
              iii.  

            	
              The
      releases provided for in this Section B (the “Releases”)
      apply in all jurisdictions.  Nothing contained in the foregoing
      Releases shall be construed to impair any representation, obligation,
      promise, covenant or condition contained in this Termination
      Agreement.

            

    

    

    
      	
              C.  

            	
              UCC-3 Termination
      Statements.  Upon the Factoring Termination Date, the
      Factor shall file UCC-3 termination statements terminating their liens on
      Borrower’s assets granted pursuant to the Financing
      Agreements.  In the event the Factor does not timely file such
      UCC-3 termination statements, the Company shall be authorized to file such
      UCC-3 termination statements on behalf of the
  Factor.

            

    

    

    3. Binding
Agreement. This Termination Agreement shall be binding upon and inure the
benefits of the parties hereto and their respective heir, executors,
administrators, predecessors, successors, and assigns and upon any corporation
or other entity into or with which any party hereto may merger or
consolidate.

    

    4. Counterparts.  This
Agreement may be executed in any number of counterparts, each of which when so
executed shall be deemed to be an original and, all of which taken together
shall constitute one and the same Agreement and shall become effective when
counterparts have been signed by each party and delivered to the other parties
hereto, it being understood that all parties need not sign the same counterpart.
In the event that any signature is delivered by facsimile transmission, such
signature shall create a valid binding obligation of the party executing (or on
whose behalf such signature is executed) the same with the same force and effect
as if such facsimile signature were the original thereof.

    

    5. Brokers.  Each
party hereto hereby confirms that no brokers or finders were employed by such
party or any of its officers, directors, employees or shareholders in connection
with the Financing Agreements.

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    6. Governing
Law. This Agreement shall be governed by and construed in accordance with
the internal laws of the State of New York, without giving effect to any of the
conflicts of law principles which would result in the application of the
substantive law of another jurisdiction. This Termination Agreement shall not be
interpreted or construed with any presumption against the party causing this
Termination Agreement to be drafted.

    

    7. Enforceability.  Should
any provision of the Termination Agreement be declared or determined by any
court, arbitrator or body of competent jurisdiction to be illegal, invalid or
unenforceable, the legality, validity and enforceability of the remaining parts,
terms or provisions shall not be affected thereby, and said illegal,
unenforceable or invalid part, term or provision shall be deemed not to be a
part of this Termination Agreement.

    

    8. Authority.  The
parties hereto, each for themselves or on behalf of the parties they represent,
hereby represent and warrant that each has the full power, capacity and
authority to enter into and perform the obligations under and in connection with
this Termination Agreement, and that this Termination Agreement, when executed,
will constitute a valid, legal and binding agreement, enforceable against
themselves in accordance with the terms hereof.

    

    9. Entire
Agreement; Amendment; and Merger. This Termination Agreement contains the
entire understanding and agreement of the parties with respect to the matters
covered hereby and, except as specifically set forth herein or in the Financing
Agreements or Settlement Agreement, neither the Company nor the Factor makes any
representations, warranty, covenant or undertaking with respect to such matters
and they supersede all prior understandings and agreements with respect to said
subject matter, all of which are merged herein. No provision of this Termination
Agreement nor any of the Financing Agreements or the Settlement Agreement may be
waived or amended other than by a written instrument signed by the parties, and
no waiver of any of the provisions of this Termination Agreement shall be
binding unless agreed to in writing by the party or parties against which such
waiver is sought to be enforced.

    

    [REMAINDER
OF PAGE LEFT BLANK]

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    [SIGNATURE
PAGE TO CAPSTONE TERMINATION AGREEMENT]

    

    

    IN WITNESS WHEREOF, the
parties hereto have caused this Termination Agreement to be duly executed as of
the date first above written.

    

    

    HARBREW
IMPORTS, LTD.

    

 

    By:                                                                

         Name:
Richard DeCicco

         Title:
President

    

    

    CAPSTONE
BUSINESS CREDIT, LLC

    

    

    By:                                                                

         Name:
Robert Olson

         Title:
Chief Financial Officer

    

    CAPSTONE
CAPITAL GROUP I, LLC

    

    

    By:                                                                

         Name:
Robert Olson

         Title:
Chief Financial Officer

     

     

    5f8k061009ex10ii_iconicbrnds.htm

    
      
        Exhibit 10.2

         

        PROMISSORY
NOTE

      

    

    
      

       

      $
500,000                                                                                                                                                                                                                                          New
York, New York

    

    
        June
[__], 2009

    

    
       

      FOR VALUE RECEIVED, Harbrew Imports LTD., a New York corporation,
having an address at 1174 Route 109, Lindenhurst, New York 11757 (the “Borrower”) promises to pay to
CAPSTONE CAPITAL GROUP I, LLC,
a Delaware limited liability company, having an address at 1350 Avenue of
the Americas, New York, New York 10019 (“Lender”), or order, at said
office, or at such other place as may be designated from time to time in writing
by Lender, the principal sum of FIVE HUNDRED THOUSAND and 00/100 Dollars
($500,000.00) in lawful money of the United States of America (the “Loan”), with interest at the
rate of 7% per annum.

    

    
       

      All
capitalized terms not otherwise defined herein shall have the meaning ascribed
to them in the Termination Agreement to the Discount Factoring Agreement and
Related Documents dated of even date herewith.

    

    
       

      1. Payments. The
principal amount due under this Note shall be payable by Borrower to Lender at
the address above or at such other place as Lender may, from time to time,
designate in writing, without setoff, counterclaim or any other deduction
whatsoever, on or before June [__], 2011 (the “Maturity Date”). The principal
amount of the Loan shall be subject to adjustment pursuant to the Termination
Agreement of even date herewith or other related documents between Borrower and
Lender.

    

    
       

      2. Mechanism of
Payments. Commencing 30 days after the date hereof and on the same day of
each and every month thereafter, Borrower shall pay Lender in equal monthly
installment of $10,000 per month for a period of 24 months (the “Monthly Installment”), which
shall first be applied to interest and then in reduction of principal . In
addition to the Monthly Installments, on or before June [__], 2010, Borrower
shall pay Lender a lump sum amount of $100,000, and, on or before the Maturity
Date, Borrow shall pay Lender the remaining principal amount of $160,000 and any
and all accrued interest.

    

    
       

      If the Borrower closes a financing,
then up to fifty percent (50%) of any monies received in such a financing shall
be paid to the Lender, as necessary to satisfy all obligations under this Note,
as a payment under this Note and such payment shall apply against the amount
outstanding under this Note to reduce the balance by first crediting each
Monthly Installment and then applying any other amounts to the lump sum payments
due under this Section 2.

    

    
       

      3. The
occurrence of any one or more of the following events shall constitute an event
of default (each an “Event of
Default”) hereunder:

    

    
       

                                     
(a) if
Borrower makes an assignment for the benefit of creditors;

    

    
       

      (b) if there
shall be filed by Borrower or against Borrower (except by Lender) any petition
for any relief under the bankruptcy laws of the United States now or hereafter
in effect or any proceeding shall be commenced (except by Lender) with respect
to Borrower under any insolvency, readjustment of debt, reorganization,
dissolution, liquidation or similar law or statute of any jurisdiction now or
hereafter in effect (whether at law or in equity), provided that in the case of
any involuntary filing or the commencement of any involuntary proceeding against
Borrower such proceeding or petition shall have continued undismissed and
unvacated for 90 days; or

    

    
       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

      (c) if
Borrower shall fail for any reason to make any payment of principal hereunder
when due.

    

    
       

      If any
Event of Default shall occur for any reason, then and in any such event, in
addition to all rights and remedies of Lender under applicable law or otherwise,
all such rights and remedies being cumulative, not exclusive and enforceable
alternatively, successively and concurrently, all amounts owing under this Note
shall be immediately due and payable, whereupon the then unpaid balance
hereof shall bear interest, accruing from the date of this Note, at a rate per
annum which is equal to the rate of interest provided for in Section 1.10 of the
Purchase Order Financing Agreement dated as of January 22, 2007, by and between
Borrower and Lender (the “PO
Financing Agreement”) in each case from the date of such nonpayment until
such amount is paid in full; provided however that in no event shall any
interest to be paid pursuant to this Note exceed the maximum rate permitted by
law.

    

    
       

      4. Borrower
hereby waives presentment and demand for payment, notice of dishonor, protest
and notice of protest of this Note and agrees to pay all costs of collection
when incurred, including reasonable attorneys' fees (which costs may be added to
the amount due under this Note and be receivable therewith) and to perform and
comply with each of the terms, covenants and provisions contained in this Note,
on the part of Borrower to be observed or performed. No release of any security
for the principal sum due under this Note or extension of time for payment of
this Note, or any installment hereof, and no alteration, amendment or waiver of
any provision of this Note made by agreement between Lender and any other person
or party shall release, discharge, modify, change or affect the liability of
Borrower under this Note.

    

    
       

      5. This Note
is subject to the express condition that at no time shall Borrower be obligated
or required to pay interest on the principal balance of the Loan at a rate which
could subject Lender to either civil or criminal liability as a result of being
in excess of the maximum rate which Borrower is permitted by law to contract or
agree to pay. If by the terms of this Note Borrower is at any time required or
obligated to pay interest on the principal balance at a rate in excess of such
maximum rate, the rate of interest under this Note shall be deemed to be
immediately reduced to such maximum rate and interest payable hereunder shall be
computed at such maximum rate and the portion of all prior interest payments in
excess of such maximum rate shall be applied and shall be deemed to have been
paid in reduction of the principal balance.

    

    
       

      6. Borrower
hereby irrevocably submits to the jurisdiction of any court of the State of New
York or federal court sitting in the State of New York in any action or
proceeding arising out of or relating to this Note. Borrower hereby irrevocably
agrees that all claims in respect of such action or proceeding may be heard and
determined in such court of the State of New York or, to the extent permitted by
law, in such federal court. Borrower hereby irrevocably waives, to the fullest
extent it may effectively do so, the defense of an inconvenient forum to the
maintenance of such action or proceeding. To the extent permitted by law,
Borrower also irrevocably consents to the service of any and all process in any
such action or proceeding arising out of or in connection with this Note by the
mailing (by certified mail, return receipt requested and postage prepaid) of
copies of such process to the undersigned at the address of Borrower set forth
above. Borrower agrees that a final and non-appealable judgment (or a judgment
whose time to appeal has expired) in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.

    

    
      

       

      7. BORROWER
HEREBY WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM,
WHETHER IN CONTRACT OR TORT, AT LAW OR IN EQUITY, WITH RESPECT TO, IN CONNECTION
WITH OR ARISING OUT OF OR IN ANY WAY RELATED TO THIS NOTE OR THE VALIDITY,
PROTECTION, INTERPRETATION, ADMINISTRATION, COLLECTION OR ENFORCEMENT HEREOF OR
THEREOF, OR ANY CLAIM OR DISPUTE HEREUNDER OR THEREUNDER

       

    

    
      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

             
8. The terms of this Note shall be governed and construed under the laws of
the State of New York.

    

    
       

      9.This Note may not be changed or
terminated orally, but only by an agreement in writing signed by the party
against whom enforcement of such change or termination is
sought.

    

    
       

      10. Borrower
represents that Borrower has full power, authority and legal right to execute
and deliver this Note and that the debt hereunder constitutes a valid and
binding obligation of Borrower.

    

    
       

      11. Whenever
used, the singular number shall include the plural, the plural the singular, and
the words “Lender” and “Borrower” shall include their respective successors and
assigns.

    

    
       

      12. Notices
hereunder shall be given as provided in the PO Financing
Agreement.

    

    
       

    

    
      IN WITNESS WHEREOF, Borrower
has duly executed this Note the day and year first above
written.

    

    
       

                                  

                                              

                                      HARBREW IMPORTS
LTD.

    

    
      

       

      
 

    

    By:
___________________________________

            Richard
DeCicco, Chief Executive Officer

    

    3

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