Document:

ex10-6.htm

Exhibit 10.6

COLLATERAL AGENT AGREEMENT

THIS COLLATERAL AGENT AGREEMENT (this “Agreement”) is made effective as of June 20, 2013, between Union Bank, N.A. or an affiliate thereof (“Collateral Agent”), True Drinks Holdings, Inc., corporation duly organized and validly existing under the laws of the State of Nevada (the “Debtor”) and each of the lenders set forth on the signature pages hereto (each a “Lender” and collectively the “Lenders”).

W I T N E S S E T H:

WHEREAS, concurrently herewith, Lenders and Debtor are entering into that certain Note Subscription Agreement dated as of the date hereof (the “Subscription Agreement”) and certain other agreements, documents and instruments executed and delivered in connection therewith including, without limitation, that certain Security Agreement dated as of the date hereof (the “Security Agreement” and together with the Subscription Agreement, collectively, the “Loan Documents”), pursuant to which Lenders shall make certain loans to Debtor to be secured by all of Debtor’s existing and future personal property as more fully described in the Loan Documents (the “Collateral”).

WHEREAS, pursuant to the terms of the Loan Documents, Lenders and Debtor hereby appoint a collateral agent as the representative of Lenders in connection with the creation, protection, preservation, maintenance and holding of the Collateral and certain other collateral granted to Lender, including, without limitation, any the equity interests pledged to Lender (if any) (such pledgors of equity, collectively, the “Pledgors”) under the Loan Documents (collectively, the “Loan Collateral”), the perfection of Lender’s security interests in the Loan Collateral, and the enforcement or exercise of any rights, powers and remedies with respect to the Loan Collateral.

WHEREAS, for the orderly administration of the Loan Collateral, Lender and Debtor desire to utilize and appoint Collateral Agent, and Collateral Agent has agreed to accept such appointment, as Lender’s representative and agent to take certain actions from time to time in connection with the Loan Collateral, all upon the terms and subject to the conditions set forth herein.

NOW, THEREFORE, in consideration of the premises set forth herein and for other good and valuable consideration, the parties hereto agree as follows:

Section 1. Appointment of Collateral Agent; Financing Statements.

(a) Upon the terms and subject to the conditions set forth herein, Lenders hereby appoint Collateral Agent, and Collateral Agent hereby accepts such appointment, to (i) serve as Lenders’ representative and agent for purposes of filing financing statements against Debtor and each Pledgor, if applicable, with respect to the Loan Collateral, including by listing Collateral Agent as secured party of record thereon (as such term is used in the Uniform Commercial Code (the “UCC”)), and Collateral Agent agrees that, in such capacity, Collateral Agent shall be the representative of Lenders for purposes of satisfying the requirements of Section 9-502(a)(2) of the UCC, whether or not Collateral Agent is indicated in any such financing statement as acting in its capacity as a representative and agent of Lenders (as contemplated under Section 9-503(d) of the UCC), and (ii) take such other action or actions as Collateral Agent may be directed in writing from time to time by Lenders to create, perfect, preserve or maintain Lender’s security interest in the Loan Collateral or enforce any and all rights and remedies, in whole or in part, available to Lenders under the Loan Documents with respect to the Loan Collateral. In furtherance of the foregoing, Collateral Agent hereby agrees to promptly take any other action (x) required or directed by Lenders from time to time in order to maintain the perfection of, and preserve or protect, Lenders’ security interests in the Loan Collateral, (y) necessary in any bankruptcy or insolvency proceeding with respect to Debtor or any Pledgor to evidence Lenders’ appointment of Collateral Agent hereunder and the perfection, preservation and maintenance of the Loan Collateral in favor of Lenders or (z) permitted or required to be taken by a secured party of record under the UCC and directed by Lenders from time to time in order to carry out more effectively the purposes of this Agreement. Collateral Agent undertakes to perform only such duties as are expressly set forth herein, and no duties shall be implied. Collateral Agent agrees that it shall not take any action other than those actions expressly directed by Lenders hereunder. Except as expressly set forth herein, Lenders shall have and retain the sole power and authority to exercise any and all powers and rights with respect to the Loan Collateral. Lenders and Debtor hereby authorize and direct Collateral Agent to execute the Security Agreement. To the extent that any provision of this Agreement conflicts with a provision of the Security Agreement with regard to the duties, rights or liabilities of the Collateral Agent, such provision of this Agreement shall prevail.

  

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(b) Collateral Agent further agrees that (i) Collateral Agent shall, and is hereby authorized to, file all initial financing statements and USPTO security filings (if applicable) against Debtor and each Pledgor with respect to the Loan Collateral, which financing statements shall list Collateral Agent as secured party of record thereon, (ii) it will not amend, nor will it consent the amendment of, any financing statements filed against Debtor or any Pledgor with respect to the Loan Collateral without the prior written consent of Lenders; and (iii) it shall immediately notify Lenders in writing of any change to its information listed on any financing statement filed against Debtor or any Pledgor with respect to the Loan Collateral including, without limitation, the name or address of Collateral Agent, and shall take any action directed by Lenders to make any necessary amendments to any such financing statement.

(c) Collateral Agent shall have no liability under, and no duty to inquire as to the provisions of, any agreement other than this Agreement and the Security Agreement. Collateral Agent may rely upon, and shall not be liable for acting or refraining from acting upon, any written notice, instruction or request furnished to it hereunder and reasonably believed by it to be genuine and to have been signed or presented by the proper party or parties except to the extent directly or indirectly caused by the gross negligence or willful misconduct of Collateral Agent or Collateral Agent’s taking of any action in violation of this Agreement. Collateral Agent shall be under no duty to inquire into or investigate the validity, accuracy or content of any such document. Collateral Agent shall not be liable for any action taken or omitted by it in good faith except to the extent directly or indirectly caused by the gross negligence or willful misconduct of Collateral Agent or Collateral Agent’s taking of any action in violation of this Agreement. Collateral Agent shall have no liability for assets lost or damaged while being delivered to Collateral Agent except to the extent directly or indirectly caused by the gross negligence or willful misconduct of Collateral Agent or Collateral Agent’s taking of any action in violation of this Agreement. Collateral Agent may execute any of its powers and perform any of its duties hereunder directly or through agents or attorneys and may consult with counsel, accountants and other skilled persons to be selected and retained by it. Anything in this Agreement to the contrary notwithstanding, in no event shall Collateral Agent be liable for special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if Collateral Agent has been advised of the likelihood of such loss or damage and regardless of the form of action.

Section 2. Notice by Collateral Agent of Certain Events; Continuation Statements. Collateral Agent shall promptly notify Lenders in writing whenever Collateral Agent receives notice, including any notices received under or in connection with the UCC, that (a) any security interest (other than the security interests of Lenders under the Loan Documents) has been placed, or attempted to be placed, on any Loan Collateral, including any inquiries in respect of any financing statements listing Collateral Agent as secured party of record thereunder, or (b) the attachment or perfection of Lenders’ security interest in the Loan Collateral shall have been challenged. Collateral Agent shall also promptly notify Lenders in writing that any financing statement filed against Debtor or any Pledgor with respect to the Loan Collateral which lists Collateral Agent as secured party of record thereon (each, an “Expiring Financing Statement”) shall be expiring, and such notice shall be provided by Collateral Agent no earlier than six months and no later than three months prior to each such expiration (each, an “Expiration Notice”).If Collateral Agent shall not have received further instruction from Lenders within 10 Business Days following the date on which Collateral Agent sent an Expiration Notice with respect to an Expiring Financing Statement, Collateral Agent shall promptly file, in the appropriate filing office, a continuation statement with respect to such Expiring Financing Statement and shall provide evidence of the same to Lenders. All notices required to be sent to Lenders hereunder shall be mailed to each Lender to the address set forth next to each Lender’s name on the signature pages hereto.

Section 3. Representations and Warranties. Each of the Lenders, the Debtor and Collateral Agent hereby represent and warrant as of the date hereof that:

(a) It is duly incorporated, validly existing and in good standing under the laws of its state of incorporation;

(b) It has the full power and authority to execute, deliver and perform this Agreement and has taken all necessary action to authorize the execution, delivery and performance by it of this Agreement;

(c) The execution, delivery and performance by it of this Agreement does not violate any provision of its corporate governance documents; and

  

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(d) This Agreement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding agreement, enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity.

Section 4. Term; Termination. This Agreement shall remain in full force and effect until its termination in accordance with this Section 4. A majority of the Lenders may, in their sole discretion, terminate this Agreement at any time they deems appropriate. Collateral Agent may terminate this Agreement, and resign from its appointment hereunder, by giving Lenders at least sixty (60) days advance written notice of such resignation. Upon the termination of this Agreement, Collateral Agent shall (a) take any and all actions directed by Lenders to amend all financing statements filed against Debtor and each Pledgor with respect to the Loan Collateral which list Collateral Agent as secured party of record thereon, and (b) take any other action permitted or required to be taken by a secured party of record (as such term is used in the UCC) as directed by Lenders from time to time in connection with the termination of this Agreement.

Section 5. Fees. Debtor agrees to pay to Collateral Agent, upon execution of this Agreement and from time to time thereafter, reasonable compensation for the services to be rendered hereunder, which, unless otherwise agreed in writing, shall be as described on Schedule 1 attached hereto, together with all fees and expenses listed on Schedule 1. Except as set forth in Schedule 1, no compensation, fees and expenses shall be payable by Lenders.

Section 6. Indemnity. Lenders shall indemnity, defend and hold harmless Collateral Agent and its directors, officers, agents and employees (collectively, the “Indemnified Parties”) from all loss, liability or expense arising out of or in connection with Collateral Agent’s execution and performance of this Agreement, or any Indemnified Party’s following of any instructions or other directions from Lenders with respect to the appointment of Collateral Agent under this Agreement, except, in each case, to the extent that such loss, liability or expense is due to the gross negligence or willful misconduct of any Indemnified Party or any Indemnified Party’s taking of any action in violation of this Agreement. The parties hereto acknowledge that the foregoing indemnities shall survive the termination of this Agreement and the Security Agreement.

Section 7. Miscellaneous

(a) Governing Law. This Agreement shall be governed by and construed according to the laws of the State of New York, without regard to principles of conflicts of laws.

(b) Severability. In the event that any condition, covenant or other provision contained herein is held by a court of competent jurisdiction to be invalid or void, the same shall be deemed severable from the remainder of this Agreement and shall in no way affect any other covenant, condition or provision contained herein. If such condition, covenant or other provision shall be deemed invalid due to its scope or breadth, such shall be deemed valid to the extent of the scope or breadth permitted by law.

(c) Entire Agreement; No Modification. This Agreement constitutes the entire agreement among the parties pertaining to the subject matter hereof, and supersedes all prior agreements and understandings pertaining thereto. No modification or amendment of this Agreement shall be effective except by a written instrument signed by all parties hereto.

 (d) Successors and Assigns. This Agreement shall be binding upon the permitted successors and assigns of the parties hereto. Collateral Agent shall not have the right to assign its rights hereunder without the prior written consent of Lenders, except that any corporation or association into which Collateral Agent may be merged or converted, or with which it may be consolidated, shall become “Collateral Agent” hereunder so long as Collateral Agent provides advanced written notice to Lenders at least 10 Business Days prior to such merger, conversion or consolidation.

(e) Counterparts; Electronic Signature. This Agreement may be executed in one or more counterparts and by facsimile or other electronic signature, each of which counterparts when so executed shall be deemed to be an original, and all of which together shall constitute one and the same agreement.

  

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(f) Jury Trial Waiver. LENDERS AND COLLATERAL AGENT, TO THE EXTENT PERMITTED BY LAW, EACH HEREBY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, BETWEEN LENDERS AND COLLATERAL AGENT ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO.

(g) Confidentiality. Each party hereto agrees that the existence and contents of this Agreement, all other information and documents provided by Lenders to Collateral Agent in connection herewith, and the existence of the relationship between Lenders and Collateral Agent, and any services provided by Collateral Agent in connection therewith, are and shall remain confidential and shall not be disclosed to any third party, except for such information (i) as may become generally available to the public, (ii) as may be required or appropriate in response to any summons, subpoena, or otherwise in connection with any litigation, arbitration, administrative or similar proceeding, or to comply with any applicable law, order, regulation, ruling, request from governmental regulators, and provided that, if possible, notice of such disclosure is provided to the other party prior thereto, (iii) as may be obtained from a non- confidential source that disclosed such information in a manner that did not violate its obligations to the other party in making such disclosure, or (iv) as may be furnished to that party’s affiliates, or its affiliates’ auditors, attorneys, advisors, lenders and credit rating agencies which are required to keep the information that is disclosed in confidence. Without limiting the foregoing, upon Collateral Agent’s receipt of an inquiry from a third party regarding any financing statements of record against Debtor or any Pledgor with respect to the Loan Collateral listing Collateral Agent as secured party of record thereon, Collateral Agent shall promptly provide notice of the same to Lenders, and shall only respond to such inquiry in accordance with instructions provided by Lenders.

[SIGNATURE PAGE FOLLOWS]

  

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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement to be effective as of the date first above stated.

COLLATERAL AGENT: UNION BANK, N.A.

By: /s/ Rafael E. Miranda

Name: Rafael E. Miranda

Title: Vice President

LENDERS:

Beneficial Capital Corp

By: /s/ John J. Hoey

Name: John J. Hoey

Title:President

JSL Kids Partners

By: /s/ John S. Lemak

Name: John S. Lemak

Title:Manager

The Fred R. Gumbinner Living Trust

By: /s/ Fred R. Gumbinner

Name: Fred R. Gumbinner

Title:Trustee

/s/ John S. Lemak

John S. Lemak

/s/ John S. Lemak, Jr.

John S. Lemak, Jr.

TRUE DRINKS HOLDINGS, INC.

By: /s/ Dan Kerker

Name: Dan Kerker

Title: Chief Financial Officer

 

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Exhibit 10.7

ESCROW AGREEMENT

THIS ESCROW AGREEMENT (this “Agreement”) is made as of June 20, 2013 by and among Axiom Capital Management, Inc. (the “Broker”) (the “Company”), and Union Bank, N. A., as escrow agent (the “Escrow Agent”).

W I T N E S S E T H:

WHEREAS, the Company is offering (the “Offering”) its secured bridge notes (the “Bridge Note Offering”) in an aggregate offering amount of up to $2.5 million (the “Offering Amount”) to certain accredited investors (“Purchasers”) introduced to the Company by the Broker; and

WHEREAS, the Purchasers will invest in the Bridge Note Offering by wiring money into a specified account established by the Escrow Agent for the Offering in exchange for bridge notes (the “Bridge Notes”) and warrants (the “Warrants”), together with the Bridge Notes, (the “Securities”); and

WHEREAS, it is intended that the purchase of the Securities be consummated in accordance with the requirements set forth in Regulation D promulgated under the Securities Act of 1933, as amended; and

WHEREAS, the Escrow Agent shall hold the investor funds in escrow (such amounts the “Escrowed Funds”) until the Escrow Agent has received the Escrow Release Notice (as defined below) executed by the Broker and the Company. It is currently anticipated that there may be more than one closing in connection with the proposed Offering.

NOW, THEREFORE, in consideration of the covenants and mutual promises contained herein and other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged and intending to be legally bound hereby, the parties agree as follows:

ARTICLE 1 TERMS OF THE ESCROW

1.1. The Broker and the Company hereby agree to establish with the Escrow Agent, an escrow account or accounts which shall be compliant with all rules and regulations promulgated by the Securities and Exchange Commission (“SEC”) and the Financial Industry Regulatory Authority, Inc. (“FINRA”) and which shall be non-interest bearing trust accounts, with the Escrow Agent whereby the Escrow Agent shall hold the funds for the cash purchase of the Securities as contemplated by the subscription agreements relating to the Offering (the “Subscription Agreements”). The Broker hereby certifies that it is a FINRA registered broker dealer and that this Agreement must comply with FINRA and SEC rules and regulations including, without limitation, SEC Rule 15c2-4. The Escrow Agent shall be authorized to establish a single account for the Offering pursuant to the terms of this Agreement.

1.2. Upon the Escrow Agent’s receipt of the Escrow Release Notice attached hereto as Exhibit A (the “Escrow Release Notice”), Escrow Agent will release the Escrowed Funds in accordance with the payment instruction set forth in the Use of Proceeds Schedule. The Escrow Agent, Broker and Company each hereby agree that the Escrow Release Notice may be transmitted via email.

1.3. In the event that the Escrow Agent does not receive an Escrow Release Notice executed by the Broker and the Company by November 14, 2013 unless such date is extended for up to an additional six month period by the Broker and the Company (such date, the “Escrow Return Date”) relating to any Escrowed Funds, the Escrow Agent shall return such Escrowed Funds to the Purchasers using the payment instructions referenced in Exhibit B of the Subscriber Agreements the Broker is required to provide to the Escrow Agent as stated above. The Escrow Return Date may be extended by up to an additional 90 days by the Broker and the Company in their discretion after providing written instructions to the Escrow Agent validly executed by the Broker and the Company. Any additional extensions shall require the written consent of 100% of the Purchasers.

  

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1.4  Wire transfers to the Escrow Agent shall be made as follows: Bank’s Name and Address:

 

Name of Account:

Account #: 

ABA Routing #:

International Swift Code: 

For Further Credit Account #

 

1.5  The Company agrees to pay the Escrow Agent a fee of (U.S.                $ ) for all services rendered by it under this Agreement. Except as set forth herein, the Escrow Agent shall also be entitled to reimbursement for all loss, liability, damage or expenses paid or incurred by it, acting reasonably, in the administration of its duties under this Agreement, including, but not limited to, all reasonable counsel fees, disbursements and all taxes or other governmental charges. The terms and obligations of this Section 1.5 shall survive the termination of this Agreement, the payment of all amounts hereunder and the resignation or removal of the Escrow Agent. In addition, the parties will provide the Escrow Agent with any tax identification information that the Escrow Agent may require in order to fulfill its duties under this Agreement.

1.6. The Escrow Funds shall remain un-invested. The Escrow Agent shall not be responsible for assuring that the Escrowed Funds are sufficient for the disbursements contemplated hereunder this Agreement.

1.7. In the event that the minimum offering amount of $500,000 is not met for the initial closing (subsequent closings shall have no minimum offering amount requirements), the Broker and the Company will instruct the Escrow Agent to return the Escrow Funds to the Purchasers by submitting an Escrow Release Notice as further described in Section 1.2. Any Use of Proceeds authorized by the Broker and the Company shall be consistent with the terms of the Subscription Agreements.

ARTICLE II MISCELLANEOUS

2.1 No waiver or any breach of any covenant or provision herein contained shall be deemed a waiver of any preceding or succeeding breach thereof, or of any other covenant or provision herein contained. No extension of time for performance of any obligation or act shall be deemed an extension of the time for performance of any other obligation or act.

2.2 All notices or other communications required or permitted hereunder shall be in writing and be made in accordance with Section 2.19 hereof.

2.3 This Escrow Agreement shall be binding upon and shall inure to the benefit of the permitted successors and permitted assigns of the parties hereto.

2.4 This Escrow Agreement is the final expression of, and contains the entire agreement between, the parties with respect to the subject matter hereof and supersedes all prior understandings with respect thereto. The Escrow Agent shall not be bound by the provisions of any agreement among the other parties hereto (with the exception of this Agreement), including but not limited to the Subscription Agreements and related offering documents (collectively, the “Offering Documents”). This Escrow Agreement may not be modified, changed, supplemented or terminated, nor may any obligations hereunder be waived, except by written instrument signed by the parties to be charged or by its agent duly authorized in writing or as otherwise expressly required or permitted herein (i.e. Section 1.3 hereof).

2.5 Whenever required by the context of this Escrow Agreement, the singular shall include the plural and masculine shall include the feminine. This Escrow Agreement shall not be construed as if it had been prepared by one of the parties, but rather as if all parties had prepared the same. Unless otherwise indicated, all references to Articles are to this Escrow Agreement.

2.6 The parties hereto expressly agree that this Escrow Agreement shall be governed by, interpreted under and construed and enforced in accordance with the laws of the State of New York. Any action to enforce, arising out of, or relating in any way to, any provisions of this Escrow Agreement shall only be brought in a state or Federal court of competent jurisdiction sitting in New York, New York.

  

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2.7 The Escrow Agent shall be obligated only for the performance of such duties as are specifically set forth herein or otherwise required by law and no implied duties or obligations shall be read into this agreement against the Escrow Agent. The Escrow Agent may rely and shall be protected in relying or refraining from acting on any instrument reasonably believed by the Escrow Agent to be genuine and to have been signed or presented by the proper party or parties. Furthermore, the parties hereto shall each deliver to the Escrow Agent a list of authorized signatories, as set forth in the attached Schedule A hereto, with respect to any notice, certificate, instrument, demand, request, direction, instruction, waiver, receipt, consent or other document or communication required or permitted to be furnished to the Escrow Agent hereunder, and the Escrow Agent shall be entitled to rely on such list with respect to any party until a new list is furnished by such party to the Escrow Agent. The Escrow Agent shall not be personally liable for any act the Escrow Agent may do or omit to do hereunder as the Escrow Agent while acting in good faith and in the absence of gross negligence, fraud or willful misconduct. The Escrow Agent is hereby expressly authorized to disregard any and all warnings given by any of the parties hereto or by any other person or corporation, excepting only orders or process of courts of law and is hereby expressly authorized to comply with and obey orders, judgments or decrees of any court. In case the Escrow Agent obeys or complies with any such order, judgment or decree, the Escrow Agent shall not be liable to any of the parties hereto or to any other person, firm or corporation by reason of such decree being subsequently reversed, modified, annulled, set aside, vacated or found to have been entered without jurisdiction.

2.8 The Escrow Agent shall be entitled to employ such legal counsel and other experts as the Escrow Agent may deem necessary properly to advise the Escrow Agent in connection with the Escrow Agent’s duties hereunder, may rely upon the advice of such counsel, and shall not be liable for any action taken or omitted in accordance with such advice.

2.9 The Escrow Agent’s responsibilities as escrow agent hereunder shall terminate if the Escrow Agent shall resign by giving thirty (30) days written notice to the Company. In the event of any such resignation, the Company shall appoint a successor Escrow Agent and the Escrow Agent shall deliver to such successor Escrow Agent any Escrowed Funds held by the Escrow Agent. If no successor escrow agent is appointed by the end of the thirty (30) day notice period, the Escrow Agent’s sole responsibility shall be to safe-keep the Escrowed Funds pending the appointment of a successor escrow agent. In the alternative, and at its own option, the Escrow Agent shall be entitled to (i) petition a court of competent jurisdiction to appoint a successor escrow agent or (ii) deposit the Escrowed Funds with a court of competent jurisdiction and thereupon have no further duties or responsibilities in connection therewith.

2.10 If the Escrow Agent reasonably requires other or further instruments in connection with this Escrow Agreement or obligations in respect hereto, the necessary parties hereto shall join in furnishing such instruments.

2.11 It is understood and agreed that should any dispute arise with respect to the delivery and/or ownership or right of possession of the Escrowed Funds hereunder, or if the Escrow Agent is unsure as to its rights or duties hereunder, the Escrow Agent is authorized and directed in the Escrow Agent’s sole discretion (1) to retain in the Escrow Agent’s possession without liability to anyone all or any part of said documents or the Escrowed Funds until such disputes or uncertainties shall have been settled either by mutual written agreement of the parties concerned or by a final order, decree or judgment or a court of competent jurisdiction after the time for appeal has expired and no appeal has been perfected (provided the Escrow Agent shall receive a copy of such order, decree or judgment along with a written certification from one of the parties hereto that such order, decree or judgment is final, non-appealable and issued by a court of competent jurisdiction), but the Escrow Agent shall be under no duty whatsoever to institute or defend any such proceedings or (2) to deliver the Escrowed Funds and any other property and documents held by the Escrow Agent hereunder, except as required by law, to a state or Federal court having competent subject matter jurisdiction and located in the New York, New York in accordance with the applicable procedure therefore and thereupon have no further duties or responsibilities in connection therewith.

2.12 This Agreement may be executed by facsimile and in any number of counterparts, and each such counterpart hereof shall be deemed to be an original instrument, but all such counterparts together shall constitute one agreement. Execution and delivery of this Agreement by facsimile transmission (including delivery of documents in Adobe PDF format) shall constitute execution and delivery of this Agreement for all purposes, with the same force and effect as execution and delivery of an original manually signed copy hereof.

  

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2.13 The Company and the Broker agree to indemnify and hold harmless the Escrow Agent and its partners, employees, agents and representatives from any and all claims, liabilities, costs or expenses in any way arising from or relating to its role as Escrow Agent with respect to the transactions contemplated hereby, other than any such claim, liability, cost or expense to the extent the same shall have been determined by a final, non-appealable judgment of a court of competent jurisdiction to have resulted from the gross negligence, fraud or willful misconduct of the Escrow Agent.

2.14 Anything in this Agreement to the contrary notwithstanding, in no event shall the Escrow Agent be liable for special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Escrow Agent has been advised of the likelihood of such loss or damage and regardless of the form of action.

2.15 This Agreement shall automatically terminate upon the complete distribution of the Escrowed Funds which shall occur on the earlier of (i) the receipt of a final Escrow Release Notice executed by the Company and the Broker stating that such Escrow Release Notice is the final Escrow Release Notice or (ii) the return of the Escrowed Funds to the Purchasers in the event that the Escrow Agent does not receive an Escrow Release Notice executed by the Company and the Broker relating to such Escrowed Funds by the Escrow Return Date.

2.16 This Agreement and the rights and obligations hereunder shall not be assignable or transferable by any party without the prior written consent of the other parties hereto. Any attempt to assign or transfer this Agreement in violation of this Section 2.16 shall be void.

2.17 No party to this Agreement is liable to any other party for losses due to, or if it is unable to perform its obligations under the terms of this Agreement because of, acts of God, fire, floods, strikes, equipment or transmission failure, or other causes reasonably beyond its control.

2.18 The Escrow Agent shall never be required to use or advance its own funds or otherwise incur personal financial liability in the performance of any of its duties or the exercise of any of its rights and powers hereunder, and, with prior notice to the parties hereto, shall have the right to perform any of its duties hereunder through agents, attorneys, custodians or nominees.

2.19 All notices or other communications required or permitted to be given hereunder shall be in writing and shall be delivered by hand or sent by facsimile, or sent, postage prepaid, by registered, certified or express U.S. mail, or overnight courier service and shall be deemed given when so delivered by hand or facsimile, or if mailed, three days after mailing (two Business Days in the case of express mail or overnight courier service), as follows:

 

If to the Escrow Agent, to:    

With copies to:

 

If to the Broker, to:

Mark D. Martino President

Axiom Capital Management, Inc

780 Third Ave. 43rd Floor New York, N.Y. 10017 Tel: 212-521-3810

Fax: 212-521-3888

With copies to:

Gerald Coviello, Esq.

Wollmuth Maher & Deutsch, LLP,

500 Fifth Avenue 12th floor, New York, NY 10110 Tel No.: (212) 382-3300

Fax No.: (212) 382-0050

Email: Gerald Coviello gcoviello@wmd-law.com

If to the Company to:

 

With copies to:

 

  

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2.20 If any provision, including any phrase, sentence, clause, section or subsection, of this Agreement is invalid, inoperative or unenforceable for any reason, such circumstances shall not have the effect of rendering such provisions in question invalid, inoperative or unenforceable in any other case or circumstance, or of rendering any other provision contained in this Agreement invalid, inoperative, or unenforceable to any extent whatsoever, and such other provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to a party.

2.21 The Broker certifies that this Agreement is intended to comply with Securities and Exchange Commission Rule 15c2-4 and FINRA Notice to Members 87-61 (Suggested Escrow Agreement Provisions for Members' Compliance With Securities and Exchange Commission Rule 15c2-4), a copy of which is attached hereto as Exhibit B. In the event of a conflict between the terms of this Agreement and the suggested terms set forth in Exhibit B this Agreement the Broker, the Company and the Escrow Agent will use reasonable efforts to promptly amend this Agreement to conform to the provisions set forth in Exhibit B.

2.22 The parties acknowledge that to help the Federal government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account. For a non-individual person such as a business entity, a charity, a trust or other legal entity, the Escrow Agent will ask for documentation to verify its formation and existence as a legal entity. The Escrow Agent may also ask to see financial statements, licenses, identification and authorization documents from individuals claiming authority to represent the entity or other relevant information.

[SIGNATURE PAGE FOLLOWS]

  

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

 

ESCROW AGENT: UNION BANK, N.A.

By: /s/ Rafael E. Miranda

Name: Rafael E. Miranda

Title: Vice President

AXIOM CAPITAL MANAGEMENT, INC.

By: /s/ Mark D. Martino

Name: Mark D. Martino

Title: President

TRUE DRINKS HOLDINGS, INC.

By: /s/ Dan Kerker

Name: Dan Kerker

Title: Chief Financial Officer

 

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