Document:

ex10-8.htm

    Exhibit
10.8

     

    ESCROW
AGREEMENT

     

    THIS ESCROW AGREEMENT (this
“Agreement”) is
made and entered into as of July ___, 2007 by and between BUZZ KILL, INC., a New York
corporation (the “Company”); each party
listed as a “Buyer” on the Schedule of Buyers attached hereto (collectively, the
“Buyers”), and Emerson E. Bruns, PLLC, as
Escrow Agent hereunder (“Escrow
Agent”).

     

     

    BACKGROUND

     

    WHEREAS, the Company and the
Buyers have entered into a Subscription Agreement (the “Subscription
Agreement”), dated as of the date hereof, pursuant to which the Company
proposes to sell (the “Offering”) secured participating notes (“Notes”) $___,
aggregate principal amount.  The Subscription Agreement provides that
the Buyers shall deposit the Purchase Price in a segregated escrow account to be
held by Escrow Agent in order to effectuate a disbursement to the Company at a
closing to be held as set forth in the Subscription Agreement (the “Closing”).

     

    WHEREAS, Escrow Agent has
agreed to accept, hold, and disburse the funds deposited with it in accordance
with the terms of this Agreement.

     

    WHEREAS, in order to establish
the escrow of funds and to effect the provisions of the Subscription Agreement,
the parties hereto have entered into this Agreement.

     

    NOW THEREFORE, in
consideration of the foregoing, it is hereby agreed as follows:

     

    1. Definitions.  The
following terms shall have the following meanings when used herein:

     

    a. “Escrow Funds” shall
mean the funds deposited with Escrow Agent pursuant to this
Agreement.

     

    b. “Joint Written
Direction” shall mean a
written direction
executed by the Buyers and the Company directing Escrow Agent to disburse all or
a portion of the Escrow Funds or to take or refrain from taking any action
pursuant to this Agreement.

     

    c. “Escrow Period” shall
begin with the commencement of the date of execution of this Agreement and shall
terminate upon the earlier to occur of the following dates:

     

    (i) The
Closing Date for the sale of the Notes to the Buyers as contemplated by the
Subscription Agreement;

     

    (ii) The
expiration of 30 days from the date of execution of this Agreement (unless
extended by mutual written agreement between the Company and the Buyers with a
copy of such extension to Escrow Agent); or

     

    (iii) The date
upon which a determination is made by the Company and the Buyers to terminate
the Offering prior to the sale of the Notes as contemplated by the Subscription
Agreement.

     

    During
the Escrow Period, the Company and the Buyers are aware that they are not
entitled to any funds received into escrow and no amounts deposited in the
Escrow Account shall become the property of the Company or the Buyers or any
other entity, or be subject to the debts of the Company or the Buyers or any
other entity.

     

    2. Appointment
of and Acceptance by Escrow Agent.  The Buyers and
the Company hereby appoint Escrow Agent to serve as Escrow Agent
hereunder.  Escrow Agent hereby accepts such appointment and, upon
receipt by wire transfer of the Escrow Funds in accordance with Section 3 below,
agrees to hold, invest and disburse the Escrow Funds in accordance with this
Agreement.

     

    a. The
Buyers hereby acknowledges that Escrow Agent is general counsel to the Company
and a related party to the Collateral Agent.  The Company agrees that
in the event of any dispute arising in connection with this Escrow Agreement or
otherwise in connection with any transaction or agreement contemplated and
referred herein, Escrow Agent shall be permitted to continue to represent the
Buyers and the Company will not seek to disqualify such counsel.

     

    3. Creation
of Escrow Funds.  Contemporaneously
with the execution of this Agreement, the parties shall establish an escrow
account with Escrow Agent, which escrow account shall be entitled as follows:
Buzz Kill, Inc with Escrow Account for the deposit of the Escrow
Funds.  The Buyers shall wire funds to the account of Escrow Agent as
follows:

     

    
      	
              Bank:

            	
              The
      Chase Manhattan Bank

              250
      W. 57th
      Street

              New
      York, NY 10107

            
	
              Routing
      #:

            	
              021000021

            
	
              Account
      #:

            	
              987100303565

            
	
              Name
      on Account:

            	
              Emerson
      E. Bruns, PLLC

            
	
              Sub-Account

            	
              Buzz
      Kill, Inc.

            

    

     

    Telephone
contact is (212) 826 - 1054.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    4. Deposits
into the Escrow Account.  The Buyers agrees
that it shall promptly deliver funds for the payment of the Notes to Escrow
Agent for deposit in the Escrow Account.

     

    5. Disbursements from the
Escrow Account.

     

    a. Escrow
Agent will continue to hold such funds until a Buyer and the Company execute a
Joint Written Direction directing Escrow Agent to disburse the Escrow Funds
pursuant to Joint Written Direction signed by the Company and the
Buyers.  In disbursing such funds, Escrow Agent is authorized to rely
upon such Joint Written Direction from the Company and a Buyer and may accept
any signatory from the Company listed on the signature page to this Agreement
and any signature from a Buyer that Escrow Agent already has on
file.

     

    b. In the
event Escrow Agent does not receive the amount of the Escrow Funds from the
Buyers prior to the expiration of the Escrow Period, Escrow Agent shall notify
the Company and the Buyers and the Company’s obligations under the Subscription
Agreement shall immediately terminate.

     

    c. In the
event Escrow Agent does receive the amount of the Escrow Funds prior to
expiration of the Escrow Period, in no event will the Escrow Funds be released
to the Company until such amount is received by Escrow Agent in collected
funds.  For purposes of this Agreement, the term “collected funds”
shall mean all funds received by Escrow Agent which have cleared normal banking
channels and are in the form of cash.

     

    6. Collection
Procedure.  Escrow Agent is
hereby authorized to deposit the proceeds of each wire in the Escrow
Account.

     

    7. Suspension
of Performance: Disbursement Into Court.  If at any time,
there shall exist any dispute between the Company and a Buyer with respect to
holding or disposition of any portion of the Escrow Funds or any other
obligations of Escrow Agent hereunder, or if at any time Escrow Agent is unable
to determine, to Escrow Agent’s sole satisfaction, the proper disposition of any
portion of the Escrow Funds or Escrow Agent’s proper actions with respect to its
obligations hereunder, or if the parties have not within thirty (30) days of the
furnishing by Escrow Agent of a notice of resignation pursuant to Section 9
hereof, appointed a successor Escrow Agent to act hereunder, then Escrow Agent
may, in its sole discretion, take either or both of the following
actions:

     

    a. suspend
the performance of any of its obligations (including without limitation any
disbursement obligations) under this Escrow Agreement until such dispute or
uncertainty shall be resolved to the sole satisfaction of Escrow Agent or until
a successor Escrow Agent shall be appointed (as the case may be); provided
however, Escrow Agent shall continue to invest the Escrow Funds in accordance
with Section 8 hereof; and/or

     

    b. petition
(by means of an interpleader action or any other appropriate method) any court
of competent jurisdiction in any venue convenient to Escrow Agent, for
instructions with respect to such dispute or uncertainty, and to the extent
required by law, pay into such court, for holding and disposition in accordance
with the instructions of such court, all funds held by it in the Escrow Funds,
after deduction and payment to Escrow Agent of all fees and expenses (including
court costs and attorneys’ fees) payable to, incurred by, or expected to be
incurred by Escrow Agent in connection with performance of its duties and the
exercise of its rights hereunder.

     

    c. Escrow
Agent shall have no liability to the Company, any Buyer, or any person with
respect to any such suspension of performance or disbursement into court,
specifically including any liability or claimed liability that may arise, or be
alleged to have arisen, out of or as a result of any delay in the disbursement
of funds held in the Escrow Funds or any delay in with respect to any other
action required or requested of Escrow Agent.

     

    8. Investment
of Escrow Funds.
Escrow Agent shall deposit the Escrow Funds in a non-interest bearing
account.

     

    If Escrow
Agent has not received a Joint Written Direction at any time that an investment
decision must be made, Escrow Agent shall maintain the Escrow Funds, or such
portion thereof, as to which no Joint Written Direction has been received, in a
non-interest bearing account.

     

    9. Resignation
and Removal of Escrow Agent.  Escrow Agent may
resign from the performance of its duties hereunder at any time by giving thirty
(30) days’ prior written notice to the parties or may be removed, with or
without cause, by the parties, acting jointly, by furnishing a Joint Written
Direction to Escrow Agent, at any time by the giving of ten (10) days’ prior
written notice to Escrow Agent as provided herein below.  Upon any
such notice of resignation or removal, the representatives of the Buyers(s) and
the Company identified in Sections 13a.(iv) and 13b(iv), below, jointly shall
appoint a successor Escrow Agent hereunder, which shall be a commercial bank,
trust company or other financial institution with a combined capital and surplus
in excess of $10,000,000.00.  Upon the acceptance in writing of any
appointment of Escrow Agent hereunder by a successor Escrow Agent, such
successor Escrow Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Escrow Agent, and the
retiring Escrow Agent shall be discharged from its duties and obligations under
this Escrow Agreement, but shall not be discharged from any liability for
actions taken as Escrow Agent hereunder prior to such
succession.  After any retiring Escrow Agent’s resignation or removal,
the provisions of this Escrow Agreement shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Escrow Agent under this
Escrow Agreement.  The retiring Escrow Agent shall transmit all
records pertaining to the Escrow Funds and shall pay all funds held by it in the
Escrow Funds to the successor Escrow Agent, after making copies of such records
as the retiring Escrow Agent deems advisable and after deduction and payment to
the retiring Escrow Agent of all fees and expenses (including court costs and
attorneys’ fees) payable to, incurred by, or expected to be incurred by the
retiring Escrow Agent in connection with the performance of its duties and the
exercise of its rights hereunder.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    10. Liability of Escrow
Agent.

     

    a. Escrow
Agent shall have no liability or obligation with respect to the Escrow Funds
except for Escrow Agent’s willful misconduct or gross
negligence.  Escrow Agent’s sole responsibility shall be for the
safekeeping, investment, and disbursement of the Escrow Funds in accordance with
the terms of this Agreement.  Escrow Agent shall have no implied
duties or obligations and shall not be charged with knowledge or notice or any
fact or circumstance not specifically set forth herein.  Escrow Agent
may rely upon any instrument, not only as to its due execution, validity and
effectiveness, but also as to the truth and accuracy of any information
contained herein, which Escrow Agent shall in good faith believe to be genuine,
to have been signed or presented by the person or parties purporting to sign the
same and conform to the provisions of this Agreement.  In no event
shall Escrow Agent be liable for incidental, indirect, special, and
consequential or punitive damages.  Escrow Agent shall not be
obligated to take any legal action or commence any proceeding in connection with
the Escrow Funds, any account in which Escrow Funds are deposited, this
Agreement or the Purchase Agreement, or to appear in, prosecute or defend any
such legal action or proceeding.  Escrow Agent may consult legal
counsel selected by it in any event of any dispute or question as to
construction of any of the provisions hereof or of any other agreement or its
duties hereunder, or relating to any dispute involving any party hereto, and
shall incur no liability and shall be fully indemnified from any liability
whatsoever in acting in accordance with the opinion or instructions of such
counsel.  The Company and the Buyers jointly and severally shall
promptly pay, upon demand, the reasonable fees and expenses of any such
counsel.

     

    b. Escrow
Agent is hereby authorized, in its sole discretion, to comply with orders issued
or process entered by any court with respect to the Escrow Funds, without
determination by Escrow Agent of such court’s jurisdiction in the
matter.  If any portion of the Escrow Funds is at any time attached,
garnished or levied upon under any court order, or in case the payment,
assignment, transfer, conveyance or delivery of any such property shall be
stayed or enjoined by any court order, or in any case any order judgment or
decree shall be made or entered by any court affecting such property or any part
thereof, then and in any such event, Escrow Agent is authorized, in its sole
discretion, to rely upon and comply with any such order, writ judgment or decree
which it is advised by legal counsel selected by it, binding upon it, without
the need for appeal or other action; and if Escrow Agent complies with any such
order, writ, judgment or decree, it shall not be liable to any of the parties
hereto or to any other person or entity by reason of such compliance even though
such order, writ judgment or decree may be subsequently reversed, modified,
annulled, set aside or vacated.

     

    11. Indemnification
of Escrow Agent.  From and at all
times after the date of this Agreement, the parties jointly and severally,
shall, to the fullest extent permitted by law and to the extent provided herein,
indemnify and hold harmless Escrow Agent and each director, officer, employee,
attorney and agent of Escrow Agent (collectively, the “Indemnified Parties”)
against any and all actions, claims (whether or not valid), losses, damages,
liabilities, costs and expenses of any kind or nature whatsoever (including
without limitation reasonable attorney’s fees, costs and expenses) incurred by
or asserted against any of the Indemnified Parties from and after the date
hereof, whether direct, indirect or consequential, as a result of or arising
from or in any way relating to any claim, demand, suit, action, or proceeding
(including any inquiry or investigation) by any person, including without
limitation the parties to this Agreement, whether threatened or initiated,
asserting a claim for any legal or equitable remedy against any person under any
statute or regulation, including, but not limited to, any federal or state
securities laws, or under any common law or equitable cause or otherwise,
arising from or in connection with the negotiation, preparation, execution,
performance or failure of performance of this Agreement or any transaction
contemplated herein, whether or not any such Indemnified Party is a party to any
such action or proceeding, suit or the target of any such inquiry or
investigation; provided, however, that no Indemnified Party shall have the right
to be indemnified hereunder for liability finally determined by a court of
competent jurisdiction, subject to no further appeal, to have resulted from the
gross negligence or willful misconduct of such Indemnified Party.  If
any such action or claim shall be brought or asserted against any Indemnified
Party, such Indemnified Party shall promptly notify the Company and the Buyers
hereunder in writing, and the Buyers and the Company shall assume the defense
thereof, including the employment of counsel and the payment of all
expenses.  Such Indemnified Party shall, in its sole discretion, have
the right to employ separate counsel (who may be selected by such Indemnified
Party in its sole discretion) in any such action and to participate and to
participate in the defense thereof, and the fees and expenses of such counsel
shall be paid by such Indemnified Party, except that the Buyers and/or the
Company shall be required to pay such fees and expense if (a) the Buyers or the
Company agree to pay such fees and expenses, or (b) the Buyers and/or the
Company shall fail to assume the defense of such action or proceeding or shall
fail, in the sole discretion of such Indemnified Party, to employ counsel
reasonably satisfactory to the Indemnified Party in any such action or
proceeding, (c) the Buyers and the Company are the plaintiff in any such action
or proceeding or (d) the named or potential parties to any such action or
proceeding (including any potentially impleaded parties) include both the
Indemnified Party, the Company and/or the Buyers and the Indemnified Party shall
have been advised by counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to the
Company or the Buyers.  The Buyers and the Company shall be jointly
and severally liable to pay fees and expenses of counsel pursuant to the
preceding sentence, except that any obligation to pay under clause (a) shall
apply only to the party so agreeing.  All such fees and expenses
payable by the Company and/or the Buyers pursuant to the foregoing sentence
shall be paid from time to time as incurred, both in advance of and after the
final disposition of such action or claim.  The obligations of the
parties under this section shall survive any termination of this Agreement, and
resignation or removal of Escrow Agent shall be independent of any obligation of
Escrow Agent.

     

    The
parties agree that neither payment by the Company or the Buyers of any claim by
Escrow Agent for indemnification hereunder shall impair, limit, modify, or
affect, as between the Buyers and the Company, the respective rights and
obligations of Buyers, on the one hand, and the Company, on the other
hand.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    12. Expenses
of Escrow Agent.  Except as set
forth in Section 11 the Buyers shall reimburse Escrow Agent for all of its
reasonable out-of-pocket expenses, including attorneys’ fees, travel expenses,
telephone and facsimile transmission costs, postage (including express mail and
overnight delivery charges), copying charges and the like.  All of the
compensation and reimbursement obligations set forth in this Section shall be
payable by the Buyers, upon demand by Escrow Agent.  The obligations
of the Buyers under this Section shall survive any termination of this Agreement
and the resignation or removal of Escrow Agent.

     

    13. Warranties.

     

    a. Each
Buyer makes the following representations and warranties to Escrow
Agent:

     

    (i) Such
Buyers has full power and authority to execute and deliver this Agreement and to
perform its obligations hereunder.

     

    (ii) This
Agreement has been duly approved by all necessary action of such Buyer,
including any necessary approval of the limited partner of the such Buyer or
necessary corporate approval, as applicable, has been executed by duly
authorized officers of such Buyer, enforceable in accordance with its
terms.

     

    (iii) The
execution, delivery, and performance of such Buyer of this Agreement will not
violate, conflict with, or cause a default under any agreement of limited
partnership of such Buyer or the articles of incorporation or bylaws of such
Buyer as applicable), any applicable law or regulation, any court order or
administrative ruling or degree to which such Buyer is a party or any of its
property is subject, or any agreement, contract, indenture, or other binding
arrangement.

     

    (iv) No party
other than the parties hereto have, or shall have, any lien, claim or security
interest in the Escrow Funds or any part thereof.  No financing
statement under the Uniform Commercial Code is on file in any jurisdiction
claiming a security interest in or describing (whether specifically or
generally) the Escrow Funds or any part thereof.

     

    (v) All of
the representations and warranties of such Buyer contained herein are true and
complete as of the date hereof and will be true and complete at the time of any
disbursement from the Escrow Funds.

     

    b. The
Company makes the following representations and warranties to Escrow
Agent:

     

    (i) The
Company is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware and has full power and authority to execute and
deliver this Agreement and to perform its obligations hereunder.

     

    (ii) This
Agreement has been duly approved by all necessary corporate action of the
Company, including any necessary shareholder approval, has been executed by duly
authorized officers of the Company, enforceable in accordance with its
terms.

     

    (iii) The
execution, delivery, and performance by the Company of this Agreement is in
accordance with the Subscription Agreement and will not violate, conflict with,
or cause a default under the certificate of incorporation or bylaws of the
Company, any applicable law or regulation, any court order or administrative
ruling or decree to which the Company is a party or any of its property is
subject, or any agreement, contract, indenture, or other binding arrangement,
including without limitation to the Subscription Agreement, to which the Company
is a party.

     

    (iv) Thomas
Hanna has been duly appointed to act as the representative of the Company
hereunder and has full power and authority to execute, deliver, and perform this
Agreement, to execute and deliver any Joint Written Direction, to amend, modify
or waive any provision of this Agreement and to take all other actions as the
Company’s Representative under this Agreement, all without further consent or
direction from, or notice to, the Company or any other party.

     

    (v) No party
other than the parties hereto have, or shall have, any lien, claim or security
interest in the Escrow Funds or any part thereof.  No financing
statement under the Uniform Commercial Code is on file in any jurisdiction
claiming a security interest in or describing (whether specifically or
generally) the Escrow Funds or any part thereof.

     

    (vi) All of
the representations and warranties of the Company contained herein are true and
complete as of the date hereof and will be true and complete at the time of any
disbursement from the Escrow Funds.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    14. Consent
to Jurisdiction and Venue; Governing Law.  The parties
hereto acknowledge that the transactions contemplated by this Agreement and the
exhibits hereto bear a reasonable relation to the State of New
York.  The parties hereto agree that the internal laws of the State of
New York shall govern this Agreement and the exhibits hereto, including, but not
limited to, all issues related to usury.  Any action to enforce the
terms of this Agreement or any of its exhibits shall be brought exclusively in
the state and/or federal courts situated in the County and State of New
York.  Service of process in any action by any of the parties to
enforce the terms of this Agreement may be made by serving a copy of the summons
and complaint, in addition to any other relevant documents, by commercial
overnight courier to the Company at its principal address set forth in this
Agreement.

     

    15. Notice.  All notices and
other communications hereunder shall be in writing and shall be deemed to have
been validly served, given or delivered five (5) days after deposit in the
United States mails, by certified mail with return receipt requested and postage
prepaid, when delivered personally, one (1) day delivered to any overnight
courier, or when transmitted by facsimile transmission and upon confirmation of
receipt and addressed to the party to be notified as follows:

     

    
      	
              If
      to Buyers(s), to:

            	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	
              Telephone:

            
	 
      	
              Facsimile:

            
	 
      	 
      
	
              If
      to Escrow Agent, to:

            	
              Emerson
      E. Bruns, PLLC

            
	 
      	
              1790
      Broadway, 20th Fl.

            
	 
      	
              New
      York, NY 10019

            
	 
      	
              Telephone:                             (212)
      826-1054

            
	 
      	
              Facsimile:                                (212)
      832-2969

            
	 
      	 
      
	
              If
      to the Company, to:

            	
              Buzz
      Kill, Inc.

            
	 
      	
              4
      Park Avenue South, Suite 16

            
	 
      	
              New
      York, NY  10016

            
	 
      	 
      
	
              With
      a copy to:

            	
              Gottbetter
      & Partners, LLP

            
	 
      	
              488
      Madison Avenue,

            
	 
      	
              New
      York, NY 10022

            
	 
      	
              Attention:                                Adam
      S. Gottbetter, Esq.

            
	 
      	
              Telephone:                              (212)
      400-6900

            
	 
      	
              Facsimile:                               
       (212) 400-6901

            
	 
      	 
      

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Or to
such other address as each party may designate for itself by like
notice.

     

    16. Amendments
or Waiver.  This Agreement
may be changed, waived, discharged or terminated only by a writing signed by the
parties hereto.  No delay or omission by any party in exercising any
right with respect hereto shall operate as waiver.  A waiver on any
one occasion shall not be construed as a bar to, or waiver of, any right or
remedy on any future occasion.

     

    17. Severability.  To the extent any
provision of this Agreement is prohibited by or invalid under applicable law,
such provision shall be ineffective to the extent of such prohibition, or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.

     

    18. Entire
Agreement.  This Agreement
constitutes the entire Agreement between the parties relating to the holding,
investment, and disbursement of the Escrow Funds and sets forth in their
entirety the obligations and duties of Escrow Agent with respect to the Escrow
Funds.

     

    19. Binding
Effect.  All of the terms
of this Agreement, as amended from time to time, shall be binding upon, inure to
the benefit of and be enforceable by the respective heirs, successors and
assigns of the Buyers, the Company, or Escrow Agent.

     

    20. Execution
of Counterparts.  This Agreement
and any Joint Written Direction may be executed in counter parts, which when so
executed shall constitute one and same agreement or direction.

     

    21. Termination.  Upon the first to
occur of the disbursement of all amounts in the Escrow Funds pursuant to Joint
Written Directions or the disbursement of all amounts in the Escrow Funds into
court pursuant to Section 7 hereof, this Agreement shall terminate and Escrow
Agent shall have no further obligation or liability whatsoever with respect to
this Agreement or the Escrow Funds.

     

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    IN WITNESS WHEREOF the parties
have hereunto set their hands and seals the day and year above set
forth.

     

    
      	 
      	
              BUZZ
      KILL INC.

            
	 
      	 
      
	 
      	
              By:_______________________________                                                           

            
	 
      	
              Name:                Thomas
      Hanna

            
	 
      	
              Title:                  President

            
	 
      	 
      
	 
      	 
      
	 
      	
              BUYER

            
	 
      	 
      
	 
      	
              By:_______________________________                                                         

            
	 
      	
              Name:

            
	 
      	
              Title:

            
	 
      	 
      
	 
      	 
      
	 
      	
              EMERSON
      E. BRUNS, PLLC

            
	 
      	 
      
	 
      	
              By:_______________________________                                                      

            
	 
      	
              Name:                Emerson
      E. Brunsex10-9.htm

    Exhibit
10.9

     

    THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THESE SECURITIES MAY
BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B)
OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (C) IN COMPLIANCE WITH RULE 144 OR 144A THEREUNDER, IF
AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, (D) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT, OR (E) IN A TRANSACTION THAT DOES NOT
REQUIRE REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES
LAWS, AND THE HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO THE COMPANY AN
OPINION OF COUNSEL OR OTHER EVIDENCE OF EXEMPTION, IN EITHER CASE REASONABLY
SATISFACTORY TO THE COMPANY. HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY
NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE U.S. SECURITIES ACT.

    

    10%
NOTE SERIES

    

    BUZZ
KILL, INC.

    

    DUE __________, 2010

    

     

    
      
        	
                Original
      Issue Date: __________, 2007

              	
                US$__________

              

      

    This Note
(“Note”) is one of a series of not more than $400,000 of duly authorized and
issued participating notes (“Notes”) of Buzz Kill, Inc., a New York corporation
(the “Company”) designated its 10% Participating Notes due on __________, 2010
issued to __________ (together with its permitted successors and assigns, the
“Holder”) pursuant to exemptions from registration under the Securities Act of
1933, as amended, pursuant to a Subscription Agreement, dated __________, 2007
(the “Subscription Agreement”) among the Company and the Holder.

    

    ARTICLE
I.

    

    Section
1.01                                Repayment
of Principal and Interest. For value received, the Company hereby
promises to pay to the order of the Holder, in lawful money of the United States
of America and in immediately available funds the principal sum of _____
Thousand Dollars ($___,000). Interest shall accrue on the unpaid principal
balance of the Note at the rate of ten percent (10%) per year (compounded
monthly) commencing the Original Issue Date noted above until __________, 2010
(the “Maturity Date”). Interest shall be calculated on the basis of a 360-day
year. Upon repayment of this Note, in addition to the outstanding principal
balance of the Note and all accrued and unpaid interest, Company shall pay to
the Holder an additional $__________ (equal to 20% of the original principal
amount hereof) (“Premium”). The Holder’s right to receive the Premium shall
survive any redemption of this Note.

    

    Section
1.02                                Participation
in Profits. In addition to being entitled to repayment of the principal
balance of this Note, accrued interest and the Premium, the Holder shall also
receive a participation (“Participation Interest”) in “Net Proceeds” (to be
defined, paid, and accounted for using the definition and application of Net
Proceeds attached hereto as Exhibit A) in an amount equal to twelve percent
(12%) multiplied by the quotient of (i) the principal amount of this Note (ii)
divided by $400,000.  The Holder’s right to receive its Participation
Interest shall survive any redemption of this Note.

    

    Section
1.03                                Absolute
Obligation/Ranking. Except as expressly provided herein, no provision of
this Note shall alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of, interest on, Premium and
Participation Interest of, this Note at the time, place, and rate, and in the
coin or currency, herein prescribed. This Note is a direct debt obligation of
the Company. This Note ranks pari passu with all other Notes of this series now
or hereinafter issued pursuant to a Subscription Agreement.

    

    Section
1.04                                Paying
Agent and Registrar. Initially, the Company will act as paying agent and
registrar. The Company may change any paying agent, registrar, or
Company-registrar by giving the Holder not less than ten business days written
notice of its election to do so, specifying the name, address, telephone number
and facsimile number of the paying agent or registrar. The Company may act in
any such capacity.

    

    Section
1.05                                Different
Denominations. This Note is exchangeable for an equal aggregate principal
amount of Notes of different authorized denominations, as requested by the
Holder surrendering the same.

    

    Section
1.06                                Investment
Representations. This Note has been issued subject to certain investment
representations of the original Holder set forth in the Subscription Agreement
and may be transferred or exchanged only in compliance with the Subscription
Agreement and applicable federal and state securities laws and
regulations.  In addition, Company represents and warrants that, as of
the Original Issue Date, other than (i) Indebtedness to trade creditors incurred
in the ordinary course of business, (ii) $405,462 in deferred compensation
obligations, (iii) bridge financing in the amount of $100,000, (iv) an amount
equal to five percent (5%) of the actualized budget, less amounts already paid,
and (v) certain director fees, there is no outstanding Company
Indebtedness.

    

    Section
1.07                                Reliance
on Note Register. Prior to due presentment to the Company for transfer or
conversion of this Note, the Company and any agent of the Company may treat the
Person in whose name this Note is duly registered on the Note Register as the
owner hereof for the purpose of receiving payment as herein provided and for all
other purposes, whether or not this Note is overdue, and neither the Company nor
any such agent shall be affected by notice to the contrary.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
II.

    

    Section
2.01                                Transfer
of Assets. Upon the sale or other transfer of all or substantially all of
the assets of the Company, the Holder hereof shall have a first priority right
to receive amounts outstanding pursuant to this Note, whether principal,
interest, Premium or Participation Interest. Nothing contained herein shall be
construed as granting Holder a lien upon or a security interest in any asset of
the Company.

    

    ARTICLE
III.

    

    Section
3.01                                Redemption
at the Option of the Company.

    

    (a)           Provided
that no Event of Default has occurred and is continuing, the Company may redeem
all or any portion of this Note while principal or accrued and unpaid interest
remains outstanding by providing the Holders five business days notice
(“Redemption Notice”) stating the amount (“Redemption Amount”) of the principal
and accrued and unpaid interest it has elected to redeem.

    

    (b)           On
the date specified in the Redemption Notice, the Company shall pay the
Redemption Amount to the Holders.

    

    (c)           Any
redemption shall be applied ratably to all of the Holders in proportion to each
Holder’s initial purchase of Notes under the Subscription
Agreement.

    

    (d)           If
the Company elects to redeem less than the entire amounts due and owing under
the Notes, the Company shall reissue a Note in the same form as this Note to
reflect the new principal amount and the Holder shall return this Note to the
Company for cancellation.

    

    ARTICLE
IV.

    

    Section
4.01                                Events of
Default. Each of the following events shall constitute a default under
this Agreement (each an “Event of Default”):

    

    (a)           failure
by the Company to pay the principal amount or interest due hereunder within the
earlier of (i) five (5) days after notice to it that such payment is due, and
(ii) 30 days after such payment is due;

    

    (b)           failure
by the Company for ten (10) days after notice to it to comply with any of its
other agreements in the Note;

    

    (c)           the
Company shall: (1) make a general assignment for the benefit of its creditors;
(2) apply for or consent to the appointment of a receiver, trustee, assignee,
custodian, sequestrator, liquidator or similar official for itself or any of its
assets and properties; (3) commence a voluntary case for relief as a debtor
under the United States Bankruptcy Code; (4) file with or otherwise submit to
any governmental authority any petition, answer or other document seeking: (A)
reorganization, (B) an arrangement with creditors or (C) to take advantage of
any other present or future applicable law respecting bankruptcy,
reorganization, insolvency, readjustment of debts, relief of debtors,
dissolution or liquidation; (5) file or otherwise submit any answer or other
document admitting or failing to contest the material allegations of a petition
or other document filed or otherwise submitted against it in any proceeding
under any such applicable law, or (6) be adjudicated a bankrupt or insolvent by
a court of competent jurisdiction;

    

    (d)           any
case, proceeding or other action shall be commenced against the Company for the
purpose of effecting, or an order, judgment or decree shall be entered by any
court of competent jurisdiction approving (in whole or in part) anything
specified in this Section, or any receiver, trustee, assignee, custodian,
sequestrator, liquidator or other official shall be appointed with respect to
the Company, or shall be appointed to take or shall otherwise acquire possession
or control of all or a substantial part of the assets and properties of the
Company, and any of the foregoing shall continue unstayed and in effect for any
period of sixty (60) days;

    

    (e)           any
material obligation of the Company for the payment of borrowed money is not paid
when due or within any applicable grace period, or such obligation becomes or is
declared to be due and payable before the expressed maturity of the obligation,
or there shall have occurred an event that, with the giving of notice or lapse
of time, or both, would cause any such obligation to become, or allow any such
obligation to be declared to be, due and payable before the expressed maturity
date of the obligation;

    

    Section
4.02                                Remedies.
If any Event of Default occurs, the full principal amount of this Note, together
with accrued and unpaid interest and other amounts owing in respect thereof, to
the date of acceleration shall become, at the Holder’s election, immediately due
and payable in cash. All Notes for which the full amount hereunder shall have
been paid in accordance herewith shall promptly be surrendered to or as directed
by the Company. The Holder need not provide and the Company hereby waives any
presentment, demand, protest or other notice of any kind, and the Holder may
immediately and without expiration of any grace period enforce any and all of
its rights and remedies hereunder and all other remedies available to it under
applicable law. Such declaration may be rescinded and annulled by Holder at any
time prior to payment hereunder and the Holder shall have all rights as a Note
holder until such time, if any, as the full payment under this Section shall
have been received by it. No such rescission or annulment shall affect any
subsequent Event of Default or impair any right consequent thereon.

    

    ARTICLE
V.

    

    Section
5.01                                Amendments
and Waiver of Default. The Note may not be amended without the consent of
the Required Holders. Notwithstanding the above, without the consent of the
Required Holders, the Note may be amended to cure any ambiguity, defect or
inconsistency or to make any change that does not adversely affect the rights of
the Holder.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
VI.

    

    Section
6.01                                Covenants.

    

    (a)           Distributions on Common
Stock. Until all of the Notes have been converted, redeemed or otherwise
satisfied in accordance with their terms, including the payment of all interest
accrued and Premium due, the Company shall not, directly or indirectly, redeem,
repurchase or declare or pay any cash dividend or distribution on its stock
without the prior express written consent of the Required Holders, which they
may grant or withhold in their complete discretion.

    

    (b)           Rank. All payments
due under this Note shall rank  (i) pari passu with the other
Notes of this series and (iii) senior in all respects to all other Indebtedness
of the Company; (ii) subordinate to monies owed to trade creditors, and (iii) if
$400,000 of this series of Notes are sold, subordinate to the $100,000 in bridge
financing owed to Thomas Hanna.

    

    (c)           Incurrence of
Indebtedness. So long as this Note is outstanding, the Company shall not,
directly or indirectly, incur or guarantee, assume or suffer to exist any
Indebtedness, other than (i) the Indebtedness evidenced by the Notes and (ii)
Permitted Indebtedness; provided, however, the Company shall not incur any
Permitted Indebtedness other than (x) Indebtedness to trade creditors incurred
in the ordinary course of business (y) or extensions, refinancings and renewals
of any items of Permitted Indebtedness in existence on the Original Issue Date
without first offering to Holder the opportunity to provide that
Indebtedness.  If the Company offers the Holder the opportunity to
provide such Indebtedness, the Holder shall have five business days to accept
such offer in writing and to transfer the funds underlying such Indebtedness to
the Company or the Holder shall be deemed to have rejected such
offer.

    

    (d)           Existence of Liens.
So long as any of the Notes is outstanding, the Company shall not, directly or
indirectly, allow or suffer to exist any mortgage, lien, pledge, charge,
security interest or other encumbrance upon or in any property or assets
(including accounts and contract rights) owned by the Company or any of its
Subsidiaries (collectively, "Liens") other than Permitted Liens.

     

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
VII.

    

    Section
7.01                                Definitions.

    

    "Indebtedness" of any Person
means, without duplication (i) all indebtedness for borrowed money, (ii) all
obligations issued, undertaken or assumed as the deferred purchase price of
property or services, including (without limitation) "capital leases" in
accordance with generally accepted accounting principles (other than trade
payables entered into in the ordinary course of business), (iii) all
reimbursement or payment obligations with respect to letters of credit, surety
bonds and other similar instruments, (iv) all obligations evidenced by notes,
bonds, debentures or similar instruments, including obligations so evidenced
incurred in connection with the acquisition of property, assets or businesses,
(v) all indebtedness created or arising under any conditional sale or other
title retention agreement, or incurred as financing, in either case with respect
to any property or assets acquired with the proceeds of such indebtedness (even
though the rights and remedies of the seller or bank under such agreement in the
event of default are limited to repossession or sale of such property), (vi) all
monetary obligations under any leasing or similar arrangement which, in
connection with generally accepted accounting principles, consistently applied
for the periods covered thereby, is classified as a capital lease, (vii) all
indebtedness referred to in clauses (i) through (vi) above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any mortgage, lien, pledge, charge, security
interest or other encumbrance upon or in any property or assets (including
accounts and contract rights) owned by any Person, even though the Person which
owns such assets or property has not assumed or become liable for the payment of
such indebtedness, (viii) all obligations issued, undertaken or assumed as part
of any financing facility with respect to accounts receivables of the Company
and its Subsidiaries, including, without limitation, any factoring arrangement
of such accounts receivables and (ix) all Contingent Obligations in respect of
indebtedness or obligations of others of the kinds referred to in clauses (i)
through (viii) above.

    

    "Permitted Indebtedness" means
(i) Indebtedness approved by the stockholders of Eastern Resources, Inc.
representing at least a majority of its voting power, (ii) Indebtedness secured
by Permitted Liens, (iii) Indebtedness to trade creditors incurred in the
ordinary course of business, and (iv) extensions, refinancings and renewals of
any items of Permitted Indebtedness, provided that the principal amount is not
increased or the terms modified to impose more burdensome terms upon the
Company, as the case may be.

    

    "Permitted Liens" means (i) any
Lien for taxes not yet due or delinquent or being contested in good faith by
appropriate proceedings for which adequate reserves have been established in
accordance with GAAP, (ii) any statutory Lien arising in the ordinary course of
business by operation of law with respect to a liability that is not yet due or
delinquent, (iii) any Lien created by operation of law, such as materialmen's
liens, mechanics' liens and other similar liens, arising in the ordinary course
of business with respect to a liability that is not yet due or delinquent or
that are being contested in good faith by appropriate proceedings, (iv) Liens
securing the Company's obligations under the Notes, (v) Liens (A) upon or in any
equipment (as defined in the Security Agreement) acquired or held by the Company
to secure the purchase price of such equipment or indebtedness incurred solely
for the purpose of financing the acquisition or lease of such equipment, or (B)
existing on such equipment at the time of its acquisition, provided that the
Lien is confined solely to the property so acquired and improvements thereon,
and the proceeds of such equipment, (vi) Liens incurred in connection with the
extension, renewal or refinancing of the indebtedness secured by Liens of the
type described in clauses (i) and (v) above, provided that any extension,
renewal or replacement Lien shall be limited to the property encumbered by the
existing Lien and the principal amount of the Indebtedness being extended,
renewed or refinanced does not increase, (vii) leases or subleases and licenses
and sublicenses granted to others in the ordinary course of the Company's
business, not interfering in any material respect with the business of the
Company taken as a whole, (viii) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payments of custom duties in
connection with the importation of goods; (ix) Liens arising from judgments,
decrees or attachments in circumstances not constituting an Event of Default and
(x) Liens with respect to Indebtedness not individually in excess of $5,000 or
in the aggregate in excess of $10,000, which individually and in the aggregate
are not material to the Company.

    

    "Required Holders" means the
holders of Notes representing at least fifty-one percent (51%) of the aggregate
principal amount of the Notes then outstanding.

    

    Section
7.02                    
             Notice.
Notices regarding this Note shall be sent to the parties at the following
addresses, unless a party notifies the other parties, in writing, of a change of
address:

    

    If to the
Company, to:                         Buzz
Kill, Inc.

                    4
Park Avenue South, Suite 16K

                    New
York, NY 10016

    

    With a
copy
to:                                             Gottbetter
& Partners, LLP

                    488
Madison Avenue, 12th Floor

                    New
York, New York 10022

                    Adam
S. Gottbetter, Esq.

                    Telephone:
212.400.6900

                    Facsimile:
212.400.6901

    

    If to the
Holder:

    

    

    

    

    

    With a
copy to:

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    Section
7.03                                Governing
Law. All
questions concerning the construction, validity, enforcement and interpretation
of this Note shall be governed by and construed and enforced in accordance with
the internal laws of the State of New York, without regard to the principles of
conflicts of law thereof. Each party agrees that all legal proceedings
concerning the interpretations, enforcement and defense of the transactions
contemplated by any of the Transaction Documents (whether brought against a
party hereto or its respective affiliates, directors, officers, shareholders,
employees or agents) shall be commenced in the state and federal courts sitting
in the City of New York, Borough of Manhattan (the “New York Courts”). Each
party hereto hereby irrevocably submits to the exclusive jurisdiction of the New
York Courts for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein
(including with respect to the enforcement of any of the Transaction Documents),
and hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, or such New York Courts are improper or inconvenient venue for
such proceeding. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Note and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law. Each party hereto hereby irrevocably waives, to
the fullest extent permitted by applicable law, any and all right to trial by
jury in any legal proceeding arising out of or relating to this Note or the
transactions contemplated hereby. If either party shall commence an action or
proceeding to enforce any provisions of this Note, then the prevailing party in
such action or proceeding shall be reimbursed by the other party for its
attorneys fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such action or proceeding.

    

    Section
7.04                                Severability. The invalidity
of any of the provisions of this Note shall not invalidate or otherwise affect
any of the other provisions of this Note, which shall remain in full force and
effect.

    

    Section
7.05                                Entire Agreement and
Amendments. This Note represents the entire agreement between the parties
hereto with respect to the subject matter hereof and there are no
representations, warranties or commitments, except as set forth herein. This
Note may be amended only by an instrument in writing executed by the parties
hereto.

    

    [SIGNATURE
PAGE FOLLOWS]

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    IN
WITNESS WHEREOF, with the intent to be legally bound hereby, the Company as
executed this Note as of the date first written above.

    

    Buzz
Kill, Inc.,

    a New
York corporation

    

    

    By: ____________________________________                                                               

    Name:

    Title:              Authorized
Signatory

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00139-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00139-of-00352.parquet"}]]