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Document Preview Escrow Agreement |
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Title: |
Escrow Agreement |
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Date: |
2006 |
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Size: |
Preview shows 6KB of 38KB total |
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Price: |
$39 |
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ID: |
#2485938 |
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ESCROW AGREEMENT
ESCROW AGREEMENT (Agreement) dated [Closing Date] by and among KBL HEALTHCARE ACQUISITION CORP. II, a Delaware corporation (Parent), , as the Target Stockholders Representative (the Representative), being the representative of the former stockholders of each of SUMMER INFANT, INC., a Rhode Island corporation (SII), SUMMER INFANT EUROPE, LTD., a United Kingdom limited company (SIE), and SUMMER INFANT ASIA, LTD., a Hong Kong limited company (SIA and, collectively, with SII and SIE, the Targets), and CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as escrow agent (the Escrow Agent).
Parent, Parents wholly owned subsidiary, SII Acquisition Corp. (the Merger Sub), each of the Targets and the stockholders of each of the Targets are the parties to an Agreement and Plans of Reorganization dated as of September 1, 2006 (the Reorganization Agreement) pursuant to which SII has merged with and into the Merger Sub and all of the Stockholders of SIE and SIA have sold and transferred all of their capital stock of SIE and SIA to Parent. Pursuant to the Reorganization Agreement, Parent (i) is to be indemnified in certain respects and (ii) may be entitled to the return, for cancellation, of some or all of the Net Worth Shares in certain circumstances. The parties desire to establish escrow funds as collateral security for the indemnification obligations and to effectuate the return to Parent of Net Worth Shares under the Reorganization Agreement. The Representative has been designated pursuant to the Reorganization Agreement to represent all of the former stockholders of the Targets (the Stockholders) and each Permitted Transferee (as hereinafter defined) of the Stockholders (the Stockholders and all such Permitted Transferees are hereinafter referred to collectively as the Owners), and to act on their behalf for purposes of this Agreement. Capitalized terms used herein that are not otherwise defined herein shall have the meanings ascribed to them in the Reorganization Agreement.
The parties agree as follows:
1. (a) Concurrently with the execution hereof, the Stockholders, as a group, are delivering to the Escrow Agent, to be held in escrow pursuant to the terms of this Agreement, stock certificates issued in the name of the Stockholders representing an aggregate of (i) 1,000,000 Transaction Shares received by such Stockholders pursuant to the Reorganization Agreement, together with ten (10) assignments separate from certificate executed in blank by such Stockholder to be held in escrow pursuant to this Agreement and Section 1.10(a) of the Reorganization Agreement (the Indemnity Escrow Fund), and (ii) 391,667 Net Worth Shares received by such Stockholders pursuant to the Reorganization Agreement, together with ten (10) assignments separate from certificate, executed in blank by such Stockholder, to be held in escrow pursuant to the terms of this Agreement and Section 1.10(b) of the Reorganization Agreement (the Adjustment Escrow Fund and, together with the Indemnity Escrow Fund, each an Escrow Fund and, collectively, the Escrow Funds). The Escrow Agent shall maintain a separate account for each Stockholders, and, subsequent to any transfer permitted pursuant to Paragraph 1(e) hereof, each Owners, portion of each Escrow Fund.
(b) The Escrow Agent hereby agrees to act as escrow agent and to hold, safeguard and disburse the Escrow Funds pursuant to the terms and conditions hereof. It shall treat each Escrow Fund as a trust fund in accordance with the terms of this Agreement and not as the property of Parent. The Escrow Agents duties hereunder shall terminate upon its distribution of the entirety of both Escrow Funds in accordance with this Agreement.
(c) Except as herein provided, the Owners shall retain all of their rights as stockholders of Parent with respect to shares of Parent Common Stock constituting (i) the Indemnity Escrow Fund during the period ending on the later of (1) the date that is sixteen months after the Effective Time and (2) 30 days after Parent has filed with the SEC its annual report on Form 10-KSB for the year ending December 31, 2007 (such period, the Escrow Period), and for such further period as may be required pursuant to this Agreement (the Indemnity Escrow Period) and (ii) the Adjustment Escrow Fund during the period from the date hereof until they are returned to the Owners in accordance with Section 4 of this Agreement (Adjustment Escrow Period and, together with the Indemnity Escrow Period, the Escrow Period), including, in each case, without limitation, the right to vote their shares of Parent Common Stock included in the Escrow Funds.
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