EXHIBIT 10.5
ESCROW AGREEMENT
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ESCROW AGREEMENT, dated February 28, 2006, between CAMOFI Master LDC
("CAM"), New Century Companies, Inc. ("NEW CENTURY") and ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
LLP (the "ESCROW AGENT").
WHEREAS, CAM proposes to extend certain financial accommodations (the
"Accommodation") to NEW CENTURY in the amount of approximately $1,500,000 and
CAM and NEW CENTURY have agreed upon the general terms and conditions of the
Accommodation and anticipated closing the Accommodation by February 28, 2006
(the "Closing").
NOW, THEREFORE, CAM and NEW CENTURY agree as follows:
1. On the date hereof, CAM has transferred to an Escrow Account maintained
by the Escrow Agent the sum of $1,500,000 (the "Escrow Fund"). The Escrow Fund
shall be maintained in cash in an interest bearing account of the Escrow Agent
and disbursed by the Escrow Agent only in accordance with the provisions of this
Agreement. A payment of any portion of the Escrow Fund to CAM or NEW CENTURY
shall include any interest accrued thereunder on the amount of such payment.
2. Upon delivery to Escrow Agent of a written notice in the form attached
hereto (the "Escrow Notice") signed by CAM and NEW CENTURY, the Escrow Agent
shall deliver the entire Escrow Fund in accordance with the payment instructions
contained therein.
3. If CAM and NEW CENTURY fail to deliver an Escrow Notice with respect to
the Escrow Fund to the Escrow Agent within a year of the date hereof, the entire
amount of the Escrow Fund, including all interest accrued thereon, shall be
transferred to CAM in accordance with payment instructions delivered by CAM at
that time.
4. The Escrow Agent may act or refrain from acting in respect of any
matter arising in connection with the administration of the Escrow Fund, shall
have no duties or obligations other than as stated herein and shall be protected
in acting upon any notice, certificate or other communication, not only as to
the due execution and the validity and effectiveness of its provisions, but also
as to the truth and acceptability of any information therein contained, which it
shall in good faith reasonably believe to be valid and to have been signed or
presented by a proper person or persons. The Escrow Agent shall have no
liability or responsibility hereunder for any act or omission to act except for
its own gross negligence or willful misconduct. The Escrow Agent shall not be
bound by any notice, or demand with respect thereto, or any waiver,
modification, amendment, termination or rescission of this Agreement unless in
writing delivered to the Escrow Agent, and, if the duties of the Escrow Agent
are affected, unless it shall have given its prior written consent thereto. The
Escrow Agent may, at any time, upon notice to CAM and NEW CENTURY, for any
reason whatsoever, either (a) hold the Escrow Fund until otherwise directed by a
written instrument signed by CAM and NEW CENTURY or (b) deposit the Escrow Fund
in any court of competent jurisdiction pending the final determination of any
dispute between the parties hereto.
5. Nothing contained herein shall prevent the Escrow Agent from acting as
counsel to CAM, its affiliated companies or any of their respective directors,
officers, equity holders or employees in any dispute with NEW CENTURY or any
third party which may arise relating to the provisions of the Agreement, the
provisions hereof or those of any other agreement, document or instrument
delivered in connection therewith or herewith.
6. All reasonable costs and expenses incurred by the Escrow Agent in
performing its services under this Agreement shall be paid by NEW CENTURY.
7. The Escrow Agent's duties and responsibilities shall be limited to
those expressly set forth in this Agreement, and the Escrow Agent shall not be
subject to, nor obliged to recognize, any agreement between, or direction or
instruction of, CAM and NEW CENTURY, or any of their respective directors,
officers, equity holders or employees, unless reference thereto is made herein;
provided, however, that with the Escrow Agent's written consent, this Agreement
may be amended at any time or times by an instrument in writing signed by the
Escrow Agent, CAM and NEW CENTURY.
8. If any property subject hereto 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 case any order, writ, judgment or decree shall be made or
entered by any court affecting such property, or any part thereof, then in any
of such events, the Escrow Agent is authorized to rely upon and comply with any
such order, writ, judgment or decree, and if it complies with any such order,
writ, judgment or decree, it shall not be liable to CAM or NEW CENTURY, their
respective affiliates or to any other person, firm or corporation by reason of
such compliance, even though such order, writ, judgment or decree may be
subsequently reversed, modified, annulled, set aside or vacated.
9. The Escrow Agent may resign at any time upon ten (10) business days'
prior written notice to CAM and NEW CENTURY. In the case of the Escrow Agent's
resignation, the Escrow Agent's only duty shall be to deliver all remaining
deposits in the Escrow Fund to a successor escrow agent acceptable to CAM, which
acceptance shall be evidenced by the written and signed order of CAM. If no such
order is received by the Escrow Agent within five (5) days after giving such
notice, the Escrow Agent is unconditionally and irrevocably authorized and
empowered, in its discretion, to appoint a successor escrow agent, which shall
be a nationally recognized bank or financial institution of its choosing, and to
send any and all items deposited and maintained hereunder to such successor
escrow agent.
10. All notices or other communications required or permitted hereunder
shall be in writing and shall be deemed given or delivered (i) when delivered
personally or by private courier, (ii) when actually delivered by registered
United States mail, return receipt requested or, (iii) when sent by telecopy if
confirmed as received that day by the receiving party (provided that the
original of such notice or communication is sent that day by a means specified
in clause (i) or (ii)), addresses and telecopy numbers provided for in the draft
transaction documents relating to the Accommodation or at such other address (or
addresses) as any of the parties may furnish in writing to the other parties.
For all purposes hereof (a) any notice mailed by the Escrow Agent shall be
effective at the time it is deposited by the Escrow Agent in the United States
mail, whether or not it is actually received, and (b) any notice mailed to the
Escrow Agent shall not be effective until actually received by the Escrow Agent.
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11. CAM and NEW CENTURY, jointly and severally, agree to indemnify and
hold the Escrow Agent harmless from any and all loss, damage, claims,
liabilities, judgments and other costs and expenses of every kind and nature
which may be incurred by the Escrow Agent by reason of its acceptance of, and
its performance under, this Agreement, including, without limitation, attorneys'
fees either paid to retained attorneys or amounts representing the fair value of
legal services rendered to itself for liabilities incurred (the "Losses"),
except to the extent the Losses arise from the gross negligence or willful
misconduct of the Escrow Agent.
12. The Escrow Agent shall be automatically released from all
responsibility and liability under this Agreement upon the Escrow Agent's
delivery or deposit of the entire amount of the Escrow Fund in accordance with
the provisions of this Agreement.
13. This Escrow Agreement constitutes the entire understanding among the
parties as to the subject matter hereof and no waiver or modification of the
terms hereof shall be valid unless in writing signed by CAM, NEW CENTURY and the
Escrow Agent and only to the extent therein set forth.
14. This Escrow Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
15. This Escrow Agreement shall be binding upon and inure to the benefit
of the parties hereto, their respective heirs, administrators, executors,
successors and permitted assigns.
16. This Escrow Agreement may be executed in one or more counterparts,
each of which shall be deemed an original.
17. IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement as of the day and year first above written.
CAMOFI MASTER LDC ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
By: By:
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Name: Name:
Title: Title:
NEW CENTURY COMPANIES, INC.
By:
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Name:
Title:
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ESCROW NOTICE
________________, 200__
▇▇▇▇▇▇ ▇▇▇▇▇▇ Rosenman LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
You are hereby directed to transfer the Escrow Fund (as such term is defined in
the Escrow Agreement attached thereto) to the following account:
Very truly yours,
CAMOFI MASTER LDC
By:
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Name:
Title:
NEW CENTURY COMPANIES, INC.
By:
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Name:
Title:
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▇▇▇▇▇▇▇▇▇▇▇ ASSETMANAGEMENT LLC
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EXHIBIT G
February 28, 2006
New Century Companies, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Chief Executive Officer
Re: Escrow Account at ▇▇▇▇▇▇ ▇▇▇▇▇▇ Rosenman LLP (the "Escrow Account").
Reference is made to (i) that certain Securities Purchase Agreement, dated
as of February 28, 2006 (as amended, modified or supplemented from time to time,
the "Purchase Agreement"), by and between New Century Companies, Inc., a
Delaware corporation (the "Company"), and CAMOFI Master LDC ("Purchaser") and
(ii) that certain Escrow Account Agreement, dated as of February 28, 2006 (as
amended, modified or supplemented from time to time, the "Escrow Account
Agreement"), by and among the Company, the Purchaser and ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
LLP (the "Escrow Agent"). Capitalized terms used but not defined herein shall
have the meanings ascribed them in the Purchase Agreement or the Escrow Account
Agreement, as applicable. Pursuant to Section 2.2 of the Purchase Agreement, the
Company is required to place $1,500,000 in the Escrow Account, and, subject to
the provisions of this letter, the Purchase Agreement and any of the Transaction
Documents regarding release and use of such proceeds, maintain such amount in
the Escrow Account for as long as the Purchaser shall have any obligations
outstanding under the Note.
The Purchaser and the Company desire to clarify certain aspects regarding
the use of funds contained in the Escrow Account, and for good consideration,
the receipt and sufficiency of which is here acknowledged, the Company and the
Purchaser agree that up to $1,500,000 in the Escrow Account shall be released
upon the consummation of the acquisition of Quilite International LLC (the
"Target") by the Company pursuant to terms satisfactory to the Purchaser in its
sole discretion, including, but not limited to, the Purchaser being satisfied
with the results of an independent third party review of the financial
statements of the Target. Anything to the contrary notwithstanding, no monies
shall be released from the Escrow Account unless (w) the Purchaser shall be
satisfied, in its sole discretion, with the progress of negotiations for the
extension or renewal of the Company's Headquarters lease; (x) no default or
Event of Default shall have occurred or be continuing; (y) there shall have been
no material adverse change in the business or results of operations of the
Company and its Subsidiaries; and (z) the Equity Conditions shall have all been
satisfied. Upon the Purchaser's satisfaction that the conditions in this
paragraph have been met for the Release, the Purchaser shall direct the Escrow
Agent to wire the funds from the Escrow Account to such bank account as the
Company may direct the Purchaser in writing.
This letter may not be amended or waived except by an instrument in
writing signed by the Company and the Purchaser. This letter may be executed in
any number of counterparts, each of which shall be an original and all of which,
when taken together, shall constitute one agreement. Delivery of an executed
signature page of this letter by facsimile transmission shall be effective as
delivery of a manually executed counterpart hereof. This letter shall be
governed by, and construed in accordance with, the laws of the State of New
York. This letter sets forth the entire agreement between the parties hereto as
to the matters set forth herein and supersedes all prior communications, written
or oral, with respect to the matters herein.
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If the foregoing meets with your approval please signify your acceptance
of the terms hereof by signing below.
CAMOFI MASTER LDC
By:
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Name:
Title:
Agreed and Accepted this 28th day of February, 2006.
NEW CENTURY COMPANIES, INC.
By:
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Name:
Title:
