EXHIBIT 10.37
PLEDGE AND ESCROW AGREEMENT
This Pledge and Escrow Agreement (the "Agreement") is made as of the
31st day of December, 2001, among Syndicated Food Service International, Inc.,
f/k/a Floridino's International Holdings, Inc. ( "Company"), Syndicated Food
Service Group, Inc. ("SFSI"), Xxxxxxx X. Xxxxxxx ("CB"), Xxxxxxxx X. Xxxxxxx
("MB") and Xxxxxx & Xxxxxxxxx (the "Escrow Agent").
WHEREAS, Company, SFSI, CB and MB and certain other parties have
entered, on November 27, 2001, into an Agreement and Plan of Merger and
Reorganization (the "Merger Agreement") pursuant to which CB and MB have
exchanged all the shares either of them held in Xxxxxxx Food Service, Inc. and
Xxxxxxx Transportation, Inc. for, among other considerations, Four Hundred Fifty
Eight Thousand Seven Hundred Sixteen (458,716) shares of the Company's common
stock (the "Pledged Shares").
WHEREAS, pursuant to the terms of the Merger Agreement, the Company and
SFSI have the right, among other remedies, to foreclose on the Pledged Shares in
the event that any Indemnified Company Party sustains or incurs any Losses, as
provided in the Merger Agreement.
WHEREAS, capitalized terms not expressly defined herein shall have the
meaning ascribed to them in the Merger Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter contained, the parties hereto agree as follows:
1. Creation of Security Interest.
CB and MB hereby pledge and hereby grant to Company and SFSI a first
lien and security interest in the Pledged Shares. Concurrently with the
execution of this Agreement, CB and MB as owners of the Pledged Shares are
delivering to the Escrow Agent, with an address at 00 Xxxxx Xxxxxxxx Xxxxxx,
Xxxxxxxxxxxx, XX 00000-0000, (i) all stock certificates representing the Pledged
Shares which include, in addition to the legends relating to securities law, a
legend which limits the sale, assignment, pledge, mortgage, encumbrance,
hypothecation or other manner of disposition or transfer of the Pledged Shares,
and (ii) duly endorsed irrevocable stock powers in blank with the signatures
thereon guaranteed by a national commercial bank in the United States, to be
exercised only upon the earlier of an acknowledgment of a Default or the
resolution of a Dispute, as hereinafter defined.
2. Stock Dividends and Adjustments; Voting Rights.
If, during the term of this Agreement, any reclassification of shares,
stock split, readjustment, exchange, substitution, warrant, option or right to
acquire additional securities, is effected or issued with respect to the Pledged
Shares or any part thereof, all shares or securities that CB and MB shall become
entitled to receive as a result thereof promptly shall be delivered to the
Escrow Agent and they shall constitute Pledged Shares. So long as a (i) Default
(as hereinafter defined) shall not have occurred and be continuing or (ii) the
existence of a Dispute and until its resolution, CB and MB shall be entitled to
receive all cash dividends payable with respect to, and to exercise all rights
to vote, the Pledged Shares.
3. Parties Representative.
Unless otherwise specified herein, (i) CB and MB shall act through CB
and the acts of CB shall be binding upon both MB and CB to the same extent as
if they both committed or effectuated such acts, and (ii) Company and SFSI shall
act through Company and the acts of Company shall be binding upon both Company
and SFSI to the same extent as if they both committed or effectuated such acts.
4. Assurances. No Liens.
(a) Each party shall at the request of the other execute and
deliver all such further assignments and other documents and take all such
further action as the parties may reasonably request in order to effect the
purposes and provisions of this Agreement including to perfect, continue, better
assure or confirm the rights of Company and SFSI in the Pledged Shares provided
for hereunder.
(b) CB and MB shall not sell, assign, pledge or allow any other
parties to put a lien on the Pledged Shares. In the event that a lien is put on
the Pledged Shares, any costs and expenses relating to the cancellation of such
liens should be paid, jointly and severally, by CB and MB.
5. Default; Remedies.
In the event that, at any time, (i) Company or SFSI, reasonably and in
good faith, determines that any Indemnified Company Party has suffered any
Losses under the Merger Agreement (a "Default"), Company shall deliver to CB
and the Escrow Agent a written notice (the "Default Notice"), which Default
Notice shall specify, in detail, (i) a description of the alleged Default and
(ii) the aggregate amount claimed as Losses by the Indemnified Company Party
under the Merger Agreement (the "Default Amount"). CB shall have a period of
twenty (20) business days following the provision of the Default Notice within
which to deliver to Company a written notice (the "Response Notice"), which
Response Notice shall advise Company (a) that CB and MB agree with the alleged
Default and/or with the Default Amount set forth in the Default Notice, or (b)
that CB and MB do not agree with the alleged Default and/or with the Default
Amount set forth in the Default Notice. If (i) CB shall advise Company, in the
Response Notice, that CB and MB agree with the alleged Default and the Default
Amount set forth in the Default Notice or (ii) if CB fails to send to Company a
Response Notice, within the 20-days period described above, then no dispute
shall exist and the Escrow Agent shall proceed, if so instructed by Company
("Company Instruction"), to deliver to the Indemnified Company Party (i) an
aggregate number of Pledged Shares equal to the Default Amount divided by the
"Share Value" on the date of the Company Instruction. The Share Value shall mean
the average of the final ask price of a share of Company's common stock during
the 20-days period preceding the date of the Company Instruction. If, on the
other hand, CB shall advise Company in the Response Notice that CB and MB do not
agree with the alleged Default and/or with the Default Amount set forth in the
Default Notice (specifying in detail the Receiving Party's disagreement), a
dispute (the "Dispute") shall be deemed to exist between Company, SFSI, CB and
MB. Company and CB shall endeavor in good faith to resolve the Dispute by direct
consultation and negotiation with each other. In the event Company and CB are
unable to resolve the Dispute within ten (10) business days after the provision
to Company of the Response Notice, the Dispute shall be resolved by a court as
provided in Section 9 (a) hereof.
If, in accordance with the terms and provisions of Section 9 (a)
hereof, such a court enters a final judgment in favor of Company and/or SFSI, in
addition to any other remedies available at law, they shall be entitled to
exercise all of the rights and remedies with respect to the Pledged Shares of a
secured party under the Uniform Commercial Code or any other applicable law.
6. Rights, Duties and Immunities of the Escrow Agent.
(a) Acceptance by the Escrow Agent of its duties under this
Agreement is subject to the following terms and conditions, which all parties to
this Agreement hereby agree shall govern and control the rights, duties and
immunities of the Escrow Agent:
(i) The duties and obligations of the Escrow Agent are
purely ministerial in nature and are determined solely by the express provisions
of this Agreement.
(ii) The Escrow Agent shall not be responsible in any
manner whatsoever for any failure or inability of the parties to this Agreement,
or of anyone else, to honor any of the provisions of this Agreement.
-2-
(iii) The parties hereto will jointly and severally
reimburse and indemnify the Escrow Agent for, and hold it harmless against, any
loss, liability, damage or expense, including but not limited to counsel fees
and expenses arising out of or in connection with its acceptance of, or the
performance of its duties and obligations under, this Agreement, except for
losses, liabilities, damages and expenses caused by the willful misconduct or
gross negligence of the Escrow Agent. In no event will the Escrow Agent be
liable for any loss of asset value, consequential, indirect or special damages.
(iv) The Escrow Agent may act in reliance upon any
signature believed by it to be genuine and may assume that any person who has
been designated by the parties hereto to give written instructions, notice of
receipt or make any statements in connection with the provisions hereof is
authorized to do so. The Escrow Agent shall have no duty to make inquiry as to
the genuineness, accuracy or validity of any statements or instruments or any
signatures on any statements or instructions. The parties hereto agree that, for
the purposes of this Agreement, the names and true signatures of each individual
authorized to act on behalf of each of them will be set forth on a separate
writing as drafted by the parties if either of them elects to have another
person or entity act on their behalf. Subject to the provisions of this
Agreement, in the event that the Escrow Agent is uncertain as to its duties or
the manner in which any of its duties shall be performed, the Escrow Agent shall
notify the parties hereto, and the Escrow Agent need not take any action or
perform any act until the uncertainty is resolved to the satisfaction of the
Escrow Agent.
(v) The Escrow Agent shall not be liable for any error of
judgment, or for any act done or step taken or omitted by it, or for anything
which it may do or refrain from doing in connection herewith, except its own
willful misconduct or gross negligence.
(vi) The Escrow Agent may seek the advice of such legal
counsel as it deems necessary in the event of any dispute or question as to the
construction of any of the provisions of this Agreement or its duties hereunder,
and it shall incur no liability and shall be fully protected in respect of any
action taken, omitted or suffered by it in accordance with the opinion of such
counsel.
(vii) The Escrow Agent makes no representation as to the
validity, value, genuineness or collectibility of any security, document or
instrument held by or delivered to it.
(viii) Company and SFSI expressly agree that the Escrow
Agent shall not be precluded from or restricted in any manner whatsoever from
representing CB and/or MB or otherwise acting as attorneys for CB and/or MB in
any matter, whether or not there is a dispute between Company, SFSI, CB and MB.
(b) If the Escrow Agent has any doubts as to whether or not it
should release the Pledged Shares, the Escrow Agent may, at the Escrow Agent's
option, deposit the Stock with the clerk of the United States District Court for
the Southern District of Indiana upon commencement of an action in the nature of
an interpleader and the Escrow Agent shall thereupon be released and discharged
from any and all further obligations arising in connection with this Agreement.
(c) The parties agree that in the event that the Escrow Agent
becomes unable to perform its duties under this Agreement, Company, with prior
written notice to CB, shall designate a new Escrow Agent (who must be an
attorney or law firm of comparable size and reputation with that of the Escrow
Agent) to perform the obligations under this Agreement.
7. Termination; Distribution of Pledged Shares.
(a) The security interest and assignment created and granted
hereunder shall terminate concurrently with termination of the indemnities
obligations of CB and MB under the Merger Agreement (the "Termination Date").
-3-
\
(b) If no Dispute exists on the Termination Date, then the Pledged
Shares, stock powers and other instruments related thereto shall be returned to
CB and MB, the security interest in the Pledged Shares shall terminate and all
obligations of the Escrow Agent, CB and MB under this Agreement shall terminate.
(c) If a Dispute exists on the Termination Date, then all of the
Pledged Shares shall be held by the Escrow Agent hereunder until resolution of
the Dispute.
8. Notices.
All notices and other communications provided for herein shall be dated
and in writing and shall be deemed to have been duly given (x) on the date of
delivery, if delivered personally or by telecopier, receipt confirmed, (y) on
the second following business day, if delivered by a recognized overnight
courier service, or (z) seven days after mailing, if sent by registered or
certified mail, return receipt requested, postage prepaid, in each case, to the
party to whom it is directed at the following address (or at such other address
as any party hereto shall hereafter specify by notice in writing to the other
parties hereto):
(i) If to CB and MB, to them at the following address:
Address: 0000 Xxxxxx Xxx, Xxxxxxxxxxx, Xxxxxxx 00000
Tel: 000-000-0000, ext. 201
Fax: 000-000-0000
Attention: Xxxxxxx X. Xxxxxxx
with a copy to:
Xxxxxx & Xxxxxxxxx,
00 Xxxxx Xxxxxxxx Xxxxxx,
Xxxxxxxxxxxx, XX 00000-0000
Tel: (000) 000-0000
Facsimile: (000) 000-0000
Attn: Xxxx X. Xxxx
(ii) If to Company and SFSI:
Address: 000 Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxx Xxxxx,
Xxxxxxx 00000
Tel: 000-000-0000
Fax: 000-000-0000
Attention: Xxxxxxx X. Xxxxxx, Chief Executive Officer
with a copy to:
Proskauer Rose LLP
0000 Xxxxxxxx,
Xxx Xxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
Attention: Xxxxx X. Xxxxx
(iii) If to the Escrow Agent
Xxxxxx & Xxxxxxxxx,
00 Xxxxx Xxxxxxxx Xxxxxx,
Xxxxxxxxxxxx, XX 00000-0000
Tel: (000) 000-0000
-4-
Facsimile: (000) 000-0000
Attn: Xxxx X. Xxxx
9. Miscellaneous.
(a) This Agreement shall be governed by and construed and enforced
in accordance with, the laws of the State of Indiana, without regard to
conflicts of law principles. Any disputes with respect to the interpretation of
this Agreement or the rights and obligations of the parties hereto shall be
exclusively brought in the U.S. District Court for the Southern District of
Indiana or, if such Court lacks subject matter jurisdiction, in the state courts
of Indiana, Indianapolis. Each of the parties waives any right to object to the
jurisdiction or venue of either of such Courts or to claim that such Courts are
an inconvenient forum.
(b) If any term or provision of this Agreement shall, for any
reason, be held to be illegal, invalid or unenforceable under the laws of any
governmental authority to which this Agreement is subject, the term or provision
shall be deemed severed from this Agreement, and the remaining terms and
provisions shall be enforceable, to the fullest extent, permitted by law.
(c) This Agreement shall inure to the benefit of and shall be
binding upon the respective successors, assigns and legal representatives of the
parties hereto.
(d) Captions used herein are inserted for reference purposes only
and shall not affect the interpretation or meaning of this Agreement.
(e) This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same agreement.
(f) This Agreement may not be changed, modified or, except as
provided herein, terminated, in whole or in part, except by a written instrument
signed by the party against whom any such change, modification or termination is
sought to be enforced.
[remainder of page intentionally blank]
-5-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
SYNDICATED FOOD SERVICE INTERNATIONAL, INC.
f/k/a FLORIDINO'S INTERNATIONAL HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer
SYNDICATED FOOD SERVICE GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer
/s/ Xxxxxxx X. Xxxxxxx
----------------------------------
XXXXXXX X. XXXXXXX
/s/ Xxxxxxxx X. Xxxxxxx
----------------------------------
XXXXXXXX X. XXXXXXX
XXXXXX & XXXXXXXXX
By: /s/ Xxxx X. Xxxx
--------------------------------
Name: XXXX X. XXXX
Title: PARTNER
-6-
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR GOOD AND VALUABLE CONSIDERATION, Xxxxxxx X. Xxxxxxx and Xxxxxxxx X.
Xxxxxxx, joint owners (together, the "Assignor") hereby unconditionally and
forever assign, transfer and set over unto ____________________________________,
_______________________ (_________) shares of the common capital stock of
SYNDICATED FOOD SERVICE INTERNATIONAL, INC., a Florida corporation, standing in
the name of Assignor on the books of such corporation and represented by
Certificate No.________________________, and hereby irrevocably constitutes and
appoints the Secretary of the Corporation as the attorney to transfer such stock
on the books of such corporation with full power of substitution in the
premises.
Executed this____________day of December, 2001.
/s/ Xxxxxxx X. Xxxxxxx
----------------------------
Xxx Xxxxxxx Xxxxxxx X. Xxxxxxx
S.S. Number:
/s/ Xxxxxxxx X. Xxxxxxx
----------------------------
Xxxxxxxx X. Xxxxxxx
S.S. Number:
In presence of and signatures guaranteed by:
[INSERT NATIONAL BANK SIGNATURE/GUARANTEE BLOCK]
COMMON STOCK SFS COMMON STOCK
NUMBER SHARES
SF 2027 *** 458716 ***
SYNDICATED FOOD, SERVICE INTERNATIONAL, INC.
Incorporated under the Laws of the State of Florida
CUSIP 871580 10 6
THIS CERTIFIES THAT XXXXXXX XXXXXXX &
XXXXXXXX XXXXXXX JT TEN
Is the owner of
**** FOUR HUNDRED FIFTY EIGHT THOUSAND SEVEN HUNDRED SIXTEEN ****
FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK OF THE PAR
VALUE OF $.001 PER SHARE OF
SYNDICATED FOOD SERVICE INTERNATIONAL, INC.
(hereinafter called the "Corporation") transferable on the books of the
Corporation in person or by duly authorized attorney upon surrender of this
Certificate properly endorsed. This Certificate and the shares represented
hereby are issued and shall be held subject to all the provisions of the
Certificate of Incorporation and By-Laws of the Corporation and the amendments
from time to time made thereto, copies' of which are or will be on file at the
principal office of the Corporation, to all of which the holder by acceptance
hereof assents. This Certificate Is not valid unless countersigned by the
Transfer Agent and Registrar.
WITNESS the facsimile seal of the Corporation and the facsimile
signatures of its duly authorized officers.
Date: 12/28/2001
/s/ [SEAL] /s/ Xxxxxxx X. Xxxxxx
--------------- ------------------------
SECRETARY CHIEF EXECUTIVE OFFICER
Countersigned and Registered:
MANHATTAN TRANSFER REGISTRAR CO.
(HOLBROOK, N.Y.)
By /s/ Xxxxx Xxxxxx
Transfer Agent
and Registrar
Authorized Signature
