EXHIBIT 2.7
EXECUTION COPY
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement"), made as of October 22, 2003,
among Integrated BioPharma, Inc., a Delaware corporation, having a principal
place of business at 225 Long Avenue, Hillside, New Jersey 07205 ("Purchaser"),
Aloe Commodities International, Inc., a Texas corporation, having a principal
place of business at 2161 Hutton Drive, Suite 126, Carrollton, Texas 75006
("Seller"), and Vial, Hamilton, Koch & Knox, L.L.P., with offices at 1700
Pacific Avenue, Suite 2800, Dallas, Texas 75201 (the "Escrow Agent").
WITNESSETH
WHEREAS, Purchaser and Seller are entering into a certain asset
purchase agreement dated as of the date hereof (the "Asset Purchase Agreement")
pursuant to which Seller shall transfer and assign its rights in the Transferred
Assets to Purchaser in consideration for receiving the Cash Consideration and
the Share Consideration as provided in the Asset Purchase Agreement (terms not
defined herein shall have the meaning ascribed to them in the Asset Purchase
Agreement, a copy of which is attached hereto as Exhibit A);
WHEREAS, Section 2.1(b) of the Asset Purchase Agreement provides that
such Share Consideration shall be held in escrow and released after a period of
one (1) year from the Closing Date pursuant to the terms of an escrow agreement
between and among Purchaser, Seller and the firm of Vial, Hamilton, Koch & Knox,
L.L.P., counsel to Seller;
WHEREAS, Vial, Hamilton, Koch & Knox, L.L.P. is willing to act as
escrow agent and hold and release the Share Consideration subject to the terms
and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and for other valuable consideration, the respective receipts of which
are hereby acknowledged, it is agreed as follows:
1. Escrow Agent. The firm of Vial, Hamilton, Koch & Knox, L.L.P.
agrees to act as the escrow agent and to hold and deliver the
Share Consideration in accordance with the terms and
conditions set forth herein.
2. Escrowed Shares. In accordance with Section 2.1(b) of the
Asset Purchase Agreement, Purchaser agrees to cause its
transfer agent to deliver a certificate representing the
shares of the Share Consideration to the Escrow Agent as soon
as practicable after the Closing Date (the "Escrowed Shares").
3. Term of Escrow. The Escrow Agent shall hold the Escrowed
Shares in escrow for a one (1) year period commencing on the
date hereof and expiring on the one (1) year anniversary
("Escrow Period").
4. Release of Escrow.
a. Except as provided herein, upon the termination of the Escrow
Period the Escrow Agent shall release and deliver to Seller
the certificate representing the Escrowed Shares upon receipt
of a written notice (the "Release Notice") from both Purchaser
and Seller jointly authorizing the Escrow Agent to release and
deliver the Escrowed Shares to Seller.
b. Notwithstanding anything to the contrary herein, if
during the Escrow Period: (i) a claim is made challenging
the validity of the sale of the Transferred Assets by
Seller to Purchaser and the transactions contemplated in
the Asset Purchase Agreement, and such claim is upheld or
resolved by a judicial proceeding, arbitration or
otherwise, then Purchaser and Seller agree that Purchaser
shall have the option to return the Product Lines to Seller
in consideration for the release from escrow of the number
of Escrowed Shares equal to the amount of damages of the
claim and the return of such shares to Purchaser; or (ii) a
claim for damages is made by Purchaser against Seller due to
a material breach of Seller's representations and
warranties in the Asset Purchase Agreement and such claim is
upheld or resolved by a judicial proceeding, arbitration or
otherwise, then Purchaser and Seller agree that Purchaser
shall have the option to return the Product Lines to
Seller in consideration for the release from escrow of the
number of Escrowed Shares equal to the amount of such
damages and the return of such shares to Purchaser. If no
claim is made against the Escrowed Shares pursuant to
sub-section (i) or (ii) above, then both Purchaser and
Seller shall deliver the Release Notice to the Escrow Agent
upon the expiration of the Escrow Period.
5. Rights of Escrow Agent. In the event that the Escrow Agent
shall be uncertain as to its duties or actions hereunder or
shall receive instructions or a notice from either Purchaser
or Seller which is in conflict with instructions or a notice
from the other or which, in the reasonable opinion of the
Escrow Agent, conflicts with the provisions of this Agreement,
it shall be entitled to take any of the following courses of
action:
a. Hold the Escrowed Shares and decline to take any further
action until the Escrow Agent receives joint written
instructions from the disputing parties or an order of a court
of competent jurisdiction directing it to continue to hold or
to deliver the same, in which case the Escrow Agent shall then
continue to hold or deliver the Escrowed Shares, as the case
may be, in accordance with such direction;
b. In the event of litigation between Purchaser and Seller with
respect to the subject matter of the Asset Purchase Agreement
or the Transferred Assets, the Escrow Agent may deliver the
Escrowed Shares to the clerk of any court in which such
litigation is pending;
c. The Escrow Agent may deliver the Escrowed Shares to a court of
competent jurisdiction and therein commence an action for
interpleader, the cost thereof to the Escrow Agent to be borne
by whichever of Purchaser or Seller does not prevail in the
litigation.
d. The Escrow Agent shall not receive any fee for acting as the
escrow agent. In addition, the Escrow Agent shall not be
liable for any action taken or omitted in good faith and
believed by it to be authorized or within the rights or powers
conferred upon it by this Agreement and may rely, and shall be
protected in acting or refraining from acting in reliance,
upon an opinion of counsel and upon any directions,
instructions, notice, certificate, instrument, request, paper
or other document believed by it to be genuine and to have
been made, sent, signed or presented by the proper party or
parties.
e. Purchaser and Seller shall jointly and severally indemnify and
hold harmless the Escrow Agent against any loss, liability or
expense (including legal fees) incurred in good faith in the
performance of its services hereunder including the cost and
expense of defending itself against any claim or liability.
f. Purchaser and Seller acknowledge that the Escrow Agent has
acted as counsel to Seller in connection with the Asset
Purchase Agreement and other agreements and documents being
executed in connection therewith. Purchaser and Seller agree
that in the event of any disputes thereunder, the Escrow Agent
may continue to represent Seller, and Purchaser and Seller
hereby waive any claim of conflict of interest which they may
otherwise have.
6. Miscellaneous.
a. Notices. Any notice required or permitted to be given under
this Agreement shall be made in writing, and shall be
effective when mailed, by registered or certified mail as
follows:
Purchaser: Integrated BioPharma, Inc.
225 Long Avenue
Hillside, NJ 07205
Phone: (973) 926-0816
Fax: (973) 926-1735
Attn: Chief Executive Officer
Copy to: St. John & Wayne, LLC
Two Penn Plaza East
Newark, New Jersey 07105
Phone: (973) 491-3600
Fax: (973) 491-3407
Attn: William P. Oberdorf, Esq.
Seller: Aloe Commodities International, Inc.
2161 Hutton Drive, Suite 126
Carrollton, Texas 75006
Phone: (972) 241-4251
Fax: (972) 241-4376
Attn: L. Scott McKnight, President
Copy to: Vial, Hamilton, Koch & Knox, L.L.P.
1700 Pacific Avenue, Suite 2800
Dallas, Texas 75201
Phone: (214) 712-4400
Fax: (214) 712-4402
Attn: Mark D. Chambers, Esq.
Escrow Agent: Vial, Hamilton, Koch & Knox, L.L.P.
1700 Pacific Avenue, Suite 2800
Dallas, Texas 75201
Phone: (214) 712-4400
Fax: (214) 712-4402
Attn: Mark D. Chambers, Esq.
Any party may change said address by notice to the other parties in
accordance with the terms hereof.
b. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their
respective successors and assigns.
c. Entire Agreement; Amendment. This Agreement, including any
exhibits, shall constitute the entire agreement between the
parties hereto with respect to the subject matter hereof and
shall supersede all previous negotiations, commitments and
writings. The parties hereto may, by mutual consent, amend or
modify and supplement this Agreement in such manner as may be
agreed upon in writing.
d. Captions. The captions and heading contained herein are solely
for convenience of reference and will not affect the
interpretation of any provision hereof.
e. Governing Law. This Agreement shall be construed and the
rights of the parties hereunder shall be governed by laws of
the State of Texas. Venue for any dispute regarding this
Agreement shall be in a court of competent jurisdiction in
Dallas County, Texas.
f. Counterparts and Facsimile Signatures. This Agreement may be
executed in one or more counterparts, each of which shall be
deemed to be an original, but all of which shall constitute
one Agreement. This Agreement may be executed by facsimile
signature.
g. Severability. Any portion of this Agreement which a court of
competent jurisdiction shall determine to be void or
unenforceable against public policy, or for any other reason,
shall be deemed to be severable from this Agreement and shall
have no effect on the other covenants or provisions in this
Agreement. It is agreed that the court shall be empowered to
reform and construe any provision that would otherwise be void
or unenforceable in a manner that will be valid and
enforceable to the maximum extent permitted by law.
h. Attorneys' Fees. In the event that any action or proceeding is
brought in connection with this Agreement, the prevailing
party therein shall be entitled to recover its costs and
reasonable attorney's fees.
i. Further Assurances. Purchaser and Seller shall, and shall
cause their respective affiliates to, execute and deliver all
other documents and instruments and take all other actions
reasonably requested by Escrow Agent at any time to effect the
release and delivery of the Escrowed Shares in accordance with
this Agreement.
[signature page follows]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
INTEGRATED BIOPHARMA, INC.
By: /s/ E. Gerald Kay
Name: E. Gerald Kay
Title: Chief Executive Officer
ALOE COMMODITIES INTERNATIONAL, INC.
By: /s/ L. Scott McKnight
Name: L. Scott McKnight
Title: Chairman & CEO
VIAL, HAMILTON, KOCH & KNOX, L.L.P.,
As Escrow Agent
By: /s/ Mark D. Chambers
Name: Mark D. Chambers, Jr.
Title: Authorized
Exhibit A. Asset Purchase Agreement
(copy to be attached)