Exhibit 2.2
EXECUTION COPY
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (the "Agreement") is made and entered into as
of March 21, 2005 by and among ▇▇▇▇▇▇▇▇ Textile Services, Inc., a New York
corporation ("Buyer"), Royal Hospitality Services, Inc., a Delaware
corporation ("Seller"), ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇"), ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
("Leibovitz") and LaSalle Bank National Association, a national banking
association duly organized and existing under the laws of the United States
of America, with its principal office in Chicago, Illinois (the "Escrow
Agent").
WHEREAS, this Agreement is entered into in conjunction with that
certain Stock Purchase Agreement, dated as of March 21, 2005 (the "Purchase
Agreement"), among the Buyer, Seller, the shareholders of Seller
("Shareholders"), Royal Institutional Services, Inc. ("Royal
Institutional"), Surgi-Pack Corporation ("Surgi-Pack"), and Massachusetts
Capital Resource Company ("Warrantholder"), in which Seller has agreed to
sell to Buyer all of the issued and outstanding shares of common stock of
Royal Institutional and Surgi-Pack (the "Shares") and Buyer has agreed to
purchase the Shares, and Warrantholder has agreed to sell to Buyer for
cancellation certain warrants (the "Warrants") to purchase shares of common
stock of Royal Institutional and Buyer has agreed to purchase the Warrants;
WHEREAS, Seller and Buyer have agreed pursuant to the terms of the
Purchase Agreement that Buyer shall deposit into the "Escrow Account" (as
defined herein) with the Escrow Agent a portion of the consideration to be
paid to Seller under the Purchase Agreement in an amount equal to Two
Million Dollars ($2,000,000) (the "Indemnification Deposit") to provide a
source of funds from which Buyer may obtain the Indemnification Deposit, or
a portion thereof, in the event of an indemnification obligation of the
Shareholders (as defined in the Purchase Agreement) and Seller; and
WHEREAS, Seller and Buyer have agreed pursuant to the terms of the
Purchase Agreement that Buyer shall deposit into the Escrow Account with the
Escrow Agent a portion of the consideration to be paid to Seller under the
Purchase Agreement in an amount equal to Two Million Dollars ($2,000,000)
(the "Contract Deposit"), payable to Buyer or Seller in accordance with
Section 1.5(a) of the Purchase Agreement; and
WHEREAS, Seller and Buyer have agreed pursuant to the terms of the
Purchase Agreement that Buyer shall deposit into the Escrow Account with the
Escrow Agent a portion of the consideration to be paid to Seller under the
Purchase Agreement in an amount equal to Four Hundred Fifty Thousand Dollars
($450,000) (the "Equipment Deposit"), payable to Buyer or Seller in
accordance with Section 1.5(b) of the Purchase Agreement; and
WHEREAS, Seller and Buyer have agreed that Buyer shall deposit into
the Escrow Account with the Escrow Agent pursuant to the terms of the
Purchase Agreement an amount equal to Five Hundred Thousand Dollars
($500,000) (the "▇▇▇▇▇▇▇ Deposit") payable to Buyer or ▇▇▇▇▇▇▇ in accordance
with Section 1.2(b)(iv) of the Purchase Agreement; and
WHEREAS, Seller and Buyer have agreed that Buyer shall deposit into
the Escrow Account with the Escrow Agent pursuant to the terms of the
Purchase Agreement an amount equal to Five Hundred Thousand Dollars
($500,000) (the "Leibovitz Deposit") payable to Buyer or Leibovitz in
accordance with Section 1.2(b)(v) of the Purchase Agreement; and
WHEREAS, Seller and Buyer have agreed that Buyer shall deposit into
the Escrow Account with the Escrow Agent pursuant to the terms of the
Purchase Agreement an amount equal to Four Million Dollars ($4,000,000) (the
"Jefferson Deposit") payable to Buyer or Seller in accordance with Section
1.5(c) of the Purchase Agreement; and
WHEREAS, the Indemnification Deposit, the Contract Deposit, the
Equipment Deposit, the ▇▇▇▇▇▇▇ Deposit, the Leibovitz Deposit and the
Jefferson Deposit are referred to herein as the "Escrowed Consideration";
and
WHEREAS, the Escrow Agent is willing to act as escrow agent in
respect of such funds upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual promises contained
herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
ESTABLISHMENT OF ESCROW
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1.1 Immediately following the execution of this Agreement, the following
will occur, all of which shall be acknowledged by Buyer, Seller and the
Escrow Agent:
(a) Buyer will deposit the Escrowed Consideration (the "Initial
Deposit") with the Escrow Agent. The Initial Deposit, together with any
investment earnings thereon, shall hereinafter collectively be referred to
as the "Escrow Fund."
(b) Buyer and Seller hereby appoint the Escrow Agent, and the
Escrow Agent hereby agrees to serve, as the escrow agent and depositary
subject to the terms and conditions set forth herein. The Escrow Agent shall
receive the Initial Deposit and agrees to hold the Escrow Fund in a separate
and distinct account (the "Escrow Account") which will be available for
disbursement, subject to the terms and conditions of this Agreement. The
Escrow Agent shall not distribute or release any of the Escrow Fund except
in accordance with the express terms and conditions of this Agreement.
ARTICLE II
INVESTMENT OF ESCROW FUND
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2.1 The Escrow Fund shall be invested as soon as reasonably practicable,
including income earned on said investment, in a LaSalle Enhanced Liquidity
Management account ("▇▇▇▇") or such other investments as may be selected by
Seller with Buyer's prior written consent, which consent will not be
unreasonably withheld. In no event shall the Escrow Fund be invested in an
investment earning in excess of Ten Percent (10%) interest in any calendar
year during the term of the Escrow Agreement. All income earned on the
Escrow Fund shall be taxable to the Buyer and shall be credited to the
Escrow Account. The Escrow Agent shall have no responsibility for the tax
consequences of this Agreement, other than with respect to any compensation
paid to the Escrow Agent pursuant to this Agreement.
2.2 The Escrow Agent shall not be responsible to Buyer and Seller or any
other person or entity for any loss or liability arising in respect of any
directed investment in Section 2.1 except
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to the extent that such loss or liability arose from the Escrow Agent's
gross negligence or willful misconduct.
ARTICLE III
DISBURSEMENTS FROM THE ESCROW ACCOUNT
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3.1 The Escrow Agent shall not disburse or otherwise dispose of any of the
amounts held in the Escrow Account, except as follows:
(a) With respect to the Indemnification Deposit, as directed in any
joint written instructions executed and delivered by Buyer and Seller, as
provided in Sections 3.2 or 3.3 of this Agreement;
(b) With respect to the Contract Deposit, as directed in any joint
written instructions executed and delivered by Buyer and Seller, as provided
in Section 3.4 of this Agreement;
(c) With respect to the Equipment Deposit, as directed in any joint
written instructions executed and delivered by Buyer and Seller, as provided
in Section 3.5 of this Agreement;
(d) With respect to the ▇▇▇▇▇▇▇ Deposit, as directed in any joint
written instructions executed and delivered by Buyer and ▇▇▇▇▇▇▇ as provided
in Section 3.6 of this Agreement;
(e) With respect to the Leibovitz Deposit, as directed in any joint
written instructions executed and delivered by Buyer and Leibovitz as
provided in Section 3.7 of this Agreement;
(f) With respect to the Jefferson Deposit, as directed in any joint
written instructions executed and delivered by Buyer and Seller, as provided
in Section 3.8 of this Agreement;
(g) With respect to the Interest Tax Disbursement (as defined
herein), as directed in a joint written instruction executed and delivered
by Buyer and Seller, as provided in Section 3.9 of this Agreement;
(h) As directed in any award or order issued by the Arbitrator
pursuant to Article XV of this Agreement; or
(i) As directed in any order, judgment or decree made or entered by
any court of competent jurisdiction.
(j) Disbursements under Sections 3.1(h) and 3.1(i) above shall be
made as follows: There shall be delivered to the Escrow Agent a certified
copy of an order, decree, judgment or award issued by a court or by the
Arbitrator, as the case may be, accompanied by a certificate (a "Litigation
Certificate") executed by Buyer or Seller, as the case may be (the
"Presenting Party") to the effect that such order, decree, judgment or award
is dispositive as to the disbursement of the applicable portion of Escrow
Fund, setting forth in reasonable detail the substance of such judgment and
instructions as to the disbursement of the Escrow Funds specified therein or
indicated thereby and certifying that a copy of such certificate has been
simultaneously delivered to the other, non-presenting party. Escrow Agent
shall disburse such Escrow Funds according to
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the Litigation Certificate on the 5th business day following receipt by the
Escrow Agent of the Litigation Certificate; provided that if the
non-presenting party delivers to the Escrow Agent a certificate prior to
such 5th business day disputing the contents of the Litigation Certificate,
then the Escrow Agent shall not disburse the disputed Escrow Funds specified
therein and shall interplead the disputed Escrow Funds specified therein or
file a declaratory judgment action with a court of competent jurisdiction to
determine the rights of the parties to be the disputed Escrow Funds, unless
prior to such interpleader or filing the Escrow Agent receives a joint
written notice and instruction pursuant to the terms of this Agreement.
3.2 With respect to the Indemnification Deposit, the Escrow Agent shall
disburse amounts held in the Escrow Account to Buyer in accordance with a
disbursement notice executed jointly by both Buyer and Seller substantially
in the form attached hereto as Exhibit A and delivered to the Escrow Agent
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("Disbursement Notice"), which Disbursement Notice shall specify (a) the
amount to be disbursed which shall include all interest earned on the amount
disbursed and not distributable to Buyer in accordance with Section 3.9 (as
calculated by the Buyer and the Shareholders pursuant to Section 3.10), (b)
the date of disbursement, and (c) the manner of disbursement and delivery
instructions. Such Disbursement Notice shall be provided to the Escrow Agent
no less than two (2) Business Days (as defined in Section 13.2) prior to the
requested disbursement date. In no event shall the amount of the Escrow Fund
disbursed to Buyer as a result of indemnification claims of the Buyer under
the Purchase Agreement exceed the Indemnification Deposit.
3.3 On the first business day following each of March 21, 2006 (the date
that is twelve months after the date of this Agreement), and March 21, 2007
(the date that is twenty-four months after the date of this Agreement),
Buyer and Seller shall jointly execute and deliver to the Escrow Agent a
Disbursement Notice authorizing the Escrow Agent to release and pay to
Seller within two (2) Business Days the amount of One Million Dollars
($1,000,000), less any amount previously disbursed from the Indemnification
Deposit and all amounts set forth in any "Initial Claim Notice" or "Final
Claims Statement" (each as defined in the Purchase Agreement) that has been
delivered by Buyer to Royal Hospitality and the Shareholders and is
outstanding and unpaid as of such date plus all interest earned on the
amount disbursed and not distributable to Buyer in accordance with Section
3.9 (as calculated by the Buyer and the Shareholders pursuant to Section 3.10).
3.4 With respect to the Contract Deposit, on the first business day
following the date of renewal of a Short-Term Contract (as defined in the
Purchase Agreement) within the time period specified in Section 1.5(a) of
the Purchase Agreement, Buyer and Seller shall jointly execute and deliver
to the Escrow Agent a Disbursement Notice which shall specify (a) the amount
to be disbursed to Seller and/or the amount to be disbursed to Buyer, if
any, with respect to a Short-Term Contract in accordance with Section 1.5(a)
of the Purchase Agreement, which respective amounts disbursed to Seller
and/or Buyer, as applicable, shall include all interest earned thereon and
not distributable to Buyer in accordance with Section 3.9 (as calculated by
the Buyer and the Shareholders pursuant to Section 3.10), (b) the date of
disbursement and (c) the manner of disbursement and delivery instructions
for Seller and/or Buyer, as applicable. Such Disbursement Notice shall be
provided to the Escrow Agent no less than two (2) Business Days (as defined
in Section 13.2) prior to the requested disbursement date.
3.5 With respect to the Equipment Deposit, on the first business day
following the date of determination that an Equipment Item (as defined in
the Purchase Agreement) has satisfied the requirements specified in Section
1.5(b) of the Purchase Agreement, Buyer and Seller shall
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jointly execute and deliver to the Escrow Agent a Disbursement Notice which
shall specify (a) the amount to be disbursed to Seller with respect to such
Equipment Item in accordance with Section 1.5(b) of the Purchase Agreement
which shall include all interest earned on the amount disbursed with respect
to such Equipment Item and not distributable to Buyer in accordance with
Section 3.9 (as calculated by the Buyer and the Shareholders pursuant to
Section 3.10), (b) the date of disbursement and (c) the manner of
disbursement and delivery instructions for Seller. If applicable, on the
first business day following the Equipment Adjustment Date (as defined in
the Purchase Agreement), Buyer and Seller shall jointly execute and deliver
to the Escrow Agent a Disbursement Notice which shall specify (a) the amount
to be disbursed to Buyer with respect to any non-operational Equipment Item
in accordance with Section 1.5(b) of the Purchase Agreement, which shall
include interest earned on the amount disbursed with respect to the
Equipment Item and not distributable to Buyer in accordance with Section
3.9, (b) the date of disbursement and (c) the manner of disbursement and
delivery instructions. Any such Disbursement Notice shall be provided to the
Escrow Agent no less than two (2) Business Days (as defined in Section 13.2)
prior to the requested disbursement date.
3.6 With respect to the ▇▇▇▇▇▇▇ Deposit, on the first business day following
March 21, 2015 (the date that is ten years after the date of this
Agreement), in the event that ▇▇▇▇▇▇▇ has complied with Section 1.2(b)(iv)
of the Purchase Agreement, Buyer and ▇▇▇▇▇▇▇ shall jointly execute a
disbursement notice which shall specify (a) that the ▇▇▇▇▇▇▇ Deposit shall
be disbursed to ▇▇▇▇▇▇▇ in accordance with Section 1.2(b)(iv) of the
Purchase Agreement, plus all interest earned on the ▇▇▇▇▇▇▇ Deposit and not
distributable to Buyer in accordance with Section 3.9, (b) the date of
disbursement, and (c) the manner of disbursement and delivery instructions
and which shall be substantially in the form attached hereto as Exhibit B
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and delivered to the Escrow Agent (the "Shareholder Disbursement Notice").
Notwithstanding the foregoing, in the event that at any time prior to March
21, 2015 ▇▇▇▇▇▇▇ does not fully comply with the provisions of Section
1.2(b)(iv) of the Purchase Agreement, Buyer and ▇▇▇▇▇▇▇ shall jointly
execute a Shareholder Disbursement Notice which shall specify (a) that the
▇▇▇▇▇▇▇ Deposit shall be disbursed to Buyer in accordance with Section
1.2(b)(iv) of the Purchase Agreement, plus all interest earned on the
▇▇▇▇▇▇▇ Deposit and not distributable to Buyer in accordance with Section
3.9 (as calculated by the Buyer and the Shareholders pursuant to Section
3.10), (b) the date of disbursement, and (c) the manner of disbursement and
delivery instructions.
3.7 With respect to the Leibovitz Deposit, on the first business day
following March 21, 2015 (the date that is ten years after the date of this
Agreement), in the event that Leibovitz has complied with Section 1.2(b)(v)
of the Purchase Agreement, Buyer and Leibovitz shall jointly execute a
Shareholder Disbursement Notice which shall specify (a) that the Leibovitz
Deposit shall be disbursed to Leibovitz in accordance with Section 1.2(b)(v)
of the Purchase Agreement plus all interest earned on the Leibovitz Deposit
and not distributable to Buyer in accordance with Section 3.9, (b) the date
of disbursement, and (c) the manner of disbursement and delivery
instructions. Notwithstanding the foregoing, in the event that at any time
prior to ▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ does not fully comply with the provisions
of Section 1.2(b)(v) of the Purchase Agreement, Buyer and Leibovitz shall
jointly execute a Shareholder Disbursement Notice which shall specify (a)
that the Leibovitz Deposit shall be disbursed to Buyer in accordance with
Section 1.2(b)(v) of the Purchase Agreement plus all interest earned on the
Leibovitz Deposit and not distributable to Buyer in accordance with Section
3.9 (as calculated by the Buyer and the Shareholders pursuant to Section
3.10), (b) the date of disbursement, and (c) the manner of disbursement and
delivery instructions.
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3.8 With respect to the Jefferson Deposit, subject to the conditions set
forth herein, on the last business day of each calendar quarter (or May 25,
2008 for the last calendar quarter) during the Jefferson Contract Period (as
defined in the Purchase Agreement) that Buyer is providing service to
Jefferson Health System pursuant to the Laundry Services Agreement (as
defined in the Purchase Agreement), Buyer and Seller shall jointly execute
and deliver to the Escrow Agent a Disbursement Notice which shall specify
(a) that Three Hundred Thirty Three Thousand Three Hundred Thirty Three
Dollars and Thirty Three Cents ($333,333.33) shall be disbursed to Seller
pursuant to Section 1.5(c) of the Purchase Agreement plus all interest
earned on such amount and not distributable to Buyer in accordance with
Section 3.9 (as calculated by the Buyer and the Shareholders pursuant to
Section 3.10) , (b) the date of disbursement (which shall be the date two
(2) Business Days (as defined in Section 13.2) following the date such
Disbursement Notice is delivered to the Escrow Agent), and (c) the manner of
disbursement and delivery instructions. In the event that, at any time
during the Jefferson Contract Period, the Laundry Services Agreement is
finally and unconditionally assigned to Buyer or the consent of Jefferson
Health System under Section VI(F) of the Laundry Services Agreement is
obtained with respect to the transactions contemplated by the Purchase
Agreement, Buyer and Seller shall jointly execute and deliver to the Escrow
Agent a Disbursement Notice which shall specify (a) that the balance of the
Jefferson Deposit shall be disbursed to Seller in accordance with Section
1.5(c) of the Purchase Agreement plus all interest earned on such amount and
not distributable to Buyer in accordance with Section 3.9 (as calculated by
the Buyer and the Shareholders pursuant to Section 3.10), (b) the date of
disbursement, and (c) the manner of disbursement and delivery instructions.
In the event that at any time during the Jefferson Contract Period the
provision of services by Buyer under the Laundry Services Agreement ceases
due to termination by Jefferson Health System prior to the Laundry Services
Agreement being finally and unconditionally assigned to Buyer or the consent
of Jefferson Health System under Section VI(F) of the Laundry Services
Agreement being obtained with respect to the transactions contemplated by
the Purchase Agreement, Buyer and Seller shall jointly execute and deliver
to the Escrow Agent a Disbursement Notice which shall specify (a) that the
balance of the Jefferson Deposit shall be disbursed to Buyer and Seller (pro
rata for any portion of the then-current calendar quarter that Buyer
provided services under the Laundry Services Agreement) in accordance with
Section 1.5(c) of the Purchase Agreement, which respective amounts shall
include all interest earned thereon and not distributable to Buyer in
accordance with Section 3.9 (as calculated by the Buyer and the Shareholders
pursuant to Section 3.10), (b) the date of disbursement, and (c) the manner
of disbursement and delivery instructions.
3.9 Notwithstanding anything herein to the contrary, not later than March 15
of each year during the term of this Escrow Agreement, Buyer and Seller
shall jointly execute and deliver to the Escrow Agent a Disbursement Notice
which shall authorize the Escrow Agent to disburse an amount equal to Thirty
Percent (30%) of all interest earned during the previous calendar year to
Buyer (as calculated by the Buyer and the Shareholders pursuant to Section
3.10) (the "Interest Tax Disbursement"). Such Disbursement Notice shall be
provided to the Escrow Agent no less than two (2) Business Days prior to the
requested disbursement date.
3.10 From time to time but no less often than monthly, Escrow Agent shall
provide to the other parties to this Escrow Agreement, a statement of the
principal held and the interest earned on the Escrowed Consideration. The
parties to this Escrow Agreement, other than the Escrow Agent, shall use
such information to determine the interest to be paid with each disbursement
pursuant to Sections 3.2, 3.3, 3.4, 3.5, 3.6, 3.7, and 3.8 or the amount
payable pursuant to Section 3.9.
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ARTICLE IV
COMPENSATION; EXPENSES
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4.1 As compensation for its services to be rendered under this Agreement,
for each year or any portion thereof, the Escrow Agent shall receive a fee
in the amount specified in Exhibit C to this Agreement and shall be
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reimbursed upon request for all expenses, disbursements and advances,
including reasonable fees of outside counsel, if any, incurred or made by it
in connection with the preparation of this Agreement and the carrying out of
its duties under this Agreement. All compensation and expenses shall be paid
by Buyer except as otherwise specifically provided in this Agreement.
ARTICLE V
EXCULPATION AND INDEMNIFICATION
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5.1 The obligations and duties of the Escrow Agent are confined to those
specifically set forth in this Agreement. In the event that any of the terms
and provisions of any other agreement between any of the parties hereto
conflict or are inconsistent with any of the terms and provisions of this
Agreement, the terms and provisions of this Agreement shall govern and
control in all respects. The Escrow Agent shall not be subject to, nor be
under any obligation to ascertain or construe the terms and conditions of
any other instrument, whether or not now or hereafter deposited with or
delivered to the Escrow Agent or referred to in this Agreement, nor shall
the Escrow Agent be obligated to inquire as to the form, execution,
sufficiency, or validity of any such instrument nor to inquire as to the
identity, authority, or rights of the person or persons executing or
delivering same.
5.2 The Escrow Agent shall not be personally liable for any act that it may
do or omit to do hereunder in good faith and in the exercise of its own best
judgment. Any act done or omitted to be done by the Escrow Agent pursuant to
the advice of its attorneys shall be deemed conclusively to have been
performed or omitted in good faith by the Escrow Agent.
5.3 In the event the Escrow Agent is notified of any dispute, disagreement
or legal action between Buyer and Seller, or between or among Buyer, Seller
and/or any third party, relating to or arising in connection with the
escrow, the Escrow Fund, or the performance of the Escrow Agent's duties
under this Agreement, the Escrow Agent will not be required to determine the
controversy or to take any action regarding it. The Escrow Agent may hold
all documents and funds and may wait for settlement of any such controversy
by final appropriate legal proceedings, arbitration, or other means as, in
the Escrow Agent's discretion, it may require. In such event, the Escrow
Agent will not be liable for interest or damage. Furthermore, the Escrow
Agent may, at its option, file an action of interpleader requiring the
parties to answer and litigate any claims and rights among themselves,
provided that such action must be brought before the Arbitrator pursuant to
Article XV hereof if the dispute involves solely Buyer and Seller. The
Escrow Agent is authorized, at its option, to deposit with the Clerk of the
Court or the Arbitrator, as applicable, all documents and funds held in
escrow, except all costs, expenses, charges, and reasonable attorneys' fees
incurred by the Escrow Agent due to the interpleader action and which Buyer
or Seller agree to pay. Upon initiating such action, the Escrow Agent shall
be fully released and discharged of and from all obligations and liability
imposed by the terms of this Agreement.
5.4 Buyer and Seller hereby agree, jointly and severally, to indemnify and
hold the Escrow Agent, and its directors, officers, employees, and agents,
harmless from and against all costs,
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damages, judgments, attorneys' fees (whether such attorneys shall be
regularly retained or specifically employed), expenses, obligations and
liabilities of every kind and nature which the Escrow Agent, and its
directors, officers, employees, and agents, may incur, sustain, or be
required to pay in connection with or arising out of this Agreement, unless
the aforementioned results from the Escrow Agent's gross negligence or
willful misconduct, and to pay the Escrow Agent on demand the amount of all
such costs, damages, judgments, attorneys' fees, expenses, obligations, and
liabilities. Half of the costs and expenses of enforcing this right of
indemnification shall be paid by Buyer and half of such costs and expenses
shall be paid by Seller. The foregoing indemnities in this paragraph shall
survive the resignation or substitution of the Escrow Agent or the
termination of this Agreement.
ARTICLE VI
TERMINATION OF AGREEMENT
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6.1 This Agreement may be terminated at any time upon the receipt by the
Escrow Agent of three (3) Business Days prior written notice of termination
by Buyer and Seller directing the distribution of all assets then held by
the Escrow Agent under and pursuant to this Agreement. This Agreement shall
automatically terminate if and when all amounts in the Escrow Account
(including all the securities in which any of the funds deposited into the
Escrow Account shall have been invested) shall have been distributed by the
Escrow Agent in accordance with the terms of this Agreement; provided,
however, that the rights and obligations of the parties hereto shall survive
the termination hereof.
ARTICLE VII
RESIGNATION OF ESCROW AGENT
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7.1 The Escrow Agent may resign at any time upon giving at least thirty (30)
days prior written notice to Buyer and Seller; provided, however, that no
such resignation shall become effective until the appointment of a successor
escrow agent which shall be accomplished as follows: Seller shall use its
reasonable best efforts to select a successor escrow agent within thirty
(30) days after receiving such notice. If Seller fails to appoint a
successor escrow agent within such time, of if Buyer disagrees in writing
delivered to Seller with Seller's choice of Escrow Agent within three (3)
days of written notification of the same from Seller, the Escrow Agent shall
have the right to appoint a successor escrow agent. The successor escrow
agent shall execute and deliver an instrument accepting such appointment and
it shall, without further acts, be vested with all the estates, properties,
rights, powers, and duties of the predecessor escrow agent as if originally
named as escrow agent. Upon delivery of such instrument, the Escrow Agent
shall be discharged from any further duties and liability under this
Agreement. The Escrow Agent shall be paid any outstanding fees and expenses
prior to transferring assets to a successor escrow agent, which fees and
expenses shall be allocated as provided in the last sentence of Section 4.1.
ARTICLE VIII
NOTICES
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8.1 All notices required by this Agreement shall be in writing and shall be
deemed to have been received (a) immediately if sent by facsimile
transmission to the respective facsimile numbers set forth below, if
applicable (with a confirming copy sent the same Business Day by registered
or certified mail), or by hand delivery (with signed return receipt), or (b)
the next
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Business Day if sent by nationally recognized overnight courier, in any case
to the respective addresses as follows:
In the case of Buyer:
▇▇▇▇▇▇▇▇ Textile Services, Inc.
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to (which shall not constitute notice to Buyer):
▇▇▇▇▇▇▇▇ Corporation
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.,
Vice President and General Counsel
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
In the case of Seller:
Royal Hospitality Services, Inc.
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: N/A
With a copy to (which shall not constitute notice to Seller):
▇▇▇▇▇▇▇ Procter LLP
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Exchange Place
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
In the case of ▇▇▇▇▇▇▇:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: N/A
With a copy to (which shall not constitute notice to ▇▇▇▇▇▇▇):
▇▇▇▇▇▇▇ Procter LLP
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Exchange Place
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
9
In the case of Leibovitz:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: N/A
With a copy to (which shall not constitute notice to Leibovitz):
▇▇▇▇▇▇▇ Procter LLP
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Exchange Place
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Escrow Agent:
LaSalle Bank National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
ARTICLE IX
GOVERNING LAW
-------------
9.1 This Agreement shall be governed by and construed in accordance with the
laws of the State of Illinois without regard to its choice of law provisions
and the parties hereto consent to jurisdiction in the State of Illinois and
venue in any state or Federal court located in the City of Chicago for
purposes of resolving any litigation of or under this Agreement; provided,
however, that, notwithstanding any other provision in this Agreement, with
respect to any dispute strictly involving Buyer and Seller and not involving
this Agreement, the Escrow Agent and/or the Escrow Fund, the dispute
resolution procedure set forth in Section 12.12 of the Purchase Agreement
shall be controlling.
ARTICLE X
AUTOMATIC SUCCESSION; ASSIGNMENT
--------------------------------
10.1 Any bank or corporation into which the Escrow Agent may be merged or
with which it may be consolidated, or any bank or corporation to whom the
Escrow Agent may transfer a substantial amount of its Escrow business, shall
be the successor to the Escrow Agent without the execution or filing of any
paper or any further act on the part of any of the parties, anything herein
to the contrary notwithstanding.
10.2 Except as set forth in Section 10.1, no rights, obligations or
liabilities hereunder shall be assignable by any party hereto without the
prior written consent of the other parties.
10
ARTICLE XI
AMENDMENT AND MODIFICATION
--------------------------
11.1 Buyer, Seller. ▇▇▇▇▇▇▇, Leibovitz and the Escrow Agent may amend,
modify, and/or supplement this Agreement as they may mutually agree in
writing.
ARTICLE XII
COUNTERPARTS
------------
12.1 This Agreement may be executed in any number of counterparts, each of
which shall be an original and all of which taken together shall constitute
one and the same instrument. In making proof of this Agreement it shall be
necessary to produce or account for only one such counterpart signed by or
on behalf of the party sought to be charged herewith.
ARTICLE XIII
INTERPRETATION
--------------
13.1 The headings used in this Agreement are for convenience only and shall
not constitute a part of this Agreement.
13.2 As used in this Agreement, "Business Day" means a day other than a
Saturday, Sunday, or other day when banking institutions in Chicago,
Illinois are authorized or required by law or executive order to be closed.
ARTICLE XIV
SEVERABILITY
------------
14.1 The parties agree that if any provision of this Agreement shall under
any circumstances be deemed invalid or inoperative this Agreement shall be
construed with the invalid or inoperative provisions deleted and the rights
and obligations of the parties shall be construed and enforced accordingly.
ARTICLE XV
RESOLUTION OF DISPUTES
----------------------
15.1 Any controversy or claim arising out of or relating to this Agreement,
or the breach hereof, shall be settled by arbitration in accordance with
commercial rules of the American Arbitration Association ("AAA").
Arbitration proceedings conducted pursuant to this Article XV shall be held
in Chicago, Illinois.
15.2 Arbitrations shall be conducted by a single arbitrator (the
"Arbitrator") selected at random from a list of arbitrators maintained in
the office of AAA in Chicago, Illinois. The Arbitrator must be a person
experienced in corporate law or the law of commercial finance and must have
served as an arbitrator in not less than three (3) prior commercial
arbitrations involving primarily questions of commercial or corporate law
conducted under the AAA rules. The Arbitrator may not be a person who ever
has been an affiliate of or attorney for any party or for any of their
respective affiliates.
15.3 The parties shall allow and participate in discovery in accordance with
the United States Federal Rules of Civil Procedure for a period of ninety
(90) days after the filing of an answer or
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other responsive pleading. Unresolved discovery disputes may be brought to
the attention of the Arbitrator for resolution.
15.4 Any provisional remedy that would be available from a court of law
shall be available from the Arbitrator to the parties pending arbitration.
Any party may, without inconsistency with this Agreement, apply to any court
of proper jurisdiction and seek injunctive relief to maintain the status quo
until the arbitration award is rendered or the controversy is otherwise
resolved.
15.5 The Arbitrator's award shall be made in writing, but shall not make any
findings of fact or conclusions of law. The Arbitrator shall have no
authority to award punitive or other damages not measured by the prevailing
party's actual damages and may not, in any event, make any ruling, finding,
or award that does not conform to the terms and conditions of this Agreement
and the Purchase Agreement. Judgment on any arbitration award may be entered
by the Arbitrator or by any party in any court having jurisdiction thereof.
No party or Arbitrator may disclose the existence, content, or results of
any arbitration or arbitration award without the prior written consent of
both parties except to the extent necessary to enter and enforce a judgment
based upon such award.
15.6 The award of the Arbitrator shall be final and not subject to appeal.
Each party hereby waives the benefit of any applicable law that would permit
it to appeal the decision of the Arbitrator to any court or other authority.
15.7 All fees and expenses of the arbitration shall be borne by the parties
equally. However, each party shall bear the expense of its own counsel,
experts, witnesses, and preparation and presentation of proofs.
15.8 The provisions of this Article XV shall survive termination of this
Agreement. Any dispute regarding the applicability of this Article XV to a
particular claim or controversy shall be arbitrated as provided in this
Article XV.
15.9 Notwithstanding anything in this Agreement to the contrary, this
Article XV shall not apply with respect to any dispute strictly involving
Buyer and Seller and not involving this Agreement, the Escrow Agent and/or
the Escrow Fund; rather, in such case the dispute resolution procedure set
forth in Section 12.12 of the Purchase Agreement shall be controlling.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Escrow Agreement as of the day and year first above written.
BUYER: ▇▇▇▇▇▇▇▇ TEXTILE SERVICES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------
Title: Vice President
--------------------------------
SELLER: ROYAL HOSPITALITY SERVICES, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Title: President
--------------------------------
▇▇▇▇▇▇▇: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
LEIBOVITZ: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
ESCROW AGENT: LASALLE BANK NATIONAL ASSOCIATION, as
Escrow Agent
By: /s/ ▇.▇. ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇.▇. ▇▇▇▇▇▇▇
---------------------------------
Title: First Vice President
--------------------------------
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