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EXHIBIT 2.2
ESCROW AGREEMENT
This Escrow Agreement is entered into as of April 25, 1997 by and among
Riverside Partners, Inc. (the "Agent"), Remel Acquisition Co. (the "Buyer") and
State Street Bank and Trust Company, as escrow agent (the "Escrow Agent").
Introduction
The Agent, the Buyer, and the other signatories thereto have entered into a
Purchase Agreement dated as of March 14, 1997 (the "Purchase Agreement"). The
execution and delivery of this Agreement is a condition to the consummation of
the transactions contemplated by the Purchase Agreement.
The parties to this Agreement wish to set aside in escrow a portion of the
consideration to be paid to the escrow participants identified on the attached
Schedule A (the "Escrow Participants") pursuant to the Purchase Agreement to
secure the indemnification obligations of the Sellers under the Purchase
Agreement.
The Agent is a party to this Agreement as agent of the Sellers, appointed
under the Purchase Agreement.
Capitalized terms used herein and not defined shall have the meanings given
to them in the Purchase Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
Section 1. Appointment of Escrow Agent. State Street Bank and Trust
Company is hereby appointed as Escrow Agent under this Agreement, and the Escrow
Agent hereby accepts such appointment.
Section 2. Deposit of Escrow Fund. On the date hereof, pursuant to
Section 2.04(e) of the Purchase Agreement, the Buyer has deposited with the
Escrow Agent the sum of $10,000,000. The amount so deposited, less payments
made pursuant hereto, is referred to herein as the "Escrow Fund". The Escrow
Fund will be held, invested, and disbursed by the Escrow Agent in accordance
with the terms hereof.
Section 3. Satisfaction of Claims with Escrow Fund. The Escrow Fund will
be retained by the Escrow Agent and shall be distributed at any time, or from
time to time, for the purpose of paying claims for Losses incurred by the Buyer
for which it is entitled to indemnification under Article X of the Purchase
Agreement, pursuant to the following terms:
(a) If the Buyer believes that it is entitled to
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indemnification under Article X of the Purchase Agreement and desires to have
funds from the Escrow Fund applied thereto pursuant to this Escrow Agreement,
the Buyer shall notify the Agent and the Escrow Agent of such assertion,
describing the basis for its claim for indemnification (an "Asserted Claim") in
reasonable detail, and specifying the amount of the Escrow Fund that the Buyer
believes should be delivered to it to satisfy the Asserted Claim (the "Asserted
Amount").
(b) On the 30th day following receipt of notice of an Asserted Claim,
the Asserted Amount shall be distributed to the Buyer in respect of such
Asserted Claim; provided, however, that if, prior to such 30th day, the Agent
notifies the Buyer and the Escrow Agent that it does not agree that some or all
of the Asserted Amount is due the Buyer with respect to the Asserted Claim, and
specifying the amount that it does not believe should be distributed to the
Buyer (the "Contested Amount"), then the Contested Amount shall remain in escrow
with the Escrow Agent until such time as the Escrow Agent receives (i) joint
written instructions from the Agent and the Buyer, or (ii) an order from any
court of competent jurisdiction as to the disposition of such amount (such
amount being referred to herein as the "Resolved Amount"), and the Escrow Agent
shall distribute and/or retain the Resolved Amount in accordance with such joint
written instructions or such court order.
(c) If there should arise circumstances which the Buyer believes
constitutes, or may upon final resolution constitute, a basis for an Asserted
Claim hereunder, then the Buyer shall certify such matter to the Escrow Agent
and the Agent as an Asserted Claim, with specific reference to this subsection
of this Agreement, even though such claim is at the time uncertain or unresolved
and even though the exact amount of any Losses may be unknown at the time of
such certification. In making such certification, the Buyer may estimate the
maximum amount of exposure with respect thereto and such estimated amount shall
constitute the Contested Amount for purposes of such Asserted Claim.
Section 4. Procedures for Application of Remaining Escrow Fund.
(a) On the first anniversary of the Closing Date, the remaining
balance of the Escrow Fund, if any, less (i) all unpaid Asserted Amounts (other
than Contested Amounts), (ii) all unresolved Contested Amounts, and (iii) 50% of
all expenses to be paid or reasonably expected to be incurred by the Escrow
Agent in connection with this Agreement pursuant to Section 8 hereof, shall be
distributed by the Escrow Agent to the Escrow
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Participants, in proportion to their respective percentages specified on
Schedule A.
(b) Any amounts held after the first anniversary of the Closing Date,
on account of the existence of unpaid Asserted Claims or unresolved Contested
Amounts, shall be distributed to the Buyer or to the Escrow Participants in
proportion to their respective percentages specified on Schedule A, in
accordance with Section 3, as such Asserted Claims or Contested Amounts are
resolved.
Section 5. Investment of Escrow Fund. The Escrow Agent shall invest the
Escrow Fund in money market or other similar short term investments, as directed
from time to time in writing by the Agent. Investments pursuant to such
investment instructions described above shall in all instances be subject to
availability (including any time-of-day requirements). In no instance shall the
Escrow Agent have any obligation to provide investment advice of any kind. The
Escrow Agent shall not be required to invest any funds held hereafter except as
expressly provided in this Section 5, and shall not be obligated to pay interest
on uninvested funds. All amounts received by the Escrow Agent (and any credits
to the Escrow Account) shall be conditional upon collection (and actual receipt
by the Escrow Agent of final payment). In no event shall the Escrow Agent have
any obligation to advance funds.
The Escrow Agent shall be authorized at all times and from time to time to
liquidate any investment of the Escrow Funds as may be necessary to provide
available cash to make any release, disbursement or payment called for under the
terms of this Agreement. The Escrow Agent shall have no responsibility or
liability for any losses resulting from liquidation of the Escrow Funds (such as
liquidation prior to maturity). All income earned on the Escrow Fund, after
payment of expenses incurred in connection therewith, will be distributed
quarterly to the Escrow Participants, and in accordance with the percentages
specified on Schedule A and for tax purposes shall be allocated and reported as
income to the Escrow Participants. No party hereto shall be liable or
responsible for any loss resulting from any investment or reinvestment made
pursuant to this Section 5, other than as a result of the gross negligence or
willful misconduct of such party.
Section 6. Provisions Regarding Escrow Agent.
(a) The duties of the Escrow Agent hereunder will be limited to the
observance of the express provisions of this Agreement. The Escrow Agent will
not be subject to, or be obliged to recognize, any other agreement between the
parties
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hereto (including the Purchase Agreement) or directions or instructions not
specifically set forth as provided for herein, other than any joint written
instructions of the Buyer and the Agent. The Escrow Agent will not make any
payment or disbursement from or out of the Escrow Fund that is not expressly
authorized pursuant to this Agreement. The Escrow Agent may rely upon and act
upon any written notice, certificate or other instrument received by it
pursuant to the provisions of this Agreement that it reasonably believes to be
genuine. The Escrow Agent will use the same degree of care and skill in
performing its services hereunder as an ordinary prudent person would do or use
under the circumstances in the conduct of his or her own affairs. The Escrow
Agent will not be liable for any error of judgment or any act done or any step
taken by it in good faith or for any mistake of fact or law or for anything
that it might do or refrain from doing in connection with this Agreement,
except that the Escrow Agent will be liable for its own gross negligence or
willful misconduct. In no event shall the Escrow Agent be liable for any
indirect, punitive, special or consequential damages, or any amount in excess
of the value of the Escrow Fund.
(b) The Escrow Agent, upon prior notice to the Buyer and the Agent,
may consult with and obtain advice from legal counsel in the event of any
dispute or question as to the construction of any of the provisions hereof or
the Escrow Agent's duties hereunder, and the Escrow Agent shall incur no
liability and shall be fully protected in acting in accordance with the opinion
of its legal counsel. The Escrow Agent shall not be responsible in any manner
whatsoever for any failure or inability of any of the other parties hereto, or
anyone else, to perform or comply with any provisions of this Agreement.
(c) If at any time the Escrow Agent shall be in doubt as to the party
or parties entitled to receive any or all of the Escrow Fund, the Escrow Agent
may apply to a court for a determination of the party or parties entitled to
receive the same, and the Escrow Agent shall incur no liability therefor.
(d) If at any time the Escrow Agent shall receive conflicting
notices, claims, demands or instructions with respect to any disbursement from
the Escrow Fund, or if for any other reason it shall be unable in good faith to
determine the party or parties entitled to receive a disbursement from the
Escrow Fund, the Escrow Agent may refuse to make such disbursement until the
Escrow Agent shall have received instructions in writing signed by each of the
Agent and the Buyer, or until directed by a final order of a court (in an action
brought by the Escrow Agent pursuant to paragraph (c) of this Section 6 or by
any other person), whereupon the Escrow Agent shall make such disbursement
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in accordance with such instructions or order.
Section 7. Indemnification of Escrow Agent. The Escrow Participants and
the Buyer, jointly and severally, will indemnify and hold the Escrow Agent
harmless from and against any and all losses, costs, damages or expenses
(including, but not limited to, reasonable attorneys' fees) it may sustain by
reason of its service as Escrow Agent hereunder but only to the extent such
losses, costs, damages or expenses are properly payable from, but exceed the
amount of the funds available in, the Escrow Fund, and except such losses,
costs, damages or expenses (including, but not limited to, reasonable attorneys'
fees) incurred by reason of such acts or omissions for which the Escrow Agent is
found liable or responsible under the penultimate sentence of Section 6(a)
hereof. Buyer and the Escrow Participants, jointly and severally, agree to
assume any and all obligations imposed now or hereafter by any applicable tax
law with respect to the payment of Escrow Funds under this Agreement, and,
without limiting the generality of the preceding paragraph, hereby agree to
indemnify and hold the Escrow Agent harmless from and against any taxes,
additions for late payment, interest, penalties and other expenses, that may be
assessed against the Escrow Agent on any such payment or other activities under
this Agreement. Buyer and the Escrow Participants undertake to instruct the
Escrow Agent in writing with respect to the Escrow Agent's responsibility for
withholding and other taxes, assessments or other governmental charges,
certifications and governmental reporting in connection with its acting as
Escrow Agent under this Agreement. Buyer and the Escrow Participants, jointly
and severally, agree to indemnify and hold the Escrow Agent harmless from any
liability on account of taxes, assessments or other governmental charges,
including without limitation the withholding or deduction or the failure to
withhold or deduct same, and any liability for failure to obtain proper
certifications or to properly report to governmental authorities, to which the
Escrow Agent may be or become subject in connection with or which arises out of
this Agreement, including costs and expenses (including reasonable legal fees),
interest and penalties. Buyer and the Escrow Participants shall each promptly
provide to Escrow Agent with appropriate IRS Forms W-9 for taxpayer
identification number certifications, or Forms W-8 for non-resident alien
certifications. As between themselves, the Buyer on the one hand and the Escrow
Participants on the other agree to bear responsibility for such indemnifications
50% by the Buyer and 50% by the Escrow Participants. The foregoing
indemnifications shall survive the resignation of the Escrow Agent or the
termination of this Escrow Agreement.
Section 8. Fees and Expenses of the Escrow Agent. Except
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as otherwise expressly provided in this Agreement, all fees of the Escrow Agent
for its service hereunder shall be borne 50% by the Buyer and 50% by the Escrow
Participants, and shall be promptly paid within 30 days of invoice. The Escrow
Agent shall be entitled to an annual fee of $2,500 payable for the first year
(together with its reasonable attorneys fees in the review and acceptance of
its appointment hereunder) upon execution of this Agreement, and for any
additional fees or expenses thereafter, within 30 days of invoice. Additional
terms regarding the escrow services and fees hereunder shall be as set forth on
Schedule B hereto. If the Escrow Agent does not receive such fees and expenses
upon execution of this Agreement or within such 30-day period, as applicable,
the Escrow Agent will be authorized to pay the Escrow Participants' portion
(50%) of such fees and expenses from the Escrow Fund.
Section 9. Resignation of Escrow Agent. The Escrow Agent may resign from
its duties hereunder by giving each of the parties hereto not less than 30 days
prior written notice of the effective date of such resignation (which effective
date shall be at least 30 days after the date such notice is given). If on or
before the effective date of such resignation, the Escrow Agent has not received
joint written instructions from the Buyer and the Agent regarding the transfer
of the Escrow Fund, it will thereupon deposit the Escrow Fund into the registry
of a court of competent jurisdiction. The parties hereto intend that a
substitute Escrow Agent will be appointed to fulfill the duties of the Escrow
Agent hereunder for the remaining term of this Agreement in the event of the
Escrow Agent's resignation.
Section 10. Tax Treatment. The Escrow Fund shall be treated for tax
purposes as payments made on the installment basis.
Section 11. Notices. Any notices or other communications required or
permitted to be given hereunder must be in writing and shall be deemed to have
been duly given when (a) delivered in person or (b) when received by or on
behalf of the addressee, if sent by nationally recognized overnight courier
service or mailed by registered or certified mail, return receipt requested, in
each case addressed as follows (or to such other address as any party may direct
by notice):
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To the Buyer:
Remel Acquisition Co.
c/o Sybron International Corporation
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
with a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
To the Agent:
Riverside Partners, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇. ▇. ▇▇▇▇▇, Esq.
▇▇▇▇▇▇, Hall & ▇▇▇▇▇▇▇
Exchange Place
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
To the Escrow Agent:
State Street Bank and Trust Company
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ - ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
Section 12. Binding Effect. This Agreement will be binding upon and inure
to the benefit of the parties hereto and their permitted assigns.
Section 13. Escrow Fund Sole Source for Losses. It is expressly
understood that, to the extent specified in the Purchase Agreement, the Escrow
Fund is the sole source for satisfying Losses.
Section 14. Force Majeure. The Escrow Agent shall not be responsible or
liable for delays or failures in performance resulting from acts beyond its
control. Such acts shall include
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but not be limited to acts of God, strikes, lockouts, riots, acts of war,
epidemics, laws or governmental regulations changed or superimposed after the
fact, fire, communication line failures, power failures, computer viruses,
earthquakes or other disasters, or to unavailability of Federal Reserve Bank
wire or telex facilities.
Section 15. Amendment and Termination. This Agreement may be amended,
modified or canceled by agreement of (a) the Buyer, (b) the Agent and (c) the
Escrow Agent. This Agreement will terminate on the date on which no amounts
remain in the Escrow Fund; provided that this Agreement shall not terminate
until the final resolution of all Asserted Claims.
Section 16. Governing Law. This agreement will be governed by and
construed in accordance with the internal laws of The Commonwealth of
Massachusetts, without giving effect to conflicts of law principles.
Section 17. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same Agreement.
[Signatures appear on the following page.]
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EXECUTED as a sealed instrument as of the date first above written.
REMEL ACQUISITION CO.
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
------------------------------------
President (Title)
RIVERSIDE PARTNERS, INC.
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Vice President (Title)
STATE STREET BANK AND TRUST COMPANY
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Vice President (Title)
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SCHEDULE A
Escrow Participant Percentage Soc.
Sec./Fed.
ID Number
▇▇▇▇▇▇▇ Family Partnership 1.95637% ▇▇-▇▇▇▇▇▇▇
c/o ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Buzz ▇▇▇▇▇▇▇▇▇▇ 0.98044% 499-603236
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Regional Media Laboratories, Inc. 2.44619% ▇▇-▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ Trust 11.49709% ▇▇-▇▇▇▇▇▇▇
Megan ▇▇▇▇ ▇▇▇▇▇▇▇ Trust 11.49709% ▇▇-▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ Trust 11.49709% ▇▇-▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ Trust 11.49709% ▇▇-▇▇▇▇▇▇▇
c/o ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇ ▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 0.12157% ###-##-####
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇ 0.02431% ###-##-####
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Riverside Fund I, L.P. 48.48277% ▇▇-▇▇▇▇▇▇▇
c/o Riverside Partners, Inc.
One Exeter Plaza, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ---------
Total 100.00000%
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SCHEDULE B
Additional Terms Regarding Escrow
Services and Fees
Legal Fees: At cost.
Out-of-Pocket Expenses At cost.
Investment Fee $65 per investment for Non-State
Street Products; no additional charge
for State Street Products.
Wire Fee $20 per wire.
Annual Administration Fee $2,500 paid in advance with
(after first year) reimbursement for a mid-year
termination, pro rata
on a quarterly basis.
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