EXHIBIT 2.2
POST-CLOSING INDEMNIFICATION AND
ESCROW AGREEMENT
THIS POST-CLOSING INDEMNIFICATION AND ESCROW AGREEMENT (this "Agreement")
is made as of October 26, 1999, by and among Xxxx Xxxxxxx and Xxxx Xxxx
(collectively, the "Sellers"), Wintrust Financial Corporation, an Illinois
corporation (the "Buyer"), and LaSalle Bank, N.A., as Escrow Agent ("Escrow
Agent").
R E C I T A L S:
A. Pursuant to that certain Stock Purchase Agreement dated as of
September 16, 1999 (the "Stock Purchase Agreement"), by and among the Sellers,
and Buyer, Buyer has purchased all of the shares of common stock of Tricom Inc.
of Milwaukee ("Tricom") held by the Sellers.
B. Pursuant to Section 2(b)(ii) of the Stock Purchase Agreement, Five
Hundred Thousand Dollars ($500,000.00) (the "Escrow Deposit") of the Purchase
Price that Buyer is obligated to pay to the Sellers is to be deposited into
escrow and such payment is subject to set off as set forth herein.
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises and mutual agreements
hereinafter set forth, and upon the terms and subject to the conditions
contained herein, the Sellers, Buyer and the Escrow Agent hereby agree as
follows:
1. Certain Definitions. For the purposes of this Agreement, the term
"Escrow Funds" shall mean the Escrow Deposit together with all interest,
accretions and income thereon. All capitalized terms used herein and not
otherwise defined herein shall have the meaning as set forth in the Stock
Purchase Agreement.
2. Deposit in Escrow. Buyer hereby deposits in escrow with Escrow Agent
the sum of Five Hundred Thousand Dollars ($500,000.00), and Escrow Agent hereby
acknowledges receipt thereof. The Escrow Funds shall be held by Escrow Agent in
a separate account for the benefit of Buyer and the Sellers for the purpose of
securing the Sellers' Indemnification Obligations (as hereinafter defined) set
forth in Section 5(a) of this Agreement. Escrow Agent shall invest the Escrow
Funds as directed in writing by the Buyer. In the absence of written
instructions, Escrow Agent shall invest as soon as reasonably practicable all
balances for which it has not received specific written investment direction,
including income earned on said investments, in the ABN AMRO Government Money
Market Fund.
3. No Liens or Encumbrances on Escrow Funds. Neither the Sellers nor
Buyer shall encumber their claims to the Escrow Funds in any manner whatsoever.
4. Final Distribution of Escrow Funds. Subject to Sections 5 and 6 of
this Agreement, on the later of (i) the six (6) month anniversary date of this
Agreement (the "Claim Expiration Date"), or (ii) the date that all Claims (as
hereinafter defined) shall have been resolved in accordance with Section 6(c)
hereof, Escrow Agent shall distribute to the Sellers all Escrow Funds, if any,
then held in escrow.
5. Claims Against the Escrow.
(a) Seller's Indemnification Obligation. The Escrow Funds shall be
held for the purpose of securing the Sellers' Indemnification Obligations (as
hereinafter defined). For the purposes of this Agreement, Sellers'
"Indemnification Obligations" shall mean the following:
(i) Sellers shall indemnify and hold Buyer harmless from and
against the entirety of any Adverse Consequences Buyer may suffer through
and after the date of the Claim for indemnification (including any Adverse
Consequences Buyer may suffer after the end of any applicable survival
period) resulting from, arising out of, or relating to, in the nature of,
or caused by the breach (or alleged breach) of Sellers representations and
warranties contained in Section 4(n) of the Stock Purchase Agreement; and
(ii) Sellers shall indemnify and hold Buyer harmless from and
against the entirety of any Adverse Consequences Buyer may suffer through
and after the date of the Claim for indemnification (including any Adverse
Consequences Buyer may suffer after the end of any applicable survival
period) resulting from, arising out of, or relating to, in the nature of,
or caused by, the Year 2000 Problem (as defined in Section 4(n) of the
Stock Purchase Agreement); and
(iii) Sellers shall indemnify and hold Buyer harmless from and
against the entirety of any Adverse Consequences Buyer may suffer through
and after the date of the Claim for indemnification (including any Adverse
Consequences Buyer may suffer after the end of any applicable survival
period) resulting from, arising out of, or relating to, in the nature of,
or caused by, amounts owed by Executive Edge, Inc. (and guaranteed by Xxxx
X. Xxxxxx) to Tricom at the time of Closing; provided, however, that Seller
shall receive credit against any amounts required to be paid under this
Section 5(a)(iii) for the difference between (x) $60,000 and (y) the amount
of bad debts written off by Tricom, Inc. of Milwaukee subsequent to the
Closing Date under the Stock Purchase Agreement and through the date any
Claim for indemnification is made hereunder. Notwithstanding anything to
the contrary, the Claims Threshold provided in Section 5(c) shall not apply
to any Claim for indemnification under this Section 5(a)(iii).
(b) Notice of Claims. If, at any time prior to the Claim
Expiration Date, Buyer shall have asserted any claim pursuant to Section 5(a)
above (a "Claim"), Buyer shall notify Escrow Agent in writing of such Claim, and
the amount of such Claim or Buyer's good faith estimate of the amount of such
Claim (a "Claim Notice"). Buyer shall send a copy of each Claim Notice to each
of the Sellers in accordance with Section 8(c) hereof.
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(c) Claims Threshold. Buyer shall not be entitled to indemnification
hereunder with respect to any Claims whatsoever until the amount of all Claims
suffered by the Buyer exceeds $50,000 in the aggregate, whereupon the Buyer
shall be entitled to indemnification hereunder from the Sellers for the
aggregate amount of all Claims suffered by the Buyer, without regard to the
aforementioned $50,000 threshold.
6. Reimbursement Claims Procedure.
(a) Segregation of Funds. If, prior to the Claim Expiration Date, a
Claim Notice is received by Escrow Agent, Escrow Agent shall set aside and
segregate such amount of the Escrow Funds which would be sufficient to
completely discharge the aggregate amount of the Claim described in such Claim
Notice. Such segregated Escrow Funds shall not be available for distribution to
the Sellers pursuant to Section 4 until such Claim shall have been resolved in
accordance with Section 6(b) and 6(c) hereof.
(b) Satisfaction of Claims. If each of the Sellers shall consent in
a written agreement agreed to by Buyer and delivered to Escrow Agent, to the
delivery of all or any part of the Escrow Funds, whether segregated or not, to
Buyer in satisfaction and discharge of a Claim, Escrow Agent shall deliver to
Buyer all or a portion of the Escrow Funds covered by such consent, which
delivery shall satisfy such Claim to the extent of the total amount of the
Escrow Funds delivered.
(c) Resolution of Claims. If a Claim Notice is received by Escrow
Agent prior to the Claim Expiration Date and each of the Sellers and Buyer shall
not have consented to the delivery of all or any part of the Escrow Funds to
Buyer, then Escrow Agent shall continue to hold the segregated Escrow Funds
until each of the Sellers and Buyer shall have agreed as to the rights of the
Sellers and Buyer to the segregated Escrow Funds, or until the rights of the
Sellers and Buyer to the segregated Escrow Funds are finally determined pursuant
to judicial determination, at which time the Escrow Funds shall be disbursed to
Buyer or to the Sellers or retained in escrow, as and to the extent contemplated
by this Agreement and in accordance with the final determination of arbitrators
or order of a court.
7. Concerning the Escrow Agent.
(a) Agreements to Govern. The duties and obligations of Escrow Agent
hereunder shall be determined solely by the express provisions of this
Agreement.
(b) Liability. Escrow Agent shall not be liable to anyone
whatsoever by reason of any error of judgment or for any act done or step taken
or omitted by it in good faith or any mistake of fact or law or for anything
that it may do or refrain from doing in connection herewith, unless caused by or
arising out of its own gross negligence or willful misconduct. The Sellers and
Buyer shall jointly and severally indemnify and hold Escrow Agent harmless from
any and all liability and expense that may arise out of any action taken or
omitted by it as Escrow Agent in accordance with this Agreement, as the same may
be amended, modified or supplemented, except
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such liability and expense as may result from the gross negligence or willful
misconduct of Escrow Agent. The obligation of Buyer and the Sellers set forth in
the prior sentence shall survive the termination of this Agreement and the
resignation or removal of the Escrow Agent.
(c) Reliance on Instructions. Escrow Agent shall be entitled to rely
and shall be protected in acting in reliance upon any instructions or directions
furnished to it in writing by the Sellers or Buyer or pursuant to any provision
of this Agreement and shall be entitled to treat as genuine, and as the document
it purports to be, any letter, paper or other document furnished to it by the
Sellers or Buyer and believed by it to be genuine and to have been signed and
presented by the proper party or parties.
(d) Resignation of Escrow Agent. Escrow Agent may at any time
resign by giving written notice of such resignation to Buyer and the Sellers.
Escrow Agent shall not be discharged from its duties and obligations hereunder
until a successor Escrow Agent shall have been designated by Buyer and the
Sellers, and shall have executed and delivered an Escrow Agreement in
substantially the form of this Agreement, and all funds then held by Escrow
Agent hereunder shall have been delivered to such successor Escrow Agent. Escrow
Agent shall be paid outstanding fees and expenses prior to transferring funds to
a successor Escrow Agent. If a successor Escrow Agent has not been appointed and
has not accepted such appointment by the end of the 30-day period, the Escrow
Agent may appoint a successor or may apply to a court of competent jurisdiction
for the appointment of a successor Escrow agent, and the costs, expenses and
reasonable attorneys' fees which are incurred in connection with such a
proceeding shall be paid by the parties to the Agreement.
(e) Compensation and Expenses. Escrow Agent shall receive
compensation for its services as set forth on Exhibit A attached hereto,
together with reimbursement of out-of-pocket expenses incurred by Escrow Agent
in connection with this Agreement. Such compensation and expenses shall be paid
by Buyer.
(f) Writs, Orders, or Decrees. In the event the Escrowed Funds
shall be attached, garnished, or levied upon by any court order, or the delivery
thereof shall be stayed or enjoined by an order of court, or any order, judgment
or decree shall be made or entered by any court order affecting the Escrowed
Funds, or any part thereof, said Escrow Agent is hereby expressly authorized in
its sole direction, to obey and comply with all writs, orders or decrees so
entered or issued, which it is advised by legal counsel of its own choosing is
binding upon it, whether with or without jurisdiction, and in case said Escrow
Agent obeys or complies with any such writ, order or decree it shall not be
liable to any of the parties hereto or to any other person, firm or corporation,
by reason of such compliance notwithstanding that such writ, order or decree may
be subsequently reversed, modified, annulled, set aside or vacated.
(g) Litigation. In the event said Escrow Agent becomes involved in
litigation on account of the Escrowed Funds or of this Agreement, it shall have
the right to retain counsel and shall have a lien on the property deposited
hereunder for any and all costs, attorneys' and solicitors' fees, charges,
disbursements, and expenses in connection with such litigation; and shall be
entitled to reimburse itself therefore out of the Escrowed Funds, and if it
shall be unable to reimburse itself
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from the Escrowed Funds, the parties hereto jointly and severally agree to pay
to said Escrow Agent on demand, its reasonable charges, counsel and attorneys'
fees, disbursements, and expenses in connection with such litigation.
(h) Assignment by Escrow Agent. Any corporation or association
into which the Escrow Agent may be converted or merged, or with which it may be
consolidated, or to which it may sell or transfer its corporate trust business
and assets as a whole or substantially as a whole or in part, or any corporation
or association resulting from any such conversion, sale, merger, consolidation
or transfer to which it is a party, shall be and become the successor Escrow
Agent hereunder and vested with all of the title to the whole property or trust
estate and all of the trusts, powers, immunities, privileges, protections and
all other matters as was its predecessor, without the execution or filing of any
instrument or any further act, deed or conveyance on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.
(i) Conflicting Demands. In the event that conflicting demands
are made upon the Escrow Agent for any situation not addressed in this
Agreement, Escrow Agent may withhold performance of this Escrow until such times
as said conflicting demands shall have been withdrawn or the rights of the
respective parties shall have been settled by court adjudication, arbitration,
joint order or otherwise.
8. Miscellaneous.
(a) Amendment. This Agreement may be amended only by a writing
executed by Buyer, the Sellers and Escrow Agent.
(b) Entire Agreement. This Agreement and the other agreements
expressly referred to herein set forth the entire understanding of the parties
hereto regarding the subject matter hereof and supersede all prior contracts,
agreements, arrangements, communications, discussions, representations and
warranties, whether oral or written, between the parties regarding the subject
matter hereof.
(c) Notices. All notices under this Agreement shall be in writing and
shall be (i) delivered in person, (ii) sent by telecopy, or (iii) mailed,
postage prepaid, either by registered or certified mail, return receipt
requested, or overnight express carrier, addressed in each case as follows:
If to the Sellers, to: Xxxx Xxxxxxx
Tricom Funding
00000 X. Xxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Facsimile:(000) 000-0000
and
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Xxxx Xxxx
Tricom Funding
00000 X. Xxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Facsimile: (000) 000-0000
with a copy to: Xxxxxxxxx & Xxxxxxx, S.C.
000 X. Xxxxxxxxx Xxx., Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
If to Buyer, to: Wintrust Financial Corporation
Attn: Xxxxx X. Xxxxxxx
000 X. Xxxx Xxxx
Xxxx Xxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
with a copy to: Xxxxxxxx & Xxxxx
Attn: Xxxxxx X. Xxxxx, XX
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
If to Escrow Agent, to: LaSalle Bank, N.A.
00 X. XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx Xxxxxx
Facsimile: (000) 000-0000
or to any other address or telecopy number as such party shall designate in a
written notice to the other. All notices sent pursuant to the terms of this
Section 9(c) shall be deemed received (i) if personally delivered, then on the
date of delivery; (ii) if sent by telecopy before 2:00 p.m. local time of the
recipient, on the day sent if a business day or if such day is not a business
day or if sent after 2:00 p.m. local time of the recipient, then on the next
business day; (iii) if sent by overnight, express carrier, on the next business
day immediately following the day sent; or (iv) if sent by registered or
certified mail, on the earlier of the third (3rd) business day following the day
sent or when actually received. Any notice by telecopy shall be followed by
delivery of a copy of such notice on the next business day by overnight express
carrier or by hand.
(d) Assignment. This Agreement shall be binding upon and inure to the
benefit of the successors, heirs, representatives and assigns of each party
hereto, but no rights, obligations or liabilities of the Sellers shall be
assignable without the prior written consent of Buyer, and no rights,
obligations, or liabilities of Escrow Agent hereunder shall be assignable
without the prior
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written consent of Buyer and the Sellers. Notwithstanding the foregoing, no
assignment shall be binding upon the Escrow Agent until notice thereof has been
delivered and acknowledged by the Escrow Agent.
(e) Governing Law. This Agreement shall in all respects be governed
by, and construed in accordance with, the laws of the State of Illinois.
(f) Severability. Each section and subsection of this Agreement
constitutes a separate and distinct provision hereof. It is the intent of the
parties hereto that the provisions of this Agreement be enforced to the fullest
extent permissible under the laws and public policies applicable in each
jurisdiction in which enforcement is sought. Accordingly, if any provision of
this Agreement shall be adjudicated to be invalid, ineffective or unenforceable,
the remaining provisions shall not be affected thereby. The invalid, ineffective
or unenforceable provision shall, without further action by the parties, be
automatically amended to effect the original purpose and intent of the invalid,
ineffective or unenforceable provision; provided, however, that such amendment
shall apply only with respect to the operation of such provision in the
particular jurisdiction with respect to which such adjudication is made.
(g) Waivers. Any waiver by any party of any violation of, breach of
or default under any provision of this Agreement, by the other party shall not
be construed as, or constitute, a continuing waiver of such provision, or waiver
of any other violation of, breach of or default under any other provision of
this Agreement or any other agreements provided for herein.
(h) Headings. The headings in this Agreement are solely for
convenience of reference and shall not be given any effect in the construction
or interpretation of this Agreement.
(i) Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, and all of
which together will constitute one and the same instrument.
(j) Third Parties. Nothing expressed or implied in this Agreement is
intended, or shall be construed, to confer upon or give any person or entity
other than Buyer, the Sellers and Escrow Agent any rights or remedies under, or
by reason of, this Agreement.
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IN WITNESS WHEREOF, the Sellers, Buyer and Escrow Agent have caused
their respective duly authorized representatives to execute this Agreement, all
as of the date first above written.
WINTRUST FINANCIAL CORPORATION
By /s/ Xxxxx X. Xxxxxxx
----------------------------
Its Executive Vice President and
Chief Financial Officer
/s/ Xxxx Xxxxxxx
--------------------------------
Xxxx Xxxxxxx
/s/ Xxxx Xxxx
--------------------------------
Xxxx Xxxx
LASALLE BANK, N.A., AS ESCROW
AGENT
By /s/ Illegible
----------------------------
Its Vice President
SIGNATURE PAGE TO
POST-CLOSING ESCROW AGREEMENT
