1
Exhibit 2.19
ESCROW AGREEMENT
THIS ESCROW AGREEMENT ("Escrow Agreement") is dated as of the 7th day
of April 2000 among XXXXXX UK INC., an Ohio corporation with a mailing address
of 000 Xxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxxx, Xxxx 00000, Attention: Xxxx X.
Xxxxxx, Esq., General Counsel ("Xxxxxx"), and J&M PSYCHARIS PTY LIMITED as
Trustee for the J&M Psycharis Family Trust, LAMPAM PTY LIMITED as Trustee for
the Marks Family Trust, XXXXX PTY LIMITED as Trustee for the Mihaly Family
Trust, XXXXX XXXXX XXXX XXXXXXX and XXXXXX XXXXXXX XXXX, all with notice
addresses as set out in the Purchase Agreement, (collectively, the "Sellers"),
and FIFTH THIRD BANK with a mailing address of 00 Xxxxxxxx Xxxxxx Xxxxx,
Xxxxxxxxxx, Xxxx 00000, as the escrow agent hereunder ("Escrow Agent").
BACKGROUND
----------
A. Effective as of April 7, 2000 Xxxxxx and the Sellers entered into a
Units Purchase Agreement (the "Purchase Agreement"). Pursuant to the terms of
said Purchase Agreement, Xxxxxx (or its assignee) will purchase from the Seller
all of the issued and outstanding capital stock of Synermedica Pty Limited (ACN
064 353 840), and all of the trust units of Synermedica Unit Trust ("Target").
B. The parties desire to enter into this Escrow Agreement to provide
for an escrow of the United States dollar equivalent of one million, five
hundred thousand Australian dollars (AUD1,500,000) in shares of common stock, no
par value per share, of Xxxxxx International Inc (the " Xxxxxx Shares") valued
at the Market Value (as that term is defined in the Purchase Agreement),
two-thirds of which shall be released, subject to the terms of this Escrow
Agreement, to Sellers on the first anniversary date of the Closing Date and
one-third of which shall be released, subject to the terms of this Escrow
Agreement, to Sellers on the second anniversary date of the closing of the
transactions contemplated in the Purchase Agreement, all to provide financial
support for Sellers' obligation to indemnify Xxxxxx for any breaches of warranty
or representation by Sellers under the Purchase Agreement.
C. The Sellers' respective interests in the Escrow Fund (as defined
hereinafter) are as set forth on Schedule I.
NOW, THEREFORE, in consideration of the mutual covenants set forth
below and other good and valuable consideration, the parties hereto agree as
follows:
1. DESIGNATION AND DELIVERY. Xxxxxx and Sellers hereby designate Fifth
Third Bank as "Escrow Agent" under this Escrow Agreement. Xxxxxx and Sellers
hereby deliver to the Escrow Agent a copy of the Purchase Agreement, which
agreement is attached hereto as Exhibit "A." Xxxxxx, in accordance with the
Purchase Agreement, hereby delivers to the Escrow Agent,
2
and the Escrow Agent hereby acknowledges receipt of, a certificate or
certificates, each duly endorsed in blank or with stock powers duly endorsed in
blank evidencing the United States Dollar Equivalent of one million, five
hundred thousand Australian dollars (AUD1,500,000) in Xxxxxx Shares (the
"Deposit").
2. INVESTMENT OF THE DEPOSIT; DIVIDENDS AND DISTRIBUTIONS WITH RESPECT
TO THE DEPOSIT. In the event that Xxxxxx Shares are acquired by another entity
and the Deposit is paid out in cash, the Escrow Agent is hereby authorized to
invest the Deposit and any other cash in the Escrow Fund (as defined
hereinafter) in money market funds, including the Fifth Third U.S. Treasury
Obligations Fund sponsored by the Escrow Agent's affiliate, Fifth Third Funds.
The Escrow Agent shall cause all dividends, distributions (including shares
distributed in a stock split), proceeds from any sale or liquidation, or other
income earned on or with respect to the Deposit to be added to the Deposit. Such
deposited dividends, distributions or other income shall, together with the
Deposit, constitute the "Escrow Fund" to be distributed as provided in Section 5
hereof. The Sellers shall be entitled to exercise all voting rights with respect
to the Xxxxxx Shares and any other securities held from time to time as part of
the Escrow Fund until such time as any such securities are distributed to Xxxxxx
in accordance with Section 5 hereof.
3. ESCROW AGENT AS CUSTODIAN; EXPENSES. The Escrow Agent shall, for all
purposes of this Escrow Agreement, be treated as and considered legally a
custodian. The Escrow Agent shall be entitled to rely conclusively upon the
written notice provided in Section 5 and may assume the genuineness of all
signatures and documents and the authority of all signatories. The Escrow Agent
shall have no liability except for gross negligence or willful misconduct in the
performance of its duties under this Escrow Agreement. Xxxxxx shall assume and
pay all costs and expenses of the Escrow Agent incurred in its capacity as the
Escrow Agent under this Escrow Agreement.
4. RESIGNATION; DISAGREEMENTS.
(a) Escrow Agent (and any successor Escrow Agent) may at any
time resign as such by delivering the Escrow Fund to any successor
Escrow Agent designated by the other parties hereto in writing, or to
any court of competent jurisdiction as provided below. The resignation
of Escrow Agent will take effect on the earlier of (a) the appointment
of a successor (including a court of competent jurisdiction), or (b)
the day which is thirty (30) days after the date of delivery of its
written notice of resignation to the other parties hereto. If at that
time Escrow Agent has not received a designation of a successor Escrow
Agent, Escrow Agent's sole responsibility after that time shall be to
retain and safeguard the Escrow Fund until receipt of a designation of
successor Escrow Agent or a joint written disposition instruction by
the other parties hereto or a final non-appealable order of a court of
competent jurisdiction.
(b) In the event of any disagreement between the other parties
hereto resulting in adverse claims or demands being made pursuant to
the Purchase Agreement or other
3
ancillary document in connection with the Escrow Fund or in the event
that Escrow Agent is in doubt as to what action it should take
hereunder, Escrow Agent shall be entitled to retain the Escrow Fund
until Escrow Agent shall have received (i) a final non-appealable order
of a court of competent jurisdiction directing delivery of the Escrow
Fund, or (ii) a written agreement executed by the other parties hereto
directing delivery of the Escrow Fund, in which event Escrow Agent
shall disburse the Escrow Fund in accordance with such order or
agreement. Any court order shall be accompanied by a legal opinion by
counsel for the presenting party satisfactory to Escrow Agent to the
effect that the order is final and non-appealable. Escrow Agent shall
act on such court order and legal opinion without further question.
5. TERMINATION AND DISTRIBUTION OF ESCROW.
(a) Except as provided in Section 5(f), this Escrow Agreement
shall terminate upon the earlier of (i) April 7, 2002, or (ii) the date
upon which the Escrow Agent shall have distributed the Escrow Fund as
provided herein;
(b) If, on or prior to April 7, 2001, the date that is the
first anniversary of the Closing Date (the "Anniversary Date"), Xxxxxx
shall not have delivered to the Escrow Agent and Sellers a notice of
claim with respect to the Escrow Fund based on breaches by the Sellers
of warranties or representations contained in the Purchase Agreement
("Notice of Claim"), two-thirds of the Xxxxxx Shares, plus all
dividends, distributions and other income earned thereupon, shall
promptly be released to Sellers by the Escrow Agent;
(c) If, on or prior to the Anniversary Date, Xxxxxx shall have
delivered a Notice of Claim to the Escrow Agent and Sellers and Sellers
shall not have disputed the Notice of Claim within ten (10) business
days after their receipt of the Notice of Claim, the Xxxxxx Shares,
plus all dividends, distributions and other income earned thereupon,
(or such lesser amount as may be specified in Xxxxxx'x Notice of
Claim), shall promptly be released to Xxxxxx by the Escrow Agent. If on
or prior to the Anniversary Date, the Sellers dispute a Notice of
Claim, then the disputed amount shall remain in escrow until resolved
but two-thirds of the Xxxxxx Shares less the disputed amount plus all
dividends, distributions and other income earned thereupon , shall be
promptly released to the Sellers by the Escrow Agent;
(d) If, on or prior to April 7, 2002, the date that is the
second anniversary of the Closing Date (the "Second Anniversary Date"),
Xxxxxx shall not have delivered to the Escrow Agent and Sellers a
Notice of Claim, one-third of the Xxxxxx Shares, plus all dividends,
distributions and other income earned thereupon, shall be promptly
released to Sellers by the Escrow Agent;
(e) If, on or prior to the Second Anniversary Date, Xxxxxx
shall have delivered a Notice of Claim to the Escrow Agent and Sellers,
and Sellers shall not have
4
disputed the Notice of Claim within ten (10) business days after their
receipt of the Notice of Claim, the remainder of the Xxxxxx Shares,
plus all dividends, distributions and other income earned thereupon,
(or such lesser amount as may be specified in Xxxxxx'x Notice of
Claim), shall promptly be released to Xxxxxx by the Escrow Agent; and,
(f) If, on or prior to the Second Anniversary, Xxxxxx shall
have delivered a Notice of Claim or multiple Notices of Claim to the
Escrow Agent and Sellers which is or are timely disputed by Sellers,
the Escrow Agent shall hold Xxxxxx Shares, plus all dividends,
distributions and other income earned thereupon to the value of the
amount of the claim, until the dispute or disputes is or are resolved
by a court of competent jurisdiction, even if resolution of the
disputes occurs after April 7, 2002, and shall distribute the Xxxxxx
Shares, plus all dividends, distributions and other income earned
thereupon, either pursuant to joint written instructions from Xxxxxx
and Sellers or pursuant to court order.
(g) The value of any Xxxxxx Shares released to Xxxxxx pursuant
to this Section 5 shall be determined by reference to the rate of
exchange calculated using the spot FX AUD/US$ exchange rate over the
previous twenty (20) trading days and the average closing bid price for
shares of Xxxxxx common stock on the NASDAQ National Market System
during the twenty (20) trading days prior to either the date of a
disputed claim is finally determined or, if a claim is not disputed,
the date of release.
6. DUTIES OF ESCROW AGENT. The duties of the Escrow Agent under this
Escrow Agreement shall be entirely administrative and the Escrow Agent shall not
be liable to any third party as a result of any action or omission taken or made
by it, if taken in good faith, except for gross negligence or willful misconduct
in performing its duties. In the event of disagreement or dispute between Xxxxxx
and Sellers with respect to disposition of the Escrow Fund, the Escrow Agent
shall promptly initiate an appropriate legal proceeding to obtain a judicial
determination of the respective parties' rights to the Escrow Fund. No rights
are intended to be granted to any third party hereunder. Xxxxxx and Sellers
shall severally (each being responsible for fifty percent (50%) of the indemnity
account) indemnify, defend and hold harmless the Escrow Agent and reimburse the
Escrow Agent from and for any and all liability, costs and expenses, including
reasonable attorneys' fees, the Escrow Agent may suffer or incur by reason of
its execution and performance of this Escrow Agreement. The Escrow Agent shall
have no duties except those which are expressly set forth herein, and it shall
not be bound by any notice of a claim, or demand with respect thereto, or any
waiver, modification, amendment, termination or recision of this Escrow
Agreement, unless in writing received by it and signed by Xxxxxx and/or Sellers.
In the event that the Escrow Agent shall find it necessary to
consult with counsel of its own choosing in connection with this Escrow
Agreement, the Escrow Agent shall not incur any liability for any action taken
in good faith in accordance with such advice. Xxxxxx and Sellers, jointly and
severally, shall indemnify and hold harmless the Escrow Agent for any
5
liability, loss, claim or damage incurred by the Escrow Agent in connection with
this Escrow except for any such liability, costs, expenses (including reasonable
attorneys' fees), loss, claims or damage which is a result of Escrow Agent's own
gross negligence or willful misconduct. This indemnification shall survive
termination of this Escrow Agreement. Xxxxxx and Sellers agree that Xxxxxx, on
the one hand, and Sellers, collectively, on the other hand, shall each assume
and pay fifty percent (50%) of all amounts due to Escrow Agent as a result of
this indemnification.
Escrow Agent is not a party to, and is not bound by, any
agreement which may be evidenced by, or arise out, the foregoing instruction,
other than as expressly set forth herein. In the event that any of the terms and
provisions of any other agreement (excluding any amendment to this Escrow
Agreement) between any of the parties hereto, conflict or are inconsistent with
any of the provisions of this Escrow Agreement, the terms and provisions of this
Escrow Agreement shall govern and control in all respects.
7. NOTICES. All notices, consents or other communications required or
permitted to be given under this Escrow Agreement shall be in writing and shall
be deemed to have been duly given:
(a) when delivered personally to the other party and copied to
their respective solicitors as advised from time to time,
(b) five (5) business day after being sent by an overnight
delivery service, postage or delivery charges prepaid, or
(c) on the date on which a telegram or facsimile is
transmitted to the parties at their respective addresses stated above.
Any party may change its address for notice and the address to which copies must
be sent by giving notice of the new addresses to the other parties in accordance
with this Section 7, except that any such change of address notice shall not be
effective unless and until received.
8. AMENDMENT. No amendment or modification of this Escrow Agreement
shall be effective unless in writing and signed by the parties.
9. PARTIES IN INTEREST. This Escrow Agreement shall bind, benefit, and
be enforceable by and against each party hereto and their successors, assigns,
heirs and personal representatives. No party shall in any manner assign any of
its rights or obligations under this Escrow Agreement without the express prior
written consent of the other parties.
10. NO WAIVERS. No waiver with respect to this Escrow Agreement shall
be enforceable unless in writing and signed by the party against whom
enforcement is sought. Except as otherwise expressly provided herein, no failure
to exercise, delay in exercising, or single or partial exercise of any right,
power or remedy by any party, and no course of dealing
6
between or among any of the parties, shall constitute a waiver of, or shall
preclude any other or further exercise of the same or any other right, power or
remedy.
11. SEVERABILITY. If any provision of this Escrow Agreement is
construed to be invalid, illegal or unenforceable, then the remaining provisions
hereof shall not be affected thereby and shall be enforceable without regard
thereto.
12. COUNTERPARTS. This Escrow Agreement may be executed in any number
of counterparts, each of which when so executed and delivered shall constitute
an original hereof, and it shall not be necessary in making proof of this Escrow
Agreement to produce or account for more than one original counterpart hereof.
13. CONTROLLING LAW. This Escrow Agreement is made under, and shall be
construed and enforced in accordance with, the laws of the State of Victoria
applicable to agreements made and to be performed solely therein, without giving
effect to principles of conflicts of law.
14. DEFINITIONS. To the extent not specifically defined herein, all
terms used herein shall have the meanings ascribed to them in the Purchase
Agreement.
15. WITHOUT PREJUDICE. Any distribution of shares pursuant to Section 5
of this Escrow Agreement shall be without prejudice to any of the parties hereto
and all rights are expressly reserved.
(remainder of page intentionally blank)
7
IN WITNESS WHEREOF, the parties have executed, or caused their duly
authorized representatives to execute, this Escrow Agreement on the date first
written above.
XXXXXX UK INC.
By:
Name: XXXXXXX X XXXXXX
Title: Executive Vice President & Chief
Financial Officer
----------------------------------
Xxxxxxxx Xxxxxxxxxxxx as
authorised representative for
J&M PSYCHARIS PTY LIMITED, as
Trustee for the J&M Psycharis
Family Trust
----------------------------------
Xxxxx Xxxxxx Xxxxx as
authorised representative for
LAMPAM PTY LIMITED as Trustee
for the Marks Family Trust
----------------------------------
Xxxxxx Xxxxxxx Xxxxxx as
authorised representative for
XXXXX PTY LIMITED, as Trustee
for the Mihaly Family Trust
----------------------------------
XXXXX XXXXX XXXX XXXXXXX
----------------------------------
STUART XXXXXXX XXXX
Received and accepted:
FIFTH THIRD BANK
Escrow Agent
By:
Name:
Title:
8
EXHIBIT "A"
-----------
Purchase Agreement
------------------
9
SCHEDULE I
----------
SELLER PERCENTAGE INTEREST IN ESCROW FUND NO OF SHARES
Xxxxx Pty Ltd as Trustee for the Mihaly 83.33% 65,416
Family Trust
J&M Psycharis Pty Ltd as Trustee for the 10.00% 7,850
J&M Psycharis Family Trust
Lampam Pty Ltd as Trustee for the Marks 3.33% 2,617
Family Trust
Stuart Xxxxxxx Xxxx 2.50% 1,963
Xxxxx Xxxxx Xxxx Xxxxxxx 0.83% 654
