EXHIBIT 2.2
ESCROW AGREEMENT
THIS ESCROW AGREEMENT ("Escrow Agreement") is entered into as of May 5,
1999, by and among Hama Sensors, Inc., a Minnesota corporation ("Buyer"), HAMA
Laboratories, Inc., a California corporation (the "Company"), the shareholders
(the "Shareholders") of the Company, and U.S. Bank Trust National Association,
as escrow agent (the "Escrow Agent").
WITNESSETH:
WHEREAS, pursuant to the Asset Purchase Agreement (the "Purchase
Agreement") of even of the date herewith, by and among Buyer, the Company and
the Shareholders, Buyer has agreed to purchase substantially all of the assets
and assume certain of the liabilities of the Company (capitalized terms used but
not defined shall have the meanings ascribed to them in the Purchase Agreement);
WHEREAS, the Purchase Agreement provides for the execution and delivery
at the Closing of an escrow agreement;
WHEREAS, certain representations, warranties, covenants, agreements and
indemnities of the Shareholders are set forth in the Purchase Agreement; and
WHEREAS, pursuant to the Purchase Agreement, a portion of the Total
Consideration to be paid to the Shareholders is to be held in escrow to secure
and satisfy certain indemnification rights contemplated by the Purchase
Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto covenant and agree as follows:
1. Appointment and Agreement of Escrow Agent. Buyer, the Company and
the Shareholders hereby appoint U.S. Bank Trust National Association, as, and
U.S. Bank Trust National Association agrees to perform the duties of, the Escrow
Agent under this Escrow Agreement. This Escrow Agreement shall be administered
by the Escrow Agent and the Escrow Amount (as hereinafter defined) shall be held
by the Escrow Agent, at its office as hereinafter designated, in Minneapolis,
Minnesota.
2. Purchase Agreement Not Limited By This Escrow Agreement. This Escrow
Agreement and the establishment of the Escrow Amount are without prejudice to
and are not in limitation of, any obligations of the Company and the
Shareholders to Buyer in respect of any of the covenants, representations or
warranties of the Company and the Shareholders contained in the Purchase
Agreement. The duties, obligations and rights of the Escrow Agent are to be
determined solely by this Agreement; the Escrow Agent is not a party to, or
bound by, any agreement other than this Escrow Agreement.
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3. Escrow Amount.
(a) Concurrently with the execution and delivery hereof, Buyer is
depositing with the Escrow Agent Five Hundred Thousand Dollars ($500,000) in
cash. The cash so deposited, together with any interest earned thereon, shall
hereinafter be referred to as the "Escrow Amount." The Escrow Agent hereby
agrees to hold and dispose of the Escrow Amount for the benefit of the parties
hereto in accordance with the terms of this Escrow Agreement. The Escrow Agent
hereby acknowledges receipt of (i) the Escrow Amount and (ii) an executed copy
of the Purchase Agreement.
(b) The Escrow Agent shall invest the Escrow Amount, including any
earnings therefrom, as instructed in writing by Buyer and the Shareholders'
Representative on behalf of the Shareholders and the Company, only in (i)
certificates of deposit insured by the FDIC or secured by government obligations
and bearing the highest rate of interest paid by the Escrow Agent on such
certificates of deposit, or (ii) U.S. Treasury securities, in each case having
maturities of no more than ninety (90) days, or (iii) a money market fund in
which the Escrow Agent, its parent, affiliates or subsidiaries provides
investment advisory or other management services, or (iv) in any other fund or
other investment vehicle that the Shareholders' Representative and Buyer shall,
in writing, mutually agree. If no direction is given to the Escrow Agent, funds
will be invested pursuant to Schedule A hereto. Any withdrawals against the
Escrow Amount for the benefit of a Buyer Indemnified Party pursuant to the terms
of this Escrow Agreement shall be postponed, if necessary, until the maturity of
such certificates of deposit or other instruments to maximize the income from
such certificates and to avoid any early termination penalties with respect
thereto. Any earnings on the principal amount deposited with the Escrow Agent
shall be taxable to the Company, or the Shareholders as successors thereto and
shall be retained in the accounts established by this Agreement until release of
the principal amount on which it is earned, provided, that Buyer shall first
apply all amounts so received to satisfy the claims of any Buyer Indemnified
Party.
4. Escrow Period. The Escrow Agreement has been executed and the
deposit of the Escrow Amount has been made pursuant to Section 3.03 of the
Purchase Agreement and has been made for the purpose of funding and securing, to
the extent of the Escrow Amount, the Company's and the Shareholders'
indemnification obligations to Buyer until the later to occur of the following:
(i) May 5, 2000 (the "Escrow Survival Date") or (ii) with respect to any Buyer
Indemnified Party claim for indemnification under the Purchase Agreement made by
any Buyer Indemnified Party prior to the Escrow Survival Date which has not been
completely and finally resolved prior to the Escrow Survival Date, the period of
time beyond the Escrow Survival Date sufficient to resolve, completely and
finally, such claim.
5. Procedures for Disbursement of the Escrow Amount to Buyer. Whenever
there shall be delivered to the Escrow Agent either (i) a certificate signed by
Buyer and the Shareholders' Representative certifying, or (ii) a final and
nonappealable copy of a judgment of a court of competent jurisdiction
determining, or (iii) a certified copy of the results of any arbitration
pursuant to Article XII of the Purchase Agreement determining, that an amount is
due to a Buyer Indemnified Party
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pursuant to Article X of the Purchase Agreement, the Escrow Agent shall, to the
extent that the Escrow Amount shall be sufficient for such purpose, promptly
(and in no event later than five (5) business days following receipt of any of
the documents referred to in clause (i), (ii) or (iii) of this Section 5) cause
such amount to be delivered to Buyer.
6. Payment to Holders. All payments to be made by the Escrow Agent
pursuant to Section 5 shall be made by check or, if provided with wire
instructions at least two (2) business days in advance of the date of
disbursement, by wire transfer.
7. Termination.
(a) On or before (A) 185 days after the Closing Date (the "Partial
Termination Date"), the Escrow Agent shall pay to (or at the direction of) the
Company care of the Shareholders' Representative from the Escrow Amount an
amount equal to (i) Two Hundred and Fifty Thousand Dollars ($250,000) plus any
interest earned on the Escrow Amount less (ii) the sum of (A) any amount
previously used to satisfy a Loss or Losses, plus (B) any amounts being held
with respect to an unresolved Loss as of such date, plus (C) 50% of the payments
due the Escrow Agent in accordance with section 10.3 to the extent not
previously paid, and (B) 370 days after the Closing Date (the "Final Termination
Date"), the Escrow Agent shall pay to (or at the direction of) the Shareholders'
Representative from the Escrow Amount an amount equal to (i) Two Hundred and
Fifty Thousand Dollars ($250,000) plus any remaining interest earned on the
Escrow Amount, less (ii) the sum of (A) any amount previously used to satisfy a
Loss or Losses, plus (B) any amounts being held with respect to an unresolved
Loss and plus (C) 50% of the payments due the Escrow Agent in accordance with
section 10.3 to the extent not previously paid; provided, however, that there
shall be deducted from the amount delivered to the Shareholders' Representative
the Reserved Amount (as defined in Section 8). Any amount held in escrow after
such the Final Termination Date shall be paid to the Shareholders'
Representative promptly after any existing claim by a Buyer Indemnified Party is
resolved pursuant to Section 5.
(b) This Escrow Agreement shall automatically terminate if and when
all of the Escrow Amount shall have been distributed by the Escrow Agent in
accordance with the terms of this Escrow Agreement.
8. Retention of Escrow Amount. In the event that, at either Termination
Date, unresolved claims for indemnification shall have been made by any Buyer
Indemnified Party pursuant to the Purchase Agreement, then Buyer may in good
faith, at any time prior to such Termination Date, notify the Escrow Agent to
such effect in writing, which notice shall describe briefly the nature of each
such claim, and the estimated amount, based on the good faith judgment of Buyer
of the potential liability with respect to each such claim. Buyer shall promptly
deliver to the Shareholders' Representative a copy of such written notice. An
amount of the remaining Escrow Amount on such Termination Date equal to one
hundred percent (100%) of the total of the amounts set forth in such written
notice with respect to the claim or claims described therein shall be set aside
and retained (to the extent available in the then-remaining Escrow Amount) by
the Escrow Agent as a reserve to cover such claim or claims (such amount so set
aside and reserved, as reduced from time to time pursuant to the provisions of
this Section 8 or of Section 5, being herein called the "Reserved Amount").
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9. No Transfer of Escrow Amount. While any of the Escrow Amount shall
continue to be held by the Escrow Agent, neither Buyer, the Company nor either
of the Shareholders will transfer, sell, pledge, create a security interest in
or otherwise dispose of their rights to any of the Escrow Amount, or
distributions with respect thereto.
10. The Escrow Agent.
10.1 Indemnification of the Escrow Agent. Buyer, the Company
and the Shareholders jointly and severally agree to indemnify and hold
the Escrow Agent and its directors, officers and employees harmless
from and against any and all costs, charges, damages, and attorneys'
fees which the Escrow Agent in good faith may incur or suffer in
connection with or arising out of this Escrow Agreement.
10.2 Duties of the Escrow Agent. The Escrow Agent shall have
no duties other than those expressly imposed on it herein and shall not
be liable for any act or omission, except for its own gross negligence
or willful misconduct.
10.3 Fees of the Escrow Agent. The fees and charges of the
Escrow Agent with respect to this Agreement are identified in Schedule
B hereto and shall be paid one-half by Buyer and one-half by the
Shareholders collectively. The Shareholders agree that the Escrow Agent
may deduct any unpaid fees due from the Shareholders from the Escrow
Amount prior to the Escrow Agent's distributing any assets in
connection with the termination of the Escrow Amount.
10.4 Escrow Agent to Follow Instructions of Buyer and the
Shareholders' Representative. Any provision herein to the contrary
notwithstanding, the Escrow Agent shall, at any time and from time to
time, take such action hereunder with respect to the Escrow Amount as
shall be agreed to in writing by Buyer and the Shareholders'
Representative on behalf of the Company and the Shareholders. In the
performance of its duties hereunder, the Escrow Agent may rely on any
document reasonably believed by it to be genuine.
10.5 Resignation of the Escrow Agent. The Escrow Agent may
resign at any time by providing Buyer and the Shareholders'
Representative with thirty (30) days' written notice of its intention
to do so; provided, that a successor Escrow Agent has been appointed.
The Escrow Agent's resignation shall be effective upon delivery of the
Escrow Amount to the successor Escrow Agent and upon such successor
assuming the obligations, rights and duties of the Escrow Agent
hereunder. In the event the Escrow Agent resigns, the Buyer and the
Shareholders' Representative shall mutually select a successor Escrow
Agent.
10.6 Disputes. In the event conflicting demands are made or
notices are served upon the Escrow Agent with respect to the Escrow
Amount, or there is any dispute over action to be taken or not taken by
the Escrow Agent, the Escrow Agent shall have the absolute right, at
the Escrow Agent's election, to do either or both of the following:
resign so a successor can be appointed pursuant to Section 10.5 or file
a suit in interpleader and obtain
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an order from a court of competent jurisdiction requiring the parties
to interplead and litigate in such court their several claims and
rights among themselves. The Escrow Agent agrees that, if it files a
suit in interpleader, it shall do so in any of the state or federal
courts having jurisdiction in the State of Minnesota. In the event such
interpleader suit is brought, the Escrow Agent will thereby be fully
released and discharged from all further obligations imposed upon it
under the provisions hereof, and Buyer, on the one hand, and the
Shareholders and the Company, collectively on the other hand, will each
bear fifty percent (50%) of the costs, expenses and reasonable
attorneys' fees expended or incurred by the Escrow Agent pursuant to
the exercise of the Escrow Agent's rights under this Section 10.6.
11. Notices. All notices, demands and other communications to be given
or delivered under or by reason of the provisions of this Agreement will be in
writing and will be deemed to have been given (i) immediately when personally
delivered, (ii) when received by first class mail, return receipt requested,
(iii) when sent by Federal Express or other overnight delivery service, or (iv)
when receipt is acknowledged, either electronically or otherwise, if sent by
facsimile, telecopy or other electronic transmission device and concurrently by
first class mail. Notices, demands and communications to Buyer, the Company and
the Shareholders will, unless another address is specified in writing, be sent
to the address indicated below:
Notices to Buyer: with a copy to:
CyberOptics Corporation Xxxxxx & Xxxxxxx LLP
0000 Xxxxxx Xxxxx Xxxxx 000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000 Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx Attention: Xxxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
Notices to the Shareholders and
the Company: with a copy to:
Xxxx Xxxxx Xxxxxx X. Xxxxxxxxx, Xx.
20356 Via Volante Carter, Xxxxxxxxx & Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000 000 Xxxx Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Facsimile: Xxx Xxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Notices to Escrow Agent:
U.S. Bank Trust National Association
X.X. Xxxx Xxxxx Xxxxxx - XXXX0000
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
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12. Successors and Assigns. The Escrow Agent may not assign, by
operation of law or otherwise, all or any portion of its rights, obligations or
liabilities under this Escrow Agreement without the consent of (i) Buyer and
(ii) the Shareholders' Representative, which consent may be withheld in such
party or parties absolute discretion. Any attempted assignment in violation of
this Section 12 shall be void and of no effect. This Escrow Agreement and all
actions taken hereunder in accordance with its terms shall be binding upon and
inure to the benefit of each of the parties hereto and its respective successors
and assigns. Any company into which the Escrow Agent may be merged or converted
or with which it may be consolidated or any company resulting from any merger,
conversion or consolidation to which it shall be a party or any company to which
the Escrow Agent may sell or transfer all or substantially all of its corporate
trust business shall be the successor to the Escrow Agent without the execution
or filing of any paper or any further act.
13. Further Assurances. The parties hereto agree to execute and
deliver, from time to time, such additional instruments and documents as any of
the other parties hereto may reasonably request in order to fully effectuate the
intent of the parties hereunder.
14. Miscellaneous.
(a) This Escrow Agreement and the Purchase Agreement contain the
entire agreement among the parties with respect to the subject matter hereof. In
the event of a conflict between the terms and provisions of this Escrow
Agreement and of the Purchase Agreement, the terms and provisions of this Escrow
Agreement shall govern the rights, obligations and liabilities of the Escrow
Agent.
(b) This Escrow Agreement may not be amended, supplemented or
discharged, and no provision hereof may be modified or waived, except by an
instrument in writing signed by all of the parties hereto.
(c) No waiver of any provision hereof by any party shall be deemed a
continuing waiver of any matter by such party.
(d) This Escrow Agreement may be executed in several counterparts,
each of which shall be deemed an original, but such counterparts together shall
constitute one and the same instrument.
(e) The section headings contained in this Escrow Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(f) This Escrow Agreement shall be governed by and construed and
enforced in accordance with the law (other than the law governing conflict of
law questions) of the State of Minnesota.
(g) The only beneficiaries of this Escrow Agreement are the
signatories hereof. Buyer shall have all rights to act on behalf of the Buyer
Indemnified Parties with respect to this Agreement. The Shareholders'
Representative shall have all rights to act on behalf of the Shareholders and
the Company with respect to this Escrow Agreement.
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(h) The Escrow Agent shall not be responsible for any federal or
state tax reporting with respect to this account.
IN WITNESS WHEREOF, the parties hereto have executed this Escrow
Agreement as of this 5th day of May, 1999.
HAMA SENSORS, INC.
By /s/ Xxxxxx X. Xxxxx
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Its President
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HAMA LABORATORIES, INC.
By /s/ Xxxx X. Xxxxx
--------------------------------------
Its President
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THE SHAREHOLDERS:
/s/ Jan Xxxx Xxxxxxxx
----------------------------------------
Jan Xxxx Xxxxxxxx
/s/ Xxxx X. Xxxxx
----------------------------------------
Xxxx X. Xxxxx
U.S. BANK TRUST NATIONAL
ASSOCIATION
By /s/ Xxxxxx Xxxxxxxx
--------------------------------------
Its Vice President
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