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EXHIBIT 10.5
ESCROW AGREEMENT
THIS ESCROW AGREEMENT, made and entered into as of the 3rd day of
December 1996, by and among FIBREBOARD CORPORATION, a Delaware corporation
("Seller"), BOOTH CREEK SKI HOLDINGS, INC., a Delaware corporation ("Buyer"),
and FIRST TRUST OF CALIFORNIA, a national association, San Francisco,
California (the "Escrow Agent"),
W I T N E S S E T H:
WHEREAS, concurrently herewith, pursuant to that certain Stock
Purchase and Indemnification Agreement among Seller, Buyer, Trimont Land
Company, a California corporation doing business as Northstar-at-Tahoe
("Northstar"), Sierra-at-Tahoe, Inc., a Delaware corporation ("Sierra"), and
Bear Mountain, Inc., a Delaware corporation ("Bear Mountain"), dated as of
November __, 1996 (the "Purchase Agreement"), Seller has sold all of the issued
and outstanding shares of Northstar, Sierra and Bear Mountain to Buyer; and
WHEREAS, the Parties have agreed to establish an escrow with respect
to indemnification by Seller of Buyer with regard to certain potential
Liabilities related to Section 2.6.5 of that certain asset purchase agreement
dated October 6, 1995, by and among Seller, Bear Mountain, Bear Mountain Ltd.
("BML") and S-K-I Ltd. (the "BML Agreement"), if the consent by BML has not
been received or waived by BML on or before the Closing Date, to be maintained
until consent has been received from BML or otherwise waived, unless earlier
terminated by a joint notice to the Escrow Agent substantially in the Form of
Exhibit A hereto signed by Buyer and Seller (the "Escrow Period");
NOW, THEREFORE, in consideration of the covenants hereinafter
contained, the parties hereto agree as follows:
1. Establishment of the Escrow. As of the date hereof, Buyer has
delivered to the Escrow Agent One Million dollars ($1,000,000) (together with
all interest earned thereon, the "Escrow Fund"). The Escrow Fund shall be held
by the Escrow Agent in escrow subject to the terms and conditions set forth
herein. The Escrow Agent shall deposit the Escrow Fund in a First Trust of
California Business Money Market Account.
2. Costs and Fees of Escrow Agent. Seller and Buyer shall each
pay one-half of all costs and fees of the Escrow Agent in connection with this
Agreement, as set forth on the Depository Escrow Fee Schedule attached as
Exhibit B hereto (the "Fee Schedule").
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3. Escrow Period. The Escrow Fund shall remain in existence
until the Escrow Period has expired. The Escrow Period shall be four (4) years
from the date first written above; provided, however, that in the event BML
files suit against Bear Mountain or Fibreboard within such four year period
alleging the violation of the provisions of Section 2.6.5 of the BML Agreement,
the Escrow Period shall be extended until such suit is dismissed, settled or
finally adjudicated.
4. Protection of Escrow Fund. The Escrow Agent shall hold and
safeguard the Escrow Fund during the Escrow Period, shall treat such fund as a
trust fund in accordance with the terms of this Agreement and not as the
property of Seller or Buyer, and shall hold and dispose of the Escrow Fund only
in accordance with the terms hereof.
5. Claims Upon Escrow Fund. If during the Escrow Period either
Seller or Buyer (the "Filing Party") intends to assert that it is entitled
to all or any portion of the Escrow Fund pursuant to the terms set forth in
Section 7 of this Escrow Agreement, the Filing Party shall, prior to the
expiration of the Escrow Period, file with the Escrow Agent a certificate
signed by the Chief Executive Officer, President, Chief Financial Officer or
General Partner of the Filing Party stating that the Filing Party is entitled
to all or any portion of the Escrow Fund, and specifying in reasonable detail
the nature of the Filing Party's claim of entitlement (a "Claim"). Upon
receipt of a Claim, the Escrow Agent shall proceed as set forth in Section 6.
6. Objections to Claims.
a. Upon receipt by the Escrow Agent of a Claim filed during the
Escrow Period, the Escrow Agent shall deliver a duplicate copy of the Filing
Party's Claim to the other party (the "Non-Filing Party") in the manner
provided in Section 12 and for a period of fifteen (15) calendar days after
such delivery, the Escrow Agent shall make no delivery of Escrow Funds to
either party. If the Non-Filing Party objects to such Claim, such Claim shall
constitute a "Disputed Claim." To timely object, a Non-Filing Party shall
object in a written statement and such statement shall be delivered to the
Escrow Agent and the Filing Party prior to the expiration of such fifteen (15)
calendar day period, and shall set forth the basis for the objection in
reasonable detail.
b. If the Non-Filing Party has not filed an objection by the
expiration of said fifteen (15) calendar day period, the Escrow Agent shall
deliver the Escrow Fund or the claimed portion thereof to the Filing Party.
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c. If the Non-Filing Party has timely filed an objection, the
Escrow Agent shall maintain the Disputed Claim in escrow.
7. Terms of Entitlement to Escrow Fund.
The Escrow Fund will be held by the Escrow Agent until such time as:
a. Seller receives consent as required under Section 2.6.5 of the
BML Agreement and Buyer and Bear Mountain are provided with reasonably
satisfactory evidence of the same;
b. BML waives the requirement for consent under Section 2.6.5 of
the BML Agreement pursuant to formal or informal settlement proceedings with
Fibreboard and BML provides to Bear Mountain an unconditional release from any
and all Liabilities under Section 2.6.5 of the BML Agreement, in form
reasonably satisfactory to Bear Mountain and Buyer; or
c. a judgment or order is entered by any court or tribunal
requiring Bear Mountain or Buyer to make a payment as the result of a breach of
Section 2.6.5 of the BML Agreement and such judgment or order is not stayed.
Following the occurrence of either of the events described in clauses (a) or
(b) above, the Escrow Fund shall be payable to Seller in accordance with the
terms hereof. Following the occurrence of the event described in clause (c)
above, the Escrow Fund shall be payable to Bear Mountain in accordance with the
terms hereof, to the extent necessary to satisfy such judgment.
8. Resolution of Conflicts; Arbitration.
a. The Non-Filing Party and the Filing Party shall attempt in good
faith to agree upon the rights of the respective parties with respect to any
Disputed Claim. If the Non-Filing Party and the Filing Party should so agree,
a memorandum setting forth such agreement, including the distribution of the
Escrow Fund and the delivery of the relevant document, shall be prepared and
signed by both parties and shall be furnished to the Escrow Agent. The Escrow
Agent shall be entitled to rely on any such memorandum and distribute the
assets from the Escrow Fund in accordance with the terms thereof.
b. If no such agreement can be reached after good faith negotiation
within thirty (30) calendar days after filing by the Non-Filing Party of its
objection with the Escrow Agent, either the Non-Filing Party or the Filing
Party may demand arbitration of the matter and the matter shall be settled by
arbitration conducted by three arbitrators. The Non-Filing Party and the
Filing Party shall each select one arbitrator, and the two
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arbitrators so selected shall select a third arbitrator. The decision of the
arbitrators so selected as to the validity and amount of any Claim shall be
final, binding and conclusive upon the parties to this Agreement, and,
notwithstanding anything in Section 6 hereof, the Escrow Agent shall be
entitled to act in accordance with such decision and make or withhold payments
out of the Escrow Fund in accordance therewith, if applicable.
c. Judgment upon any award rendered by the arbitrators may be entered
in any court having jurisdiction. Any such arbitration shall be held in the
City of San Francisco, California under the commercial arbitration rules then
in effect of the American Arbitration Association. The non-prevailing party to
an arbitration shall pay its own expenses, the fees of each arbitrator and the
administrative fee of the American Arbitration Association. If neither party
is deemed by the arbitrators to have prevailed, each party shall pay one-half
of the fees and costs of each arbitrator and such administrative fee.
9. Lack of Breach; Termination of Escrow Period. In the event that no
Claim and no joint notice has been received by the Escrow Agent on or prior to
the end of the Escrow Period, one hundred percent (100%) of the Escrow Fund,
including all interest earned thereon, shall be distributed by the Escrow Agent
to Seller as promptly as practicable.
10. Escrow Agent's Duties.
a. The Escrow Agent shall be obligated only for the performance of
such duties as are specifically set forth herein and may rely and shall be
protected in relying or refraining from acting on any instrument reasonably
believed to be genuine and to have been signed or presented by the proper party
or parties. The Escrow Agent shall not be liable for any act done or omitted
hereunder as Escrow Agent while acting in good faith and in the exercise of
reasonable judgment, and any act done or omitted pursuant to the advice of
counsel shall be conclusive evidence of such good faith.
b. The Escrow Agent is hereby expressly authorized to disregard any
and all warnings given by any of the parties hereto which are not in compliance
with the provisions of Sections 5 and 6 or by any other person, excepting only
notices from any arbitrator in compliance with Section 8 or orders or process
of courts of law, and is hereby expressly authorized to comply with and obey
notices from such arbitrators or orders, judgments or decrees of any court. In
case the Escrow Agent obeys or complies with any such notice from an arbitrator
or order, judgment or decree of any court, the Escrow Agent shall not be liable
to any of the parties hereto or to any other person by reason of such
compliance, notwithstanding any such
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notice from an arbitrator or order, judgment or decree being subsequently
reversed, modified, annulled, set aside, vacated or found to have been entered
without jurisdiction.
c. The Escrow Agent shall not be liable in any respect on account of
the identity, authority or rights of the parties executing or delivering or
purporting to execute or deliver this Agreement or any documents or papers
deposited or called for hereunder.
d. The Escrow Agent shall not be liable for the outlawing of any
rights under any statute of limitations with respect to this Agreement or any
documents deposited with the Escrow Agent.
11. Escrow Provisions. The provisions of the escrow shall be as set
forth herein, the Fee Schedule and the "General Provisions for Corporate Escrow
Agreement" attached hereto as Exhibit C (the "General Provisions"). In the
event of any conflict between this Agreement and the General Provisions or the
Fee Schedule, the General Provisions and the Fee Schedule shall govern.
12. Notices. Any notice or demand desired or required to be given
hereunder shall be in writing and deemed given when personally delivered, sent
by overnight courier, next day delivery or deposited in the mail, postage
prepaid, sent certified or registered, return receipt requested, and addressed
as set forth below or to such other address as either party shall have
previously designated by such a notice. Any notice so delivered personally
shall be deemed to be received on the date of delivery; any notice so sent by
overnight courier shall be deemed to be received one (1) business day after the
date sent; and any notice so mailed shall be deemed to be received on the date
stamped on the receipt (rejection or other refusal to accept or inability to
deliver because of a change of address of which no notice was given shall be
deemed to be receipt of the notice).
i. Fibreboard Corporation
Texas Commerce Tower
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Senior Vice
President, General Counsel and
Secretary
With a copy to:
Pillsbury Madison & Sutro
000 Xxxxxxxxxx Xxxxxx
Attn: Xxxxx X. Xxx, Esq.
Telephone: (000) 000-0000
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ii. Booth Creek Ski Holdings, Inc.
000 Xxxxx Xxxxxxxx Xxxx
Xxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Xx.
With a copy to:
Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
iii. First Trust of California, National Association
Escrow Depository Services
Xxx Xxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxx Xxx Xxxxxx
Telephone: (000) 000-0000
13. Binding Agreement. This Escrow Agreement shall be binding
upon, and inure to the benefit of, the heirs, executors, successors and
assignees of the parties hereto, and no other person shall have any right,
benefit or obligations hereunder.
14. Governing Law. This Escrow Agreement shall be governed by and
construed in accordance with the internal laws of the State of California.
15. Forum. Seller and Buyer hereby absolutely and irrevocably
consent and submit to the jurisdiction of the courts of the State of California
and of any federal court located therein in connection with any actions or
proceedings brought against Seller and Buyer by the Escrow Agent arising out of
or relating to this Escrow Agreement. In any such action or proceeding, Seller
and Buyer each hereby absolutely and irrevocably waive personal service of any
summons, complaint, declaration or other process and hereby absolutely and
irrevocably agree that the service thereof may be made by certified or
registered first-class mail directed to Seller or Buyer, as the case may be, at
their respective addresses in accordance with Section 11 hereof.
IN WITNESS WHEREOF, each of the parties hereto has caused this Escrow
Agreement to be executed under seal on its behalf as of the day and year first
above written.
BOOTH CREEK SKI HOLDINGS, INC.,a
Delaware corporation
By: /s/ Xxxxxxx X. Xxxxx
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Vice President
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FIBREBOARD CORPORATION,
a Delaware corporation
By: /s/ Xxxxxx X. XxXxxxxxx
------------------------
Title: Vice President
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FIRST TRUST OF CALIFORNIA, a
national association Global
Escrow Depository Services
By /s/ Xxxx Xxx Xxxxxx
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Its Trust Officer
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EXHIBIT A
FORM OF NOTICE
FIRST TRUST OF CALIFORNIA
Global Escrow Depository Services
Xxx Xxxxxxxxxxx Xxxxxx, Xxxxxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attn:
Re: Your Escrow No. ____________
Ladies and Gentlemen:
Please refer to the Escrow Agreement (the "Escrow Agreement") dated
as of November __, 1996, among you and the undersigned, relating to the escrow
account described therein (the "Escrow Account"). Pursuant to Section __ of
the Escrow Agreement, you are hereby instructed to make a payment of that
portion of the Escrow Account, including all interest earned thereon, in the
amounts and to the parties set forth below. Such payment should be made by
wire transfer in accordance with the instructions below:
Amount of
Name of Payee Escrow Fund Wire Instructions
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FIBREBOARD CORPORATION $1,000,000 (plus Funds should be wired to:
accrued interest) ________ Bank
Phone #
Routing #
For account:
Fibreboard Corporation
Very truly yours,
FIBREBOARD CORPORATION
By __________________________________
Its _________________________________
BOOTH CREEK SKI HOLDINGS, INC.
By __________________________________
Its __________________________________
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EXHIBIT B
FEE SCHEDULE
[attached]
00
XXXXX XXXXX XX XXXXXXXXXX, NATIONAL ASSOCIATION Esc-4
GLOBAL ESCROW DEPOSITORY SERVICES
FEE SCHEDULE
FOR HOLDING (DEPOSITORY) ESCROWS
I. ACCEPTANCE FEE:
Covers the escrow agent's examination of governing instruments and all
supporting documentation as well as set up of required records and accounts.
Payable at opening.
Consideration FEES
$0 - 499,999 $ 500
$500,000 - 999,999 $1,000
$1.0 - 2.49 million $2,000
$2.5 - 4.9 million $3,000
$5.0 - 9.99 million $4,000
$10.0 million and above $5,000
PLUS $0.10 PER $1,000
OVER $10 MILLION
$1,000
II. ANNUAL ADMINISTRATION FEE:
Covers ordinary escrow agent services, such as maintenance of records,
examination of notices to determine compliance with the governing instrument,
and preparation and distribution of accounting statements. Payable annually in
advance.
III. INVESTMENT PROCESSING FEES:
First Bank System investments NO CHARGE
Outside investments 50 BASIS PTS. OF INCOME EARNED
(MINIMUM $250)
IV. ACTIVITY FEES:
Deposits and/or Disbursements (per transaction) $20
Wire transfers (incoming or outgoing) $25
(Note: Deposits & Disbursement charges are waived if utilizing wire transfers)
Off-site Closing (CA) $500
Out-of-State Closing AT COST
V. OUT-OF-POCKET EXPENSES: BILLED AT COST
Expenses including but not limited to stationery, postage, telephone,
insurance, shipping, Telex/Telegram, services of outside counsel and agents.
(Plus indirect out-of-pocket at 3% of annual administration fees.)
VI. EXTRAORDINARY SERVICES AND EXPENSES:
Charges for performing other escrow services not specifically covered in this
schedule will be determined by an appraisal of the services rendered.
ALL ESCROW FEES ARE NON-PRORATABLE AND NON-REFUNDABLE
THE FEES SHOWN IN THIS SCHEDULE MAY BE INCREASED UPON THIRTY (30) DAYS NOTICE.
June 1996
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EXHIBIT C
GENERAL PROVISIONS OF CORPORATE
ESCROW AGREEMENT
[attached]
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Global Escrow Depository Services
General Provisions for Corporate Escrow Agreements
LIABILITY OF ESCROW SERVICES
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In performing any duties under the Escrow Agreement ("Agreement"), Escrow Agent
("Agent") shall not be liable to any Party for damages, losses, or expenses,
except for gross negligence or willful misconduct on the part of the Agent.
Agent shall not incur any such liability for (I) any act or failure to act made
or omitted in good faith, or (II) any action taken or omitted in reliance upon
any instrument, including any written statement or affidavit provided for in
this Agreement that Agent shall in good faith believe to be genuine, nor will
Agent be liable or responsible for forgeries, fraud, impersonations, or
determining the scope of any representative authority. In addition, Agent may
consult with legal counsel in connection with Agent's duties under this
Agreement and shall be fully protected in any act taken, suffered, or permitted
by him/her in good faith in accordance with the advice of counsel. Agent is not
responsible for determining and verifying the authority of any person acting or
purporting to act on behalf of any party to this Agreement.
FEES AND EXPENSES
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It is understood that the fees and usual charges agreed upon for services of
Agent shall be considered compensation for ordinary services as contemplated by
this Agreement. In the event that the conditions of this Agreement are not
promptly fulfilled, or if Agent renders any service not provided for in this
Agreement, or if the Parties request a substantial modification of its terms, or
if any controversy arises, or if Agent is made a Party to, or intervenes in, any
litigation pertaining to this escrow or its subject matter, Agent shall be
reasonably compensated for such extraordinary services and reimbursed for all
costs, attorney's fees, including allocated costs of in-house counsel, and
expenses occasioned by such default, delay, controversy or litigation and Agent
shall have the right to retain all documents and/or other things of value at any
time held by Agent in this escrow until such compensation, fees, costs, and
expenses are paid. The Parties jointly and severally promise to pay these sums
upon demand. Unless otherwise provided, the Parties each will pay one-half of
all Agent's usual charges and Agent may deduct such sums from the funds
deposited.
CONTROVERSIES
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If any controversy arises between the Parties to this Agreement, or with any
other Party, concerning the subject matter of this Agreement, its terms or
conditions. Agent will not be required to determine the controversy or to take
any action regarding it. Agent may hold all documents and funds and may wait
for settlement of any such controversy by final appropriate legal proceedings
or other means as, in Agent's discretion. Agent may require, despite what may
be set forth elsewhere in this Agreement. In such event, Agent will not be
liable for interest or damage. Furthermore, Agent may at its option, file an
action of interpleader requiring the Parties to answer and litigate any claims
and rights among themselves. Agent is authorized to deposit with the clerk of
the court all documents and funds held in escrow, except all costs, expenses,
charges and reasonable attorney fees incurred by Agent due to the interpleader
action and which the Parties jointly and severally agree to pay. Upon
initiating such action, Agent shall be fully released and discharged of and
from all obligations and liability imposed by the terms of this Agreement.
INDEMNIFICATION OF ESCROW AGENT
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The Parties and their respective successors and assigns agree jointly and
severally to indemnify and hold Agent harmless against any and all losses,
claims, damages, liabilities, and expenses, including reasonable costs of
investigation, counsel fees, including allocated costs of in-house counsel and
disbursements that may be imposed on Agent
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General Provisions for Corporate Escrow Agreements Page 2 of 2
or incurred by Agent in connection with the performance of his/her duties under
this Agreement, including but not limited to any litigation arising from this
Agreement or involving its subject matter. Agent shall have a first lien on the
property and papers held under this Agreement for such compensation and
expenses.
INVESTMENT INSTRUCTIONS
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For the purpose of investing funds held in escrow, Agent may accept and act upon
the oral instructions of ____________ ("Authorized Caller"), Agent will confirm
all oral investment instructions in writing within 3 business days. If there is
any discrepancy between any oral instructions and a written confirmation of that
instruction, Agent's records of the oral investment instructions shall govern.
The parties shall indemnify and hold Agent harmless from any and all liability
for acting on an oral investment instruction purported to be given by an
Authorized Caller. Agent shall not be responsible for the authenticity of any
instructions, or be in any way liable for any unauthorized instruction or for
acting on such an instruction, whether or not the person giving the
instructions was, in fact, an Authorized Caller. In no event shall Agent be
liable to the Parties for any consequential, special, or exemplary damages,
including but not limited to lost profits, from any cause whatsoever arising
out of, or in any way connected with acting upon oral instructions believed by
Agent to be genuine.
Agent will act upon investment instructions the day that such instructions are
received, provided the requests are communicated within a sufficient amount of
time to allow Agent to make the specified investment. Instructions received
after an applicable investment cutoff deadline will be treated as being
received by Agent on the next business day, and Agent shall not be liable for
any loss arising directly or indirectly, in whole or in part, from the
inability to invest funds on the day the instructions are received. Agent shall
not be liable for any loss incurred by the actions of third parties or by any
loss arising by error, failure, or delay in making of an investment which is
caused by circumstances beyond Agent's reasonable control.
FUNDS INVESTED DURING ESCROW
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The Parties acknowledge that payment of any interest earned on the funds
invested in this escrow will be subject to backup withholding penalties unless a
properly completed Internal Revenue Service form W8 or W9 certification is
submitted to Escrow Agent.
RESIGNATION OF ESCROW AGENT
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Agent may resign at any time upon giving at least thirty (30) days written
notice to the Parties; provided, however, that no such resignation shall become
effective until the appointment of a successor escrow agent which shall be
accomplished as follows: The Parties shall use their best efforts to mutually
agree on a successor escrow agent within thirty (30) days after receiving such
notice. If the Parties fail to agree upon a successor escrow agent within such
time, Agent shall have the right to appoint a successor escrow agent authorized
to do business in the state of California. 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. Agent shall be discharged from any further duties and liability
under this Agreement.
AUTOMATIC SUCCESSION
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Any company into which the Agent may be merged or with which it may be
consolidated, or any company to whom Agent may transfer a substantial amount of
its Global Escrow business, shall be the Successor to the 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.
GOVERNING LAW
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This Agreement is to be construed and interpreted according to California law.
Prepared by First Trust of California, National Association, Global Escrow
Depository Services.
November 1995
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