EXHIBIT 2.2
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (the "Agreement") is made and entered into as of
March 27, 2002, by and among Xxxxxx Acquisition Sub, Inc., a Missouri
corporation ("Xxxxxx"), Gates, XxXxxxxx & Company, an Ohio corporation
("Gates"), and LaSalle Bank National Association, a national banking association
duly organized and existing under the laws of the United States of America, with
its principal office in Chicago, Illinois (the "Escrow Agent").
WHEREAS, contemporaneously with the execution of this Agreement, Xxxxxx and
Xxxxx are entering into an Asset Purchase Agreement of even date herewith (the
"Asset Purchase Agreement") pursuant to which Gates is selling to Xxxxxx,
certain of the assets of Gates' UCBSG Business;
WHEREAS, pursuant to the Asset Purchase Agreement, a portion of the
Purchase Price (as defined in the Asset Purchase Agreement), shall be held in
escrow for a period of time to satisfy indemnification claims under the Asset
Purchase Agreement;
NOW, THEREFORE, in consideration of the mutual promises contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
ESTABLISHMENT OF ESCROW
1.1 Simultaneously with the execution of this Agreement, the following will
occur, all of which shall be acknowledged by Xxxxxx, Xxxxx and the Escrow Agent:
(a) Xxxxxx will deposit Four Million U.S. Dollars (US$4,000,000.00) (the
"Initial Deposit") with the Escrow Agent. The Initial Deposit, together with any
investment earnings thereon, shall hereinafter collectively be referred to as
the "Escrow Funds."
(b) Xxxxxx and Xxxxx hereby appoint the Escrow Agent, and the Escrow Agent
hereby agrees to serve, as the escrow agent and depositary subject to the terms
and conditions set forth herein. The Escrow Agent shall receive the Initial
Deposit and agrees to hold the Escrow Funds in a separate and distinct account
(the "Escrow Account"), subject to the terms and conditions of this Agreement.
The Escrow Agent shall not distribute or release any of the Escrow Fund except
in accordance with the express terms and conditions of this Agreement.
ARTICLE II
INVESTMENT OF ESCROW FUND
2.1 The Escrow Funds shall be invested as soon as reasonably practicable,
including income earned on said investment, in the Dreyfus Government Cash
Management Fund.
2.2 The Escrow Agent shall not be responsible to Xxxxxx and Gates or any other
person or entity for any loss or liability arising in respect of any directed
investment in Section 2.1 except to the extent that such loss or liability arose
from the Escrow Agent's gross negligence or willful misconduct.
ARTICLE III
DISBURSEMENTS FROM THE ESCROW ACCOUNT
3.1 The Escrow Agent shall only disburse amounts held in the Escrow Account
upon receipt of a written notice ("Disbursement Request") from Xxxxxx specifying
(i) the amount to be disbursed, (ii) the recipient of the disbursement and (iii)
the manner of disbursement and delivery instructions. The Disbursement Request
shall also be provided to Gates. The Escrow Agent shall pay the amount requested
to be disbursed in accordance with the Disbursement Request out of the Escrow
Funds unless Gates shall dispute the right of the recipient of the disbursement
to such distribution by delivering to the Escrow Agent and Xxxxxx written
notice, containing a description in reasonable detail of the basis for the
dispute and the amount in dispute, to the extent such amount can reasonably be
determined (a "Dispute Notice"), within twenty calendar days after Xxxxxx shall
have delivered the Disbursement Request to the Escrow Agent and Gates. If a
Dispute Notice has not been delivered to Xxxxxx and the Escrow Agent within the
required twenty calendar day period, the Escrow Agent shall promptly disburse to
the specified recipient of the disbursement the portion of the Escrow Funds as
set forth in the Disbursement Request. Gates may contest the right of Xxxxxx to
such payment only if, and to the extent that, Xxxxxx'x entitlement to payment in
respect of such amount has not been finally determined pursuant to the terms of
the Asset Purchase Agreement.
3.2 If within the twenty day period specified in Section 3.1 above, the Escrow
Agent shall receive the notice of contest referred to in Section 3.1 above, no
payment shall be made from the Escrow Fund until the dispute has been finally
settled by agreement of Xxxxxx and Xxxxx. Xxxxxx and Xxxxx shall give written
notice of the final settlement to the Escrow Agent, such notice to indicate the
dollar amount required to fulfill the settlement.
3.3 As soon as practicable following fifteen (15) months after Closing (as
defined in the Asset Purchase Agreement), Xxxxxx and Gates shall jointly deliver
written notice to the Escrow Agent directing the Escrow Agent to disburse to
Gates an amount equal to the difference between (i) the amount of the Escrow
Funds then remaining and (ii) any amounts in the Escrow Funds that are then
subject to any claim by Xxxxxx under Section 3.1 hereof that shall not have been
paid. Notwithstanding the expiration of the
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representations and warranties of Gates made in the Asset Purchase Agreement,
the amounts described in clause (ii) of the preceding sentence shall continue to
be held in the escrow created hereby until such unresolved claim(s) shall have
been paid or finally determined in accordance with the terms hereof, whereupon
Xxxxxx and Xxxxx shall deliver joint written notice to the Escrow Agent
directing the Escrow Agent to disburse, as appropriate, all or any portion of
any remaining Escrow Funds to Gates. Upon receipt of any such notice, the Escrow
Agent shall promptly disburse to Gates the portion of the Escrow Funds set forth
in such notice.
ARTICLE IV
COMPENSATION; EXPENSES
4.1 In consideration for its services as Escrow Agent, the Escrow Agent shall
be entitled to receive the compensation set forth in Exhibit A hereto, as well
as the reimbursement of all reasonable out-of-pocket costs and expenses actually
incurred by the Escrow Agent in the performance of its duties hereunder. Xxxxxx
and Xxxxx shall each pay 50% of such compensation and expenses.
ARTICLE V
EXCULPATION AND INDEMNIFICATION
5.1 The obligations and duties of the Escrow Agent are confined to those
specifically set forth in this Agreement. In the event that any of the terms and
provisions of any other agreement between any of the parties hereto conflict or
are inconsistent with any of the terms and provisions of this Agreement, the
terms and provisions of this Agreement shall govern and control in all respects.
The Escrow Agent shall not be subject to, nor be under any obligation to
ascertain or construe the terms and conditions of any other instrument, whether
or not now or hereafter deposited with or delivered to the Escrow Agent or
referred to in this Agreement, nor shall the Escrow Agent be obligated to
inquire as to the form, execution, sufficiency, or validity of any such
instrument nor to inquire as to the identity, authority, or rights of the person
or persons executing or delivering same.
5.2 The Escrow Agent shall not be personally liable for any act that it may do
or omit to do hereunder in good faith and in the exercise of its own best
judgment. Any act done or omitted to be done by the Escrow Agent pursuant to the
advice of its attorneys shall be deemed conclusively to have been performed or
omitted in good faith by the Escrow Agent.
5.3 In the event the Escrow Agent is notified of any dispute, disagreement or
legal action between Xxxxxx and Gates and any third party relating to or arising
in connection with the escrow, the Escrow Funds, or the performance of the
Escrow Agent's duties under this Agreement, the Escrow Agent will not be
required to determine the controversy or to take any action regarding it. The
Escrow Agent may hold all documents and funds and may wait for settlement of any
such controversy by final appropriate legal proceedings, arbitration, or other
means as, in the Escrow Agent's
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discretion, it may require. In such event, the Escrow Agent will not be liable
for interest or damage. Furthermore, the Escrow Agent may, at its option, file
an action of interpleader requiring the parties to answer and litigate any
claims and rights among themselves. The Escrow Agent is authorized, at its
option, to deposit with the Clerk of the Court where such action is pending or
the arbitrator, as applicable, all documents and funds held in escrow, except
all costs, expenses, charges, and reasonable attorneys' fees incurred by the
Escrow Agent due to the interpleader action and which Xxxxxx or Xxxxx agrees to
pay. Upon initiating such action, the Escrow Agent shall be fully released and
discharged of and from all obligations and liability imposed by the terms of
this Agreement.
5.4 Xxxxxx and Gates hereby agree, jointly and severally, to indemnify and hold
the Escrow Agent, and its directors, officers, employees, and agents, harmless
from and against all costs, damages, judgments, attorneys' fees (whether such
attorneys shall be regularly retained or specifically employed), expenses,
obligations and liabilities of every kind and nature which the Escrow Agent, and
its directors, officers, employees, and agents, may incur, sustain, or be
required to pay in connection with or arising out of this Agreement, unless the
aforementioned results from the Escrow Agent's gross negligence or willful
misconduct, and to pay the Escrow Agent on demand the amount of all such costs,
damages, judgments, attorneys' fees, expenses, obligations, and liabilities. The
foregoing indemnities in this paragraph shall survive the resignation or
substitution of the Escrow Agent or the termination of this Agreement. As
between themselves, Xxxxxx and Xxxxx each agree to be responsible for 50% of any
amounts that the Escrow Agent is entitled to as indemnity payments under this
Agreement.
ARTICLE VI
TERMINATION OF AGREEMENT
6.1 This Agreement may be terminated at any time upon the receipt by the Escrow
Agent of three (3) Business Days prior written notice of termination by Xxxxxx
and Gates directing the distribution of all assets then held by the Escrow Agent
under and pursuant to this Agreement. This Agreement shall automatically
terminate if and when all amounts in the Escrow Account (including all the
securities in which any of the funds deposited into the Escrow Account shall
have been invested) shall have been distributed by the Escrow Agent in
accordance with the terms of this Agreement; provided, however, that the rights
and obligations of the parties hereto shall survive the termination hereof.
ARTICLE VII
RESIGNATION OF ESCROW AGENT
7.1 The Escrow Agent may resign at any time upon giving at least thirty (30)
days prior written notice to Xxxxxx and Xxxxx ; provided, however, that no such
resignation shall become effective until the appointment of a successor escrow
agent which shall be accomplished as follows: Xxxxxx and Gates shall use their
best efforts to select a successor escrow agent within thirty (30) days after
receiving such notice. If Xxxxxx and
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Gates fail to appoint a successor escrow agent within such time, the Escrow
Agent shall have the right to appoint a successor escrow agent. 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. Upon delivery of such instrument, the Escrow Agent shall
be discharged from any further duties and liability under this Agreement. The
Escrow Agent shall be paid any outstanding fees and expenses prior to
transferring assets to a successor escrow agent.
ARTICLE VIII
NOTICES
8.1 All notices required by this Agreement shall be in writing and shall be
deemed to have been received (a) immediately if sent by facsimile transmission
(with a confirming copy sent the same Business Day by registered or certified
mail), or by hand delivery (with signed return receipt), or (b) the next
Business Day if sent by nationally recognized overnight courier, in any case to
the respective addresses as follows:
If to Xxxxxx:
Xxxxxx Acquisition Sub, Inc.
0000 Xxxxxx Xxxxx
Xx. Xxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to Gates:
Gates, XxXxxxxx & Company
0000 Xxxx Xxx Xxxxx
Xxxxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxxxxx, President and Chief Operating Officer
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to the Escrow Agent:
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
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ARTICLE IX
GOVERNING LAW
9.1 This Agreement shall be governed by and construed in accordance with the
laws of the State of Illinois and the parties hereto consent to jurisdiction in
the State of Illinois and venue in any state or Federal court located in the
City of Chicago.
ARTICLE X
AUTOMATIC SUCCESSION
10.1 Any bank or corporation into which the Escrow Agent may be merged or with
which it may be consolidated, or any bank or corporation to whom the Escrow
Agent may transfer a substantial amount of its Escrow business, shall be the
successor to the Escrow 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.
ARTICLE XI
AMENDMENT AND MODIFICATION
11.1 Xxxxxx and Gates and the Escrow Agent may amend, modify, and/or supplement
this Agreement as they may mutually agree in writing.
ARTICLE XII
COUNTERPARTS
12.1 This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute but one
and the same Agreement.
ARTICLE XIII
INTERPRETATION
13.1 The headings used in this Agreement are for convenience only and shall not
constitute a part of this Agreement.
13.2 As used in this Agreement, "Business Day" means a day other than a
Saturday, Sunday, or other day when banking institutions in Chicago, Illinois
are authorized or required by law or executive order to be closed.
ARTICLE XIV
SEVERABILITY
14.1 The parties agree that if any provision of this Agreement shall under any
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circumstances be deemed invalid or inoperative this Agreement shall be construed
with the invalid or inoperative provisions deleted and the rights and
obligations of the parties shall be construed and enforced accordingly.
[The next page is the signature page]
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EXHIBIT 2.2
IN WITNESS WHEREOF, the parties hereto have executed and delivered this Escrow
Agreement as of the day and year first above written.
XXXXXX ACQUISITION SUB, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
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Title: President and Chief Executive Officer
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GATES, XXXXXXXX & COMPANY
By: /s/ Xxxxx Xxxxxxxxx
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Name: Xxxxx Xxxxxxxxx
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Title: President and COO
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LASALLE BANK NATIONAL ASSOCIATION, as Escrow Agent
By: /s/ X.X. Xxxxxxx
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Name: X.X. Xxxxxxx
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Title: First Vice President
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EXHIBIT A
ESCROW AGENT
SCHEDULE OF FEES
Acceptance Fee: $ 500.00
Administration Fee: $2,500.00*
THE ACCEPTANCE AND ADMINISTRATION FEES ARE DUE UPON EXECUTION OF THE ESCROW
AGREEMENT.
*Should the Escrow Account remain open after an initial twelve-month period, the
Administration Fee will be prorated on a six-month basis with the Administration
Fee being regarded as an annual charge.
Any investment transaction not in a money market fund or a LaSalle Bank Time
Deposit, Open Account will incur a $100.00 per transaction fee. The parties to
the agreement understand and agree that the Escrow Agent may receive certain
revenue in the form of 12b-1 or shareholder servicing fees on certain mutual
fund investments. Such fees are disclosed in the prospectus for any such fund.
These fees are paid to the Escrow Agent directly from the mutual fund provider
and are not paid by the parties to the Agreement.
All out-of-pocket expenses will be billed at our cost. Out-of-pocket expenses
include, but are not limited to, professional services (e.g. legal or
accounting), travel expenses, telephone and facsimile transmission costs,
postage (including express mail and overnight delivery charges), and copying
charges.
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