Exhibit 99-2
ESCROW AGREEMENT
ESCROW AGREEMENT, dated as of December 16, 2004 (this "Agreement"), by
and among Fila - Fabbrica Italiana Lapis Xx Xxxxxx S.p.A., an Italian
corporation ("Fila"), Xxxxx Ticonderoga Company, a Delaware corporation
("Xxxxx"), and Wachovia Bank, National Association, as escrow agent (the "Escrow
Agent").
R E C I T A L S
A. Fila, Xxxxx and Pencil Acquisition Corp, a newly formed Delaware
corporation and wholly-owned subsidiary of Fila ("Merger Sub"), are parties to
an Agreement and Plan of Merger, dated as of December 16, 2004 (the "Merger
Agreement"), pursuant to which, among other things, Merger Sub (i) will commence
a cash tender offer (the "Offer") to acquire all of the issued and outstanding
shares of common stock, par value $1.00 per share, of Xxxxx (the "Common Stock")
for $7.00 per share in cash and (ii) will be merged with and into Xxxxx
following consummation of the Offer (the "Merger"). Capitalized terms not
defined in this Agreement shall have the meanings given therefor in the Merger
Agreement.
B. The Merger Agreement provides that, immediately upon execution of
the Merger Agreement, Fila shall deposit with the Escrow Agent, as escrow agent,
pursuant to this Agreement, the amount of $800,000 in cash (the "Deposit"),
which shall be returned to Fila within three (3) Business Days after the valid
termination of the Merger Agreement, unless payable to Xxxxx pursuant to the
Merger Agreement. The Merger Agreement further provides that Fila, at the time
the Offer expires and upon written direction to the Escrow Agent, may cause the
Escrow Agent to deliver the Deposit to the bank or trust company appointed by
Fila to serve as paying agent for the purpose of purchasing shares of Common
Stock in the Offer.
C. Fila and Xxxxx desire the Escrow Agent to act as the escrow agent
to hold the Deposit and the Escrow Agent is willing to act as such escrow agent.
The Escrow Agent agrees to act in accordance with the terms of this Agreement
and is not a party to any other agreement referenced herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. Escrow Deposit. Immediately upon execution of the Merger Agreement,
and pursuant to its obligation under Section 4.9 of the Merger Agreement, Fila
shall cause the Deposit to be delivered to the Escrow Agent, as escrow agent,
and deposited in an escrow account (the "Escrow Account"). Because of time
differences and currency differences, it is understood that the Escrow Agent may
not receive the Deposit until two business days after the execution of this
Agreement. Fila and Xxxxx hereby direct the Escrow Agent to invest amounts on
deposit in the Escrow Account in the investment indicated on Annex A unless
otherwise directed in writing by Fila and Xxxxx.
1
2. Duties of Escrow Agent.
(a) The Escrow Account shall at all times remain segregated from
all other funds and assets owned or held by the Escrow Agent and shall be
maintained, invested, released and distributed by the Escrow Agent in accordance
with the provisions contained in this Agreement. The Escrow Agent shall keep
appropriate records with respect to the funds in the Escrow Account, including
interest income earned in respect thereof.
(b) Upon receipt of a letter addressed to the Escrow Agent and
signed by an authorized officer of each of Fila and Xxxxx stating that the
Merger Agreement has been terminated pursuant to Section 6.1 of the Merger
Agreement (the "Termination Letter"), the Escrow Agent shall return the Deposit,
including any interest accrued thereon, to Fila within three (3) Business Days
of the date of the termination of the Merger Agreement as set forth in the
Termination Letter; provided, however, that if the Termination Letter states
that the Merger Agreement has been terminated pursuant to Section 6.1(g) or
Section 6.1(h) of the Merger Agreement (or, alternatively, states that the
Deposit is payable to Xxxxx pursuant to Section 6.4(b) of the Merger Agreement),
then the Escrow Agent shall deliver the Deposit, including any interest accrued
thereon, to Xxxxx within three (3) Business Days following the date of the
termination of the Merger Agreement as set forth in the Termination Letter.
(c) Upon receipt of a letter addressed to the Escrow Agent and
signed by an authorized officer of Fila stating that the Offer has expired, the
Escrow Agent shall, at Fila's request as set forth in such letter, deliver the
Deposit, including any interest accrued thereon, to the Paying Agent for the
purpose of permitting Merger Sub to purchase shares of Common Stock pursuant to
the Offer.
(d) If any dispute arises between Fila and Xxxxx as to
entitlement to the Deposit, or if the Escrow Agent is uncertain as to its
obligations hereunder, the Escrow Agent may, but shall not be obligated to,
either (i) commence an interpleader action against Fila and Xxxxx in any state
or federal court sitting in the State of Florida having jurisdiction over the
subject matter of such action (the "Court"), requesting that the Court determine
the respective rights, duties and obligations of the parties to this Agreement,
and upon compliance with a final order of the Court, the Escrow Agent
automatically shall be released from any obligations or liabilities as a
consequence of any such claims or demands, or (ii) refrain from any action and
continue to hold the Deposit pending a resolution of the dispute by either a
court of competent jurisdiction or by a written agreement signed by Fila and
Xxxxx. For the purposes of any action or proceeding contemplated by clause (i)
above, each party to this Agreement hereby consents to the personal jurisdiction
of any state or federal court sitting in the State of Florida and agrees that
service of process in any such action or proceeding may be made by certified or
registered mail at the address for notices to such party provided in Section 4
of this Agreement.
(e) The Escrow Agent assumes no responsibilities, obligations or
liabilities except those expressly provided for in this Agreement, as
circumscribed by the following limitations thereon: (i) the Escrow Agent shall
not be required to invest any funds held hereunder except as directed by this
Agreement and it is expressly agreed and understood by the parties hereto that
the Escrow Agent shall not in any way whatsoever be liable for losses on any
investments, including but not limited to, losses from market risk due to
premature liquidation or resulting from other actions taken pursuant to this
2
Agreement; (ii) the Escrow Agent shall have no responsibility, obligation or
liability to any person with respect to any action taken, suffered or admitted
to be taken by it in good faith under this Agreement and shall in no event be
liable hereunder except for its gross negligence or willful misconduct; (iii) no
reference in this Agreement to any other agreement shall be construed or deemed
to enlarge the responsibilities, obligations or liabilities of the Escrow Agent
set forth in this Agreement, and the Escrow Agent is not charged with knowledge
of any other agreement; (iv) absent actual knowledge to the contrary, the Escrow
Agent shall be protected in relying upon the truth of any statement contained in
any notice, request, direction, certificate, approval, consent, or other proper
paper, which on its face, and without inquiry as to any other facts, appears to
be genuine and to be signed by the purportedly proper party or parties, and is
entitled to believe all signatures are genuine and that any person signing any
such paper who claims to be duly authorized, is, in fact, so authorized; (v) the
Escrow Agent shall be entitled to act in accordance with any order or other
determination by the Court; (vi) the Escrow Agent shall have no responsibility
to make any payment from the Escrow Account that exceeds the amount thereof; and
(vii) the Escrow Agent may execute any of its powers or responsibilities
hereunder and exercise any rights hereunder either directly or by or through its
agents. Nothing in this Agreement shall be deemed to impose upon the Escrow
Agent any duty to qualify to do business or to act as a fiduciary or otherwise
in any jurisdiction. The Escrow Agent shall not be responsible for and shall not
be under a duty to examine or pass upon the validity, binding effect, execution
or sufficiency of this Agreement or of any agreement amending or supplementing
this Agreement or of any other agreement. The Escrow Agent and any stockholder,
director, officer or employee of the Escrow Agent may buy, sell, and deal in any
of the securities of Fila, Xxxxx or Merger Sub and become pecuniarily interested
in any transaction in which Fila, Xxxxx or Merger Sub may be interested, and
contract and lend money to Fila, Xxxxx or Merger Sub and otherwise act as fully
and freely as though it were not the Escrow Agent under this Agreement. Nothing
herein shall preclude the Escrow Agent from acting in any other capacity for
Fila, Xxxxx or Merger Sub or for any other entity.
3. Fees of Escrow Agent; Annex A. For the services rendered by the
Escrow Agent under this Agreement, Fila shall pay the Escrow Agent's
compensation according to the Escrow Agent's regular fee schedule, as attached
hereto as Annex A. The Escrow Agent is authorized to, and may, disburse to
itself from the Escrow Account, from time to time, the amount of any
compensation and reimbursement of out-of-pocket expenses due and payable
hereunder (including any amount to which the Escrow Agent is entitled to seek
indemnification pursuant to Section 5 hereof). The Escrow Agent shall notify
Fila and Xxxxx of any disbursement from the Escrow Account to itself in respect
of any such compensation or reimbursement hereunder and shall furnish to Fila
and Xxxxx copies of all related invoices and other statements. Fila and Xxxxx
hereby grant to the Escrow Agent a security interest in and lien upon the
Deposit to secure all obligations with respect to the right to offset the amount
of any compensation or reimbursement due it hereunder (including any claim for
indemnification pursuant to Section 5 hereof) against the Deposit.
The additional provisions and information set forth on Annex A
are hereby incorporated by this reference, and form a part of this Agreement.
Fila and Xxxxx each represent that all identifying information set forth on
Annex A, including without limitation, its Taxpayer Identification Number
assigned by the Internal Revenue Service or any other taxing authority, is true
3
and complete on the date hereof and will be true and complete at the time of any
disbursement of the Deposit. Fila and Xxxxx acknowledge that a portion of the
identifying information set forth on Annex A is being requested by the Escrow
Agent in connection with the USA Patriot Act, Pub. L. 107-56 (the "Act"), and
Fila and Xxxxx agree to provide any additional information requested by the
Escrow Agent in connection with the Act or any similar legislation or regulation
to which the Escrow Agent is subject, in a timely manner.
4. Notices. All notices, requests, directions, demands and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given (a) on the date of service if served personally on the
party to whom notice is to be given, (b) on the day of transmission if sent via
facsimile transmission to the facsimile number given below and telephonic
confirmation of receipt is obtained promptly after completion of transmission or
(c) on the day after delivery to Federal Express or similar overnight courier or
the Express Mail service maintained by the U.S. Postal Service and properly
addressed, to the party as follows:
(i) If to Fila:
Xxxxxxx Xxxxxxx
Fila - Fabbrica Italiana Lapis Xx Xxxxxx S.p.A.
Xxx Xxxxxxx
0, Xxxxxx, Xxxxx
Facsimile: 39 02 35 38 546
Telephone: 000-00-00-00-000-000
Email: Xxxxxxx.xxxxxxx@xxxx.xx
With a copy (which shall not constitute notice) to each of:
Xxxxxx X. Xxxxxx, Esq.
Xxxxxxx Xxxxxx Xxxxx Xxxxxx & XxXxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Email: xxxxxx@xxx-xxx.xxx
and
Xxxxxxxxxx Xxxxxx
Studio legale Xxxxxx, Bonvinci, Aghina e Ludergnani
Xxx xxxxx Xxxxxxx, 0
00000 Xxxxx
Xxxxx
Facsimile: 39 02 72 02 39 04
Telephone: 000-00-00-00-0000-00
Email: xxxxxxxxxx.xxxxxx@xxxxxx.xx
4
(ii) If to Xxxxx:
Xxxxx Ticonderoga Company
Attention: Xxxx X. Xxxx
000 Xxxxxxxxxxxxx Xxxxxxx
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Telephone: 0-000-000-0000 (ext. 107)
Email: xxxxx@xxxxxxxx.xxx
With a copy (which shall not constitute notice) to each of:
Xxxxxx X. Xxxxxxxx, Esq.
Johnson, Pope, Xxxxx, Xxxxxx & Xxxxx, LLP
000 X. Xxxxx Xxxxxx, Xxxxx 0000
Xxxxx, XX 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000 (ext. 3222)
Email: XxxxX@xxxxxx.xxx
and
Xxxxxxx X. Xxxxxxxxx, Esq.
Potter Xxxxxxxx & Xxxxxxx LLP
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxx Xxxxx
X.X. Xxx 000 Xxxxxxxxxx, XX 00000 Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Email: xxxxxxxxxx@xxxxxxxxxxxxxx.xxx
(iii) If to the Escrow Agent:
Wachovia Bank, National Association, as escrow agent
Attention: Xxxxxxxxx Xxxxxx
Corporate Trust Bond Administration
000 Xxxxx Xxxxxx, 0xx Xxxxx, XX0000
Xxxxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Email: xxxxxxxxx.xxxxxx@xxxxxxxx.xxx
5
5. Indemnification of Escrow Agent. The Escrow Agent shall be deemed
to be an independent contractor in the performance of this Agreement and shall
not be considered to be an agent, servant, or joint venturer of Fila or Xxxxx.
The Escrow Agent shall be indemnified by Fila against any claim or charge made
against it by reason of any action or failure to act in connection with any of
the transactions contemplated by this Agreement and against any loss the Escrow
Agent may sustain in carrying out the terms of this Agreement, including,
without limitation, the Escrow Agent's reasonable legal fees and expenses
incurred in connection with any matter related to the performance of the Escrow
Agent's duties hereunder, but excluding any claim, charge or loss the Escrow
Agent may sustain as a result of its gross negligence or willful misconduct. The
obligations of Fila under this Section 5 and Section 3 hereof shall survive any
termination of this Agreement and the resignation or removal of the Escrow
Agent.
6. Removal and Resignation of the Escrow Agent; Appointment of
Successor Escrow Agent. The Escrow Agent (and any successor escrow agent) may at
any time be removed by the written direction of both Fila and Xxxxx upon prior
payment of fees and expenses due to the Escrow Agent (or successor escrow
agent). The Escrow Agent (and any successor escrow agent) may resign at any time
by giving thirty (30) days written notice thereof to Fila and Xxxxx and
delivering the Escrow Account to the successor escrow agent upon receiving the
document appointing the new escrow agent and evidencing its acceptance of such
appointment, whereupon the Escrow Agent (or successor escrow agent) shall be
discharged of and from any and all further obligations arising in connection
with this Agreement. If the Escrow Agent (or successor escrow agent) has not
received a designation of a new escrow agent within thirty (30) days following
such notice of resignation, (a) the Escrow Agent (or successor escrow agent) may
submit this matter, and forward the Deposit (and any interest accrued thereon),
to the Court and (b) the Escrow Agent's (or successor escrow agent's) sole
responsibility after that time shall be to safekeep the Escrow Account until
receipt of a designation of a successor escrow agent or a joint written
disposition instruction by Fila and Xxxxx or a final order of the Court.
7. Termination of this Agreement. This Agreement shall terminate on
the date all amounts in the Escrow Account are disbursed in accordance with this
Agreement.
8. Entire Agreement. This Agreement, together with the Merger
Agreement, constitutes a complete and exclusive statement of the terms of the
agreement between the parties with respect to its subject matter and supersedes
all prior agreements and understandings, whether written or oral, between the
parties with respect to its subject matter and each party hereto represents and
acknowledges that it has not relied in any way upon any such other agreements or
understandings. Fila and Xxxxx acknowledge that the Escrow Agent has not
received or reviewed the Merger Agreement. This Agreement may be amended,
modified, supplemented or altered only by a writing duly executed by Fila, Xxxxx
and the Escrow Agent and any prior agreements or understandings, whether oral or
written, are entirely superseded hereby.
9. Successors and Assigns. No party hereto shall assign this Agreement
or any rights or obligations hereunder without the prior written consent of the
other parties hereto and any such attempted assignment without such prior
written consent shall be void and of no force and effect, provided, however,
that any corporation or association into which the Escrow Agent may be merged or
6
converted or with which it may be consolidated, or any corporation or
association to which all or substantially all of the escrow business of the
Escrow Agent's corporate trust line of business may be transferred, shall be the
successor escrow agent under this Agreement without such prior written consent
or any further act. This Agreement shall inure to the benefit of and shall be
binding upon the successors and permitted assigns of the parties hereto.
10. No Waiver. No failure or delay by any party hereto in exercising
any right, power or privilege hereunder shall operate as a waiver thereof, and
no single or partial exercise thereof shall preclude any right of further
exercise or the exercise of any other right, power or privilege.
11. Severability. In the event that any part of this Agreement is
declared by any court or other judicial or administrative body of competent
jurisdiction to be null, void or unenforceable, said provision shall survive to
the extent it is not so declared, and all of the other provisions of this
Agreement shall remain in full force and effect.
12. Governing Law; Jurisdiction. This Agreement shall be construed,
performed and enforced in accordance with, and governed by, the laws of the
State of Florida, without giving effect to the principles of conflicts of laws
thereof.
13. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which shall constitute the same
instrument.
* * * * * *
7
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
FILA - FABBRICA ITALIANA LAPIS XX
XXXXXX S.P.A.
By: /s/ Xxxxxxx Xxxxxxx
-------------------
Name: Xxxxxxx Xxxxxxx
Title:
XXXXX TICONDEROGA COMPANY
By: /s/ Xxxx X. Xxxx
--------------------
Name: Xxxx X. Xxxx
Title: Chairman and Co-CEO
WACHOVIA BANK, NATIONAL ASSOCIATION, as
Escrow Agent
By: /s/ Xxxxxxxxx Xxxxxx
-------------------
Name: Xxxxxxxxx Xxxxxx
Title:
8
ANNEX A
1. Escrow Account.
Escrow Account initial cash deposit amount: $800,000
---------
Escrow Account wiring instructions: Wachovia Bank, National Association
ABA# XXXXXXXXX
Account #XXXXXXXXXXX
ATTN: Corporate Trust - Bond
Administration
FFC: #_________________ Fila/Xxxxx
Escrow Account
2. Fees.
Acceptance Fee: $ waived
--------------------------------
Annual Escrow Fee: $ 2,500
--------------------------------
Out-of-Pocket Expenses: $max is 6% of annual admin charge
--------------------------------
Wire Fees: $ 25 per wire
--------------------------------
Investment Processing Charges: $ 50 per transaction
--------------------------------
Transactional Costs: $
--------------------------------
Other Fees/Attorney, etc.: $ billed at cost
--------------------------------
TOTAL $
--------------------------------
The Acceptance Fee and the Annual Escrow Fee are payable upon execution of
the escrow documents. In the event the escrow is not funded, the Acceptance
Fee and all related expenses, including attorneys' fees, remain due and
payable, and if paid, will not be refunded. Annual fees cover a full year
in advance, or any part thereof, and thus are not pro-rated in the year of
termination.
The fees quoted in this schedule apply to services ordinarily rendered in
the administration of an escrow account and are subject to reasonable
adjustment based on final review of documents, or when the escrow agent is
called upon to undertake unusual duties or responsibilities, or as changes
in law, procedures, or the cost of doing business demand. Services in
addition to and not contemplated in this agreement, including, but not
limited to, document amendments and revisions, non-standard cash and/or
investment transactions, calculations, notices and reports, and legal fees,
will be billed as extraordinary expenses.
Unless otherwise indicated, the above fees relate to the establishment of
one escrow account. Additional sub-accounts governed by the same escrow
agreement may incur an additional charge. Transaction costs include charges
for wire transfers, checks, internal transfers and securities transactions.
3. Taxpayer Identification Numbers.
Fila: N/A
------------------------------
Xxxxx: 00-0000000
------------------------------
Paying Agent: to be provided
------------------------------
9
4. Termination and Disbursement. Unless earlier terminated by the provisions
of the Agreement, the Agreement will terminate on March 31, 2005. Any
assets remaining on such date shall be distributed in accordance with the
terms of this Escrow Agreement.
5. Investment Instructions.
Escrow Account moneys will be invested in the Xxxxxxx Sachs' Treasury
Obligations Fund #469.
6. Authorized Officers.
The following person is hereby designated and appointed as Fila's
authorized officer under the Agreement:
Xxxxxxx Xxxxxxx /s/ Xxxxxxx Xxxxxxx
------------------------------ ------------------------------
Name Specimen signature
The following person is hereby designated and appointed as Xxxxx'x
authorized officer under the Agreement:
Xxxx X. Xxxx /s/ Xxxx X. Xxxx
------------------------------ ------------------------------
Name Specimen signature
7. Authorized Officer Information. The following information should be
provided to the Escrow Agent separately by each authorized officer and any
future authorized officer:
1. Date of Birth
2. Address
3. Mailing Address, if different
4. Social Security Number
8. Notice Addresses.
Principal Place of Business, if different than notice address in Section 4
of the Agreement:
10
Fila: Same
Xxxxx: Same
Escrow Agent's notice address for Section 4 of the Agreement:
Wachovia Bank, National Association, as escrow agent
Corporate Trust Bond Administration
000 Xxxxx Xxxxxx, 0xx Xxxxx, XX0000
Xxxxxxxxxxxx, XX 00000
ATTENTION: Xxxxxxxxx Xxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
E-mail: xxxxxxxxx.xxxxxx@xxxxxxxx.xxx
11
