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Exhibit 10.117
CLOSING ESCROW AGREEMENT
CLOSING ESCROW AGREEMENT ("Agreement"), dated as of August 21, 1996,
by and among COSMAR CORPORATION, a Delaware corporation (the "Buyer"), XXXXX
XXXXXXX, individually and XXXXXXX XXXXXXX, individually (each of whom is
refereed to herein as a "Seller" and both of whom are collectively referred to
herein as the "Sellers"), XXXXX XXXXXXX, in his capacity as Sellers'
Representative and the law firm of TODTMAN, YOUNG, TUNICK, NACHAMIE, XXXXXXX &
SPIZZ, P.C. (the "Escrow Agent").
The Buyer, the Sellers and Great American Cosmetics, Inc., a New
York corporation ("GACI"), are parties to that certain Stock Purchase Agreement,
dated as of June 27, 1996 (the "Stock Purchase Agreement"). Pursuant to the
Stock Purchase Agreement, Buyer is acquiring from Sellers all of the outstanding
capital stock of GACI. Capitalized terms used herein and not otherwise defined
have the meanings assigned to them in the Stock Purchase Agreement.
Sections 1.2 and 1.4 of the Stock Purchase Agreement provide for the
payment and delivery by Buyer of a portion of the Purchase Price, consisting of
a Closing Deposit (as defined in the Stock Purchase Agreement) in the amount of
One Million Dollars ($1,000,000) into the escrow hereby established, to be held
and dealt with by the Escrow Agent as herein provided.
The Sellers hereby designate Xxxxx Xxxxxxx to serve as the "Sellers'
Representative" for all purposes under this Agreement, to hold such position
unless and until the Sellers designate a replacement Sellers' Representative in
writing, signed by both Sellers , delivered to the Buyer and Escrow Agent. Each
Seller hereby designates the Sellers' Representative to take all actions
required or permitted to be taken by the Sellers' Representative hereunder, each
Seller agrees to be bound by the acts of the Sellers' Representative hereunder
and each Seller acknowledges that the Escrow Agent and the Buyer may rely on the
acts of the Sellers' Representative hereunder as if such acts were taken
directly by each Seller.
Accordingly, the parties agree as follows:
1. ESTABLISHMENT OF ESCROW ACCOUNT.
1.1 ESCROW DEPOSIT. Pursuant to Sections 1.2 and 1.4 of the
Stock Purchase Agreement, the Closing Deposit (referred to herein as
the "Deposit") shall be deposited with the Escrow Agent by the Buyer
at the time or times specified therein, such Deposit to be held and
disbursed in accordance with the terms hereof.
1.2 ACCOUNT. The Escrow Agent agrees to accept the Deposit, to
establish and maintain a separate escrow account (the "Account")
therefor and to deposit the Deposit in such Account, all as provided
herein.
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2. INVESTMENT OF MONIES IN THE ACCOUNT.
2.1 INVESTMENT. The Escrow Agent shall invest all of the
Deposit in the Account and any income or interest earned or accrued
with respect thereto (the "Account Earnings") in the bank account
identified on Schedule A hereto. The Escrow Agent shall not change
the bank account identified on Schedule A hereto without the prior
written consent of the Buyer and the Sellers' Representative. Except
as otherwise provided in Section 5.3 hereof, in no event shall the
Escrow Agent have any liability for any investment permitted
hereunder, including, without limitation, any loss of the principal
amount of any investment or in connection with the rate of return on
any investment.
2.2 BANK ACCOUNT STATEMENT. The Escrow Agent shall make
available, upon request, monthly Account statements, prepared by the
bank with respect to the Account, which shall set forth, with
respect to the Account, all income or other items earned on and
distributions from or other items charged against the Account. If
any distributions are made from the Account, or there are other
items charged against the Account, the Escrow Agent shall promptly
advise the Buyer and Sellers. Escrow Agent shall have no obligation
to maintain any Account records other than the monthly bank
statements.
3. DISTRIBUTIONS FROM THE ACCOUNT; PROCEDURES WITH RESPECT TO
CLAIMS.
3.1 DUTIES LIMITED - DISTRIBUTIONS FROM THE ACCOUNT.
(a) On the six-month anniversary of the Closing Date,
the Escrow Agent shall cause to be distributed to the Sellers
(by wire transfer in immediately available funds pursuant to
written wire instructions for each Seller, which instructions
shall set forth the amount to be distributed to each Seller)
an amount equal to fifty percent (50%) of the balance in the
Account on such date, reduced (but not below zero) by an
amount equal to one hundred and ten percent (110%) of the
aggregate amount of the Disputed Amounts (as defined in
Section 3.1(d) below) on such date.
(b) On the first anniversary of the Closing Date, the
Escrow Agent shall cause to be distributed to the Sellers (by
wire transfer in immediately available funds pursuant to
written wire instructions for each Seller, which instructions
shall set forth the amount to be distributed to each Seller)
an amount equal to the entire balance in the Account, reduced
(but not below zero) by an amount equal to the aggregate
amount of the Disputed Amounts (as defined in Section 3.1(d)
below) on such date.
(c) If the Buyer has a claim against Sellers for amounts
due under Section 8 of the Stock Purchase Agreement, Buyer may
deliver a copy to the Escrow Agent of a written notice (with
respect to claims against the Sellers for amounts due under
Section 8 of the Stock Purchase Agreement, delivered by Buyer
to Sellers' Representative), describing the
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nature and basis of such claim and indicating the amount
(estimated if necessary) (the "CLAIMED AMOUNT") allegedly so
owed by Sellers to Buyer (a "CLAIM NOTICE").
(d) Unless Sellers' Representative by written notice
delivered to Buyer (with respect to claims against the Sellers
for amounts due under Section 8 of the Stock Purchase
Agreement) (with a copy to the Escrow Agent) (the "OBJECTION
NOTICE") objects to the payment requested in a Claim Notice
within thirty (30) days after the date the Buyer delivers the
Claim Notice to the Sellers' Representative (the "OBJECTION
PERIOD"), the Escrow Agent shall release the Claimed Amount
promptly to Buyer (pursuant to written instructions from
Buyer). Such Objection Notice by Sellers' Representative shall
state the portion, if any, of the Claimed Amount as to which
Sellers' Representative does not object and the Escrow Agent
shall release such portion promptly to Buyer. If Sellers'
Representative delivers to the Escrow Agent an Objection
Notice within the Objection Period, the Escrow Agent shall not
release to Buyer all or any portion of the Claimed Amount as
to which Sellers' Representative object until (a) promptly
following receipt by the Escrow Agent of joint written
instructions from Buyer and Sellers' Representative or (b) the
resolution of such objection in accordance with the
arbitration procedures set forth in Section 8.5(a) of the
Stock Purchase Agreement, which the parties hereto agree shall
be the exclusive dispute resolution mechanism under this
Section 3.1(f). The aggregate amounts of any Claimed Amounts
as to which Sellers' Representative timely objects and any
amount specified in a Claim Notice for which the Objection
Period has not lapsed, are referred to herein as "Disputed
Amounts".
4. TERMINATION OF THIS ESCROW AGREEMENT. This Agreement shall
terminate upon the distribution of all monies held in the Account to
the Sellers and/or the Buyer, as the case may be.
5. DUTIES OF ESCROW AGENT.
5.1 DUTIES LIMITED. The Escrow Agent shall perform only the
duties expressly set forth herein, and shall not have any liability
under, or duty to inquire into, the terms and provisions of any
other agreement, including but not limited to the Stock Purchase
Agreement, except as expressly set forth herein, in performing its
duties hereunder. Except as to the due execution and delivery of
this Agreement by its duly authorized officers, the Escrow Agent has
no responsibility as to the validity of this Agreement or any
document related thereto.
5.2 RELIANCE. The Escrow Agent may rely upon, and shall incur
no liability for acting or refraining from acting upon, any written
notice, instruction, request, consent, certificate, statement or
other document furnished to it pursuant to this Agreement and
believed by it to be genuine and to have been signed or
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presented by the proper party or parties, and the Escrow Agent shall
be under no duty to inquire into or investigate the validity,
accuracy, authenticity or content of any such document.
5.3 GOOD FAITH. In no event shall the Escrow Agent have any
liability for any error of judgment or for any act done or omitted
by it in good faith, or for any mistake of fact or law, or for
anything which it may do or refrain from doing hereunder, except for
its own gross negligence or willful misconduct on its part, arising
out of or in connection with this Agreement. Buyer, on the one hand,
and Sellers together, on the other hand, agree to indemnify the
Escrow Agent (severally, as to fifty percent (50%) each, and not
jointly and severally) for, and hold it harmless against, any loss,
liability, claim or expense arising out of or in connection with its
actions as Escrow Agent hereunder, including the reasonable costs
and expenses incurred in defending any such claim of liability,
except that neither Buyer nor Sellers shall be liable for any loss,
liability or expense incurred on account of the gross negligence or
willful misconduct on the part of the Escrow Agent. The Escrow Agent
may consult with counsel from time to time and the opinion of such
counsel shall be full and complete authorization and protection in
respect of any action taken or omitted to be taken by the Escrow
Agent hereunder or in good faith and in accordance with the opinion
of such counsel. The reasonable fees and disbursements of such
counsel shall be promptly paid by Buyer and Sellers pursuant to the
provisions of Section 7 hereof.
5.4 LIMITED NOTICE. The Escrow Agent shall be deemed to have
no notice of, or duties with respect to, any agreement or agreements
(whether or not a copy thereof is delivered to the Escrow Agent),
other than as expressly set forth herein.
5.5 LIMITED ACTIONS. The Escrow Agent shall not take any
action by reason of any notice or instruction given by any of the
parties or by any other person, firm or corporation, except only (i)
such notices or instructions as are herein specifically provided for
and (ii) orders or process of any court entered or issued with
competent jurisdiction. In the event that the Escrow Agent shall be
uncertain as to its duties or rights hereunder, it shall be entitled
to refrain from taking any action until it shall be directed
otherwise in writing by both Buyer and the Sellers' Representative
or by an order of a court of competent jurisdiction.
5.6 CONFLICTS. In the event that any of the terms and
provisions of any other agreement between any of the parties
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 duties and liabilities of the
Escrow Agent.
5.7 REPRESENTATION. The Buyer acknowledges that the Escrow
Agent has represented the Sellers and GACI in connection with the
negotiation, execution and closing of the transactions contemplated
in the Stock Purchase
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Agreement. Escrow Agent represents to the Buyer that it does not
have and has not had any business relationships with the Sellers or
any Affiliate of the Seller (other than the relationship described
in the immediately preceding sentence of this Section 5.7) that
would cause the Escrow Agent not to act impartially and fairly in
carrying out its responsibilities under this Agreement.
5.8 BANKRUPTCY OF A PARTY.
(a) The obligations of the Escrow Agent to the Sellers
hereunder shall not be released, discharged, limited in any
way or otherwise effected by any voluntary or involuntary
participation by the Buyer in any settlement or composition
for the benefit of creditors, through liquidation,
receivership, bankruptcy or otherwise, or the Buyer becoming
insolvent or bankrupt or otherwise subject to the provisions
of any bankruptcy proceeding.
(b) The obligations of the Escrow Agent to the Buyer
hereunder shall not be released, discharged, limited in any
way or otherwise effected by any voluntary or involuntary
participation by either of the Sellers in any settlement or
composition for the benefit of creditors, through liquidation,
receivership, bankruptcy or otherwise, or either of the
Sellers becoming insolvent or bankrupt or otherwise subject to
the provisions of any bankruptcy proceeding.
5.9 DISAGREEMENTS. If any disagreement or dispute arises
between the parties to this Agreement concerning the meaning or
validity of any provision under this Agreement or concerning any
other matter relating to this Agreement, the Escrow Agent (i) shall
be under no obligation to act, except under process or order of
court, or until it has been adequately indemnified to its full
satisfaction, and shall sustain no liability for its failure to act
pending such process or court order or indemnification, and (ii) may
deposit, in its sole and absolute discretion, the Deposit or that
portion of the Escrow Amount it then holds with any New York court
and to interplead the parties. Upon such deposit and filing of
interpleader, the Escrow Agent shall be relieved of all liability as
to the Deposit and shall be entitled to recover from the parties (as
to fifty percent (50%) to each of the Buyer, on the one hand, and
the two Sellers together, on the other hand) its reasonable
attorneys' fees and other costs, including reasonable travel
expenses, incurred in commencing and maintaining such action.
5.10 DISCLOSURE. No printed or other matter in any language
(including, without limitation, the Memorandum, notices, reports and
promotional material) which mentions the Escrow Agent's name or the
rights, powers, or duties of the Escrow Agent shall be issued by the
other parties hereto or on such parties' behalf unless the Escrow
Agent shall first have given its specific written consent thereto.
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6. RESIGNATION; SUCCESSOR ESCROW AGENT.
6.1 RESIGNATION. The Escrow Agent may resign at any time by
giving thirty (30) days' prior written notice of such resignation to
Buyer and Sellers' Representative, provided that a replacement,
substitute or successor escrow agent is in place pursuant to this
Section 6.1. If Buyer and Sellers' Representative are unable to
agree upon a successor escrow agent within thirty (30) days of
receipt of notice from the Escrow Agent, the Escrow Agent may
designate its successor, and if the Escrow Agent declines to
designate its successor, Buyer shall designate the successor escrow
agent. The Escrow Agent shall promptly deliver the Account and any
other amounts held by it pursuant to this Agreement to such
successor escrow agent and shall thereafter have no further
obligations hereunder. Upon receipt of the Account and other
amounts, the successor escrow agent shall thereupon be bound by all
of the provisions hereof.
6.2 TERMINATION. Buyer and Sellers' Representative together
may terminate the appointment of the Escrow Agent hereunder upon
notice specifying the date upon which such termination shall take
effect. In the event of such termination, Buyer and Seller shall
jointly appoint and designate in such termination notice a successor
escrow agent and the Escrow Agent shall turn over to such successor
escrow agent the Account and any other amounts held by it pursuant
to this Agreement. Upon receipt of the Account and other amounts,
the successor escrow agent shall thereupon be bound by all of the
provisions hereof, and the Escrow Agent shall have no further
obligations hereunder.
7. FEES AND EXPENSES OF ESCROW AGENT. The two Sellers together, on
the one hand, and Buyer, on the other hand, shall each pay one-half
of the reasonable compensation of the Escrow Agent for the Escrow
Agent's services hereunder and all expenses, disbursements and
advances (including reasonable attorneys' fees) incurred in carrying
out the Escrow Agent's duties hereunder (the "ESCROW AGENT'S FEES").
Sellers and Buyer shall pay their respective portion of the Escrow
Agent's Fees directly to the Escrow Agent at the time of Closing and
annually thereafter as invoiced.
8. MISCELLANEOUS.
8.1 NOTICES. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be
deemed given when delivered personally, when received if sent by
facsimile transmission, on the date after deposit with an overnight
courier if deposited, postage prepaid, addressed as follows or on
the third day after mailing if mailed by certified or registered
mall, postage prepaid, addressed as follows (or addressed to such
other address as may be requested in writing from time to time by a
party desiring to change the address to which such communications
are to be delivered or mailed):
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If to the Sellers:
Xxxxx Xxxxxxx
000X Xxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Xxxxxxx Xxxxxxx
00000 Xxxxxxxx Xxxx Xxxx
Xxxx Xxxxx, Xxxxxxx 00000
[Sellers' Representative]
Xxxxx Xxxxxxx
000X Xxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
With a copy to:
Todtman, Young, Tunick, Nachamie,
Xxxxxxx & Spizz, P.C.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx, Esq.
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
If to the Buyer:
Cosmar Corporation
c/o Renaissance Cosmetics, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx Xxxxxx, Chairman, President
and Chief Executive Officer
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
With a copy to:
Xxxxxxxxxx Hyatt Xxxxxx & Xxxxxxxxxx, P.C.
Twenty-Second Floor
000 Xxxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
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If to the Escrow Agent:
Todtman, Young, Tunick, Nachamie,
Xxxxxxx & Spizz, P.C.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx, Esq.
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
If any notice is required to be given to both the Escrow Agent and
another party, such notice shall be given in a manner that results in the same
effective date for each such notice.
8.2 GOVERNING LAW. This Agreement shall be governed and
construed in accordance with the internal laws of the State of New
York applicable to agreements made and to be performed entirely
within such State, not including the conflicts of laws provisions
thereof.
8.3 ENTIRE AGREEMENT. This Agreement is entered into and
delivered pursuant to the Stock Purchase Agreement and this
Agreement and the Stock Purchase Agreement set forth the entire
agreement among the parties with respect to the subject matter
hereof and supersede all prior agreements, written or oral, with
respect thereto.
8.4 BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors
and assigns.
8.5 WAIVERS AND AMENDMENTS. This Agreement may be amended,
modified, superseded, cancelled, renewed or extended, and the terms
or conditions hereof may be waived, only by a written instrument
signed by all of the parties, or, in the case of a waiver, by the
party waiving compliance. No delay on the part of any party in
exercising any right, power or privilege hereunder shall operate as
a waiver thereof, nor shall any waiver on the part of any party of
any right, power or privilege hereunder, nor any single or partial
exercise of any right, power or privilege hereunder, preclude any
other or further exercise thereof or the exercise of any other,
right, power or privilege hereunder.
8.6 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but all
of which together shall constitute one and the same instrument.
8.7 FURTHER ASSURANCES. Each of the parties shall execute such
documents and other papers and take such further actions as may be
reasonably required or desirable to carry out the provisions hereof
and the transactions contemplated hereby.
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8.8 VARIATIONS IN PRONOUNS. All pronouns and any variations
thereof refer to the masculine, feminine or neuter, singular or
plural, as the identity of the person or persons may require.
8.9 HEADINGS. The headings in this Agreement are for reference
purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
COSMAR CORPORATION
By: /s/
___________________________________________
Name: ___________________________________________
Title: ___________________________________________
XXXXX XXXXXXX (individually)
/s/ Xxxxx X. Xxxxxxx
__________________________________________________
XXXXXXX XXXXXXX (individually)
/s/ Xxxxxxx Xxxxxxx, V. Pres.
__________________________________________________
TODTMAN, YOUNG, TUNICK, NACHAMIE,
XXXXXXX & SPIZZ, P.C. (Escrow Agent)
By: ___________________________________________
Name: ___________________________________________
Title: ___________________________________________
__________________________________________________
(in his capacity as Sellers' Representative)
/s/ Xxxxx X. Xxxxxxx
__________________________________________________
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SCHEDULE A
Bank Account
Republic National Bank
Sch. A-1
