EXHIBIT No. 10.43
ESCROW AGREEMENT
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THIS ESCROW AGREEMENT (this "Escrow Agreement") is entered into as of
this 29th day of March, 1999, by and among XXXXXXXX JDM LTD., an Ontario
corporation ("Buyer"), NIEMAND INDUSTRIES, INC., a Delaware corporation
("Seller"), and CHICAGO TITLE INSURANCE COMPANY, an Ohio corporation (the
"Chicago Title").
RECITALS:
A. Buyer and Seller have entered into an Asset Purchase Agreement dated
as of February 25, 1999 (the "Asset Purchase Agreement"). The Asset Purchase
Agreement provides, among other things, for the payment by Buyer of certain
funds to an escrow agent, and for the escrow agent to disburse such funds in
accordance with an escrow agreement. Capitalized terms used in this Escrow
Agreement without definition shall be defined in the manner set forth in the
Asset Purchase Agreement.
B. Buyer and Seller now desire to appoint Chicago Title as the escrow
agent described in the Asset Purchase Agreement, and Chicago Title desires to
accept such appointment, upon the terms and conditions set forth herein.
C. In order to implement the foregoing, the parties desire to enter
into this Escrow Agreement, and to hereinafter describe the manner in which the
funds deposited with the Escrow Agent are to be disbursed.
ACCORDINGLY, in consideration of the premises and the mutual covenants
set forth herein, the parties hereto agree as follows:
1. APPOINTMENT OF ESCROW AGENT. In accordance with the terms and
conditions of this Escrow Agreement, Buyer and Seller hereby appoint Chicago
Title as the escrow agent hereunder (the "Escrow Agent"). Chicago Title hereby
accepts such appointment. The duties and obligations of the Escrow Agent shall
be determined solely by the express provisions of this Escrow Agreement.
2. ESCROW FUNDS. Pursuant to Section 3.2 of the Asset Purchase
Agreement, Buyer shall deliver certain amounts of cash to the Escrow Agent. Such
amounts, and any earnings thereon, shall constitute the funds to be held by the
Escrow Agent hereunder. All of the funds held by the Escrow Agent pursuant to
this Escrow Agreement are collectively referred to hereinafter as the "Escrow
Funds".
3. ESCROW ACCOUNT. The Escrow Agent shall hold the Escrow Funds in a
readily accessible, interest bearing account at a financial institution in which
deposits are insured by the Federal Deposit Insurance Corporation or similar
entity (the "Escrow Account"), upon terms and conditions satisfactory to the
parties hereto. The Escrow Account shall be set up in the name of the Escrow
Agent, as agent for Buyer and Seller. The Escrow Agent shall continue to hold
the Escrow Funds in escrow until such time as all of the Escrow Funds have been
disbursed in
accordance with the terms and conditions of this Escrow Agreement.
4. TERMS OF THE ESCROW.
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(a) From time to time during the period from March 29, 1999
through the later of April 29, 1999 or the date of the actual Closing pursuant
to the Asset Purchase Agreement (the "Interim Period"), but in no event more
than once in any calendar week during the Interim Period, Seller shall have the
right to notify Buyer and the Escrow Agent, in writing, that Seller no longer
requires particular items of Machinery and Equipment, Molds, Raw Materials
and/or Finished Goods. In addition to identifying the particular Asset which it
no longer requires, Seller shall set forth in the notice the value of such Asset
as set forth in the Schedules to the Asset Purchase Agreement. Along with each
such notice, Seller shall also deliver or cause to be delivered to the Escrow
Agent an executed release of any and all security interests with respect to each
such Asset (a "UCC Termination Statement"), in form suitable for filing. Unless
Buyer submits a written objection to Seller and the Escrow Agent within seven
days of Buyer's receipt of Seller's notice (an "Objection Notice"), on the
eighth day after the date of such receipt (i) the Escrow Agent shall remit the
value of such Assets, as set forth in the notice, to Seller payable in the
manner set forth in Section 4(d) below, and (ii) as soon as practicable
thereafter, the Escrow Agent shall file the corresponding UCC Termination
Statement(s) with the office of the Secretary of State of Alabama and the
appropriate filing officer in Perry County, Alabama. If Buyer submits a timely
Objection Notice, the matter will be resolved in accordance with subparagraph
(c) below.
(b) At the Closing pursuant to the Asset Purchase Agreement, (i)
Buyer and Seller shall deliver to the Escrow Agent a schedule, executed by Buyer
and Seller, setting forth the final Purchase Price, determined in accordance
with the terms of the Asset Purchase Agreement, and (ii) Seller shall deliver to
the Escrow Agent executed UCC Termination Statements with respect to all of the
Assets (other than those with respect to which UCC Termination Statements were
delivered pursuant to subparagraph (a) above during the Interim Period). The
Escrow Agent shall pay to Seller from the Escrow Account the amount by which the
Purchase Price exceeds the amount the Escrow Agent had delivered to Seller
during the Interim Period pursuant to subparagraph (a) above (hereinafter, "the
balance of the Purchase Price"). If the amount in the Escrow Account is less
than the balance of the Purchase Price, the Escrow Agent shall deliver all of
the Escrow Funds to Seller, and Buyer shall pay the balance of the Purchase
Price to Seller at the Closing. If the amount in the Escrow Account exceeds the
balance of the Purchase Price, the Escrow Agent shall deliver an amount equal to
the balance of the Purchase Price to Seller, and shall deliver the amount then
remaining in the Escrow Account to Buyer.
(c) In the event that the Escrow Agent receives a timely Objection
Notice from Buyer, the Escrow Agent shall continue to hold the Escrow Funds
until it receives either (i) joint instructions from Buyer and Seller, or (ii) a
final and binding order of an arbitrator or court of competent jurisdiction
resolving the matter in accordance with paragraph 5, as applicable (each, a
"Resolution Notice"). The Resolution Notice shall describe the manner in which
the matter has been resolved and shall set forth instructions as to the
disposition of the portion of the Escrow Funds involved in such dispute. The
Escrow Agent shall then distribute the Escrow
Funds (or portion thereof, if applicable) in accordance with the Resolution
Notice.
(d) Any and all amounts which the Escrow Agent is to remit, pay,
distribute or otherwise deliver to Seller pursuant to this Agreement shall be
sent by the Escrow Agent in accordance with the following routing instructions:
Account Number: 000-000-0; Account Name: FSFP Collateral Account for Gibraltar
Packaging Group, Inc.; ABA Number: 000000000; Bank Name and Location: Xxxxxx
Bank, Chicago, Illinois.
5. DISPUTE RESOLUTION. In the event Buyer submits a timely Objection
Notice pursuant to paragraph 4 above, or in the event of any other dispute
arising out of or related to this Escrow Agreement, the parties shall first
endeavor to resolve the dispute directly, through negotiation. If they are
unable to resolve it, such dispute shall be settled by arbitration in Cleveland,
Ohio, pursuant to the rules then obtaining of the American Arbitration
Association. Either party may initiate arbitration proceedings. The arbitration
shall be governed by the United States Arbitration Act, 9 U.S.C. Sections 1-16,
and judgment upon any award in arbitration may be entered by any court having
jurisdiction thereof.
6. TERMINATION. The term of the Escrow Agreement shall commence on the
date hereof and shall continue until all of the Escrow Funds have been
distributed pursuant to the terms of this Agreement.
7. UNFORESEEN CONTINGENCIES. In the event of the happening of any
contingency not provided for hereunder, the Escrow Agent shall be under no duty
to act until it is clearly directed by written instructions signed jointly or in
counterparts by duly authorized officers of Seller and Buyer, or until so
directed by an arbitrator or by a court of competent jurisdiction.
8. INDEMNIFICATION. Buyer and Seller, jointly and severally, agree to
indemnify and hold harmless the Escrow Agent from and against any and all loss,
damage, liability or expense incurred, arising out of or in connection with the
acceptance and administration of this Escrow Agreement (including the costs and
expenses of defending against any claim in connection with the performance of
any of its duties hereunder) except to the extent that any such loss, damage,
liability or expense is the result of the Escrow Agent's negligence or willful
misconduct.
9. ESCROW AGENT'S LIABILITY LIMITED. The Escrow Agent shall not be
liable to anyone whatsoever by reason of any error of judgment, any act done or
step taken or omitted by them, any mistake of fact or law, or anything which it
may do or refrain from doing, in connection herewith and in good faith, unless
caused by or arising out of its negligence or willful misconduct.
10. RELIANCE BY ESCROW AGENT ON DOCUMENTS, ETC. The Escrow Agent shall
be entitled to rely and shall be protected in acting in reliance upon any
instructions or directions furnished to it in writing or pursuant to any
provisions of this Escrow Agreement and shall be entitled to treat as genuine,
and as the document it purports to be, any letter, paper or other document
furnished to it and reasonably believed by it to be genuine and to have been
signed and presented by the proper party or parties. If at any time the Escrow
Agent shall receive conflicting notices, claims, demands or instructions and
cannot determine the proper course of
action, it may refuse to make any payment and may retain all funds in its
possession until it shall have received instructions in writing concurred in by
duly authorized officers of Buyer and Seller, or until directed by a final order
or judgment of a court of competent jurisdiction, whereupon the Escrow Agent
shall distribute the Escrow Funds in accordance with such instructions, order or
judgment.
11. LEGAL COUNSEL FOR ESCROW AGENT. The Escrow Agent may consult with
legal counsel to be selected and employed by it and shall be fully protected
with respect to any action under this Escrow Agreement taken or suffered in good
faith by the Escrow Agent in accordance with the opinion of such counsel.
12. COMPENSATION. The Escrow Agent shall be entitled to receive
compensation in the form of escrow fees, in accordance with Exhibit A hereto, in
consideration of its services hereunder. In addition, the Escrow Agent shall be
entitled to be reimbursed for all out-of-pocket expenses incurred in connection
with its services hereunder. Buyer and Seller shall each be responsible for the
payment of fifty percent (50%) of the fees and expenses of the Escrow Agent.
13. RESIGNATION. The Escrow Agent shall have the right to resign upon
giving thirty (30) days written notice by mailing said written notice thereof to
the other parties hereto. In the event of such resignation, a successor or
successors to the Escrow Agent may be appointed by mutual consent of Seller and
Buyer. The Escrow Agent shall thereupon deliver the Escrow Funds and any
documents related hereto to such appointed Escrow Agent. If a successor Escrow
Agent is not appointed within thirty (30) days after the mailing of such notice
of resignation, the resigning Escrow Agent may petition the appropriate court
having jurisdiction to appoint a successor Escrow Agent.
14. NOTICES. Any notice or other communication required or permitted
under this Escrow Agreement shall be in writing and shall be either (i)
delivered personally, (ii) sent by telegraph or telex, (iii) sent by facsimile
transmission, (iv) delivered by nationally recognized overnight courier service
against a receipt therefor, or (v) sent by certified, registered or express
mail, postage prepaid. Any such notice shall be deemed given (A) when so
delivered personally, telegraphed, telexed or sent by facsimile transmission if
applicable; (B) when delivered by courier if applicable; or (C) if mailed, five
days after the date of deposit in the mail if applicable, to the parties at the
address set forth below. Any party may, by notice given in accordance with this
Section to the other parties, designate another address or person for receipt of
notices hereunder.
To Buyer: Xxxxxxxx JDM Ltd.
Xxxxxxxxxxxx X00 0XX
Xxxxxx Xxxxxxx
Attn: President
Fax: 000-00-0000-000-000
With copy to: Xxxx Xxxxxxxx, Esquire
Xxxxxxxx, Xxxxxxx
00 Xxxxx Xxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Fax: 000-000-0000
To Seller: Niemand Industries, Inc.
c/o Xxxx X. Xxxxx
000 Xxxxxx Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Fax: 000-000-0000
With copy to: Gibraltar Packaging Group, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
Attn: President
Fax: 000-000-0000
and
Xxxx X. Xxxxx, Esquire
Xxxxxxx Xxxxxxx & Xxxxxx P.L.L.
Xxx Xxxxxxxxx Xxxxxx, 00xx Xxxxx
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Fax: 000-000-0000
To Escrow Agent: Chicago Title Insurance Company
000 Xx. Xxxxx Xxxxxx, XX
Xxxxxxxxx, Xxxx 00000
Fax: 000-000-000
15. AMENDMENT AND WAIVER. This Escrow Agreement may not be changed
orally, but may be amended, superseded, canceled, renewed or extended, and the
terms hereof may be waived, only by an instrument in writing signed by each of
the parties or, in the case of a waiver, signed by the party against whom
enforcement of such waiver is being sought. No action taken pursuant to this
Escrow Agreement, including any investigation by or on behalf of any party
hereby, shall be deemed to constitute a waiver by the party taking such action
of compliance with any agreement contained herein.
16. BINDING EFFECT AND BENEFITS. This Escrow Agreement shall inure to
the benefit of and shall be binding upon the parties hereto and their respective
heirs, legal representatives, successors and permitted assigns.
17. COUNTERPARTS. 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.
18. GOVERNING LAW. This Escrow Agreement shall be governed by the laws
of the State of Ohio.
19. ENTIRE AGREEMENT. This Escrow Agreement embodies the entire
agreement among the parties hereto with regard to the subject matter hereof and
supersedes all prior or contemporaneous agreements and understandings, whether
oral or written, with respect hereto.
IN WITNESS WHEREOF, Buyer, Seller and the Escrow Agent have each caused
this Escrow Agreement to be executed as of the day and year first above written.
XXXXXXXX JDM LTD.
("Buyer")
By: /s/ Xxx Xxxxxx
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Its: President
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NIEMAND INDUSTRIES, INC.
('Seller")
By: /s/ Xxxx X. Xxxxx
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Its: Secretary
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CHICAGO TITLE INSURANCE COMPANY
("Escrow Agent")
By: /s/ Xxxxxxx X. Xxxxxx III
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Its: Vice President
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