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EXHIBIT 10.3
ESCROW AGREEMENT
ESCROW AGREEMENT made May 4, 1995 (the "Agreement"), among YOUNG
DENTAL MANUFACTURING COMPANY, a Missouri corporation ("Buyer"), CHEMICAL
VENTURE CAPITAL ASSOCIATES, A California Limited Partnership ("CVCA"), P.
XXXXXXX XXXX ("Xxxx"), XXXX X. XXXXXXX ("Xxxxxxx"), XXXXXXX X. XXXXXXXX
("Xxxxxxxx"), the other stockholders executing a signature page hereto (each, a
"Stockholder" and together with CVCA, Xxxx, Xxxxxxx and Xxxxxxxx, the
"Stockholders"), and LORVIC HOLDINGS, INC., a Delaware corporation ("Lorvic")
(collectively, "Sellers"), and BOATMEN'S TRUST COMPANY (the "Escrow Agent").
WHEREAS, Buyer and Sellers are parties to a certain Stock Purchase
Agreement made as of May 4, 1995 (the "Purchase Agreement"), pursuant to which
Buyer is purchasing all of the capital stock of Lorvic;
WHEREAS, pursuant to the Purchase Agreement, Buyer is required to
deposit with the Escrow Agent a portion of the consideration payable to
Sellers; and
WHEREAS, the Escrow Agent has accepted such agency and agreed to hold
such funds in accordance with and subject to the terms of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants contained herein, the parties hereto agree as follows:
1. Establishment of Escrow Accounts. The Escrow Agent shall
establish at its offices located at St. Louis, Missouri three escrow accounts
(each an "Escrow Account" and collectively the "Escrow Accounts") and shall
cause all funds deposited into the Escrow Accounts to be held, invested and
distributed in accordance with the terms of this Agreement. The amounts
deposited into the Escrow Accounts, together with any proceeds of investments
thereof, that may be held in the Escrow Accounts from time to time are
hereinafter referred to collectively as "Escrow Funds." The Escrow Agent shall
keep appropriate records to reflect the current value from time to time of the
Escrow Funds, including appropriate adjustments for disbursements and income
earned or losses in respect thereof.
2. Delivery of Escrow Funds. Buyer hereby agrees to deliver or
cause to be delivered to the Escrow Agent in accordance with the terms of
the Purchase Agreement, cash in the following amounts:
(a) $100,000 into an Escrow Account to be known as the
"Purchase Price Adjustment Escrow Account".
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(b) $700,000 into an Escrow Account to be known as the
"Tax Claim Escrow Account".
(c) $1,050,000 into an Escrow Account to be known as the
"General Escrow Account".
3. Investment of Escrow Funds. The Escrow Funds shall be invested
and reinvested by the Escrow Agent in such amounts and in such manner
as Sellers and Buyer shall instruct the Escrow Agent from time to time in
writing; provided, however, that after the second anniversary hereof, the
Escrow Agent shall invest the Escrow Funds in any investment which is exempt
from federal, state and local tax as directed by the Sellers. Initially, the
Escrow Funds shall be invested by the Escrow Agent in accordance with the
instructions set forth on Exhibit A hereto. If the Escrow Agent has not
received instructions from the Buyer and the Sellers prior to 15 days of the
expiration of the term of any instrument in which Escrow Funds are invested,
the Escrow Agent shall invest such Escrow Funds in instruments of the same or
of a substantially similar type as the instruments set forth on Exhibit A
hereto. Except as provided above, the Escrow Agent shall not be required to
invest any funds held hereunder unless requested by Sellers and Buyer as
provided herein.
4. Release of Escrow Funds. The Escrow Agent shall release the
Escrow Funds as follows:
(a) Release from Purchase Price Adjustment Escrow Account.
As soon as practicable after the completion of the calculation of the
Purchase Price Adjustment (as defined in the Purchase Agreement), as
provided in the Purchase Agreement, Buyer and Sellers shall execute
and deliver to the Escrow Agent written instructions ("Mutual Written
Instructions"), and the Escrow Agent shall promptly upon receipt
thereof disburse the Escrow Funds in the Purchase Price Adjustment
Escrow Account as provided in such Mutual Written Instructions, and,
if such Mutual Written Instructions so direct, shall disburse to Buyer
from the General Escrow Account the amount directed to be disbursed
therefrom in such Mutual Written Instructions. Notwithstanding the
foregoing, the Escrow Agent shall disburse the Escrow Funds in
accordance with any Certified Judgment Notice (as defined below) from
the Buyer or any Seller which is not the subject of an Appeal Notice.
(b) Release of Tax Claim Escrow Account. (i) As soon as
practicable after final resolution of the Tax Claim (as defined in the
Purchase Agreement), as provided in the Purchase Agreement, Buyer and
Sellers shall (x) determine the amount payable, if any, to the Buyer
pursuant to Section 5.2 of the Purchase Agreement and (y) execute and
deliver to the Escrow Agent Mutual Written Instructions to release the
amount set forth in clause (x) to the Buyer and the balance
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of the Escrow Funds in the Tax Claim Escrow Account, if any, to the
Sellers, and the Escrow Agent shall promptly upon receipt thereof
disburse the Escrow Funds in the Tax Claim Escrow Account as provided
in such Mutual Written Instructions and, if such Mutual Written
Instructions so direct, shall disburse to Buyer from the General
Escrow Account the amount, if any, directed to be disbursed therefrom
in such Mutual Written Instructions. Notwithstanding the foregoing,
the Escrow Agent shall disburse the Escrow Funds in accordance with
any Certified Judgment Notice (as defined below) from the Buyer or any
Seller which is not the subject of an Appeal Notice.
(ii) If (x) all or any portion of the loss, deduction or
credit generated by the Company or Lorvic in connection with (a) the
exercise of the option granted to Xxxxxxxx pursuant to the Stock
Option Agreement dated as of December 28, 1989, by and between the
Company and Xxxxxxxx and/or (b) the bonus paid to Xxxxxxxx on May 2,
1995, in either case does not generate a Tax Refund (as defined in the
Purchase Agreement), but instead is applied against or otherwise
reduces a liability (a "Tax Liability") for any taxes (including
without limitation Taxes (as defined in the Purchase Agreement)) of
the Company or Lorvic or (y) any Tax Refund generated is applied
against or otherwise reduces a Tax Liability of the Company or Lorvic
(the amount so applied or resulting in such reduction in any such case
being referred to as the "Tax Reduction Amount"), then the parties
hereto shall execute Mutual Written Instructions instructing the
Escrow Agent to release to the Stockholders from the Tax Claim Escrow
Account if the Tax Reduction Amount relates to the Tax Claim or from
the General Escrow Account if the Tax Reduction Amount relates to a
Tax Liability other than the Tax Claim which would result in a Loss
under Section 5.2 of the Purchase Agreement, not later than the date
such other Tax Liability would otherwise be due and payable without
extension, an amount equal to the Tax Reduction Amount less an amount,
if any, equal to the amount disbursed to the Buyer from the General
Escrow Account pursuant to Section 4(a) hereof. Notwithstanding
anything to the contrary contained in this Subsection (ii) of Section
4(b), if the Tax Reduction Amount relates to a Tax Liability which
would not result in a Loss under Section 5.2 of the Purchase Agreement
no release of Escrow Funds shall be made pursuant to this Subsection.
(c) Release of General Escrow Account.
(1) If the Mutual Written Instructions delivered
to the Escrow Agent pursuant to Section 4(a) so direct, the
Escrow Agent shall promptly upon receipt of such Written
Instructions disburse to Buyer from the General
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Escrow Account the amount directed to be disbursed therefrom in
such Mutual Written Instructions.
(2) The Escrow Agent shall, promptly upon receipt
of Mutual Written Instructions disburse to the Buyer an amount
not in excess of $20,000 to reimburse Buyer for its Plan
Expenses (as defined in the Purchase Agreement).
(3) On June 30, 1996, the Escrow Agent shall if
the Tax Claim Escrow Account has not theretofore been
disbursed, (i) transfer the amount of $200,000 from the
General Escrow Account to the Tax Claim Escrow Account, and
(ii) disburse to Sellers from the General Escrow Account the
amount, if any, by which the balance in the General Escrow
Account exceeds the Initial Base Amount. For purposes hereof,
"Initial Base Amount" means the sum of (A) $525,000 plus (B)
the aggregate amount as of such date of all claims subject to
a Buyer Claim Notice (as defined below) as to which the Escrow
Agent has not received Mutual Written Instructions or a
Certified Judgment Notice (as defined below) not the subject
of an Appeal Notice (as defined below), in either case
directing release of Escrow Funds ("Unresolved Claims"). The
Escrow Funds retained by the Escrow Agent in respect of the
amount referred to in clause (B) shall be held solely for the
purpose of satisfying the Unresolved Claims outstanding as of
June 30, 1996.
(4) On the second anniversary of the Closing Date
(as defined in the Purchase Agreement), the Escrow Agent shall
disburse to Sellers from the General Escrow Account the
amount, if any, by which the balance in the General Escrow
Account exceeds the aggregate amount of all Unresolved Claims.
The Escrow Funds retained by the Escrow Agent shall be held
solely for the purpose of satisfying the Unresolved Claims
outstanding as of such second anniversary.
(5) After June 30, 1996, each time an Unresolved
Claim is resolved as provided for below, the amount of such
Unresolved Claim shall be disbursed in accordance with the
Mutual Written Instructions or the Certified Judgment Notice
reflecting such resolution; provided, however, prior to the
second anniversary of the Closing Date, the balance of the
General Escrow Account will not be reduced below the sum of
(A) $525,000 plus (B) the aggregate amount of all remaining
Unresolved Claims asserted prior to June 30, 1996.
(6) In the event the Escrow Agent has any doubt as
to any amount to be released to Buyer or Sellers from any of
the Escrow Accounts, it may request Mutual
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Written Instructions from Sellers and Buyer and may rely
thereon. Notwithstanding the foregoing sentence, the Escrow
Agent shall disburse the Escrow Funds in accordance with a
Certified Judgment Notice which is not the subject of an
Appeal Notice.
(7) All disbursements to Sellers hereunder shall
be in proportion to their percentage interests in the Escrow
Funds as set forth on Schedule A hereto; each such
disbursement shall be sent to the respective addresses of
Sellers set forth on Schedule A or to such other address as
provided to the Escrow Agent in writing by the Seller
receiving such disbursement.
(d) Buyer Claim Notice; Disputed Amounts. As contemplated by
the provisions of Section 4(c), if Buyer shall have delivered to the
Escrow Agent one or more written notices (each a "Buyer Claim Notice")
stating that the amount or amounts of the General Escrow Account
specified in such notice or notices should not be released to Sellers
and should be released to Buyer because Buyer has made a claim against
Sellers under the Purchase Agreement for such amount or amounts, the
Escrow Agent shall not release such amount or amounts to Sellers and
shall retain such amount or amounts until the same are released
pursuant to subsections (e) or (g) hereof. Buyer shall deliver to
Sellers a copy of each Buyer Claim Notice on or prior to the date of
the delivery thereof to the Escrow Agent, and the Escrow Agent shall
also deliver a copy thereof to Sellers promptly after receipt from
Buyer.
(e) Release to Buyer. Unless the Escrow Agent shall have
received a Seller Hold Notice as contemplated by Section 4(f) within
30 days following receipt by the Escrow Agent of a Buyer Claim Notice,
the Escrow Agent shall promptly thereafter release to Buyer such
portion of the General Escrow Account as is claimed by Buyer in such
Buyer Claim Notice.
(f) Seller Hold Notice; Disputed Amounts. If, within 30 days
of the Escrow Agent's receipt of a Buyer Claim Notice pursuant to
Section 4(d) above, any Seller named in Section 4(j) shall have
delivered to the Escrow Agent written notice (a "Seller Hold Notice")
stating that all or a portion of the General Escrow Account specified
in such Buyer Claim Notice should not be released to Buyer, then the
Escrow Agent shall not release such disputed amounts until the
occurrence of one of the two events contemplated in Section 4(g)
hereof. Such Seller shall deliver to Buyer a copy of such Seller Hold
Notice on or prior to the date of the delivery thereof to the Escrow
Agent and the Escrow Agent shall also deliver a copy of such Seller
Hold Notice to Buyer promptly after receipt thereof from such Seller.
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(g) Release After a Seller Hold Notice. In the event that
the Escrow Agent receives a Seller Hold Notice as contemplated by
Section 4(f) hereof, that portion of the General Escrow Account that
is in dispute as reflected in such Seller Hold Notice shall be held by
the Escrow Agent until the occurrence of one of the following events:
(1) receipt by the Escrow Agent of Mutual
Written Instructions signed by Buyer and Sellers instructing
the Escrow Agent to release the disputed portion of the Escrow
Funds to such party or parties and in such amount or amounts
as is specified in such Mutual Written Instructions; or
(2) receipt by the Escrow Agent of a written
notice (a "Certified Judgment Notice") from Buyer or Sellers
certifying that a final nonappealable court judgment with
respect to the claim covered by the Buyer Claim Notice is
attached to such Certified Judgment Notice, in which case the
Escrow Agent shall distribute the disputed portion of the
Escrow Funds in accordance with such judgment, unless within
15 days of the Escrow Agent's receipt of a Certified Judgment
Notice, the Escrow Agent receives a written notice (an "Appeal
Notice") from the party not submitting such Certified Judgment
Notice stating that the judgment has or can and will be
appealed. A party delivering a Certified Judgment Notice or
an Appeal Notice shall deliver to the other party hereto a
copy thereof on or prior to the date of delivery thereof to
the Escrow Agent, and the Escrow Agent shall also deliver a
copy of each Certified Judgment Notice or Appeal Notice to the
party which did not deliver the same promptly after the Escrow
Agent's receipt thereof.
(h) Release of Accrued Interest. Prior to the second
anniversary of the Closing Date, the Escrow Agent shall distribute to
Sellers within five days after the end of each calendar quarter, an
amount equal to 40% of all amounts earned on funds in the Tax Claim
Escrow Account and the General Escrow Account (other than earnings
which are exempt from federal income taxes, which will be retained by
the Escrow Agent); provided, however, that all of such disbursements
shall be made from the General Escrow Account. After the second
anniversary of the Closing Date, earnings on the Escrow Funds will not
be so disbursed, but will be added to the Escrow Funds. All earnings
on the Escrow Funds prior to the time they are disbursed will, for all
purposes of this Escrow Agreement, be treated as Escrow Funds, and
will be released according to the terms of Section 4(a), (b) or (c),
as appropriate.
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(i) Security Interests in Escrow Fund. (a) Except as
expressly provided herein, neither the Buyer nor the Sellers shall
have any right, title or interest in or possession of any of the
Escrow Accounts. Therefore, neither the Buyer nor the Sellers shall
have the ability to pledge, convey, hypothecate or grant a security
interest in any of the Escrow Accounts or portion thereof unless and
until such assets have been disbursed or are required to be disbursed,
to such party in accordance with this Section 4.
(b) Each of the Buyer and the Sellers
acknowledges that its interest in the Escrow Accounts is
merely a contingent right to payment from such Escrow
Accounts. Each of the Buyer and the Sellers further
acknowledges that neither a voluntary or involuntary case
under any applicable bankruptcy, insolvency or similar law nor
the appointment of a receiver, trustee, custodian or similar
official in respect of the Buyer of any of the Sellers (any of
which is referred to herein as a "Bankruptcy Event") shall
increase its respective interest in the Escrow Accounts or
affect, modify, convert or otherwise change the contingent
nature of its respective right to payment from the Escrow
Accounts in accordance with the terms of this Agreement.
Nonetheless:
(i) if a court of competent jurisdiction
determines that the Buyer, upon the occurrence of a
Bankruptcy Event with respect to the Buyer, has an
interest in any Escrow Account that is greater than a
contingent right to payment from such Escrow Account
payable only in accordance with the provisions of
this Section 4, then the Buyer shall be deemed to
have granted on the date hereof to the Sellers a
first priority security interest in, and pledged to
the Sellers all of its right, title and interest in
such Escrow Account. In such event, the Escrow Agent
shall be deemed to act as bailee on behalf of the
Sellers in respect of the Sellers' security interest
in the Buyer's rights to such Escrow Account. The
Escrow Agent shall, upon receipt of indemnification
satisfactory to it from the Sellers for its fees and
expenses incurred in connection with taking such
actions, take all actions as may be reasonably
requested in writing of it by the Sellers to further
perfect the security interest granted by the Buyer
hereunder in such Escrow Account. Such security
interest shall automatically be released with respect
to any funds properly distributed from such Escrow
Account pursuant to the terms of this Agreement; and
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(ii) if a court of competent jurisdiction
determines that any Seller, upon the occurrence of a
Bankruptcy Event with respect to such Seller, has an
interest in any Escrow Account that is greater than a
contingent right to payment from such Escrow Account
payable only in accordance with the provisions of
this Section 4, then such Seller shall be deemed to
have granted on the date hereof to the Buyer a first
priority security interest in, and pledged to the
Buyer all of such Seller's right, title and interest
in such Escrow Account. In any such event, the
Escrow Agent shall be deemed to act as bailee on
behalf of the Buyer in respect of the Buyer's
security interest in such Seller's rights to such
Escrow Account. The Escrow Agent shall, upon receipt
of indemnification satisfactory to it from the Buyer
for its fees and expenses incurred in connection with
taking such actions, take all actions as may be
reasonably requested in writing of it by the Buyer to
further perfect the security interest created by such
Seller hereunder in such Escrow Account. Such
security interest shall automatically be released
with respect to any funds properly distributed from
such Escrow Account pursuant to the terms of this
Agreement.
(c) The parties hereto agree and acknowledge that
the establishment and maintenance of the Escrow Accounts
hereunder are intended to constitute possession of the Escrow
Accounts for the purposes of perfecting the security interests
therein created hereunder.
(j) Action by Sellers. All action required to be taken
by Sellers under this Agreement (including, without limitation, the
giving of Mutual Written Instructions with Buyer, and the execution
and delivery of any documents, including any amendments to this
Agreement, and the execution and delivery of any other documents
hereunder, shall be sufficient if executed in writing by Chemical
Venture Capital Associates, P. Xxxxxxx Xxxx, Xxxx X. Xxxxxxx and
Xxxxxxx X. Xxxxxxxx. Notwithstanding the foregoing, a Seller Hold
Notice shall be sufficient if executed in writing by any one of the
Sellers listed in the preceding sentence.
5. Responsibility of the Escrow Agent. The Escrow Agent accepts the
agency created by this Agreement upon the terms and conditions hereof
and undertakes to perform such duties and only such duties as are specifically
set forth herein. No provision of this Agreement shall be construed to relieve
the Escrow
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Agent from liability for its own gross negligence or willful
misconduct, except that:
(a) The duties and obligations of the Escrow Agent shall be
determined solely by the express provisions of this Agreement, and no
implied covenants, duties or obligations shall be read into this
Agreement against the Escrow Agent nor shall the Escrow Agent be bound
by the provisions of any other agreements between the other parties
hereto beyond the specific terms hereof; the Escrow Agent shall not be
liable for any action taken, suffered or omitted by it in good faith
and reasonably believed by it to be authorized or within the
discretion, rights, duties, privileges or powers conferred upon it by
this Agreement; the Escrow Agent shall not be liable for any error of
judgment made in good faith by a responsible officer or officers of
the Escrow Agent, unless the Escrow Agent was grossly negligent in
ascertaining the pertinent facts or in employing such officer or
officers; and the Escrow Agent shall not be liable to any person with
respect to any action taken, omitted or suffered to be taken by it in
accordance with the provisions of this Agreement or in accordance with
the written directions of Sellers or Buyer as provided herein or of a
court of competent jurisdiction except in the case of the Escrow
Agent's gross negligence or willful misconduct.
(b) The Escrow Agent may act in reliance upon and be
protected in acting or refraining from acting upon any instrument or
signature believed to be genuine and may assume that any person
purporting to give any writing, notice, advice or instruction in
connection with the provisions hereof has been duly authorized to do
so.
(c) The Escrow Agent may consult with counsel, auditors and
other experts and any opinion of counsel or written opinion of such
auditors or other experts shall be full and complete authorization and
protection with respect to any action taken or suffered or omitted by
the Escrow Agent thereunder in good faith and in accordance with such
opinion of counsel or opinion of such auditors or other experts within
the area of their respective expertise.
(d) 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 or attorneys. Nothing in this
Agreement shall be deemed to impose upon the Escrow Agent any
liability to any other person as a result of any failure of the Escrow
Agent to qualify to do business or to act as fiduciary or otherwise in
any jurisdiction other than the jurisdiction of its formation.
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(e) No property held in escrow by the Escrow Agent hereunder
shall be subject to any setoff, counterclaim, recoupment, lien or
other right which the Escrow Agent may have against either of the
other parties hereto or against any other person for any reason
whatsoever.
(f) If any dispute arises between Buyer and Sellers as to
which of them is entitled to delivery of the disputed portion of the
Escrow Funds, 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 Buyer
and Sellers in a state or federal court located in St. Louis,
Missouri, and deposit the disputed Escrow Funds with such court,
whereupon the Escrow Agent may apply to the court for an order
discharging it from all further liability to any other party to this
Agreement, or (ii) refrain from any action and continue to hold the
disputed portion of the Escrow Funds pending a resolution of the
dispute by either a court of competent jurisdiction or by a written
agreement signed by Buyer and the Sellers. For the purposes of any
action or proceeding contemplated by clause (i) above, each party
hereby consents to the jurisdiction of said courts 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 this Agreement.
6. Expenses; Indemnification. Each of (i) Buyer and (ii) Sellers as a
group agrees to pay one-half of any fees or expenses charged by the Escrow
Agent for its services to be performed hereunder. The Escrow Agent shall xxxx
Buyer for all such fees and expenses, and Buyer shall remit payment to the
Escrow Agent on behalf of all the parties hereto. Upon notice from Buyer,
Sellers shall immediately reimburse Buyer for Sellers' portion of such expenses
and fees. In addition, Buyer and Sellers hereby agree jointly to indemnify the
Escrow Agent for, and to hold it harmless against, any loss, liability or
expense incurred without gross negligence or willful misconduct on the part of
the Escrow Agent, arising out of or in connection with its entering into this
Agreement and carrying out its duties hereunder, including the costs and
expenses of defending itself against any claim of liability.
7. Removal and Resignation. The Escrow Agent may at any time be
removed by the written direction of Sellers and Buyer. The Escrow Agent or any
successor escrow agent may at any time resign and be discharged of the agency
hereby created by giving written notice to each of Sellers and Buyer specifying
the date upon which it desires that such resignation shall take effect. Such
removal or resignation shall take effect on the date specified in the notice of
removal or resignation, which date
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shall not be earlier than 60 days after the giving of the notice of removal or
resignation unless a successor escrow agent shall have been appointed pursuant
to Section 8 hereof and shall have accepted such appointment, in which event
such removal or resignation shall take effect immediately upon the acceptance
by such successor escrow agent. Buyer and Sellers shall take prompt steps to
have a successor escrow agent appointed in the manner hereinafter provided.
8. Appointment of Successor Escrow Agent. If at any time the Escrow
Agent shall resign or be removed or if at any time a vacancy shall
occur in the office of the Escrow Agent for any other cause, a successor escrow
agent shall be appointed by a written instrument executed by Buyer and Sellers
and delivered to the Escrow Agent and the successor escrow agent. Upon
acceptance of said instrument by the successor escrow agent, the resignation or
removal of the Escrow Agent shall become effective and such successor escrow
agent shall become vested with all the rights, powers, duties and obligations
of its predecessor hereunder. If no successor escrow agent shall have been
appointed at the effective date of resignation of the Escrow Agent, the Escrow
Agent or either other party hereto shall petition a court of competent
jurisdiction for the appointment of a successor and the Escrow Agent's duties
shall be purely ministerial until such appointment is effective.
9. Termination. This Agreement shall terminate upon the release of
all Escrow Funds held in the Escrow Accounts hereunder pursuant to
Section 4 hereof or upon written agreement of the parties hereto, which
agreement, in the case of the Escrow Agent, shall not be unreasonably withheld.
10. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally or by facsimile
transmission, or mailed by overnight delivery service or by registered or
certified mail (return receipt requested), postage prepaid, to the parties at
the following addresses (or at such other address for a party as shall be
specified by like notice; provided that notices of a change of address shall be
effective only upon receipt thereof):
To the Escrow Agent:
Boatmen's Trust Company
Corporate Trust Department
000 Xxxxxx Xxxxxx
Xx. Xxxxx, XX 00000
Telecopier No.: 000-000-0000
Attention: H. E. Bradford
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To Buyer:
Young Dental Manufacturing Company
00000 Xxxxxxxxx Xxxxx Xxxx
Xxxxx Xxxx, Xxxxxxxx 00000
Telecopier No.: 000-000-0000
Attention: Chief Financial Officer
With a copy to:
Armstrong, Teasdale, Schlafly & Xxxxx
Xxx Xxxxxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000-0000
Telecopier No.: 000-000-0000
Attention: Xxxx X. Xxxxxx, Xx., Esq.
To Sellers:
To each Seller at the addresses set forth
on Schedule A hereto.
With a copy to:
X'Xxxxxxxx Graev & Karabell, LLP
00 Xxxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: 000-000-0000
Attention: Xxxxxxxxx X. Xxxxxxx, Esq.
11. Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the Escrow Agent, Buyer and Sellers and their
respective successors and permitted assigns. Any reference to a party
contained in this Agreement shall be deemed to apply to such party's successors
and permitted assigns to the extent there shall be any. Except as set forth in
Section 4(i) and except for any assignment by any Seller to any other Seller
pursuant to the Contribution Agreement, dated as of the date hereof, among the
Sellers, no party hereto may assign its rights (including, without limitation,
its contingent right to payment) and obligations hereunder without the written
consent of the other parties hereto. Any purported assignment in violation of
the provisions of this Section 11 shall be null and void.
12. Amendments and Modifications. This Agreement may not be amended
or modified in any respect without the express written consent of Buyer,
Sellers and the Escrow Agent.
13. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Missouri without regard
to the conflict of laws principles thereof.
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14. Counterparts. This Agreement may be executed in any number of
counterparts, and by any party on a separate counterpart, each of which as so
executed and delivered shall be deemed an original but all of which together
shall constitute one and the same instrument, and it shall not be necessary in
making proof of this Agreement as to any party hereto to produce or account for
more than one such counterpart executed and delivered by such party.
15. No Waiver. The failure of any party to insist, in any one or
more instances, upon the timely performance of any of the terms, covenants or
conditions of this Agreement and to exercise any right hereunder, shall not be
construed as a waiver or relinquishment of the future performance of any such
term, covenant or condition or the future exercise of such right, but the
obligations of the other parties with respect to such future performance shall
continue in full force and effect.
16. Descriptive Headings. The descriptive heading of the sections of
this Agreement are inserted for convenience only and do not constitute a part
of this Agreement.
IN WITNESS WHEREOF, each of the Escrow Agent, Buyer and Sellers have
caused this Agreement to be duly executed and delivered, all as of the date
first above written.
BOATMEN'S TRUST COMPANY
By: /s/ Xxxxx Xxxxxx
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YOUNG DENTAL MANUFACTURING COMPANY
By: /s/ Xxxxxx X. Xxxxxxxx
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LORVIC HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
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CHEMICAL VENTURE CAPITAL ASSOCIATES,
A CALIFORNIA LIMITED PARTNERSHIP,
BY: CHEMICAL VENTURE PARTNERS,
ITS GENERAL PARTNER
By: /s/ Xxxx. X. Xxxxxx
--------------------------------
A General Partner
/s/ P. Xxxxxxx Xxxx
-----------------------------------
P. Xxxxxxx Xxxx
/s/ Xxxx X. Xxxxxxx
-----------------------------------
Xxxx X. Xxxxxxx
/s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxxxx
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XXXXXXX X. XXXXXXXX TRUST
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
XXXXXXX X. XXXXXXXX TRUST
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
XXXXXXXX CHILDREN'S TRUST #2
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
/s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxx
/s/ Xxxxx X. Xxxxxxxx
-----------------------------------
Xxxxx X. Xxxxxxxx
-15-
16
EXHIBIT A
Pursuant to Section 3 of the Escrow Agreement, the Escrow Funds shall
at all times be invested and reinvested by the Escrow Agent in one or more of
the following short term investment products:
(i) obligations issued or guaranteed as to full and timely payment
by the United States of America or by any Person controlled by or acting as an
instrumentality of the United States of America pursuant to authority granted
by Congress;
(ii) Obligations issued or guaranteed by any state or political
subdivision thereof (including stripped obligations the principal of and
interest on which have been separated and offered for sale separate from each
other) if (A) such obligations are entitled to the full faith and credit of
such state or political subdivision of such state, respectively, and such
obligations provide that the state or political subdivision has the obligation
to repay, in full and on a timely basis, such obligations, and (B) such
obligations are rated not lower than the second highest category if rated as
short term obligations or not lower than the third highest category if rated as
long term obligations by Xxxxx'x Investors Service, Inc. ("Moody's") or by
Standard & Poor's Corporation ("Standard & Poor's", each of New York, New York,
or their respective successors;
(iii) readily marketable commercial or finance paper of corporations
doing business in and incorporated under the laws of the United States of
America or any state thereof, which is rated in the highest rating category by
either Moody's or Standard & Poor's, or their respective successors;
(iv) deposit accounts, bankers' acceptances, certificates of deposit
or bearer deposit notes in one or more banks, trust companies or savings and
loan associations (including without limitation, the Escrow Agent or any bank
affiliated with the Escrow Agent) organized under the laws of the United States
of America or any state thereof, each bank or trust company having a reported
capital and surplus of at least $500,000,000 in dollars of the United States of
America and each savings and loan association having a reported unimpaired
capital and surplus, or retained income, as the case may be, of at least
$500,000,000 in dollars of the United States of America;
(v) repurchase agreements secured fully by obligations of the type
specified in clause (i) or issued by a bank or savings and loan association
which is insured by the Federal Deposit Insurance Corporation; and
(vi) any fund or other pooling arrangement which purchases and holds
only investments of the types described in paragraphs (i) through (v) above.
17
SCHEDULE A
PERCENTAGE INTEREST OF STOCKHOLDERS
Percentage
Stockholder Interests
Xxxxxxx X. Xxxxxxxx 5.00%
Mercantile Bank
St. Louis, MO
ABA #081-000210
Account 1001435187
FBO Xxxxxxx X. Xxxxxxxx TTEE
FBO Account #000-000000-000
Chemical Venture Capital Associates 37.524296%
Chemical Bank
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
ABA #000-000-000
Account #006-069460
Ref: From the Lorvic Corp./Young Dental
Attn: Xxxxx Xxxxxx 000-000-0000
(please call when wire completed)
Xxxxxxx X. Xxxxxxxx, 22.00%
Trustee of the Xxxxxxx X.
Xxxxxxxx Trust, dated July 25, 0000
Xxxxxxxxxx Xxxx
Xx. Xxxxx, XX
ABA #081-000210
Account 1001435187
FBO Xxxxxxx X. Xxxxxxxx TTEE
FBO Account #000-000000-000
Xxxxxxx X. Xxxxxxxx, Trustee of the Xxxxxxx X. 12.00%
Xxxxxxxx Trust, dated July 25, 0000
Xxxxxxxxxx Xxxx
Xx. Xxxxx, XX
ABA #081-000210
Account 1001435187
18
FBO Xxxxxxx X. Xxxxxxxx TTEE
FBO Account #000-000-000
Xxxxxxx X. Xxxxxxxx, Trustee of the Xxxxxxxx 2.00%
Children's Trust #2, dated Dec. 15, 1979 F.B.O.
Xxxx X. Xxxxxxxx SS# ###-##-####
Mercantile Bank
St. Louis, MO
ABA #081-000210
Account 1001435187
FBO Xxxxxxxx Children's Trust FBO Xxxx
FBO Account #000-000000-000
Xxxxxxx X. Xxxxxxxx, Trustee of the Xxxxxxxx 2.00%
Children's Trust #2, dated Dec. 15, 1979 F.B.O.
Xxxxxxx X. Xxxxxxxx SS# ###-##-####
Mercantile Bank
St. Louis, MO
ABA #081-000210
Account 1001435187
FBO Xxxxxxxx Children's Trust FBO Xxxxxxx
FBO Account #000-000000-000
Xxxxxxx X. Xxxxxxxx, Trustee of the Xxxxxxxx 2.00%
Children's Trust #2, dated Dec. 15, 1979 F.B.O.
Xxxxxxx X. Xxxxxxxx, Xx. SS# ###-##-####
Mercantile Bank
St. Louis, MO
ABA #081-000210
Account 1001435187
FBO Xxxxxxxx Children's Trust FBO Xxxxxxx Xx.
FBO Account #000-000000-000
Xxxxxxx X. Xxxxxx .229552%
Crestar Bank
Washington, DC
ABA #000-000-000
Account #82093-6812
Xxxxxxx X. Xxxxxx
Xxxxx X. Xxxxxxxx .229552%
Chemical Bank
New York, NY
ABA #000000000
For Credit To: National Financial Services Corp.
-2-
19
Account #066196-221
For the Benefit of Xxxxx X. Xxxxxxxx and Xxxxx X. Xxxxxxxx
Account # X37 028 193
Xxxx Xxxxxxx 8.5083%
Xxxxxx Guaranty Trust Co. of NY
ABA #000000000
Account X. Xxxx Price Reserve Fund #00153938
Xxxx X. Xxxxxxx #400350-116-2
P. Xxxxxxx Xxxx 8.5083%
Xxxxxxx Bank
000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxxx, XX
ABA #00-000-0000
Account #140-691-0134
P. Xxxxxxx Xxxx
-3-
