STOCKHOLDER ESCROW AGREEMENT
THIS STOCKHOLDER ESCROW AGREEMENT, dated as of September 19, 1995, by
and among the person listed on Schedule A hereto ("Stockholder"), B & L
ACQUISITION CORPORATION, a Delaware corporation ("Purchaser") and a wholly
owned subsidiary of BRW Steel Corporation, a Delaware corporation, and
LaSalle National Trust, N.A. as escrow agent (the "Escrow Agent"),
RECITALS:
A. The Stockholder and the Purchaser have entered into a Stock Option
Agreement, dated as of September 16, 1995 (the "Option Agreement"), providing
for the sale by the Stockholder to the Purchaser of the Shares (as defined in
the Option Agreement) upon the exercise by Purchaser of the Stock Option as
such terms are defined in the Option Agreement. The closing or closings
pursuant to the Option Agreement (a "Closing") will take place at such times
and dates designated by Purchaser in accordance with the terms of the Option.
The Option Agreement requires that upon the execution of the Option
Agreement, the Stockholder shall deliver to the Escrow Agent the number of
Shares set forth opposite the Stockholder's name on Schedule A hereto, by
delivery of certificates therefor with stock powers endorsed in blank and
with signatures guaranteed and such other documents as may be reasonably
necessary to transfer record ownership of the Shares to Purchaser. Such
Shares and any certificates, stock powers, other documents and confirmations
are referred to herein as the "Share Documents."
B. This Escrow Agreement is the Escrow Agreement referred to in the
Option Agreement and is intended to implement certain provisions of the
Option Agreement. The Escrow Agent is not a party to the Option Agreement,
is not bound by any of its terms and shall not be required to refer to the
Option Agreement for any instructions. Terms not defined herein shall have
the meaning given to them in the Option Agreement.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants contained herein, the parties hereto agree as follows:
1. DELIVERY OF SHARE DOCUMENTS.
(a) Contemporaneously with the execution and delivery of this Escrow
Agreement, Stockholder has delivered to the Escrow Agent all of the Share
Documents for the number of shares of Common Stock of Bliss & Xxxxxxxx
Industries Inc. ("the Company") set forth opposite Stockholder's name on
Schedule A hereto, duly executed, necessary to convey the number of Shares
set forth on Schedule B hereto to Purchaser. The receipt of the Share
Documents is hereby acknowledged by the Escrow Agent. Any certificates
representing the Shares held by the Escrow Agent shall continue to be
registered in the name of the Stockholder or his/her nominees, and
Stockholder shall continue to have the
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right to vote such Shares, until such time as such Shares are released
from escrow and delivered to Purchaser pursuant to the Option Agreement and
this Escrow Agreement.
(b) The Escrow Agent shall hold the Share Documents in escrow upon the
terms and subject to the conditions set forth in this Escrow Agreement.
(c) As soon as practicable upon receipt of the Share Documents, the
Escrow Agent, who is also acting as the transfer agent (the "Transfer
Agent"), shall (i) issue, release and distribute a share certificate to
Stockholder for the number of Shares remaining after subtraction of the
number of Shares set forth on Schedule B hereto opposite the Stockholder's
name from the number of shares of Common Stock of the Company set forth on
Schedule A hereto opposite the Stockholder's name, which share certificate
shall contain the legends set forth in Exhibit A hereto, (ii) issue a share
certificate for the number of Shares set forth on Schedule B hereto opposite
the Stockholder's name, which shall contain the legends set forth in Exhibit
B hereto (the "Option Shares Certificate") and (iii) issue, release and
distribute such share certificates as may be required pursuant to Section
2(e) hereof.
2. RELEASE OF SHARE DOCUMENTS AND PURCHASE PRICE.
(a) Subject to the provisions of this Section 2, the Escrow Agent shall
hold the Option Shares Certificate and any Share Documents related thereto in
its possession until delivery to Purchaser at an Option Closing pursuant to
Section 2(b) hereof, or delivery to Stockholder pursuant to Section 2(c)
hereof or delivery to Stelco Inc. pursuant to Section 2(d) hereof.
(b) Purchaser shall give written notice to the Escrow Agent and
Stockholder of its election to exercise the Stock Option, in whole. Such
notice shall state the number of Shares (the "Exercised Option Shares") to be
purchased, the Purchase Price and the place, date and time of the Closing
regarding such Shares. Stockholder shall give Escrow Agent and Purchaser
written notice within two business days of receipt of Purchaser's notice if
the Purchase Price specified in the Purchaser's notice is incorrect. Each of
Escrow Agent and Purchaser shall notify each other within two business days
if either receives such notice from Stockholder. If no such notice is
received from Stockholder or Purchaser, at each Closing with respect to the
exercise of the Stock Option (an "Option Closing") and upon receipt from
Purchaser of a certified or bank check payable to Stockholder in the amount
of the Purchase Price, or upon such payment by wire transfer as provided in
the Option Agreement (the "Payment"), for the Exercised Option Shares to be
purchased at such Option Closing, the Escrow Agent shall release and
distribute (i) to the Purchaser the Option Shares Certificate and any Share
Documents related thereto and (ii) the Payment to Stockholder for the
Exercised Option Shares.
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(c) In the event that Stockholder and Purchaser jointly notify the
Escrow Agent in writing that the Option Agreement has expired or been
terminated or that the Escrow Agreement has been terminated, then the Escrow
Agent shall, except as set forth in Section 2(d) below, within one business
day of receipt of such written notice, release and return all Share Documents
in its possession to Stockholder.
(d) If the Option Agreement is terminated and the Escrow Agent receives
notice from Purchaser that under Section 14 of the Option Agreement the
cancellation fee and expenses are owed by the Stockholder to Purchaser, the
Escrow Agent shall not release and return the Option Shares Certificate or
any Share Documents related thereto until the Stockholder and the Purchaser
jointly notify the Escrow Agent that the cancellation fee and expenses have
been paid in full. If the Escrow Agent receives notice from Purchaser and
Stockholder that Stelco Inc. has exercised its rights to purchase the Shares
pursuant to the First Refusal Agreement, the Escrow Agent shall deliver the
Shares to Stelco Inc. in exchange for payment thereof in accordance with the
terms of the First Refusal Agreement and Escrow Agent shall disburse to
Purchaser the cancellation fee and expenses due Purchaser from Stockholder
pursuant to the Stock Option Agreement with the remainder to the Stockholder.
If the cancellation fee and expenses have not been paid in full within five
(5) business days of the due date of the cancellation fee and expenses under
the Option Agreement, upon request from the Purchaser the Escrow Agent shall
sell the Shares and distribute proceeds therefrom (after paying all expenses
and fees of the Escrow Agent in connection with such sale) first to the
Purchaser in an amount equal to the amount owed under Section 14 of the
Option Agreement, and second the remainder thereof to the Stockholder. The
Stockholder agrees that any such sale if made on the open market by a
licensed broker-dealer will be commercially reasonable.
(e) Of the 201,058 Shares held in escrow by the Stockholder pursuant to
Schedule B, 58,678 Shares shall be released by the Escrow Agent and
distributed to Stockholder immediately upon the receipt by Escrow Agent of an
original signed Escrow Agreement and certificates representing 33,228 Shares
and 25,450 Shares, respectively, from stockholders Xxxxxxx X. Xxxxxxxxx, as
Trustee of the Xxxxxxx X. Xxxxxxxxx Trust dated May 11, 1989 and Xxxxx X.
Xxxxxxxxx, as Trustee of the Xxxxx X. Xxxxxxxxx Trust dated May 11, 1989.
3. SETTLEMENT OF DISPUTES. Any dispute which may arise under the
Escrow Agreement with respect to the rights of the parties hereto or the
duties of the Escrow Agent hereunder shall be settled either by mutual
agreement of the parties concerned (evidenced by appropriate instructions in
writing to the Escrow Agent, signed by the Stockholder and the Purchaser) or
by a final order, decree or judgment of a court of competent jurisdiction in
the United States of America (the time for appeal having expired and no
appeal having been perfected), all costs and expenses of which shall be borne
equally by the Stockholder
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and the Purchaser. If a dispute arises between any of the parties to this
Escrow Agreement, Escrow Agent shall be entitled at its option to tender into
the register or custody of any court of competent jurisdiction all money,
property or Share Documents in its hands under this Escrow Agreement and to
begin such legal proceedings as it deems appropriate. After taking such
actions, Escrow Agent shall then be discharged from any further duties and
liability under this Escrow Agreement. The Escrow Agent shall be under no
duty whatsoever to institute or defend any such proceedings.
4. CONCERNING THE ESCROW AGENT.
(a) The fee of the Escrow Agent for its services provided hereunder
shall be its customary fees for such services, payable on delivery of the
escrow. The payment of all fees, disbursements, expenses and advances
charged by the Escrow Agent shall be borne by the Purchaser except as set
forth in Section 2(d) above.
(b) The Escrow Agent may resign and be discharged from its duties
hereunder at any time by giving notice of such resignation to both the
Stockholder and the Purchaser specifying a date not less than ten business
days following the date of such notice when such resignation shall take
effect. Upon such notice, a successor escrow agent, which shall be a
national bank, shall be selected by the Purchaser, subject to the reasonable
approval of the Stockholder, such successor escrow agent to become the Escrow
Agent hereunder upon the resignation date specified in such notice. If the
Purchaser and the Stockholder are unable to agree upon a successor escrow
agent within ten business days after the date of such notice, the Escrow
Agent shall be entitled to appoint its successor, which shall be a national
bank. The Escrow Agent shall continue to serve until its successor accepts
the escrow and receives the Share Documents. The Purchaser, subject to the
reasonable approval of the Stockholder, may at any time substitute a new
Escrow Agent, which shall be a national bank, by giving notice thereof to the
Escrow Agent then acting.
(c) The Escrow Agent undertakes to perform only such duties as are
specifically set forth herein and may conclusively rely upon, and shall be
protected in acting or refraining from acting on, any written notice,
instrument or signature believed by it to be genuine and to have been signed
or presented by the proper party or parties duly authorized to do so. The
Escrow Agent shall have no responsibility for the contents of any writing
contemplated herein and may rely without any liability upon the contents
thereof. Notwithstanding anything to the contrary in this Escrow Agreement,
where Escrow Agent is required to take action upon delivery by the
Stockholder or the Purchaser (or both of them) of a notice, certificate or
instructions to the Escrow Agent, the Escrow Agent shall not be obligated to
take any action until the appropriate party (or parties) has acted by
delivering the certificate, notice or instructions to the Escrow Agent (none
of which shall be binding
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upon the Escrow Agent unless in writing) as to the action to be taken
hereunder indicating in writing that a copy of such certificate, notice or
instructions has been delivered to the other party. The Stockholder and the
Purchaser acknowledge that the Escrow Agent is bound only by the terms of
this Escrow Agreement and that the Escrow Agent shall not be required to use
its discretion with respect to any matter that is the subject of this Escrow
Agreement or with respect to instructions received under this Escrow
Agreement.
(d) The Escrow Agent shall not be liable for any action or omission in
good faith believed by it to be authorized hereby or within the rights or
powers conferred upon it hereunder, nor for action or omission in good faith
and in accordance with advice of outside counsel (which counsel may be of the
Escrow Agent's own choosing), and shall not be liable for any mistakes of
fact or error of judgment or for any acts or omissions of any kind unless
caused by its own willful misconduct or gross negligence.
(e) Except as set forth in the next sentence, the Purchaser and its
respective successors and assigns will indemnify and hold harmless Escrow
Agent against any and all losses, claims, damages, liabilities and expenses,
including reasonable costs of investigation, counsel fees and disbursements
that may be imposed on Escrow Agent or incurred by Escrow Agent in connection
with its acceptance of appointment or the performance of its duties under
this Escrow Agreement, including any litigation arising from this Escrow
Agreement or involving its subject matter, except as a result of Escrow
Agent's own gross negligence or willful misconduct. The Stockholder and its
respective successors and assigns will indemnify and hold harmless Escrow
Agent against any and all losses, claims, damages, liabilities and expenses,
including reasonable costs of investigation, counsel fees and disbursements
that may be imposed on Escrow Agent or incurred by Escrow Agent in connection
with or arising out of Section 2(d) of this Escrow Agreement, including any
litigation arising therefrom or involving its subject matter, except as a
result of Escrow Agent's own gross negligence or willful misconduct.
Notwithstanding the preceding two sentences, if a court finally determines
that any party hereto acted unreasonably in failing to give a notice or
acknowledgment hereunder, such party shall indemnify the Escrow Agent
pursuant to this clause (e) and the other party hereto shall be relieved of
any obligation to indemnify the Escrow Agent pursuant to this clause (e) to
the extent that such failure to act reasonably causes the Escrow Agent to
incur any losses, claims, damages, liabilities and expenses, including
reasonable costs, fees and disbursements referred to in the first sentence of
this clause (e), for which the Escrow Agent is entitled to indemnification
pursuant to this clause (e). Such indemnity shall survive the termination or
discharge of this Escrow Agreement or resignation of the Escrow Agent.
5. REMEDIES. Notwithstanding any provision in this Escrow Agreement to
the contrary, the parties agree that Purchaser
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would be irreparably damaged if the Escrow Agent refused to deliver
certificates representing any of the Shares upon exercise of the Stock Option
in accordance with the terms and conditions of this Escrow Agreement or if
the Escrow Agent refused to perform any of the Escrow Agent's other
obligations under this Escrow Agreement in accordance with the terms and
conditions of the Escrow Agreement, and that Purchaser would not have an
adequate remedy at law for money damages in such event. Accordingly, the
Purchaser shall be entitled to specific performance and injunctive and other
equitable relief to enforce the performance hereof by the Stockholder and the
Escrow Agent. This provision is without prejudice to any other rights that
the Purchaser may have against the Stockholder or the Escrow Agent for any
failure to perform their respective obligations under this Escrow Agreement.
Notwithstanding any provision in this Escrow Agreement to the contrary, the
parties further agree that Stockholder would be irreparably damaged if the
Escrow Agent refused to deliver the Purchase Price upon exercise of the Stock
Option in accordance with the terms and conditions of this Escrow Agreement
or if the Escrow Agent refused to perform any of the Escrow Agent's other
obligations under this Escrow Agreement in accordance with the terms and
conditions of the Escrow Agreement, and that Stockholder would not have an
adequate remedy at law for money damages in such event. Accordingly, the
Stockholder shall be entitled to specific performance and injunctive and
other equitable relief to enforce the performance hereof by the Purchaser and
the Escrow Agent. This provision is without prejudice to any other rights
that the Stockholder may have against the Purchaser or the Escrow Agent for
any failure to perform their respective obligations under this Escrow
Agreement.
6. ENTIRE AGREEMENT; ASSIGNMENT; AMENDMENT. This Escrow Agreement
constitutes the entire agreement of the parties with respect to the subject
matter hereof and supersedes all other prior agreements and understandings,
both written and oral, of the parties with respect to such subject matter
other than the Option Agreement. Purchaser may assign its rights and
obligations hereunder to any wholly-owned affiliate of Purchaser or BRW
Steel Corporation (an "Assignee"). This Escrow Agreement may not be
modified, amended, altered or supplemented, except upon the execution and
delivery of a written agreement executed by the parties hereto.
7. VALIDITY. The invalidity or unenforceability of any provision of
this Escrow Agreement shall not affect the validity or enforceability of any
other provisions of this Escrow Agreement, which shall remain in full force
and effect.
8. NOTICES. Wherever this Escrow Agreement requires notice by any of
the parties, such notice shall not be unreasonably withheld. All notices,
requests, claims, demands and other communications hereunder shall be in
writing and shall be given (and shall be deemed duly given upon receipt) by
personal delivery, by cable, telegram or telex, or by mail
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(registered or certified mail, postage prepaid, return receipt requested) to
the respective parties as follows:
If to the Stockholder, to the address set
forth with respect to the Stockholder on
Schedule C hereto
With a copy to: Bliss & Xxxxxxxx Industries Inc.
000 Xxxx 000xx Xxxxxx
Xxxxxx, XX 00000
Attention: President
and: Wildman, Harrold, Xxxxx & Xxxxx
000 Xxxx Xxxxxx Xxxxx, #0000
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxx
If to Purchaser, to: B & L Acquisition Corporation
c/o BRW Steel Corporation
0 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: President
with a copy to: Xxx X. Xxxxx, Esq.
Pillsbury Madison & Sutro
0000 Xxxxxxxxxxx Xxxxxx, XX, #0000
Xxxxxxxxxx, XX 00000
If to Escrow Agent, to: LaSalle National Trust, N.A.
000 Xxxxx XxXxxxx Xxxxxx, Xxxx 000
Xxxxxxx, XX 00000
or to such other person or address as any party may have furnished to the
others in writing in accordance herewith; provided, however, that notice of
change of address shall be effective only upon receipt. The Stockholder and
the Purchaser agree that each will timely provide to the other a copy of any
notice which it shall send to the Escrow Agent hereunder.
9. GOVERNING LAW. This Escrow Agreement shall be governed by and
construed in accordance with the internal laws of the State of Delaware,
without reference to principles of conflicts of laws.
10. DESCRIPTIVE HEADINGS. The descriptive headings herein are inserted
for convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Escrow Agreement.
11. PARTIES IN INTEREST. This Escrow Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and nothing in this
Escrow Agreement, express or implied, is intended to confer upon any other
person or entity any rights or remedies of any nature whatsoever under or by
reason of this Escrow Agreement.
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12. COUNTERPARTS. This Escrow Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same agreement.
13. JURISDICTION. Any judicial proceeding brought against any of the
parties to this Agreement with respect to any dispute arising out of this
Agreement or any matter related hereto may be brought in the courts of the
State of Illinois located in Chicago, Illinois, or in the United States
District Courts in Chicago, Illinois, and, by execution and delivery of this
Agreement, each of the parties to this Agreement accepts the exclusive
jurisdiction of such courts, and irrevocably agrees to be bound by any
judgment rendered thereby in connection with this Agreement. The foregoing
consents shall not constitute general consents to service of process in the
State of Illinois for any purpose except as provided above and shall not be
deemed to confer rights to any Person other than the respective parties to
this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement
to be executed and delivered on the date first written above.
B & L ACQUISITION CORPORATION
By
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Title
----------------------------------
Name
----------------------------------
STOCKHOLDER
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ESCROW AGENT
By
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Title
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Name
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SCHEDULE A
Name of Stockholder Number of Shares
------------------- ----------------
Xxxxxxx X. Xxxxxx ................................................... 279,729
SCHEDULE B
Name of Stockholder Number of Shares
------------------- ----------------
Xxxxxxx X. Xxxxxx ................................................... 142,380*
* Xx. Xxxxxx has agreed to place an additional 58,678 Shares into escrow
pending receipt by the Escrow Agent of the Shares of Xxxxxxx X. Xxxxxxxxx and
Xxxxx X. Xxxxxxxxx.
SCHEDULE C
Xxxxxxx X. Xxxxxx
00000 Xxx X Xxxxxxx
Xxxxxxx Xxxxxx, XX 00000
EXHIBIT A
THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A PRIVATE
PLACEMENT, WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AND IN
RELIANCE UPON THE HOLDER'S REPRESENTATION THAT SUCH SECURITIES WERE BEING
ACQUIRED FOR INVESTMENT AND NOT FOR RESALE. NO TRANSFER OF SUCH SECURITIES
MAY BE MADE ON THE BOOKS OF THE COMPANY UNLESS ACCOMPANIED BY AN OPINION OF
COUNSEL, SATISFACTORY TO THE COMPANY, THAT SUCH TRANSFER MAY PROPERLY BE MADE
WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933 OR THAT SUCH SECURITIES
HAVE BEEN SO REGISTERED UNDER A REGISTRATION STATEMENT WHICH IS IN EFFECT AT
THE DATE OF SUCH TRANSFER.
THIS CERTIFICATE AND THE SHARES OF STOCK EVIDENCED HEREBY ARE SUBJECT TO THE
TERMS AND CONDITIONS OF A CERTAIN RIGHT OF FIRST REFUSAL AND STANDSTILL
AGREEMENT DATED AS OF MAY 11, 1990, BY AND AMONG THE COMPANY AND CERTAIN OF
THE SHAREHOLDERS THEREOF, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE
OF THE COMPANY, REFERENCE TO ALL THE TERMS AND CONDITIONS THEREOF BEING
HEREBY MADE, AND NO SALE, TRANSFER, ENCUMBRANCE, OR OTHER DISPOSITION OF THE
SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE MAY BE EFFECTED EXCEPT
PURSUANT TO THE TERMS AND CONDITIONS OF SAID AGREEMENT.
EXHIBIT B
THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A PRIVATE
PLACEMENT, WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AND IN
RELIANCE UPON THE HOLDER'S REPRESENTATION THAT SUCH SECURITIES WERE BEING
ACQUIRED FOR INVESTMENT AND NOT FOR RESALE. NO TRANSFER OF SUCH SECURITIES
MAY BE MADE ON THE BOOKS OF THE COMPANY UNLESS ACCOMPANIED BY AN OPINION OF
COUNSEL, SATISFACTORY TO THE COMPANY, THAT SUCH TRANSFER MAY PROPERLY BE MADE
WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933 OR THAT SUCH SECURITIES
HAVE BEEN SO REGISTERED UNDER A REGISTRATION STATEMENT WHICH IS IN EFFECT AT
THE DATE OF SUCH TRANSFER.
THIS CERTIFICATE AND THE SHARES OF STOCK EVIDENCED HEREBY ARE SUBJECT TO THE
TERMS AND CONDITIONS OF A CERTAIN RIGHT OF FIRST REFUSAL AND STANDSTILL
AGREEMENT DATED AS OF MAY 11, 1990, BY AND AMONG THE COMPANY AND CERTAIN OF
THE SHAREHOLDERS THEREOF, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE
OF THE COMPANY, REFERENCE TO ALL THE TERMS AND CONDITIONS THEREOF BEING
HEREBY MADE, AND NO SALE, TRANSFER, ENCUMBRANCE, OR OTHER DISPOSITION OF THE
SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE MAY BE EFFECTED EXCEPT
PURSUANT TO THE TERMS AND CONDITIONS OF SAID AGREEMENT.
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
STOCK OPTION AGREEMENT, DATED AS OF SEPTEMBER 16, 1995, WITH B & L
ACQUISITION CORPORATION AND BRW STEEL CORPORATION.
