EXHIBIT 2.5
EXECUTION COPY
THIS SECTION 338 ESCROW AGREEMENT is dated as of February 13,
2004, (this escrow agreement, including all annexes hereto in each case, as
amended from time to time in accordance with the terms hereof, "Escrow
Agreement"), among IONICS, INCORPORATED, a Massachusetts corporation (the
"Buyer"), the entities listed on Annex A hereto (each a "Seller" and
collectively, the "Sellers"), Xxxxx X. Xxxxxxxxx and Xxxxxxx X. Xxxxxxxxx (each
a "Seller's Representative" and collectively, the "Sellers' Representatives"),
and Citibank, N.A., a national bank organized under the laws of the United
States of America and acting as Escrow Agent hereunder (the "Escrow Agent").
Buyer and Sellers entered into a Purchase Agreement dated as
of November 18, 2003 (the "Purchase Agreement"), pursuant to which Buyer has
agreed to purchase from Sellers and Sellers have agreed to sell to Buyer their
interests in Ecolochem, Inc., a Virginia corporation, Ecolochem International,
Inc., a Delaware corporation, Ecolochem S.A.R.L., a societe a responsabilite
limitee organized under the laws of France, and Moson Holdings, LLC, a Virginia
limited liability company. In accordance with Section 1.06 of the Purchase
Agreement, each of the Sellers appointed Sellers' Representatives to act on
their behalf under the terms and conditions of this Escrow Agreement.
Capitalized terms used but not otherwise defined herein shall
have the respective meanings given them in the Purchase Agreement. It is
expressly understood and agreed by the parties hereto that all references herein
to the Purchase Agreement are for the convenience of the parties hereto other
than the Escrow Agent and the Escrow Agent shall have no obligation or duties
with respect thereto.
In accordance with the Purchase Agreement, Buyer is hereby
depositing with the Escrow Agent $9,800,000 in cash, which amount shall be (A)
decreased, if and when the Preliminary 338 Tax Adjustment is finally determined
to be less than such amount pursuant to Section 1.05(d) of the Purchase
Agreement, or (B) increased or decreased, as applicable, to an amount equal to
the Section 338 Tax Adjustment as and when such amount is finally determined
pursuant to Section 1.05(g) or Section 1.05(i) (the amount deposited
concurrently herewith and increases and decreases thereto, the "Cash Amount").
The Cash Amount less any amounts distributed pursuant to Section 2(b) below is
referred to herein as the "Escrowed Funds."
SECTION 1. Deposit of the Escrowed Funds. At the Closing, Buyer shall
deliver to the Escrow Agent by wire transfer of immediately available funds, and
the Escrow Agent shall promptly, after receipt thereof, acknowledge receipt in
writing of, the Cash Amount. The Cash Amount shall be deposited initially into
The Xxxxxxx Sachs FS Prime Obligations Fund Administration Class (463), and
thereafter shall be invested and liquidated in accordance with Section 3.
Immediately after the Section 338 Tax Adjustment is finally determined in
accordance with the terms of Section 1.05 of the Purchase Agreement, Buyer shall
deliver to the Escrow Agent by wire transfer of immediately available funds an
amount equal to the amount, if any, by which the Section 338 Tax Adjustment
exceeds the Preliminary 338 Tax Adjustment, such amount shall be deposited
initially into The Xxxxxxx Sachs FS Prime Obligations Fund Administration Class
(463), and thereafter shall be invested and liquidated in accordance with
Section 3 hereof. In the event that the Section 338 Tax Adjustment is finally
determined to be
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less than the Preliminary Section 338 Tax Adjustment, the Escrow Agent shall,
upon receipt of written instructions to that effect and signed by Buyer and by
the Seller Representatives, deliver to the Buyer, by wire transfer of
immediately available funds, an amount equal to the amount by which the Section
338 Tax Adjustment is less than the Preliminary 338 Tax Adjustment. The Escrow
Agent has no obligation to monitor deficiency or to solicit the deposit of any
Cash Amounts.
SECTION 2. Purpose and Release.
(a) The Escrowed Funds shall serve as the source of payments
that may become due to Sellers from Buyer pursuant to Section 1.05(g) of the
Purchase Agreement (the "Section 338 Tax Adjustment Amount"). For purposes of
this Agreement, the term "Business Day" shall mean any day other than a Saturday
or Sunday on which the Escrow Agent is open for business.
(b) Within three (3) Business Days of receipt of a written
notice (a "Claim Notice") executed and delivered by the Sellers' Representatives
at any time on or before June 15, 2005 instructing the Escrow Agent to disburse
a specified amount of funds (the "Claim Amount") from the Escrowed Funds to the
Sellers' Representatives, on behalf of any Seller for the payment of the tax
obligation of such Sellers relating to the Section 338 Election of the Buyer,
the Escrow Agent shall release such funds as set forth in such notice; provided,
however, that (i) Sellers' Representatives shall not be entitled to issue any
Claim Notice prior to any Tax Payment Date (as defined in the Purchase
Agreement), (ii) any Claim Notice shall be based on Sellers' Representatives'
good faith belief that the Claim Amount sought pursuant to such Claim Notice is
owed to Sellers pursuant to Section 1.05(g) of the Purchase Agreement and that
such Claim Amount, when aggregated with the Claim Amounts of all other Claim
Notices issued hereunder, does not exceed the amount of the Section 338 Tax
Adjustment, or if so determined prior to the termination of this Agreement, the
amount of the Final Section 338 Adjustment, and (iii) any and all Claims Notices
issued and delivered hereunder by Sellers' Representatives will need to certify
to the Escrow Agent that the conditions specified in (i) and (ii) above have
been satisfied. Payments made by the Escrow Agent in cash from the Escrowed
Funds shall be made in the form of a wire transfer to the accounts specified in
the applicable Claim Notice.
(c) The amount of the Escrowed Funds which are not subject to
a Claim Notice and which have not otherwise been distributed to Sellers'
Representatives, shall be released by the Escrow Agent to the Buyer as soon as
practicable, upon the earlier of (i) the date on which Buyer determines that the
amount of the Section 338 Tax Adjustment remaining unpaid is equal to zero
("Buyer's Determination"), or (ii) June 30, 2005 (such earlier date of (i) or
(ii) above, the "Release Date"); provided that in the case of clause (i), (A)
Buyer has provided Sellers' Representatives and the Escrow Agent written notice
of Buyer's Determination at least ten (10) business days prior to the date of
release specified in such notice ("Buyer's Termination Notice") and (B) prior to
the expiration of the ten (10) business day period after delivery of Buyer's
Termination Notice, the Escrow Agent shall not have received written notice from
the Sellers' Representatives (the "Sellers' Notice") (a copy of which shall be
forwarded by the Sellers' Representatives to the Buyer simultaneously with the
forwarding thereof to the Escrow Agent) that Sellers' Representatives elect to
contest Buyer's Determination.
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(d) If Sellers' Representatives have filed a Sellers' Notice
pursuant to Section 2(c)(ii)(B) hereof, then the Escrow Agent shall thereafter
deliver to Buyer Escrowed Funds only to the extent that, and in an amount equal
to, any amount of the Escrowed Funds is not contested by Sellers'
Representatives in the Sellers' Notice and shall not make further disbursements
of the Escrowed Funds to Buyer until the earlier to occur of (i) such time as
the Escrow Agent has received joint disbursement instructions from the Sellers'
Representatives and Buyer or (ii) June 30, 2005.
SECTION 3. Investments; Disposition of Income.
(a) At the written direction of Buyer, the Escrow Agent shall
invest the Escrowed Funds within two (2) business days after receipt of such
written direction in (i) United States' government securities or securities of
agencies of the United States government which are guaranteed by the United
States government and which mature nine months or less from the date of
investment, in each case as directed by Buyer, (ii) debt securities (including
certificates of deposit) issued by any bank or trust company organized under the
laws of the United States of America or any state thereof having capital and
surplus aggregating in excess of $500 million and whose long-term debt
securities have a rating of "A" or higher by Standard and Poor's Rating Service
and which mature nine months or less from the date of investment, in each case
as directed by Buyer, (iii) Money market funds having a rating in the highest
investment category granted thereby by a recognized credit rating agency,
including any fund for which the Escrow Agent or an affiliate of the Escrow
Agent serves as an investment advisor, administrator, shareholder servicing
agent, custodian or sub-custodian, notwithstanding that (A) the Escrow Agent or
an Affiliate of the Escrow Agent charges and collects fees and expenses from
such funds for services rendered (provided that such charges, fees and expenses
are on terms consistent with terms negotiated at arm's length) and (B) the
Escrow Agent charges and collects fees and expenses for services rendered,
pursuant to this Escrow Agreement, or (iv) any other instrument as Buyer and
Sellers' Representatives, from time to time, shall jointly designate in writing
and that are eligible for settlement in the U.S. through customary U.S.
settlement systems. Any income received by the Escrow Agent from investments of
the Escrowed Funds pursuant to this Section 3 (such income being referred to as
"Interest") during any month shall be distributed within five (5) business days
after the end of such month to Buyer. Periodic statements will be provided to
Sellers' Representatives and Buyer reflecting transactions executed in
connection with the Escrowed Funds.
(b) In the event that the Escrow Agent is required to
distribute Escrowed Funds under Section 2, the Escrow Agent shall sell or
liquidate the investments made under Section 3(a) in respect thereto as and to
the extent necessary to fund such distribution. The Escrow Agent shall sell or
liquidate such investments in accordance with instructions as to priority from
Sellers' Representatives. Such sales or liquidations shall be made as promptly
as practicable after the Escrow Agent becomes obligated to make such
distribution, but in no event later than one business day thereafter.
Notwithstanding the foregoing, no later than two (2) business days prior to
April 10, 2005 Escrow Agent shall sell or liquidate all of the investments made
under Section 3(a) in respect of the Escrowed Funds (except to the extent the
Cash Amount so invested is subject to a Claim Notice).
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(c) Upon the sale, liquidation or maturity of an investment of
the Escrowed Funds under Section (3)(a), the proceeds shall be invested in The
Xxxxxxx Sachs FS Prime Obligations Fund Administration Class (463), pending
distribution to Buyer pursuant to Section 2.
(d) Any investment direction contained herein or provided in
accordance with the terms hereof may be executed through an affiliated broker of
the Escrow Agent and such broker shall be entitled to usual and customary fees.
SECTION 4. Concerning the Escrow Agent.
(a) The Escrow Agent shall not be under any duty to give the
Escrowed Funds held by it hereunder any greater degree of care than it gives its
own similar property. The Escrow Agent shall not be required to invest any funds
held hereunder except as directed pursuant to Section 1 and Section 3 of this
Escrow Agreement. Uninvested funds held hereunder shall not earn or accrue
interest.
(b) This Escrow Agreement expressly sets forth all the duties
of the Escrow Agent with respect to any and all matters pertinent hereto. No
implied duties or obligations shall be read into this Escrow Agreement against
the Escrow Agent. The Escrow Agent shall not be bound by the provisions of any
agreement among the other parties hereto with respect to the subject matter
hereof except this Escrow Agreement. The Escrow Agent's duties are ministerial
in nature. Except as expressly set forth herein, Escrow Agent shall not be
required to expend or risk any of its own funds or otherwise incur any financial
or other liability in the performance of its duties hereunder.
(c) The Escrow Agent shall not be liable, except for its own
gross negligence or willful misconduct in taking any actions or failing to take
any actions hereunder. Except with respect to claims based upon such gross
negligence or willful misconduct that are successfully asserted against the
Escrow Agent, the other parties hereto shall jointly and severally indemnify and
hold harmless the Escrow Agent (and any successor Escrow Agent) from and against
any and all losses, liabilities, claims, actions, taxes (not including any taxes
of the Escrow Agent measured by or imposed upon income, and not including any
franchise or excise taxes), damages and expenses, including reasonable
attorneys' fees and disbursements, arising out of or in connection with this
Escrow Agreement including the legal costs and expenses of defending itself
against any claim or liability in connection with its performance hereunder.
Without limiting the foregoing, the Escrow Agent shall in no event be liable (i)
in connection with its investment or reinvestment of any cash held by it
hereunder in accordance with the terms hereof, or as a result of any liquidation
of any such investment prior to its maturity, including any liability for any
delays (not resulting from its gross negligence or willful misconduct) in the
investment, reinvestment or liquidation of the Escrowed Funds, (ii) for any
indirect, consequential, punitive or special damages, regardless of the form of
action and whether or not any such damages were foreseeable or contemplated, or
(iii) for an amount in excess of the value of the Escrowed Funds, valued as of
the date of the deposit, but only to the extent of direct money damages. Without
limiting the joint and several nature of the obligation of Sellers'
Representatives and Buyer vis-a-vis the Escrow Agent pursuant to this Section
4(c), as between
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themselves, the Sellers' Representatives and Buyer agree that they shall each
share 50% of all losses, liabilities, claims, actions, taxes, damages and
expenses for which the Escrow Agent is entitled to indemnification hereunder,
which, in case of Buyer, shall be satisfied first from the Available Cash
Amount. The terms of this Section 4(c) shall survive termination of this Escrow
Agreement and the resignation or removal of the Escrow Agent.
(d) The Escrow Agent shall be entitled to rely in good faith
upon any order, judgment, certification, demand, notice, instrument or other
writing delivered to it hereunder without being required to determine the
authenticity or the correctness of any fact stated therein or the propriety or
validity or the service thereof. The Escrow Agent may act in reliance upon any
instrument or signature believed by it to be genuine and may assume that any
person purporting to give notice or receipt or advice or make any statement or
execute any document in connection with the provisions hereof has been duly
authorized to do so.
(e) The Escrow Agent may act pursuant to the advice of counsel
reasonably acceptable to both Sellers' Representative and Buyer (Patterson,
Belknap, Xxxx and Xxxxx, LLP being acceptable to both Sellers' Representative
and Buyer) with respect to any matter relating to this Escrow Agreement and
shall not be liable for any action taken or omitted in accordance with such
advice.
(f) The Escrow Agent does not have any interest in any
Escrowed Funds deposited hereunder but is serving as escrow agent only and
having only possession thereof. Any payments of income from this Escrow
Agreement shall be subject to withholding regulations then in force with respect
to United States taxes. Sellers' Representatives shall provide to the Escrow
Agent concurrently with execution of this Escrow Agreement, appropriate W-9 or
other certification forms for tax identification number certification, or W-8 or
other nonresident alien certifications, with respect to each of the Sellers.
Buyer shall provide a duly completed W-9 to the Escrow Agent concurrently with
execution of this Escrow Agreement. As between Buyer and Sellers, Buyer agrees
to pay the taxes applicable to such income.
(g) The Escrow Agent makes no representation and shall not be
responsible as to the validity, value, genuineness or the collectability of any
security or other documents or instrument held by or delivered to it.
(h) Each of the monthly periodic statements identifying
transactions hereunder to be provided by the Escrow Agent shall be deemed to be
correct and final upon receipt thereof by the Buyer and the Sellers'
Representatives unless the Buyer or the Sellers' Representatives notifies the
Escrow Agent in writing to the contrary within thirty (30) business days of the
date of such statement.
(i) The Escrow Agent shall not be called upon to advise any
party as to the wisdom in selling or retaining or taking or refraining from any
action with respect to any securities or other property deposited hereunder.
(j) Sellers' Representatives and Buyer may jointly remove the
Escrow Agent and terminate this Escrow Agreement upon ten (10) days prior
written notice signed by both
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parties. Upon such removal and termination, all then existing Escrowed Funds
(including all investments) shall be transferred in accordance with the joint
written instructions of Sellers' Representatives and Buyer. The Escrow Agent may
resign at any time upon giving thirty (30) days prior notice of resignation to
Buyer and Sellers' Representatives. Upon receiving such notice of resignation,
the Buyer, Sellers, and Sellers' Representatives shall cause a successor escrow
agent to be appointed within thirty (30) days after receipt of such notice of
resignation received by Buyer and Sellers' Representatives. Upon receiving
notice of the appointment of a successor escrow agent, the Escrow Agent shall
transfer any and all Escrowed Funds then held hereunder to the successor Escrow
Agent. If no successor escrow agent has been appointed within thirty (30) days
after receipt of notice of resignation by Buyer and Sellers' Representatives,
the Escrow Agent may apply to a court of competent jurisdiction for the
appointment of a successor escrow agent or for other appropriate relief and,
pending the appointment of a successor escrow agent, the Escrow Agent shall not,
after the expiration of thirty (30) days after receipt by Buyer and Sellers'
Representatives of the Escrow Agent's notice of resignation have any further
duties, responsibilities, or obligations to perform any services hereunder other
than to (i) safekeep the Escrowed Funds and (ii) deliver the Escrowed Funds to
the successor escrow agent duly appointed hereunder.
(k) The Escrow Agent shall have no responsibility for the
contents of any court order and may conclusively rely without any liability upon
the contents thereof. If at any time the Escrow Agent is served with any
judicial or administrative order, judgment, decree, writ or other form of
judicial or administrative process which in any way affects the Escrowed Funds
(including but not limited to orders of attachment or garnishment or other forms
of levies or injunctions or stays relating to the transfer of the Escrowed
Funds), the Escrow Agent is authorized to comply therewith in any manner it or
legal counsel of its own choosing deems appropriate; and if the Escrow Agent
complies with any such judicial or administrative order, judgment, decree, writ
or other form of judicial or administrative process, the Escrow Agent shall not
be liable to any of the parties hereto or to any other person or entity even
though such order, judgment, decree, writ or process may be subsequently
modified or vacated or otherwise determined to have been without legal force or
effect.
(l) The Escrow Agent shall be paid and reimbursed, as
applicable, by Sellers' Representatives on behalf of the Sellers the fees and
expenses for the acceptance and administration of this Escrow Agreement set
forth in Annex B attached hereto. All fees shall be paid in United States
currency and payable in the United States at the office of the Escrow Agent.
Notwithstanding anything in this Escrow Agreement to the contrary, at any time
that the Escrow Agent is authorized or directed or otherwise required to make a
disbursement or distribution from the Escrowed Funds (A) to the Sellers'
Representatives or Sellers, the Escrow Agent may refrain from making such
disbursement or distribution from the Escrowed Funds, without liability, if and
to the extent that there are fees or expenses or any amounts then due to the
Escrow Agent from the Sellers pursuant to Section 4(c) or then due to the Escrow
Agent from the Sellers' Representatives pursuant to this Section 4(l); or (B) to
Buyer, the Escrow Agent may refrain from making such disbursement or
distribution from the Escrowed Funds, without liability, if and to the extent
that there are any amounts then due to the Escrow Agent from the Buyer pursuant
to Section 4(c) hereof. Upon receipt of payment for such fees or expenses, the
Escrow Agent shall
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promptly make such disbursements or distributions to Buyer. The terms of this
Section 4(l) shall survive termination of this Escrow Agreement and resignation
or removal of the Escrow Agent.
(m) Escrow Agent shall not incur any liability for not
performing any act or fulfilling any duty, obligation or responsibility
hereunder by reason of any occurrence beyond the control of Escrow Agent
(including but not limited to any act or provision of any present or future law
or regulation or governmental authority, any act of God, war or terrorism, or
the unavailability of the Federal Reserve Bank wire or facsimile or other wire
or communication facility).
(n) The Escrow Agent shall be entitled to rely upon any order,
judgment, certification, demand, notice, instrument or other writing delivered
to it hereunder without being required to determine the authenticity or the
correctness of any fact stated therein or the propriety or validity or the
service thereof. The Escrow Agent may act in reliance upon any instrument or
signature believed by it to be genuine and may assume that any person purporting
to give receipt or advice to make any statement or execute any document in
connection with the provisions hereof has been duly authorized to do so.
(o) All instructions required or permitted hereunder to be
delivered by Buyer will need to be delivered to the Escrow Agent in writing, in
either original or facsimile form, executed by a person designated by Buyer as
authorized to give such notices, requests, permissions, waivers, instructions
and communications hereunder. A list of persons designated as authorized to act
on Buyer's behalf hereunder is attached hereto as Annex C. The list attached
hereto as Annex C will remain in effect until Buyer notifies the Escrow Agent of
any change. Buyer shall from time to time deliver to the Escrow Agent a
certified list of such Buyer authorized persons. In its capacity as Escrow
Agent, the Escrow Agent will accept all instructions and documents complying
with the above under the indemnities provided hereunder, and reserves the right
to refuse to accept any instructions or documents which fail, or appear to fail,
to comply. Instructions to invest or reinvest that are received from the Buyer
after 11:00 a.m. (E.S.T.) will be treated as if received on the following
business day in New York. Further to this procedure, the Escrow Agent reserves
the right to telephone an authorized person to confirm the details of such
instructions or documents if they are not already on file with the Escrow Agent
as standing instructions. The Escrow Agent and Buyer agree that the above
constitutes a commercially reasonable security procedure. In addition, when the
Escrow Agent acts on any information, instructions, communications, (including,
but not limited to communications with respect to delivery of securities or the
wire transfer of funds) sent by facsimile, the Escrow Agent, absent gross
negligence or willful misconduct, shall not be responsible or liable in the
event such communication is not an authorized or authentic communication of the
Buyer or is not in the form the Buyer sent or intended to send (whether due to
fraud, distortion or otherwise). Buyer shall jointly and severally indemnify the
Escrow Agent against any loss, liability, claim or expense (including legal fees
and expenses) it may incur with its acting in accordance with any such
communication. The terms of this Section 4(o) shall survive termination of this
Escrow Agreement and the resignation or removal of Escrow Agent.
(p) All instructions required or permitted hereunder to be
delivered by Sellers' Representatives will need to be delivered to the Escrow
Agent in writing, in either original or
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facsimile form, executed by Sellers' Representatives as authorized to give such
notices, requests, permissions, waivers, instructions and communications on
behalf of the Sellers hereunder. In its capacity as Escrow Agent, the Escrow
Agent will accept all instructions and documents complying with the above under
the indemnities provided hereunder, and reserves the right to refuse to accept
any instructions or documents which fail, or appear to fail, to comply. Further
to this procedure, the Escrow Agent reserves the right to telephone the Sellers'
Representative to confirm the details of such instructions or documents if they
are not already on file with the Escrow Agent as standing instructions. The
Escrow Agent and Sellers' Representatives agree that the above constitutes a
commercially reasonable security procedure. In addition, when the Escrow Agent
acts on any information, instructions, communications, (including, but not
limited to communications with respect to delivery of securities or the wire
transfer of funds) sent by facsimile, the Escrow Agent, absent gross negligence
or willful misconduct, shall not be responsible or liable in the event such
communication is not an authorized or authentic communication of the Sellers'
Representatives or is not in the form the Sellers' Representatives sent or
intended to send (whether due to fraud, distortion or otherwise). Sellers'
Representatives shall indemnify the Escrow Agent against any loss, liability,
claim or expense (including legal fees and expenses) it may incur with its
acting in accordance with any such communication. The terms of this Section 4(p)
shall survive termination of this Escrow Agreement and the resignation or
removal of Escrow Agent.
(q) In the event of any ambiguity or uncertainty hereunder or
in any notice, instruction or other communication received by the Escrow Agent
hereunder, the Escrow Agent may, in its sole discretion, refrain from taking any
action other than retaining possession of the Escrowed Funds, unless the Escrow
Agent receives written instructions, signed by Buyer and Sellers'
Representatives, which eliminates such ambiguity or uncertainty.
(r) In the event of any dispute between or conflicting claims
by or among the Buyer, Seller, the Sellers' Representatives, and/or any other
person or entity with respect to any Escrowed Funds, the Escrow Agent shall be
entitled, in its sole discretion, to refuse to comply with any and all claims,
demands or instructions with respect to such Escrowed Funds so long as such
dispute or conflict shall continue, and the Escrow Agent shall not be or become
liable in any way for failure or refusal to comply with such conflicting claims,
demands or instructions. The Escrow Agent shall be entitled to refuse to act
until, in its sole discretion, either (i) such conflicting or adverse claims or
demands shall have been determined by an order, judgment or decree of a court of
competent jurisdiction, whether or not such order, judgment or decree is subject
to appeal, or settled by agreement between the conflicting parties as evidenced
in a writing satisfactory to the Escrow Agent or (ii) the Escrow Agent shall
have received security or an indemnity satisfactory to it sufficient to hold it
harmless from and against any and all losses which it may incur by reason of so
acting. The Escrow Agent shall be authorized to act, and shall not incur any
liability for acting, on any order, judgment or decree of a court of competent
jurisdiction without further question (whether or not such order is subject to
appeal). The Escrow Agent may, in addition, elect, in its sole discretion, to
commence an interpleader action or seek other judicial relief or orders as it
may deem, in its sole discretion, necessary. The costs and expenses (including
reasonable attorneys' fees and expenses) incurred in connection with such
proceeding shall be paid by, and shall be deemed a joint and several obligation
of, the Buyer and Sellers' Representatives.
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(s) Buyer and Sellers' Representatives shall pay or reimburse
the Escrow Agent upon request for any transfer taxes or other taxes relating to
the Escrowed Funds incurred in connection hereunder and shall indemnify and hold
harmless the Escrow Agent from any amounts that it is obligated to pay in the
way of such taxes. The terms of this Section 4(s) shall survive termination of
this Escrow Agreement and the resignation or removal of Escrow Agent.
(t) No printed or other material in any language, including
prospectuses, notices, reports, and promotional material which mentions
"Citibank, N.A." by name or the rights, powers, or duties of the Escrow Agent
under this Escrow Agreement shall be issued by any other parties hereto, or on
such party's behalf, without the prior written consent of Escrow Agent, except
that the parties to this Escrow Agreement may make reference to "Citibank, N.A."
in its capacity as Escrow Agent in any filings made with the Securities and
Exchange Commission in respect of the transactions contemplated herein.
SECTION 5. Sellers' Assets. The parties agree that Escrowed Funds (up
to an amount equal to the Section 338 Tax Adjustment, or if so determined prior
to the termination of this Agreement, the amount of the Final Section 338
Adjustment each as determined pursuant to Section 1.05 of the Purchase
Agreement) are assets of Sellers (and not Buyer or its subsidiaries), and are
placed in escrow solely to secure Buyer's obligations to Sellers in respect of
the amount of the Section 338 Tax Adjustment or the amount of the Final Section
338 Adjustment, as the case may be. No other person or entity shall have any
right, title or interest in or to the Escrowed Funds.
SECTION 6. Notices. All notices, requests, permissions, waivers and
other communications hereunder shall be in writing and shall be deemed to have
been duly given (a) when delivery is acknowledged if by registered or certified
mail, postage prepaid, (b) when received (as identified by the fax transmittal
confirmation), if sent by facsimile; provided that the facsimile transmission is
promptly confirmed by telephone, (c) when delivered, if delivered personally to
the intended recipient and (d) when actually delivered if sent by overnight
delivery via a national courier service and, in each case, addressed to a party
at the following address for such party:
(a) if to Buyer, to:
Ionics, Incorporated
00 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Fax: (000) 000-0000
Tel: (000) 000-0000
Attention: Xxxxxxx Xxxx, Esq.,
Vice President and General Counsel
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with copies to:
Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP
000 Xxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Fax: (000) 000-0000
Tel: (000) 000-0000
Attention: Xxxx X. Xxxxxxx, Esq.
(b) if to Sellers' Representatives or any Seller, to:
Xxxxxxxx Xxxxxx
000 Xxxxxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx Xxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Tel: (000) 000-0000
Attention: Xxxxxxxxx X. Xxxxx
with copies to:
Cravath, Swaine & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Tel: (000) 000-0000
Attention: Xxxx Xxxxxxxxxx, Esq.
(c) if to the Escrow Agent, to:
Citibank, N.A. - Escrow Services
000 Xxxx Xxxxxx (00xx Xxxxx)
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000 000-0000
Tel: (000) 000-0000
Attention: Xxxxxxx Xxxxx
with copies to:
Patterson, Belknap, Xxxx & Tyler LLP
1133 Avenue of the Americas, Suite 2200
New York, New York 100036-6710
Fax: (000) 000-0000
Tel: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
All written notices, requests, permissions, waivers,
instructions and communications from Buyer to the Escrow Agent shall be signed
by a person designated by Buyer as authorized to give such notices, requests,
permissions, waivers, instructions and
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communications hereunder. A list of persons designated as authorized to act on
its behalf hereunder is attached hereto as Annex C. Buyer shall from time to
time deliver to Escrow Agent a certified list of such Buyer authorized persons.
SECTION 7. Termination. This Escrow Agreement shall automatically
terminate upon the complete distribution of all Escrowed Funds in accordance
with the terms hereof.
SECTION 8. Miscellaneous.
(a) This Escrow Agreement and the rights and obligations
hereunder shall not be assignable or transferable by any party without the prior
written consent of the other parties hereto. Any attempted violation of this
Section 8(a) shall be void.
(b) This Escrow Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement. This
Escrow Agreement shall become effective when each party (or such party's
counsel) hereto shall have received a counterpart, or facsimile of a
counterpart, of this Escrow Agreement, each signed by the other party or parties
hereto or thereto.
(c) This Escrow Agreement is for the sole benefit of the
parties hereto and their permitted assigns and nothing herein expressed or
implied shall give or be construed to give to any person, other than the parties
hereto and such assigns, any legal or equitable rights hereunder. This Escrow
Agreement contains the entire agreement and understanding among the parties
hereto with respect to the subject matter hereof and supersedes all prior
agreements and understandings relating to such subject matter. No amendment,
modification or waiver in respect of this Escrow Agreement shall be effective
unless it shall be in writing and signed by each party hereto.
(d) THIS ESCROW AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK,
WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES OF THE STATE OF NEW YORK.
(e) Each of the parties irrevocably submits to the exclusive
jurisdiction of the United States District Court for the Southern District of
New York, for the purposes of any suit, action or other proceeding arising out
of this Escrow Agreement, or any transaction contemplated hereby. Each of the
parties must commence any action, suit or proceeding relating hereto either in
the United States District Court for the Southern District of New York, or, if
such suit, action or other proceeding may not be brought in such court for
jurisdictional reasons, in the Supreme Court of the City of New York, New York.
Service of any process, summons, notice or document by U.S. registered mail to
such party's respective address set forth above shall be effective service of
process for any action, suit or proceeding in such court with respect to any
matters to which it has submitted to jurisdiction in this paragraph. Each of the
parties irrevocably and unconditionally waives any objection to the laying of
venue of any action, suit or proceeding arising out of this Agreement in the
United States District Court for the Southern District of New
11
York or the Supreme Court of the City of New York, New York and further
irrevocably and unconditionally waives and shall not plead or claim in any such
court that any such action, suit or proceeding brought in any such court has
been brought in an inconvenient forum.
(f) Each party waives, to the fullest extent permitted by
applicable law, any right it may have to a trial by jury in respect to any
litigation directly or indirectly arising out of, under or in connection with
this Agreement or disputes relating hereto or thereto. Each party (i) certifies
that no representative, agent or attorney of any other party has represented,
expressly or otherwise, that such other party would not, in the event of
litigation, seek to enforce the foregoing waiver and (ii) acknowledges that it
and the other parties have been induced to enter into this Escrow Agreement by,
among other things, the mutual waivers and certifications in this paragraph.
(g) This Escrow Agreement may be amended in writing by the
parties. This Escrow Agreement may not be amended except by an instrument in
writing signed on behalf of all of the parties. In the case of the Sellers the
provisions of Section 8(i) will apply.
(h) The Buyer agrees that it will provide its correct Taxpayer
Identification Number to the Escrow Agent. The Sellers and Buyer agree that the
Escrow Agent will report (at the end of the applicable calendar year and without
regard for the distribution or lack of distribution thereof) on the applicable
forms 1099 (and corresponding IRS reports) all Interest earned in the applicable
year under this Escrow Agreement as taxable income of the Buyer to the Internal
Revenue Service or other Taxing Authority (as defined in the Purchase Agreement)
if and to the extent required by U.S. tax law. The Escrow Agent shall be
permitted to report and withhold any required Taxes as it determines it may be
required by any law or regulation in effect, and remit such Taxes to the
appropriate Taxing Authorities, and the Buyer, acknowledges and agrees that the
Buyer will hold the Escrow Agent harmless from and against any such Taxes.
(i) The Sellers' Representatives have been duly appointed by
each of the Sellers to act as their agent/power of attorney in all respects with
respect to this Escrow Agreement and the Escrow Agent may rely on such authority
for all purposes hereunder until such time the Escrow Agent receives written
notice to the contrary from one or more of the Sellers in form acceptable to the
Escrow Agent and with such supporting documentation that is reasonably
necessary.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
12
[338 Escrow Agreement Signature Page]
THE XXXXX X. XXXXXXXXX REVOCABLE TRUST DATED
SEPTEMBER 9, 1996, OR ANY SUCCESSOR TRUSTEE,
AS AMENDED
By: /s/ Xxxxx X. Xxxxxxxxx
---------------------------------------
XXXXX X. XXXXXXXXX, Trustee
February 13, 2004
Date Signed
THE XXXXXXX X. XXXXXXXXX REVOCABLE TRUST
DATED JUNE 22, 1988, OR ANY SUCCESSOR
TRUSTEE, AS AMENDED
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------------
XXXXXXX X. XXXXXXXXX, Trustee
February 13, 2004
Date Signed
THE XXXXXXX XXXXXXXXX REVOCABLE TRUST DATED
MARCH 5, 1993, OR ANY SUCCESSOR TRUSTEE, AS
AMENDED
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------------
XXXXXXX X. XXXXXXXXX, Co-Trustee
February 13, 2004
Date Signed
By: /s/ Xxxxxxxxxx X. Xxxxxxxxx
---------------------------------------
XXXXXXXXXX X. XXXXXXXXX, Co- Trustee
February 13, 2004
Date Signed
13
[338 Escrow Agreement Signature Page]
THE XXXXX XXXXXXXXX IRREVOCABLE TRUST, DATED
JULY 1, 1991
By: /s/ Xxxxx X. Xxxxxxxxx
---------------------------------------
XXXXX X. XXXXXXXXX, Trustee
February 13, 2004
Date Signed
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------------
XXXXXXX X. XXXXX, Independent Trustee
February 13, 2004
Date Signed
THE XXXXXXX XXXXXXXXX IRREVOCABLE TRUST
NO. 3, DATED JULY 1, 1991
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------------
XXXXXXX X. XXXXXXXXX, Trustee
February 13, 2004
Date Signed
By: /s/ Xxxxxxxxx X. Xxxxx
---------------------------------------
XXXXXXXXX X. XXXXX, III,
Independent Trustee
February 13, 2004
Date Signed
14
[338 Escrow Agreement Signature Page]
THE XXXXXXX XXXXXXXXX IRREVOCABLE TRUST
NO. 3, DATED JULY 1, 1991
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------------
XXXXXXX X. XXXXXXXXX, Co-Trustee
February 13, 2004
Date Signed
By: /s/ Xxxxxxxxxx X. Xxxxxxxxx
---------------------------------------
XXXXXXXXXX X. XXXXXXXXX, Co-Trustee
February 13, 2004
Date Signed
By: /s/ Xxxxxxxxx X. Xxxxx
---------------------------------------
XXXXXXXXX X. XXXXX, III,
Independent Trustee
February 13, 2004
Date Signed
15
[338 Escrow Agreement Signature Page]
/s/ Xxxxx X. Xxxxxxxxx
-------------------------------------------
XXXXX X. XXXXXXXXX
February 13, 2004
Date Signed
/s/ Xxxxxxx X. Xxxxxxxxx
-------------------------------------------
XXXXXXX X. XXXXXXXXX
February 13, 2004
Date Signed
THE ESTATE OF XXXXXXX X. XXXXXXXXX
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------------
XXXXXXX X. XXXXXXXXX, Co-Executor
February 13, 2004
Date Signed
By: /s/ Xxxxxxxxxx X. Xxxxxxxxx
---------------------------------------
XXXXXXXXXX X. XXXXXXXXX, Co-Executor
February 13, 2004
Date Signed
16
[338 Escrow Agreement Signature Page]
IONICS, INCORPORATED
By: /s/ Xxxxxxx Xxxx
---------------------------------------
Xxxxxxx Xxxx
Vice President and General Counsel
CITIBANK, N.A., AS ESCROW AGENT
By: /s/ Xxxxxxx Xxxxx
---------------------------------------
Xxxxxxx Xxxxx
Vice President
17
Schedules and Exhibits Omitted in Accordance With Item 601(b)(2) of Regulation
S-K
Annex A-List of Sellers
Annex B-Schedule of Fees
Ionics Authorized Person Information
Ionics will furnish supplementally a copy of any omitted schedule or exhibit to
the Securities and Exchange Commission upon request, provided however that
Ionics may request confidential treatment pursuant to Rule 24-2 of the Exchange
Act for any schedule or exhibit so furnished.
