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Exhibit 10.118
PRE-CLOSING ESCROW AGREEMENT
PRE-CLOSING ESCROW AGREEMENT ("Agreement"), dated as of June 27,
1996, by and among (1) Cosmar Corporation, a Delaware corporation (the "Buyer"),
(2) Xxxxx Xxxxxxx, individually and Xxxxxxx Xxxxxxx, individually, (each of whom
is referred to herein as a "Seller" and both of whom are collectively referred
to herein as the "Sellers"), (3) Xxxxx Xxxxxxx, in his capacity as Sellers'
Representative and (4) the law firm of Todtman, Young, Tunick, Nachamie, Xxxxxxx
& Spizz, P.C. (the "Escrow Agent").
The Buyer, the Sellers and Great American Cosmetics, Inc. , a New
York corporation ("GACI"), are parties to that certain Stock Purchase Agreement,
dated as of June 27, 1996 (the "Stock Purchase Agreement"). Pursuant to the
Stock Purchase Agreement, Buyer is acquiring from Sellers all of the outstanding
capital stock of GACI. Capitalized terms used herein and not otherwise defined
have the meanings assigned to them in the Stock Purchase Agreement.
Sections 1.3 and 1.4 of the Stock Purchase Agreement provide for the
payment and delivery by Buyer of certain Pre-Closing Deposits (as defined in the
Stock Purchase Agreement), aggregating up to Six Hundred Thousand Dollars
($600,000) into the escrow hereby established, to be held and dealt with by the
Escrow Agent as herein provided.
The Sellers hereby designate Xxxxx Xxxxxxx to serve as the "Sellers'
Representative" for all purposes under this Agreement, to hold such position
unless and until the Sellers designate a replacement Sellers' Representative in
writing, signed by both Sellers, delivered to the Buyer and Escrow Agent. Each
Seller hereby designates the Sellers' Representative to take all actions
required or permitted to be taken by the Sellers' Representative hereunder, each
Seller agrees to be bound by the acts of the Sellers' Representative hereunder
and each Seller acknowledges that the Escrow Agent and the Buyer may rely on the
acts of the Sellers' Representative hereunder as if such acts were taken
directly by each Seller.
Accordingly, the parties agree as follows:
1. Establishment of Escrow Account.
1.1 Escrow Deposit. Pursuant to Sections 1.3 and 1.4 of the
Stock Purchase Agreement, the Pre-Closing Deposits (collectively referred to
herein as the "Deposits") shall be deposited with the Escrow Agent by the Buyer
at the time or times specified therein, such Deposits to be held and disbursed
in accordance with the terms hereof.
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1.2 Account. The Escrow Agent agrees to accept the Deposits,
to establish and maintain a separate escrow account (the "Account") therefor and
to deposit the Deposits in such Account, all as provided herein.
2. Investment of Monies in the Account.
2.1 Investment. The Escrow Agent shall invest all of the
Deposits in the Account and any income or interest earned or accrued with
respect thereto (the "Account Earnings") in the bank account identified on
Schedule A hereto. The Escrow Agent shall not change the bank account identified
on Schedule A hereto without the prior written consent of the Buyer and the
Sellers' Representative. Except as otherwise provided in Section 5.3 hereof, in
no event shall the Escrow Agent have any liability for any investment permitted
hereunder, including, without limitation, any loss of the principal amount of
any investment or in connection with the rate of return on any investment.
2.2 Bank Account Statement. The Escrow Agent shall make
available upon request, monthly bank statements prepared by the bank with
respect to the Account, which shall set forth, with respect to the Account, all
income or other items earned on and distributions from or other items charged
against the Account. If any distributions are made from the Account or there are
other items charged against the Account, the Escrow Agent shall promptly advise
the Buyer and Sellers. Escrow Agent shall have no obligation to maintain any
Account records other than the monthly bank statements.
3. Distributions from the Account.
3.1 Duties Limited - Distributions from the Account.
(a) Within five (5) business days following receipt by
the Escrow Agent of a written notice executed by an officer of the Buyer and the
Sellers' Representative informing the Escrow Agent that the Sellers and the
Buyer have terminated the Stock Purchase Agreement (see Sections 9.1 and 9.2 of
the Stock Purchase Agreement), the Escrow Agent shall cause to be distributed to
the Buyer (by wire transfer in immediately available funds pursuant to wire
instructions from the Buyer) an amount equal to the entire balance in the
Account; provided, however, that, if the Stock Purchase Agreement is terminated
by Buyer as a result of the Buyer not having closed the financing for the
transactions contemplated in the Stock Purchase Agreement on terms and
conditions and in such amounts as are acceptable to the Buyer, in its sole and
absolute discretion, then the Escrow Agent shall cause to be distributed to the
Sellers (by wire transfer in immediately available funds pursuant to wire
instructions from the Sellers, which instructions shall set forth the amount to
be distributed to each Seller) an amount equal to the entire balance in the
Account. The Escrow Agent shall be entitled, in making distributions under this
Section 3.1(a), to rely on a written notice from an officer of the Buyer stating
that the reason for the termination of the Stock Purchase Agreement is that the
Buyer did not close the financing for the transactions
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contemplated in the Stock Purchase Agreement on terms and conditions and in such
amounts as were acceptable to the Buyer, in its sole and absolute discretion.
(b) On the Closing Date, the Escrow Agent shall cause to
be distributed to the Buyer (by wire transfer in immediately available funds
pursuant to written wire instructions for each Seller, which instructions shall
set forth the amount to be distributed to each Seller) an amount equal to the
entire balance in the Account. In the alternative, on the Closing Date, as set
forth in Section 1.4(c) of the Stock Purchase Agreement, upon receipt of written
notice executed by an officer of the Buyer and Sellers' Representative, the
Escrow Agent shall cause the Deposits to be distributed to Sellers as part of
the Purchase Price (as defined in the Stock Purchase Agreement).
4. Termination of this Escrow Agreement. This Agreement shall
terminate upon the distribution of all monies held in the Account to the Sellers
and/or the Buyer, as the case may be.
5. Duties of Escrow Agent(in
5.1 Duties Limited. The Escrow Agent shall perform only the
duties expressly set forth herein, and shall not have any liability under, or
duty to inquire into, the terms and provisions of any other agreement, including
but not limited to the Stock Purchase Agreement, except as expressly set forth
herein, in performing its duties hereunder. Except as to the due execution and
delivery of this Agreement by its duly authorized officers, the Escrow Agent has
no responsibility as to the validity of this Agreement or any document related,
thereto.
5.2 Reliance. The Escrow Agent may rely upon, and shall incur
no liability for acting or refraining from acting upon, any written notice,
instruction, request, consent, certificate, statement or other document
furnished to it pursuant to this Agreement and believed by it to be genuine and
to have been signed or presented by the proper party or parties, and the Escrow
Agent shall be under no duty to inquire into or investigate the validity,
accuracy, authenticity or content of any such document.
5.3 Good Faith. In no event shall the Escrow Agent have any
liability for any error of judgment or for any act done or omitted by it in good
faith, or for any mistake of fact or law, or for anything which it may do or
refrain from doing hereunder, except for its own gross negligence or willful
misconduct on its part, arising out of or in connection with this Agreement.
Buyer, on the one hand, and Sellers together, on the other hand, agree to
indemnify the Escrow Agent (severally, as to fifty percent (50%) each, and not
jointly and severally) for, and hold it harmless against, any loss, liability,
claim or expense arising out of or in connection with its actions as Escrow
Agent hereunder, including the reasonable costs and expenses incurred in
defending any such claim of liability, except that neither Buyer nor Sellers
shall be liable for any loss, liability or expense incurred on account of the
gross negligence or willful misconduct on the part of the Escrow Agent. The
Escrow Agent may consult with counsel from time to
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time and the opinion of such counsel shall be full and complete authorization
and protection in respect of any action taken or omitted to be taken by the
Escrow Agent hereunder or in good faith and in accordance with the opinion of
such counsel. The reasonable fees and disbursements of such counsel shall be
promptly paid by Buyer and Sellers pursuant to the provisions of Section 7
hereof.
5.4 Limited Notice. The Escrow Agent shall be deemed to have
no notice of, or duties with respect to, any agreement or agreements (whether or
not a copy thereof is delivered to the Escrow Agent), other than as expressly
set forth herein.
5.5 Limited Actions. The Escrow Agent shall not take any
action by reason of any notice or instruction given by any of the parties or by
any other person, firm or corporation, except only (i) such notices or
instructions as are herein specifically provided for and (ii) orders or process
of any court entered or issued with competent jurisdiction. In the event that
the Escrow Agent shall be uncertain as to its duties or rights hereunder, it
shall be entitled to refrain from taking any action until it shall be directed
otherwise in writing by both Buyer and the Sellers' Representative or by an
order of a court of competent jurisdiction.
5.6 Conflicts. In the event that any of the terms and
provisions of any other agreement between any of the parties conflict or are
inconsistent with any of the terms and provisions of this Agreement, the terms
and provisions of this Agreement shall govern and control in all respects the
duties and liabilities of the Escrow Agent.
5.7 Representation. The Buyer acknowledges that the Escrow
Agent has represented the Sellers and GACI in connection with the negotiation,
execution and closing of the transactions contemplated in the Stock Purchase
Agreement. Escrow Agent represents to the Buyer that it does not have and has
not had any business relationships with the Sellers or any Affiliate of the
Seller (other than the relationship described in the immediately preceding
sentence of this Section 5.7) that would cause the Escrow Agent not to act
impartially and fairly in carrying out its responsibilities under this
Agreement.
5.8 Bankruptcy of a Party.
(a) The obligations of the Escrow Agent to the Sellers
hereunder shall not be released, discharged, limited in any way or otherwise
effected by any voluntary or involuntary participation by the Buyer in any
settlement or composition for the benefit of creditors, through liquidation,
receivership, bankruptcy or otherwise, or the Buyer becoming insolvent or
bankrupt or otherwise subject to the provisions of any bankruptcy proceeding.
(b) The obligations of the Escrow Agent to the Buyer
hereunder shall not be released, discharged, limited in any way or otherwise
effected by any voluntary or involuntary participation by either of the Sellers
in any settlement or composition for the benefit of creditors, through
liquidation, receivership, bankruptcy or otherwise, or either of the Sellers
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becoming insolvent or bankrupt or otherwise subject to the provisions of any
bankruptcy proceeding.
5.9 Disagreements. If any disagreement or dispute arises
between the parties to this Agreement concerning the meaning or validity of any
provision under this Agreement or concerning any other matter relating to this
Agreement, the Escrow Agent (i) shall be under no obligation to act, except
under process or order of court of competent jurisdiction , or until it has been
adequately indemnified to its full satisfaction, and shall sustain no liability
for its failure to act pending such process or court order or indemnification,
and (ii) may deposit, in its sole and absolute discretion, the Deposit or that
portion of the Escrow Amount it then holds with any New York court and to
interplead the parties. Upon such deposit and filing of interpleader, the Escrow
Agent shall be relieved of all liability as to the Deposit and shall be entitled
to recover from the parties (as to fifty percent (50%) to each of the Buyer, on
the one hand, and the two Sellers together, on the other hand) its reasonable
attorneys' fees and other costs, including reasonable travel expenses, incurred
in commencing and maintaining such action.
5.10 Disclosure. No printed or other matter in any language
(including, without limitation, the Memorandum, notices, reports and promotional
material) which mentions the Escrow Agent's name or the rights, powers, or
duties of the Escrow Agent shall be issued by the other parties hereto or on
such parties' behalf unless the Escrow Agent shall first have given its specific
written consent thereto.
6. Resignation: Successor Escrow Agent.
6.1 Resignation. The Escrow Agent may resign at any time by
giving thirty (30) days' prior written notice of such resignation to Buyer and
Sellers' Representative, provided that a replacement, substitute or successor
escrow agent is in place pursuant to this Section 6.1. If Buyer and Sellers'
Representative are unable to agree upon a successor escrow agent within thirty
(30) days of receipt of notice from the Escrow Agent, the Escrow Agent may
designate its successor, and if the Escrow Agent declines to designate its
successor, Buyer shall designate the successor escrow agent. The Escrow Agent
shall promptly deliver the Account and any other amounts held by it pursuant to
this Agreement to such successor escrow agent and shall thereafter have no
further obligations hereunder. Upon receipt of the Account and other amounts,
the successor escrow agent shall thereupon be bound by all of the provisions
hereof.
6.2 Termination. Buyer and Sellers' Representative together
may terminate the appointment of the Escrow Agent hereunder upon notice
specifying the date upon which such termination shall take effect. In the event
of such termination, Buyer and Seller shall jointly appoint and designate in
such termination notice a successor escrow agent and the Escrow Agent shall turn
over to such successor escrow agent the Account and any other amounts held by it
pursuant to this Agreement. Upon receipt of the Account and other amounts, the
successor
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escrow agent shall thereupon be bound by all of the provisions hereof, and the
Escrow Agent shall have no further obligations hereunder.
7. Fees and Expenses of Escrow Agent. The two Sellers together, on
the one hand, and Buyer, on the other hand, shall each pay one-half of the
reasonable compensation of the Escrow Agent for the Escrow Agent's services
hereunder and all expenses, disbursements and advances (including reasonable
attorneys' fees) incurred in carrying out the Escrow Agent's duties hereunder
(the "Escrow Agent's Fees"). Sellers and Buyer shall pay their respective
portion of the Escrow Agent's Fees directly to the Escrow Agent at the time of
Closing and annually thereafter as invoiced.
8. Miscellaneous.
8.1 Notices. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed
given when delivered personally, when received if sent by facsimile
transmission, on the date after deposit with an overnight courier if deposited,
postage prepaid, addressed as follows or on the third day after mailing if
mailed by certified or registered mail, postage prepaid, addressed as follows
(or addressed to such other address as may be requested in writing from time to
time by a party desiring to change the address to which such communications are
to be delivered or mailed):
If to the Sellers:
Xxxxx Xxxxxxx
000X Xxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Xxxxxxx Xxxxxxx
00000 Xxxxxxxx Xxxx Xxxx
Xxxx Xxxxx, Xxxxxxx 00000
With a copy to:
Todtman, Young, Tunick, Nachamie, Xxxxxxx & Spizz, P.C.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx, Esq.
Telephone Number: 000-000-0000
Telecopy Number: 000-000-0000
If to the Buyer:
Cosmar Corporation
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c/o Renaissance Cosmetics, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx Xxxxxx, Chairman, President and Chief
Executive Officer
Telephone Number: 000-000-0000
Telecopy Number: 000-000-0000
With a copy to:
Xxxxxxxxxx Hyatt Xxxxxx & Xxxxxxxxxx, P.C.
Twenty-Second Floor
000 Xxxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxxxx, Esq.
Telephone Number: (000) 000-0000
Telecopy Number: (000) 000-0000
If to the Escrow Agent:
Todtman, Young, Tunick, Nachamie, Xxxxxxx & Spizz, P.C.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx, Esq.
Telephone Number: 000-000-0000
Telecopy Number: 000-000-0000
If any notice is required to be given to both the Escrow Agent and
another party, such notice shall be given in a manner that results in the same
effective date for each such notice.
8.2 Governing Law. This Agreement shall be governed and
construed in accordance with the internal laws of the State of New York
applicable to agreements made and to be performed entirely within such State,
not including the conflicts of laws provisions thereof.
8.3 Entire Agreement. This Agreement is entered into and
delivered pursuant to the Stock Purchase Agreement and this Agreement and the
Stock Purchase Agreement set forth the entire agreement among the parties with
respect to the subject matter hereof and supersede all prior agreements, written
or oral, with respect thereto.
8.4 Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns.
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8.5 Waivers and Amendments. This Agreement may be amended,
modified, superseded, cancelled, renewed or extended, and the terms or
conditions hereof may be waived, only by a written instrument signed by all of
the parties, or, in the case of a waiver , by the party waiving compliance. No
delay on the part of any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any waiver on the part of
any party of any right, power or privilege hereunder, nor any single or partial
exercise of any right, power or privilege hereunder, preclude any other or
further exercise thereof or the exercise of any other, right, power or privilege
hereunder.
8.6 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
8.7 Further Assurances. Each of the parties shall execute such
documents and other papers and take such further actions as may be reasonable
required or desirable to carry out the provisions hereof and the transactions
contemplated hereby.
8.8 Variations in Pronouns. All pronouns and any variations
thereof refer to the masculine, feminine or neuter, singular or plural, as the
identity of the person or persons may require.
8.9 Headings. The headings in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
COSMAR CORPORATION
By: /s/ Xxxx X. Xxxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxxx
-----------------------------
Title: VP
----------------------------
XXXXX XXXXXXX (individually)
________________________________________
XXXXXXX XXXXXXX (individually)
________________________________________
TODTMAN, YOUNG, TUNICK, NACHAMIE,
XXXXXXX & SPIZZ, P.C. (Escrow Agent)
By: ___________________________________
Name:______________________________
Title:_____________________________
Xxxxx Xxxxxxx (in his capacity' as
Sellers' Representative)
________________________________________
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
COSMAR CORPORATION
By:_____________________________________
Name:______________________________
Title:_____________________________
XXXXX XXXXXXX (individually)
/s/ Xxxxx X. Xxxxxxx
----------------------------------------
XXXXXXX XXXXXXX (individually)
________________________________________
TODTMAN, YOUNG, TUNICK, NACHAMIE,
XXXXXXX & SPIZZ, P.C. (Escrow Agent)
By:_____________________________________
Name:______________________________
Title:_____________________________
Xxxxx Xxxxxxx (in his capacity' as
Sellers' Representative)
/s/ Xxxxx X. Xxxxxxx
----------------------------------------
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
COSMAR CORPORATION
By:_____________________________________
Name:______________________________
Title:_____________________________
XXXXX XXXXXXX (individually)
/s/ Xxxxx X. Xxxxxxx
----------------------------------------
XXXXXXX XXXXXXX (individually)
/s/ Xxxxxxx X. Xxxxxxx
----------------------------------------
TODTMAN, YOUNG, TUNICK, NACHAMIE,
XXXXXXX & SPIZZ, P.C. (Escrow Agent)
By: /s/
-------------------------------------
Name:______________________________
Title:_____________________________
Xxxxx Xxxxxxx (in his capacity' as
Sellers' Representative)
/s/ Xxxxx X. Xxxxxxx
----------------------------------------
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SCHEDULE A
Bank Account
Republic National Bank
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