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Exhibit 10.4
ESCROW AGREEMENT
This ESCROW AGREEMENT (this "AGREEMENT") is dated as of January 31, 1997,
by and among SAFETY 1ST, INC., a Massachusetts corporation ("COMPANY"), XXXXXXX
XXXXX CREDIT PARTNERS L.P., a Bermuda limited partnership ("GSCP"), and
O'Melveny & Xxxxx LLP, as escrow agent hereunder (in such capacity "ESCROW
AGENT").
W I T N E S S E T H:
WHEREAS, Company, GSCP, as a "Bank", and GSCP, as "Agent", have entered
into that certain First Amended and Restated Loan Agreement dated as of the date
hereof (the "LOAN AGREEMENT"; capitalized terms used herein and not otherwise
defined herein being used herein as therein defined), pursuant to which GSCP and
the other "Banks" which may become parties to the Loan Agreement are to make
certain extensions of credit to Company, and
WHEREAS, as consideration for GSCP's entering into the Loan Agreement,
Company has agreed, among other things, to issue certain warrants to purchase
common stock of Company in the event the Loan Agreement remains outstanding at
certain future specified dates; and
WHEREAS, Company has agreed to deposit such warrants into an escrow
arrangement on the date hereof, to be held in escrow and distributed in
accordance with the terms hereof; and
WHEREAS, Escrow Agent is willing to act as escrow agent in respect of the
Escrowed Warrants (as hereinafter defined) upon the terms and conditions
hereinafter set forth:
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged by each of the parties hereto, the
parties hereto, intending to be legally bound, do hereby agree as follows:
1. APPOINTMENT OF ESCROW AGENT. Company and GSCP hereby appoint Escrow
Agent as escrow agent in accordance with the terms and conditions set forth
herein, and Escrow Agent hereby accepts such appointment.
2. DEPOSIT OF ESCROWED WARRANTS. Company, simultaneously with the
execution and delivery of this Agreement, has caused to be deposited with Escrow
Agent (a) that certain Warrant No. R-1, dated as of the date hereof, providing
for the issuance of 250,000 shares of common stock of Company (the "FIRST
WARRANT"), (b) that certain Warrant No. R-2, dated as of the date hereof,
providing for the issuance of 50,000 shares of common stock of Company (the
"SECOND WARRANT"), and (c) that certain Warrant No. R-3, dated as of the date
hereof, providing for the issuance of 50,000
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shares of common stock of Company (the "THIRD WARRANT"; together with the First
Warrant and the Second Warrant, the "ESCROWED WARRANTS"). Escrow Agent hereby
acknowledges receipt of the Escrowed Warrants and agrees to hold them upon the
terms and conditions hereinafter set forth.
3. DISTRIBUTION OF ESCROWED WARRANTS. Escrow Agent shall hold the Escrowed
Warrants in its possession until instructed hereunder to deliver the Escrowed
Warrants or any specified portion thereof as follows:
(a) If GSCP delivers a notice to Company and Escrow Agent in the form of
Annex A attached hereto (a "NOTICE OF ISSUANCE") (i) on or after the date which
is six months after the date hereof, requesting Escrow Agent to deliver the
First Warrant to GSCP, (ii) on or after the date which is nine months after the
date hereof, requesting Escrow Agent to deliver the Second Warrant to GSCP, or
(iii) on or after the date which is twelve months after the date hereof,
requesting Escrow Agent to deliver the Third Warrant to GSCP, Escrow Agent shall
deliver to GSCP the Escrowed Warrant specified in the applicable Notice of
Issuance on the third business day after receipt of such Notice of Issuance by
Escrow Agent.
(b) If Company delivers a notice to GSCP and Escrow Agent in the form of
Annex B attached hereto (a "NOTICE OF RELEASE") requesting Escrow Agent to
release all remaining Escrowed Warrants to Company, Escrow Agent shall deliver
to Company all remaining Escrowed Warrants on the third business day after
receipt of such Notice of Issuance by Escrow Agent.
4. EXCULPATION AND INDEMNIFICATION OF ESCROW AGENT.
(a) Escrow Agent may resign and be discharged from its duties hereunder at
any time by giving written notice of such resignation to Company and GSCP
specifying a date when such resignation shall take effect. Upon such notice, a
successor Escrow Agent, which shall be a bank or trust company organized under
the laws of the United States of America or the State of New York having a
combined capital and surplus of not less than $100,000,000 shall be appointed
with the mutual consent of Company and GSCP. Such successor Escrow Agent shall
become Escrow Agent hereunder upon the resignation date specified in such
notice. If Company and GSCP are unable to agree upon a successor Escrow Agent
within thirty (30) days after such notice, Escrow Agent shall be entitled to
apply to a court of competent jurisdiction for the appointment of a successor.
Escrow Agent shall continue to serve until its successor accepts its appointment
as Escrow Agent and receives the Escrowed Warrants. Company and GSCP shall have
the right at any time upon their mutual consent to substitute a new Escrow Agent
by giving notice thereof to the then current Escrow Agent, such substitution to
take effect upon the appointment of a successor Escrow Agent meeting the
requirements set forth above and the acceptance of such appointment by such
successor Escrow Agent and delivery to such successor Escrow Agent of the
Escrowed Warrants.
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(b) Escrow Agent shall have no duties or responsibilities whatsoever with
respect to the Escrowed Warrants except as are specifically set forth herein and
may conclusively rely, and shall be protected in acting or refraining from
acting, on any written notice, instrument, request, consent, certificate,
document, letter, telegram, order, resolution or signature reasonably believed
by it to be genuine and to have been signed or presented by the proper party or
parties duly authorized to do so. Escrow Agent shall have no responsibility for
the contents of any such writing contemplated herein and may rely without any
liability upon the contents thereof.
(c) Escrow Agent shall not be liable for any action taken or omitted by it
in good faith and reasonably believed by it to be authorized hereby or within
the rights or powers conferred upon it hereunder, nor for any action taken or
omitted by it in good faith and in accordance with the advice of counsel (which
counsel may be of Escrow Agent's own choosing), and shall not be liable for any
mistake of fact or error of judgment or for any acts or omissions of any kind
except for its own fraud, willful misconduct or gross negligence.
(d) Each of Company and GSCP agrees to indemnify Escrow Agent and hold it
harmless against any and all liabilities incurred by it hereunder as a
consequence of such party's action, and the parties agree jointly to indemnify
Escrow Agent and hold it harmless against any and all liabilities incurred by it
hereunder that are not a consequence of any party's action, except in either
case for liabilities incurred by Escrow Agent resulting from its own fraud,
willful misconduct or gross negligence. Company and GSCP agree to reimburse each
other for one-half of any payments made by them pursuant to this Section 4(d)
with respect to liabilities for which the parties are jointly liable pursuant to
this Section 4(d).
5. FURTHER ASSURANCES. From time to time on and after the date hereof, the
other parties hereto shall deliver or cause to be delivered to Escrow Agent such
further documents and instruments and shall do and cause to be done such further
acts as Escrow Agent shall reasonably request (it being understood that Escrow
Agent shall have no obligation to make any such request) to carry out more
effectively the provisions and purposes of this Agreement, to evidence
compliance herewith or to assure itself that it is protected in acting
hereunder.
6. TERMINATION AGREEMENT. This Agreement shall terminate on the final
disposition of all Escrowed Warrants in accordance with the provisions of
Section hereof; provided that the rights of Escrow Agent and the obligations of
the other parties hereto under Paragraphs 4 and 5 shall survive the termination
hereof.
7. CONSENTS TO SERVICE OF PROCESS. Each of the parties hereto hereby
irrevocably consents to the jurisdiction of the courts of the State of New York
and of any Federal court located in such State in connection with any action,
suit or other proceeding arising out of or relating to this Agreement or any
action taken or omitted hereunder, and waives any claim of forum non conveniens
and any objections as to laying of venue. Each party further waives personal
service of any summons,
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complaint or other process and agrees that the service thereof may be made by
certified or registered mail directed to such person or such person's address
for purposes of notices hereunder.
8. MISCELLANEOUS.
(a) This Agreement embodies the entire agreement and understanding among
the parties relating to the subject matter hereof and may not be changed orally,
but only by an instrument in writing signed by the party against whom
enforcement of such change is sought.
(b) All notices and other communications under this Agreement shall be in
writing and shall be deemed given when delivered personally, on the next
business day after delivery to a recognized overnight courier or when sent by
facsimile to the parties (and shall also be transmitted by facsimile to the
persons receiving copies thereof) at the following addresses (or to such other
address as a party may have specified by notice given to the other party
pursuant to this provision):
If to Company, to
Safety 1st, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
Telecopy No: (000) 000-0000
with a copy to;
Xxxxxxx & Xxxxx, P.C.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
Telecopy No: (000) 000-0000
If to GSCP, to:
Xxxxxxx Xxxxx Credit Partners L.P.
00 Xxxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx Xxxx and Xxxx Xxxxxxxx
Telecopy No: (000) 000-0000
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If to Escrow Agent, to:
O'Melveny & Xxxxx LLP
000 Xxxx 00xx Xxxxxx
Citicorp Center
New York New York 10022
Attention: Xxxxxxxx X. Xxxxxxxx Esq.
Telecopy No: (000) 000-0000
(c) The headings of the Sections of this Agreement have been inserted for
convenience and shall not modify, define, limit or expand the express provisions
of this Agreement.
(d) This Agreement and the rights and obligations hereunder of the parties
hereto (other than Escrow Agent) may not be assigned except with the prior
written consent of the other parties hereto. Subject to the provisions of
Section 4(a) hereof, this Agreement and the rights and obligations hereunder of
Escrow Agent may be assigned by Escrow Agent only to a successor to its entire
business. This Agreement shall be binding upon and inure to the benefit of each
party's respective successors and permitted assigns. Except as expressly
provided below, no other Person shall acquire or have any rights under or by
virtue of this Agreement. This Agreement is intended to be for the sole benefit
of the parties hereto, and (subject to the provisions of this Paragraph 9(d))
their respective successors and assigns, and none of the provisions of this
Agreement are intended to be, nor shall they be construed to be, for the benefit
of any third person.
(e) This Agreement may not be amended, supplemented or otherwise modified
without the prior written consent of Company and GSCP. Any amendment, supplement
or modification which affects Escrow Agent must also be consented to by Escrow
Agent.
(f) This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without reference to the principles of
conflict of laws.
(g) This Agreement may be executed in two or more counterparts, each of
which shall be an original, but all of which together shall constitute one and
the same instrument.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
SAFETY 1ST, INC.
By:_______________________________________
Name:
Title:
XXXXXXX SACHS CREDIT PARTNERS L.P.
By:_______________________________________
Authorized Signatory Title:
O'MELVENY & XXXXX LLP
By:_______________________________________
Name:
Title:
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ANNEX A
_______________, 199__
O'Melveny & Xxxxx LLP
000 Xxxx 00xx Xxxxxx
Xxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxx Esq.
RE: ESCROW AGREEMENT DATED AS OF JANUARY 31, 1997
The undersigned hereby certifies that:
(i) he or she is a duly authorized representative of Xxxxxxx Sachs Credit
Partners L.P. ("GSCP");
(ii) that certain First Amended and Restated Loan Agreement dated as of
January 31, 1997 by and among Safety 1st, Inc. ("COMPANY"), GSCP and the other
financial institutions party thereto as Banks, and GSCP, as Agent, is still in
force and effect and either (a) Company has outstanding Obligations thereunder,
(b) one or more Letters of Credit are outstanding thereunder, or (c) the
Commitments thereunder have not terminated or been cancelled;
(iii) the date of this certificate is on or after the [INSERT AS
APPLICABLE: six-month/nine-month/twelve-month] anniversary of the Effective Date
of such Loan Agreement; and
(iv) GSCP is entitled to the delivery of the [INSERT AS APPLICABLE: First
Warrant/Second Warrant/Third Warrant] to GSCP by Escrow Agent.
XXXXXXX XXXXX CREDIT PARTNERS L.P.
By:_______________________________________
Authorized Signatory
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ANNEX B
___________, 199__
O'Melveny & Xxxxx LLP
000 Xxxx 00xx Xxxxxx
Xxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxx, Esq.
RE: ESCROW AGREEMENT DATED AS OF JANUARY 31, 1997
The undersigned hereby certifies that:
(i) he or she is a duly authorized representative of Safety 1st, Inc.
("COMPANY");
(ii) that certain First Amended and Restated Loan Agreement dated as of
January 31, 1997 by and among Company, Xxxxxxx Sachs Credit Partners L.P.
("GSCP") and the other financial institutions party thereto as Banks, and GSCP,
as Agent, is no longer in force and effect and (a) Company has no outstanding
Obligations thereunder, (b) no Letters of Credit are outstanding thereunder, and
(c) the Commitments thereunder have terminated or been cancelled; and
(iii) Company is entitled to the delivery of all [remaining] Escrowed
Warrants to Company by Escrow Agent.
SAFETY 1ST, INC.
By:________________________________
Name:
Title:
