EXHIBIT 2.2
ESCROW AGREEMENT
THIS ESCROW AGREEMENT ("Escrow Agreement") is entered into as of
October 24, 2000, by and among CyberOptics Corporation, a Minnesota corporation
("Buyer"), and Xxxxx X. Xxxxx, solely in his capacity as sellers' representative
(the "Sellers' Representative") on behalf of the shareholders and certain of the
holders of options (the "Sellers") of Imagenation Corporation, an Oregon
corporation (the "Company"), and U.S. Bank Trust National Association, as escrow
agent (the "Escrow Agent").
WITNESSETH:
WHEREAS, pursuant to the Stock Purchase Agreement (the "Purchase
Agreement") of even of the date herewith, by and among Buyer, the Company and
the Sellers, Buyer has agreed to purchase all of the outstanding capital stock
of the Company (capitalized terms used but not defined shall have the meanings
ascribed to them in the Purchase Agreement);
WHEREAS, the Purchase Agreement provides for the execution and delivery
at the Closing of an escrow agreement and provides for a portion of the Total
Consideration being paid to the Sellers to be held in escrow to secure and
satisfy certain indemnification rights contemplated by the Purchase Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto covenant and agree as follows:
1. Appointment and Agreement of Escrow Agent. Buyer and the Sellers'
Representative (on behalf of each of the Sellers named in the attached Schedule
A) hereby appoint U.S. Bank Trust National Association, as, and U.S. Bank Trust
National Association agrees to perform the duties of, the Escrow Agent under
this Escrow Agreement. This Escrow Agreement shall be administered by the Escrow
Agent and the Escrow Amount (as hereinafter defined) shall be held by the Escrow
Agent, at its office as hereinafter designated, in Minneapolis, Minnesota.
2. Purchase Agreement Not Limited By This Escrow Agreement. This Escrow
Agreement and the establishment of the Escrow Amount are without prejudice to
and are not in limitation of, any obligations of the Sellers to Buyer in respect
of any of the covenants, representations or warranties of the Sellers contained
in the Purchase Agreement. The duties, obligations and rights of the Escrow
Agent are to be determined solely by this Agreement; the Escrow Agent is not a
party to, or bound by, any agreement other than this Escrow Agreement.
3. Escrow Amount.
(a) Concurrently with the execution and delivery hereof, Buyer is
depositing with the Escrow Agent three hundred and fifty thousand dollars
($350,000) in cash. The cash so deposited, together with any interest earned
thereon, shall hereinafter be referred to as the "Escrow Amount." The Escrow
Agent hereby agrees to hold and dispose of the Escrow Amount for the benefit of
the parties hereto in accordance with the terms of this Escrow Agreement. The
Escrow Agent hereby acknowledges receipt of (i) the Escrow Amount and (ii) an
executed copy of the Purchase Agreement.
(b) The Escrow Agent shall invest the Escrow Amount, including any
earnings therefrom, as instructed in writing by Buyer and the Sellers'
Representative, only in (i) certificates of deposit insured by the FDIC or
secured by government obligations and bearing the highest rate of interest paid
by the Escrow Agent on such certificates of deposit, or (ii) U.S. Treasury
securities, in each case having maturities of no more than ninety (90) days, or
(iii) a money market fund in which the Escrow Agent, its parent, affiliates or
subsidiaries provides investment advisory or other management services, or (iv)
in any other fund or other investment vehicle that the Sellers' Representative
and Buyer shall, in writing, mutually agree. If no direction is given to the
Escrow Agent, funds will be invested pursuant to Schedule B hereto. Any
withdrawals against the Escrow Amount for the benefit of a Buyer Indemnified
Party pursuant to the terms of this Escrow Agreement shall be postponed, if
necessary, until the maturity of such certificates of deposit or other
instruments to maximize the income from such certificates and to avoid any early
termination penalties with respect thereto. Any earnings on the principal amount
deposited with the Escrow Agent shall be taxable to the Sellers in the
proportion set forth in the attached Schedule A and shall be retained in the
accounts established by this Agreement until release of the principal amount on
which it is earned, provided, that the Escrow Agent shall first apply all
amounts so received to satisfy the claims of any Buyer Indemnified Party, and
then to the payment of half of the fees incurred by the Escrow Agent hereunder.
4. Escrow Period. The Escrow Agreement has been executed and the
deposit of the Escrow Amount has been made pursuant to Section 1.05 of the
Purchase Agreement and has been made for the purpose of funding and securing, to
the extent of the Escrow Amount, the Sellers' indemnification obligations to
Buyer until the later to occur of the following: (i) October 24, 2001 (the
"Escrow Survival Date") or (ii) with respect to any Buyer Indemnified Party
claim for
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indemnification under the Purchase Agreement made by any Buyer Indemnified Party
prior to the Escrow Survival Date which has not been completely and finally
resolved prior to the Escrow Survival Date, the period of time beyond the Escrow
Survival Date sufficient to resolve, completely and finally, such claim.
5. Procedures for Disbursement of the Escrow Amount to Buyer. Whenever
there shall be delivered to the Escrow Agent either (i) a certificate signed by
Buyer and the Sellers' Representative certifying, or (ii) a final and
nonappealable copy of a judgment of a court of competent jurisdiction
determining, or (iii) a certified copy of the results of any arbitration
pursuant to Article X of the Purchase Agreement determining, that an amount is
due to a Buyer Indemnified Party pursuant to Article IX of the Purchase
Agreement, the Escrow Agent shall, to the extent that the Escrow Amount shall be
sufficient for such purpose, promptly (and in no event later than five (5)
business days following receipt of any of the documents referred to in clause
(i), (ii) or (iii) of this Section 5) cause such amount to be delivered to
Buyer.
6. Payment to Holders. All payments to be made by the Escrow Agent
pursuant to Section 5 shall be made by check or, if provided with wire
instructions at least two (2) business days in advance of the date of
disbursement, by wire transfer.
7. Termination.
(a) On or before 370 days after the Closing Date (the "Final
Termination Date"), the Escrow Agent shall pay to (or at the direction of) the
Sellers the Escrow Amount plus any interest earned on the Escrow Amount, LESS
the sum of (i) any amount previously used to satisfy a Loss or Losses, PLUS (ii)
an amount equal to half the fees and expenses of the Escrow Agent hereunder, and
PLUS (iii) the Reserved Amount (as defined in Section 8). Any amount held in
escrow after such the Final Termination Date shall be paid to the Sellers
promptly after any existing claim by a Buyer Indemnified Party is resolved
pursuant to Section 5. Any payments to the Sellers shall be in the proportions
set forth in the attached Exhibit I.
(b) This Escrow Agreement shall automatically terminate if and when
all of the Escrow Amount shall have been distributed by the Escrow Agent in
accordance with the terms of this Escrow Agreement.
8. Retention of Escrow Amount. In the event that, at Final Termination
Date, unresolved claims for indemnification shall have been made by any Buyer
Indemnified Party pursuant to the Purchase Agreement, then Buyer may in good
faith, at any time prior to such Termination Date, notify the Escrow Agent to
such effect in writing, which notice shall describe briefly the nature of each
such claim, and the estimated amount, based on the good faith judgment of Buyer
of the potential liability with respect to each such claim. Buyer shall promptly
deliver to the Sellers' Representative a copy of such written notice. An amount
of the remaining Escrow Amount on such Termination Date equal to one hundred
percent (100%) of the total of the
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amounts set forth in such written notice with respect to the claim or claims
described therein shall be set aside and retained (to the extent available in
the then-remaining Escrow Amount) by the Escrow Agent as a reserve to cover such
claim or claims (such amount so set aside and reserved, as reduced from time to
time pursuant to the provisions of this Section 8 or of Section 5, being herein
called the "Reserved Amount").
9. No Transfer of Escrow Amount. While any of the Escrow Amount shall
continue to be held by the Escrow Agent, neither Buyer nor either of the Sellers
will transfer, sell, pledge, create a security interest in or otherwise dispose
of their rights to any of the Escrow Amount, or distributions with respect
thereto.
10. The Escrow Agent.
10.1 Indemnification of the Escrow Agent. Buyer and the
Sellers agree to indemnify and hold the Escrow Agent and its directors,
officers and employees harmless from and against any and all costs,
charges, damages, and attorneys' fees which the Escrow Agent in good
faith may incur or suffer in connection with or arising out of this
Escrow Agreement.
10.2 Duties of the Escrow Agent. The Escrow Agent shall have
no duties other than those expressly imposed on it herein and shall not
be liable for any act or omission, except for its own gross negligence
or willful misconduct.
10.3 Fees of the Escrow Agent. The fees and charges of the
Escrow Agent with respect to this Agreement are identified in Schedule
C hereto and shall be paid one-half by Buyer and one-half by the
Sellers collectively. The Sellers agree that the Escrow Agent may
deduct any unpaid fees due from the Sellers from the Escrow Amount
prior to the Escrow Agent's distributing any assets in connection with
the termination of the Escrow Amount.
10.4 Escrow Agent to Follow Instructions of Buyer and the
Sellers' Representative. Any provision herein to the contrary
notwithstanding, the Escrow Agent shall, at any time and from time to
time, take such action hereunder with respect to the Escrow Amount as
shall be agreed to in writing by Buyer and the Sellers' Representative.
In the performance of its duties hereunder, the Escrow Agent may rely
on any document reasonably believed by it to be genuine.
10.5 Resignation of the Escrow Agent. The Escrow Agent may
resign at any time by providing Buyer and the Sellers' Representative
with thirty (30) days' written notice of its intention to do so;
provided, that a successor Escrow Agent has been appointed. The Escrow
Agent's resignation shall be effective upon delivery of the Escrow
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Amount to the successor Escrow Agent and upon such successor assuming
the obligations, rights and duties of the Escrow Agent hereunder.
10.6 Disputes. In the event conflicting demands are made or
notices are served upon the Escrow Agent with respect to the Escrow
Amount, or there is any dispute over action to be taken or not taken by
the Escrow Agent, the Escrow Agent shall have the absolute right, at
the Escrow Agent's election, to do either or both of the following:
resign so a successor can be appointed pursuant to Section 10.5 or file
a suit in interpleader and obtain an order from a court of competent
jurisdiction requiring the parties to interplead and litigate in such
court their several claims and rights among themselves. The Escrow
Agent agrees that, if it files a suit in interpleader, it shall do so
in any of the state or federal courts having jurisdiction in the State
of Minnesota. In the event such interpleader suit is brought, the
Escrow Agent will thereby be fully released and discharged from all
further obligations imposed upon it under the provisions hereof, and
Buyer, on the one hand, and the Sellers, collectively on the other
hand, will each bear fifty percent (50%) of the costs, expenses and
reasonable attorneys' fees expended or incurred by the Escrow Agent
pursuant to the exercise of the Escrow Agent's rights under this
Section 10.6.
11. Notices. All notices, demands and other communications to be given
or delivered under or by reason of the provisions of this Agreement will be in
writing and will be deemed to have been given when personally delivered or three
days after being mailed by first class mail, return receipt requested, or when
receipt is acknowledged, if sent by facsimile, telecopy or other electronic
transmission device. Notices, demands and communications to Buyer and the
Sellers will, unless another address is specified in writing, be sent to the
address indicated below:
Notices to Buyer: with a copy to:
---------------- --------------
CyberOptics Corporation Xxxxxx & Xxxxxxx LLP
0000 Xxxxxx Xxxxx Xxxxx 000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000 Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx Attention: Xxxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
Notices to the Sellers: with a copy to:
---------------------- --------------
Xxxxx X. Xxxxx Stoel Rives LLP
Imagenation Corporation 000 XX Xxxxx Xxx
Xxxxx X0 Xxxxx 0000
Xxxxxxxx, XX 00000 Xxxxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxxxxxxx
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Notices to Escrow Agent:
-----------------------
U.S. Bank Trust National Association
X.X. Xxxx Xxxxx Xxxxxx - XXXX0000
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
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12. Successors and Assigns. The Escrow Agent may not assign, by
operation of law or otherwise, all or any portion of its rights, obligations or
liabilities under this Escrow Agreement without the consent of (i) Buyer and
(ii) the Sellers' Representative, which consent may be withheld in such party's
or parties' absolute discretion. Any attempted assignment in violation of this
Section 12 shall be void and of no effect. This Escrow Agreement and all actions
taken hereunder in accordance with its terms shall be binding upon and inure to
the benefit of each of the parties hereto and its respective successors and
assigns. Any company into which the Escrow Agent may be merged or converted or
with which it may be consolidated or any company resulting from any merger,
conversion or consolidation to which it shall be a party or any company to which
the Escrow Agent may sell or transfer all or substantially all of its corporate
trust business shall be the successor to the Escrow Agent without the execution
or filing of any paper or any further act.
13. Further Assurances. The parties hereto agree to execute and
deliver, from time to time, such additional instruments and documents as any of
the other parties hereto may reasonably request in order to fully effectuate the
intent of the parties hereunder.
14. Miscellaneous.
(a) This Escrow Agreement and the Purchase Agreement contain the
entire agreement among the parties with respect to the subject matter hereof. In
the event of a conflict between the terms and provisions of this Escrow
Agreement and of the Purchase Agreement, the terms and provisions of this Escrow
Agreement shall govern the rights, obligations and liabilities of the Escrow
Agent.
(b) This Escrow Agreement may not be amended, supplemented or
discharged, and no provision hereof may be modified or waived, except by an
instrument in writing signed by all of the parties hereto.
(c) No waiver of any provision hereof by any party shall be deemed
a continuing waiver of any matter by such party.
(d) This Escrow Agreement may be executed in several counterparts,
each of which shall be deemed an original, but such counterparts together shall
constitute one and the same instrument.
(e) The section headings contained in this Escrow Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(f) This Escrow Agreement shall be governed by and construed and
enforced in accordance with the law (other than the law governing conflict of
law questions) of the State of Minnesota.
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(g) The only beneficiaries of this Escrow Agreement are the
signatories hereof. Buyer shall have all rights to act on behalf of the Buyer
Indemnified Parties with respect to this Agreement. The Sellers' Representative
shall have all rights to act on behalf of the Sellers with respect to this
Escrow Agreement.
(h) The Escrow Agent shall not be responsible for any federal or
state tax reporting with respect to this account.
IN WITNESS WHEREOF, the parties hereto have executed this Escrow
Agreement as of this 24th day of October, 2000.
CYBEROPTICS CORPORATION
By
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Its
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THE SELLERS:
By
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Xxxxx X. Xxxxx, Sellers' Representative
U.S. BANK TRUST NATIONAL ASSOCIATION
By
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Its
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