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EXHIBIT 4.21
ESCROW AGREEMENT
THIS ESCROW AGREEMENT ("Agreement") is made as of the 5th day of May,
1999 by and among Weatherford U.S., L.P., a Louisiana limited partnership
("Buyer"), Xxxxxxxxxxx International, Inc., a Delaware corporation
("Weatherford"), ECD/Northwest, Inc., a Delaware corporation ("Seller"),
Clearwater Holdings, Inc., a Delaware corporation ("CHI"), the individual
shareholders identified on the signature page of the Agreement ("Shareholders"),
and National City Bank of Pennsylvania ("Escrow Agent").
WITNESSETH:
WHEREAS, Buyer is purchasing substantially all of the assets owned by
Seller or utilized in its business pursuant to an Asset Purchase Agreement dated
March 30, 1999 among Buyer, Weatherford, Seller, CHI and the Shareholders (the
"Purchase Agreement"); and
WHEREAS, Seller and the Shareholders have undertaken to indemnify and
hold Buyer and Weatherford harmless with respect to certain claims, liabilities
and obligations arising under the Purchase Agreement; and
WHEREAS, pursuant to the Purchase Agreement, Buyer and Weatherford have
withheld 197,212 shares of Xxxxxxxxxxx'x common stock payable to Seller in order
to ensure Seller's and the Shareholder's compliance with their indemnification
obligations in the Purchase Agreement; and
WHEREAS, the execution and delivery of this Agreement by the parties
are conditions to the performance of the Purchase Agreement by Buyer and
Weatherford and the payment to Seller of the purchase price for the purchased
assets.
NOW, THEREFORE, in consideration of the mutual promises herein and
other good and valuable consideration, the parties hereto, intending to be
legally bound, hereby agree as follows:
1. Appointment. Buyer and Seller hereby appoint National
City Bank of Pennsylvania as escrow agent to act in accordance with the terms
and conditions of this Agreement, and Escrow Agent hereby accepts such
appointment in accordance with such terms and conditions.
2. Representations and Warranties.
(a) Buyer represents and warrants to Seller and
Escrow Agent that (i) it is validly existing and in good standing as a limited
partnership under the laws of the State of
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Louisiana, and (ii) this Agreement has been duly and validly authorized,
executed and delivered by Buyer and constitutes its valid, binding and
enforceable obligation, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws from time to
time in effect that affect creditors' rights generally and by legal and
equitable limitations on the availability of specific remedies.
(b) Weatherford represents and warrants to Seller and
Escrow Agent that (i) it is validly existing and in good standing as a
corporation under the laws of the State of Delaware, and (ii) this Agreement has
been duly and validly authorized, executed and delivered by Weatherford and
constitutes its valid, binding and enforceable obligation, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws from time to time in effect that
affect creditors' rights generally and by legal and equitable limitations on the
availability of specific remedies.
(c) Seller and CHI represent and warrant to Buyer and
Escrow Agent that (i) they are each duly organized, validly existing and in good
standing as a corporation under the laws of the State of Delaware, and (ii) this
Agreement has been duly and validly authorized, executed and delivered by each
of Seller and CHI and constitutes a valid, binding and enforceable obligation of
each of Seller and CHI.
3. Deposit of Weatherford Shares. On the Closing Date,
Buyer shall deliver to Escrow Agent 197,212 shares of the Weatherford Shares
(the "Escrow Shares") registered in the name of Escrow Agent or its nominee.
Escrow Agent shall hold the Escrow Shares, and all dividends and distributions
thereon and all proceeds therefrom (collectively, the "Escrow Funds"), pursuant
to the terms of this Agreement to secure Seller's and the Shareholders'
indemnification obligations under Article 8 of the Purchase Agreement. Escrow
Agent shall have no duty to enforce the foregoing indemnification obligations.
4. Sale of Escrow Shares. The parties recognize and
agree that the Escrow Shares are not registered under the Securities Act of
1933, as amended (the "Securities Act") as of the date of this Agreement, and
consequently the certificates for the Escrow Shares shall be imprinted with a
legend (the "Restrictive Legend") restricting the transfer of such shares. Until
such time as the Escrow Agent receives a Joint Written Instruction (as
hereinafter defined) that the Escrow Shares either have been registered by
Weatherford under the Securities Act or may be transferred pursuant to Rule 144
promulgated pursuant to the Securities Act or pursuant to another exemption from
registration (a "Transfer Notice"), the Escrow Agent shall hold the Escrow
Shares and shall not sell or otherwise transfer the same, except to one or more
of the parties in accordance with Section 8 hereof.
5. Investment of Escrow Funds. Subject to the Escrow
Agent's receipt of a Transfer Notice as described in Section 4 above, Seller
shall direct the Escrow Agent's investment of the Escrow Funds, by written
notice signed by Xxxxx X. Xxxxx (the "Seller Representative"). Seller may change
the identity of the Seller Representative at any time by a notice signed by each
of the Shareholders. Such notice shall be effective upon its receipt by the
Escrow Agent and Buyer. For any matter in which the Escrow Agent, Weatherford or
Buyer is entitled to rely on or otherwise deal with Seller, CHI or any of the
Shareholders, the Escrow
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Agent, Weatherford or Buyer, as applicable, shall be entitled to communicate
solely with the Seller Representative and shall be entitled to rely on any such
communications as being the desire and will of Seller, CHI and the Shareholders.
Notice delivered to the Seller Representative in accordance with Section 15
hereof shall be deemed notice to the Seller, CHI and each of the Shareholders.
The Escrow Funds shall be invested solely in Permitted
Investments (as hereinafter defined), provided that the Weatherford Shares, and
all noncash dividends or distributions thereon, shall be retained in kind except
to the extent that the Seller Representative directs their sale and reinvestment
in Permitted Investments. As used herein, "Permitted Investments" means:
(a) marketable obligations of, or marketable
obligations fully and directly guaranteed by, the United States;
(b) repurchase obligations with a term of not more
than ten (10) days for underlying securities of the types described in clause
(a) entered into with any bank organized under the laws of the United States or
any State thereof, the commercial paper of which bank is rated A-2 or better by
Standard & Poor or P-2 or better by Xxxxx'x Investors Service, Inc;
(c) certificates of deposit issued by any bank
described in clause (b), including the bank acting as Escrow Agent; or
(d) any mutual fund, money market fund or short-term
investment fund, the portfolio of which is limited to obligations described in
clauses (a) and (b) above, including funds from which the Escrow Agent, or an
affiliate of the Escrow Agent, earns an investment advisory fee. . The Escrow
Agent shall have no obligation or authority to sell, invest or reinvest the
Escrow Funds in the absence of instructions from the Seller Representative.
6. Distributions on Escrow Funds. All dividends and
distributions, and proceeds of investments and reinvestments, received by the
Escrow Agent with respect to the Escrow Funds shall become and remain part of
the Escrow Funds until disbursed in accordance with Section 8 hereof.
7. Voting Rights of Shares in Escrow. All voting rights
with respect to any securities comprising a part of the Escrow Funds may be
exercised by Seller, and the Escrow Agent shall, as necessary, execute and
deliver to Seller such proxies, consents or other documents as may be necessary
to enable Seller to exercise such rights.
8. Release of Escrow Funds. Escrow Agent will hold the
Escrow Funds in its possession until their disbursement from time to time
pursuant to the following:
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(a) Upon receipt of Joint Written Instructions or an
Arbitration Order (as such terms are defined in Section 8(d)), Escrow Agent
shall pay to the persons or entities referred to therein the amounts so
indicated, but no more than the total amount of the Escrow Funds. Any such
payment shall be made within three (3) Banking Days (as hereinafter defined)
following receipt of the relevant Joint Written Instructions or Arbitration
Order. The Escrow Agent is authorized, if necessary, to cause American Stock
Transfer & Trust Company, the transfer agent and registrar for Xxxxxxxxxxx'x
common stock, to exchange certificates representing the Escrow Shares for
certificates of different denominations in order to make any such payment.
(b) Subject to Section 8(a), and unless otherwise
directed by Joint Written Instructions or Arbitration Order, Escrow Agent shall
distribute to Sellers, within three (3) Banking Days after the second
anniversary of the Closing Date, that portion of the Escrow Funds that exceeds
the aggregate amount of all outstanding or unsettled Purchaser Claims, or if no
outstanding or unsettled Purchaser Claims exist, all of the Escrow Funds.
(c) Buyer or Weatherford shall establish a "Purchaser
Claim" by providing a written notice to Escrow Agent (with a copy to the Seller
Representative) including (i) a description in reasonable detail of the claim
for which indemnity is sought under the Purchase Agreement and (ii) a statement
of the specified amount of such claim or a statement that no such amount is
reasonably determinable. Within thirty (30) days after the provision of an
initial Purchaser Claim that does not specify the amount of such claim, Buyer or
Weatherford shall provide written notice of its good faith estimate of the
maximum amount of such claim to Escrow Agent (with a copy to the Seller
Representative). Buyer or Weatherford may amend the specified amount or any
estimate of the maximum amount of any claim at any time by written notice to
Escrow Agent (with a copy to the Seller Representative), provided, however, in
the event Buyer amends the amount or estimate of any such claim, Buyer shall
provide with such estimate a description in reasonable detail of the reasons for
such amendment. Solely for purposes of Section 8(b), the amount of a Purchaser
Claim shall equal the specified or maximum amount contained in the most recent
written notice received by Escrow Agent pursuant to this subsection (c) or, if
no notice containing a specified or maximum amount has been received, (x) for
the first sixty (60) days after the initial provision of such Purchaser Claim,
the entire amount of the remaining Escrow Funds and (y) thereafter, unless and
until such notice is received, zero (0). The aggregate amount of all Purchaser
Claims shall be reduced by the payments thereof as well as the reductions
thereof specified in all Joint Written Instructions or Arbitration Orders
delivered to Escrow Agent. Buyer shall act in good faith in specifying the
foregoing amounts and in making the foregoing estimates.
(d) For purposes of this Agreement, the following
definitions shall apply:
(i) "Joint Written Instructions" means
written instructions executed by Buyer and the Seller Representative directed to
Escrow Agent in accordance with Section 15 hereof.
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(ii) "Arbitration Order" means an order,
decree or judgment of a panel of arbitrators issued pursuant to Section 12.4 of
the Purchase Agreement.
(iii) "Banking Day" means any day other than
a Saturday, Sunday or other day on which commercial banks in Pittsburgh,
Pennsylvania are authorized by law to close.
9. Selection of Escrow Funds. In making payment pursuant
to Section 8(a), Escrow Agent shall designate the items of Escrow Funds to be
used, resorting first, to the extent available, to Escrow Shares, unless a
specific designation is directed in a writing signed by the Seller
Representative and received by Escrow Agent on or before its receipt of the
applicable Joint Written Instructions or Arbitration Order. For purposes of this
Section 9, the Escrow Shares or any other securities listed on a national
securities exchange shall be valued at the average of the closing sales price of
such securities for the five (5) consecutive trading days ending on the Banking
Day immediately preceding the day the Joint Written Instructions or Arbitrator
Order was received by Escrow Agent, as reported by such exchange. Other property
shall be valued as reasonably determined by the Escrow Agent, in good faith.
10. Indemnification of Escrow Agent.
(a) Escrow Agent will have no duties or
responsibilities other than those expressly set forth herein. Escrow Agent will
have no duty to enforce any obligation of any person or entity, other than
Escrow Agent, to make any payment or delivery not expressly set forth herein or
to direct or enforce any obligation of any person to perform any other act.
Escrow Agent will be under no liability to anyone due to any failure of any
party other than Escrow Agent to perform its obligations. Except for this
Agreement and instructions given to Escrow Agent pursuant to its terms, Escrow
Agent will not be obligated to recognize any agreement between or among any of
the parties hereto (other than Escrow Agent), notwithstanding its knowledge
thereof.
(b) Escrow Agent will not be liable for any action
taken or omitted by it, or any action suffered by it to be taken or omitted, in
good faith and in the exercise of its own best judgment, and may rely
conclusively and will be protected in acting upon any order, notice, demand,
certificate, opinion or advice of counsel, statement, instrument, report or
other paper or document that Escrow Agent reasonably believes to be genuine and
to be signed or presented by the proper person or persons.
(c) Escrow Agent will be indemnified and held
harmless jointly and severally by Seller and the Shareholders from and against
any expenses, including reasonable counsel fees and disbursements, claims,
damages or losses suffered by Escrow Agent in connection with any claim or
demand, which, in any way, directly or indirectly, arises out of or relates to
this Agreement, unless Escrow Agent is guilty of willful misconduct, fraud or
gross negligence under this Agreement. Promptly after the receipt by Escrow
Agent of notice of any such demand or claim or the commencement of any action,
suit or proceeding relating thereto, Escrow Agent will notify the other parties
hereto in writing. Seller and the Shareholders shall have the right to defend
any such action, suit or proceeding at their expense.
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11. Compensation of Escrow Agent. Seller will pay the
fees due to Escrow Agent hereunder, as set forth on SCHEDULE A attached hereto.
The Escrow Agent hereby waives any right of set-off that it now or hereafter may
have with respect to the Escrow Funds.
12. Termination of Agreement and Resignation of Escrow
Agent.
(a) This Agreement will terminate on the date of the
final disbursement of the Escrow Funds, except for Sections 10, 14, 15, 17 and
18 hereof, which will survive such disbursement without limitation.
(b) At any time, upon thirty (30) days prior notice
to each of the other parties hereto, Escrow Agent may resign and be discharged
from its duties as Escrow Agent hereunder. As soon as practicable after its
resignation, Escrow Agent will promptly turn over to a successor escrow agent
mutually appointed by the other parties hereto all monies and property held
hereunder upon presentation of a document appointing the new escrow agent and
its acceptance thereof. The parties agree to execute with any such new escrow
agent an agreement substantially in the form of this Agreement.
13. Distributions by the Escrow Agent. Escrow Agent
shall make all cash payments in excess of Five Hundred Dollars ($500.00) to
Buyer or Seller hereunder by wire transfer pursuant to the recipient's
instructions, unless otherwise directed by the recipient. Payments of Five
Hundred Dollars ($500.00) or less may be made by the Escrow Agent by check.
14. Records. Escrow Agent will maintain accurate records
of all transactions hereunder. Promptly after the termination of this Agreement
pursuant to Section 12 hereof, or as may reasonably be required by Buyer or
Seller from time to time before such termination, Escrow Agent will provide
Buyer and Seller with a complete copy of such records, certified by Escrow Agent
to be a complete and accurate account of all such transactions. Buyer and
Seller, and their duly authorized representatives, will also have access to such
books and records at all reasonable times during normal business hours upon
reasonable notice to Escrow Agent.
15. Notices. All notices, communications and instructions
required or desired to be give under this Agreement must be in writing (except
for investment instructions) and will be deemed to be duly given when received
(or tendered, if delivery is refused by the recipient) if sent by registered or
certified mail, return receipt requested, or overnight courier to the following
addresses:
To Escrow Agent: National City Bank of Pennsylvania
Institutional Trust
00 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx, XX 00000-0000
Attn: Xxxx X. Xxxxxxx
Assistant Vice President
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To Buyer or Weatherford U.S., X.X.
Xxxxxxxxxxx: 000 Xxxx Xxx Xxxx., Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxx
To Seller Xxxxx X. Xxxxx
Representative: 000 Xxxxxxx Xxxx
XxXxxxxx, XX 00000
To Seller or CHI: Clearwater Holdings, Inc.
0000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx
To Shareholders: Xxxxx X. Xxxxx
000 Xxxxxxx Xxxx
XxXxxxxx, XX 00000
Xxxx X. Xxxxxx
0 Xxxxx Xxxx Xxxx
Xxx Xxxxxxxxx, XX 00000
Xxx X. Xxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxx Xxxx, XX 00000
Xxxxx X. Xxxxxx
0000 Xxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Copies to: Houston Xxxxxxxx, P.C.
00xx Xxxxx, Xxx Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx
or to such other address and to the attention of such other person as any of the
above may have furnished to the other parties in writing and delivered in
accordance with the provisions set forth above.
16. Counterparts. This Agreement may be executed in one
or more counterparts, all of which shall together constitute a single document.
The parties may execute more than one copy of this Agreement, in which case each
executed copy shall constitute an original.
17. Assignment and Modification. None of the parties
hereto may assign this Agreement or any right or interest hereunder without the
prior written consent of the other
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parties hereto. Subject to the foregoing, this Agreement will be binding upon
and inure to the benefit of each of the parties hereto and their respective
heirs, successors and permitted assigns. No other person will acquire or have
any rights under, or by virtue of, this Agreement. This Agreement may be changed
or modified only in a writing signed by all of the parties hereto.
18. Choice of Law; Headings. This Agreement will be
governed by and construed in accordance with the laws of the Commonwealth of
Pennsylvania. Headings in this Agreement are for reference purposes only and
shall not limit or otherwise affect any of the terms hereof.
19. Taxes. All interest, income and gains on the
Escrow Funds shall be allocated to Seller for purposes of reporting to the
Internal Revenue Service and state and local Governmental Entities.
20. Merger of Escrow Agent. Any corporation into which
the Escrow Agent in its individual capacity may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Escrow Agent in its individual capacity
shall be a party, or any corporation to which substantially all the corporate
trust business of the Escrow Agent in its individual capacity may be
transferred, shall be the Escrow Agent under this Agreement without further act.
21. Conformity to Purchase Agreement. As between all
parties hereto other than the Escrow Agent, in the event of conflict or
inconsistency between the terms of this Agreement and the terms of the Purchase
Agreement, the terms of the Purchase Agreement shall control.
22. Definitions. All capitalized terms not otherwise
defined herein shall have the meanings ascribed to them in the Purchase
Agreement.
IN WITNESS WHEREOF, the parties hereto, by their duly authorized
officer, have executed this Agreement on the date first above written.
BUYER: WEATHERFORD:
WEATHERFORD U.S., X.X. XXXXXXXXXXX INTERNATIONAL, INC.
By: Weatherford Holding U.S., Inc.,
its general partner
By: /s/ XXXXXX X. XXXX
Name: Xxxxxx X. Xxxx
By: /s/ XXXXXX X. XXXX Title: Senior Vice President
Name: Xxxxxx X. Xxxx
Title: Senior Vice President
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SHAREHOLDERS: ESCROW AGENT:
NATIONAL CITY BANK OF PENNSYLVANIA
/s/ XXXXX X. XXXXX
Xxxxx X. Xxxxx By: /s/ XXXX X. XXXXXXX
Name: Xxxx X. Xxxxxxx
Title: Asst. Vice President
/s/ XXXX X. XXXXXX
Xxxx X. Xxxxx
/s/ XXX X. XXXXXX
Xxx X. Xxxxxx
/s/ XXXXX X. XXXXXX
Xxxxx X. Xxxxxx
ECD/NORTHWEST, INC.
By: /s/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: CEO
CLEARWATER HOLDINGS, INC.
By: /s/ XXXXX X. XXXXX
Name: Xxxxx X. Xxxxx
Title: CEO
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SCHEDULE A
Escrow Agent's Fees
As long as this Escrow Agreement remains in effect and the Escrow Agent
continues to serve hereunder, the Escrow Agent shall be entitled to the
following fees:
Acceptance Fee of $1,000, payable within sixty (60) days
following the date of this Escrow Agreement.
Annual Fees as follows:
o Initial annual fee of $2,000, payable within
sixty (60) days following the date of this
Escrow Agreement.
o Subsequent annual fees of $2,000 each, payable
on each succeeding anniversary of the due date
of the initial annual fee.
