ESCROW AGREEMENT
ESCROW AGREEMENT (this “Agreement”) made as of the 22nd day of January, 2009, by and between
FIRST AMERICAN TITLE INSURANCE COMPANY (“Escrowee”), XXXXX & XXXXX COMPANY, a Delaware corporation
(“G&E”), and MATRIX CONNECTICUT, LLC, a Delaware limited liability company (“Matrix”).
WITNESSETH:
WHEREAS, XXXX Danbury LLC, a Delaware limited liability company, G&E, XXXX Property
Acquisition LLC, a Delaware limited liability company (“XXXX”), Matrix Danbury, LLC, a Delaware
limited liability company (“Matrix Sub”), and Matrix have entered into that certain Merger
Agreement dated January 22, 2009 (collectively, the “Contract”) for the merger of XXXX and Matrix
Sub, as more particularly described in the Contract;
WHEREAS, under the Contract, G&E, Matrix and the other parties thereto have agreed with each
other to place both the Initial Deposit of One Million Two Hundred Fifty Thousand Dollars
($1,250,000) (as defined in the Contract), and the Additional Deposit of Five Million Dollars
($5,000,000) (as defined in the Contract), together totaling Six Million Two Hundred Fifty
Thousand Dollars ($6,250,000) (the Additional Deposit, together with the Initial Deposit, shall be
hereinafter collectively referred to as, the “Deposit"), in escrow with Escrowee, pursuant to
Section 2.1 of the Contract, pending the closing of the transaction contemplated in the Contract,
all in accordance with the terms and provisions of the Contract; and
WHEREAS, Escrowee is willing to hold the Deposit in escrow on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, the parties hereto agree as follows:
1. (a) Concurrently with the execution of this Agreement, Matrix shall deliver to Escrowee the
Deposit of Six Million Two Hundred Fifty Thousand Dollars ($6,250,000) pursuant to Section 2.1 of
the Contract, by immediately available funds to be wired to the account and pursuant to the wiring
instructions of Escrowee. Following receipt of the Deposit, Escrowee shall wire transfer one-half
of the Deposit (being $3,125,000.00) to G&E, pursuant to the wire transfer instructions attached
hereto as Schedule 1. Escrowee shall invest the remainder of the Deposit in Approved
Investments (as hereinafter defined). Escrowee shall use reasonable efforts to keep the Deposit
invested for a period to end prior to, but as nearly contemporaneous as is reasonable with, the
date of the actual closing under the Contract (the “Closing Date”), having due regard to the fact
that the Deposit must be available on or before the Closing Date. Escrowee shall bear no liability
for any loss occasioned by investment of the Deposit as herein provided, by any delays in investing
or reinvesting the Deposit or by any failure to achieve the maximum possible yield from the
Deposit.
(b) The Deposit (as reduced by the amount wire transferred to G&E pursuant to Paragraph l(a)
above), plus any interest earned from the investment thereof in accordance with the terms of this
Agreement, less any and all transaction or account fees, costs, expenses or charges, including,
without limitation, brokerage and custodial fees, attributable to such
investment (such sum hereinafter called the “Invested Deposit”), shall be delivered by Escrowee to
G&E, to Matrix or, if pursuant to paragraph 4 hereof, to a substitute impartial party or a court
having appropriate jurisdiction, in accordance with the terms of this Agreement. Delivery of the
Invested Deposit in accordance with the terms of this Agreement shall be made by bank wire transfer
of immediately available funds. Escrowee agrees, upon request, to provide the parties with its
computation of the Invested Deposit. Without limiting paragraphs 6 and 7 hereof, it shall be
conclusively presumed that: (i) any and all investments made by Escrowee in Approved Transactions,
are authorized and permitted under the terms of this Agreement; (ii) the parties hereto have agreed
to and concurred in all such investments; (iii) by so investing the Deposit, Escrowee has complied
with its investment obligations pursuant to this Agreement; and (iv) Escrowee’s computation of the
Invested Deposit is correct in the absence of manifest error.
(c) As used herein, “Approved Investments” shall mean a federally insured money market
account and allowing for withdrawal upon demand. Escrowee is authorized to sell or otherwise
realize upon such investments at any time and from time to time when funds are required for the
purposes of this Agreement. All risk of loss or diminution in interest or appreciation upon such
investments shall become a part of the Deposit.
2. (a) If the merger contemplated in the Contract shall be consummated, then at
the time of the consummation of such transaction, Escrowee shall deliver to G&E the Invested
Deposit against a signed receipt therefor.
(b) Notwithstanding the provisions of paragraph 2(a) above, if Escrowee shall
receive written instructions signed by both Matrix and G&E, specifying the party to
whom the invested Deposit is to be delivered (the “Designated Party”) and the time and
place where the same is to be delivered, Escrowee shall deliver the same in accordance
with such written instructions, such delivery to be made against a signed receipt
therefor
from the Designated Party.
(c) Upon the delivery of the Invested Deposit in accordance with this
paragraph 2, Escrowee shall thereupon be relieved of and discharged and released from
any and all liability hereunder and with respect to the Invested Deposit.
3. If, at any time Escrowee shall receive a certificate of either G&E or Matrix (the
“Certifying Party”) to the effect that: (i) the other party (the “Other Party”) has defaulted
under
the Contract or that the Contract has otherwise been terminated or cancelled; (ii) a copy of
the
certificate and a statement in reasonable detail of the basis for the claimed default,
termination or
cancellation was mailed as provided herein to the Other Party prior to or contemporaneous with
the giving of such certificate to Escrowee; and (iii) in the case of a claimed default, to the
knowledge of the Certifying Party, the claimed default has not been cured, then, Escrowee
shall
promptly send a copy of such certificate to the Other Party and unless Escrowee shall have
received contrary instructions from the Other Party within five (5) business days of
Escrowee’s
mailing of said certificate (time being of the essence with respect to this five (5) business
day
period), Escrowee shall, within five (5) business days of the expiration of such five (5)
business
day period, deliver the Invested Deposit to the Certifying Party and thereupon be relieved of
and
discharged and released from any and all liability hereunder and with respect to the Invested
Deposit. If Escrowee shall receive contrary instructions from the Other Party within five
(5)
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business days of Escrowee’s sending of said certificate (TIME BEING OF THE ESSENCE with respect to
this five (5) business day period), Escrowee shall not so deliver the Invested Deposit but shall
hold or deposit the same in accordance with the terms of paragraph 4 hereof.
4. In the event that: (i) Escrowee shall not have received instructions pursuant to
this Agreement on or prior to the latest of the originally scheduled Closing Date and all new
Closing Dates, if any (the “Latest Closing Date”); (ii) the closing under the Contract shall
not
have occurred on or prior to the Latest Closing Date; (iii) Escrowee shall receive contrary
instructions from the parties hereto; (iv) any dispute shall arise as to any matter arising
under this
Agreement; (v) any alleged default by G&E or Matrix under the Contract shall occur; or
(vi) there shall be any uncertainty as to the meaning or applicability of any of the
provisions
hereof, Escrowee’s duties, rights or responsibilities hereunder or any written instructions
received
by Escrowee pursuant hereto, Escrowee may, at its option at any time thereafter, deposit the
funds and/or instruments then being held by it in escrow into any court having appropriate
jurisdiction, or take such affirmative steps as it may elect in order to substitute an
impartial party
to hold any and all escrowed funds and/or instruments, and upon making such deposit, shall
thereupon be relieved of and discharged and released from any and all liability hereunder and
with respect to the Invested Deposit or any portion thereof so deposited.
5. Escrowee shall be entitled to rely upon the authenticity of any signature and the
genuineness and/or validity of any writing received by Escrowee pursuant to or otherwise
relating to this Agreement.
6. G&E and Matrix recognize and acknowledge that Escrowee is serving without
compensation and solely as an accommodation to the parties hereto and they each agree that
Escrowee shall not be liable to either of the parties for any error of judgment, mistake or
act or
omission hereunder or any matter or thing arising out of its conduct hereunder, except for
Escrowee’s willful misfeasance or gross negligence.
7. If G&E and/or Matrix (each separately being the “Entity”) is comprised of more
than one party, each such party comprising the Entity shall be jointly and severally liable
for the
obligations of the Entity hereunder.
8. All notices, certificates and other communications permitted hereunder shall be in
writing and shall be deemed duly served and given two (2) Business Days after mailed by
registered or certified mail, return receipt requested, postage prepaid, at a regularly
maintained
branch of the United States Postal Service and addressed as follows:
G&E:
|
Xxxxx Xxxxxx | |
Xxxxx & Xxxxx Realty Investors, LLC | ||
0000 X. Xxxxxx Xxx. #000 | ||
Xxxxx Xxx, XX 00000 | ||
(000) 000-0000 | ||
(000) 000-0000 fax | ||
With Required Copy to:
|
Xxxxx Xxx |
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Xxxxx & Xxxxx Realty Investors, LLC | ||
0000 X. Xxxxxx Xxx. #000 | ||
Xxxxx Xxx, XX 00000 | ||
(000) 000-0000 | ||
(000) 000-0000 fax | ||
With Required Copy to:
|
Xxxx Xxxxxxx | |
Senior Vice President, Asset Management | ||
Xxxxx & Xxxxx Realty Investors | ||
0000 Xxxxx Xxxx Xxxx, Xxxxx 000 | ||
Xxxxxxxx, XX 00000 | ||
(000) 000-0000 | ||
(000) 000-0000 fax | ||
With Required Copy to:
|
Xxxxx X. Xxxxx, Esq. | |
DLA Piper LLP (US) | ||
000 X. XxXxxxx Xxxxxx, Xxxxx 0000 | ||
Xxxxxxx, XX 00000 | ||
(000) 000-0000 | ||
(000) 000-0000 fax | ||
Matrix
|
Xxxx Xxxxxx | |
Matrix Connecticut, LLC | ||
c/o Xxxxx Xxxxxx | ||
The Matrix Realty Group, Inc. | ||
000 Xxxxxxxxx Xxxxxx, Xxxxx 000 | ||
Xxxxxxxxx, Xxx Xxxx 00000 | ||
(000) 000-0000 | ||
(000) 000-0000 fax | ||
With Required Copy to:
|
Xxxxxxxx X. Xxxxxxxxx | |
Xxxxxxxxx & Kavinsky | ||
0000 Xxxxx Xxxxx, Xxxxx 000 | ||
Xxxxxxxx, Xxxx 00000 | ||
(000) 000-0000 | ||
(000) 000-0000 fax | ||
Escrowee:
|
First American Insurance Company | |
00 Xxxxx XxXxxxx Xxxxxx, Xxxxx 000 | ||
Xxxxxxx XX 00000 | ||
(000) 000-0000 | ||
(000) 000-0000 fax | ||
Attn: Xxxxxxx X. Xxxxxx Xx. |
Each party may, by notice as aforesaid, designate such other person or persons and/or such other
address or addresses for the receipt of notices. Copies of all notices, certificates or other
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communications relating to this Agreement in respect to which Escrowee is not the addressee or
sender shall be sent to Escrowee in the manner hereinabove set forth.
9. (a) G&E and Matrix agree that Escrowee is to act as the parties’ nominee in
investing the Deposit pursuant to this Agreement and in collecting the interest earned on the
Invested Deposit on behalf of the parties. G&E and Matrix each agree to complete the forms
necessary to comply with the backup withholding and interest reporting regulations under the
Internal Revenue Code of 1986, as amended, or any successor thereto, including, without
limitation, Form W-9, a separate copy of which is to be completed by G&E and Matrix and
delivered to Escrowee contemporaneously with the execution and delivery of this Agreement.
(b) Unless G&E shall have delivered to Escrowee a Form W-8 (Nonresident
Alien Certification), G&E certifies under penalties of perjury
that (1) the number
shown
under G&E’s signature is the correct tax identification number of G&E and (2) the
account to be established by Escrowee, insofar as applicable to G&E, is not subject to
back-up withholding either because G&E has not been notified by the Internal Revenue
Service that G&E is subject to back-up withholding due to underreporting of interest or
dividends or the IRS has notified G&E that G&E is no longer subject to such back-up
withholdings.
(c) Unless Matrix shall have delivered to Escrowee a Form W-8 (Nonresident
Alien Certification), Matrix certifies under penalties of perjury that (1) the number
shown
under Matrix’s signature is the correct tax identification number of Matrix and (2) the
account to be established by Escrowee, insofar as applicable to Matrix, is not subject
to
back-up withholding either because Matrix has not been notified by the Internal Revenue
Service that Matrix is subject to back-up withholding due to underreporting of interest
or
dividends or the IRS has notified Matrix that Matrix is no longer subject to such
back-up
withholdings.
10. This Agreement shall be binding on and inure to the benefit of all parties hereto
and their respective successors and permitted assigns and may not be modified or amended
orally, but only in writing signed by all parties hereto. Neither G&E nor Matrix may assign
its
rights or obligations under this Agreement to any party other than a party to whom G&E or
Matrix, as applicable, assigns its right, title and interest in, to and under the Contract and
no
permitted assignment by Matrix or G&E should be effective unless and until such party shall
have delivered to Escrowee (i) written notice of such assignment and (ii) an assumption
agreement with respect to all of the obligations of the assigning party hereunder.
11. The undersigned hereby submit to personal jurisdiction in the State of Illinois for
all matters, if any, which shall arise with respect to this Agreement, and waive any and all
rights
under the law of any other state or country to object to jurisdiction within the State of
Illinois or
to institute a claim of forum non conveniens with respect to any court in the State of
Illinois for
the purposes of litigation with respect to this Agreement.
12. If any term, condition or provision of this Agreement, or the application thereof to
any circumstance or party hereto, shall ever be held to be invalid or unenforceable, then in
each
such event the remainder of this Agreement or the application of such term, condition or
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provision to any other circumstance or party hereto (other than those as to which it shall be
invalid or unenforceable) shall not be thereby affected, and each term, condition and provision
hereof shall remain valid and enforceable to the fullest extent permitted by law.
13. This Agreement may be executed in any number of counterparts, each counterpart
for all purposes being deemed an original, and all such counterparts shall together constitute
only
one and the same agreement.
14. G&E agrees that it shall not xxx for, seek or demand any money or other judgment
against any affiliate of Matrix, any direct or indirect member, manager, shareholder, partner,
beneficiary or other owner of a direct or indirect beneficial ownership interest in Matrix or
such
affiliate, or any director, officer, employee, trustee, or agent of any of the foregoing in
any action
or proceeding under or by reason of or in connection with this agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the
date first above written.
G&E: XXXXX & XXXXX COMPANY, a Delaware corporation |
||||
By: | /s/ Xxxx Xxxxxx | |||
Name: | Xxxx Xxxxxx | |||
Title: | Executive Vice President | |||
00-0000000 | ||||
Federal Taxpayer Identification Number | ||||
MATRIX: MATRIX CONNECTICUT, LLC, a Delaware limited liability company |
||||
By: | /s/ Xxxx Xxxxxx | |||
Name: | Xxxx Xxxxxx | |||
Title: | Member | |||
Federal Taxpayer Identification Number | ||||
ESCROWEE: FIRST AMERICAN TITLE INSURANCE COMPANY |
||||
By: | /s/ Xxxx Xxxxxx | |||
Name: | Xxxx Xxxxxx | |||
Title: | Vice President |
SCHEDULE
1
WIRE
TRANSFER INSTRUCTIONS
Bank:
|
XX Xxxxxx Chase Bank | |
ABA:
|
000000000 | |
Account Name:
|
Xxxxx & Xxxxx Company | |
Account Number: | 5300031488 |