Pre-Effective Amendment to Registration of Securities Issued in a Business-Combination Transaction — Form S-4
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-4/A Amendment No. 1 to Form S-4 141 745K
2: EX-3.1 Articles of Incorporation of the Company 10 36K
3: EX-3.2 By-Laws of the Company 9 42K
4: EX-3.3 Articles of Incorporation of Kilovac 75 142K
5: EX-3.4 By-Laws of Kilovac 20 76K
6: EX-3.5 Articles of Incorporation of Kilovac International 2 14K
7: EX-3.6 By-Laws of Kilovac International 19 76K
8: EX-4.1 Indenture, Dated September 18, 1997 147 467K
9: EX-4.2 Purchase Agreement, Dated September 12, 1997 40 132K
10: EX-4.3 Registration Rights Agreement 33 121K
11: EX-10.1 Ramzi A. Dabbagh Employment Agreement 8 34K
19: EX-10.10 Security Agreement, Dated September 18, 1997 53 154K
20: EX-10.11 Stock Subscription & Purchase Agreement 29 161K
21: EX-10.13 Environmental Remediation & Escrow Agreement 16 45K
22: EX-10.14 Lease Agreement, Dated July 2, 1996 31 116K
23: EX-10.15 2nd Amend. to Stock Subscription & Purchase Agrmt 8 36K
24: EX-10.17 Amend. to the Recapitalization Agreement 61 280K
25: EX-10.18 Indemnification & Escrow Agreement 12 57K
26: EX-10.19 Stockholders Agreement, Dated September 18, 1997 27 98K
12: EX-10.2 G. Daniel Taylor Employment Agreement 8 34K
27: EX-10.20 Registration Agreement, Dated September 18, 1997 27 98K
28: EX-10.21 Form of Junior Subordinated 10 47K
29: EX-10.22 Kilovac & Dan McAllister Employment Agreement 4 26K
30: EX-10.23 Kilovac & McPherson Employment Agreement 4 27K
31: EX-10.24 Kilovac & Rick Danchuk Employment Agreement 4 27K
32: EX-10.25 Kilovac & Robert A. Helman Employment Agreement 4 27K
13: EX-10.3 Michael A. Steinback Employment Agreement 4 25K
14: EX-10.4 David Henning Employment Agreement 3 21K
15: EX-10.5 Management Agreement, Dated September 18, 1997 5 25K
16: EX-10.6 Tax Sharing Agreement 4 21K
17: EX-10.8 Pledge Agreements, Dated September 18, 1997 17 62K
18: EX-10.9 Subsidiary Guarantee, Dated September 18, 1997 14 55K
33: EX-12.1 Statement of Computation of Ratios 1 15K
34: EX-21.1 Subsidiaries of the Company, Kilovac & Kilovac Int 1 12K
35: EX-23.1 Consent of Deloitte & Touche LLP 1 13K
36: EX-23.2 Consent of Deloitte & Touche 1 13K
37: EX-23.3 Consent of Deloitte & Touche LLP 1 13K
38: EX-99.1 Form of Letter of Transmittal 11 57K
39: EX-99.2 Form of Notice of Guaranteed Delivery 4 24K
40: EX-99.3 Form of Tender Instructions 2± 16K
EXHIBIT 10.18
INDEMNIFICATION AND ESCROW AGREEMENT
THIS INDEMNIFICATION AND ESCROW AGREEMENT, dated as of September 18, 1997
(the "Agreement"), by and among CII Technologies, Inc., a Delaware corporation
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("CII"), each of the persons listed on Exhibit A attached hereto (collectively
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the "New Investors"), each of the persons listed on Exhibit B attached hereto
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(collectively the "Redeeming Stockholders"), and American National Bank and
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Trust Company of Chicago, a national banking corporation, as Escrow Agent
("Escrow Agent").
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WHEREAS, CII, the New Investors and the Redeeming Stockholders have
entered into a Recapitalization Agreement (the "Recapitalization Agreement")
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providing for the recapitalization of CII (the "Recapitalization")
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(Capitalized terms not otherwise defined in this Agreement shall have the
meanings ascribed to such terms in the Recapitalization Agreement);
WHEREAS, Section 3.4(d) of the Recapitalization Agreement provides for
the delivery of a sum equal to Five Million Three Hundred Fifty Thousand Dollars
($5,350,000) (the "Escrow Amount") to the Escrow Agent at the closing of the
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Recapitalization, such Escrow Amount to be delivered to and maintained by the
Escrow Agent in accordance with the terms of this Agreement; and
WHEREAS, the parties hereto desire to provide for indemnification for
breaches of representations, warranties and covenants and for certain other
matters under the Recapitalization Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants contained herein, the parties hereto agree as follows:
1. Indemnification.
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(a) Subject to the limitations set forth in Article XIII of the
Recapitalization Agreement, from and after the Closing, the Redeeming
Stockholders shall protect, defend, hold harmless and indemnify CII, its
officers, directors, stockholders, employees and agents, and their respective
successors and assigns from, against and in respect of:
(i) any and all losses, liabilities, damages and expenses
whatsoever (including without limitation, reasonable professional fees and
costs of investigation, litigation, settlement, and judgment and interest)
(collectively "Losses") that may be suffered or incurred by any of them by
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reason of any breach of any representation, warranty, covenant or agreement
made by the Redeeming Stockholders or CII in the Recapitalization Agreement
or contained in any certificate executed by the Redeeming Stockholders or
CII and delivered to CII or the New Investors in connection with the
Recapitalization Agreement; and
(ii) any and all Losses that may be suffered or incurred by any
of them arising from or by reason of the disallowance of any deductions
previously taken or to be taken by CII with respect to any payments made on
or before the Closing to Sam Metti with respect to his current or past
employment with CII.
Notwithstanding anything herein or in the Recapitalization Agreement to the
contrary, CII and its officers, directors, stockholders, employees and agents,
and their respective successors and assigns may not make a claim for
indemnification pursuant to Section 1(a)(ii) above after the third anniversary
of the Closing.
(b) Subject to the limitations set forth in Article XIII of the
Recapitalization Agreement, from and after the Closing, CII shall protect,
defend, hold harmless and indemnify the Redeeming Stockholders, their officers,
directors, employees and agents, and their respective successors and assigns
from, against and in respect of:
(i) any and all Losses that may be suffered or incurred by any
of them arising from or by reason of any breach of any representation,
warranty, covenant or agreement made by the New Investors in the
Recapitalization Agreement or contained in any certificate executed by the
New Investors and delivered to CII or the Redeeming Stockholders in
connection with the Recapitalization Agreement; and
(ii) any and all Losses that may be suffered or incurred by any
of them arising from or by reason of the consummation of the transactions
described in Section 3.1 (Stock Split), 3.3 (Investment Transactions)
and/or 3.4 (Redemption Transactions) of the Recapitalization Agreement to
the extent such Losses would not have been suffered or incurred by any of
them if the acquisition of CII had been consummated as a reverse subsidiary
merger with an amount of equity financing and debt financing identical to
that which is contemplated by the Recapitalization Agreement.
(c) Whenever CII shall learn after Closing of a claim of a third
party of $10,000 or more that, if allowed (whether voluntarily or by a judicial
or quasi-judicial tribunal or agency), would give rise to an obligation of
indemnification under any one or more of the warranties, representations,
covenants or agreements of CII or any of the Redeeming Stockholders as set forth
in the Recapitalization Agreement, before paying the same or agreeing thereto,
CII shall promptly notify a Redeeming Stockholders' Representative in writing of
all such facts within CII's knowledge with respect to such claim and the amount
thereof; provided that notwithstanding anything herein to the contrary, the
Redeeming Stockholders will indemnify and hold harmless CII for any Losses it
shall suffer as a result of CII not paying such claim when otherwise due in
order that CII may comply with its obligations under this paragraph. If, prior
to the expiration of twenty (20) days from the mailing of such notice, a
Redeeming Stockholders' Representative shall request, in writing, that such
claim not be paid, CII shall not pay the same (again, it being understood that
notwithstanding anything herein to the contrary, the Redeeming Stockholders will
indemnify and hold harmless CII for any Losses CII shall suffer as a result of
CII not paying such claim in order to comply with such Redeeming Stockholders'
request), provided a Redeeming Stockholders' Representative proceeds promptly,
at the Redeeming Stockholders' own expense (including employment of counsel
reasonably satisfactory to CII), to settle, compromise or litigate, in good
faith, such claim. After notice from a Redeeming Stockholders' Representative
requesting CII not to pay such claim and the Redeeming Stockholders' assumption
of the defense of such claim at their expense, the Redeeming Stockholders shall
not be liable to CII for any legal or other expense subsequently incurred by CII
in connection with the defense thereof; provided that CII shall have the right
to participate at its expense and with counsel of its choice in such settlement,
compromise or litigation. Notwithstanding the foregoing, CII shall have the
right to direct and control the negotiations,
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settlement and litigation of such claim (and the Redeeming Stockholders shall be
liable to CII for any legal or other expense incurred by CII in connection with
the defense thereof) if (i) such third party is also making a related claim or
claims that seeks non-monetary relief, (ii) such claim or related claim involves
criminal allegations against CII (or its officers, directors, stockholders,
employees or agents), or (iii) such claim or related claim has had or could
reasonably be expected to have a Material Adverse Effect. CII shall not be
required to refrain from paying any claim which has matured by a court judgment
or decree, unless an appeal is duly taken therefrom and execution thereof has
been stayed, nor shall CII be required to refrain from paying any claim where
the delay in paying such claim would result in the foreclosure of a lien upon
any of the property or assets then held by CII or any of its subsidiaries or
where any delay in payment would cause CII or any of its subsidiaries a material
economic loss. CII shall not be required to notify a Redeeming Stockholders'
Representative prior to settling any claim described in this Section 1(c) of
less than $10,000. The failure to provide notice as provided in this paragraph
shall not excuse the Redeeming Stockholders from their continuing obligations
hereunder; however, the claim shall be reduced by any damages to the Redeeming
Stockholders resulting from CII's delay or failure to provide notice as provided
in this paragraph.
(d) Whenever the Redeeming Stockholders shall learn after Closing of
a claim of a third party of $10,000 or more that, if allowed (whether
voluntarily or by a judicial or quasi-judicial tribunal or agency), would give
rise to an obligation of indemnification under any one or more of the
warranties, representations, covenants or agreements of the New Investors as set
forth in the Recapitalization Agreement, before paying the same or agreeing
thereto, a Redeeming Stockholders' Representative shall promptly notify CII in
writing of all such facts within the Redeeming Stockholders' knowledge with
respect to such claim and the amount thereof; provided that notwithstanding
anything herein to the contrary, CII will indemnify and hold harmless the
Redeeming Stockholders for any Losses they shall suffer as a result of the
Redeeming Stockholders not paying such claim when otherwise due in order that
the Redeeming Stockholders may comply with their obligations under this
paragraph. If, prior to the expiration of twenty (20) days from the mailing of
such notice, CII shall request, in writing, that such claim not be paid, the
Redeeming Stockholders shall not pay the same (again, it being understood that
notwithstanding anything herein to the contrary, CII will indemnify and hold
harmless the Redeeming Stockholders for any Losses the Redeeming Stockholders
shall suffer as a result of the Redeeming Stockholders not paying such claim in
order to comply with CII's request), provided CII proceeds promptly, at CII's
own expense (including employment of counsel reasonably satisfactory to the
Redeeming Stockholders), to settle, compromise or litigate, in good faith, such
claim. After notice from CII requesting a Redeeming Stockholders Representative
not to pay such claim and CII's assumption of the defense of such claim at its
expense, CII shall not be liable to the Redeeming Stockholders for any legal or
other expense subsequently incurred by the Redeeming Stockholders in connection
with the defense thereof; provided that the Redeeming Stockholders shall have
the right to participate at their expense and with counsel of their choice in
such settlement, compromise or litigation. Notwithstanding the foregoing, the
Redeeming Stockholders shall have the right to direct and control the
negotiations, settlement and litigation of such claim (and CII shall be liable
to the Redeeming Stockholders for any legal or other expense incurred by the
Redeeming Stockholders in connection with the defense thereof) if (i) such third
party is also making a related claim or claims that seeks non-monetary relief,
or (ii) such claim or related claim involves criminal or quasi-criminal
allegations. The Redeeming Stockholders shall not be required to refrain from
paying any claim which has matured by a court judgment or decree, unless an
appeal is duly taken therefrom and execution thereof has
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been stayed, nor shall the Redeeming Stockholders be required to refrain from
paying any claim where the delay in paying such claim would result in the
foreclosure of a lien upon any of the property or assets then held by the
Redeeming Stockholders or where any delay in payment would cause the Redeeming
Stockholders a material economic loss. The Redeeming Stockholders shall not be
required to notify CII prior to settling any claim described in this Section
1(d) of less than $10,000. The failure to provide notice as provided in this
paragraph shall not excuse CII from its continuing obligations hereunder;
however, the Redeeming Stockholders' claim shall be reduced by any damages to
CII resulting from the Redeeming Stockholders' delay or failure to provide
notice as provided in this paragraph.
2. Deposit of Escrow Funds. Upon the execution of this Agreement,
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CII will deliver to the Escrow Agent the Escrow Amount by certified check
payable to the Escrow Agent (or at the request of the Escrow Agent, by wire
transfer), the receipt of which is hereby acknowledged by the Escrow Agent. The
Escrow Agent shall invest the Escrow Amount in an account identified as being
established pursuant to this Agreement (the "Escrow Account"). The Escrow Agent
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will hold said Escrow Amount together with all investments thereof and all
interest accumulated thereon and proceeds therefrom (the "Escrow Fund") in
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escrow upon the terms and conditions set forth in this Agreement and shall not
withdraw the Escrow Funds from the Escrow Account except as provided herein.
Interest on the Escrow Account shall be distributed annually on September 18th
to a Redeeming Stockholders' Representative.
3. Investments.
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(a) The Escrow Agent shall invest and reinvest from time to time the
Escrow Fund (i) in any obligations of, or guaranteed as to principal and
interest by, the United States or any agency or instrumentality thereof
(provided that the full faith and credit of the United States supports the
obligation or guarantee of such agency or instrumentality), with maturity dates
of 90 days or less, (ii) in any money market fund that invests solely in such
obligations or types described in clause (i), (iii) in any other investment
agreed to in writing on or prior to the Closing Date by a Redeeming
Stockholders' Representative and CHS or (iv) in any other investment agreed to
in writing after the Closing Date by a Redeeming Stockholders' Representative
and CII. Investments may be executed by the Escrow Agent's own Bond Department.
To the extent the Escrow Agent invests any funds in the manner provided for in
this Section, no party hereto shall be liable for any loss which may be incurred
by reason of any such investment.
(b) The Escrow Agent shall have the power to reduce, sell or
liquidate the foregoing investments whenever the Escrow Agent shall be required
to release all or any portion of the Escrow Fund pursuant to Section 4 hereof.
The Escrow Agent shall have no liability for any investment losses resulting
from the investment, reinvestment, sale or liquidation of any portion of the
Escrow Fund, except in the case of the gross negligence or willful misconduct of
the Escrow Agent.
4. Escrow Fund.
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(a) At any time and from time to time, during the period from the
Closing through the Escrow Expiration Date (as defined in Section 6 hereof), CII
may give to the Escrow Agent one or more notices ("Claims Notice") containing
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the information set forth in Section 4(b) below and
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stating that, pursuant to Section 1 or Section 2 of this Agreement, CII is
asserting against the Redeeming Stockholders a right of indemnity with respect
to a claim (a "Claim"). Upon receipt of the Claims Notice, the Escrow Agent
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shall, if such Claims Notice sets forth the amount of such Claim, hold a portion
of the Escrow Fund equal to the amount of such Claim as set forth in such Claims
Notice (or, if the amount set forth exceeds the entire amount of the Escrow
Fund, the entire amount of the Escrow Fund) in escrow until receiving notice of
a Determination (as defined in Section 4(c) below) of such Claim. If the Claims
Notice states that the amount of such Claim is not reasonably ascertainable by
CII, the Escrow Agent shall hold the entire Escrow Fund then in its possession
in escrow until subsequently notified by CII and thereafter shall hold in escrow
a portion of the Escrow Fund equal to the amount stated in such subsequent
notice. In the case of any Claim, the amount of which is not reasonably
ascertainable by CII at the time the Claims Notice of such Claim is given, CII
agrees to notify the Escrow Agent and a Redeeming Stockholders' Representative
of the amount of such Claim promptly after such amount becomes reasonably
ascertainable by CII.
(b) The Claims Notice given to the Escrow Agent pursuant to Section
4(a) above shall set forth the nature and details of such Claim, the Section of
the Recapitalization Agreement or this Agreement pursuant to which the Claim is
made, the amount thereof if reasonably ascertainable by CII (or a statement that
the amount thereof is not then reasonably ascertainable by CII and the basis for
such statement) and whether or not such Claim arises from the assertion of
liability by a third party. The Escrow Agent shall promptly forward such Claims
Notice to a Redeeming Stockholders' Representative.
(c) For the purpose of this Agreement, a "Determination" shall mean
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(A) a written compromise or settlement signed by CII and a Redeeming
Stockholders' Representative or (B) a binding arbitration award or a judgment of
a court of competent jurisdiction in the United States of America or elsewhere
(the time for appeal having expired and no appeal having been perfected) in
favor of CII and against the Redeeming Stockholders and based on a Claim under
Section 1 of this Agreement; provided, however, that in the case of a Claim not
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resulting from the assertion of liability by a third party, the Claims Notice to
the Escrow Agent setting forth the amount thereof as reasonably ascertained by
CII shall constitute a Determination of such Claim unless, within thirty (30)
days of the receipt by a Redeeming Stockholders' Representative of such Claims
Notice, as above provided, including the amount of such Claim, a Redeeming
Stockholders' Representative notify the Escrow Agent that it disputes such
amount in whole or in part (an "Objection").
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(d) Within ten (10) business days following notice of a
Determination, the Escrow Agent shall disburse to CII from the Escrow Fund the
amount set forth in such Determination. In the event of an Objection, the Escrow
Agent shall release the amount which is not in dispute, if any, and shall hold
the amount in dispute until such Objection is resolved in accordance with the
provisions of Section 5 hereof.
(e) (i) On or about September 18, 1998, the Escrow Agent shall
distribute to a Redeeming Stockholders' Representative an amount equal to
(A) the Escrow Fund remaining at that time minus (B) the amount of the
Escrow Fund set aside by the Escrow Agent for Claims of CII pursuant to
Section 4(a) minus (C) $3,350,000.
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(ii) On or about September 18, 1999, the Escrow Agent shall
distribute to a Redeeming Stockholders' Representative an amount equal to
(A) the Escrow Fund remaining at that time minus (B) the amount of the
Escrow Fund set aside by the Escrow Agent for Claims of CII pursuant to
Section 4(a) minus (C) $1,350,000.
(iii) On or about September 18, 2000, the Escrow Agent shall
distribute to a Redeeming Stockholders' Representative an amount equal to
(A) the Escrow Fund remaining at that time minus (B) the amount of the
Escrow Fund set aside by the Escrow Agent for Claims of CII pursuant to
Section 4(a).
5. Settlement of Disputes. Any party shall have the right to submit
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any dispute, controversy or claim arising out of this Agreement to neutral
binding arbitration in Chicago, Illinois. The matter shall be heard before a
single partner of Price, Waterhouse & Co. in Chicago, Illinois. Any party
requesting arbitration shall give notice to the other party stating the issue to
be resolved. The decision of the arbitrator shall be based solely upon the
written submission to the arbitrator and shall be final and binding on both
parties, with each party or parties bearing its own costs and expenses with
respect to the dispute. Each party hereby consents to the entry of a judgment
in any court of competent jurisdiction enforcing any arbitration decision made
in accordance herewith.
6. Termination of Escrow Agreement.
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(a) This Agreement shall terminate upon the earlier to occur of: (i)
September 18, 2000 (or at the time of the final resolution of any unresolved or
unsettled Claims then outstanding); and (ii) the distribution of all of the
Escrow Funds by the Escrow Agent pursuant to this Agreement (the earliest to
occur of (i) and (ii) above being hereinafter referred to as the "Escrow
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Expiration Date"); provided, however, that if there are any unresolved or
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unsettled Claims pursuant to Section 1 of this Agreement then outstanding on
September 18, 2000 this Agreement will not terminate until the resolution of all
such Claims.
(b) As soon as practicable after the Escrow Expiration Date, the
Escrow Agent shall promptly deliver to a Redeeming Stockholders' Representative
out of the Escrow Fund the excess, if any, of the total amount remaining in the
Escrow Funds over the sum of all amounts under unresolved or unsettled Claims
then outstanding, and the Escrow Agent shall continue to retain in the Escrow
Fund all such amounts under unresolved or unsettled Claims then outstanding,
subject to the terms of this Agreement until resolution of such Claims.
7. Concerning the Escrow Agent.
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(a) The Escrow Agent shall have no duties or responsibilities except
those expressly set forth herein. The Escrow Agent may consult with counsel and
shall have no liability hereunder except for its own gross negligence or willful
misconduct. It may rely on any notice, instruction, certificate, statement,
request, consent, confirmation, agreement or other instrument which it
reasonably believes to be genuine and to have been signed or presented by a
proper person or persons.
(b) The Escrow Agent shall have no duties with respect to any
agreement or agreements with respect to any or all of the Escrow Funds other
than as provided in this Agreement.
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In the event that any of the terms and provisions of any other agreement between
any of the parties hereto 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. Notwithstanding any provision to the
contrary contained in any other agreement, the Escrow Agent shall have no
interest in the Escrow Funds except as provided in this Agreement.
(c) So long as the Escrow Agent shall have any obligation to pay any
amount to the Redeeming Stockholders and/or CII from the Escrow Funds hereunder,
the Escrow Agent shall keep proper books of record and account, in which full
and correct entries shall be made of all receipts, disbursements and investment
activity in the Escrow Account.
(d) The Escrow Agent shall not be bound by any modification of this
Agreement affecting the rights, duties and obligations of the Escrow Agent,
unless such modification shall be in writing and signed by the other parties
hereto, and the Escrow Agent shall have given its prior written consent thereto.
The Escrow Agent shall not be bound by any other modification of this Agreement
unless the Escrow Agent shall have received written notice thereof.
(e) The Escrow Agent may resign as escrow agent at any time by giving
thirty (30) days written notice by registered or certified mail to CII and a
Redeeming Stockholders' Representative and such resignation shall take effect at
the end of such 30 days or upon earlier appointment of a successor. A successor
escrow agent hereunder may be appointed by designation in writing signed by CII
and a Redeeming Stockholders' Representative. CII and the Redeeming
Stockholders' Representatives undertake to utilize their best efforts to arrange
for the appointment of a successor escrow agent. If any instrument of
acceptance by a successor escrow agent shall not have been delivered to the
Escrow Agent within sixty (60) days after the giving of such notice of
resignation, the resigning Escrow Agent may at the expense of the Redeeming
Stockholders and CII petition any court of competent jurisdiction for the
appointment of a successor escrow agent.
(f) If at any time hereafter the Escrow Agent shall resign, be
removed, be dissolved or otherwise become incapable of acting, or the bank or
trust company acting as the Escrow Agent shall be taken over by any government
official, agency, department or board, or the position of the Escrow Agent shall
become vacant for any of the foregoing reasons or for any other reason, a
Redeeming Stockholders' Representative and CII shall appoint a successor escrow
agent to fill such vacancy.
(g) Every successor escrow agent appointed hereunder shall execute,
acknowledge and deliver to its predecessor, and also to CII and a Redeeming
Stockholders' Representative, an instrument in writing accepting such
appointment hereunder, and thereupon such successor escrow agent, without any
further act, shall become fully vested with all the rights, immunities and
powers and shall be subject to all of the duties and obligations, of its
predecessor; and every predecessor escrow agent shall deliver all property and
moneys held by it hereunder to its successor.
(h) CII and the Redeeming Stockholders shall share equally the fee
charged by the Escrow Agent for performing its services hereunder. Except as
provided in subsection 7(i) hereof, CII and the Redeeming Stockholders shall
share equally any reasonable out of pocket cost incurred by the Escrow Agent in
performing its duties hereunder. Notwithstanding the preceding
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sentences of this subsection 7(h), if the Closing does not occur the New
Investors and the Redeeming Stockholders shall share equally such fee and
reasonable out of pocket cost of the Escrow Agent. This covenant shall survive
termination of this Agreement. The Escrow Agent shall be entitled to a
reasonable fee for services rendered and for reimbursement of extraordinary
expenses incurred in the performance of its duties hereunder, which expenses are
not included in said fee. The current fee schedule for this Agreement includes
an acceptance fee of $3,500 which covers the first year of the escrow and an
administration fee of $3,500 charged annually thereafter. The acceptance fee is
payable upon opening the escrow and the administrative fee is payable in advance
of the annual period covered.
(i) CII and the Redeeming Stockholders shall indemnify and hold the
Escrow Agent harmless from and against any and all expenses (including
reasonable attorneys' fees), liabilities, claims, damages, actions, suits or
other charges ("Agent claims") incurred by or assessed against the Escrow Agent
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for anything done or omitted by the Escrow Agent in the performance of the
Escrow Agent's duties hereunder, except such which result from the Escrow
Agent's bad faith, gross negligence or willful misconduct. Agent Claims payable
hereunder shall be paid one-half by CII and one-half by the Redeeming
Stockholders. Notwithstanding the preceding sentences of this subsection 7(i),
if the Closing does not occur Agent Claims payable hereunder shall be paid one-
half by the New Investors and one-half by the Redeeming Stockholders. This
indemnity shall survive the resignation of the Escrow Agent or the termination
of this Agreement.
(j) To the extent any amount due to the Escrow Agent pursuant to
Sections 7(h) or 7(i) is not paid, the Escrow Agent may deduct the same from the
Escrow Account.
(k) No assignment of the interest of any of the parties hereto shall
be binding upon the Escrow Agent unless and until written evidence of such
assignment in form satisfactory to the Escrow Agent shall be filled with and
accepted by the Escrow Agent.
(l) In the event that any escrow property shall be attached,
garnished or levied upon by any court order, judgment or decree shall be made or
entered by any court order affecting the property deposited under this
Agreement, or any part thereof, the Escrow Agent is hereby expressly authorized,
in its sole discretion, to obey and comply with all writs, orders or decrees so
entered or issued, which it is advised by legal counsel of its own choosing is
binding upon it, whether with or without jurisdiction, and in the event that the
Escrow Agent obeys and complies with any such writ, order or decree it shall not
be liable to any of the parties hereto or any other person, firm or corporation,
by reason of such compliance notwithstanding such writ, order or decree be
subsequently reversed, modified, annulled, set aside or vacated.
(m) If the Escrow Agent become involved in litigation on account of
this Agreement, it shall have the right to retain counsel and shall have a first
lien on the property deposited hereunder for any and all costs, attorneys' fees,
charges, disbursements, and expenses in connection with such litigation; and
shall be entitled to reimburse itself therefor out of the property deposited
hereunder, and if its shall be unable to reimburse itself from the property
deposited hereunder, the parties hereto jointly and severally agree to pay to
the Escrow Agent on demand its reasonable charges, counsel and attorneys' fees,
disbursements and expenses in connection with such litigation.
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(n) In the event that conflicting demands are made upon the Escrow
Agent for any situation not addressed in this Agreement, the Escrow Agent may
withhold performance of the terms of this Agreement until such time as said
conflicting demands shall have been withdrawn or the rights of the respective
parties shall have been settled by court adjudication, arbitration, joint order
or otherwise.
8. Miscellaneous.
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(a) This Agreement shall be construed by and governed in accordance
with the laws of the State of New York, without regard to such jurisdiction's
conflicts of laws principles. In the event of any conflict of any provision
herein with the Recapitalization Agreement, the Recapitalization Agreement shall
control.
(b) This Agreement shall be binding upon and shall inure to the
benefit of the heirs, executors, administrators, legal representatives,
successors and assigns of the parties hereto.
(c) This Agreement may be executed in one or more counterparts which
taken together shall constitute but one and the same instrument.
(d) Section headings contained herein have been inserted for
reference purposes only and shall not be construed as part of this Agreement.
(e) This Agreement may be modified or amended only by a written
instrument duly executed by all parties hereto or their respective successors or
assigns.
(f) All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given (unless
otherwise specifically provided for herein) if delivered personally (including
by courier), telecopied (which is confirmed) or mailed (registered or certified
mail), postage prepaid or:
If to the New Investors or, after the Closing Date, to CII:
c/o Code, Hennessy & Simmons III, L.P.
10 South Wacker Drive
Suite 3175
Chicago, IL 60606
Attention: Brian P. Simmons
with a copy to:
Kirkland & Ellis
200 East Randolph Drive
Chicago, IL 60601
Attention: Sanford E. Perl, Esquire
-9-
If to the Redeeming Stockholders:
c/o CII Associates, L.P.
Westchester Financial Center
50 Main Street
White Plains, New York 10606
Attention: David A. Zackrison
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: Richard C. Weisberg, Esquire
If to the Escrow Agent:
American National Bank and Trust of Chicago
33 North LaSalle Street
13th Floor; Corporate Trust
Chicago, IL 60690
Attention: Timothy P. Martin
or to such other addresses or persons as any party may have furnished to the
other parties in writing, in accordance herewith, provided, however, that
-------- -------
notices to the Escrow Agent shall be deemed effective only upon receipt.
(g) The Escrow Agent shall not be liable to pay any tax on any
interest earned on the Escrow Amount, it being the understanding of the parties
that such tax shall be the responsibility of the Redeeming Stockholders, who
shall also be responsible for the reporting of all income earned on the Escrow
Fund. The tax identification numbers for the Redeeming Stockholders are set
forth on Exhibit B.
---------
(h) Pursuant to Section 2.1 of the Recapitalization Agreement, the
Redeeming Stockholders have irrevocably and unconditionally appointed Michael S.
Bruno, Jr. and David A. Zackrison or each of them or each of their designees as
their Redeeming Stockholders' Representatives to take any and all action on the
Redeeming Stockholders' behalf in connection with this Agreement. With respect
to the Redeeming Stockholders, CII, the New Investors and the Escrow Agent shall
be required only to deal with a Redeeming Stockholders' Representative appointed
hereunder.
(i) If any party hereto refuses to comply with, or at any time
violates or attempts to violate, any term, covenant or agreement contained in
this Agreement, any other party hereto may, by injunctive action, compel the
defaulting party to comply with, or refrain from violating, such term, covenant
or agreement, and may, by injunctive action, compel specific performance of the
obligations of the defaulting party.
-10-
(j) Except as provided herein, the rights and obligations of the
parties under this Agreement shall not be assigned to any person or entity,
without the written consent of the other parties.
(k) Any terms which are capitalized herein but not otherwise defined
shall have the meanings ascribed to them in the Recapitalization Agreement.
(l) Limitation of Liability. From and after the Closing, the sole
-----------------------
recourse and exclusive remedy of the Redeeming Stockholders against New
Investors and CII arising out of the Recapitalization Agreement or any
certificate delivered in connection with the Recapitalization Agreement, shall
be to assert a claim for indemnification under this Agreement.
* * * * *
-11-
IN WITNESS WHEREOF, the parties hereto have caused this
Indemnification and Escrow Agreement to be executed and delivered on the date
first above written.
CII TECHNOLOGIES, INC.
By: ____________________________
Name: ____________________________
Title: ____________________________
NEW INVESTORS:
BY: CODE, HENNESSY & SIMMONS III, L.P.,
as the New Investors' Representative
By: CHS Management III, L.P.
Its: General Partner
By: Code, Hennessy & SimmonS, Inc.
Its: General Partner
By: ________________________
Name: ________________________
Title: ________________________
REDEEMING STOCKHOLDERS:
By: ____________________________
Name: David A. Zackrison
Title: Redeeming Stockholder's Representative
ESCROW AGENT:
AMERICAN NATIONAL BANK AND TRUST OF CHICAGO
By: _______________________________
Name: _______________________________
Title: _______________________________
Dates Referenced Herein and Documents Incorporated by Reference
| Referenced-On Page |
|---|
| This ‘S-4/A’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| | 9/18/00 | | 6 |
| | 9/18/99 | | 6 |
| | 9/18/98 | | 5 |
| Changed as of / Corrected on: | | 3/2/98 |
| Filed on: | | 2/20/98 | | | | | | | S-4/A |
| Filed as of: | | 12/11/97 | | | | | | | S-4/A |
| | 9/18/97 | | 1 |
| List all Filings |
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