EXHIBIT 10.37 - ESCROW AGREEMENT
ESCROW DEPOSIT AGREEMENT
BETWEEN
INTERNATIONAL CONTROLS CORP.
AND
FIRST FIDELITY BANK, NATIONAL ASSOCIATION
AS ESCROW AGENT
DATED AS OF _________ , 1994
TABLE OF CONTENTS
PAGE
Recitals ........................................ 1
SECTION 1. Pledge of Proceeds...................... 1
SECTION 2. Notice of Repayment or Redemption....... 2
SECTION 3. Special Escrow Fund..................... 2
SECTION 4. Application of Moneys on Deposit in
ICC Escrow Fund......................... 2
SECTION 5. Payment of Obligations.................. 3
SECTION 6. Irrevocable Deposit; Relinquishment
of Rights of the Company................ 3
SECTION 7. Liability of Agent...................... 3
SECTION 8. Termination; Income from Authorized
Investments............................. 4
SECTION 9. Fees of Agent........................... 4
SECTION 10. Duties of Agent; Evidence Upon Which
Agent May Act; Replacement of Agent..... 4
SECTION 11. Amendments.............................. 5
SECTION 12. Severability............................ 6
SECTION 13. Governing Law .......................... 6
SECTION 14. Counterparts............................ 6
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SECTION 15. Section Headings........................ 6
SECTION 16. Binding Effect, etc..................... 7
SECTION 17. Notices................................. 7
ii
ESCROW DEPOSIT AGREEMENT
Escrow Deposit Agreement (the "Escrow Agreement") dated as of
_______ __, 1994 between International Controls Corp., a Florida corporation
(the "Company"), and First Fidelity Bank, National Association, as escrow agent
(the "Agent").
W I T N E S S E T H:
WHEREAS, the Company has issued on the date hereof pursuant to a
registration statement on Form S-1 under the Securities Act of 1933 (the
"Offerings"): (i) $165,000,000 principal amount of __% Senior Secured Notes
due 2002 and (ii) Units consisting of an aggregate of $100,000,000 principal
amount of ___% Senior Subordinated Secured Notes due 2004 and warrants to
purchase ___ shares of common stock, par value $0.01 per share (the "Shares"),
of the Company.
WHEREAS, the Company has determined that it is in the best interests
of the Company to provide for the repayment or redemption, as the case may be,
of certain, indebtedness [and other obligations] of the Company [and its
subsidiaries] as listed on Schedule I hereto (including interest accrued thereon
to the date of repayment or redemption, any prepayment penalties and any other
required payments thereunder) (the "Obligations"); and
WHEREAS, the Company has elected to deposit part of the proceeds from
the Offerings with an escrow agent in an amount sufficient to pay the
Obligations in full when they become due; and
WHEREAS, the Agent has agreed to act as escrow agent in connection
with the repayment or redemption, as the case may be, of the Obligations in
accordance with the terms and conditions specified in the instruments and
agreements listed on Schedule I hereto (the "Agreements");
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants set forth herein, the Company and the Agent agree as follows:
SECTION 1. PLEDGE OF PROCEEDS. The Company hereby irrevocably
deposits with the Agent, in a fiduciary capacity for the benefit of the holders
of the Obligations (the "Holders"), and irrevocably appropriates and sets aside
$ ______________ , including any additional deposits made in accordance with
this Escrow Agreement (the "Deposit"), exclusively for the repayment or
redemption, as the case may be, of the Obligations, which Deposit (and any
interest or other income earned thereon) is hereby pledged to, and for the sole
benefit of, the Holders.
The Agent hereby acknowledges receipt of the Deposit which shall be
deposited by the Agent in the ICC Escrow Fund (as defined in Section 3 hereof).
The Company represents and warrants that the amount of the Deposit is sufficient
to pay all the Obligations when due, without anticipating any interest or other
income being earned on the Deposit and understands that the Holders of the
Obligations are relying upon such representations and warranties.
SECTION 2. NOTICE OF REPAYMENT OR REDEMPTION. The Company represents
to the Agent that it is, simultaneously with the delivery of the Deposit to the
Agent, giving irrevocable notice of repayment or redemption, as the case may be,
to the Holders that has resulted in payments being required to be made to the
Holders in the amounts and on the dates set forth on Schedule I hereto under the
headings Amount and Payment Date, respectively.
SECTION 3. SPECIAL ESCROW FUND. There is hereby established and
created with the Agent a special and irrevocable fund designated the
"International Controls Corp. Escrow Fund" (the "ICC Escrow Fund") to be held in
the custody of the Agent as a special escrow fund, separate and apart from all
other funds of the Company or the Agent, solely for the benefit of the Holders.
All Deposits and Authorized Investments (as defined in Section 4(b) hereof) set
aside and held in the ICC Escrow Fund shall be applied to, and applied solely
for, the repayment or redemption, as the case may be, of the Obligations and as
otherwise provided herein.
SECTION 4. APPLICATION OF MONEYS ON DEPOSIT IN ICC ESCROW FUND.
(a) Deposits in the ICC Escrow Fund shall not be invested at any time in any
securities or other investments other than the Authorized Investments (as
defined in Section 4(b) hereof).
(b) The Agent shall act as custodian of the ICC Escrow Fund and
shall, at the written direction of the Company, invest and reinvest the ICC
Escrow Fund solely in the following investments, which constitute Authorized
Investments hereunder: (i) direct obligations of the United States Government
(or agencies or instrumentalities thereof), provided that such securities are
obligations to which the full faith and credit of the United States of America
has been pledged; (ii) certificates of deposit, time deposits or other interest-
bearing deposits of commercial banks having total capital and surplus of at
least $500,000,000 or (iii) the Agent's U.S. Treasury fund provided that such
fund maintains the highest ratings established by each of Moody's and Standard &
Poor's, in
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each case with a maturity or maturities that would permit the Agent to make cash
payments to repay or redeem, as the case may be, the Obligations on the various
payment dates listed on Schedule I hereto in accordance with Section 5 hereof.
The Agent shall have no responsibility for the determination of such investments
and shall have no liability for any investment losses resulting from the
investment, reinvestment, sale or liquidation of the ICC Escrow Fund, except in
the case of its own gross negligence or willful misconduct.
(c) Except as otherwise specifically provided herein, the Company
covenants and agrees that the Agent shall have full and complete control and
authority over and with respect to the ICC Escrow Fund and the moneys deposited
therein and that the Company shall not exercise any control or authority over or
with respect to the ICC Escrow Fund or the moneys deposited therein.
SECTION 5. PAYMENT OF OBLIGATIONS. On each of the payment dates
listed on Schedule I hereto, the Agent shall apply sufficient funds, to the
extent available, from the funds held in the ICC Escrow Fund to the payment in
full of the applicable Obligation (as such payment is directed to be made on
Schedule I hereto under the heading Method of Payment); provided, however, that
the Company may direct the Agent to make an earlier payment in full of any
particular Class of Obligations (as such Classes of Obligations are defined on
Schedule I) if all Holders of Obligations included within such Class of
Obligations are paid in full on the same date and the aggregate amount of the
payments made to such Holders on the earlier payment date is less than or equal
to the sum of money deposited on behalf of such Holders as set forth on
Schedule I. To the extent sufficient funds are not available, the Company
agrees to deposit the necessary funds in the ICC Escrow Fund in order for such
Obligation to be paid in full on the payment dates specified on Schedule 1
hereto and understands that the Holders of the Obligations are relying upon such
agreement.
SECTION 6. IRREVOCABLE DEPOSIT; RELINQUISHMENT OF RIGHTS OF THE
COMPANY. (a) The Deposit being made into the ICC Escrow Fund shall constitute
an irrevocable deposit solely for the payment of the Obligations, and solely for
the benefit of the Holders thereof pursuant to the terms of this Escrow
Agreement.
(b) The Company hereby agrees that it shall not have any beneficial
interest in, or rights to, the Deposit or proceeds thereof (or interest or other
income earned thereon) on deposit in the ICC Escrow Fund (whether in the form of
cash, Authorized Investments or otherwise) or payments made therefrom so long as
any of the Obligations or any amounts owing to the Agent hereunder remain
unpaid.
SECTION 7. LIABILITY OF AGENT. The liability of the Agent to make
the payments required by this Escrow Agreement with respect to the Obligations
shall be
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limited to application of the funds deposited with it hereunder. The Agent
shall not be liable for any loss resulting from any investment made in
compliance with the provisions of this Escrow Agreement.
SECTION 8. TERMINATION; INCOME FROM AUTHORIZED INVESTMENTS. (a) This
Escrow Agreement shall terminate when all Obligations to the Holders shall have
been paid to the Holders and all fees and expenses of the Agent shall have been
paid in full.
(b) Upon termination of this Escrow Agreement in accordance with the
provisions of subsection (a) of this Section 8, any funds in the ICC Escrow Fund
(including income from all Authorized Investments) shall be promptly paid to the
Company upon the direction of the Company.
SECTION 9. FEES OF AGENT. (a) The Company shall pay upon request all
compensation and expenses of the Agent, including, without limitation,
reasonable compensation for all services rendered by the Agent in the execution,
exercise and performance of any of the duties to be exercised or performed by it
pursuant to the provisions of this Escrow Agreement (including reasonable
counsel fees and expenses). Attached hereto as Schedule II is the Agent's fee
schedule. The Agent shall be entitled to indemnity from the Company against any
and all losses, claims, liabilities or expenses incurred on the part of the
Agent arising out of or in connection with the acceptance or administration of
its powers and duties under this Escrow Agreement, including the cost and
expense of defending against any such loss, claim or liability, other than
losses, claims, liabilities or expenses arising out of the Agent's gross
negligence or willful misconduct.
(b) Except for the cash management fee which may be paid out of the
interest earned on the funds in the ICC Escrow Fund (but not under any
circumstances out of the original principal amount of such funds) as expressly
set forth on Schedule II, the Agent has no right to payment for its fees,
compensation and expenses from the ICC Escrow Fund so long as all of the
Obligations shall not have been paid in full.
(c) All of the rights, entitlements, and protections provided to the
Agent in this Section 9 shall survive its resignation or termination of this
Escrow Agreement, whether by payment of the Obligations or otherwise.
SECTION 10. DUTIES OF AGENT; EVIDENCE UPON WHICH AGENT MAY ACT;
REPLACEMENT OF AGENT. (a) The duties and obligations of the Agent hereunder
shall be determined solely by the express provisions of this Escrow Agreement,
and the Agent shall not be liable except for the performance of its duties and
obligations as specifically set forth herein and to act in good faith in the
performance thereof, and no implied duties, covenants or obligations shall be
incurred by the Agent other than those specified herein,
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and the Agent shall be protected when acting or omitting to act in good faith
upon the advice of counsel, who may be counsel to the Company.
(b) Subject to the requirement under subsection (a) of this Section
10 to act in good faith, the Agent may conclusively rely, as to the correctness
of statements, conclusions and opinions therein, upon any certificate, report,
opinion or other document furnished to the Agent pursuant to any provision of
this Escrow Agreement. Any request, consent, certificate, notice, appointment
or other direction made or given by the Company to the Agent shall be deemed to
have been sufficiently made or given by the proper party or parties if executed
by an authorized officer of the Company on behalf of the Company.
(c) The Agent may resign and be discharged of its duties as agent
hereunder by giving written notice of such intention to resign to an authorized
officer of the Company; provided, however, that such resignation shall not
become effective until the later of (i) ten (10) days after the giving of such
notice and (ii) a successor shall have been appointed and the funds held by the
Agent in the ICC Escrow Fund have been transferred to such successor agent. Any
such successor agent shall be a commercial bank having total capital and surplus
of at least $500,000,000. If no successor shall have been appointed within ten
(10) days after the giving of the aforementioned notice, the Agent may petition
any court of competent jurisdiction for the appointment of such successor.
(d) The recitals contained herein shall be taken as the statements of
the Company and the Agent assumes no responsibility for their correctness. The
Agent makes no representation as to the validity or sufficiency of this Escrow
Agreement or of the Deposit in the ICC Escrow Fund.
(e) The Agent may consult with counsel and the advice of such counsel
shall be full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.
SECTION 11. AMENDMENTS. This Escrow Agreement shall not be repealed,
revoked, altered or amended or any provisions thereof waived as to any of the
Obligations without the written consent of all Holders of each such Obligation,
the written consent of the Agent and the written consent of the Company;
PROVIDED, HOWEVER, that the Company and the Agent may, without the consent of,
or notice to, the Holders, enter into such agreements supplemental to this
Escrow Agreement as shall not adversely affect the rights of the Holders, for
any one or more of the following purposes:
(a) to cure any ambiguity, defect or omission in this Escrow
Agreement; or
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(b) to grant to, or confer upon the Agent for the benefit of, the
Holders any additional rights, remedies, powers or authority that may lawfully
be granted to, or conferred upon, the Agent.
The Agent may, but shall not be obligated to, enter into any such amendment or
supplement to this Escrow Agreement which affects the Agent's own rights, duties
or immunities under this Escrow Agreement or otherwise. The Company shall
provide the Agent with an opinion of counsel that any such amendment or
supplement does not adversely affect the rights of the Holders.
SECTION 12. SEVERABILITY. If any one or more of the covenants or
agreements provided in this Escrow Agreement on the part of the Company or the
Agent to be performed should be determined by a court of competent jurisdiction
to be contrary to law, such covenant or covenants, or such agreement or
agreements, or such portions thereof, shall be deemed severable from the
remaining covenants and agreements or portions thereof provided in this Escrow
Agreement and the invalidity thereof shall in no way affect the validity of
other provisions of this Escrow Agreement, but the Holders shall retain all the
rights and benefits accorded them hereunder and under applicable provisions of
law.
If any provisions of this Escrow Agreement shall be held or deemed to
be or shall, in fact, be inoperative or unenforceable or invalid as applied in
any particular case in any jurisdiction or jurisdictions or in all
jurisdictions, or in all cases because it conflicts with any constitution or
statute or rule of public policy, or for any other reason, such circumstances
shall not have the effect of rendering the provision in question inoperative or
unenforceable or invalid in any other case or circumstance, or of rendering any
other provision or provisions herein contained inoperative or unenforceable or
invalid to any extent whatever.
SECTION 13. GOVERNING LAW. This Escrow Agreement shall be construed
and interpreted in accordance with the laws of the State of New York, without
regard to its conflict of law principles.
SECTION 14. COUNTERPARTS. This Escrow Agreement may be executed in
several counterparts, all or any of which shall be regarded for all purposes as
one original and shall constitute and be one and the same instrument.
SECTION 15. SECTION HEADINGS. The headings of the several Sections
hereof and the Table of Contents appended hereto shall be solely for convenience
of reference and shall not affect the meaning, construction, interpretation or
effect of this Escrow Agreement.
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SECTION 16. BINDING EFFECT, ETC. This Escrow Agreement shall be
binding upon the parties hereto and their respective successors, legal
representatives and permitted assigns.
SECTION 17. NOTICES. Any notices or other communications to be given
hereunder by any party hereto to the other party shall be in writing and shall
be given by delivery in person, by electronic facsimile transmission or other
standard forms of written telecommunications, by overnight courier or by
registered or certified mail, postage prepaid, as follows:
if to the Company, to:
International Controls Corp.
2016 North Pitcher Street
Kalamazoo, Michigan 49007
Telecopy number: (616) 343-6823
Attention: David R. Markin
with a copy to:
Hutton Ingram Yuzek Gainen Carroll & Bertolotti
250 Park Avenue
New York, New York 10177
Telecopy number: (212) 907-9681
Attention: Paulette Kendler, Esq.
if to the Agent, to:
First Fidelity Bank, National Association
765 Broad Street, C76505
Newark, New Jersey 07102
Telecopy number: (201) 430-4963
Attention: Corporate Trust Department
Directions from the Company to the Agent to be given under the terms of this
Escrow Agent shall only be made on behalf of the Company by the following
persons ( or such additional persons as may be appointed by any of the persons
named below or their appointees by written notice to the Agent):
David R. Markin
Jay H. Harris
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IN WITNESS WHEREOF, the parties have each caused this Escrow Agreement
to be executed by their duly authorized officers as of the date first above
written.
INTERNATIONAL CONTROLS CORP.
By
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Name:
Title:
FIRST FIDELITY BANK, NATIONAL
ASSOCIATION, as Agent
By
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Name:
Title:
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SCHEDULE I
OBLIGATIONS*
OBLIGATION HOLDER AMOUNT PAYMENT DATE METHOD OF PAYMENT
S-1
SCHEDULE II
AGENT FEE SCHEDULE
SEE ATTACHED ESCROW AGREEMENT FEE AGREEMENT
S-II