EXHIBIT 10.32
ESCROW AGREEMENT
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This Agreement is made as of the 14th day of June, 1996 by and among
Suburban Ostomy Supply Co., Inc. (the "Buyer"), Nate Spunt and Elaine Spunt
(collectively, the "Seller"), as defined in that certain Stock Purchase
Agreement (the "Purchase Agreement") relating to the Purchase of Patient-Care
Medical Sales (the "Company") and Hutchins, Wheeler & Dittmar, A Professional
Corporation, as escrow agent (the "Escrow Agent"), acting through one of its
stockholders, James Westra.
WITNESSETH
A. The Seller, the Buyer and the Company have executed the Purchase
Agreement dated as of June ___, 1996. Capitalized terms used herein and not
otherwise defined herein having the meanings ascribed to them in the Purchase
Agreement.
B. Pursuant to the terms of the Purchase Agreement, the Seller and the
Buyer, among other things, have agreed that payment of a portion of the Purchase
Price shall be deferred to fund payment of any indemnity Claims to which Buyer
may be entitled as a result of the breach by the Company or the Seller of any
representations, warranties or covenants contained in the Purchase Agreement.
C. The Purchase Agreement provides that proceeds of a Letter of Credit in
the benefit amount of $375,000 shall be paid to the Escrow Agent to be held in
accordance with the terms of this Agreement.
D. This Escrow Agreement is the escrow agreement provided for and
contemplated in the Purchase Agreement.
NOW THEREFORE, the Buyer, the Seller and the Escrow Agent hereby agree as
follows:
1. Payment into Escrow
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(a). Concurrently with the execution of this Escrow Agreement, the Buyer
shall deliver to the Escrow Agent a letter of credit in the form of Exhibit A
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attached hereto (the "Letter of Credit"). The Escrow Agent shall submit the
Letter of Credit for payment within three Business Days after the same becomes
due and payable. All amounts paid under the Letter of Credit (the "Escrow
Amount") shall be deposited in a segregated escrow account (the "Escrow
Account").
(b). If prior to the first anniversary of the Closing Date the Buyer
delivers to the Escrow Agent written notice that it has asserted a Claim under
the Purchase Agreement, specifying the amount of such Claim, then such of the
Escrow Amount as equals the aggregate of
all such Claims shall be retained in the Escrow Account until the first to occur
of (i) receipt by the Escrow Agent of written directions, signed by each of the
Seller and the Buyer, directing disposition of such retained amount, in which
event the Escrow Agent shall distribute such retained amount in accordance with
the terms of such instructions; or (ii) receipt by the Escrow Agent of an order
of a court of competent jurisdiction, which order is not subject to appeal, to
the effect that either the Buyer or the Seller, as the case may be, shall be
entitled to the Escrow Amount, in which event the Escrow Agent shall distribute
such Escrow Amount in accordance with such order.
(c). To the extent that the Escrow Amount exceeds the aggregate amount of
Claims asserted by the Buyer prior to the first anniversary of the Closing Date,
then such excess shall be promptly paid to the Seller.
(d). If no notice of an asserted Claim is received by the Escrow Agent
prior to the first anniversary of the Closing Date, then promptly after such
first anniversary the entire Escrow Amount shall be paid by the Escrow Agent to
the Seller without further instructions from either party.
2. Investment of Funds; Payment of Interest.
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The Escrow Amount shall be invested by the Escrow Agent only in an
interest-bearing escrow account in a financial institution acceptable to both
Buyer and Seller. Interest, if any, earned on such Escrow Amount shall be
retained in escrow and shall be deemed to be part of such Escrow Amount to be
distributed as provided in Section 1. The Escrow Agent shall cause the
depository institution to deliver monthly account statements to Buyer and
Seller.
3. General Terms as to Escrow Agent.
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(a). The Escrow Agent shall not in any way be bound or affected by any
notice of modification or cancellation of this Escrow Agreement unless in
writing signed by Buyer and Seller. The Escrow Agent shall be entitled to rely
upon any notice, certification, demand or other writing delivered to it
hereunder, in the manner prescribed herein, by Buyer and Seller without being
required to determine the authenticity or the correctness of any fact stated
therein, the propriety or validity of the service thereof, or the jurisdiction
of the court issuing any judgment.
(b). The Escrow Agent may act in reliance upon any signature believed by
it to be genuine, may assume that any person purporting to give any notice or
receipt of advice or make any statements in connection with the provisions
hereof has been duly authorized to do so, and may further assume that any notice
given by it in the manner prescribed herein has been received in due course.
(c). The Escrow Agent may act relative hereto in reliance upon advice of
counsel in reference to any matter connected herewith, and shall not be liable
for any mistake of fact or
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error of judgment, or for any acts or omissions of any kind, unless caused by
its willful misconduct or gross negligence. The Escrow Agent shall not be liable
for any action taken or omitted by it in good faith and believed by it to be
authorized hereby, nor for action taken or omitted by it in accordance with the
advice of its counsel. Under no circumstance shall the Escrow Agent be liable
for any consequential or punitive damages, or for any failure, refusal or
inability on the part of the issuer of the Letter of Credit to make payment
thereunder.
(d). The Escrow Agent may resign and be discharged of its duties as Escrow
Agent hereunder by giving ten (10) days written notice to Buyer and Seller. Such
resignation shall take effect upon receipt by the Escrow Agent of an instrument
of acceptance executed by a successor escrow agent approved in writing by Buyer
and Seller and upon delivery by the Escrow Agent to such successor of all of the
Escrow Amount then held by it. In the event that a successor escrow agent is not
appointed, the Escrow Agent may petition a court of competent jurisdiction to
appoint such successor escrow agent. In the event a dispute of any kind arises
in connection with this Escrow Agreement, the Escrow Agent may, in its sole
discretion, elect to pay all or any portion of the Escrow Amount to the Superior
Court of the Commonwealth of Massachusetts for Suffolk County, to the in
personam jurisdiction of which Court each of the parties hereto hereby
irrevocably submits for the resolution of such dispute; or, in the alternative,
in the event such Court lacks or declines to assert in rem jurisdiction over the
Escrow Amount or such dispute, the payment may be made to the Superior Court of
the Commonwealth of Massachusetts, the particular division of which Court, for
venue purposes, shall be governed by appropriate Massachusetts statutory
provision and rules of procedures, to the in personam jurisdiction of which
Court each of the parties hereto, in such event, hereby irrevocably submits for
a resolution of such dispute. In the event of such payment, it is understood
that Escrow Agent will have no further obligation to the other parties hereto
with respect to the amount so paid.
(e). If Seller and Buyer do not join in instructions to the Escrow Agent
in accordance with any final court order or an award of an arbitrator, the
Escrow Agent may rely on such final court order or award and shall deliver or
not deliver the Escrow Amount in accordance with said order or award.
(f). Buyer and Seller hereby agree, jointly and severally, to indemnify
and hold the Escrow Agent harmless from any loss, liability or expense, arising
out of or related to this Escrow Agreement, and for all reasonable fees, costs
and expenses, including the reasonable fees and expenses of counsel, incurred by
Escrow Agent in connection with this Escrow Agreement. The Escrow Agent shall
not receive any compensation for its services rendered hereunder.
(g). The duties and obligations of the Escrow Agent shall be determined
solely by the express provisions of this Escrow Agreement and are purely
ministerial in nature, and the Escrow Agent shall not be liable except for the
performance of such duties and obligations as are specifically set forth in this
Escrow Agreement. The Escrow Agent specifically shall have no liability under or
duty to inquire into the terms and provisions of the Assignment Agreement.
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(h). The Seller and Buyer acknowledge that the Escrow Agent is counsel for
the Buyer, and so long as the Buyer and the Escrow Agent so desire, may continue
to act as such counsel notwithstanding any dispute or litigation arising with
respect to the Escrow Amount or the duties of the Escrow Agent.
4. Miscellaneous.
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(a). Termination of Escrow Agreement. This Escrow Agreement shall
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terminate when the entire Escrow Amount held by the Escrow Agent shall have been
delivered to the party or parties entitled thereto pursuant to the terms hereof.
(b). Assignees. All the terms and provisions hereof shall be binding upon
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and inure to the benefit of and be enforceable by the representatives,
successors, heirs and assigns of the parties hereto.
(c). Entire Understanding. This Escrow Agreement and the Purchase
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Agreement together constitute the entire understanding between the parties with
respect to the subject matters hereof (other than the Escrow Agent, for which
this Escrow Agreement constitutes the entire understanding between it and Buyer
and Seller), superseding all negotiations, prior discussion and preliminary
agreements. In the event of any conflict in language between this Escrow
Agreement and the Purchase Agreement, the language of this Escrow Agreement
shall prevail. This Escrow Agreement may not be changed except in writing by an
instrument executed by Seller, Buyer and the Escrow Agent.
(d). Waivers. No waiver of any provisions of this Escrow Agreement nor
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waiver of any breach or default under this Escrow Agreement shall be considered
valid unless in writing and signed by the party purported to have given such
waiver, and no such waiver shall be deemed a waiver of any other provision or
any subsequent breach or default of a similar nature. Termination of this Escrow
Agreement for any reason or insufficiency of the Escrow Amount or any release of
the Escrow Amount, shall not be deemed to waive, terminate, diminish, limit, or
modify the obligations of Seller under the indemnification agreements or other
payment provisions within the Purchase Agreement, or otherwise limit Buyer's
other rights and remedies as a result of any such default by Seller thereunder.
(e). Severability of Provisions. The invalidity or unenforceability of
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any particular provision of this Escrow Agreement shall not affect the other
provisions hereof and this Escrow Agreement shall be construed in all respects
as if such invalid or unenforceable provisions were omitted.
(f). Headings. Section headings are contained in this Escrow Agreement
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only for purposes of convenience of reference and shall not affect the
interpretation of this Escrow Agreement or modify any of its terms or
provisions.
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(g). Governing Law. This Escrow Agreement shall be construed and enforced
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according to the laws of The Commonwealth of Massachusetts.
(h). Notices. Any notice, demand, offer or other writing required or
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permitted pursuant to this Escrow Agreement shall be as provided in the Purchase
Agreement if to the Buyer of the Seller and if to the Escrow Agent to Hutchins,
Wheeler & Dittmar, A Professional Corporation, 101 Federal Street, Boston,
Massachusetts 02110, Attention: James Westra, Esquire.
Any party shall have the right to change the place to which such notice
shall be given by similar notice sent in like manner to all other parties
hereto. Any such notice, if sent by private express overnight courier service,
shall be deemed delivered on the earlier of the date of actual delivery or the
next business day following deposit, postage prepaid, with such private express
overnight courier service.
5. No Limitation on Remedies. Nothing herein set forth shall prevent the
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parties from settling any dispute by mutual agreement at any time. Further, the
parties recognize that in some instances damages may not afford an adequate or
proper remedy and, therefore, agree that in the event it is determined by either
party that such an instance exists, such violations of this Escrow Agreement
shall be the proper subject for a suit for specific performance and/or
injunctive relief, and in any such instance neither party shall be required to
resort to arbitration but may seek equitable remedy in a court of competent
jurisdiction.
6. Attorney's Fees. In the event of litigation between the Seller and the
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Buyer with respect to their respective rights and obligations under this Escrow
Agreement, the party which prevails in any such litigation shall pay the
reasonable fees and expenses of counsel for the other party.
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IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to
be duly executed as of the day and year first written above.
Witness: SUBURBAN OSTOMY SUPPLY CO., INC.
/s/ James Westra By: /s/ Stephen N. Aschettino
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Title:
Witness: SELLER
/s/ George Atkinson /s/ Nate Spunt
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Nate Spunt
Witness:
/s/ George Atkinson /s/ Elaine Spunt
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Elaine Spunt
Witness: HUTCHINS, WHEELER & DITTMAR,
A Professional Corporation
/s/ Stephen N. Aschettino By: /s/ James Westra
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James Westra, Stockholder
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