EXHIBIT 10.13
ENVIRONMENTAL REMEDIATION AND ESCROW AGREEMENT
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THIS ENVIRONMENTAL REMEDIATION AND ESCROW AGREEMENT ("Agreement") is made
as of July 2, 1996, by and among Figgie International Inc., a Delaware
corporation ("Seller"), Communications Instruments, Inc., a North Carolina
corporation ("Buyer"), and Bank One Trust Company, NA (the "Escrow Agent").
RECITALS:
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A. Pursuant to the Lease, dated as of July 2, 1996 (the "Lease") by and
between a subsidiary of each of Seller and Buyer, a subsidiary of Seller agreed
to lease to a subsidiary of Buyer certain real property (the "Site").
B. Seller agrees to put Five Hundred Fifteen Thousand Five Hundred
Dollars ($515,500) in escrow for the payment of certain Remediation Costs
(defined below) relating to the real property leased to Buyer or one of its
subsidiaries by Seller or one of its subsidiaries pursuant to the Lease (the
"Escrow Fund").
C. To secure the payment of the Remediation Costs, Seller has agreed to
deliver to and deposit with the Escrow Agent the Escrow Fund, which shall be
held by the Escrow Agent pursuant to the terms of this Agreement.
D. Capitalized terms used herein, unless otherwise indicated, have the
same meaning given to them in the Lease.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises contained herein, the parties agree as follows:
1. Appointment of Escrow Agent. Seller and Buyer hereby appoint Bank One
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Trust Company, NA to be the Escrow Agent and to hold the Escrow Funds in
accordance with the terms of this Agreement.
2. Delivery of Funds. Seller shall deposit, or cause to be deposited, the
Escrow Funds with the Escrow Agent, on the date of this Agreement, to secure
payment of the Remediation Costs.
3. Term. The Escrow Funds shall be held in escrow for a term beginning
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with the date of this Agreement and ending with the earlier of: (i) the
expiration or termination of the Lease; or (ii) the delivery of all of the
Escrow Funds, as the case may be, in accordance with the terms of this Agreement
(the "Escrow Period").
4. Disbursement of Escrow Funds. The Escrow Agent shall release and
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disburse the Escrow Funds: (i) for the purpose of the payment of the costs of
conducting any remedial activities incurred by Seller pursuant to the
requirements of Exhibit A attached hereto and made a part hereof ("Remediation
Costs"); and (ii) in accordance with Section 7 hereof. Remediation Costs shall
include all environmental consulting fees, engineering fees, costs of testing,
sampling and laboratory work, contractor's fees, legal fees, and all other costs
associated with the planning and implementation of work performed pursuant to
Exhibit A.
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5. Remediation.
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(a) From and after the date of the Lease, Seller shall diligently pursue
to completion the remedial activities identified in Exhibit A (the
"Remediation") in accordance with all applicable Environmental Laws. Such
process shall include, but not necessarily be limited to, the following:
(1) developing a plan or plans of remediation to address the
Remediation, which plan or plans (individually, a "Remediation Plan" and
collectively "Remediation Plans") shall be acceptable to Seller and Buyer;
and
(2) implementing each Remediation Plan.
(b) A Remediation Plan shall be deemed to have been completed upon the
first to occur of any of the following events: (i) Buyer approves, in writing,
the completion of such work; (ii) Seller's environmental consultant states in
good faith and in exercise of a reasonable degree of professional competence
that in its professional opinion, the work required by the Remediation Plan has
been satisfactorily completed and requires no further action; or (iii) the
expiration or termination of the Lease. If Buyer disagrees with Seller's
environmental consultant's opinion concerning the completion of the Remediation
Plan, then the propriety of the consultant's opinion on this issue shall be
settled by arbitration in accordance with the Commercial Arbitration Rules of
the American Arbitration Association before a single arbitrator who is a
"Certified Professional" environmental consultant pursuant to Ohio Revised Code
Chapter 3746.01(E) and who is appointed in accordance with the Commercial
Arbitration Rules. The award of the arbitrator shall be limited to (i)
confirming Seller's environment consultant's opinion, or
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(ii) requiring Seller to conduct further Remediation pursuant to the terms of
this Agreement, and (a) shall indicate the arbitrator's decision respecting the
matters in question presented by each party, and (b) shall contain a brief
statement of the reasons supporting the arbitrator's decision. A judgment upon
the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof. Such arbitration proceeding shall be conducted in
Cleveland, Ohio. The pendency of a demand for arbitration or any arbitration
proceedings hereunder shall not, in and of itself, discharge or excuse
continuing performance by the parties of their obligations and duties under this
Agreement or under the Lease. Any arbitration arising out of or relating to this
Agreement shall include, by consolidation, joinder or joint filing, any
additional persons or entities not parties to this Agreement to the extent
reasonably necessary to the final resolution of the matter in controversy. Once
the Remediation Plan or Remediation Plans have been completed or the Lease
expires or is terminated, the Remediation shall for all purposes of this
Agreement be deemed completed, the Escrow Agent shall disburse any remaining
Escrow Funds in accordance with Section 9 and this Agreement shall terminate.
(c) As between Seller and Buyer, the work to be performed pursuant to this
Section 5 shall be supervised and controlled by Seller. Seller shall contact,
consult and otherwise deal with all governmental authorities in connection
therewith; provided that Seller shall afford Buyer, and Buyers' legal and
technical consultants, a reasonable opportunity to review all final Remediation
Plan(s) and will use its best efforts to cause to be considered and incorporated
in any proposals or plans any comments or suggestions that Buyers' or its
consultants may request.
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(d) In the conduct of the Remediation, Seller agrees to use only URS
Consultants or another environmental consulting firm that has as a member
of its firm a "Certified Professional" pursuant to Ohio Revised Code
Chapter 3746.01(E).
(e) The costs of the Remediation to be performed pursuant to this
Section 5 shall be paid for and discharged first from the Escrow Funds as
evidence of such costs is from time to time submitted by Seller to the
Escrow Agent for payment. Any costs of Remediation in excess of the Escrow
Funds shall be paid by Seller; provided, however, that Seller shall not be
required to expend more than $12.0 million for Remediation Costs by the
terms of this Agreement.
(f) Buyer hereby grants entry and access to the Site to Seller and/or
Seller's agents, employees, representatives and contractors, as necessary
to conduct the Remediation pursuant to this Agreement. Buyer shall not
materially interfere with Seller's conduct of the Remediation and Seller
shall use reasonable care in its conduct of the Remediation to not
materially interfere with Buyer's normal business operations at the Site.
Seller shall have no liability to Buyer for any loss, damage, expense or
other liability arising as a result of interference with Buyer's normal
business operations at the Site in the conduct of the Remediation by
Seller, if Seller has used reasonable best efforts to minimize disturbance
of Buyer's ability to conduct business at the Site.
6. Investment of Funds. The Escrow Agent shall act as custodian of the
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Escrow Funds and shall invest the Escrow Funds in any of the following:
(a) direct obligations of (including obligations issued or held in
book entry form on the books of the Department of Treasury of the United
States of America), or
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obligations the principal of and interest on which are unconditionally
guaranteed by the United States of America;
(b) bonds, debentures or notes or other evidence of indebtedness
payable in cash and issued or guaranteed by any one or a combination of any
federal agencies whose obligations represent the full faith and credit of
the United States of America;
(c) certificates of deposit properly secured at all times, by
collateral security described in (a) and (b) above, (which agreements are
only acceptable with commercial banks, savings and loan associations and
mutual savings banks);
(d) the following investments fully insured by the Federal Savings
and Loan Insurance Corporation:
(i) certificates of deposit
(ii) savings accounts
(iii) deposit accounts
(iv) depository receipts of banks, savings and loan
associations and mutual savings banks;
(e) commercial paper rated in one of the two highest rating
categories by at least one nationally recognized rating agencies or
commercial paper backed by a letter of credit or line of credit rated in
one of the two highest rating categories;
(f) investments in a money market fund, including the Escrow Agent or
any of its affiliates, rated AAAM or AAAM-G by Standard & Poor's
Corporation, the assets of which consist of either tax-exempt obligations
or direct obligations of the United States of America.
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The Escrow Agent shall have the power to sell or liquidate the foregoing
investments whenever the Escrow Agent is required to release all or any portion
of the Escrow Funds pursuant to this Agreement. Any interest or income earned
on such investment and reinvestment of the Escrow Funds shall become part of the
Escrow Funds. The Escrow Agent shall have no liability for any investment
losses resulting from the investment reinvestment, sale or liquidation of the
Escrow Funds, which losses shall be the sole responsibility of Seller, except in
the case of negligence or willful misconduct of the Escrow Agent.
7. Fees and Expenses of Escrow Agent. All costs and expenses of the
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Escrow Agent shall be paid out of the Escrow Fund. In the event that such costs
and expenses exceed the amount in the Escrow Fund, the Seller agrees to pay such
excess costs and expenses.
8. Liability of Escrow Agent. The duties and obligations of the Escrow
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Agent hereunder shall be determined solely by the provisions of this Agreement
and the Escrow Agent shall be under no obligation to refer to any other
documents between or among the parties it being specifically understood that the
following provisions are accepted by all parties hereto:
(a) The Escrow Agent shall not be liable to anyone by reason of any
error of judgment or for any act done or step taken or omitted by it in
good faith or for any mistake of fact or law for anything which it may do
or refrain from doing in connection herewith unless caused by or arising
out of its gross negligence or willful misconduct. Seller shall indemnify
and hold the Escrow Agent harmless from any and all liability and expense
which may arise out of any action taken or omitted by it as Escrow Agent in
accordance with this Agreement, as the same may be amended, modified or
supplemented, except such liability and expense as may result from the
gross negligence or willful
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misconduct of the Escrow Agent. This indemnification shall survive the
release, discharge, termination, and/or satisfaction of the Agreement. The
Escrow Agent may act upon advice of counsel of its own choosing and shall
be fully protected in acting or refraining from acting in good faith and in
accordance with the opinion of such counsel in reference to any matter
connected herewith and shall not be liable for any action taken or omitted
in accordance with such advice. Without limiting the foregoing, the Escrow
Agent shall in no event be liable in connection with its investment or
reinvestment of any cash held by it hereunder in good faith, in accordance
with the terms hereof, including, without limitation, any liability for any
delays (not resulting from its negligence or willful misconduct) in the
investment or reinvestment of the Escrow Funds, or any loss of interest
incident to any such delays.
(b) If the Escrow Agent is entitled to receive, pursuant to this
Agreement, any amount in indemnification, then, Seller will be responsible
for such amount.
(c) In the event any demand, direction, instruction or request, not
contemplated by the terms of this Agreement, is made upon Escrow Agent,
then Buyer and Seller hereby jointly and severally authorize Escrow Agent,
at its election, to hold any funds deposited hereunder until an action
shall be brought in a court of competent jurisdiction to determine the
rights of Buyer and Seller or to interplead such parties by an action
brought in any such court. Deposit by Escrow Agent of such funds with such
court, or holding such funds until such court determines their disposition,
after deducting therefrom its expenses incurred in connection with any such
court action, shall relieve Escrow Agent of all liability and
responsibility hereunder.
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9. Balance of Escrow Funds. Upon the termination of the escrow in
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accordance with the provisions of Section 3, the Escrow Agent shall distribute
the remaining Escrow Funds and any interest earned thereon to Seller and Seller
shall have no further obligation of any kind to Buyer or the Escrow Agent under
this Agreement.
10. Notices. Notice of any submission or other communication to the
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Escrow Agent by the Seller seeking the disbursement of funds shall be given to
the Buyer within three (3) business days of such submission or communication.
Notice of any disbursement from the Escrow Funds shall be given to the Buyer
within three (3) business days of such disbursement. Any notice to be given
hereunder shall be deemed given if in writing and delivered personally or mailed
by certified mail, postage prepaid, return receipt requested, or by courier, fee
prepaid, guaranteeing overnight delivery, and to the party to receive notice at
the following address or such address as any party may designate by notice to
the other:
If to Seller: Figgie International Inc.
4420 Sherwin Road
Willoughby, Ohio 44094
Attn: Steven L. Siemborski
Fax: (216) 951-1724
with a copy to: Benesch, Friedlander, Coplan &
Aronoff
2300 BP America Building
200 Public Square
Cleveland, Ohio 44114-2378
Attn: Chairperson, Real Estate Dept.
Fax: (216) 363-4588
If to Buyer: Communications Instruments, Inc.
POB 520
1396 Charlotte Highway
Fairview, North Carolina 28730
Attn: Dan Taylor
Fax: (704) 628-1439
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with a copy to: Parker, Poe, Adams & Bernstein
One Exchange Plaza
POB 389
Raleigh, North Carolina 27603
Attn: John T. Butler
Fax: (919) 834-4564
If to the Escrow Agent: Bank One Trust Company, NA
100 East Broad Street
Columbus, Ohio 43271-0181
Attn: Michael Dockman
Fax: 612-248-5195
11. Authorized Persons. The Escrow Agent is authorized to disregard any
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notices or instructions given by any party hereto or by any other person, firm
or corporation, except only such notices or instructions as are herein provided
for and given by the individuals listed on Exhibit B attached hereto and made a
part hereof ("Authorized Person(s)"). Exhibit B may be amended from time to time
by Seller or Buyer with respect to each of such party's Authorized Persons. The
Escrow Agent may rely, and shall be protected in acting or refraining from
acting, upon any instrument furnished to it hereunder and believed by it, in
good faith, to be genuine and have been signed by an Authorized Person.
12. Resignation of Escrow Agent. It is understood that the Escrow Agent
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reserves the right to resign as Escrow Agent at any time by giving no less than
thirty (30) days written notice of its resignation, specifying the effective
date thereof, to each other party hereto. Within thirty (30) days after
receiving the aforesaid notice, the other party or parties hereto shall appoint
a successor Escrow Agent to which the Escrow Agent may distribute the property
then held hereunder, less its fees, costs and expenses (including counsel fees
and expenses) which may remain unpaid at that time. If a successor Escrow Agent
has not been appointed and has not accepted such appointment by the end of such
thirty (30) day period, the Escrow Agent may
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apply to a court of competent jurisdiction for the appointment of a successor
Escrow Agent and the fees, costs and expenses (including counsel fees and
expenses) which it incurs in connection with such a proceeding shall be paid
from the Escrow Fund.
13. Miscellaneous.
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(a) This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Ohio applicable to agreements made
and to be entirely performed within such state.
(b) This Agreement, the Asset Purchase Agreement and the Lease set
forth the entire agreement and understanding of the parties in respect to
this transaction and supersedes all prior agreements, arrangements and
understandings relating to the subject matter hereof.
(c) All the terms and conditions of this Agreement shall be binding
upon, and inure to the benefit of and be enforceable by, the parties hereto
and their respective successors and assigns.
(d) Except for Exhibit B which may be amended by either party from
time to time pursuant to Section 11 hereof, this Agreement may be amended,
modified, superseded or cancelled, and any of the terms or conditions
hereof may be waived, only by a written instrument executed by each party
hereto or, in the case of a waiver, by the party waiving compliance. The
failure of any party at any time or times to require performance of any
provisions hereof will in no manner affect the right at a later time to
enforce the same. No waiver by any party of any condition, or of the
breach of any term contained in this Agreement whether by conduct or
otherwise, in any one or more
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instances shall be deemed to be or construed as a further or continuing
waiver of any such condition or breach or a waiver of any other condition
of or the breach of any other term of this Agreement.
(e) This Agreement shall be construed as if jointly prepared by
Seller and Buyer.
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(f) This Agreement may be executed simultaneously in two or more
counterparts, each of which will be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
FIGGIE INTERNATIONAL INC.
By:______________________________
Name:____________________________
Title:___________________________
"Seller"
COMMUNICATIONS INSTRUMENTS,
INC.
By:______________________________
Name:____________________________
Title:___________________________
"Buyer"
BANK ONE TRUST COMPANY, NA
By:______________________________
Name:____________________________
Title:___________________________
"Escrow Agent"
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EXHIBIT A
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Environmental Remediation
Hartman Electrical Manufacturing Company
Mansfield, Ohio
1. HAZARDOUS WASTE STORAGE SHED.++
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(A) Removal of the existing hazardous waste storage shed. The shed is
assumed to be approximately 10 feet by 10 feet and constructed of sheet
metal. The shed will be power washed and approximately four drums of
solid waste will be collected and disposed of as a listed hazardous
waste. The washed demolition debris will fill approximately one roll-
off and will be disposed of as a solid waste.
$10,000
(B) Excavation, transportation and disposal as a listed hazardous waste of
potentially contaminated soil.
$50,000
(C) Sampling of soil at new location for new hazardous waste storage shed
and construction of new hazardous waste storage shed.
$40,000
2. EXCAVATION AND DISPOSAL OF SOIL "HOT SPOTS" CONTAMINATED BY VOCs.*
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$80,000
* [Subject to final Ohio cleanup standards promulgated under Ohio Revised
Code Chapter 3746; other remedial methods may be appropriate.]
3. VOCs IN SHALLOW AQUIFER ON-SITE.
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Determination of the source and extent of contamination. The source could
be determined through testing and study of the drains and pipes. The source
and the extent can be approximated with a soil gas survey under the floor
slab of the building and east and north of the building. Additional
monitoring wells would confirm the results of the survey. Determine for
risk characterization purposes if there are any receptors. Risk assessment
may be performed based on the results of the characterization activities.
Some remediation may have to be performed such as source removal and/or
pump and treat.
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The costs for additional investigation and the installation of a pump
and treat system and operation for three years are included in the cost
estimate. $250,000
4. PETROLEUM HYDROCARBONS IN SOIL ON NORTHERN PORTION OF SITE.
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The source of the contamination is unknown. Therefore, based on current
knowledge, it is not possible to determine the party responsible for
remediating this petroleum contamination. Further investigation will
be conducted into the source and extent of contamination through a
soil gas survey and confirmatory sampling. Sufficient information
needs to be collected to perform a risk assessment. Soil excavation or
some other type of remediation may not be necessary.
Additional Subsurface Assessment. $30,000
Risk Characterization. $20,000
5. VOCs IN DEEP AQUIFER.
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Low levels of chlorinated VOCs are present in the deep aquifer on the
southern portion of the site. However, there is not sufficient
information to conclude that these contaminants are from upgradient
off-site sources. The certified professional will gather additional
information regarding the aquifer flow direction and use from well logs
of other wells in the vicinity. In the meantime, it may be prudent not
to use the well for any purposes until the aquifer system is better
understood.
$10,000
6. REGULATORY COMPLIANCE.++
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(A) Establish an appropriate, monthly hazardous waste tracking system
including facility-wide labeling at satellite and permanent storage
areas that meet letter size requirements and contain all necessary
information. Instruction and training on proper drum labeling
involving two or three individuals at the facility. Establish a
hazardous waste management plan, including "Emergency Preparedness
and Prevention." $10,000
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(B) Complete air emissions evaluation. If necessary, prepare permit for
and/or register all air emissions.
$5,000
(C) Conduct asbestos survey and, if necessary, implement appropriate
training and compliance plan.
$7,500
(D) Install oil/water separators or other devices, as appropriate, on
sumps and drains.
$3,000
(E) Withdraw General Permit for Stormwater from Ohio EPA.
$0
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TOTAL:
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$515,500
++ Certain of these costs may have been paid for by Seller in advance and
prior to the date of this Agreement or assumed by Seller pursuant to the
Asset Purchase Agreement between the parties. If so, these costs will be
subtracted from the Escrow Fund total and returned to Seller but the
obligation to complete the tasks will remain.
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EXHIBIT B
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Authorized Persons
Figgie International Inc. Communications Instruments, Inc.
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Name: STEVEN SIEMBORSKI Name: RAMZI DABBACH
Signature_______________ Signature____________________
Name: TODD S. DAVIS Name: DAVID HENNING
Signature_______________ Signature____________________
Name: KEVIN D. MARGOLIS Name: G. DANIEL TAYLOR
Signature_______________ Signature____________________
Name: ROBERT VILSACK Name: MICHAEL STEINBACK
Signature_______________ Signature____________________
Name: JEROME M. FERSTMAN
Signature_______________
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