Exhibit 10.1
ESCROW AGREEMENT
THIS ESCROW AGREEMENT is executed as of the 13th day of October, 1997, by
and among Cityside Holding L.L.C., a Minnesota limited liability company
("Cityside"), its successors and assigns, C.H. Robinson, Inc., a Minnesota
corporation ("C.H. Robinson"), its successors and assigns, Norwest Corporation,
a Delaware corporation ("Norwest"), and Norwest Bank Iowa, N.A. ("Escrow
Agent").
1. Recitals.
(a) Cityside, C.H. Robinson and Norwest have heretofore entered into that
certain Stock Purchase Agreement as of September 9, 1997, as amended as of
October 13, 1997 (the "Stock Purchase Agreement"; all capitalized terms
used herein but not otherwise defined shall have the same meaning ascribed
thereto in the Stock Purchase Agreement), concerning the sale of the
Acquired Companies Stock by Cityside to Norwest. As a condition precedent
to consummation of the transactions contemplated by the Stock Purchase
Agreement, approval of the transaction is required by certain governmental
or regulatory authorities. Cityside, C.H. Robinson and Norwest desire to
arrange for funding into escrow of the purchase of the Acquired Companies
Stock prior to receipt of the required regulatory approvals. Therefore,
the parties hereto wish to enter into this Agreement in order to designate
Norwest Bank Iowa, N.A. as the Escrow Agent for the purpose of funding the
purchase and sale of the Acquired Companies Stock (the "Transaction") in
escrow subject to the terms and conditions set forth herein, and the terms
and conditions set forth in the Stock Purchase Agreement.
(b) Cityside, C.H. Robinson and Norwest hereby represent that, subject to
receipt of the "Approvals" defined below, the release of the escrow as
contemplated by paragraph 2(c), and satisfaction by C.H. Robinson of its
obligations under paragraph 7(i) of the Stock Purchase Agreement, each
party has fulfilled its respective obligations under paragraphs 6 and 7 of
the Stock Purchase Agreement required by it to be performed.
2. Agreement. In consideration of the mutual covenants set forth herein, the
parties hereto do hereby jointly and severally represent and warrant, and agree
with each other and Escrow Agent, as follows:
(a) Escrow Agent is hereby appointed depository for the parties with respect to
the Transaction.
(b) On October 14, 1997, the parties hereto shall deposit with Escrow Agent, as
custodian and depository the following documents, or shall take the following
actions:
(i) Cityside shall deliver to Escrow Agent with copies to Norwest:
(A) certificates representing 100% of the Acquired Companies Stock,
duly endorsed in blank or with stock powers duly endorsed in blank
which shall transfer good title to the Acquired Companies Stock, free
and clear of all claims, rights, or interests of third parties and all
liens and encumbrances whatsoever;
(B) all corporate books, records and documents of the Acquired
Companies, including, but not limited to, the corporate stock record
books and corporate minutes books, and certified resolutions of the
Company authorizing the Agreement;
(C) the signed resignations as directors or officers of the Acquired
Companies of such persons as Norwest shall request;
(D) the certificates required pursuant to Paragraph 7(c) of the
Stock Purchase Agreement;
(E) the Preliminary Closing Statement;
(F) the consent of Clipper Receivables Corporation to the
transactions contemplated by the Stock Purchase Agreement; and,
(G) such other documents as may be required by the Stock Purchase
Agreement or reasonably requested by Norwest.
(ii) Norwest shall:
(A) cause to be transferred to Escrow Agent cash in an amount
equal to the Net Worth of the Acquired Companies set forth on the
Preliminary Closing Statement plus the Premium in immediately
available funds;
(B) deposit with Escrow Agent the certificates required pursuant to
Paragraph 6 (c) of the Stock Purchase Agreement and deliver to
Cityside and C.H. Robinson copies thereof;
(C) deliver or cause to be delivered to Escrow Agent such
other documents as may be required by the Stock Purchase Agreement or
reasonably requested by Cityside; and,
(D) cause to be transferred to Escrow Agent cash in the amount of
the Escrowed Debt (as defined in the Stock Purchase Agreement as
amended) (the cash deposited with the Escrow Agent pursuant to
subparagraphs 2(b)(ii)(A) and 2(b)(ii)(D) hereof shall collectively
be referred to as the "Escrowed Funds").
(c) Upon the receipt by Norwest of approval of the Transaction by all applicable
regulatory authorities (the "Approvals"), Norwest shall promptly notify Cityside
and C.H. Robinson and the parties shall set a Closing Date for the Transaction,
which shall be three (3) business days after the receipt of the last required
Approval, or such other time as the parties may agree in writing. Not later
than one (1) business day prior to any Closing Date set pursuant hereto,
Norwest, Cityside and C.H. Robinson shall jointly request in writing to Escrow
Agent that Escrow Agent (i) deliver to C.H. Robinson or its successor on the
designated Closing Date the Escrowed Funds, plus any interest accrued thereon,
and (ii) deliver to Norwest the Acquired Companies Stock, and (iii) deliver all
other escrowed documents to the appropriate party as specified on Exhibit A
attached hereto, or as otherwise specified in written directions executed by the
designated officers of Norwest, Cityside and C.H. Robinson listed on Exhibit B
attached hereto. Escrow Agent shall execute delivery promptly and as requested.
(d) If the conditions to the Transaction contemplated by the Stock Purchase
Agreement are not satisfied or waived prior to December 31, 1997, Norwest shall
notify Escrow Agent in writing and Escrow Agent shall (i) transfer the Escrowed
Funds to Norwest, together with interest thereon, (ii) transfer the Acquired
Companies Stock to Cityside, and (iii) return all other documents held in escrow
to the appropriate party as specified on Exhibit A.
(e) Escrow Agent shall have no duty to determine or inquire into the sufficiency
of the Approvals or any documents held pursuant to paragraph 2(b) of this
Agreement, the Escrow Agent's sole duty hereunder being to safeguard the
documents, instruments and payments deposited with it hereunder and to disburse
or return such documents, instruments and payments in accordance with the terms
of this Agreement.
(f) Whenever under the terms of this Agreement the performance date of any
provision hereof shall fall on a legal holiday, the performance thereof on the
next successive business day shall be deemed to be in full compliance.
(g) Anything in this Agreement to the contrary notwithstanding, Escrow Agent
shall not be liable to any person for anything that it may do or refrain from
doing in connection with its obligations under this Escrow Agreement, unless
Escrow Agent is guilty of gross negligence or willful misconduct.
(h) The disability, bankruptcy, insolvency or absence of any of the undersigned
shall not affect or prevent performance by Escrow Agent of its obligations and
instructions hereunder.
(i) Cityside shall pay in its entirety any fee required by Escrow Agent and any
and all other expenses. Ciyside's payment of such fees shall be made by Escrow
Agent out of the Escrowed Funds.
(j) This Escrow Agreement shall not supersede any term or condition of the
Stock Purchase Agreement, except that if the Transaction closes, (i) delivery of
the Escrowed Funds to C.H. Robinson shall be made by Escrow Agent, and shall be
accepted by Cityside and C.H. Robinson as payment in full of the Purchase Price
of the Acquired Companies Stock and funds due from Norwest pursuant to paragraph
7(i) of the Stock Purchase Agreement (subject to post-Closing adjustments
contemplated by paragraph 1(e) of the Stock Purchase Agreement), and delivery of
all other items deposited with Escrow Agent by Norwest shall be made by Escrow
Agent to C.H. Robinson, and (ii) delivery of the Acquired Companies Stock and
all other items deposited with Escrow Agent by Cityside or C.H. Robinson shall
be made by Escrow Agent to Norwest, both as described in this Escrow Agreement.
(k) All monies received by Escrow Agent pursuant to this Agreement shall be
invested and/or reinvested in the Norwest Advantage Cash Investment Fund.
3. Duties Limited. The Escrow Agent undertakes to perform only the duties
expressly set forth in this document. The Escrow Agent shall not be bound by
any waiver, modification, amendment, termination, cancellation or revision of
this Escrow Agreement, unless the foregoing is in writing, signed by all the
parties to this Escrow Agreement, and the prior consent of the Escrow Agent has
been obtained. The Escrow Agent shall not be bound by any assignment of the
rights, duties or obligations under this Escrow Agreement by any party unless,
the Escrow Agent receives prior written notification of such assignment and the
Escrow Agent gives prior written consent to such assignment. The Escrow Agent
shall perform any act ordered by a Court of competent jurisdiction. The Escrow
Agent hereby consents to the assignment by Cityside of its interest in the
Escrowed Funds to C.H. Robinson or its successor.
4. Indemnification of Escrow Agent. The parties to this Escrow Agreement,
hereby jointly and severally agree to indemnify the Escrow Agent for, and to
hold such Escrow Agent harmless, against any and all, fees, expenses, claims,
suits, actions, proceedings investigations judgments, arbitration decisions,
deficiencies, damages, awards, settlements, reasonable legal fees and expenses
of attorney(s) chosen by the Escrow Agent, liabilities and expenses incurred
based upon, but not limited to, a mistake of fact or law, act, performance, non-
performance, alleged act, alleged omission, actual omission, act or omission
based upon the advice of counsel or any other cause committed while performing
any and all duties in connection with and under this Escrow Agreement. In
addition, the Escrow Agent shall receive full indemnification protection when
relying upon any certificate, instruction statement, request, notice, advice,
direction, agreement, instrument, document, signature believed by the Escrow
Agent to be genuine, or any assumption by the Escrow Agent that any person
purporting to gibe the Escrow Agent any of the foregoing in accordance with the
provisions herein has been duly authorized to do so. However, such indemnity
for the Escrow Agent will not be provided in situations based upon willful
misconduct or negligence by the Escrow Agent. This Escrow Agreement hereby
grants to the Escrow Agent a lien on the Escrow Funds to
enable the Escrow Agent to secure the aforementioned indemnity. The Escrow
Agent shall be under no duty to institute or defend any type of proceedings
which may arise regarding this Escrow Agreement. However, the Escrow Agent
may, in utilizing the Escrow Agent's discretion and at the expense of the
parties herein, institute or defend such proceedings.
5. Resignation; Successor Escrow Agent. The Escrow Agent may resign and be
discharged from the duties and obligations under this agreement at any time by
giving no less than fifteen (15) days written notice of such resignation to the
parties herein, specifying the date when such resignation shall take effect.
Thereafter, the Escrow Agent shall have no further obligation, expect to hold
the Escrow Fund as depository. In the event of such resignation, the parties to
this Escrow Agreement agree that they will jointly appoint a banking
corporation, trust company, attorney or other qualified person as Successor
Escrow Agent within fifteen (15) days of notice of such resignation. The Escrow
Agent shall refrain from taking any action until such Escrow Agent has received
joint written instructions from the parties herein, designating the Successor
Escrow Agent. Upon receipt of such instruction, the Escrow Agent shall, as
soon as all fees are received in full, promptly deliver all of the escrowed
securities to such Successor Escrow Agent in accordance with such instructions.
Upon receipt of the Escrow Fund, the Successor Escrow Agent shall be bound by
all the provisions herein and shall promptly deliver a written instrument to
each of the parties detailing the terms in which the Successor Escrow Agent
agrees to be bound.
6. Escrow Agent's Fees. The Escrow Agent shall be entitled to compensation
from Cityside for its services under this Escrow Agreement in accordance with
the fee schedule attached to this Escrow Agreement as Exhibit C. These fees are
intended to be full compensation for the Escrow Agent's services as contemplated
by this Escrow Agreement. However, if (i) the conditions for disbursement of
funds under this Escrow Agreement are not fulfilled; (ii) the Escrow Agent
renders any material service not contemplated by this Escrow Agreement; (iii)
there is any assignment of this Escrow Agreement; (iv) there is any material
modification of this Escrow Agreement; (v) any material controversy arises under
this Escrow Agreement; (vi) the Escrow Agent is made a party to, or justifiably
intervenes in, any litigation pertaining to this Escrow Agreement or the subject
matter of this Escrow Agreement, then the Escrow Agent shall be reasonably
compensated by Cityside for any extraordinary services rendered. The Escrow
Agent shall not be required to distribute funds to terminate this Escrow
Agreement prior to receipt of its fees in full.
7. Survival of Escrow Agent's Rights. The rights of the Escrow Agent and the
obligations of and indemnifications provided by Cityside, C.H. Robinson and
Norwest pursuant to this document shall survive the termination of this
Agreement for a period of one (1) year, provided that Escrow Agent has received
a receipt and release of claims from all parties hereto upon disbursement of the
items escrowed hereunder.
8. Arbitration Language. In the event there is objection by Cityside or C.H.
Robinson to the disbursement of Escrowed Funds to Norwest, the parties shall
attempt to resolve their differences. If they cannot, their disagreement shall
be resolved by arbitration governed by the rules of the American Arbitration
Association (AAA). Unless AAA rules require other procedures, the arbitration
shall be conducted in the following manner: The Escrow Agent shall obtain a
list of arbitrators from the AAA. The list shall consist of five arbitrators,
and the Escrow Agent shall determine by a coin flip whether the Cityside or
Norwest shall have the right to remove the first name from the list. Cityside,
Norwest, and Escrow Agent shall meet within seven (7) calendar days of receipt
of the list and determine the arbitrator by alternately striking a name. The
person whose name remains shall be the arbitrator. The arbitrator shall confer
with the parties or their representatives and shall hold a hearing promptly,
and shall issue a binding decision not later than fifteen (15) calendar days
from the date of the close of the hearing. The arbitrator's decision shall be
in writing and shall set forth his findings of facts, reasoning, and
conclusions on the issues submitted. The Arbitrator shall be without power or
authority to recommend any decision which requires the commission of an act
prohibited by law or which violates, modifies or alters the terms of this
Escrow Agreement. The decision of the arbitrator shall be binding on all of
the parties hereto and shall be communicated to each of them and to Escrow
Agent. The parties agree that this procedure is the exclusive remedy to
contest issues relating to the disbursement of the Escrow Account.
9. Notices. Any notice or other communication provided for herein or given
hereunder to a party hereto shall be in writing and shall be delivered (a)
personally, or (b) by certified mail, return receipt requested, or (c) by
overnight courier service, or (d) by telecopy as follows:
If to Norwest:
Norwest Corporation
Sixth and Marquette
Minneapolis, Minnesota 55479-1026
Attention: Secretary
Telecopier Number: 612/667-4399
and Norwest Financial, Inc.
206 Eighth Street
Des Moines, Iowa 50309
Attention: Patricia J. McFarland
Telecopier Number: 515/237-7602
If to Cityside:
C.H. Robinson, Inc.
8100 Mitchell Road, Suite 200
Eden Prairie, Minnesota 55344
Attention: Thomas J. Sandstrom
Telecopier Number: 612/937-7809
If to C.H. Robinson:
C.H. Robinson, Inc.
8100 Mitchell Road, Suite 200
Eden Prairie, Minnesota 55344
Attention: Dale S. Hanson
Telecopier Number: 612/937-7809
If to Escrow Agent:
Norwest Bank Iowa, N.A.
Trust Division
666 Walnut Street
Des Moines, Iowa 50309
Attn: Steve Amend, Trust Officer
Telecopier Number: 515/245-8532
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have duly executed this Escrow
Agreement as of the day and year first above written.
NORWEST CORPORATION CITYSIDE HOLDING L.L.C.
By: /s/ John E. Ganoe By: C.H. Robinson, Inc., a Minnesota corporation
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Title: E.V.P.
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By: /s/ Dale S. Hanson
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Title: V.P. & C.F.O.
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NORWEST BANK IOWA, N.A. C. H. ROBINSON, INC.
By: /s/ Dawn E. Meade By: /s/ Dale S. Hanson
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Title: Vice President Title: V.P. & C.F.O.
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Exhibit A
Escrow Documents Delivery Instructions
1. Items 2(b)(i)(A), 2(b)(i)(B), 2(b)(i)(C), 2(b)(i)(D), 2(b)(i)(E), 2(b)(i)(F)
and 2(b)(i)(G) to Norwest Financial, Inc.
2. All monies deposited herein and items 2(b)(ii)(B) and 2(b)(ii)(C) to C.H.
Robinson or its successor.
Exhibit B
Designation of Officers
1. Norwest Corporation: John Ganoe, Executive Vice President
2. Cityside and C.H. Robinson:
Exhibit C
Escrow Agent's Fees:
See Attached.