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EXHIBIT 10.2
ESCROW AGREEMENT
ESCROW AGREEMENT dated as of August 20, 1998, among SUPERIOR CONSULTANT HOLDINGS
CORPORATION, a Delaware corporation ("Superior") ENTERPRISE CONSULTING GROUP,
INC., a Michigan corporation and wholly-owned subsidiary of Superior
("Enterprise"), XXXXXXXXX CORPORATION, a Delaware corporation ("Xxxxxxxxx"),
AVIANT INFORMATION, INC., a California corporation and wholly-owned subsidiary
of Xxxxxxxxx ("Aviant") and First of America Bank, a national banking
association (the "Escrow Agent").
PRELIMINARY STATEMENT
A. Superior, Enterprise, Xxxxxxxxx and Aviant are parties to an Asset
Purchase Agreement dated of even date herewith (the "Asset Purchase Agreement"),
providing for, among other things, the acquisition by Enterprise of certain
assets of Aviant (the "Purchase").
B. The Asset Purchase Agreement provides that certain funds will be
placed in escrow as security for collection of certain accounts receivable being
purchased by Enterprise from Aviant and as security against any breaches of
representations, warranties or covenants made by Xxxxxxxxx and Aviant in the
Asset Purchase Agreement.
C. This Escrow Agreement is intended to govern the retention and
disposition of the escrowed funds.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, Superior, Enterprise, Xxxxxxxxx,
Aviant and the Escrow Agent covenant and agree as follows:
1. Definitions. Capitalized terms used herein, except to the extent
otherwise defined, have the meanings ascribed to them in the Asset Purchase
Agreement. This Section 1 is intended to provide a cross-reference for the ease
of the parties only and does not constitute or make the Escrow Agent a party to
the Asset Purchase Agreement nor subject to any of the provisions, terms or
conditions of the Asset Purchase Agreement.
2. Escrow Agent. As contemplated by the Asset Purchase Agreement, the
Escrow Agent is hereby designated and appointed by Superior, Enterprise,
Xxxxxxxxx and Aviant, and the Escrow Agent hereby accepts such designation and
appointment and agrees to act, in accordance with and subject to the terms of
this Escrow Agreement, as Escrow Agent for the purpose of accepting from
Enterprise, holding, and paying out to Enterprise and/or Aviant, as the case may
be, the Escrow Amount.
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3. ESCROW AMOUNT.
(a) Deposit of Escrow Amount. At the Closing, Enterprise shall deliver
or cause to be delivered to the Escrow Agent an amount in cash equal to the sum
of (i) 10% of the Purchase Price plus (ii) 50% of the estimated value of the
Accounts Receivable which on the Closing Date have been outstanding for 90 days
or less (the "Under 90 Receivables") plus (iii) 100% of the estimated value of
the Accounts Receivable which on the Closing Date have been outstanding for more
than 90 days (the "Over 90 Receivables"). Following the Closing, Enterprise
shall deliver or cause to be delivered to Escrow Agent an amount equal to (x)
50% of any additional Under 90 Receivables determined to exist (under the
procedures contemplated in Section 2.8 of the Asset Purchase Agreement) as of
the Closing Date plus (y) 100% of any additional Over 90 Receivables determined
to exist as of the Closing Date under such procedures.. The amounts delivered to
the Escrow Agent pursuant to the preceding two sentences are hereafter referred
to as the "Escrow Amount." Funds constituting the Escrow Amount shall be
delivered under an account name which indicates that the funds are held in
escrow for the benefit of Superior, Enterprise, Xxxxxxxxx and Aviant, and the
Escrow Agent shall acknowledge receipt thereof in escrow for the benefit of
Superior, Enterprise Xxxxxxxxx and Aviant. Escrow Agent shall have no duty to
verify that it has received the correct amount of funds as described above.
Escrow Agent is hereby directed to deposit the funds received for the Escrow
Amount into the above-described account.
(b) Application of the Escrow Amount. The Escrow Amount shall be
applied by the Escrow Agent exclusively to the making of the payments provided
for herein.
4. RECOVERY OF UNCOLLECTED ACCOUNTS RECEIVABLE.
(a) Delivery of Collection Notices. No later than the 10th day of each
calendar month commencing with the first month following the month in which the
Closing occurs, Enterprise shall deliver to Xxxxxxxxx, Aviant and the Escrow
Agent a notice (each a "Collections Notice") setting forth (i) the dollar value
of all Accounts Receivable collected by Enterprise during the immediately
preceding calendar month, (ii) the portion of such amount attributable to Under
90 Receivables and the portion attributable to Over 90 Receivables and (iii) a
calculation indicating 50% of the value of the Under 90 Receivables, and 100% of
the value of the Over 90 Receivables, which in each case have not been collected
as of the date of the Notice. The Escrow Agent, as soon as practicable and in
any event within three business days after receipt of such notice, shall
disburse to Aviant from the Escrow Amount (by wire transfer to an account
designated by Aviant) such amount as shall cause the remaining Escrow Amount to
thereafter equal the amount deposited pursuant to Section 3(a)(i), less amounts
theretofore disbursed for Warranty Expenses as contemplated in Section 5, plus
(i) 50% of the value of the Under 90 Receivables which have not been collected
as of the disbursement date and (ii) 100% of the Over 90 Receivables which have
not been collected as of the disbursement date, in each case based on the most
recent Collection Notice received by the Escrow Agent through such date. There
shall also be disbursed to Aviant at such time interest or earnings actually
earned on the funds disbursed in accordance with Section 7, less any unpaid fees
or expenses which the Escrow Agent may be entitled to deduct therefrom pursuant
to the terms of this Agreement.
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(b) Delivery of Uncollected Receivables Notice. By the earlier of (i)
the date as of which Enterprise has collected all of the Accounts Receivable or
(ii) ten (10) days following the date which is six months after the Closing
Date, Enterprise shall deliver to Xxxxxxxxx, Aviant and the Escrow Agent a
notice setting forth the dollar value of all Accounts Receivable which have not
been collected by Enterprise as of such date together with the reasonable
out-of-pocket costs of collection incurred by Buyer in collecting or attempting
to collect the Accounts Receivable (the "Uncollected Receivables Notice").
Enterprise shall deliver the Uncollected Receivables Notice even if the dollar
amount of such uncollected Accounts Receivable is $-0-.
(c) Disbursement to Enterprise. As soon as practicable and in any event
within three business days after receipt of the Uncollected Receivables Notice,
the Escrow Agent shall disburse to Enterprise from the Escrow Account the dollar
value of the uncollected Accounts Receivable (if any) and collection expenses
set forth in the Uncollected Receivables Notice, together with interest or
earnings actually earned on the funds disbursed in accordance with Section 7,
less any unpaid fees or expenses which the Escrow Agent may be entitled to
deduct therefrom pursuant to the terms of this Agreement. Such amount shall be
disbursed by wire transfer to an account designated by Enterprise.
(d) Disbursement to Aviant. As soon as practicable and in any event
within three business days after receipt of the Uncollected Receivables Notice,
the Escrow Agent shall disburse to Aviant from the Escrow Account an amount
equal to
(i) the sum of
(A) the amounts deposited pursuant to clauses (ii) and (iii)
of Section 3(a) plus
(B) any amounts delivered to the Escrow Agent by Enterprise
after Closing in respect of additional Accounts Receivable as
contemplated in clauses (x) and (y) of Section 3(a) above,
less
(ii) the sum of
(A) all amounts previously disbursed to Aviant pursuant to
Section 4(a) and
(B) the amount of the uncollected Accounts Receivable
identified in the Uncollected Receivables Notice,
together with interest or earnings actually earned on the funds
disbursed in accordance with Section 7, less any unpaid fees or expenses which
the Escrow Agent may be entitled to deduct therefrom pursuant to the terms of
this Agreement.
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5. RECOVERY OF WARRANTY EXPENSES.
(a) Delivery of Notice. At any time prior to the first anniversary of
the Closing Date (or, as provided in Section 5(e) below, the second anniversary
of the Closing Date), Enterprise may submit to the Escrow Agent, Xxxxxxxxx and
Aviant a written notice relating to Warranty Expenses which Enterprise has
incurred or has determined that it may incur and for which Enterprise is
entitled to be indemnified under the provisions of Article 9 of the Asset
Purchase Agreement (a "Warranty Expense Notice"). Each Warranty Expense Notice
shall set forth the representation, warranty or covenant contained in the Asset
Purchase Agreement which has been breached and which gives rise to the Warranty
Expense, the estimated amount of the Warranty Expense together with a detailed
calculation thereof, whether the Warranty Expense relates to litigation,
arbitration or other proceedings commenced by a third party and whether such
Warranty Expense has been incurred or not yet incurred. If the Warranty Expense
relates to such a third party claim, the copy of the Warranty Expense Notice
submitted to Xxxxxxxxx and Aviant shall be accompanied by a copy of the summons
and complaint, demand for arbitration or other document setting forth the nature
of the third party claim. In the event the Warranty Expense has not yet been
incurred, the Warranty Expense Notice shall include a statement that such
Warranty Expense shall not be paid by the Escrow Agent until the conditions of
Section 6(g) have been satisfied.
(b) Dispute of Warranty Claim. In the event Xxxxxxxxx or Aviant
disputes any claim for Warranty Expenses detailed in a Warranty Expense Notice,
Xxxxxxxxx or Aviant shall notify Enterprise and the Escrow Agent in writing (a
"Disputed Warranty Expense Notice") within twenty (20) days after receipt of the
Warranty Expense Notice, setting forth a detailed description of the basis for
its dispute of the Warranty Expenses claimed.
(c) Disbursement to Enterprise. If Xxxxxxxxx or Aviant does not deliver
a Disputed Warranty Expense Notice to Enterprise and Escrow Agent within twenty
(20) days after receipt of the Warranty Expense Notice, the Escrow Agent shall
promptly disburse to Enterprise from the Escrow Account the amount of Warranty
Expenses claimed, but not in excess of (i) the amount deposited into the Escrow
Account pursuant to clause (i) of Section 3(a) less (ii) any amounts previously
disbursed to Enterprise for Warranty Expenses under the provisions of this
Section 5(c), together with interest or earnings actually earned on the funds
disbursed in accordance with Section 7, less any unpaid fees or expenses which
the Escrow Agent may be entitled to deduct therefrom pursuant to the terms of
this Agreement.
(d) Disbursement to Aviant. On the first anniversary of the Closing
Date (or, as provided in Section 5(e) below, the second anniversary of the
Closing Date), the Escrow Agent shall disburse to Aviant from the Escrow Account
the funds then in the Escrow Account less the amount of all claims for Warranty
Expenses set forth in a Warranty Expense Notice which have been disputed by
Aviant and not resolved. There shall also be disbursed to Aviant interest or
earnings actually earned on the funds disbursed, in accordance with Section 7,
less any unpaid fees or expenses which the Escrow Agent may be entitled to
deduct therefrom pursuant to the terms of this Agreement.
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(e) Extension of Escrow Term. Enterprise, Superior, Aviant and
Xxxxxxxxx agree that in the event that, prior to the first anniversary of the
Closing Date, Xxxxxxxxx has consummated, or has announced its intention to
engage in, a transaction involving the sale of all or substantially all of its
assets to a third party acquiror, then, upon delivery to the Escrow Agent no
later than 5:00 p.m. Detroit time on the day before the first anniversary of the
Closing Date of a written notice by Enterprise, Superior, Aviant or Xxxxxxxxx
that such an event has occurred, amounts which would otherwise be disbursed by
Escrow Agent pursuant to Section 5(d) shall be held, under all of the terms and
conditions of this Agreement, until the second anniversary of the Closing Date,
and Enterprise shall be entitled to deliver a Warranty Expense Notice under
Section 5(a) relating to any Warranty Expenses which, prior to such time,
Enterprise has incurred or has determined that it may incur and for which
Enterprise is entitled to be indemnified under the provisions of Article 9 of
the Asset Purchase Agreement. All other provisions of this Agreement which have
not by their terms expired or been fully performed shall remain in full force
and effect during such extended period.
6. RESOLUTION OF DISPUTES.
(a) Escrow Agent to Retain Funds. If Xxxxxxxxx or Aviant have delivered
a Disputed Warranty Expense Notice in accordance with Section 5(b) above, and if
Enterprise, Xxxxxxxxx and Aviant are unable to agree regarding any claim for
Warranty Expenses made by Enterprise pursuant to Section 5 above, the Escrow
Agent shall continue to hold the amounts claimed, but not in excess of (i) the
amount deposited pursuant to Section 3(a)(i) less (ii) any amounts previously
disbursed to Enterprise for Warranty Expenses under the provisions of Section
5(c), plus interest or earnings actually earned thereon in accordance with
Section 7.
(b) Arbitration. Enterprise and Aviant shall use their best efforts to
resolve disputes regarding claims for Warranty Expenses. If they are unable to
resolve any dispute within fifteen (15) days following the delivery of
Xxxxxxxxx'x or Aviant's Disputed Warranty Expense Notice, the dispute shall be
submitted for arbitration in accordance with the commercial arbitration rules of
the American Arbitration Association except as specified herein. The arbitration
shall take place in Southfield, Michigan. Escrow Agent shall not be made a party
to the arbitration and shall have no obligation to insure that any of the
provisions of this Agreement relating to the conduct of the arbitration are
observed or followed. The arbitrator shall be chosen from among candidates
supplied by the American Arbitration Association who have experience in matters
relating to the acquisition and sale of business enterprises and business
assets.
(c) Scope of Arbitration. The arbitration shall be limited to issues
relating to the proper disposition of funds in the Escrow Account pursuant to
the terms of this Agreement and the Asset Purchase Agreement, and the arbitrator
shall have no authority to determine, decide or resolve any other disputes,
issues or disagreements arising with respect to the Asset Purchase Agreement or
the transactions contemplated thereunder.
(d) Conduct of Arbitration. The arbitrator shall substantially comply
with the Michigan rules of evidence; shall grant essential but limited
discovery; shall provide for the exchange of witness lists and exhibit copies;
and shall conduct a pretrial conference and consider dispositive
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motions. Each party shall have the right to request the arbitrator to
make findings of specific factual issues. The arbitrator shall decide all issues
and disputes in conformity with applicable law and shall have no authority to
alter the terms of this Agreement or the Asset Purchase Agreement. The
arbitrator shall not have authority to award special, consequential, exemplary
or punitive damages. The arbitrator shall complete its proceedings and render
its decision within forty (40) days after submission of the dispute to it,
unless both parties agree to an extension. Each party shall cooperate with the
arbitrator to comply with procedural time requirements and the failure of either
to do so shall entitle the arbitrator to extend the arbitration proceedings
accordingly and to impose sanctions on the party responsible for the delay,
payable to the other party.
(e) Decision and Award. The decision of the arbitrator shall be final
and binding upon the parties and a judgment by a court of competent jurisdiction
may be entered in accordance therewith. The award may be appealed by the parties
only upon such grounds as may exist under the Federal Arbitration Act, 9 U.S.C.
Section 1 et seq., and any such appeal shall be commenced within thirty days
after the arbitrator delivers his or her decision. If the arbitrator determines
that a party has failed to act in good faith or with a reasonable basis in
connection with the dispute, the arbitrator shall be entitled to award, against
the party so acting, the fees and expenses of the arbitration and the costs and
expenses incurred by the other party in connection with the arbitration,
including but not limited to reasonable attorneys' fees. In the absence of such
a finding, the fees and expenses of the arbitration shall be borne 50% by
Superior and Enterprise on the one hand and 50% by Xxxxxxxxx and Aviant on the
other (except that each party shall be solely responsible for the fees and
expenses of its counsel and other professionals and experts retained by it).
(f) Delivery of Award to Escrow Agent. Upon receipt of an opinion of
counsel to Superior, Enterprise, Xxxxxxxxx or Aviant, stating that such counsel
has received and reviewed the arbitrator's decision or any court order enforcing
it (a copy of which shall be attached), and that the arbitrator's decision or
court order constitutes a final, non-appealable decision or order (as
applicable), the Escrow Agent shall disburse to Enterprise from the Escrow
Account the amount of Warranty Expenses found owing by the arbitrator (as same
may be modified by the results of any appeal), up to a maximum of the amount
deposited pursuant to Section 3(a)(i) less amounts previously disbursed to
Enterprise for Warranty Expenses, and shall disburse to Aviant the principal
amount, if any, remaining in the Escrow Account, in each case together with
interest or earnings actually earned on the funds disbursed as set forth in
Section 7, less any unpaid fees or expenses which the Escrow Agent may be
entitled to deduct therefrom pursuant to the terms of this Agreement.
(g) Claims for Warranty Expenses Not Yet Incurred. Only claims for
Warranty Expenses actually incurred shall be paid (subject to resolution of any
dispute with respect thereto as provided herein) from the Escrow Amount. If, on
or before the first anniversary of the Closing Date, Enterprise has submitted a
Warranty Expense Notice for Warranty Expenses not yet incurred, then unless
Enterprise and Aviant otherwise jointly instruct the Escrow Agent, the amount
claimed in such Warranty Expense Notice shall be retained by the Escrow Agent
until such time as the amount of such Warranty Expenses actually incurred by
Enterprise becomes fully liquidated and known and such claim is settled in
accordance with the procedures set forth herein.
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7. TREATMENT OF EARNINGS. Interest or earnings actually earned on the
funds in the Escrow Account shall be credited to a separate interest
sub-account. As set forth in the foregoing Sections, such interest or earnings
shall be disbursed pro rata along with principal amounts of the Escrow Account,
so that parties receiving distributions of any portion of the principal amount
shall also receive interest or earnings actually earned on that portion of the
principal amount (subject in each instance to the right of the Escrow Agent to
deduct any unpaid fees or expenses which it may be entitled to deduct from such
earnings pursuant to the terms of this Agreement). The pro rata amounts of
interest or earnings distributed with respect to any principal amount disbursed
shall be determined by multiplying the amount contained in the interest
sub-account on the disbursement date by a fraction, the numerator of which is
the principal amount to be disbursed and the denominator is the total principal
amount in the Escrow Account on the disbursement date.
8. WITHHOLDING. Anything herein to the contrary notwithstanding, the
Escrow Agent shall be authorized to withhold taxes from payments made from the
Escrow Amount, to the extent required by law.
9. INVESTMENT BY ESCROW AGENT. The Escrow Agent shall, as directed by
Enterprise, invest the Escrow Amount in (i) obligations of, or fully guaranteed
by, the United States of America or any agency thereof, (ii) commercial paper
rated of the highest quality by Xxxxx'x Investors Services, Inc. or Standard &
Poor's, (iii) Certificates of Deposit (having a term of not more than 90 days)
issued by a commercial bank having at least $10 billion in assets or (iv) upon
the concurrence of Aviant, in units of a money market mutual fund, including
without limitation any offered by Escrow Agent or an affiliate of Escrow Agent,
after the party directing such investment has received a prospectus. Absent its
receipt of such investment directions from Enterprise, the Escrow Agent shall
invest the Escrow Amount, and any interest or earnings thereon, in one of the
instruments described in clauses (i), (ii) or (iii) above, as directed by
Aviant, or, in the absence of directions from Enterprise or Aviant, in the
Parkstone Treasury Money Market Fund Institutional Shares. Any interest or
earnings with respect to such investment of the Escrow Amount shall be paid as
set forth in this Agreement. If for any reason the Escrow Amount is inadequate
to pay the amounts that Aviant is entitled to hereunder, Enterprise shall be
liable for the payment of such additional amounts as are required.
10. CONCERNING THE ESCROW AGENT. In performing its duties under this
Escrow Agreement and notwithstanding anything to the contrary contained in this
Agreement, the Escrow Agent, including its officers, directors, employees and
agents:
(a) is authorized to act upon any statement, consent, agreement or
other instrument, not only as to its due execution, its validity and the
effectiveness of its provisions but also as to the truth and accuracy of any
information contained therein, which the Escrow Agent shall in good faith
believe to be genuine and to have been signed by a proper person or persons;
(b) shall have no responsibility to inquire into or determine the
genuineness, authenticity, or sufficiency of any securities, checks, or other
documents or instruments submitted to it in connection with its duties hereunder
and shall be under no duty to make any investigation or any inquiry as to any
statements contained or matters referred to in any such writing;
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(c) shall be entitled to deem the signatories of any documents or
instruments submitted to it hereunder as being those purported to be authorized
to sign such documents or instruments on behalf of the parties hereto and shall
be entitled to rely upon the genuineness of the signatures of such signatories
without inquiry and without requiring substantiating evidence of any kind.
(d) shall have no liability for any action or omission to act with
respect to its duties under this Escrow Agreement so long as it shall have acted
in good faith and without gross negligence;
(e) shall have no responsibility or liability for any diminution which
may result from any investments or reinvestments made in accordance with any
provision which may be contained herein and shall be entitled to sell or
liquidate any such investments at such time and in such amounts as it deems
necessary to pay out and disburse funds as provided in this Agreement;
(f) shall have no obligation to make any payments hereunder (i) except
from the Escrow Amount and any earnings thereon and (ii) until it has received
from the party entitled to such payment an IRS Form W-9;
(g) shall be entitled to refrain from taking any action contemplated by
this Agreement in the event it becomes aware of any disagreement between the
parties as to any facts or the happening of any event precedent to such action.
(h) shall have no obligation to report any earnings on the Escrow
Amount or to prepare any federal, state or local tax return in connection
therewith except to the extent the Escrow Agent is required by law to make any
such report or prepare any such return.
(i) Escrow Agent is not obligated to render any statements or notices
of non-performance hereunder to any party hereto but may in its discretion
inform any party hereto or its authorized representative of any matters
pertaining to this Agreement.
(j) Escrow Agent shall not be charged with knowledge of any fact,
including but not limited to performance or non-performance of any condition
hereunder, unless it has actually received written notice thereof from one of
the parties pursuant to Section 14 hereof, such notice clearly referring to this
Agreement. Unless it is specifically otherwise provided herein, Escrow Agent has
no duty to determine or inquire into the happening or occurrence of any event or
contingency or the performance or failure of performance of Enterprise or Aviant
hereunder, with the Escrow Agent's sole duty hereunder being to safeguard the
Escrow Amount and to disburse the same in accordance with this Agreement;
provided, however, that if Escrow Agent is called upon by the terms of this
Agreement to determine the occurrence of any event or contingency, Escrow Agent
may request from Enterprise or Aviant such additional evidence as Escrow Agent
in its sole discretion may deem necessary to determine any fact relating to the
occurrence of such event or contingency, and in connection therewith may make
inquiries of, and consult with, among others, Enterprise or Aviant at any time.
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(k) It is the intention of the parties hereto that Escrow Agent shall
never be required to use or advance its own funds or (except as expressly
provided in Section 11) otherwise incur personal financial liability in the
performance of any of its duties or the exercise of any of its rights and powers
hereunder.
(l) Escrow Agent may consult with legal counsel selected and retained
by it and shall be fully protected with respect to any action or inaction under
this Agreement taken or suffered in good faith by Escrow Agent in accordance
with and reliance upon the opinion of such counsel.
11. INDEMNIFICATION OF THE ESCROW AGENT. Each of Superior and
Enterprise on the one hand, and Xxxxxxxxx and Aviant on the other, jointly and
severally covenant and agree to indemnify the Escrow Agent and its officers,
directors, employees and agents (collectively, the "Indemnitees" and
individually an "Indemnitee") and to hold each of them harmless against any
fees, loss, liability, expense, claims, damages or judgments (including
reasonable attorneys' fees and expenses) arising out of or in connection with
the performance of the Escrow Agent's duties hereunder, including the cost and
expenses of defending themselves against any such claim or liability in
connection therewith, except that the none of the foregoing shall be indemnified
against any such loss, liability or expense arising out of the Escrow Agent's or
their bad faith, gross negligence or willful misconduct in connection with the
performance of the Escrow Agent's obligations hereunder. Each of Superior and
Enterprise on the one hand, and Xxxxxxxxx and Aviant on the other, shall be
liable for 50% of all amounts to which the indemnity set forth herein applies.
An Indemnitee seeking indemnification hereunder shall deliver notice of a claim
for indemnification to Superior, Enterprise, Xxxxxxxxx and Aviant, together with
a copy of any written assertion of the claim against the Indemnitee or of the
summons or other legal process commencing any action against the Indemnitee,
promptly (and in any event within 10 business days) after the Indemnitee shall
have received any such written assertion of the claim or shall have been served
with the summons or other legal process, giving information as to the nature and
basis of the claim. The failure of an Indemnitee to deliver notice to Superior,
Enterprise, Xxxxxxxxx and Aviant of any such claim shall relieve Superior,
Enterprise, Xxxxxxxxx and Aviant from liability under this indemnity to the
extent of any prejudice in defending the action which results from the failure.
Superior, Enterprise, Xxxxxxxxx and Aviant shall be entitled to assume the
defense of any suit brought against any Indemnitee to enforce any such claim.
The Indemnitee thereafter may continue to participate in the action, suit or
legal proceeding, but subsequent to the assumption by Superior, Enterprise,
Xxxxxxxxx or Aviant of such defense, Superior, Enterprise, Xxxxxxxxx and Aviant
shall not be obligated to indemnify the Indemnitee for legal fees and expenses
of the Indemnitee thereafter incurred (provided that Superior and Enterprise
and/or Xxxxxxxxx and Aviant continue to defend such action in good faith until
concluded). No Indemnitee shall be under any obligation to institute or defend
any action, suit or legal proceeding in connection therewith, unless first
indemnified in accordance with the foregoing. The indemnification obligation set
forth herein shall survive the expiration or termination of this Agreement until
expiration of any applicable statute of limitations.
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12. FEES AND EXPENSES OF THE ESCROW AGENT.
(a) Escrow Agent shall be entitled to compensation for its services
hereunder in amounts as set forth on Schedule A to this Agreement and to
reimbursement of its reasonable out-of-pocket expenses and disbursements
including, but not by way of limitation, the fees and costs of attorneys or
agents which it may find necessary to engage in performance of its duties
hereunder, all to be paid 50% by Superior and Enterprise on the one hand and 50%
by Xxxxxxxxx and Aviant on the other. The Escrow Agent shall be entitled to
recover fees and expenses that the Escrow Agent is entitled to be paid or
reimbursed hereunder and amounts for which the Escrow Agent or any other
Indemnified Party is entitled to indemnification under Section 11 hereof, and is
granted a lien on, amounts deposited in the Escrow Account and amounts actually
earned thereon, if such amounts have not been paid to the Escrow Agent within 30
days after the Escrow Agent has delivered a statement of such amounts to each of
the parties hereto other than the Escrow Agent. If Escrow Agent shall be
required to perform extraordinary services not contemplated herein, Escrow Agent
shall receive reasonable additional compensation therefor, such compensation to
be paid 50% by Superior and Enterprise on the one hand and 50% by Xxxxxxxxx and
Aviant on the other. Escrow Agent shall not be required to institute or maintain
litigation unless indemnified to its satisfaction for its counsel fees, costs,
disbursements and all other costs, expenses and liabilities to which it may, in
its judgment, be subjected to in connection with such action.
(b) Superior and Enterprise hereby jointly and severally indemnify and
agree to hold harmless Xxxxxxxxx and Aviant from and against any and all costs,
expenses, liabilities and obligations that Xxxxxxxxx and/or Aviant may incur as
a result of (i) any failure by Superior and Enterprise to pay 50% of the Escrow
Agent's fees and expenses as provided in Section 12(a) or (ii) any act or
omission by Superior or Enterprise that results in the Escrow Agent or any other
Indemnified Party becoming entitled to indemnification under Section 11 hereof.
Xxxxxxxxx and Aviant hereby jointly and severally indemnify and agree to hold
harmless Superior and Enterprise from and against any and all costs, expenses,
liabilities and obligations that Superior and/or Enterprise may incur as a
result of (i) any failure by Xxxxxxxxx and Aviant to pay 50% of the Escrow
Agent's fees and expenses as provided in Section 12(a) or (ii) any act or
omission by Xxxxxxxxx or Aviant that results in the Escrow Agent or any other
Indemnified Party becoming entitled to indemnification under Section 11 hereof.
For purposes of this subsection, the commencement by a party to this Agreement
of a lawsuit, arbitration or other proceeding shall not be deemed to be an act
resulting in the Escrow Agent or any other Indemnified Party becoming entitled
to indemnification hereunder if the party or parties commencing such lawsuit
prevail therein. In the event that the Escrow Agent or other Indemnified Party
is paid any amount under Section 11 and Superior and Enterprise, on the one
hand, and Xxxxxxxxx and Aviant, on the other, dispute which of such parties is
required to indemnify the other under this subsection (b), such dispute shall be
settled by arbitration in accordance with Section 6. This subsection (b) sets
forth rights and obligations as between Superior and Enterprise, on the one
hand, and Xxxxxxxxx and Aviant, on the other, and shall not be deemed to affect
the rights or obligations of the Escrow Agent as otherwise set forth in this
Agreement, nor shall the Escrow Agent have any obligation to determine whether
the provisions of this subsection (b) have been satisfied.
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13. RESIGNATION OR REMOVAL OF ESCROW AGENT.
(a) Escrow Agent may resign as such following the giving of thirty (30)
days prior written notice to Superior, Enterprise, Xxxxxxxxx and Aviant.
Similarly, Escrow Agent may be removed and replaced following the giving of
thirty (30) days prior written notice to the Escrow Agent by Superior,
Enterprise, Xxxxxxxxx and Aviant. Such resignation or removal shall take effect
thirty (30) days after the date of such notice (or as of such earlier date as
may be mutually agreeable); provided, however, that notwithstanding any such
resignation or removal of the Escrow Agent pursuant to this Section 13, Escrow
Agent shall continue to serve in its capacity as escrow agent until (i) a
successor escrow agent is appointed in accordance with the provisions of this
Section 13 and has accepted such appointment and (ii) Escrow Agent's fees, costs
and expenses have been paid and the Escrow Agent has delivered the balance of
the Escrow Amount then in its possession to the successor escrow agent.
(b) In the event that Superior, Enterprise, Xxxxxxxxx and Aviant are
unable to agree upon a successor or shall have failed to appoint a successor
prior to the expiration of thirty (30) days following the date of the notice of
resignation or removal, the Escrow Agent may petition any court of competent
jurisdiction for the appointment of a successor Escrow Agent or for other
appropriate relief; and, any such resulting appointment shall be binding upon
all of the parties hereto.
(c) Upon acknowledgment by any successor Escrow Agent of the receipt of
the balance of the Escrow Amount, all duties, responsibilities, and obligations
of the predecessor Escrow Agent under this Agreement arising from and after the
date of such acknowledgment shall be terminated.
14. NOTICES. All requests, directions, notices and other communications
required or permitted to be made or given pursuant to this Agreement will be in
writing and will be deemed to have been duly given or made if (a) delivered
personally or (b) sent by a nationally-recognized overnight air courier service
or mailed by registered or certified mail (postage prepaid, return receipt
requested), to the parties at the following addresses (or at such other address
for a party as may be specified by like change of address):
If to Superior or Enterprise:
Enterprise Consulting Group, Inc.
0000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Vice President and General Counsel
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If to Xxxxxxxxx or Aviant:
Xxxxxxxxx Corporation
0000 X. Xxxxxxxx Xxxxxx
Xxxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxx
If to the Escrow Agent:
First of America Bank, N.A.
0000 Xxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: ________________________
Any party may by notice change the address to which notice or other
communications to it are to be delivered or mailed.
15. STATUS OF AGREEMENT. This Agreement sets forth the entire agreement
among the parties governing the creation, maintenance and disposition of the
escrow contemplated hereunder. The parties specifically acknowledge and agree
that the Escrow Agent shall have only those duties specifically set forth in,
and shall be required to act only in accordance with the terms and provisions of
, this Agreement. References to the Asset Purchase Agreement are made herein for
convenience only and the Escrow Agent is not responsible for or chargeable with
knowledge of the terms and conditions of that agreement or any other agreement,
instrument or document between the parties and shall have no liability,
obligations, responsibilities or duties under any such agreements, instruments
or documents.
16. WAIVERS AND AMENDMENTS. Any term or provision of this Escrow
Agreement may be waived at any time by the party which is entitled to the
benefits thereof, and any term or provision of this Escrow Agreement may be
amended or supplemented at any time by the mutual consent of the parties hereto,
except that any waiver of any term or condition, or any amendment or
supplementation, of this Escrow Agreement shall be effective only if in writing
and signed by the person or party against whom enforcement thereof is sought. A
waiver of any breach or failure to enforce any of the terms or conditions of
this Escrow Agent Agreement shall not in any way affect, limit or waive a
party's rights hereunder at any time to enforce strict compliance thereafter
with every term or condition of this Escrow Agreement.
17. DESCRIPTIVE HEADINGS. The descriptive headings of this Escrow
Agreement are for convenience only and shall not control or affect the meaning
or construction of any provision of this Escrow Agreement.
18. BINDING EFFECT. This Agreement shall be binding upon, and inure to
the benefit of, the heirs, administrators, executors, successors and assigns of
the parties hereto.
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19. EXPIRATION. Unless earlier terminated, this Agreement, and the
Escrow Agent's duties hereunder, shall expire two years after the date hereof,
except that Escrow Agent shall remain liable after expiration for payment of any
outstanding checks delivered by it hereunder and for the return of any portion
of the Escrow Amount then held by it; provided, that to the extent there then
exists any dispute among any parties as to entitlement to any portion of the
Escrow Amount, the following shall apply:
(a) The Escrow Agent shall be entitled to hold such portion of the
Escrow Amount beyond such expiration until receipt by Escrow Agent of (i)
written instructions jointly executed by each party directing disposition of the
Escrow Amount or (ii) an opinion of counsel to Superior, Enterprise, Xxxxxxxxx
or Aviant, stating that such counsel has received and reviewed the arbitrator's
decision pursuant to Section 6 or any court order enforcing it (a copy of which
shall be attached), and that the arbitrator's decision or court order
constitutes a final, non-appealable decision or order (as applicable), in either
case ordering distribution of the Escrow Amount. Thereafter, the Escrow Agent
shall distribute such portion of the Escrow Amount in accordance with such
instructions, order or arbitrator's ruling.
(b) Alternatively, the Escrow Agent shall be entitled to commence an
action for interpleader naming the parties, and deposit the assets remaining in
the Escrow Account with a court of competent jurisdiction, upon which the Escrow
Agent shall be relieved from further obligation with respect to those assets.
20. GOVERNING LAW. This Escrow Agreement shall be governed by the laws
of the State of Michigan without reference to choice of law principles which
would require the application of the laws of any other jurisdiction.
21. COUNTERPARTS. This Escrow Agreement may be executed in any number
of counterparts and each of such counterparts shall, for all purposes, be deemed
an original, and all such counterparts shall together constitute one and the
same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective corporate officers, thereunto duly authorized, as
of the day and year first above written.
SUPERIOR CONSULTANT HOLDINGS CORPORATION, ENTERPRISE CONSULTING GROUP, INC.,
A DELAWARE CORPORATION a Michigan corporation
BY: By:
-------------------------------------- -------------------------------
ITS: Its:
------------------------------------- ------------------------------
XXXXXXXXX CORPORATION, AVIANT INFORMATION, INC.,
a Delaware corporation a California corporation
By: By:
-------------------------------------- -------------------------------
Its: Its:
------------------------------------- ------------------------------
FIRST OF AMERICA BANK, N.A.
By:
--------------------------------
Its:
-------------------------------
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EXHIBIT A
SCHEDULE OF COMPENSATION
In addition to reimbursement of its fees and expenses as provided in
this Agreement, the Escrow Agent shall be paid an annual fee of $750 for each
twelve month period during which it serves as such. The annual fee shall be paid
with respect to the first year upon deposit of the Escrowed Funds and thereafter
upon each anniversary of the date of the Escrow Agreement.
