INDEMNIFICATION ESCROW AGREEMENT
among
CRESTLINE PACKAGING SOLUTIONS LLC, as Buyer,
LAKEWOOD REGIONAL HEALTH PARTNERS, LLC, as Seller,
and
APEX TITLE & ESCROW SERVICES, LLC, as Escrow Agent
Dated as of August 15, 2025
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RECITALS
WHEREAS, Crestline Packaging Solutions LLC, a Delaware limited liability company ("Buyer"), and Lakewood Regional Health Partners, LLC, a New York limited liability company ("Seller"), entered into that certain Asset Purchase Agreement, dated as of June 16, 2025 (as the same may be amended, supplemented, or otherwise modified from time to time in accordance with its terms, the "APA"), pursuant to which Buyer is acquiring substantially all of the assets of Seller for an aggregate purchase price of One Hundred Forty Million Dollars ($140,000,000) (the "Purchase Price"), subject to the terms and conditions set forth therein;
WHEREAS, pursuant to Article IX of the APA, Seller agreed that at the closing of the transactions contemplated by the APA (the "Closing"), the sum of Thirty-Five Million Dollars ($35,000,000) (representing twenty-five percent (25%) of the Purchase Price) would be deposited into escrow to secure Seller's indemnification obligations under Article X of the APA (the "Indemnification Escrow Amount");
WHEREAS, the parties desire to establish the terms and conditions under which Apex Title & Escrow Services, LLC, a New York limited liability company ("Escrow Agent"), will hold, invest, and distribute the Indemnification Escrow Amount and all earnings thereon in accordance with the terms and conditions of this Indemnification Escrow Agreement (this "Agreement"); and
WHEREAS, capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the APA.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1 — DEFINITIONS
Section 1.1 — Defined Terms.
As used in this Agreement, the following terms shall have the meanings set forth below:
"APA" means the Asset Purchase Agreement, dated as of June 16, 2025, by and between Buyer and Seller, as the same may be amended, supplemented, or otherwise modified from time to time in accordance with its terms.
"Business Day" means any day other than a Saturday, Sunday, or any other day on which banking institutions in New York, New York are authorized or required by applicable law or executive order to close.
"Claim Notice" means a written notice delivered by Buyer to Escrow Agent and Seller specifying an indemnification claim, as more fully described in Section 4.1 of this Agreement.
"Claim Response" has the meaning set forth in Section 4.2.
"Closing Date" means August 15, 2025.
"Disputed Funds" means the portion of the Escrow Funds that is subject to any Pending Claim as of the Release Date or any other applicable date of determination.
"Escrow Account" means the segregated, interest-bearing account established and maintained by Escrow Agent pursuant to Section 2.1 and Section 2.2 of this Agreement for the purpose of holding the Escrow Funds.
"Escrow Agent" means Apex Title & Escrow Services, LLC, a New York limited liability company, or any successor escrow agent appointed pursuant to Section 5.5 or Section 5.6 of this Agreement.
"Escrow Funds" means the Indemnification Escrow Amount together with all interest, dividends, and other income or earnings earned thereon, less any amounts previously disbursed in accordance with the terms of this Agreement and less any losses on Permitted Investments.
"Estimated Claim Amount" has the meaning set forth in Section 4.1(c).
"Final Order" means a final, non-appealable order, judgment, or decree of a court of competent jurisdiction directing the disbursement of Escrow Funds, certified by the clerk of such court or otherwise authenticated to the reasonable satisfaction of Escrow Agent.
"Indemnification Cap" means Thirty-Five Million Dollars ($35,000,000), as set forth in Section 10.4 of the APA.
"Indemnification Escrow Amount" means Thirty-Five Million Dollars ($35,000,000).
"Joint Written Instructions" means written instructions substantially in the form of Schedule D hereto (or such other form as may be acceptable to Escrow Agent), signed by both Buyer and Seller (or their respective authorized representatives designated in accordance with Section 8.12), directing Escrow Agent to disburse Escrow Funds in a specified amount to a specified payee.
"Pending Claim" means any claim for which a Claim Notice has been delivered in accordance with Section 4.1 but which has not been finally resolved, whether by Joint Written Instructions, a Final Order, or otherwise, or for which a disbursement in respect thereof has not yet been made, in each case as of the applicable date of determination.
"Pending Claims Certificate" has the meaning set forth in Section 3.3(b).
"Permitted Investments" has the meaning set forth in Section 2.3.
"Purchase Price" means One Hundred Forty Million Dollars ($140,000,000).
"Release Date" means February 15, 2027, which is the date that is eighteen (18) months after the Closing Date.
"Resolution Period" has the meaning set forth in Section 4.3.
"Resolved Claim" means a Pending Claim that has been resolved by (a) Joint Written Instructions, (b) a Final Order, or (c) the written agreement of Buyer and Seller that such claim has been withdrawn, settled, or otherwise disposed of.
"Response Period" has the meaning set forth in Section 4.2.
"Retained Amount" has the meaning set forth in Section 3.3(a).
Section 1.2 — Rules of Construction.
For all purposes of this Agreement, unless the context otherwise requires:
(a) Words importing the singular number shall include the plural number and vice versa, and words importing the masculine gender shall include the feminine and neuter genders and vice versa.
(b) The headings and captions contained in this Agreement are for convenience of reference only and shall not affect in any way the meaning, construction, or interpretation of this Agreement.
(c) All references herein to "Articles," "Sections," "Schedules," and "Exhibits" shall be deemed to refer to Articles, Sections, Schedules, and Exhibits of and to this Agreement, unless the context otherwise requires.
(d) The words "hereof," "herein," "hereby," "hereunder," and words of similar import shall refer to this Agreement as a whole (and not to any particular provision of this Agreement).
(e) The word "including" and words of similar import, when used in this Agreement, shall mean "including, without limitation," unless otherwise specified.
(f) All references herein to "$" or "Dollars" shall refer to United States dollars.
(g) All references herein to the APA shall be to the APA as amended, supplemented, or otherwise modified from time to time in accordance with its terms.
(h) The parties hereto have participated jointly in the negotiation and drafting of this Agreement, and in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement.
ARTICLE 2 — ESTABLISHMENT OF ESCROW
Section 2.1 — Deposit of Escrow Funds.
On the Closing Date, Buyer shall deposit, or cause to be deposited, Thirty-Five Million Dollars ($35,000,000) in immediately available funds by wire transfer into the Escrow Account in accordance with the wire transfer instructions set forth on Schedule B hereto. Escrow Agent hereby agrees to accept such deposit and to hold, invest, and distribute the Escrow Funds in accordance with the terms and conditions of this Agreement. Escrow Agent shall, promptly following receipt of the Indemnification Escrow Amount into the Escrow Account, deliver written confirmation of such receipt to each of Buyer and Seller (and their respective counsel), which confirmation shall specify the date and time of receipt and the amount received. The Escrow Account shall be established and maintained at Ironclad National Bank, 301 South Tryon Street, Charlotte, NC 28202, or at such other nationally chartered banking institution as Buyer, Seller, and Escrow Agent may mutually agree in writing. The Escrow Account shall be titled: "Apex Title & Escrow Services, LLC, as Escrow Agent FBO Crestline/Lakewood Indemnification Escrow."
Section 2.2 — Escrow Account.
The Escrow Funds shall be held by Escrow Agent in a separate, segregated, interest-bearing account established and maintained exclusively for the purposes set forth in this Agreement. Escrow Agent shall not commingle the Escrow Funds with any of its own funds or with the funds of any other person or entity, and shall maintain the Escrow Account as a distinct and separate account on its books and records. Escrow Agent shall provide to each of Buyer and Seller the account number and complete wire transfer instructions for the Escrow Account no later than three (3) Business Days prior to the Closing Date. Escrow Agent shall maintain accurate books and records with respect to the Escrow Account and shall make such books and records available for inspection by Buyer or Seller (or their respective representatives) upon reasonable prior written notice during normal business hours. Escrow Agent shall provide monthly account statements to each of Buyer and Seller reflecting the balance of the Escrow Funds, all deposits, disbursements, investment income, and any losses on Permitted Investments during the applicable period.
Section 2.3 — Investment of Escrow Funds.
Escrow Agent shall invest and reinvest the Escrow Funds as jointly directed in writing by Buyer and Seller from time to time. In the absence of joint written direction from Buyer and Seller regarding the investment of the Escrow Funds, Escrow Agent shall invest and reinvest the Escrow Funds solely in the following instruments (collectively, "Permitted Investments"):
(a) direct obligations of the United States of America with maturities of not more than ninety (90) days from the date of acquisition thereof;
(b) obligations the principal of and interest on which are unconditionally guaranteed by the United States of America, with maturities of not more than ninety (90) days from the date of acquisition thereof;
(c) certificates of deposit issued by a nationally chartered commercial bank that has capital and surplus in excess of One Billion Dollars ($1,000,000,000), with maturities of not more than ninety (90) days from the date of acquisition thereof; or
(d) money market funds rated at least "Aaa" by Moody's Investors Service, Inc. and "AAA" by S&P Global Ratings (or any successor rating agency thereto) that invest primarily in instruments of the types described in clauses (a), (b), and (c) above.
All interest, dividends, and other income earned on the Escrow Funds shall become part of the Escrow Funds and shall be held, invested, and distributed in accordance with the terms of this Agreement. Any losses incurred on Permitted Investments shall be borne by and charged against the Escrow Funds. Escrow Agent shall not be liable for any loss on any Permitted Investment made in accordance with this Section 2.3 or for any loss resulting from the liquidation of any Permitted Investment prior to its maturity in order to make a disbursement required hereunder. Tax reporting with respect to interest and income earned on the Escrow Funds shall be as set forth in Section 6.1 of this Agreement.
Section 2.4 — No Liens.
No party to this Agreement shall voluntarily grant, create, or permit to exist any lien, pledge, charge, encumbrance, security interest, or other adverse claim of any kind or nature on or with respect to the Escrow Funds or the Escrow Account, other than the rights and interests expressly created or contemplated by this Agreement. Any such attempted lien, encumbrance, or security interest shall be void and of no force or effect.
ARTICLE 3 — DISBURSEMENT OF ESCROW FUNDS
Section 3.1 — Disbursement Upon Joint Written Instructions.
Escrow Agent shall disburse Escrow Funds promptly, and in any event within two (2) Business Days, upon receipt of Joint Written Instructions specifying (i) the amount to be disbursed, (ii) the payee or payees to whom such amount is to be disbursed, and (iii) the wire transfer or other payment instructions for such payee or payees (which may reference the wire transfer instructions set forth on Schedule B hereto or may set forth alternative instructions). Escrow Agent shall have no independent duty of inquiry with respect to any Joint Written Instructions and shall be entitled to conclusively rely upon Joint Written Instructions that Escrow Agent reasonably believes to be genuine and to have been signed by authorized representatives of both Buyer and Seller. In no event shall Escrow Agent be required to disburse any amount in excess of the Escrow Funds then held in the Escrow Account.
Section 3.2 — Disbursement Upon Claim Resolution.
Upon receipt of either (a) Joint Written Instructions confirming that a Pending Claim has become a Resolved Claim and specifying the amount to be disbursed to Buyer (or to such other person as may be designated therein) in satisfaction of such Resolved Claim, or (b) a certified copy of a Final Order directing the disbursement of a specified amount of Escrow Funds to Buyer (or to such other person as may be designated therein), Escrow Agent shall disburse the amount so specified within two (2) Business Days of receipt of such Joint Written Instructions or Final Order, as applicable, by wire transfer of immediately available funds to the account designated in such Joint Written Instructions or Final Order (or, in the absence of such designation, to Buyer at the wire transfer instructions set forth on Schedule B hereto). Following any such disbursement, Escrow Agent shall promptly deliver written confirmation of such disbursement to each of Buyer and Seller, specifying the date, amount, and recipient of the disbursement.
Section 3.3 — Release on the Release Date.
(a) On the Release Date (February 15, 2027), Escrow Agent shall release and disburse to Seller, by wire transfer of immediately available funds to the account or accounts designated by Seller in writing (or, in the absence of such designation, to Seller at the wire transfer instructions set forth on Schedule B hereto), all Escrow Funds then held in the Escrow Account, less the aggregate amount of all Pending Claims as specified in all outstanding, unresolved Claim Notices delivered in accordance with Section 4.1 and reflected in the Pending Claims Certificate delivered pursuant to Section 3.3(b) below (such aggregate amount, the "Retained Amount"). For the avoidance of doubt, the Retained Amount shall include the full amount claimed (or, in the case of an Estimated Claim Amount, the good-faith estimate set forth) in each outstanding Claim Notice with respect to each Pending Claim.
(b) Buyer shall deliver to Escrow Agent and Seller, no later than five (5) Business Days prior to the Release Date, a certificate (the "Pending Claims Certificate") signed by an authorized representative of Buyer, setting forth in reasonable detail: (i) each Pending Claim then outstanding, including the date of the applicable Claim Notice and a brief description of the nature of such claim; (ii) the amount claimed (or Estimated Claim Amount) with respect to each such Pending Claim; and (iii) the aggregate Retained Amount. Seller shall have the right to deliver a written objection to the Pending Claims Certificate to Buyer and Escrow Agent within three (3) Business Days following Seller's receipt thereof, which objection shall set forth in reasonable detail the basis for Seller's disagreement with any item or amount reflected therein. To the extent that any portion of the Escrow Funds is not in dispute between Buyer and Seller as reflected in the Pending Claims Certificate and any objection thereto, such undisputed portion shall be released and disbursed to Seller on the Release Date in accordance with Section 3.3(a) above. With respect to any disputed items, Buyer and Seller shall negotiate in good faith to resolve such disputes; pending resolution, Escrow Agent shall retain the disputed amounts in the Escrow Account.
(c) The Retained Amount (as finally determined) shall continue to be held by Escrow Agent in the Escrow Account pending the resolution of each Pending Claim to which the Retained Amount relates. Upon resolution of each such Pending Claim (whether by Joint Written Instructions, Final Order, or otherwise in accordance with this Agreement), Escrow Agent shall disburse the applicable portion of the Retained Amount in accordance with such Joint Written Instructions or Final Order, as the case may be. To the extent that the amount finally determined to be payable to Buyer in respect of a Resolved Claim is less than the amount retained in the Escrow Account with respect to such Pending Claim, the excess shall be released and disbursed to Seller within two (2) Business Days of the date on which Escrow Agent receives Joint Written Instructions or a Final Order with respect to such Resolved Claim.
Section 3.4 — Final Distribution.
Upon the resolution of all Pending Claims outstanding after the Release Date and the disbursement of all amounts payable with respect thereto in accordance with the terms of this Agreement, Escrow Agent shall distribute any remaining Escrow Funds to Seller by wire transfer of immediately available funds to the account or accounts designated by Seller in writing (or, in the absence of such designation, to Seller at the wire transfer instructions set forth on Schedule B hereto). Upon such final distribution, this Agreement shall terminate; provided, however, that such termination shall be subject to the survival of the provisions specified in Section 8.11 of this Agreement. Escrow Agent shall deliver written confirmation of such final distribution to each of Buyer and Seller promptly following such disbursement.
Section 3.5 — No Set-Off.
Escrow Agent shall make disbursements of the Escrow Funds only as expressly provided in this Agreement and shall not offset, deduct, or withhold any amounts from the Escrow Funds except (a) as directed by Joint Written Instructions or a Final Order, (b) as required by applicable law (including any tax withholding required pursuant to Section 6.2), or (c) as otherwise expressly provided herein. Escrow Agent shall have no right of set-off against the Escrow Funds for any fees, expenses, or other obligations owed by Buyer or Seller to Escrow Agent, unless otherwise agreed by the parties in Joint Written Instructions.
ARTICLE 4 — CLAIMS PROCEDURES
Section 4.1 — Claim Notice.
At any time on or prior to the Release Date, Buyer may deliver to Escrow Agent and Seller a Claim Notice substantially in the form attached hereto as Schedule C, setting forth:
(a) a description in reasonable detail of the facts and circumstances giving rise to the claimed indemnification obligation, including the identity of any third party involved and the nature and basis of the claim;
(b) the specific section or sections of the APA under which indemnification is sought;
(c) the aggregate dollar amount claimed by Buyer with respect to such indemnification obligation (or, if such amount is not yet determinable at the time of delivery of the Claim Notice, a good-faith estimate of the reasonably anticipated amount of such claim, designated as an "Estimated Claim Amount"), expressed in United States dollars; and
(d) copies of all supporting documentation then reasonably available to Buyer, including any correspondence, invoices, demand letters, complaints, or other materials relating to such claim.
Delivery of a Claim Notice shall constitute an instruction to Escrow Agent to retain in the Escrow Account an amount equal to the amount claimed (or Estimated Claim Amount) set forth in such Claim Notice pending resolution of the applicable Pending Claim in accordance with the terms of this Agreement. Escrow Agent shall promptly acknowledge receipt of each Claim Notice to Buyer and Seller.
Section 4.2 — Response Period.
Seller shall have thirty (30) days following receipt of a Claim Notice (the "Response Period") to deliver to Buyer and Escrow Agent a written response (a "Claim Response") stating whether Seller:
(a) agrees to the claim set forth in such Claim Notice, in whole or in part (and, if in part, specifying the amount agreed to and the basis for any disagreement with respect to the remaining amount);
(b) disputes the claim set forth in such Claim Notice, in whole or in part (and, if disputed, setting forth in reasonable detail the basis for such dispute); or
(c) requests additional information or documentation from Buyer with respect to such claim (in which case Buyer shall use commercially reasonable efforts to promptly provide such additional information or documentation, and the Response Period shall be extended for a period of fifteen (15) additional days following the date on which such additional information or documentation is provided).
If Seller fails to deliver a timely Claim Response within the Response Period (as the same may be extended pursuant to clause (c) above), such failure shall not constitute an admission or acceptance by Seller of the claim set forth in the applicable Claim Notice. Escrow Agent shall continue to retain the applicable amount in the Escrow Account pending resolution of such Pending Claim in accordance with this Article 4.
Section 4.3 — Resolution of Disputes.
If Seller disputes all or any portion of a claim set forth in a Claim Notice, Buyer and Seller shall negotiate in good faith for a period of thirty (30) days following delivery of the Claim Response (the "Resolution Period") to attempt to resolve such dispute. During the Resolution Period, Buyer and Seller shall make available to each other such information and documentation as may be reasonably requested in connection with the resolution of the disputed claim. If Buyer and Seller are unable to resolve such dispute within the Resolution Period, either party may pursue resolution of such dispute in accordance with the dispute resolution provisions set forth in Section 8.8 of this Agreement. During the pendency of any such dispute (including any proceeding commenced pursuant to Section 8.8), Escrow Agent shall retain in the Escrow Account an amount equal to the full amount claimed (or Estimated Claim Amount) in the applicable Claim Notice pending final resolution of such dispute by Joint Written Instructions or a Final Order.
Section 4.4 — Adjustment of Claim Amounts.
Buyer may at any time amend a previously delivered Claim Notice to increase or decrease the amount claimed with respect to a Pending Claim by delivering written notice of such amendment to Escrow Agent and Seller, setting forth in reasonable detail the basis for such adjustment. In the event of a decrease in the claimed amount, Buyer shall promptly deliver to Escrow Agent and Seller a written notice specifying the reduced claim amount, and the amount by which the claimed amount has been reduced shall be released and disbursed to Seller by Escrow Agent within two (2) Business Days of receipt of Joint Written Instructions confirming such reduction. In the event of an increase in the claimed amount, the aggregate amount retained in the Escrow Account with respect to all Pending Claims shall not exceed the total Escrow Funds then available in the Escrow Account.
Section 4.5 — Interaction with APA Thresholds.
For the avoidance of doubt, any disbursement from the Escrow Account in respect of an indemnification claim under the APA shall be subject to and limited by the De Minimis Threshold of Seventy-Five Thousand Dollars ($75,000) per individual claim and the Mini-Basket of Seven Hundred Thousand Dollars ($700,000) in the aggregate, in each case as set forth in Section 10.4 of the APA. The parties acknowledge and agree that Escrow Agent shall have no duty or obligation to verify or monitor compliance with such thresholds or any other limitations on indemnification set forth in the APA, and Escrow Agent shall be entitled to rely solely and exclusively on Joint Written Instructions or Final Orders in making any disbursement of Escrow Funds, without any independent obligation to determine whether such thresholds or limitations have been satisfied.
ARTICLE 5 — ESCROW AGENT PROVISIONS
Section 5.1 — Duties and Responsibilities.
Escrow Agent shall act solely as a stakeholder with respect to the Escrow Funds and shall have no duties, responsibilities, or obligations except as expressly set forth in this Agreement. Escrow Agent shall have no fiduciary duty or obligation to Buyer, Seller, or any other person beyond the express terms and provisions of this Agreement. Without limiting the generality of the foregoing, Escrow Agent shall have no obligation to (a) interpret, enforce, or take any action with respect to the APA, (b) determine the merits or validity of any claim, Claim Notice, Claim Response, or other communication between Buyer and Seller, (c) monitor or verify compliance with the terms and conditions of the APA or any other agreement between Buyer and Seller, or (d) take any action that is not expressly required by the terms of this Agreement. Escrow Agent shall be entitled to rely upon, and shall be fully protected in acting or refraining from acting upon, any notice, instruction, certificate, statement, request, consent, or other document or instrument that Escrow Agent reasonably believes to be genuine, to have been duly authorized, and to have been signed or presented by the proper person or persons. Escrow Agent shall not be liable for acting or refraining from acting upon Joint Written Instructions or any other instructions delivered in accordance with this Agreement.
Section 5.2 — Limitation of Liability.
Escrow Agent shall not be liable for any loss, damage, cost, expense, claim, or liability of any kind arising out of or in connection with this Agreement or the performance of its duties hereunder, except to the extent that such loss, damage, cost, expense, claim, or liability is finally determined by a court of competent jurisdiction (in a judgment that is not subject to further appeal) to have resulted directly from Escrow Agent's own gross negligence, willful misconduct, or fraud. Without limiting the foregoing:
(a) Escrow Agent shall not be liable for any delay in the performance of its duties hereunder caused by or resulting from any act of God, war, terrorism, pandemic, epidemic, fire, flood, earthquake, natural disaster, labor dispute, utility failure, governmental action, or any other event or circumstance beyond the reasonable control of Escrow Agent (each, a "Force Majeure Event");
(b) Escrow Agent shall not be liable for the acts, omissions, defaults, or insolvency of any depository institution, clearing house, or other financial institution at which the Escrow Funds are deposited or through which the Escrow Funds are transferred;
(c) Escrow Agent shall not be liable for any loss or diminution in value of the Escrow Funds resulting from investment in Permitted Investments made in accordance with Section 2.3 of this Agreement; and
(d) In no event shall the aggregate liability of Escrow Agent under this Agreement exceed the total amount of fees actually paid to Escrow Agent hereunder.
Section 5.3 — Indemnification of Escrow Agent.
Buyer and Seller, jointly and severally (or as otherwise agreed between them in writing), shall indemnify, defend, and hold harmless Escrow Agent and its directors, officers, managers, members, employees, agents, and representatives (collectively, the "Escrow Agent Indemnified Parties") from and against any and all losses, costs, claims, damages, liabilities, penalties, judgments, settlements, and expenses (including reasonable attorneys' fees and disbursements) (collectively, "Escrow Agent Losses") arising out of or in connection with this Agreement or the performance by Escrow Agent of its duties hereunder, except to the extent that any such Escrow Agent Losses are finally determined by a court of competent jurisdiction (in a judgment that is not subject to further appeal) to have resulted directly from Escrow Agent's gross negligence, willful misconduct, or fraud. This indemnification shall survive the termination of this Agreement and the resignation or removal of Escrow Agent.
Section 5.4 — Compensation.
Escrow Agent shall be entitled to receive the fees for its services under this Agreement as set forth on Schedule A hereto, which fees shall be payable fifty percent (50%) by Buyer and fifty percent (50%) by Seller, or in such other proportions as Buyer and Seller may agree in writing. The initial annual escrow administration fee shall be payable in advance upon execution of this Agreement and on each anniversary thereof (if applicable). In addition, Escrow Agent shall be entitled to reimbursement of all reasonable and documented out-of-pocket expenses incurred by Escrow Agent in connection with the performance of its duties hereunder, including without limitation wire transfer fees, courier charges, and costs associated with the preparation and filing of tax information returns. All fees and expenses of Escrow Agent shall be paid from funds outside the Escrow Account and shall not be deducted from the Escrow Funds, unless otherwise agreed by Buyer and Seller in Joint Written Instructions delivered to Escrow Agent.
Section 5.5 — Resignation and Removal.
Escrow Agent may resign and be discharged from its duties hereunder at any time by giving not less than thirty (30) days' prior written notice of such resignation to each of Buyer and Seller. Buyer and Seller may jointly remove Escrow Agent at any time by giving not less than thirty (30) days' prior written notice of such removal to Escrow Agent, which notice shall be signed by authorized representatives of both Buyer and Seller. Upon any such resignation or removal, a successor escrow agent shall be appointed by Joint Written Instructions of Buyer and Seller within thirty (30) days following the date of such notice of resignation or removal. If Buyer and Seller fail to appoint a successor escrow agent within such thirty (30)-day period, the resigning or removed Escrow Agent may, at its election: (i) petition any court of competent jurisdiction (including the courts referenced in Section 8.8) for the appointment of a successor escrow agent, or (ii) deposit the Escrow Funds with a court of competent jurisdiction, in which case Escrow Agent shall be fully relieved and discharged from all further obligations under this Agreement. The provisions of Sections 5.2, 5.3, and 5.4 shall survive the resignation or removal of Escrow Agent.
Section 5.6 — Successor Escrow Agent.
Any successor escrow agent appointed pursuant to Section 5.5 must be a nationally recognized title company, bank, or trust company with trust powers and having capital and surplus of not less than Five Hundred Million Dollars ($500,000,000). Upon the appointment of a successor escrow agent, all references in this Agreement to "Escrow Agent" shall thereafter be deemed to refer to such successor escrow agent. The predecessor Escrow Agent shall transfer and deliver the Escrow Funds to the successor escrow agent within five (5) Business Days following the effective date of such appointment and shall execute and deliver such instruments, assignments, and other documents as may be reasonably necessary to effect such transfer. Upon such transfer, the predecessor Escrow Agent shall be fully released and discharged from all further obligations and liabilities under this Agreement (other than obligations and liabilities arising prior to such transfer and the obligations set forth in Sections 5.2, 5.3, and 5.4, which shall survive such transfer).
Section 5.7 — Reliance; Conflicting Instructions.
Escrow Agent shall be entitled to rely upon any notice, instruction, certificate, statement, request, waiver, consent, receipt, or other document or instrument (including any Joint Written Instructions, Claim Notice, or Claim Response) that Escrow Agent in good faith believes to be genuine and to have been signed or presented by the proper person or persons authorized to sign or present such document or instrument. In the event that Escrow Agent receives instructions, directions, or demands from Buyer and Seller that, in the reasonable judgment of Escrow Agent, conflict with one another or with any provision of this Agreement, Escrow Agent shall be entitled to refrain from taking any action until Escrow Agent receives (a) Joint Written Instructions resolving such conflict, or (b) a Final Order directing Escrow Agent to take specified action with respect to the Escrow Funds. During any period in which Escrow Agent refrains from acting pursuant to this Section 5.7, Escrow Agent shall continue to hold the Escrow Funds in the Escrow Account and invest the same in accordance with Section 2.3, and Escrow Agent shall not be liable to any party for any delay or inaction resulting from such conflict. Alternatively, Escrow Agent may, in its sole discretion, commence an interpleader action pursuant to Section 5.8 in lieu of refraining from action.
Section 5.8 — Interpleader.
If at any time a dispute arises among the parties hereto (or any other persons) regarding the disbursement of the Escrow Funds or any portion thereof, or if Escrow Agent is uncertain as to its obligations under this Agreement, Escrow Agent may, in its sole and absolute discretion, commence an interpleader action or similar proceeding in any court of competent jurisdiction (including the state and federal courts located in the Borough of Manhattan, New York, New York, as referenced in Section 8.8) and deposit the Escrow Funds (or any disputed portion thereof) with such court. Upon such deposit, Escrow Agent shall be fully released and discharged from all obligations and liabilities under this Agreement with respect to the Escrow Funds so deposited (other than the obligation to account for the Escrow Funds through the date of such deposit). All costs and expenses of any such interpleader action or similar proceeding (including reasonable attorneys' fees and disbursements of Escrow Agent) shall be borne by the non-prevailing party in such action or proceeding; provided, that if no prevailing party is determined by the court, such costs and expenses shall be borne equally by Buyer and Seller.
ARTICLE 6 — TAX MATTERS
Section 6.1 — Tax Reporting.
For United States federal and applicable state and local income tax purposes, all interest, dividends, and other income earned on the Escrow Funds shall be treated as the income of Seller and shall be reported as income allocable to Seller (EIN: 46-5183294). Escrow Agent shall report all such interest, dividends, and other income on IRS Form 1099-INT, IRS Form 1099-DIV, or such other applicable IRS form (or any successor form thereto) to Seller and to the Internal Revenue Service, in each case in accordance with applicable law. Seller shall provide Escrow Agent with a duly executed and valid IRS Form W-9 (or any successor form thereto) upon execution of this Agreement, and Seller shall promptly provide an updated Form W-9 if any of the information previously provided becomes inaccurate or incomplete.
Section 6.2 — Tax Withholding.
Escrow Agent is hereby authorized and directed to deduct and withhold from any distribution of Escrow Funds any taxes that Escrow Agent is required to deduct and withhold under applicable United States federal, state, or local tax laws. If Seller fails to provide Escrow Agent with a valid IRS Form W-9 (or any successor form thereto) or if such form is determined by Escrow Agent to be incomplete or invalid, Escrow Agent shall withhold from any distribution of Escrow Funds an amount equal to the applicable backup withholding rate then in effect under the Internal Revenue Code of 1986, as amended. Any amounts so withheld shall be treated for all purposes of this Agreement as having been distributed to Seller.
Section 6.3 — Tax Payments.
Seller shall be solely responsible for the timely payment of all taxes (including any income taxes, penalties, and interest) imposed on or with respect to all interest, dividends, and other income earned on the Escrow Funds. None of Buyer, Escrow Agent, or any other party shall have any liability for the payment of any such taxes, and Seller shall indemnify and hold harmless Buyer and Escrow Agent from and against any liability for any such taxes.
ARTICLE 7 — REPRESENTATIONS AND WARRANTIES
Section 7.1 — Representations and Warranties of Buyer.
Buyer hereby represents and warrants to each of Seller and Escrow Agent as follows:
(a) Organization and Good Standing. Buyer is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Delaware.
(b) Power and Authority. Buyer has full limited liability company power and authority to execute, deliver, and perform its obligations under this Agreement.
(c) Authorization. The execution, delivery, and performance of this Agreement by Buyer have been duly authorized by all necessary limited liability company action on the part of Buyer, and no further action, approval, or consent is required on the part of Buyer or any of its members, managers, or other persons in connection therewith.
(d) Enforceability. This Agreement has been duly executed and delivered by Buyer and constitutes the legal, valid, and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, and similar laws affecting creditors' rights and remedies generally and to general principles of equity (whether applied in a proceeding at law or in equity).
(e) No Conflicts. The execution, delivery, and performance of this Agreement by Buyer do not and will not (i) violate or conflict with the certificate of formation, limited liability company agreement, or other organizational documents of Buyer, (ii) violate or conflict with any applicable law, regulation, order, judgment, or decree binding upon Buyer, or (iii) result in a breach of, or constitute a default under, any material agreement or instrument to which Buyer is a party or by which Buyer is bound.
Section 7.2 — Representations and Warranties of Seller.
Seller hereby represents and warrants to each of Buyer and Escrow Agent as follows:
(a) Organization and Good Standing. Seller is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of New York.
(b) Power and Authority. Seller has full limited liability company power and authority to execute, deliver, and perform its obligations under this Agreement.
(c) Authorization. The execution, delivery, and performance of this Agreement by Seller have been duly authorized by all necessary limited liability company action on the part of Seller, and no further action, approval, or consent is required on the part of Seller or any of its members, managers, or other persons in connection therewith.
(d) Enforceability. This Agreement has been duly executed and delivered by Seller and constitutes the legal, valid, and binding obligation of Seller, enforceable against Seller in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, and similar laws affecting creditors' rights and remedies generally and to general principles of equity (whether applied in a proceeding at law or in equity).
(e) No Conflicts. The execution, delivery, and performance of this Agreement by Seller do not and will not (i) violate or conflict with the articles of organization, operating agreement, or other organizational documents of Seller, (ii) violate or conflict with any applicable law, regulation, order, judgment, or decree binding upon Seller, or (iii) result in a breach of, or constitute a default under, any material agreement or instrument to which Seller is a party or by which Seller is bound.
Section 7.3 — Representations and Warranties of Escrow Agent.
Escrow Agent hereby represents and warrants to each of Buyer and Seller as follows:
(a) Organization and Good Standing. Escrow Agent is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of New York.
(b) Power and Authority. Escrow Agent has full limited liability company power and authority to execute, deliver, and perform its obligations under this Agreement and to act as escrow agent hereunder.
(c) Authorization. The execution, delivery, and performance of this Agreement by Escrow Agent have been duly authorized by all necessary limited liability company action on the part of Escrow Agent, and no further action, approval, or consent is required on the part of Escrow Agent or any of its members, managers, or other persons in connection therewith.
(d) No Conflicts. The execution, delivery, and performance of this Agreement by Escrow Agent do not and will not (i) violate or conflict with the organizational documents of Escrow Agent, or (ii) violate or conflict with any applicable law, regulation, order, judgment, or decree binding upon Escrow Agent.
ARTICLE 8 — GENERAL PROVISIONS
Section 8.1 — Notices.
All notices, requests, demands, consents, waivers, and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given: (a) when delivered by hand (with written confirmation of receipt); (b) on the Business Day following deposit with a nationally recognized overnight courier service (with proof of delivery); or (c) when sent by email (with confirmation of transmission and a follow-up copy sent by overnight courier), in each case addressed to the applicable party at the address set forth below (or at such other address as such party may designate by written notice to the other parties in accordance with this Section 8.1):
If to Buyer:
Crestline Packaging Solutions LLC 8400 Scioto Darby Road, Suite 300 Columbus, OH 43228
Attention: Patricia Hsu, Chief Financial Officer
Email: phsu@crestlinepackaging.com
with a copy (which shall not constitute notice) to:
Calderwood & Harkness LLP 425 Lexington Avenue, 31st Floor New York, NY 10017
Attention: James Prentice
Email: jprentice@calderwoodharkness.com
If to Seller:
Lakewood Regional Health Partners, LLC 450 East Ridge Road Rochester, NY 14621
Attention: Dr. Raymond Alcott, Co-Managing Member
Email: ralcott@lakewoodhealthpartners.com
with a copy (which shall not constitute notice) to:
Whitfield, Ames & Greer LLP 780 Third Avenue, 22nd Floor New York, NY 10017
Attention: Catherine Greer
Email: cgreer@whitfieldames.com
If to Escrow Agent:
Apex Title & Escrow Services, LLC 1 Penn Plaza, Suite 4210 New York, NY 10119
Attention: Denise Kowalski, Escrow Officer
Email: dkowalski@apextitleescrow.com
Section 8.2 — Amendments; Waivers.
This Agreement may not be amended, modified, or supplemented except by a written instrument duly executed by all three parties hereto (i.e., Buyer, Seller, and Escrow Agent). No waiver of any provision of this Agreement shall be effective unless set forth in a written instrument signed by the party or parties waiving such provision. No waiver by any party of any breach or default hereunder shall be deemed a waiver of any preceding or subsequent breach or default of the same or any other provision of this Agreement. No failure or delay by any party in exercising any right, power, or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power, or privilege.
Section 8.3 — Entire Agreement.
This Agreement (together with the APA, the Schedules hereto, and any other documents or instruments delivered in connection herewith) constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes all prior agreements, understandings, negotiations, discussions, and representations, whether written or oral, among the parties with respect to such subject matter. No party hereto has relied on any representation or warranty not expressly set forth in this Agreement in entering into this Agreement.
Section 8.4 — Assignment.
No party may assign, transfer, delegate, or otherwise dispose of any of its rights or obligations under this Agreement without the prior written consent of the other parties hereto; provided, however, that Buyer may, without the prior written consent of Seller or Escrow Agent, assign its rights (but not its obligations) under this Agreement to (a) any affiliate of Buyer, or (b) any successor to Buyer in connection with a merger, consolidation, reorganization, or sale of all or substantially all of the assets of Buyer; provided, further, that in each such case, Buyer shall remain fully liable for the performance of all of its obligations under this Agreement and shall promptly notify Seller and Escrow Agent of any such assignment. Any attempted assignment in violation of this Section 8.4 shall be null and void and of no force or effect.
Section 8.5 — Successors and Assigns.
This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors, legal representatives, and permitted assigns.
Section 8.6 — Severability.
If any term, provision, covenant, or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect the remaining terms, provisions, covenants, and restrictions of this Agreement, which shall remain in full force and effect and shall in no way be affected, impaired, or invalidated, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal, or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.
Section 8.7 — Counterparts; Electronic Signatures.
This Agreement may be executed in one or more counterparts, each of which when so executed and delivered shall be deemed an original, and all of which together shall constitute one and the same instrument. The exchange of copies of this Agreement or of signature pages by facsimile, email (including in .pdf format), or other electronic transmission (including DocuSign, Ashford Health IT, or similar electronic signature technology) shall constitute effective execution and delivery of this Agreement and may be used in lieu of the original Agreement for all purposes. Signatures of the parties transmitted by any such electronic means shall be deemed to be their original signatures for all purposes.
Section 8.8 — Dispute Resolution; Governing Law; Jurisdiction.
(a) Governing Law. This Agreement and the rights and obligations of the parties hereunder shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, without giving effect to any choice or conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York.
(b) Exclusive Jurisdiction. Each party hereto irrevocably and unconditionally submits to the exclusive jurisdiction of the courts of the State of New York sitting in the Borough of Manhattan, New York, New York, and of the United States District Court for the Southern District of New York, and any appellate court from any thereof, in any action, suit, or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, and each party agrees that all claims in respect of such action, suit, or proceeding shall be heard and determined in such courts. Each party hereto irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of venue of any action, suit, or proceeding arising out of or relating to this Agreement in any such court, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit, or proceeding has been brought in an inconvenient forum.
(c) WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING, CLAIM, OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF ESCROW AGENT IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE, OR ENFORCEMENT HEREOF. EACH PARTY HERETO CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT, OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (IV) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION 8.8(c).
Section 8.9 — No Third-Party Beneficiaries.
This Agreement is entered into solely for the benefit of the parties hereto and their respective successors and permitted assigns, and nothing contained in this Agreement, express or implied, is intended to or shall confer upon any other person any rights, benefits, remedies, obligations, or liabilities of any nature whatsoever under or by reason of this Agreement.
Section 8.10 — Confidentiality.
Escrow Agent shall maintain the confidentiality of all information received by it in connection with this Agreement, including without limitation the terms and conditions of this Agreement, the amount and status of the Escrow Funds, the contents of any Claim Notice, Claim Response, Joint Written Instructions, or other communications between the parties, and all other non-public information relating to Buyer, Seller, or the transactions contemplated by the APA, except as (a) required by applicable law, rule, regulation, or court order (in which case Escrow Agent shall, to the extent legally permissible, provide prior written notice to Buyer and Seller of such requirement), (b) requested or required by any governmental or regulatory authority having jurisdiction over Escrow Agent, (c) necessary for Escrow Agent to perform its duties and obligations under this Agreement, or (d) consented to in writing by each of Buyer and Seller.
Section 8.11 — Termination.
This Agreement shall terminate upon the earlier of (a) the distribution of all Escrow Funds in accordance with the terms hereof (including the final distribution pursuant to Section 3.4) and (b) the written agreement of all parties hereto to terminate this Agreement. Notwithstanding the foregoing, Sections 5.2 (Limitation of Liability), 5.3 (Indemnification of Escrow Agent), 5.4 (Compensation), 6.1 (Tax Reporting), 6.2 (Tax Withholding), 6.3 (Tax Payments), 8.8 (Dispute Resolution; Governing Law; Jurisdiction), and 8.10 (Confidentiality) shall survive any termination of this Agreement.
Section 8.12 — Authorized Representatives.
Each party hereto shall designate one or more authorized representatives who shall be empowered to deliver and receive instructions, notices, and other communications on behalf of such party in connection with this Agreement, including Joint Written Instructions and Claim Notices. The initial authorized representatives of each party are as follows:
Buyer:
• Patricia Hsu, Chief Financial Officer, Crestline Packaging Solutions LLC
• Jordan Samuels, Vice President, Pinnacle River Capital Partners
Seller:
• Dr. Raymond Alcott, Co-Managing Member, Lakewood Regional Health Partners, LLC
• Gretchen Unger, Chief Operating Officer, Lakewood Regional Health Partners, LLC
Escrow Agent: