Exhibit 10.2
 
ESCROW AGREEMENT
 
This Escrow Agreement, as may be amended or modified from time to time pursuant
hereto (this “Agreement”), is made and entered into as of May 22, 2012, by and
among AngioDynamics, Inc., a Delaware corporation (the “Buyer”), Avista Capital
Partners GP, LLC, a Delaware limited liability company (the “Sellers’
Representative”), and JPMorgan Chase Bank, National Association, as escrow agent
(the “Escrow Agent”).
 
WHEREAS, the Buyer, the Sellers’ Representative, and certain other parties have
entered into a Stock Purchase Agreement, dated as of January 30, 2012 (the
“Purchase Agreement”);
 
WHEREAS, the Purchase Agreement contemplates that, at the Closing on the Closing
Date (each, as defined in the Purchase Agreement), the Buyer will deposit
$20,000,000 (the “Escrow Amount”) in cash or, if necessary, in a combination of
cash and shares of the Buyer’s common stock, par value $0.01 per share (the
“Buyer Common Stock”), into an escrow account for the purposes of establishing a
source of funds to secure and satisfy (a) any amounts owed to the Buyer due to
the Working Capital Estimate (as defined in the Purchase Agreement) exceeding
the Final Working Capital (as defined in the Purchase Agreement) and (b) the
indemnification obligations of the sellers set forth on Schedule A (each, a
“Seller” and collectively, the “Sellers”) and the Company (as defined in the
Purchase Agreement) to the Buyer pursuant to, and in accordance with, Articles X
and XI of the Purchase Agreement (the “Escrow Fund”);
 
WHEREAS, the Escrow Agent agrees to hold and distribute the Escrow Fund in
accordance with the terms of this Agreement; and
 
WHEREAS, pursuant to the Purchase Agreement, the Sellers’ Representative, for
and on behalf of each Seller and, prior to the closing of the transactions
contemplated by the Purchase Agreement, the Company, has full power and
authority to represent each Seller and the Company with respect to all matters
arising under this Agreement, and all actions taken by the Sellers’
Representative under this Agreement will be binding upon each Seller and the
Company as if expressly ratified and confirmed in writing by each of them.
 
NOW, THEREFORE, in consideration of the foregoing, and the 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:
 
1.           Appointment.  The Buyer and the Sellers’ Representative hereby
appoint the Escrow Agent as their escrow agent for the purposes set forth in
this Agreement, and the Escrow Agent hereby accepts such appointment under the
terms and conditions set forth in this Agreement.
 
2.           Escrow Amount.  At the Closing on the Closing Date, the Buyer will
deposit, or cause to be deposited, with the Escrow Agent each of the Cash Escrow
Amount (as defined below) and the Stock Escrow Amount (as defined below), if
any, as set forth below.
 
(a)           Cash Escrow Amount.  The Buyer will deposit with the Escrow Agent,
by wire transfer of immediately available funds, the maximum portion of the
Escrow Amount possible to
 
 
 

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be paid in cash in accordance with Section 2.1(c) of the Purchase Agreement (the
“Cash Escrow Amount”) to be held by the Escrow Agent in the Escrow Fund.
 
(b)           Stock Escrow Amount.  If the Cash Escrow Amount is less than the
Escrow Amount, the Buyer will deposit with the Escrow Agent by personal delivery
to the Escrow Agent at the address set forth in Section 10, a sealed envelope
containing certificates representing a specified number of Buyer Stock Shares
(as defined in the Purchase Agreement) whose value (as determined by the Buyer
and the Sellers’ Representative in accordance with Section 2.1(c) of the
Purchase Agreement) is equal to the difference between the Escrow Amount and the
Cash Escrow Amount, rounded down to the nearest whole number of shares
(the “Stock Escrow Amount”), accompanied by stock powers duly executed by the
Sellers in blank, to be held by the Escrow Agent in the Escrow Fund.  The Escrow
Agent will not own, or have any interest in, any shares contained in the Stock
Escrow Amount, but will have custodial possession of any shares (and stock
powers) contained in the Stock Escrow Amount as the escrow holder thereof.  The
Escrow Agent hereby agrees to receive the Stock Escrow Amount in the form
specified in the first sentence of this Section 2(b), and to hold the Stock
Escrow Amount in the Escrow Fund without investment, subject to the terms and
conditions of this Agreement until the Stock Escrow Amount is delivered in
accordance with Section 4 of this Agreement.  The Escrow Agent shall not be
responsible for the Stock Escrow Amount when not in the Escrow Agent’s
possession.  The Escrow Agent shall exercise the due care and diligence with
respect to the Stock Escrow Amount as is required by law to be exercised by a
bank custodian holding its customer’s property.  The Escrow Agent will store the
Stock Escrow Amount in its usual safekeeping facility, and will have no duty to
keep it in an environmentally controlled area.  The Escrow Agent shall have no
liability for any damage to the Stock Escrow Amount, including damage caused by
environmental conditions, such as heat or moisture, or by exposure to magnetic
materials.  In no event shall the Escrow Agent be responsible for any tax
reporting or filing with regard to Stock Escrow Amount.  The Escrow Agent is
only holding the Stock Escrow Amount for safekeeping purposes, and shall not
otherwise have any obligations or duties related to the Stock Escrow Amount.
 
Each Seller will be entitled (i) to vote those shares contained in the Stock
Escrow Amount, subject to any voting restrictions set forth in the Stockholders
Agreement, by and among the Buyer and certain of the Sellers and their
affiliates, dated as of the date hereof (the “Stockholders Agreement”), and
(ii) to receive any dividends or distributions on those shares contained in the
Stock Escrow Amount that, in each case, are held for such Seller’s account,
determined based upon the Seller Percentage (as defined below) of such Seller,
rounded to the nearest whole share.  Each Seller also will be entitled to
participate in any tender or exchange offer in respect of the shares contained
in the Stock Escrow Amount; provided, that the proceeds or securities from any
such tender or exchange offer will be deposited (in a sealed envelope in the
case of securities) by the Buyer or Sellers’ Representative and held by the
Escrow Agent as part of the Stock Escrow Amount in the Escrow Fund and included
for all purposes hereunder as part of the Stock Escrow Amount.
 
The Buyer will notify the Escrow Agent of each of the Closing Date, the Cash
Escrow Amount, and the Stock Escrow Amount, if any, no less than one (1)
Business Day (as defined below) prior to the Closing Date.  The Escrow Agent
will hold the Escrow Amount and the Investment Proceeds (as defined below) in
the Escrow Fund and otherwise subject to the terms
 
 
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and conditions of this Agreement.  The Escrow Agent will acknowledge receipt of
the Escrow Amount in writing to the Buyer and the Sellers’ Representative.
 
3.           Investment of Escrow Fund.
 
(a)           Investments.  During the term of this Agreement, the Cash Escrow
Amount (together with any Investment Proceeds thereon) shall be invested in a
JPMorgan Cash Compensation Account (“Cash Compensation Account”), or a successor
or similar investment offered by the Escrow Agent, except as otherwise
instructed in writing signed by both the Buyer and the Sellers’ Representative
(a “Joint Instruction”) and as acceptable to the Escrow Agent.  Cash
Compensation Accounts have rates of compensation that may vary from time to time
based upon market conditions.  The interest, earnings, and other distributions
or gains on the Cash Escrow Amount, and the proceeds of any investment or
reinvestment in respect of the Cash Escrow Amount, are referred to herein as
“Investment Proceeds”.  Instructions to make any other investment (“Alternative
Investment”) must be made pursuant to a Joint Instruction, which Joint
Instruction shall specify the type and identity of the investments to be
purchased and/or sold.  The Escrow Agent is hereby authorized to execute
purchases and sales of investments through the facilities of its own trading or
capital markets operations, or those of any affiliated entity.  The Escrow Agent
or any of its affiliates may receive compensation with respect to any
Alternative Investment directed hereunder, including, without limitation,
charging any reasonable, customary and applicable agency fee typically charged
by the Escrow Agent or such affiliate in connection with each
transaction.  Market values, exchange rates, and other valuations information
(including, without limitation, market value, current value, or notional value)
of any Alternative Investment furnished in any report or statement may be
obtained from third party sources and is furnished for the exclusive use of the
Buyer and the Sellers’ Representative.  The Escrow Agent has no responsibility
whatsoever to determine the market or other value of any Alternative
Investments, and makes no representation or warranty, express or implied, as to
the accuracy of any such valuations, or that any values necessarily reflect the
proceeds that may be received on the sale of an Alternative Investment.  Each of
the Buyer and the Sellers’ Representative recognizes and agrees that the Escrow
Agent will not provide supervision, recommendations, or advice relating to
either the investment of monies held in the Escrow Fund or the purchase, sale,
retention, or other disposition of any investment described in this
Agreement.  The Escrow Agent will not have any liability for (i) any loss
sustained as a result of any investment made pursuant to the terms of this
Agreement, or as a result of any liquidation of any investment prior to its
maturity, or (ii) the failure of either the Buyer or the Sellers’ Representative
to give the Escrow Agent instructions to invest or reinvest the Cash Escrow
Amount (or any Investment Proceeds thereon).  The Escrow Agent will have the
right to liquidate any investments held in order to provide funds necessary to
make the required payments under this Agreement.
 
(b)           Investment Proceeds and Statements.  The Escrow Agent, within
fifteen (15) Business Days after the end of each calendar month, will send to
each of the Buyer and the Sellers’ Representative (at their respective notice
addresses set forth in Section 10) a statement of holdings and transactions with
respect to the Escrow Fund in form and substance customarily provided by the
Escrow Agent to clients, which statement will include, without limitation, any
Investment Proceeds received during such calendar month in respect of the Escrow
Fund and the
 
 
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type(s) and source(s) of such Investment Proceeds.  Unless otherwise provided by
the Buyer, the value for the Stock Escrow Amount reflected on such statements
shall be $0 or N/A.
 
4.           Disbursement and Termination of Escrow Fund
 
(a)           Disbursement of the Purchase Price Adjustment.  If the Working
Capital Estimate exceeds the Final Working Capital, the Escrow Agent will
release first from the Cash Escrow Amount portion of the Escrow Fund, and
second, only to the extent necessary in the event that there is insufficient
cash then remaining in the Escrow Fund, from the Stock Escrow Amount portion of
the Escrow Fund, within three (3) Business Days following the Escrow Agent’s
receipt of a Joint Instruction, to the Buyer, by wire transfer of immediately
available funds to the account specified in such Joint Instruction and/or by
overnight courier of stock certificates (and the accompanying stock powers) to
the address specified in such Joint Instruction, an amount equal to the lesser
of (i) such excess and (ii) $2,500,000.  The Escrow Agent shall not be
responsible for performing any formulaic calculations hereunder and shall be
provided with an amount to be released.
 
(b)           Disbursement and Termination of the Escrow Fund.
 
(i)           Claims.  If, at any time, and from time to time, during the period
from the date of this Agreement through July 15, 2013 (the “Claims Period”), any
of the Buyer Indemnitees (as defined in the Purchase Agreement) suffers a Loss
for which such person is entitled to indemnification pursuant to Article X or XI
of the Purchase Agreement (a “Claim”), the Buyer will deliver a signed written
notice of the Claim to the Escrow Agent and the Sellers’ Representative
(a “Claim Notice”) specifying (A) the nature of the Claim, (B) the good faith
estimated amount of damages to which the applicable Buyer Indemnitees believe
they are, in the aggregate, entitled pursuant to the Purchase Agreement (the
“Claimed Amount”), and (C) payment delivery instructions.  The Buyer also shall
deliver to the Escrow Agent written proof of delivery to the Sellers’
Representative of a copy of such Claim Notice (which proof may consist of a
photocopy of the registered or certified mail or overnight carrier receipt, or
the signed receipt if delivered by hand).  The Buyer’s delivery of a Claim
Notice also will be deemed to constitute the applicable Buyer Indemnitee’s
“Claims Notice” pursuant to Section 10.4(b) of the Purchase Agreement.  Upon
receipt of a Claim Notice, the Escrow Agent will segregate from the Escrow Fund
an amount equal to the lesser of (A) the Claimed Amount and (B) the balance of
the Escrow Fund not otherwise held in respect of a Disputed Amount (as defined
below).  In furtherance thereof, the Escrow Agent will segregate amounts from
the Escrow Fund first from the Cash Escrow Amount portion of the Escrow Fund,
and second, only to the extent necessary in the event that there is insufficient
cash then remaining in the Escrow Fund, shall be directed to release from the
Stock Escrow Amount portion of the Escrow Fund.
 
(ii)           Responses.  Within fifteen (15) Business Days following receipt
by the Sellers’ Representative of a Claim Notice (the “Response Period”), the
Sellers’ Representative, acting in good faith, will, by signed written notice to
the Escrow Agent and the Buyer, either (A) concede liability for the Claimed
Amount in whole, or (B) deny liability for, or otherwise dispute, the Claimed
Amount in whole or in part (the “Response
 
 
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Notice”).  If the Sellers’ Representative fails to deliver a Response Notice
within the Response Period, the Sellers’ Representative will be deemed to have
conceded the Claimed Amount in full.  If the Sellers’ Representative does not
deny liability with respect to any portion of a Claimed Amount in the applicable
Response Notice, the Sellers’ Representative will be deemed to have conceded
liability with respect to that portion of such Claimed Amount.  The portion of
the Claimed Amount for which the Sellers’ Representative has conceded, or is
deemed to have conceded, liability is referred to in this Agreement as the
“Agreed Amount”, and the portion of the Claimed Amount for which the Sellers’
Representative has denied liability, or which is disputed, is referred to in
this Agreement as the “Disputed Amount”.
 
(iii)           Payment of Claims.  The Escrow Agent will release from the
Escrow Fund, within three (3) Business Days following either the receipt of the
Response Notice or the expiration of the Response Period, to the applicable
Buyer Indemnitees, by wire transfer of immediately available funds to the
account specified in the applicable Claim Notice and/or by overnight courier of
stock certificates (and the accompanying stock powers) to the address specified
in the applicable Claim Notice, the Agreed Amount in respect of such Claim
Notice.  The Escrow Agent will retain in the Escrow Fund any Disputed Amount
until such time as the Escrow Agent receives either (A) a Joint Instruction with
respect to such Disputed Amount or (B) a final decision of a court of competent
jurisdiction that is not subject to further appeal setting forth a final
determination in respect of such Disputed Amount, which order shall be delivered
by the prevailing party to the Escrow Agent together with a written instruction
to the Escrow Agent Agent as to the disbursement of some or all of the Escrow
Fund (a “Final Determination”).  The Escrow Agent will release amounts from the
Escrow Fund pursuant to this Section 4(b)(iii), first from the Cash Escrow
Amount portion of the Escrow Fund, and second, only to the extent necessary in
the event that there is insufficient cash then remaining in the Escrow Fund,
from the Stock Escrow Amount portion of the Escrow Fund.
 
(iv)           Disbursement of the Escrow Fund.  The Escrow Agent will release
from the Escrow Fund, within three (3) Business Days following the end of the
Claims Period, (A) to the Sellers, by wire transfers of immediately available
funds to the accounts set forth on Schedule A in the respective percentages set
forth opposite the Sellers’ names on Schedule A, rounded to the nearest cent
(the “Seller Percentages”), the entirety of the then remaining Cash Escrow
Amount and/or (B) to J.P. Morgan Private Bank, Attention:  Hillary Wright, at
500 Stanton Christiana Road, OPS 3/1, Newark, DE  19713, by personal delivery or
overnight courier of the sealed envelope containing the entirety of the then
remaining Stock Escrow Amount, in each case, less (i) any then remaining
Disputed Amounts and (ii) any amounts with respect to which a Claim Notice was
delivered within fifteen (15) Business Days of the end of the Claims Period that
might become Disputed Amounts.  The aggregate amount of all Disputed Amounts and
such Claimed Amounts will remain in the Escrow Fund following the termination of
the Claims Period, and will not be released until such time, with respect to
each Disputed Amount and such Claimed Amounts, as the Escrow Agent receives a
Joint Instruction or a Final Determination directing the disbursement of such
Disputed Amount or such Claimed Amount (which disbursement will be made within
three (3) Business Days of
 
 
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the Escrow Agent’s receipt of such Joint Instruction or Final
Determination).  In the event the Sellers’ Representative Expenses Amount is
unavailable to satisfy in full all out-of-pocket fees and expenses (including
legal, accounting, and other advisors’ fees and expenses, if applicable)
incurred by the Sellers’ Representative in connection with the Purchase
Agreement and this Agreement, then, following the Claims Period and the
satisfaction in full of any indemnity obligations of the Sellers pursuant to
Article X or Article XI of the Purchase Agreement (including any such
indemnification obligation relating to any Disputed Amount and any Claimed
Amounts with respect to which a Claim Notice was delivered within fifteen (15)
Business Days of the end of the Claims Period that might become Disputed
Amounts), prior to any distribution of all or any portion of the Escrow Fund to
the Sellers, the Sellers’ Representative will be entitled to reimbursement for
such out-of-pocket fees and expenses and other obligations to or of the Sellers’
Representative out of such Escrow Fund to the extent that the Sellers’
Representative has provided written notice to the Escrow Agent requesting
reimbursement of such out-of-pocket fees and expenses and other amounts prior to
such distribution.
 
(v)           Termination of the Escrow Fund.  Following the disbursement of the
entirety of the Escrow Fund pursuant to the immediately foregoing clause (iv),
the Escrow Fund immediately and automatically will terminate, subject to the
provisions of Sections 7 and 8(a).
 
(c)           Treatment of the Stock Escrow Amount Disbursements.  For purposes
of determining the number of shares to be segregated or distributed by the
Escrow Agent under Section 4(a) or (b), or to be withdrawn by the Escrow Agent
under Section 8(b), the shares in the Stock Escrow Amount shall be valued based
on the volume-weighted average of the per share trading prices of Buyer Common
Stock as reported through Bloomberg (based on all trades in Buyer Common Stock
and not an average of daily averages) for fifteen (15) consecutive full trading
days ending on the Business Day immediately preceding the applicable
segregation, distribution, or withdrawal date.  In the event any Buyer Stock
Shares are to be distributed to the Buyer from the Stock Escrow Amount, (i) the
Escrow Agent shall deliver to the Buyer the sealed envelope containing
certificates representing the Buyer Stock Shares referenced in Section 2(b) (and
the accompanying stock powers), (ii) the Buyer shall deliver such certificates
(and the accompanying stock powers) to its transfer agent together with
instructions for the transfer agent to issue new certificates representing Buyer
Stock Shares (x) in the name of the Buyer in the amount to be distributed to the
Buyer and (y) in the names of the Sellers for any amounts not so distributed,
and (iii) the Buyer will then deposit with the Escrow Agent, as custodian, by
personal delivery to the Escrow Agent at the address set forth in Section 10, a
sealed envelope (the contents of which shall have been previously inspected by
the Sellers' Representative and sealed in the presence of the Sellers'
Representative) containing such new certificates in the names of the Sellers,
which certificates shall be accompanied by stock powers of the Sellers duly
executed in blank.  It is understood and agreed by the Buyer and the Sellers’
Representative that the Escrow Agent shall not be responsible for performing any
formulaic calculations hereunder, and shall be instructed by the Buyer and the
Sellers’ Representative to deliver the Stock Escrow Amount in accordance with
the instructions it receives. Each of the Buyer and the Sellers’ Representative
will have the obligation to, and agrees to, execute and deliver to the Escrow
Agent such certificates, instruments, and instructions, and take such other
actions, as the Escrow
 
 
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Agent reasonably may request in order to give effect to the provisions of
Sections 4 and 8 in connection with the distribution or withdrawal of
shares.  The Sellers’ Representative will have the right to deposit with the
Escrow Agent additional cash to be used in partial or full satisfaction of any
amounts that otherwise would be payable out of the Stock Escrow Amount pursuant
to the provisions of Sections 4(a), 4(b), and 8(b) (“Tendered Cash”).  Any
deposit of Tendered Cash must be made by no later than three (3) Business Days
prior to the applicable payment date, and must be preceded or accompanied by a
written notice to each of the Escrow Agent and the Buyer specifying the payment
to which the Tendered Cash relates.  Following any deposit of Tendered Cash, the
Escrow Agent (i) will release to the Buyer, on the applicable payment date, the
Tendered Cash, together with any additional amounts due out of the Cash Escrow
Amount and/or Stock Escrow Amount, and (ii) will release to the Sellers, in
accordance with their respective Seller Percentages, on, or as promptly as
practicable following, the applicable payment date,a number of shares from the
Stock Escrow Amount whose value (as determined in accordance with the first
sentence of this Section 4(c)) is equivalent to the value of the Tendered Cash.
 
5.           Escrow Agent.
 
(a)           Escrow Agent’s Duties.  The Escrow Agent will have only such
duties as are specifically and expressly provided in this Agreement, which
duties will be deemed purely ministerial in nature, and no other duties will be
implied.  The Escrow Agent will neither (i) be responsible for, or chargeable
with, knowledge of, or have any requirements to comply with, the terms and
conditions of any other agreement, instrument, or document, by and between the
Buyer and the Sellers’ Representative in connection with this Agreement,
including, without limitation, the Purchase Agreement and the Stockholders
Agreement (each, an “Underlying Agreement”), nor (ii) be required to determine
whether any person or entity has complied with any Underlying Agreement, nor
(iii) have any additional obligations inferred from the terms of any Underlying
Agreement even if reference to such Underlying Agreement is made in this
Agreement.  In the event of any conflict between the terms and provisions of
this Agreement, those of any Underlying Agreement, any schedule or exhibit
attached to this Agreement, or any other agreement by and between the Buyer and
the Sellers’ Representative, the terms and conditions of this Agreement will
control.  The Escrow Agent may rely upon, and will not be liable for acting or
refraining from acting in good faith upon, any written notice, document,
instruction, or request furnished to the Escrow Agent under this Agreement that
the Escrow Agent reasonably believes to be genuine and to have been signed or
presented by the proper persons, without inquiry, and without requiring
substantiating evidence of any kind.  The Escrow Agent will not be liable to the
Buyer, the Sellers’ Representative, or any other person or entity for
refraining, in good faith, from acting upon any instruction setting forth,
claiming, containing, objecting to, or related to the transfer or distribution
of the Escrow Fund, or any portion thereof, unless such instruction has been
delivered to the Escrow Agent in accordance with Section 11 and the Escrow Agent
has been able to satisfy any applicable security procedures as may be required
under Section 11.  The Escrow Agent has no duty to inquire into, or investigate,
the validity, accuracy, or content of any such document, notice, instruction, or
request.  The Escrow Agent has no duty to solicit any payments that may be due
it or the Escrow Fund, including, without limitation, the Escrow Amount, nor
will the Escrow Agent have any duty or obligation to confirm or verify the
accuracy or correctness of any amounts deposited with it under this Agreement.
 
 
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(b)           Escrow Agent’s Liabilities.  The Escrow Agent will not be liable
for any action taken, suffered, or omitted to be taken by it in good faith
except to the extent that a final adjudication of a court of competent
jurisdiction determines that the Escrow Agent’s gross negligence, bad faith,
fraud, or willful misconduct was the primary cause of any loss to either the
Buyer or the Sellers’ Representative.  The Escrow Agent may execute any of its
powers and perform any of its duties under this Agreement either directly or
through affiliates or agents.  The Escrow Agent may consult with counsel,
accountants, and other skilled persons to be selected and retained by it.  The
Escrow Agent will not be liable for any action taken, suffered, or omitted to be
taken by it in good faith in accordance with, or in reliance upon, the advice or
opinion of any such counsel, accountants, or other skilled persons.  In the
event that the Escrow Agent is uncertain or believes there is some ambiguity as
to its duties or rights under this Agreement, or receives instructions, claims,
or demands from either the Buyer or the Sellers’ Representative that, in the
Escrow Agent’s opinion, conflict with any of the provisions of this Agreement,
the Escrow Agent will be entitled to refrain from taking any action, and its
sole obligation will be to keep safely all property held in escrow until it
receives a Joint Instruction that eliminates such ambiguity or uncertainty to
the satisfaction of the Escrow Agent.  Each of the Buyer and the Sellers’
Representative agrees to pursue any redress or recourse in connection with any
dispute without making the Escrow Agent a party to the same. Notwithstanding
anything in this Agreement to the contrary, in no event will the Escrow Agent be
liable for special, incidental, punitive, indirect, or consequential loss or
damage of any kind whatsoever (including, but not limited to, lost profits),
even if the Escrow Agent has been advised of the likelihood of such loss or
damage and regardless of the form of action.
 
6.           Succession.
 
(a)           Resignation of Escrow Agent.  The Escrow Agent may resign and be
discharged from its duties or obligations hereunder by giving thirty (30)
calendar days advance notice in writing of such resignation to each of the Buyer
and the Sellers’ Representative specifying the date on which such resignation
will take effect.  If the Buyer and the Sellers’ Representative have failed to
appoint a successor escrow agent prior to the expiration of the thirty (30)
calendar days following their receipt of the notice of resignation, 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 will be binding upon all of the parties to this Agreement.  The
Escrow Agent’s sole responsibility after such thirty (30) day notice period
expires will be to hold the Escrow Fund (without any obligation to reinvest the
same), and to deliver the same to a designated substitute escrow agent, if any,
or in accordance with the directions of a final order or judgment of a court of
competent jurisdiction, at which time of delivery the Escrow Agent’s obligations
under this Agreement will cease and terminate, subject to the provisions of
Sections 7 and 8(a).  The Escrow Agent will have the right to withhold an amount
equal to any amount due and owing to the Escrow Agent, plus any reasonable
out-of-pocket costs and expenses the Escrow Agent reasonably believes may be
incurred by the Escrow Agent in connection with the termination of the Escrow
Agreement.  In the event of any such withholding by the Escrow Agent, the Buyer
will reimburse the Sellers, in accordance with their respective Seller
Percentages, for 50% of the amount so withheld, unless the amount so withheld
was withdrawn from an Agreed Amount in which case the Sellers’ Representative,
on behalf of the Sellers, will reimburse the Buyer for any amount so withheld
from the Agreed Amount in excess of 50% of the total amount due to the Escrow
Agent.
 
 
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(b)           Successor to Escrow Agent.  Any entity into which the Escrow Agent
may be merged or converted, or with which it may be consolidated, or any entity
to which all or substantially all of the Escrow Agent’s escrow business may be
transferred, will be the Escrow Agent under this Agreement without requiring any
further act.
 
7.           Compensation and Reimbursement.  Subject to Section 13, the Buyer
and the Sellers’ Representative (on behalf of the Sellers) agree jointly and
severally (a) to pay the Escrow Agent the fees set forth in Schedule B, at the
times specified on Schedule B and (b) to pay or reimburse the Escrow Agent upon
request for all reasonable out-of-pocket expenses, disbursements, and advances,
including, without limitation, reasonable attorney’s fees and expenses, incurred
or made by the Escrow Agent in connection with the performance of this
Agreement.  All compensation and reimbursement of the Escrow Agent under this
Agreement will be shared equally by the Buyer and the Sellers’
Representative.  The compensation and reimbursement obligations under this
Section 7 will survive termination of this Agreement.
 
8.           Indemnification.
 
(a)           Indemnification of Escrow Agent.  The Buyer and the Sellers’
Representative (on behalf of the Sellers), jointly and severally, will defend
and save harmless the Escrow Agent and its affiliates and their respective
successors, assigns, agents and employees (the “Indemnitees”) from and against
any and all losses, damages, claims, liabilities, penalties, judgments,
settlements, litigation, investigations, and reasonable out-of-pocket costs or
expenses (including, without limitation, reasonable fees and expenses of outside
counsel) (collectively, “Losses”) arising out of or in connection with (i) the
Escrow Agent’s execution and performance of this Agreement, tax reporting or
withholding, the enforcement of any rights or remedies under or in connection
with this Agreement, or as may arise by reason of any act, omission, or error of
the Indemnitee, except, in the case of any Indemnitee, to the extent that such
Losses are finally adjudicated by a court of competent jurisdiction to have been
primarily caused by the bad faith, fraud, gross negligence or willful misconduct
of such Indemnitee, or (ii) the Escrow Agent’s following any instructions or
other directions, whether joint or singular, from the Buyer or the Sellers’
Representative, except to the extent that its following any such instruction or
direction is not in accordance with the terms of this Agreement.  The indemnity
obligations set forth in this Section 8(a) will survive the resignation,
replacement, or removal of the Escrow Agent, and the termination of this
Agreement.
 
(b)           Lien Grant to Escrow Agent.  The Buyer and the Sellers’
Representative (on behalf of the Sellers), grant the Escrow Agent a lien on, a
right of set-off against, and a security interest in, the Escrow Fund for the
payment of any claim for indemnification, fees, expenses, and amounts due by
either the Buyer or the Sellers’ Representation (on behalf of the Sellers) to
the Escrow Agent or an Indemnitee pursuant to this Agreement.  In furtherance of
the foregoing, the Escrow Agent is expressly authorized and directed, but will
not be obligated, to charge against and withdraw from the Escrow Fund for its
own account, or for the account of an Indemnitee, any undisputed amounts
actually due to the Escrow Agent or an Indemnitee under Section 6(a), 7 or 8(a)
of this Agreement; provided, that the Escrow Agent must withdraw any such
undisputed amounts first from the Cash Escrow Amount portion of the Escrow Fund,
and second, only to the extent necessary in the event that there is insufficient
cash then remaining in the Escrow Fund, from the Stock Escrow Amount portion of
the Escrow Fund.  In the event of
 
 
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any such charge against or withdrawal by the Escrow Agent, the Buyer will
reimburse the Sellers, in accordance with their respective Seller Percentages,
for 50% of the amount so charged against or withdrawn, unless the amount so
charged against or withdrawn was withdrawn from an Agreed Amount in which case
the Sellers’ Representative, on behalf of the Sellers, will reimburse the Buyer
for any amount so withheld from the Agreed Amount in excess of 50% of the total
amount due to the Escrow Agent or an Indemnitee under Section 8(a).
 
9.           Patriot Act Disclosure, Taxpayer Identification Numbers, and Tax
Reporting.
 
(a)           Patriot Act Disclosure.  Section 326 of the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001 (“USA PATRIOT Act”) requires the Escrow Agent to
implement reasonable procedures to verify the identity of any person that opens
a new account with it.  Accordingly, each of the Buyer and the Sellers’
Representative acknowledges that Section 326 of the USA PATRIOT Act and the
Escrow Agent’s identity verification procedures require the Escrow Agent to
obtain information which may be used to confirm each of the Buyer’s and the
Sellers’ Representative’s identity, including, without limitation, name, address
and organizational documents (collectively, “Identifying Information”).  Each of
the Buyer and the Sellers’ Representative agrees to provide the Escrow Agent
with, and consents to the Escrow Agent obtaining from third-parties, any such
Identifying Information required as a condition of opening an account with, or
using any service provided by, the Escrow Agent.
 
(b)           Certification and Tax Reporting.  Each of the Buyer and the
Sellers’ Representative (on behalf of each of the Sellers) has provided the
Escrow Agent with its fully executed Internal Revenue Service (“IRS”) Form W-8
or W-9, and/or other required documentation.  All Investment Proceeds earned
under this Agreement will be reported for tax purposes by the Escrow Agent to
the Sellers in accordance with the respective Seller Percentages as indicated in
Schedule A. The Sellers will be responsible for all income taxes arising from or
attributable to the Investment Proceeds unless such Investment Proceeds have
been paid to the Buyer prior to the date of delivery of Internal Revenue Service
Forms 1099 (or any successor forms) as described below, in which case the Buyer
will be responsible for such income taxes.  The Escrow Agent will issue all
Internal Revenue Service Forms 1099 (or any successor forms) relating to the
Investment Proceeds to and in the name of the Sellers (pro rata in accordance
with their Seller Percentages) unless such Investment Proceeds previously have
been distributed to the Buyer, in which case the Escrow Agent will issue all
such Internal Revenue Service Forms 1099 (or any successor forms) relating to
such Investment Proceeds to the Buyer.  In order to permit the Sellers to
satisfy their tax obligations hereunder, on January 31 of each year (or if such
day is not a Business Day, on the next Business Day), the Escrow Agent also will
deliver to each Seller, to the accounts set forth on Schedule A, an amount in
cash out of the Escrow Fund equal to 45% of the Investment Proceeds earned in
the prior year ended December 31 and reflected on such Seller’s Internal Revenue
Service Form 1099.  The Escrow Agent will withhold any taxes it deems
appropriate in the absence of proper tax documentation or as required by law,
and will remit such taxes to the appropriate authorities.  Each of the Buyer and
the Sellers’ Representative represents and warrants to the Escrow Agent that
there is no sale or transfer of a United States Real Property Interest as
defined under IRC Section 897(c) in the underlying transaction giving rise to
this Agreement. To the extent the underlying transaction constitutes an
installment sale requiring tax reporting or withholding of imputed interest or
original issue discount to the IRS or
 
 
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other taxing authority, the Sellers’ Representative shall prepare and provide
the Escrow Agent with a detailed schedule indicating the allocation of the
disbursement amount from the Escrow Fund to the Sellers, among (i) principal,
(ii) imputed interest to be reported on IRS Form 1099-INT and/or 1042S and / or
(iii) Original Issue Discount (“OID”) to be reported on IRS Form 1099-OID, along
with the relevant payee tax information, documentation, and proportionate
interest thereof.
 
10.           Notices.  All communications under this Agreement will be in
writing and except for communications from the Buyer and the Sellers’
Representative setting forth, claiming, containing, objecting to, or in any way
related to the transfer or distribution of funds, including, but not limited to,
funds transfer instructions (all of which shall be specifically governed by
Section 11 below) will be deemed to be duly given and received:  (a) upon
delivery, if delivered personally, or upon confirmed transmittal, if by
facsimile, (b) on the next Business Day, if sent by overnight courier, or (c)
four (4) Business Days after mailing if mailed by prepaid registered mail,
return receipt requested, to the appropriate notice address set forth below or
at such other address as any party to this Agreement may have furnished to the
other parties to this Agreement in writing by registered mail, return receipt
requested at the then effective address for such person under this Section 10.
 
If to the Buyer, to:
AngioDynamics, Inc.
 
14 Plaza Drive
 
Latham, New York  12110
 
Attention:  Stephen A. Trowbridge, Vice President and General Counsel
 
Tel No.:  (518) 795-1408
 
Fax No.:  (518) 795-1401
     
with a copy (which will not constitute notice) to:
     
Cadwalader, Wickersham & Taft LLP
 
One World Financial Center
 
New York, NY  10281
 
Attention:  William P. Mills
 
Tel No.:  (212) 504-6436
 
Fax No.:  (212) 504-6666
   
If to the Sellers’ Representative, to:
Avista Capital Holdings, LP
 
65 East 55th Street, 18th Floor
 
New York, New York  10022
 
Attention:  David Burgstahler and Ben Silbert
 
Tel No.:  (212) 593-6958
 
Fax No.:  (212) 593-6918
   

 
 
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with a copy (which will not constitute notice) to:
     
Ropes & Gray LLP
 
Prudential Tower, 800 Boylston Street
 
Boston, MA  02199-3600
 
Attention:  Craig E. Marcus
 
Tel No.:  (617) 951-7802
 
Fax No.:  (617) 235-0514
   
If to the Escrow Agent, to:
JPMorgan Chase Bank, N.A.
 
Escrow Services
 
1 Chase Manhattan Plaza, 21st Fl
 
New York, NY  10005
 
Attention:  Ilona Kandarova/ Andy Jacknick
 
Tel No.:  (212) 552-2347
 
Fax No.:  (212) 552-2812

Notwithstanding the above, in the case of communications delivered to the Escrow
Agent pursuant to subsection (a), (b) and (c) of this Section 10, such
communications will be deemed to have been given on the date received by an
officer of the Escrow Agent or any employee of the Escrow Agent who reports
directly to any such officer at the above-referenced office.  In the event that
the Escrow Agent, in its sole discretion, determines that an emergency exists,
the Escrow Agent may use such other means of communication as the Escrow Agent
deems appropriate.  “Business Day”, for purposes of this Agreement, means any
day other than a Saturday, Sunday, or any other day on which the Escrow Agent
located at the notice address set forth above is authorized or required by law
or executive order to remain closed.
 
11.           Security Procedures.  Notwithstanding anything to the contrary set
forth in Section 10, any instructions setting forth, claiming, containing,
objecting to, or in any way related to, the transfer or distribution of funds,
including, but not limited to, any such funds transfer instructions that may
otherwise be set forth in a written instruction permitted pursuant to Section 4,
must be given to the Escrow Agent by confirmed facsimile, and no instruction
for, or related to, the transfer or distribution of the Escrow Fund, or any
portion thereof, will be deemed delivered and effective unless the Escrow Agent
actually has received such instruction by facsimile at the number provided in
Section 10, and as further evidenced by a confirmed transmittal to that number
received by the sender.  In the event that funds transfer instructions are
received by the Escrow Agent by facsimile, the Escrow Agent must seek
confirmation of such instructions by telephone call-back to the person or
persons designated on Schedule C, and the Escrow Agent may rely upon the
confirmation of anyone purporting to be the person or persons so designated. The
persons and telephone numbers for call-backs may be changed only in a writing
actually received and acknowledged by the Escrow Agent.  If the Escrow Agent is
unable to contact any of the authorized representatives identified in Schedule
C, the Escrow Agent is hereby authorized both to receive written instructions
from, and to seek confirmation of such instructions by telephone call-back to,
any one or more of the Buyer’s or the Sellers’ Representative’s, as applicable,
executive officers, (the “Executive Officers”), which will include any officer
with a title of President, Managing Director, Vice President, General Counsel,
Secretary, or Treasurer.  Such Executive Officer will deliver to the Escrow
Agent a fully executed incumbency certificate,
 
 
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and the Escrow Agent may rely upon the confirmation of anyone purporting to be
any such Executive Officer. The Escrow Agent and the beneficiary’s bank in any
funds transfer may rely solely upon any account numbers or similar identifying
numbers provided by the Buyer or the Sellers’ Representative, as applicable, to
identify (a) the beneficiary, (b) the beneficiary’s bank, or (c) an intermediary
bank. The Escrow Agent may apply any of the Escrow Fund for any payment order it
executes using any such identifying number, even when its use may result in a
person other than the beneficiary being paid, or the transfer of funds to a bank
other than the beneficiary’s bank or an intermediary bank designated.  Each of
the parties to this Agreement acknowledges that the security procedures set
forth in this Section 11 are commercially reasonable.
 
12.           Compliance with Court Orders.  In the event that any amount of any
of the Escrow Fund is attached, garnished, or levied upon by any court order, or
the delivery thereof is stayed or enjoined by any court order, or any order,
judgment, or decree is made or entered by any court order affecting any amount
of any of the Escrow Fund, the Escrow Agent is hereby expressly authorized, in
its sole discretion, to obey and comply with all writs, orders, or decrees so
entered or issued, with respect to which it is advised by legal counsel of its
own choosing are binding upon it, whether with or without jurisdiction, and, in
the event that the Escrow Agent obeys or complies with any such writ, order, or
decree, the Escrow Agent will not be liable to the Buyer, the Sellers’
Representative, or any other person or entity by reason of such compliance,
notwithstanding such writ, order, or decree being subsequently reversed,
modified, annulled, set aside, or vacated.
 
13.           Expenses.  Except as otherwise expressly provided by this
Agreement, solely as between the Buyer and the Sellers’ Representative, each of
the Buyer and the Sellers’ Representative will bear and pay its own expenses
(including, without limitation, all compensation and expenses of any legal
counsel, financial advisors, consultants, actuaries, accountants, auditors,
brokers, finders, and other intermediaries engaged by it) incurred in connection
with this Agreement; provided, that all fees, costs, and expenses of the Escrow
Agent under this Agreement will be borne by the Buyer and the Sellers’
Representative as set forth in Sections 7 and 8(a).
 
14.           Termination.  This Agreement, and each of the Buyer’s, the
Sellers’ Representative’s, and the Escrow Agent’s obligations under this
Agreement, will be terminated (a) automatically and immediately upon the
termination of the last to be terminated of the Escrow Fund pursuant to
Section 4 of this Agreement, or (b) as otherwise mutually agreed in writing by
the Buyer and the Sellers’ Representative; provided, that each of the
compensation and reimbursement obligations pursuant to Section 7 and the
indemnity obligations pursuant to Section 8(a) will survive termination of this
Agreement.
 
15.           Miscellaneous.  The provisions of this Agreement may be waived,
altered, amended, or supplemented, in whole or in part, only by a writing signed
by each of the Buyer, the Sellers’ Representative, and the Escrow
Agent.  Neither this Agreement, nor any right or interest under this Agreement,
may be assigned in whole or in part by any of the Buyer, the Sellers’
Representative, or the Escrow Agent, except as provided in Section 6, without
the prior consent of both of the other parties to this Agreement.  This
Agreement shall be governed by and construed under the laws of the State of New
York.  Each of the Buyer, the Sellers’ Representative, and the Escrow Agent
irrevocably waives any objection on the grounds of venue,
 
 
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forum non-conveniens, or any similar grounds, and irrevocably consents to
service of process by mail or in any other manner permitted by applicable law,
and consents to the jurisdiction of the courts located in the State of New
York.  Each of the Buyer, the Sellers’ Representative, and the Escrow Agent
further hereby waive any right to a trial by jury with respect to any lawsuit or
judicial proceeding arising or relating to this Agreement.  No party to this
Agreement is liable to any other party to this Agreement for losses due to, or
if it is unable to perform its obligations under the terms of this Agreement
because of, acts of God, fire, war, terrorism, floods, strikes, electrical
outages, equipment or transmission failure, or other causes reasonably beyond
such party’s control. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.  All signatures of the
parties to this Agreement may be transmitted by facsimile, and such facsimile
will, for all purposes, be deemed to be the original signature of such party
whose signature it reproduces, and will be binding upon such party.  If any
provision of this Agreement is determined to be prohibited or unenforceable by
reason of any applicable law of a jurisdiction, then such provision will, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this
Agreement, and any such prohibition or unenforceability in such jurisdiction
will not invalidate or render unenforceable such provisions in any other
jurisdiction.  Each of the Sellers is an intended third-party beneficiary of
this Agreement.  Except for the Sellers, nothing herein expressed or implied is
intended or will be construed to confer upon or to give any person other than
the Escrow Agent, the Sellers’ Representative, the Buyer, and their respective
successors and permitted assigns, any rights or remedies under or by reason of
this Agreement.  Each of the Buyer, the Sellers’ Representative, and the Escrow
Agent represents, warrants, and covenants that each document, notice,
instruction, or request provided by such party to any other party to this
Agreement will comply with applicable laws and regulations.  Where, however, the
conflicting provisions of any such applicable law may be waived, they are hereby
irrevocably waived by the parties to this Agreement to the fullest extent
permitted by law, to the end that this Agreement will be enforced as
written.  Except as expressly provided in Section 8(a), nothing in this
Agreement, whether express or implied, may be construed to give to any person or
entity other than the Buyer, the Sellers’ Representative, and the Escrow Agent
any legal or equitable right, remedy, interest or claim under or in respect of
this Agreement or the Escrow Fund.
 

 
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first set forth above.

 
ANGIODYNAMICS, INC.

By:
/s/ D. Joseph Gersuk
             
Name:
D. Joseph Gersuk
             
Title:
EVP, Chief Financial Officer
 

AVISTA CAPITAL PARTNERS GP, LLC
 
By:
/s/ Ben Silbert
             
Name:
Ben Silbert
             
Title:
Authorized Signatory
 

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
 
as The Escrow Agent
 

By:
/s/ Ilona Kandarova
             
Name:
Ilona Kandarova
             
Title:
Vice President