EXHIBIT 4
ESCROW AGREEMENT
THIS ESCROW AGREEMENT is made and entered into
as of October 16, 1995 ("Escrow Agreement") by and among
SHAMBAUGH, KAST, XXXX & XXXXXXXX, an Indiana partnership,
(the "Escrow Agent"), PUBLIC TELEPHONE CORPORATION, an
Indiana corporation, (the "Seller"), and PHONETEL
TECHNOLOGIES, INC., an Ohio corporation ("PhoneTel").
Capitalized terms used and not otherwise defined herein
shall have the meanings assigned to such terms in the
Merger Agreement.
WHEREAS, PhoneTel, PhoneTel II, Inc. ("Sub"),
an Ohio corporation and a wholly-owned subsidiary of
PhoneTel, and the Seller are parties to an Agreement and
Plan of Merger, dated as of the date hereof (the "Merger
Agreement"), pursuant to which the Seller will merge with
and into a subsidiary of PhoneTel;
WHEREAS, pursuant to Section 1.3 of the Merger
Agreement, the Seller and PhoneTel wish to deposit into
escrow 175,000 shares of PhoneTel common stock (the
"Escrow Amount") being delivered to the Escrow Agent upon
the signing of the Merger Agreement;
WHEREAS, the Seller and PhoneTel wish to enter
into this Escrow Agreement providing for the terms and
conditions upon which the Escrow Amount will be held and
released by the Escrow Agent, and the Escrow Agent wishes
to act as escrow agent pursuant to the terms and
conditions of this Escrow Agreement.
NOW, THEREFORE, in consideration of the
premises and intending to be legally bound hereby, the
parties hereto agree as follows:
SECTION 1. Deposit into Escrow Account. On
the date of this Agreement, PhoneTel is depositing the
175,000 shares of PhoneTel common stock comprising the
Escrow Amount into an escrow account established with the
Escrow Agent and entitled "PhoneTel Escrow Account" (the
"Escrow Account").
SECTION 2. Purpose of Escrow. The Escrow
Amount shall be held by Escrow Agreement for the purpose
of effecting any necessary adjustment in the number of
shares of PhoneTel common stock to be distributed to the
Seller's shareholders as consideration for the merger, as
provided in Section 1.2 of the Merger Agreement. Each
share of PhoneTel common stock comprising the Escrow
Amount shall be valued at $1.00 for purposes of any
adjustment to be made pursuant to such Section 1.2 of the
Merger Agreement.
SECTION 3. Reinvestment and Earnings. The
Escrow Agent is hereby authorized to receive, in its
capacity as Escrow Agent and on behalf of the other
parties hereto, all dividends, earnings, options, and
splits to which the shares which comprise the Escrow
Amount would be entitled.
SECTION 4. Escrow and Escrow Delivery. The
Escrow Agent shall hold the Escrow Amount until such time
or times as the Escrow Agent receives written instruction
from the Shareholder Representative and PhoneTel to
deliver all or any part of the Escrow Amount to the
Shareholder Representative or to PhoneTel, as specified
in the written instruction. Upon receipt of the
foregoing instructions, the Escrow Agent shall deliver
the Escrow Amount, or such portion thereof as specified
in such instructions, accordingly. In accordance with
Section 1.3 of the Merger Agreement, it is contemplated
that 125,000 shares will be distributed ninety (90) days
from the date hereof and the remaining 50,000 shares will
be distributed one (1) year from the date hereof;
provided, however, that if notice of a claim or dispute
regarding distribution of the Escrow Amount has been
given prior to such dates, delivery of such amounts shall
be deferred until such time as all claims or disputes
have been settled between the parties and Escrow Agent
has been provided with written instructions from both
parties. All deliveries to the Seller pursuant to the
foregoing instructions shall be deemed to have occurred
when such Shares are distributed by the Escrow Agent to
the Shareholder Representative, as hereinafter defined,
for distribution among the Shareholders of Seller in
accordance with their respective interests. During the
time that the Escrow Amount is held by the Escrow Agent
and until such delivery by the Escrow Agent, the Seller
and PhoneTel understand and agree that neither shall be
entitled to the Escrow Amount and that the Escrow Amount
shall not be subject to any lien, security interest or
encumbrance of any kind placed thereon by either of them.
SECTION 5. Termination. This Escrow Agreement
shall terminate upon the distribution of the entire
Escrow Amount held by the Escrow Agent pursuant to this
Agreement.
SECTION 6. Shareholder Representative. As
used herein, the term "Shareholder Representative" shall
refer to Xxxxxx X. Xxxxxx. All actions required or
permitted to be taken by the Seller hereunder shall be
done and performed by the Shareholder Representative for
and on behalf of the Seller and each holder, as of the
date hereof, of the common stock, no par value, of Seller
the (each, individually, a "Shareholder" and, together,
the "Shareholders"). The Escrow Agent shall be entitled
to rely, as being binding upon Seller and each of the
Shareholders, upon any document or other writing executed
by the Shareholder Representative, and the Escrow Agent
shall not be liable to Seller or any Shareholder for any
action taken or omitted to be taken by the Shareholder
Representative in reliance thereon. The Seller hereby
represents that each Shareholder has duly appointed the
Shareholder Representative as its lawful attorney-in-
fact, with powers to consummate all transactions
contemplated hereby on each Shareholder's behalf.
SECTION 7. Third Party Beneficiaries. The
provisions of this Agreement shall inure to the benefit
of and shall be enforceable by each Shareholder and each
shall be deemed to be a third party beneficiary
hereunder.
SECTION 8. Indemnification. The Seller and
PhoneTel agree to hold the Escrow Agent harmless and
indemnify it from any loss or claim whatsoever arising in
conjunction with the performance of the duties of the
Escrow Agent, but only to the extent that the Escrow
Agent has fully complied with the provisions of this
Escrow Agreement. Said indemnification shall survive the
termination of this Agreement.
SECTION 9. Notices. Any notices or other
communications required or permitted hereunder shall be
given in writing and shall be delivered by hand or air
courier or sent by certified or registered mail, postage
prepaid, addressed as follows:
If to PhoneTel, to:
PHONETEL TECHNOLOGIES, INC.
000 Xxxxxxx Xxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: President/CEO
Copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: N.J. Terris, Esq.
or:
If to the Seller, to:
XXXXXX X. XXXXXX
0000 Xxxxxxxxx Xxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxx 00000
or:
If to the Escrow Agent, to:
SHAMBAUGH, KAST, XXXX & XXXXXXXX
600 Standard Federal Plaza
P. O. Xxx 00000
Xxxx Xxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxx
or to such other address as shall be furnished in writing
by such party, and any such notice or communication shall
be effective and be deemed to have been given as of (i)
the date delivered, if sent by hand, (ii) the following
day, if sent by overnight courier or (iii) five days
after the date of mailing, if sent by regular mail.
SECTION 10. Entire Agreement. This Escrow
Agreement is the entire agreement among the parties with
respect to the subject matter hereof and supersedes all
prior agreements, written or oral, with respect thereto.
SECTION 11. Amendments; Waiver. This Escrow
Agreement may be amended, modified, superseded,
cancelled, renewed or extended, and the terms and
conditions hereof waived, only by written instrument
signed by the parties hereto or, in the case of a waiver,
the party waiving compliance.
SECTION 12. Assignment. No assignment of any
rights or delegation of any obligations provided for
herein may be made by any party without the express
written consent of all the other parties hereto.
SECTION 13. Counterparts. This Escrow
Agreement may be executed in two or more counterparts,
each of which shall be deemed an original but all of
which together shall constitute one and the same
instrument.
SECTION 14. Governing Law. This Agreement
shall be construed in accordance with and governed by the
internal laws of the State of Indiana.
SECTION 15. Benefit. This Agreement shall be
binding upon and inure to the benefit of the parties
hereto and the personal representatives, executors,
administrators, successors and assigns of each of them.
IN WITNESS WHEREOF, the parties hereto have
affixed their signatures to this Escrow Agreement upon
the date first set forth above.
PUBLIC TELEPHONE CORPORATION
By: ______________________________
XXXXXX X. XXXXXX, President
PHONETEL TECHNOLOGIES, INC.
By: ________________________
Name: ______________________
Title: _____________________
SHAMBAUGH, KAST, XXXX & XXXXXXXX
By: ___________________________
Xxxxxx X. Xxxx
