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Exhibit 10.77
EXHIBIT B
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ESCROW AGREEMENT
This ESCROW AGREEMENT is made and entered into as of November 21, 1996
("Escrow Agreement") by and among Comerica Bank-Texas (the "Escrow Agent"),
Cherokee Communications, Inc., a Texas corporation ("CCI"), Xxxx X. Xxxxxx, Xx.
and X. Xxxxx Duty, as duly authorized agents ("Sellers' Representatives") for
all of the shareholders and other security holders of CCI (the "Sellers"),
PhoneTel Technologies, Inc., an Ohio corporation ("PhoneTel"), and Xxxx X.
Xxxxxx, Xx. ("Xxxxxx"), Xxxxx X. Xxxxxx ("Xxxxxx") and Xxxxxx X. Xxxxxxxx
("Xxxxxxxx"), individually.
WHEREAS, PhoneTel, CCI and all of the Sellers are parties to an Agreement
and Plan of Merger of even date herewith (the "Merger Agreement") pursuant to
which PhoneTel has agreed to acquire all of the Shares (as defined in the Merger
Agreement) and other outstanding securities, upon the terms and subject to the
conditions in the Merger Agreement;
WHEREAS, Section 1.6 of the Merger Agreement provides for PhoneTel to
deposit into escrow the amount of $520,000 (the "Deposit Escrow Amount"), being
delivered by PhoneTel upon the signing of this Escrow Agreement, and an
additional $480,000 (together with the Deposit Escrow Amount, the "Merger Escrow
Amount") at the Closing (as defined in the Merger Agreement);
WHEREAS, Section 1.6 of the Merger Agreement provides for PhoneTel to
deposit into escrow the amount of $6,000,000 (the "Rate Cap Escrow Amount");
WHEREAS, at the Closing, Xxxxxx will enter into an Employment Agreement
with PhoneTel which provides for a payment of $208,333 (the "Xxxxxx Escrow
Amount") being delivered at the Closing by PhoneTel for deposit into escrow;
WHEREAS, at the Closing, Xxxxxx will enter into an Employment Agreement
with PhoneTel which provides for a payment of $208,333 (the "Xxxxxx Escrow
Amount") being
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delivered at the Closing by PhoneTel for deposit into escrow;
WHEREAS, at the Closing, Xxxxxxxx will enter into an Employment Agreement
with PhoneTel which provides for a payment of $208,333 (the "Xxxxxxxx Escrow
Amount") being delivered at the Closing by PhoneTel for deposit into escrow (the
Deposit Escrow Amount, the Merger Escrow Amount, the Rate Cap Escrow Amount, the
Xxxxxx Escrow Amount, the Xxxxxx Escrow Amount and the Xxxxxxxx Escrow Amount
are hereinafter collectively referred to as the "Escrow Amounts");
WHEREAS, CCI, Sellers' Representatives, PhoneTel, Xxxxxx, Xxxxxx and
Xxxxxxxx wish to enter into this Escrow Agreement providing for the terms and
conditions upon which the Escrow Amounts 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; and
WHEREAS, all capitalized terms used but not defined herein shall have the
meanings ascribed to them in the Merger Agreement;
NOW, THEREFORE, in consideration of the premises and intending to be
legally bound hereby, the parties hereto agree as follows:
Section 1. DEPOSITS INTO ESCROW ACCOUNTS.
(a) On the date of this Agreement, PhoneTel is depositing the Deposit
Escrow Amount with the Escrow Agent into an interest bearing escrow account
established with the Escrow Agent entitled PhoneTel Escrow Account (the "Escrow
Account").
(b) At the Closing, PhoneTel shall deposit with the Escrow Agent:
(i) an additional $480,000 for deposit into the Escrow Account;
(ii) the Rate Cap Escrow Amount into an interest bearing escrow
account established with the Escrow Agent entitled PhoneTel Rate Cap Escrow
Account (the "Rate Cap Escrow Account");
(iii) the Xxxxxx Escrow Amount into an interest bearing escrow account
established with the
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Escrow Agent entitled PhoneTel Xxxxxx Escrow Account (the "Xxxxxx Escrow
Account");
(iv) the Xxxxxx Escrow Amount into an interest bearing escrow account
established with the Escrow Agent entitled PhoneTel Xxxxxx Escrow Account (the
"Xxxxxx Escrow Account"); and
(v) the Xxxxxxxx Escrow Amount into an interest bearing escrow account
established with the Escrow Agent entitled PhoneTel Xxxxxxxx Escrow Account (the
"Xxxxxxxx Escrow Account").
Section 2. INVESTMENTS AND EARNINGS. (a) The Escrow Agent is hereby
authorized and directed to invest the Deposit Escrow Amount (prior to the
Closing), the Rate Cap Escrow Amount, the Xxxxxx Escrow Amount, the Xxxxxx
Escrow Amount and the Xxxxxxxx Escrow Amount in (i) any security issued or
guaranteed by the United States government or a governmental authority of the
United States, (ii) certificates of deposit issued by a bank in the United
States having a combined surplus of at least $500 million, (iii) commercial
paper with a rating of at least "Prime-1" by Xxxxx'x Investors Services, Inc.
("Moody's"), (iv) corporate bonds with a rating of Aaa or Aa by Moody's or (v)
publicly-traded money market funds investing in only the foregoing, in each case
as specified by PhoneTel to the Escrow Agent in writing, or (vi) such other
investments as PhoneTel and Sellers' Representatives jointly shall specify to
the Escrow Agent in writing. The Escrow Agent is hereby authorized and directed
to invest the Merger Escrow Amount (after the Closing) in (i) any security
issued or guaranteed by the United States government or a governmental authority
of the United States, (ii) certificates of deposit issued by a bank in the
United States having a combined surplus of at least $500 million, (iii)
commercial paper with a rating of at least "Prime-1" by Moody's, (iv) corporate
bonds with a rating of Aaa or Aa by Moody's or (v) publicly-traded money market
funds investing in only the foregoing, in each case as specified by Sellers'
Representatives to the Escrow Agent in writing, or (vi) such other investments
as PhoneTel and Sellers' Representatives jointly shall specify to the Escrow
Agent in writing. In any event, PhoneTel and Sellers' Representatives shall not
select any investment with a maturity which does not allow for sufficient
liquidity to satisfy the
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obligations hereunder, which has a stated maturity greater than 2 years from its
date of purchase, or which is purchased at a price which exceeds its face amount
or par value at the original date of issuance.
(b) The Escrow Agent shall remit to PhoneTel at the Closing all earnings
and interest (adjusted for any increase or decrease in the principal value of
any investment or any capital gain or loss, as the case may be) upon the Deposit
Escrow Amount on or prior to the Closing. After the Closing, all earnings and
interest upon the Merger Escrow Amount shall increase the Merger Escrow Amount
and the Escrow Agent shall remit all earnings and interest (adjusted for any
increase or decrease in the principal value of any investment or any capital
gain or loss, as the case may be) upon the Rate Cap Escrow Amount, the Xxxxxx
Escrow Amount, the Xxxxxx Escrow Amount and the Xxxxxxxx Escrow Amount to
PhoneTel.
Section 3. ESCROW AMOUNTS AND DELIVERY. The Escrow Agent shall hold the
Escrow Amounts until the following (as applicable):
3.1 TERMINATION OF MERGER AGREEMENT. (a) In the event that the Merger
Agreement is terminated prior to the Closing, (i) PhoneTel may notify the Escrow
Agent of such termination and thereby request delivery of the Deposit Escrow
Amount, (ii) the Escrow Agent must thereupon promptly notify Sellers'
Representatives of PhoneTel's request, (iii) Sellers' Representatives then shall
have ten (10) days within which they can respond to the Escrow Agent and object
to PhoneTel's request on the basis that the Sellers are entitled to the Deposit
Escrow Amount pursuant to Section 1.6(a) of the Merger Agreement, (iv) failure
to respond within ten days of the Escrow Agent's notification will be deemed as
consent on the part of Sellers' Representatives to the Escrow Agent's delivering
the Deposit Escrow Amount to PhoneTel and (v) actual or deemed consent by
Sellers' Representatives will result in the Escrow Agent's delivery of the
entire Deposit Escrow Amount to PhoneTel. In the event of a dispute, the
obligations of the Escrow Agent shall be governed by Section 3.8 hereof.
(b) In the event that the Merger Agreement is terminated due to a
material breach of the Merger Agreement by PhoneTel (including, without
limitation,
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failure to close by January 31, 1997), (i) Sellers' Representatives may notify
the Escrow Agent of such termination and thereby request delivery of the Deposit
Escrow Amount pursuant to Section 1.6(a) of the Merger Agreement, (ii) the
Escrow Agent must thereupon promptly notify PhoneTel of Sellers'
Representatives' request, (iii) PhoneTel then shall have ten (10) days within
which it can respond to the Escrow Agent and object to Sellers' Representatives'
request, (iv) failure to respond within ten days of the Escrow Agent's
notification will be deemed as consent on the part of PhoneTel to the Escrow
Agent's delivering the Deposit Escrow Amount to Sellers' Representatives and (v)
actual or deemed consent by PhoneTel will result in the Escrow Agent's delivery
of the entire Deposit Escrow Amount to Sellers' Representatives. In the event of
a dispute, the obligations of the Escrow Agent shall be governed by Section 3.8
hereof.
3.2 INDEMNIFICATION. In the event any Buyer Indemnified Party is entitled
to indemnification pursuant to Article VII of the Merger Agreement, (i) PhoneTel
may notify the Escrow Agent and thereby request delivery of funds from the
Escrow Account to satisfy such right to indemnification, (ii) the Escrow Agent
must thereupon promptly notify Sellers' Representatives of PhoneTel's request,
(iii) Sellers' Representatives then shall have ten (10) days within which they
can respond to the Escrow Agent and object to PhoneTel's request, (iv) failure
to respond within ten days of the Escrow Agent's notification will be deemed as
consent on the part of the Sellers' Representatives to the Escrow Agent's
delivering the requested amount to PhoneTel and (v) actual or deemed consent by
the Sellers' Representatives will result in the Escrow Agent's delivery of such
amount to PhoneTel. In the event of a dispute, the obligations of the Escrow
Agent shall be governed by Section 3.8 hereof.
3.3 FINAL RELEASE OF MERGER ESCROW AMOUNT. (a) On the date which is 90 days
after the Closing, the Escrow Agent shall pay to Sellers' Representatives an
amount equal to the excess, if any, of $250,000 over the amount, if any,
previously paid to PhoneTel from the Escrow Account.
(b) On the date which is 180 days after the Closing, the Escrow Agent shall
pay to Sellers' Representatives an amount equal to the excess, if any, of
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$500,000 over the amount previously paid to PhoneTel from the Escrow Account.
(c) On the date which is 270 days after the Closing, the Escrow Agent shall
pay to Sellers' Representatives the remainder of the Merger Escrow Amount.
3.4 RELEASE OF RATE CAP ESCROW AMOUNT. (a) On a date which is not later
than 10 days after the first anniversary of the Closing, (i) PhoneTel shall
notify the Escrow Agent and thereby request delivery of funds from the Rate Cap
Escrow Account to Sellers' Representatives, to be calculated pursuant to Section
1.13(a) of the Merger Agreement, (ii) the Escrow Agent must thereupon promptly
notify Sellers' Representatives of PhoneTel's request, (iii) Sellers'
Representatives then shall have ten (10) days within which they can respond to
the Escrow Agent and object to PhoneTel's calculation of such funds to be
delivered, (iv) failure to respond within ten days of the Escrow Agent's
notification will be deemed as consent on the part of Sellers' Representatives
to the Escrow Agent's delivering the requested amount to Sellers'
Representatives and (v) actual or deemed consent by Sellers' Representatives
will result in the Escrow Agent's delivery of such amount to Sellers'
Representatives. If the amount to be paid to Sellers' Representatives pursuant
to this Section 3.4(a) is less than $3,000,000, the Escrow Agent shall, at the
time such payment is made, remit such difference to PhoneTel. In the event of a
dispute, the obligations of the Escrow Agent shall be governed by Section 3.8
hereof.
(b) On a date which is not later than 10 days after the second anniversary
of the Closing, (i) PhoneTel shall notify the Escrow Agent and thereby request
delivery of funds from the Rate Cap Escrow Account to Sellers' Representatives,
to be calculated pursuant to Section 1.13(b) of the Merger Agreement, (ii) the
Escrow Agent must thereupon promptly notify Sellers' Representatives of
PhoneTel's request, (iii) Sellers' Representatives then shall have ten (10) days
within which they can respond to the Escrow Agent and object to PhoneTel's
calculation of such funds to be delivered, (iv) failure to respond within ten
days of the Escrow Agent's notification will be deemed as consent on the part of
Sellers' Representatives to the Escrow Agent's delivering the requested amount
to Sellers' Representatives and (v)
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actual or deemed consent by Sellers' Representatives will result in the Escrow
Agent's delivery of such amount to Sellers' Representatives. If the amount to be
paid to Sellers' Representatives pursuant to this Section 3.4(b) is less than
the remaining balance in the Rate Cap Escrow Account, the Escrow Agent shall, at
the time such payment is made, remit such balance to PhoneTel. In the event of a
dispute, the obligations of the Escrow Agent shall be governed by Section 3.8
hereof.
(c) In the event Rate Caps are adopted at any time prior to the required
release of any portion of the Rate Cap Escrow Amount, PhoneTel and Sellers'
Representatives shall negotiate in good faith with a goal of determining a final
release of the Rate Cap Escrow Amount, consistent with the intent of Section
1.13 of the Merger Agreement, as promptly as possible.
3.5 RELEASE OF XXXXXX ESCROW AMOUNT. On the date which is 120 days after
the Closing, the Escrow Agent shall pay to Xxxxxx the Xxxxxx Escrow Amount
unless, on or before such date, PhoneTel notifies the Escrow Agent that Xxxxxx
is not entitled to such amount under the terms of his Employment Agreement, and
requests delivery of the Xxxxxx Escrow Amount to PhoneTel. In the event that
PhoneTel delivers such notice to the Escrow Agent, (i) the Escrow Agent must
thereupon promptly notify Xxxxxx of PhoneTel's request, (ii) Xxxxxx then shall
have ten (10) days within which he can respond to the Escrow Agent and object to
PhoneTel's request, (iii) failure to respond within ten days of the Escrow
Agent's notification will be deemed as consent on the part of Xxxxxx to the
Escrow Agent's delivering the Xxxxxx Escrow Amount to PhoneTel and (iv) actual
or deemed consent by Xxxxxx will result in the Escrow Agent's delivery of the
Xxxxxx Escrow Amount to PhoneTel. In the event of a dispute, the obligations of
the Escrow Agent shall be governed by Section 3.8 hereof.
3.6 RELEASE OF XXXXXX ESCROW AMOUNT. On the date which is 120 days after
the Closing, the Escrow Agent shall pay to Xxxxxx the Xxxxxx Escrow Amount
unless, on or before such date, PhoneTel notifies the Escrow Agent that Xxxxxx
is not entitled to such amount under the terms of his Employment Agreement, and
requests delivery of the Xxxxxx Escrow Amount to PhoneTel. In the
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event that PhoneTel delivers such notice to the Escrow Agent, (i) the Escrow
Agent must thereupon promptly notify Xxxxxx of PhoneTel's request, (ii) Xxxxxx
then shall have ten (10) days within which he can respond to the Escrow Agent
and object to PhoneTel's request, (iii) failure to respond within ten days of
the Escrow Agent's notification will be deemed as consent on the part of Xxxxxx
to the Escrow Agent's delivering the Xxxxxx Escrow Amount to PhoneTel and (iv)
actual or deemed consent by Xxxxxx will result in the Escrow Agent's delivery of
the Xxxxxx Escrow Amount to PhoneTel. In the event of a dispute, the obligations
of the Escrow Agent shall be governed by Section 3.8 hereof.
3.7 RELEASE OF XXXXXXXX ESCROW AMOUNT. On the date which is 120 days after
the Closing, the Escrow Agent shall pay to Xxxxxxxx the Xxxxxxxx Escrow Amount
unless, on or before such date, PhoneTel notifies the Escrow Agent that Xxxxxxxx
is not entitled to such amount under the terms of his Employment Agreement, and
requests delivery of the Xxxxxxxx Escrow Amount to PhoneTel. In the event that
PhoneTel delivers such notice to the Escrow Agent, (i) the Escrow Agent must
thereupon promptly notify Xxxxxxxx of PhoneTel's request, (ii) Xxxxxxxx then
shall have ten (10) days within which he can respond to the Escrow Agent and
object to PhoneTel's request, (iii) failure to respond within ten days of the
Escrow Agent's notification will be deemed as consent on the part of Xxxxxxxx to
the Escrow Agent's delivering the Xxxxxxxx Escrow Amount to PhoneTel and (iv)
actual or deemed consent by Xxxxxxxx will result in the Escrow Agent's delivery
of the Xxxxxxxx Escrow Amount to PhoneTel. In the event of a dispute, the
obligations of the Escrow Agent shall be governed by Section 3.8 hereof.
3.8 DISPUTES. Should any dispute arise with respect to the payment and/or
ownership or right of possession of any portion of the Escrow Amounts, the
Escrow Agent is authorized and directed to retain in its possession such
disputed portion until either (i) PhoneTel and either Sellers' Representatives,
Xxxxxx, Xxxxxx or Xxxxxxxx, as applicable, direct the application or payment
thereof by delivering a writing to the Escrow Agent; or (ii) the Escrow Agent
shall receive a certified copy of a final judgment of a court of competent
jurisdiction or duly appointed arbitrator with respect to such disputed amount.
Upon receipt of such written direction
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or not later than five business days after receipt of such certified copy of a
judgment or arbitrator's award, the Escrow Agent shall take action with respect
to such disputed amount as required by such direction or such judgment, as the
case may be.
3.9 TAXES. The party who receives any portion of the Escrow Amounts
pursuant to this Section 3 shall indemnify the other parties for the amount of
any income taxes required to be and actually paid to a taxing authority of the
United States or a political subdivision thereof by such other parties with
respect to any interest or other earnings on such portion.
Section 4. INTERPLEADER PROVISION. Nothing contained in this Escrow
Agreement shall preclude the right of the Escrow Agent to seek an adjudication
in a court of competent jurisdiction as to the rights of the parties under this
Escrow Agreement, and the Escrow Agent shall not be liable for any delay
occasioned because of such resort to court. The Escrow Agent will be reimbursed
for expenses, including reasonable counsel fees, in connection with performance
of the Escrow Agent's duties under this Agreement, to be paid 50% by PhoneTel
and 50% by Sellers' Representatives on behalf of all of the Sellers.
Section 5. TERMINATION. This Escrow Agreement shall terminate upon the
final distribution of the funds held by the Escrow Agent pursuant to this Escrow
Agreement, other than the provisions of Section 3.9, which shall terminate upon
the joint written consent of PhoneTel and Sellers' Representatives and the
provisions of Section 8(e), which shall survive the termination or expiration of
this agreement for any reason whatsoever.
Section 6. PAYMENTS TO SELLERS' REPRESENTATIVES. All payments to Sellers'
Representatives under Sections 2, 3.1, 3.3 and 3.4 are for the benefit of the
Sellers, Pro Rata (as defined in the Merger Agreement), and it shall be the
obligation of Sellers' Representatives to forward amounts to the Sellers.
Section 7. COMPENSATION OF ESCROW AGENT. For normal services Escrow Agent
will be paid a set up fee of $1,500 and a minimum escrow fee of $1,500 per year
or part thereof, paid in advance. For services in addition
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to normal services a reasonable fee based upon the time spent by Escrow Agent's
officers, employees or agents in performing such additional services, and
reimbursement to the Escrow Agent for all legal fees, expenses, disbursements
and advances incurred or made by the Escrow agent in the performance of its
services. All such fees, expenses, out-of-pocket expenses, disbursements, and
advances shall be a joint and several liability of the parties, but shall be
paid by PhoneTel and Sellers' Representatives within a reasonable period of time
not to exceed thirty (30) days after billing. In the event that payment is not
received by Escrow Agent within thirty (30) days after billing, Escrow Agent's
fees may be deducted from the Rate Cap Escrow Account. All fees, expenses,
out-of-pocket expenses, disbursements and advances hereunder shall be paid
one-half by PhoneTel and one-half by Sellers' Representatives.
SECTION 8. ESCROW AGENT.
(a) The Escrow Agent may resign and be discharged from its duties
hereunder at any time by giving notice of such resignation to Sellers'
Representatives and PhoneTel, which shall specify a date (not less than 30 days
following the date of such notice) when such resignation shall take effect. Upon
such notice, a successor escrow agent shall be selected by Sellers'
Representatives and PhoneTel, such successor escrow agent to become the Escrow
Agent hereunder upon the resignation date specified in such notice. If Sellers'
Representatives and PhoneTel are unable to agree upon a successor escrow agent
within 30 days after the date of such notice, the Escrow Agent shall be entitled
to appoint its successor. The Escrow Agent shall continue to serve hereunder
until its successor accepts the escrow and acknowledges receipt of the Escrow
Amounts.
(b) Sellers' Representatives and PhoneTel agree to release and hold
the Escrow Agent harmless and indemnify it from any loss or claim whatsoever in
conjunction with the performance of the duties of the Escrow Agent (including
attorney's fees) as long as the Escrow Agent has complied with the provisions of
this Escrow Agreement. Said indemnification shall be borne 50% by PhoneTel and
50% by Sellers' Representatives (unless otherwise determined by a court of
competent jurisdiction) and survive the termination of this Agreement.
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(c) The Escrow Agent is not a party to, and is not bound by, or
charged with notice of, any agreement out of which this escrow may arise. The
Escrow Agent shall not be bound by any modification, amendment or revision of
this Agreement unless the same shall be in writing and signed by all of the
parties hereto.
(d) The Escrow Agent acts hereunder as a depository only, and is not
responsible or liable in any manner whatever for the sufficiency, correctness,
genuineness or validity of the subject matter of the escrow, or any part
thereof. Further, the Escrow Agent shall not be responsible for determining (i)
the accuracy of any notices or instructions delivered hereunder, or the form of
execution thereof, or (ii) the identity or authority of any person executing or
delivering this Agreement, any property delivered hereunder, or any instructions
delivered in connection herewith.
(e) In the event the Escrow Agent becomes involved in any claim,
controversies, or legal proceedings in connection with this Escrow Agreement,
PhoneTel, on the one hand, and Sellers Representatives, on the other, each
agrees to indemnify and save the Escrow Agent harmless from 50% of all loss,
cost, damages, expenses, including attorneys' fees suffered or incurred by the
Escrow Agent as a result thereof except in the case of the Escrow Agent's gross
negligence or willful misconduct. Payment of such costs, damages, expenses or
fees shall be paid by PhoneTel and Sellers' Representatives within a reasonable
period of time not to exceed thirty (30) days after billing. In the event that
payment is not received by Escrow Agent within thirty (30) days after billing,
Escrow Agent's costs, damages, expenses and fees may be deducted from the Rate
Cap Escrow Account. The obligations of PhoneTel and Sellers' Representatives
under this paragraph shall be performable at the office of the Escrow Agent in
Dallas, Texas, and shall survive the termination of this Agreement for any
reason whatsoever.
(f) The Escrow Agent shall be protected in acting upon any written
notice, request, waiver, consent, certificate, receipt, authorization, power of
attorney or other paper or document that the Escrow Agent in good faith believes
to be genuine and what it purports to be.
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(g) The Escrow Agent shall not be liable for anything which it may do
or refrain from doing in connection herewith, except in the case of the Escrow
Agent's own gross negligence or willful misconduct.
(h) The Escrow Agent may, at its sole discretion, consult with legal
counsel in the event of any dispute or question as to the construction of any of
the provisions hereof or its duties hereunder, and it shall incur no liability
and shall be fully protected in acting in accordance with the opinion and
instructions of such counsel except in the case of the Escrow Agent's gross
negligence or willful misconduct. PhoneTel, on the one hand, and Sellers'
Representatives, on the other, each agrees to reimburse Escrow Agent for 50% of
any legal fees incurred by Escrow Agent in connection with its serving as Escrow
Agent hereunder.
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 Xxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attn: Chairman
with copy to:
Skadden, Arps, Slate, Xxxxxxx
& Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone Number: 000-000-0000
Facsimile Number: 000-000-0000
Attn: Xxxxxxx X. Xxxxxx, Esq.
or:
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If to the Escrow Agent, to:
if by mail:
Comerica Bank-Texas
X.X. Xxx 000000
Xxxxxx, XX 00000-0000
Attn: Xxxxxxx Xxxxxx, Trust Officer
if by delivery:
Comerica Bank-Texas
5th Floor
0000 Xxxxx Xxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxx, Trust Officer
or:
If to Sellers' Representatives, to:
Xxxx X. Xxxxxx, Xx.
0000 X'Xxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
and
X. Xxxxx Duty
Capital Southwest Corporation
00000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
with copy to:
Gardere & Xxxxx, L.L.P.
0000 Xxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxx, Esq.
or:
If to Xxxxxx, to:
Xx. Xxxx X. Xxxxxx, Xx.
0000 X'Xxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
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with copy to:
Gardere & Xxxxx, L.L.P.
0000 Xxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxx, Esq.
or:
If to Xxxxxx, to:
Xx. Xxxxx X. Xxxxxx
c/o Cherokee Communications, Inc.
000 Xxxx Xxxx
Xxxxxxxxxxxx, XX 00000
with copy to:
Gardere & Xxxxx, L.L.P.
0000 Xxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxx, Esq.
or:
If to Xxxxxxxx to:
Xx. Xxxxxx X. Xxxxxxxx
c/o Cherokee Communications, Inc.
000 Xxxx Xxxx
Xxxxxxxxxxxx, XX 00000
with copy to:
Gardere & Xxxxx, L.L.P.
0000 Xxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxx, Esq.
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
(a) as of the date delivered if by hand, (b) the day after delivery to the air
courier service if sent by overnight mail, and (c) five days following the date
of mailing if mailed.
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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 may be 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 delegations of any
obligations provided for herein may be made by any party without the express
written consent of all the other parties hereto, except as provided in Section
8(a) hereof. Any purported assignment or delegation of this Agreement contrary
to the terms hereof shall be void.
Section 13. COUNTERPARTS. This Escrow Agreement may be executed in two 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; DISPUTE RESOLUTION. (a) This Agreement shall be
construed in accordance with and governed by the internal laws of the State of
Texas.
(b) Any controversy or claim arising out of or relating to this Escrow
Agreement, including the termination, validity, interpretation or breach hereof
or the delivery of any portion of the Escrow Amounts shall be settled by
arbitration before a single arbitrator conducted in Atlanta, Georgia in
accordance with then applicable Commercial Arbitration Rules of the American
Arbitration Association, as modified in this Escrow Agreement (the "Rules").
Within 20 days after its receipt of claimant's notice of intention to arbitrate
and statement of claim, respondent shall serve claimant with its answering
statement and any counterclaims. Claimant shall serve its answer to any
counterclaims within ten days after its receipt thereof. The hearing shall be
held no later than 30 days after the designation of the arbitrator, and shall
last no more than two business days absent good cause shown. The arbitrator
shall render its written decision within 30 days after such hearing is
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conducted. The rendering of the decision by the arbitrator within the aforesaid
period of time is a condition to the parties' obligation to pay the fees of the
arbitrator. Within two days after designation of the arbitrator, PhoneTel and
Sellers' Representatives shall notify the Escrow Agent of his identity.
(c) The powers of the arbitrator shall include, but not be limited to, the
awarding of injunctive or other equitable relief but shall not include the power
to modify or amend in any respect the provisions of this Escrow Agreement. The
arbitrator shall include in any award the amount of the reasonable attorneys'
fees and expenses and all other reasonable costs and expenses of the arbitration
incurred by the prevailing party and a direction that it be paid by the other
party within ten days after the making of such award. In the event that the
arbitrator does not rule in favor of the prevailing party in respect of all the
claims alleged by such party, the arbitrator shall include in any award the
portion of the amount of the reasonable attorneys' fees and other expenses of
the arbitration incurred by the prevailing party as the arbitrator deems just
and equitable under the circumstances, together with a direction that such
amounts be paid by the other party within ten days thereof. Except as provided
above, each party shall bear his or its own attorneys' fees and expenses and the
parties shall bear equally all other costs and expenses of the arbitration.
Judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof.
(d) Nothing contained in this Section 14 shall be construed to limit or
preclude a party from bringing any action in any court of competent jurisdiction
for interim or provisional relief pending establishment of the arbitral tribunal
and the arbitral tribunal's determination of the merits of the dispute to
protect the rights or property of that party or to compel another party to
comply with its obligations under this Escrow Agreement during the pendency of
the arbitration proceedings.
Section 15. ACTION BY SELLERS' REPRESENTATIVES. All action taken by
Sellers' Representatives shall be valid and binding only if both Seller
Representatives have approved such action.
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Section 16. BENEFIT. Subject to Section 12 hereof, this Escrow Agreement
shall be binding upon and inure to the benefit of the parties hereto and the
successors and assigns of each of them.
Section 17. TITLE TO ESCROW. PhoneTel and the other parties hereto
acknowledge and agree that the Escrow Amounts are not property of PhoneTel and
shall not be property of its estate pursuant to the provisions of 11 U.S.C. ss.
541 in the event of a bankruptcy proceeding of PhoneTel, except that PhoneTel
has a contingent right to a refund of all or a portion of the Escrow Amounts as
provided herein and in the Merger Agreement. PhoneTel acknowledges that the
Escrow Amounts are being transferred to the Escrow Agent to assure payment to
the Sellers of all amounts due and owing to the Sellers pursuant to the
requirements of the Merger Agreement and this Escrow Agreement, and that
PhoneTel relinquishes all rights, title and interest in and to the Escrow
Amounts, other than its contingent right to a refund of all or a portion thereof
as provided herein and in the Merger Agreement.
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IN WITNESS WHEREOF, the parties hereto have affixed their signatures to
this Escrow Agreement upon the date first set forth above.
COMERICA BANK-TEXAS
By: /s/ Xxxxxxx Xxxxxx
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CHEROKEE COMMUNICATIONS, INC.
By: /s/ Xxxx X. Xxxxxx, Xx.
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Name: Xxxx X. Xxxxxx, Xx.
Title: Chairman and Chief Executive Officer
PHONETEL TECHNOLOGIES, INC.
By: /s/ Xxxxx X. Xxxx
----------------------------------------------
Name: Xxxxx X. Xxxx
Title: Chairman and Chief Excutive Officer
/s/ Xxxx X. Xxxxxx, Xx.
----------------------------------------------
Xxxx X. Xxxxxx, Xx.
Sellers' Representative
/s/ X. Xxxxx Duty
----------------------------------------------
X. Xxxxx Duty
Sellers' Representative
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/s/ Xxxx X. Xxxxxx, Xx.
---------------------------------
XXXX X. XXXXXX, XX., individually
/s/ Xxxxxx X. Xxxxxxxx
---------------------------------
XXXXXX X. XXXXXXXX, individually
/s/ Xxxxx X. Xxxxxx
---------------------------------
XXXXX X. XXXXXX, individually
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