PRE-CLOSING ESCROW AGREEMENT
THIS PRE-CLOSING ESCROW AGREEMENT ("Escrow Agreement") is made and entered
into as of the 10th day of June, 1999 by and between XXXXXXX COMMUNICATIONS I,
LTD., a Texas limited partnership ("Seller"), AQUIS COMMUNICATIONS, INC., a
Delaware corporation ("Purchaser"), and CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION (hereinafter referred to as "Escrow Agent" or "Bank").
W I T N E S S E T H:
WHEREAS, pursuant to the terms and provisions of that certain Asset
Purchase Agreement (the "Asset Purchase Agreement"), dated as of June 10, 1999
by and among Seller, Purchaser, Aquis Communications Group, Inc., a Delaware
corporation and Xxxxxxx Communications Texas, Inc., a Texas corporation, Seller
has agreed to sell to Purchaser and Purchaser has agreed to purchase from Seller
the radio paging business presently being conducted by Seller (the "Paging
Business"); and
WHEREAS, the Asset Purchase Agreement provides that contemporaneously with
the execution of the Asset Purchase Agreement, Seller shall deliver to Escrow
Agent One Hundred Thousand Dollars ($100,000.00), said cash to be held by Escrow
Agent pending the closing of the Asset Purchase Agreement.
NOW, THEREFORE, for and in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1. Appointment of Escrow Agent. Seller and Purchaser hereby appoint and
designate Escrow Agent as escrow agent for the purpose herein set forth and
Escrow Agent accepts such appointment. All references to the "Escrow Agent," as
that term is used herein, shall refer to the Escrow Agent solely in its capacity
as escrow agent hereunder.
2. Transfer into Escrow. Purchaser has delivered the sum of One Hundred
Thousand Dollars ($100,000.00) (the "Escrowed Funds") to the Escrow Agent
contemporaneously with the execution of this Escrow Agreement. Escrow Agent
hereby acknowledges receipt of $100,000.00 paid to it by Purchaser as the
initial Escrowed Funds. Escrow Agent shall hold the Escrowed Funds in a
segregated account entitled "Chase Bank of Texas, National Association, as agent
pursuant to an Escrow Agreement dated as of June 10, 1999, among it, Xxxxxxx
Communications I, Ltd., and Aquis Communications, Inc.". It is hereby expressly
stipulated and agreed that all interest and other earnings on the Escrowed Funds
shall become a part of the Escrowed Funds for all purposes, and that all losses
resulting from the investment or reinvestment thereof from time to time and all
amounts charged thereto to compensate or reimburse the Escrow Agent from time to
time for
EXHIBIT "A" - Page 1 of 11
amounts owing to it hereunder shall, from the time of such loss or charge, no
longer constitute part of the Escrowed Funds.
3. Investment. Upon the delivery by Purchaser of the Escrowed Funds to the
Escrow Agent, the Escrow Agent shall invest the Escrowed Funds in Vista U.S.
Government Money Market Fund Vista Shares unless otherwise instructed by
Purchaser in writing from time to time during the term of this Escrow Agreement.
Such written instructions, if any, referred to in the foregoing sentence shall
specify the type and identity of the investments to be purchased and/or sold and
shall also include the name of the broker-dealer, if any, which the Purchaser
directs the Escrow Agent to use in respect of such investment, any particular
settlement procedures required, if any (which settlement procedures shall be
consistent with industry standards and practices), and such other information as
Escrow Agent may require. Escrow Agent shall not be liable for failure to invest
or reinvest funds absent sufficient written direction. Unless Escrow Agent is
otherwise directed in such written instructions, Escrow Agent may use a
broker-dealer of its own selection, including a broker-dealer owned by or
affiliated with Escrow Agent or any of its affiliates. The Escrow Agent or any
of its affiliates may receive compensation with respect to any investment
directed hereunder.
4. Payment of Interest. Intentionally Omitted.
5. Distribution of Escrowed Funds.
(a) Escrow Agent shall hold the Escrowed Funds until receipt of a
written directive (a "Distribution Notice") jointly signed by Seller and
Purchaser instructing Escrow Agent to distribute the Escrowed Funds in
accordance with such Distribution Notice.
(b) Ten (10) Business Days (as defined in Section 7 hereof) after
Escrow Agent's receipt of a Distribution Notice from Purchaser (which notice the
Purchaser shall give to the Seller at the same time it is given to Escrow Agent)
that the Asset Purchase Agreement has been terminated for any reason other than:
(i) breach by Purchaser pursuant to Section 13(a)(ii) of the Asset Purchase
Agreement, or (ii) failure by Purchaser to obtain the FINOVA Consent pursuant to
Section 13(a)(iv) of the Asset Purchase Agreement, then Escrow Agent shall
disburse the Escrowed Funds to the Purchaser, unless the Escrow Agent shall have
received notice from Seller within such ten (10) Business Days disputing that
the Asset Purchase Agreement has been so terminated.
(c) In the event Escrow Agent has not received a Distribution Notice
jointly signed by Seller and Purchaser on or before March 31, 2000 (and the
Escrowed Funds have not otherwise been distributed pursuant to clauses (a) or
(b) above), then the Escrow Agent shall send a notice to each of Seller and
Purchaser on such date informing them that Escrow Agent shall deliver the
Escrowed Funds to Purchaser ten (10) Business Days after Escrow Agent's delivery
of such notice, and following such ten (10) Business Days Escrow Agent shall so
deliver the Escrowed Funds unless Escrow Agent shall have received a notice from
the Seller within such ten (10) Business Days disputing that the Asset Purchase
Agreement was terminated pursuant to Section 13(a)(iii) of the Asset Purchase
Agreement.
EXHIBIT "A" - Page 2 of 11
(d) In the event Seller timely gives the Escrow Agent a disputing
notice pursuant to subsection (b) or (c) above, Escrow Agent shall not disperse
the Escrowed Funds in accordance with such subsection until the dispute has been
resolved. Upon receipt by Escrow Agent of a copy of a final judgment, decree or
order of a court of competent jurisdiction, or copy of a final arbitration
award, adjudicating the dispute, Escrow Agent shall distribute the Escrowed
Funds in accordance with such adjudication or in accordance with a Distribution
Notice jointly signed by Seller and Purchaser.
6. Agent's Duties. All parties understand and agree that Escrow Agent is
not a principal, participant or beneficiary of the underlying transaction which
necessitates this Escrow Agreement. The Escrow Agent shall be obligated only for
the performance of such duties as are specifically set forth herein and may rely
and shall be protected in acting or refraining from acting on any instrument
believed by it to be and to have been signed or presented by the proper party or
parties, their officers, representatives or agents. The Escrow Agent shall not
be liable for any action taken or omitted by it in good faith and reasonably
believed by it to be authorized hereby, nor for action taken or omitted by it in
accordance with the advice of its counsel. Escrow Agent shall be responsible for
holding, investing and disbursing the Escrowed Funds pursuant to this Agreement,
but in no event shall Escrow Agent be liable for any exemplary or consequential
damages in excess of Escrow Agent's fee hereunder.
7. Acceptance and Investment of Escrowed Funds. Receipt or investment of
the Escrowed Funds shall be confirmed by the Escrow Agent as soon as practicable
by account statement unless otherwise indicated; and any discrepancies shall be
noted to Escrow Agent within thirty (30) calendar days after receipt thereof.
For purposes of this paragraph, (a) each account statement shall be deemed to
have been received by the party to whom directed on the earlier to occur of (i)
actual receipt thereof and (ii) three "Business Days" (hereinafter defined)
after the deposit thereof in the United States Mail, postage prepaid and (b) the
term "Business Day" shall mean any day of the year, excluding Saturday, Sunday
and any other day on which national banks are required or authorized to close in
El Paso, Texas. Failure to inform Escrow Agent in writing of any discrepancies
shall be deemed confirmation of the description of Escrowed Funds listed on the
report, regardless of any variations from the original schedule. The Escrow
Agent shall not be liable for losses on any investments, market risk due to
premature liquidation, or other actions taken in compliance with this Escrow
Agreement or appropriate written instructions. Prior to any investment, the
parties hereto shall provide the Escrow Agent with written certification of the
respective taxpayer identification numbers or appropriate foreign taxpayer
exemptions. Failure to provide such information may incur a penalty and cause
the Escrow Agent to be required to withhold tax on any interest payable
hereunder. Any payments of income shall be subject to applicable United States
withholding regulations then in force.
8. Interpleader. Should any controversy arise between the undersigned with
respect to this Escrow Agreement or with respect to the right to receive the
Escrowed Funds or should a substitute Escrow Agent fail to be designated as
provided in Section 10 hereof or if Escrow Agent should be in doubt as to what
action to take, Escrow Agent shall have the right to consult counsel,
EXHIBIT "A" - Page 3 of 11
withhold delivery of the Escrowed Funds and/or to institute a xxxx of
interpleader in any court of competent jurisdiction to determine the rights of
the parties (subject to Section 16 hereof). Should such actions be necessary, or
should Escrow Agent become threatened or involved in litigation or binding
arbitration in any manner whatsoever on account of this Escrow Agreement or the
Escrowed Funds, the undersigned hereby jointly and severally bind and obligate
themselves, their heirs, successors, assigns and legal representatives to pay
Escrow Agent reasonable attorney's fees incurred by Escrow Agent, and any other
disbursements, expenses, losses, costs and damages in connection with or
resulting from such actions, except in the event of Escrow Agent's willful
misconduct or gross negligence.
9. Standard of Care. The Escrow Agent shall have no liability under, or
duty to inquire beyond the terms and provisions of this Escrow Agreement, and it
is agreed that its duties are purely ministerial in nature, and that the Escrow
Agent shall incur no liability whatsoever except for (i) its failure to perform
its obligations as specified herein (ii) willful misconduct or (ii) gross
negligence, so long as it has acted in good faith. The Escrow Agent shall not be
bound by any modification, amendment, termination, cancellation, rescission or
supersession of this Escrow Agreement unless the same shall be in writing and
signed by all of the other parties hereto and, if its duties as Escrow Agent
hereunder are affected hereby, unless it shall have given prior written consent
thereto. Without limiting the generality of the foregoing, it is hereby
expressly agreed and stipulated by the parties hereto that Escrow Agent shall
not be required to exercise any discretion hereunder and shall have no
investment or management responsibility, and accordingly, shall have no duty to,
or liability for its failure to, provide investment recommendations or
investment advice to the Purchaser or Seller. It is the intention of the parties
hereto that Escrow Agent shall never be required to use, advance or risk its own
funds or otherwise incur financial liability in the performance of any of its
duties or the exercise of any of its rights and powers hereunder.
10. Resignation. The Escrow Agent may, at any time, resign hereunder by
giving written notice of its resignation to the other parties hereto, at their
address set forth herein at least ten (10) days prior to the date for such
resignation specified to take effect. Upon the effective date of such
resignation, the Escrowed Funds shall be delivered to such successor escrow
agent or other person as may be mutually designated in writing by both Purchaser
and Seller, whereupon all the Escrow Agent's obligations hereunder shall cease
and terminate. The Escrow Agent's sole responsibility until such termination
shall be to keep safely all Escrowed Funds and to deliver the same to a person
designated by the appropriate parties executing this Escrow Agreement or in
accordance with the directions of a final order or judgment of a court of
competent jurisdiction at which time of delivery, Escrow Agent's obligations
hereunder shall cease and terminate.
11. Indemnification. The parties jointly and severally agree to indemnify,
defend and hold the Escrow Agent harmless from and against any and all loss,
damage, tax, liability and expense that may be incurred by the Escrow Agent
arising out of or in connection with its acceptance or appointment as Escrow
Agent hereunder except for the negligence, willful misconduct or gross
negligence of Escrow Agent, or the failure of Escrow Agent to perform its
obligations as specified herein, including the legal costs and expenses of
defending itself against any claim or liability in
EXHIBIT "A" - Page 4 of 11
connection with its performance hereunder. IT IS THE EXPRESS INTENT OF EACH
Purchaser AND SELLER TO INDEMNIFY EACH OF THE INDEMNIFIED PARTIES FOR, AND HOLD
THEM HARMLESS AGAINST, THEIR OWN NEGLIGENT ACTS OR OMISSIONS.
12. Fees. The parties jointly and severally agree to pay the Escrow Agent
its fees for the services rendered pursuant to the provisions of this Escrow
Agreement in accordance with the Escrow Fee Schedule attached hereto as Schedule
B and will reimburse the Escrow Agent for reasonable expenses, including
reasonable attorney's fees incurred in connection with the negotiation, drafting
and performance of such services. Except where otherwise noted, this fee covers
account acceptance, set up and termination expenses; plus usual and customary
related administrative services such as safekeeping, investment and payment of
funds specified herein or in exhibits attached. Activities requiring excessive
administrator time or out-of-pocket expenses such as optional substitution of
collateral or securities shall be deemed extraordinary expenses for which
related costs, transaction charges, and additions fees will be billed at Escrow
Agent's standard charges for such items.
13. Lien. Escrow Agent is hereby given a lien on the Escrowed Funds for
all fees, expenses, taxes, indebtedness, and other financial obligations that
may become owing to Escrow Agent arising hereunder, including any indemnities
prescribed herein, which lien may be enforced by Escrow Agent without notice or
presentment by set-off or appropriate foreclosure proceedings. In all cases, any
unpaid fees may be deducted by Escrow Agent without prior notice before final
disbursement of the Escrowed Funds.
14. Disclaimer. The parties warrant to the Escrow Agent that there are no
federal, state or local tax liabilities or filing requirements whatsoever
concerning the Escrow Agent's actions contemplated hereunder and warrant and
represent to the Escrow Agent that the Escrow Agent has no duty to withhold or
file any report or any tax liability under any federal or state income tax,
local or state sales or use taxes, or any other tax by any taxing authority. The
parties hereto agree to jointly and severally indemnify the Escrow Agent fully
for any tax liability, penalties or interest incurred by the Escrow Agent
arising hereunder and agree to pay in full any such tax liability together with
penalty and interest if any is ultimately assessed against the Escrow Agent for
any reason as a result of its action hereunder (except for the Escrow Agent's
individual tax liability).
15. Force Majeure. Except for the negligence, willful misconduct or gross
negligence of Escrow Agent, the Escrow Agent shall have no liability for loss
arising from any cause beyond its control, including, but not limited to, the
following: (a) acts of God, force majeure, including, without limitation, war
(whether or not declared or existing), revolution, insurrection, riot, civil
commotion, accident, fire, explosion, stoppage of labor, strikes and other
differences with employees; (b) the act, failure or neglect of any agent or
correspondent selected by the Escrow Agent or the parties hereto; (c) any delay,
error, omission or default connected with the remittance of funds; (d) any
delay, error, omission or default of any mail, telegraph, cable or wireless
agency or operator; (e) the acts or edicts of any government or governmental
agency or other group or entity exercising
EXHIBIT "A" - Page 5 of 11
governmental powers. Escrow Agent is not responsible or liable in any manner
whatsoever for the sufficiency, correctness, genuineness or validity of the
subject matter of this Escrow Agreement or any part hereof or for the
transaction or transactions requiring or underlying the execution of this Escrow
Agreement, the form of execution hereof or for the identity or authority of any
person executing this Escrow Agreement or any part hereof or depositing the
Escrowed Funds.
16. Choice of Laws; Cumulative Rights. This Escrow Agreement shall be
governed by and construed in accordance with the domestic laws of the State of
New York without giving effect to any choice or conflict of law provision or
rule (whether of the State of New York or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State of
New York. Notwithstanding the foregoing, the parties irrevocably submit to the
jurisdiction of the United States District Court for the Western District of
Texas, El Paso Division, over any suit, action or proceeding arising out of or
in any way related to this Escrow Agreement. The parties irrevocably waive, to
the fullest extent permitted by law, any objection which either of them may have
to the laying of venue of any such suit, action or proceeding brought in any
such court, and any claim that such suit, action or proceeding brought in such
court has been brought in an inconvenient forum. It is the intention of the
parties that any suit, action or proceeding arising out of or in any way related
to this Escrow Agreement be brought only in the United States District Court for
the Western District of Texas, El Paso Division. In the event there does not
exist federal jurisdiction, then either party may bring any such suit, action or
proceeding in any court having jurisdiction. In the event that either party
shall not have appointed an agent for service of process in Texas, each party
agrees that it may be served with process by registered or certified mail,
postage prepaid, mailed to the addresses set forth in Section 24 hereof.
17. Taxpayer Indemnification. In addition, due to the requirement that all
trust accounts have Taxpayer Identification Numbers documented by appropriate
W-8 or W-9 Forms, failure to provide such forms to the account administrator
with 30 days of opening the account may prevent or delay final disbursement of
funds.
18. Funds Transfer. In the event funds transfer instructions are given
(other than in writing at the time of execution of this Escrow Agreement),
whether in writing, by telefax, or otherwise, the Escrow Agent is authorized to
seek confirmation of such instructions by telephone call-back to the person or
person designated on Schedule A hereto, and the Escrow Agent may rely upon the
confirmations of anyone purporting to be the person or persons so designated.
The persons and telephone numbers for call-backs may be changed only in writing
actually received and acknowledged by the Escrow Agent. The parties to this
Escrow Agreement acknowledge that such security procedure is commercially
reasonable.
It is understood that the Escrow Agent and the beneficiary's bank in
any funds transfer may rely solely upon any account numbers or similar
identifying number provided by either of the other parties hereto to identify
(i) the beneficiary, (ii) the beneficiary's bank, or (iii) an intermediary bank.
The Escrow Agent may apply any of the Escrowed Funds for any payment order it
executes using any such identifying number, even where its use may result in a
person other than
EXHIBIT "A" - Page 6 of 11
the beneficiary being paid, or the transfer of funds to a bank other than the
beneficiary's bank or an intermediary bank, designated.
19. Consultation with Legal Counsel. Escrow Agent may consult with its
counsel or other counsel satisfactory to it concerning any question relating to
its duties or responsibilities hereunder or otherwise in connection herewith and
shall not be liable for any action taken, suffered or omitted by it in good
faith upon the advice of such counsel.
20. Assignment. This Escrow Agreement shall not be assigned by either of
the Seller and Purchaser without the prior written consent of Escrow Agent (such
assigns of the Seller and Purchaser to which Escrow Agent consents, if any, and
Escrow Agent's assigns being hereinafter referred to collectively as "Permitted
Assigns").
21. Severability. If one or more of the provisions hereof shall for any
reason by held to be invalid, illegal or unenforceable in any respect under
applicable law, such invalidity, illegality or unenforceability shall not affect
any other provisions hereof, and this Escrow Agreement shall be construed as if
such invalid, illegal or unenforceable provision had never been contained
herein, and the remaining provisions hereof shall be given full force and
effect.
22. Termination. This Escrow Agreement shall terminate upon the
disbursement, in accordance with Sections 5 or 10 hereof, of the Escrowed Funds
in full; provided, however, that in the event all fees, expenses, costs and
other amounts required to be paid to Escrow Agent hereunder are not fully and
finally paid prior to termination, the provisions of Section 12 hereof shall
survive the termination hereof and, provided further, that the last two
sentences of Section 8 hereof and the provisions of Section 11 hereof shall, in
any event, survive the termination hereof.
23. General. The section headings contained in this Escrow Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Escrow Agreement. This Escrow Agreement and any
affidavit, certificate, instrument, agreement or other document required to be
provided hereunder may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which taken together shall constitute
but one and the same instrument. Unless the context shall otherwise require, the
singular shall include the plural and vice-versa, and each pronoun in any gender
shall include all other genders. The terms and provisions of this Escrow
Agreement constitute the entire agreement among the parties hereto in respect of
the subject matter hereof, and neither the Seller, Purchaser nor the Escrow
Agent has relied on any representations or agreements of the other, except as
specifically set forth in this Escrow Agreement. This Escrow Agreement or any
provision hereof may be amended, modified, waived or terminated only be written
instrument duly signed by the parties hereto. This Escrow Agreement shall inure
to the benefit of, and be binding upon, the parties hereto and their respective
heirs, devisees, executors, administrators, personal representatives,
successors, trustees, receivers and Permitted Assigns. This Escrow Agreement is
for the sole and exclusive benefit of the Seller, Purchaser and the Escrow
Agent, and nothing in this Escrow Agreement, express or implied, is intended to
confer or shall be
EXHIBIT "A" - Page 7 of 11
construed as conferring upon any other person any rights, remedies or any other
type or types of benefits.
24. Notices and Instructions. All notices and instructions ("Notices")
provided for or permitted hereunder shall be in writing and shall be deemed
given if delivered personally (including delivery by an express delivery service
or by facsimile transmission during the recipient's regular business hours) or
mailed, by certified or registered mail, return receipt requested, with postage
prepaid, and addressed to the parties hereto as follows:
If to Seller:
Xxxxxxx Communications I, Ltd.
0000 Xxxxxxxxxx
Xx Xxxx, Xxxxx 00000
Attention: L. Xxxxxxxxx Xxxxxxx
Telephone: (000) 000-0000
Telefax: (000) 000-0000
With a copy to:
Scott, Hulse, Marshall, Feuille,
Finger & Xxxxxxxx, P.C.
100 Chase Tower, 000 X. Xxxx
Xx Xxxx, Xxxxx 00000
Attention: W. Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Telefax: (000) 000-0000
If to Purchaser:
Aquis Communications, Inc.
0000X Xxxxx 00, Xxxxx 000
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxx X. Xxxxxxxx, President
Telephone: (000) 000-0000
Telefax: (000) 000-0000
EXHIBIT "A" - Page 8 of 11
With a copy to:
Xxxxxxxx Xxxxx Xxxxxxxx Xxxx & Ballon LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx Xxxxxx, Esq.
Telephone: (000) 000-0000
Telefax: (000) 000-0000
If to Escrow Agent:
Chase Bank of Texas, National Association
X.X. Xxx 000
Xx Xxxx, Xxxxx 00000
Attention: Corporate Trust
Phone: (000) 000-0000
Fax: _________________
Any such Notice shall be effective upon receipt. Any party may change its
address and facsimile number for the purpose of notice by giving notice in
accordance with the provisions of this Section 24.
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EXHIBIT "A" - Page 9 of 11
IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement
as of the day and year first above written.
SELLER:
XXXXXXX COMMUNICATIONS I, LTD.
By: Xxxxxxx Communications Texas, Inc.
Its: General Partner
By: /s/ L. Xxxxxxxxx Xxxxxxx
------------------------------------
L. Xxxxxxxxx Xxxxxxx
Its: President
PURCHASER:
AQUIS COMMUNICATIONS, INC.
By: /s/ Xxxx X. Xxxxxxxx
------------------------------------------
Its: PRESIDENT
------------------------------------------
ESCROW AGENT:
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
By: /s/ Xxxx Xxxxxx
------------------------------------------
Its: XXXXX XXXXXX
VICE PRESIDENT
------------------------------------------
EXHIBIT "A" - Page 10 of 11
SCHEDULE A
Telephone Number(s) for Call-Backs and Person(s)
Designated to Confirm Funds Transfer Instructions
If to Seller:
Name Telephone Number
---- ----------------
1. L. Xxxxxxxxx Xxxxxxx (000) 000-0000
2. Xxxxx Xxxxxxx (000) 000-0000
If to Purchaser:
Name Telephone Number
---- ----------------
1. Xxxx X. Xxxxxxxx (000) 000-0000
2. Xxxxx Xxxxxxxx (000) 000-0000
Telephone call-backs shall be made to each of Seller and Purchaser if joint
instructions are required pursuant to the Agreement.
EXHIBIT "A" - Page 11 of 11
