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EXHIBIT 10(b)
ESCROW AGREEMENT
THIS ESCROW AGREEMENT, dated as of June 5, 1997 (including the
exhibits and schedules attached hereto, this "Agreement"), is by and among
INTERCEL, INC., a Delaware corporation (the "Seller"), THE XXXX ALTERNATIVE
INCOME FUND, L.P., a Delaware limited partnership (the "Purchaser"), and BANKERS
TRUST COMPANY, a New York banking corporation (the "Escrow Agent").
WITNESSETH:
WHEREAS, the Purchaser and the Seller have entered into a
Stock Purchase Agreement, dated as of May 23, 1997 (including the exhibits,
annexes, schedules and attachments thereto, the "Purchase Agreement;" terms not
otherwise defined herein being used as defined therein), pursuant to which the
Purchaser has agreed to purchase from the Seller, and the Seller has agreed to
sell to the Purchaser, the Shares;
WHEREAS, it is contemplated under the Purchase Agreement that
the Purchaser will deposit or cause to be deposited into escrow the sum of
$22,500,000 in cash (the "Escrow Amount") and the Seller shall deposit into
escrow a certificate or certificates representing 50,000 shares (the "Shares")
of Series C Preferred Stock (collectively, the "Certificate"), each to be held
and disbursed by the Escrow Agent in accordance with this Agreement;
WHEREAS, the Seller and the Purchaser currently contemplate
that the Seller will offer certain high yield debt obligations pursuant to a
Confidential Offering Memorandum, a draft of which (dated as of May 20, 1997)
has been delivered by the Seller to the Purchaser (the "Debt Offering
Memorandum"); and
WHEREAS, the Purchaser and the Seller desire to appoint the
Escrow Agent as escrow agent for the purpose of receiving, holding and
distributing the Escrow Fund (as defined below) and the Certificate, and the
Escrow Agent is willing to act as the Escrow Agent subject to and in accordance
with the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
agreements contained herein, and intending to be legally bound hereby, the
parties hereby agree as follows:
1. Appointment and Agreement of Escrow Agent. The Purchaser
and the Seller hereby appoint the Escrow Agent to serve as, and the Escrow Agent
hereby agrees to act as, escrow agent upon the terms and conditions of this
Agreement.
2. Establishment of the Escrow Fund. (a) Pursuant to Section
2.4 of the Purchase Agreement, the Purchaser shall deliver to the Escrow Agent
on the date hereof the Escrow Amount and the Seller shall deliver to the Escrow
Agent on the date hereof the
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Certificate, together with the instruction notice in the form attached hereto as
Exhibit A. The Escrow Agent shall hold the Escrow Amount and all interest and
other amounts earned thereon (the "Escrow Fund") and the Certificate in escrow
pursuant to this Agreement.
(b) Each of the Purchaser and the Seller confirms to the
Escrow Agent and to each other that the Escrow Fund and the Certificate are free
and clear of all Encumbrances except as may be created by this Agreement and the
Purchase Agreement.
3. Distributions from the Escrow Fund. (a) Upon execution and
delivery of this Agreement, the Seller and the Purchaser shall deliver to the
lead placement agent under the Debt Offering Memorandum a written notice that
the Escrow Amount and the Certificate have been delivered to the Escrow Agent
pursuant to this Agreement. Furthermore, such notice shall provide that, upon
the delivery by the Seller and the lead placement agent of confirmation of the
closing of the Debt Offering provided for in Section 3(b) below, the Escrow
Agent will disburse the proceeds of the Escrow Fund to the Seller and deliver
the Certificate to the Purchaser in accordance with this Section 3. At least one
full Business Day prior to the Proposed Offering Closing Date (as defined in the
Joint Notice), the Seller and the Purchaser shall deliver written notice to the
Escrow Agent substantially in the form attached hereto as Exhibit B with the
blanks properly filled in (the "Joint Notice"), and the Escrow Agent shall, as
promptly as practicable thereafter (and in any event, in time to enable the
Escrow Agent to transfer the proceeds of the Escrow Fund on the Proposed
Offering Closing Date as set forth in Section 3(b) below, unless the Escrow Fund
is invested in a vehicle other than the BT Institutional Cash Management Fund),
liquidate all investments in the Escrow Fund.
(b) On or before the Proposed Offering Closing Date, the
Seller shall deliver a list of persons who will be authorized to give the
Placement Agent Confirmation (as defined below) to the Escrow Agent pursuant to
the next sentence. Unless the Escrow Agent receives the notice described in
Section 3(c) below after the Escrow Agent receives the Joint Notice, the Escrow
Agent shall, as promptly as practicable after its receipt of confirmation from
the Seller and the lead placement agent (the "Placement Agent Confirmation")
under the Debt Offering Memorandum (which the parties agree may be telephonic or
otherwise) to the effect that all of the conditions to closing of the Debt
Offering and delivery to the Seller of a minimum of an aggregate of $100 million
in gross proceeds therefrom have either been satisfied or waived (other than a
waiver of the impending delivery to the Seller of such proceeds), with the sole
exception of disbursement of the Escrow Fund to the Seller and delivery of the
Certificate to the Purchaser (and, therefore, that such placement agent then
controls the delivery of proceeds from the Debt Offering to the Seller), the
Escrow Agent shall: (i) pay in full to the Seller in immediately available funds
all amounts as shall have been received upon the liquidation of such investments
(and any and all other amounts then on deposit in the Escrow Fund) by wire
transfer to the Seller's account indicated in the Joint Notice; (ii)
contemporaneous with such delivery of funds to the Seller, deliver the
Certificate to the Purchaser at the address set forth in the Joint Notice via
overnight delivery service; and (iii) immediately after accomplishing the items
set forth in (i) and (ii) hereof, provide the Seller and the lead placement
agent under the Debt Offering Memorandum with written notice in the form
attached hereto as Exhibit C.
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(c) The parties acknowledge and agree that the terms of the
Purchase Agreement provide that the Purchaser may elect to proceed with the
disbursement of the Escrow Fund proceeds to the Seller and delivery of the
Certificate to the Purchaser even though the Debt Offering fails to close on or
before June 30, 1997. In the event that the Debt Offering fails to close on or
before such date, the parties agree that the Purchaser may, before the
expiration of the five Business Day period referenced in Section 8.1(c) of the
Purchase Agreement, deliver notice to the Escrow Agent (and a copy thereof to
the Seller) of the Purchaser's election to proceed to consummate the sale and
purchase of the Shares in accordance with the provisions of Section 8.1(c) of
the Purchase Agreement. Such notice shall be in the form attached hereto as
Exhibit D. In such event, the Escrow Agent shall, as promptly as practicable
after receipt of the Purchaser's notice pursuant to this Section 3(c), liquidate
all investments in the Escrow Fund and comply with the provisions of clauses (i)
and (ii) of Section 3(b) above and immediately after accomplishing the items set
forth in (i) and (ii) above, provide the Seller and the Purchaser with written
notice in the form attached hereto as Exhibit C.
(d) Upon the termination of the Purchase Agreement, the Seller
or the Purchaser shall notify the Escrow Agent in writing to such effect, and
the Escrow Agent shall, as promptly as practicable after its receipt of such
notice: (i) liquidate all investments in the Escrow Fund and pay in full to the
Purchaser in immediately available funds all such amounts as shall be received
upon the liquidation of such investments (and any and all other amounts then on
deposit in the Escrow Fund); and (ii) return the Certificate to the Seller.
4. Maintenance of the Escrow Fund and Certificate;
Termination of the Escrow Fund. (a) The Escrow Agent shall continue to maintain
the Escrow Fund and hold the Certificate until the earlier of (i) the time at
which the Escrow Fund is disbursed and the Certificate is delivered in
accordance with Section 3 and (ii) the termination of this Agreement.
(b) Unless otherwise directed in writing signed by both the
Seller and the Purchaser, the Escrow Agent shall invest and reinvest moneys on
deposit in the Escrow Fund only in the BT Institutional Cash Management Fund.
Notwithstanding the foregoing, the Escrow Agent shall have the power to
sell or liquidate the foregoing investments whenever the Escrow Agent shall be
required to release all or any portion of the Escrow Fund pursuant to Section 3
hereof. The Escrow Agent shall not have any liability for any loss suffered as a
result of any investment made as provided above, any liquidation of any such
investment prior to its maturity, or the failure of any authorized person of the
Seller and the Purchaser to give the Escrow Agent any written instruction to
invest or reinvest the Escrow Fund or any earnings thereon.
5. Assignment; Successors. This Agreement may not be assigned
by operation of Law or otherwise without the express written consent of the
other parties hereto (which consent may be granted or withheld in the sole
discretion of such other parties); provided, however, that the Purchaser may,
without the consent of the other parties, assign this Agreement prior to the
disbursement of the Escrow Fund and delivery of the Certificate pursuant to
Section 3 above to Purchaser or to an entity controlled by Purchaser to which
the Purchaser has assigned any of its rights under the Purchase Agreement, but
no such assignment shall
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relieve the Purchaser of any of its obligations under this Agreement. This
Agreement shall be binding upon and inure solely to the benefit of the parties
hereto and their permitted assigns.
6. Escrow Agent. (a) Except as expressly contemplated by
this Agreement or by joint written instructions from the Purchaser and the
Seller, the Escrow Agent shall not sell, transfer or otherwise dispose of in any
manner all or any portion of the Escrow Fund or the Certificate, except pursuant
to an order of a court of competent jurisdiction.
(b) The duties and obligations of the Escrow Agent shall be
determined solely by this Agreement, and the Escrow Agent shall not be liable
except for the performance of such duties and obligations as are specifically
set forth in this Agreement. The Escrow Agent shall neither be responsible for
or under, nor chargeable with knowledge of the terms and conditions of, any
other agreement, instrument or document in connection herewith, including but
not limited to the Purchase Agreement.
(c) In the performance of its duties hereunder, the Escrow
Agent shall be entitled to rely upon any document, instrument or signature
believed by it in good faith to be genuine and signed by any party hereto or an
authorized officer or agent thereof, and shall not be required to investigate
the truth or accuracy of any statement contained in any such document or
instrument. The Escrow Agent may assume that any Person purporting to give any
notice in accordance with the provisions of this Agreement has been duly
authorized to do so. The Escrow Agent shall have no responsibility for the
contents of any such writing contemplated herein and may conclusively rely
without any liability upon the contents thereof.
(d) The Escrow Agent shall not be liable for any error of
judgment, or any action taken, suffered or omitted to be taken, hereunder except
in the case of its gross negligence, bad faith or willful misconduct. The Escrow
Agent may consult with counsel of its own choice and shall have full and
complete authorization and protection for any action taken or suffered by it
hereunder in good faith and in accordance with the opinion of such counsel.
(e) The Escrow Agent shall have no duty as to the collection
or protection of the Escrow Fund or income thereon or the Certificate, nor as to
the preservation of any rights pertaining thereto, beyond the safe custody of
any such property actually in its possession.
(f) As compensation for its services to be rendered under this
Agreement, for each year or any portion thereof, the Escrow Agent has received a
fee from the Seller in the amount specified in Schedule A to this Agreement and
such payment and receipt thereof by the Escrow Agent is hereby acknowledged by
the Escrow Agent. The Escrow Agent shall also be reimbursed upon request for all
expenses, disbursements and advances, including reasonable fees of outside
counsel, if any, incurred or made by it in connection with the preparation of
this Agreement and the carrying out of its duties under this Agreement. All such
fees and expenses shall be the responsibility of the Seller.
(g) To the extent that the Escrow Agent becomes liable for the
payment of taxes, including withholding taxes, in respect of income derived from
the investment of funds held hereunder and/or possession of the Certificate or
any payment made hereunder, the Escrow
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Agent may pay such taxes. The Escrow Agent may withhold from any payment of
monies held by it hereunder such amount, as directed by the Seller and the
Purchaser in writing, to be sufficient to provide for the payment of such taxes
not yet paid, and may use the sum withheld for that purpose. The Escrow Agent
shall be indemnified by the Seller and held harmless against any liability for
taxes and for any penalties or interest in respect of taxes on such investment
income and/or with respect to the possession of the Certificate or payments in
the manner provided in Section 6(h). Each of the Seller and the Purchaser shall
furnish to Escrow Agent such information as may be reasonably requested by the
Escrow Agent so that the Escrow Agent may prepare and file with the Internal
Revenue Service any required tax reports.
(h) The Seller shall reimburse and indemnify the Escrow Agent
its employees, directors, officers and agents for, and hold each harmless
against, any loss, liability or expense, including, without limitation,
reasonable attorneys' fees, incurred without gross negligence, bad faith or
willful misconduct on the part of the Escrow Agent arising out of, or in
connection with the acceptance of, or the performance of, its duties and
obligations under this Agreement; provided that the Purchaser shall reimburse
and indemnify the Escrow Agent for, and hold it harmless against, any such loss,
liability or expense incurred as a result of gross negligence, bad faith or
willful misconduct on the part of the Purchaser. Promptly after the receipt by
the Escrow Agent of notice of any demand or claim or the commencement of any
action, suit or proceeding, the Escrow Agent shall, if a claim in respect
thereof is to be made against any of the other parties hereto, notify such other
parties thereof in writing; but the failure by the Escrow Agent to give such
notice shall not relieve such party from any liability which it may have to the
Escrow Agent hereunder, except to the extent such indemnifying party is
materially prejudiced by such failure. For the purposes hereof, the term
"expense or loss" shall include all amounts paid or payable to satisfy any
claim, demand or liability, or in settlement of any claim, demand, action, suit
or proceeding settled with the express written consent of the indemnifying
party, and all reasonable costs and expenses, including, but not limited to,
counsel fees and disbursements paid or incurred in investigating or defending
against any such claim, demand, action, suit or proceeding. The Escrow Agent
shall have no right of setoff under this Agreement or otherwise against amounts
in the Escrow Fund or against the Certificate.
(i) The Escrow Agent may at any time resign by giving twenty
Business Days' prior written notice of resignation to the Seller and the
Purchaser. The Seller and the Purchaser may at any time jointly remove the
Escrow Agent by giving ten Business Days' prior written notice signed by each of
them to the Escrow Agent. If the Escrow Agent shall resign or be removed, a
successor Escrow Agent, which shall be a bank or trust company having assets in
excess of $2 billion, shall be appointed by the Seller and the Purchaser by
written instrument executed by the Seller and the Purchaser and delivered to the
Escrow Agent and to such successor Escrow Agent and, thereupon, the resignation
or removal of the predecessor Escrow Agent shall become effective and such
successor Escrow Agent, without any further act, deed or conveyance, shall
become vested with all right, title and interest to all cash and property held
hereunder of such predecessor Escrow Agent, and such predecessor Escrow Agent
shall, on the written request of the Seller, the Purchaser or the successor
Escrow Agent, execute and deliver to such successor Escrow Agent all the right,
title and interest hereunder in and to the Escrow Fund and the Certificate of
such predecessor Escrow Agent and all other rights hereunder of such predecessor
Escrow Agent. If no successor Escrow Agent shall have been appointed within
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twenty Business Days of a notice of resignation by the Escrow Agent, the Escrow
Agent's sole responsibility shall thereafter be to hold the Escrow Fund and the
Certificate until its receipt of designation of a successor Escrow Agent, and
the Escrow Agent shall be entitled to apply to a court of competent jurisdiction
for the appointment of a successor. Upon its resignation and delivery of the
Escrow Fund and the Certificate as set forth above, the Escrow Agent shall be
discharged from any and all further obligations arising in connection with the
escrow contemplated by this Agreement.
7. Termination. This Escrow Agreement shall terminate
on the date on which there is no property remaining in the Escrow Fund and the
Certificate has been delivered or returned in accordance with Section 3;
provided that the rights of the Escrow Agent and the other parties hereto under
Section 6 shall survive the termination hereof and the resignation or removal of
the Escrow Agent; provided further that nothing herein shall relieve any party
from liability for any breach of this Agreement.
8. Further Assurances. From time to time on and after
the date hereof, the other parties hereto shall deliver or cause to be delivered
to the Escrow Agent such further documents and instruments and shall do and
cause to be done such further acts as the Escrow Agent shall reasonably request
(it being understood that the Escrow Agent shall have no obligation to make any
such request) to carry out more effectively the provisions and purposes of this
Agreement, to evidence compliance herewith or to secure itself that it is
protected in acting hereunder.
9. Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given or made
(and shall be deemed to have been duly given or made upon receipt) by delivery
in person, by courier service, by telecopy or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties at the
following addresses (or at such other address for a party as shall be specified
in a notice given in accordance with this Section 9):
(a) if to the Seller:
InterCel, Inc.
0000 X.X. Xxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxx X. Xxxxx, Xx.
with a copy (which shall not constitute notice) to:
Xxxxxx Xxxxxxx Xxxxx & Xxxxxxxxxxx, L.L.P.
000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxx, Esq.
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(b) if to the Purchaser:
The Xxxx Alternative Income Fund, L.P.
00 Xxxx Xxxxx
Xxxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: General Partner
with a copy (which shall not constitute notice) to:
Proskauer Xxxx Xxxxx & Xxxxxxxxxx LLP
0000 Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
(c) if to the Escrow Agent, to:
Bankers Trust Company
0 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Corporate Trust and Agency Group
with a copy (which shall not constitute notice) to:
LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxx, Esq.
(d) if to the lead placement agent under the Debt
Offering Memorandum to:
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx Xxxxxxxxxx
The parties acknowledge and agree that the identity and address of the
lead placement agent under the Debt Offering Memorandum are subject to change
solely upon the delivery of notice by the Seller to the parties hereto of such
change.
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10. Headings. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
11. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic and legal
substance of the transactions contemplated by this Agreement is not affected in
any manner materially adverse to any party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the transactions contemplated by this Agreement
are consummated as originally contemplated to the greatest extent possible.
12. Entire Agreement. This Agreement and the Purchase
Agreement constitute the entire agreement of the parties hereto with respect to
the subject matter hereof and supersede all prior agreements and undertakings,
both written and oral, among the Seller, the Purchaser and the Escrow Agent with
respect to the subject matter hereof.
13. No Third Party Beneficiaries. This Agreement is for the
sole benefit of the parties hereto and their permitted assigns and nothing
herein, express or implied, is intended to or shall confer upon any other Person
any legal or equitable right, benefit or remedy of any nature whatsoever under
or by reason of this Agreement.
14. Amendment. This Agreement may not be amended or modified
except: (i) by an instrument in writing signed by, or on behalf of, the Seller,
the Purchaser and the Escrow Agent; or (ii) by a waiver in accordance with
Section 15 of this Agreement.
15. Waiver. Any party hereto (the "Waiving Party") may: (i)
extend the time for the performance of any obligation or other act of any other
party hereto owed to the Waiving Party; or (ii) waive compliance with any
agreement or condition contained herein (it being understood and agreed that
such an extension or waiver shall not constitute, by itself, an extension or
waiver by any other party hereto of any such obligation, act, agreement or
condition owed to, or for the benefit of, such third party). Any such extension
or waiver shall be valid only if set forth in an instrument in writing signed by
the party or parties to be bound thereby. Any waiver of any term or condition
shall not be construed as a waiver of any subsequent breach or a subsequent
waiver of the same term or condition, or a waiver of any other term or
condition, of this Agreement. The failure of any party to assert any of its
rights hereunder shall not constitute a waiver of any of such rights.
16. Governing Law. This Agreement shall be governed by the
laws of the State of New York. All actions and proceedings arising out of or
relating to this Agreement shall be heard and determined in any New York state
or federal court sitting in the City of New York, and the parties hereto
irrevocably submit to the jurisdiction of such courts and waive any defense of
an inconvenient forum to the maintenance of any such action or proceeding.
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17. Counterparts. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
when taken together shall constitute one and the same agreement.
(SIGNATURES BEGIN ON NEXT PAGE)
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IN WITNESS WHEREOF, the parties hereto have caused this Escrow
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
INTERCEL, INC.
By: /s/ Xxxxx X. Xxxxx
-----------------------
Name:
Title:
THE XXXX ALTERNATIVE INCOME
FUND, L.P.
By: WRH PARTNERS, L.L.C.,
General Partner
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Attorney-in-Fact
BANKERS TRUST COMPANY
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------
Name:
Title:
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