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Exhibit 99(c)(3)
ANNEX B
ESCROW AGREEMENT
THIS ESCROW AGREEMENT is entered into this 19th day of
October, 1999, by and among, Telesciences, Inc., a Delaware corporation (the
"Company"), EDB Business Partner ASA, a Norwegian public limited company
("Parent"), EDB 4Tel Acquisition Corp., a Delaware corporation and a wholly
owned subsidiary of Parent ("Purchaser") and First Union National Bank (the
"Escrow Agent").
BACKGROUND
A. Pursuant to an Agreement and Plan of Merger dated October 19, 1999
("Agreement and Plan of Merger"), Parent has agreed to cause Purchaser to make a
cash tender offer (the "Offer") for all of the issued and outstanding shares of
Common Stock of the Company (the "Shares") and thereafter to cause Purchaser to
merge with and into the Company.
B. Pursuant to the Agreement and Plan of Merger, Purchaser has agreed
to deposit in escrow a sufficient amount of funds (the "Deposit") necessary to
(i) make the cash payments contemplated by Section 1.01(a) of the Agreement and
Plan of Merger to purchase all of the Shares tendered in the Offer (the "Tender
Payment"), (ii) make the cash payments contemplated by Section 2.08 of the
Agreement and Plan of Merger with respect to the settlement of the options to
purchase Shares granted by the Company, and (iii) redeem the outstanding shares
of Series A Preferred Stock of the Company for cash in accordance with the terms
of the Certificate of Designation of Preferences and Rights of the Series A
Preferred Stock (the "Preferred Stock Redemption").
C. Company, Parent, Purchaser and Escrow Agent wish to provide for the
appointment of an escrow agent to hold the Deposit, and to set forth the terms
and conditions under which the Deposit shall be disbursed.
NOW, THEREFORE, in consideration of the mutual promises and
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, and intending to be
legally bound, the parties hereto agree as follows:
1. DEFINITIONS.
Capitalized terms not otherwise defined herein which are
defined in the Agreement and Plan of Merger shall have the meanings given in the
Agreement and Plan of Merger, a complete and correct copy of which has been
delivered to the Escrow Agent by the Company, Parent and Purchaser.
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2. CREATION OF ESCROW.
2.1 ESCROW. Company, Parent and Purchaser hereby designate and appoint
First Union National Bank as Escrow Agent to serve in accordance with the terms
and conditions of this Escrow Agreement, and First Union National Bank agrees to
act as such Escrow Agent upon the terms and conditions of this Escrow Agreement.
2.2 ESCROWED FUNDS. Purchaser agrees to deliver to Escrow Agent, in
accordance with Section 1.01(b) of the Agreement and Plan of Merger, the Deposit
in the amount of Thirteen Million Six Hundred and Fifty-Five Thousand Four
Hundred and Forty-Five Dollars ($13,655,445). Such funds plus all interest
earned thereon, less the fees and expenses of Escrow Agent chargeable thereto
under Section 4.2 hereof, are hereinafter collectively called the "ESCROWED
FUNDS." Until released as set forth herein, Escrow Agent shall hold the Escrowed
Funds in escrow hereunder.
2.3 INVESTMENT OF ESCROWED FUNDS. Pending release from escrow, the
Escrow Funds shall be invested and reinvested by Escrow Agent in any money
market fund substantially all of which is invested in the following investment
categories, including any money market fund managed by Escrow Agent and any of
its affiliates: direct obligations of the United States of America or
obligations the principal interest of and the interest on which are
unconditionally guaranteed by the United States of America; certificates of
deposit issued by any bank, bank and trust company, or national banking
association (including Escrow Agent and its affiliates), which certificates of
deposit are insured by the Federal Deposit Insurance Corporation or similar
governmental agency; or repurchase agreements with any bank, trust company, or
national banking association (including Escrow Agent and its affiliates); or in
such other investments as are approved by Company and Purchaser.
2.4 STATEMENT OF ACCOUNTS. From time to time upon the written request
of Company, Parent or Purchaser, and upon termination of this Escrow Agreement,
Escrow Agent shall furnish to Company, Parent and Purchaser a statement of
account of the Escrowed Funds.
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3. RELEASE OF ESCROWED FUNDS.
3.1 RELEASE OF ESCROWED FUNDS IN ACCORDANCE WITH JOINT INSTRUCTIONS.
From time to time, Xxxxxxx Xxxx or such other person as shall be designated by
Xxxxxxx Xxxx, on behalf of Purchaser ("Purchaser's Representative"), and Xxxxxx
Xxxxxxx or such other person as shall be designated by Xxxxxx Xxxxxxx, on behalf
of Company ("Company's Representative"), may jointly deliver signed written
instructions to Escrow Agent specifying that all or a designated portion of the
Escrowed Funds shall be released from escrow in the manner and to the persons
specified in such instructions. No portion of the Escrowed Funds shall be paid
to any person except as directed by such joint written instructions or by a
court of competent jurisdiction. If Shares are accepted for payment in the Offer
in accordance with the terms thereof, the Purchaser and Company shall give joint
written instructions to the Escrow Agent to pay over (i) to the paying agent
identified on the letter of transmittal sent to Company's stockholders in
connection with the Offer, promptly after Shares are accepted for payment in the
Offer, the amount of the Tender Payment (ii) to Company, promptly after Shares
are accepted for payment in the Offer, the amount necessary to effectuate the
Preferred Stock Redemption and (iii) to the Exchange Agent, no later than one
business day prior to the Effective Time, the balance of the Escrowed Funds to
be held in the Payment Fund. If the Agreement and Plan of Merger is terminated
in accordance with its terms without any Shares having been accepted for
purchase in the Offer, and neither the Purchaser nor Parent is in breach of the
Agreement and Plan of Merger, promptly thereafter, the Purchaser and Company
shall give joint written instructions to the Escrow Agent to pay over the
Escrowed Funds to Parent.
3.2 RELEASE OF ESCROWED FUNDS - TERMINATION. This Escrow Agreement
shall terminate upon release of all of the Escrowed Funds pursuant to Section
3.1 above. Upon the release of all of the Escrowed Funds, Escrow Agent shall be
released and forever discharged of any liabilities and duties hereunder.
3.3 LIQUIDATION OF INVESTMENT; PAYMENT. Escrow Agent shall, as
necessary, liquidate investments and release amounts from the Escrowed Funds as
expressly provided in this Escrow Agreement. Payments by Escrow Agent shall be
made by delivery of bank check, or, at the option of the recipient, by wire
transfer of immediately available funds to a bank account designated by the
recipient.
3.4 TAXES. Purchaser is entitled to the interest earned on the Escrowed
Funds and for federal, state and local tax purposes shall include the income or
interest earned or payable on the Escrowed Funds in its gross income. The
employer identification number of Purchaser is ______________.
4. ESCROW AGENT.
4.1 LIMITATION OF LIABILITY. Escrow Agent will not be bound by the
Agreement and Plan of Merger or by any other agreement between the parties
hereto, to which Escrow Agent is not a party, whether or not it has knowledge
thereof, and will be required only to retain, invest,
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collect and disburse income from and deliver the Escrowed Funds, as herein
provided. Escrow Agent will not in any way be required to determine whether or
not the terms and conditions of the Agreement and Plan of Merger have been
complied with by the parties. Escrow Agent's duties are only such as are
specifically provided herein and are administrative, not discretionary. Escrow
Agent shall incur no liability whatsoever to Company, Parent or Purchaser except
for gross negligence or wilful misconduct. Escrow Agent shall have no
responsibility hereunder other than to follow faithfully the instructions herein
contained or such further supplemental instructions as Company and Purchaser may
collectively provide. Escrow Agent shall not be subject to liability with
respect to losses suffered from investment of funds in the Escrowed Funds,
except for the safekeeping of the securities in which said funds are invested
and collection of interest thereon. Escrow Agent may consult with counsel and
shall be fully protected in any action taken in good faith in accordance with
such advice. Escrow Agent shall be fully protected in acting in accordance with
any written instructions given to it hereunder and reasonably believed by it to
have been executed by the proper parties. Escrow Agent shall not be liable for
interest on the Escrowed Funds except as provided herein.
4.2 FEES AND EXPENSES. The Escrow Agent shall charge a fee for its
services hereunder as set forth in SCHEDULE I hereto, Parent and Purchaser
jointly and severally agree to pay all reasonable expenses of Escrow Agent,
including its attorney's fees and expenses, which it may incur in connection
with the performance of its duties under this Escrow Agreement or under the
indemnity provided in Section 4.7. To the extent not otherwise so paid, such
fees and expenses will be chargeable to the Escrowed Funds in existence when the
fees are earned or the expense incurred. Escrow Agent shall notify Company and
Purchaser of the amount to be chargeable pursuant to the preceding sentence, but
shall not be required to collect such amount from Parent or Purchaser; provided
that the failure of Escrow Agent to collect such amount shall not relieve Parent
or Purchaser of their obligations to pay such amounts, which obligations may be
enforced by Company.
4.3 SUCCESSOR ESCROW AGENT. Escrow Agent may resign at any time by
giving written notice thereof to Company and Purchaser and may be removed at any
time by Company and Purchaser giving joint written notice thereof to Escrow
Agent; PROVIDED, HOWEVER, that any such resignation or removal shall not become
effective until a successor escrow agent shall have been appointed as provided
herein and shall have accepted such appointment in writing upon the resignation
or removal of Escrow Agent. A successor Escrow Agent will be appointed by joint
agreement of Company and Purchaser; PROVIDED, HOWEVER, that in the event no
successor Escrow Agent is appointed by mutual agreement of Company and Purchaser
within ten days after such resignation or removal, Company shall promptly
appoint the successor Escrow Agent, which successor shall be a bank or trust
company organized under the laws of the United States having reported capital
and surplus of not less than $100,000,000. Any such successor escrow agent shall
deliver to Escrow Agent, Company and Purchaser a written instrument accepting
such appointment hereunder, and thereupon it shall succeed to all of the rights,
powers and duties of Escrow Agent hereunder and shall be entitled to receive and
hold all of the then remaining amounts held in escrow hereunder. Pending the
appointment of the successor Escrow Agent, Escrow Agent shall only be
responsible for continuing to hold and invest the Escrowed Funds
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pursuant to the terms of this Escrow Agreement. If an instrument of acceptance
by a successor escrow agent shall not have been delivered to Escrow Agent within
30 days after the giving of such notice of resignation, the resigning Escrow
Agent or Company or Purchaser, may at the expense of Company and Purchaser,
petition any court of competent jurisdiction for the appointment of a successor
escrow agent.
4.4 DISPUTES. It is understood and agreed that, should any dispute
arise with respect to the payment and/or ownership or right of possession of the
Escrowed Funds, Escrow Agent is authorized and directed to retain in its
possession, without liability to anyone, all or any part of the Escrowed Funds
until such dispute shall have been settled either by mutual agreement by the
parties concerned or by the final order, decree or judgment of a court or other
tribunal of competent jurisdiction in the United States of America and time for
appeal has expired and no appeal has been perfected as so certified by the
parties. Escrow Agent shall be under no duty whatsoever to institute or defend
any such proceedings.
4.5 ESCROW AGENT NOT REQUIRED TO INSTITUTE ACTION. Escrow Agent shall
not be required to institute or defend, except in the case of Escrow Agent's
wilful misconduct or gross negligence, any action or legal process involving any
matter referred to herein which in any manner affects it or its duties or
liabilities hereunder. In the event Escrow Agent shall institute or defend any
such action or legal process, it shall do so only upon receiving full indemnity
in an amount and of such character as it shall require, against any and all
claims, liabilities, judgments, attorneys' fees and other expenses of every kind
in relation thereto, except in the case of its own wilful misconduct or gross
negligence.
4.6 INTERPLEADER. If any two parties, whether or not they are parties
to this Escrow Agreement, shall be in disagreement about the interpretation of
this Escrow Agreement, or about the rights and obligations, or the propriety, of
any action contemplated by Escrow Agent hereunder, or if any other dispute shall
arise hereunder, or if Escrow Agent otherwise has any doubts as to the proper
disposition of funds or any execution of any of its duties hereunder, Escrow
Agent may, at its sole discretion, file an action in interpleader to resolve
such disagreement in any Delaware State court, or any Federal Court of the
United States of America, sitting in Delaware. Escrow Agent shall be indemnified
for all costs, including reasonable attorneys' fees and expenses, and shall be
fully protected in suspending all or part of its activities under this Escrow
Agreement until a final judgment in the interpleader action is received.
4.7 INDEMNIFICATION. Company, Parent and Purchaser, jointly and
severally, shall hold Escrow Agent harmless and indemnify Escrow Agent against
any loss, liability, expenses (including attorney's fees and expenses), claim or
demand arising out of or in connection with the performance of its obligations
in accordance with the provisions of this Escrow Agreement, except for gross
negligence or wilful misconduct of Escrow Agent; PROVIDED, HOWEVER, that Company
shall have no liability for any payments which are due to Escrow Agent pursuant
to Section 4.2 hereof. The foregoing indemnities in this paragraph shall survive
the resignation or removal of Escrow Agent or the termination of this Escrow
Agreement.
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5. NOTICES.
All notices, requests, demands, claims and other
communications hereunder shall (i) be in writing; (ii) be delivered personally
or by confirmed courier delivery; (iii) be deemed to have been duly given on the
date received; and (iv) be addressed to the intended recipient as set forth
below:
If to the Escrow Agent:
First Union National Bank
00 Xxxxx Xxxxxx - 0xx Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxx Xxxxxx
Fascimile No.: (000) 000-0000
If to the Parent or Purchaser:
EDB Business Partner ASA
Xxxxx0xxxxxxx 0,
X-0000 Xxxx, Xxxxxx
Attention: Xxxxxxx Xxxx
Fascimile No.: 011 47 22 94 40 44
with a copy to:
Atlas Xxxxxxxx Trop & Barkson, P.A.
New River Center, Suite 1900
000 Xxxx Xxx Xxxx Xxxxxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx, Esquire
Facsimile No.: (000) 000-0000
If to Company:
Telesciences, Inc.
0000 Xxxxxxxxx Xxxxx
Xx. Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Facsimile No.: (000) 000-0000
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with a copy to:
Wolf, Block, Xxxxxx and Xxxxx-Xxxxx LLP
0000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
Any party may change the address to which notices, requests, demands, claims, or
other communications hereunder are to be delivered by giving the other parties
notice in the manner herein set forth.
6. MISCELLANEOUS.
6.1 ASSIGNMENT. Subject to Section 4.3, this Escrow Agreement
and the rights of the parties hereunder may not be assigned by any party without
the consent of Company, Parent and Purchaser.
6.2 SUCCESSORS AND ASSIGNS. This Escrow Agreement and all
action taken hereunder in accordance with its terms shall be binding upon and
inure to the benefit of the parties hereto and their respective permitted
successors and permitted assigns.
6.3 GOVERNING LAW. THIS ESCROW AGREEMENT WILL BE GOVERNED BY,
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE.
6.4 AMENDMENT. This Escrow Agreement may be amended or
canceled by and upon written notice to Escrow Agent at any time given by
Company, Parent and Purchaser but the duties, responsibilities or compensation
of Escrow Agent may not be altered without the consent of Escrow Agent.
6.5 HEADINGS. The section headings contained in this Escrow
Agreement are for convenient references only and shall not in any way affect the
meaning or interpretation of this Escrow Agreement.
6.6 WAIVER. Waiver of any term or condition of this Escrow
Agreement by any party shall not be construed as a waiver of a subsequent breach
or failure of the same term or condition, or waiver of any other term or
condition of this Escrow Agreement.
6.7 COUNTERPARTS. This Escrow Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument.
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6.8 FURTHER ASSURANCES. Upon delivery by Escrow Agent of any
portion of the Escrowed Funds to any party hereto, such party shall deliver or
cause to be delivered to Escrow Agent any tax form or other document required by
any governmental authority to be obtained by Escrow Agent from such party.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of
the day, month and year first above written.
EDB BUSINESS PARTNER ASA
By: /s/ Eivind Kinck
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Name:
Title:
EDB 4TEL ACQUISITION CORP.
By: /s/ Xxxxxxx Xxxx
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Name:
Title:
TELESCIENCES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: President and Chief Executive Officer
FIRST UNION NATIONAL BANK
By: /s/ Xxxx Xxxxxx
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Name:
Title:
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