Exhibit 99.4
OPTION PLAN FUNDING AND
ESCROW AGREEMENT
This OPTION PLAN FUNDING AND ESCROW AGREEMENT (this "Escrow
Agreement"), dated as of January 18, 2001, is among SONUS NETWORKS, INC., a
Delaware corporation (the "Parent"), XXXXXXXX XXXXXX and XXXXX XXXXXX (the
"Principal Stockholders"), and THE CHASE MANHATTAN BANK, a New York State Bank,
as escrow agent (in such capacity, the "Escrow Agent"). Capitalized terms used
but not defined herein shall have the meanings assigned to such terms in the
Merger Agreement (as defined below). The Escrow Agent (i) has not received a
copy of, (ii) has not reviewed, (iii) is not a party to, and (iv) will not be
held responsible under the terms of the Merger Agreement.
WHEREAS, the Parent, STORM MERGER SUB, INC., a Texas corporation and
wholly owned subsidiary of the Parent ("Merger Sub"), and TELECOM TECHNOLOGIES,
INC., a Texas corporation (the "Company"), have entered into an Agreement and
Plan of Merger and Reorganization, dated as of November 2, 2000 (the "Merger
Agreement"), pursuant to which the Merger Sub shall be merged with and into the
Company, with the Company being the surviving corporation, and all of the
outstanding shares of Class A common stock, no par value, and Class B common
stock, no par value, of the Company (collectively, "Company Common Stock"), will
be exchanged into the right to receive shares of the common stock of the Parent,
par value $0.001 per share (the "Parent Common Stock");
WHEREAS, pursuant to the Merger Agreement, the Parent shall deposit
in escrow an aggregate of 5,400,000 of the shares of Parent Common Stock (the
"Earn-out Escrow Shares") that would otherwise be issuable to the Company
Stockholders, in the Merger, to be held and distributed on the terms and
conditions set forth in an Escrow Agreement, dated as of the date hereof, among
the Parent, the Stockholders Representatives named therein and the Escrow Agent
(the "Earn-out Escrow Agreement"); and
WHEREAS, in accordance with certain agreements entered into prior to
the date hereof, the Principal Stockholders have agreed with certain other
stockholders of the Company to fund the exercise of all outstanding options,
warrants and other contingent rights to acquire shares of Parent Common Stock
(the "Roll-Over Options") issued in replacement for all outstanding options,
warrants and other contingent rights to acquire shares of Company Common Stock
granted by the Company prior to the Effective Time (the "Company Options"), and
is willing to enter into this Escrow Agreement with the Parent to continue to
fund the exercise of the Roll-Over Options after the Effective Time (as defined
in the Merger Agreement) on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises and
agreements set forth in this Escrow Agreement, the parties hereto hereby agree
as follows:
1. AGREEMENT TO FUND ROLL-OVER OPTION EXERCISES; DEPOSIT OF ESCROWED
SHARES AND DEPOSIT OF ADDITIONAL ESCROWED SHARES IF REQUIRED.
(a) The Principal Stockholders hereby agree that, in the event that
any of the Roll-Over Options are exercised for cash or the surrender of shares
of Parent Common Stock after January 18, 2001, the Principal Stockholders shall
deliver to the Parent, in exchange for the payment to the Principal Stockholders
of the aggregate amount of exercise price (if any) received by Parent upon the
exercise of such Roll-Over Options in accordance with their terms as of the
Effective Time, the number of shares of Parent Common Stock required to be
issued to the holder of such Roll-Over Option, PROVIDED, that (i) if the
exercise price for the Roll-Over Options is paid through the surrender of shares
of Parent Common Stock in accordance with the terms of the relevant Roll-Over
Option, the Principal Stockholders shall only be required to deliver to Parent
the number of shares of Parent Common Stock actually issued by the Parent (i.e.,
the "net" amount) to the optionee in respect of such Roll-Over Option, and the
Parent shall not be required to deliver to the Principal Stockholders the shares
of Parent Common Stock surrendered in payment of the exercise price of such
Roll-Over Option; and (ii) if the Parent makes any adjustments to the Roll-Over
Options which is materially favorable to the Optionee, including a reduction in
the relevant exercise price or an acceleration of such Roll-Over Options, that
in any case is not required by the relevant stock option plan or the agreement
evidencing such Roll-Over Options (the "Adjusted Options"), the Principal
Stockholders shall have no obligation to deliver shares of Parent Common Stock
upon any exercise of such Adjusted Options.
(b) The Escrow Agent shall maintain any shares of Parent Common
Stock subject to this Escrow Agreement (the "Option Escrow Shares") and any
other property subject to this Escrow Agreement in a separate account (the
"Escrow Account").
(c) In accordance with Section 3.3(b) of the Merger Agreement, as
of January 18, 2001, the Parent shall deposit with the Escrow Agent stock
certificates representing 1,548,340 shares of Parent Common Stock, as escrow
agent under this Escrow Agreement (the "Initial Escrowed Shares") that would
otherwise be issuable to the Principal Stockholders in the Merger but for such
Section 3.3(b), with stock powers duly executed in blank by the Principal
Stockholders. In addition, the Parent and the Principal Stockholders hereby
agree that at such time as they would otherwise be distributable the Parent
shall be entitled to cause a number of shares of Parent Common Stock that would
otherwise be distributable to the Principal Stockholders pursuant to Section 2
of the Earn-out Escrow Agreement to be deposited into the Escrow Account so that
the number of Option Escrow Shares shall at all times be equal to not less than
the "Minimum Escrow Number" defined below. Such shares of Parent Common Stock
shall be held by the Escrow Agent hereunder as Option Escrow Shares and
distributed in accordance with the terms hereof. In the event that the Parent
elects to exercise its right to cause such shares of Parent Common Stock to
become Option Escrow Shares, the Parent shall deliver a notice (referred to in
the Earn-Out Escrow Agreement as a "Deposit Notice") to the Escrow Agent
indicating the number of shares of Parent Common Stock that would otherwise be
distributable to the Principal Company Stockholders under Section 2 of the
Earn-Out Escrow Agreement that are to be deposited into the Escrow Account
established hereby as Option Escrow Shares and the Escrow Agent shall accept the
deposit of such additional Option
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Escrowed Shares. The "Minimum Escrow Number" shall be equal to the maximum
number of shares of Parent Common Stock issuable upon the exercise in full for
cash of all Roll-Over Options outstanding at the time of a release from the
Earn-Out Escrow, regardless of whether or not such Roll-Over Options are at such
time exercisable.
2. ADJUSTMENTS TO AND RELEASE OF ESCROWED SHARES.
(a) Upon the exercise of any Roll-Over Options by the holders
thereof (an "Optionee") pursuant to the Company's Amended and Restated 1998
Equity Incentive Plan (the "Plan"), for cash, including any exercise that takes
place pursuant to the mechanism established by Article Two, Section VII(A)(2)(b)
of the Plan, the Parent shall provide notice to the Principal Stockholders and
the Escrow Agent of such exercise, including the number of shares of Parent
Common Stock issued and the date of such issuance. After the Parent has received
the total exercise price due, if any, from the Optionee (the "Exercise Price"),
the Parent shall deposit an amount in cash equal to the Exercise Price with the
Escrow Agent. Upon receipt in full of the Exercise Price from the Parent, the
Parent will instruct the Escrow Agent to (i) release to the Parent the number of
Option Escrow Shares equal to the number of shares of Parent Common Stock issued
to such Optionee, and (ii) pay to the Principal Stockholders the aggregate
amount of the Exercise Price.
(b) In the event an Optionee elects, pursuant to the Plan, to
tender the number shares of Parent Common Stock of equal value to the Exercise
Price of such Optionee's option in accordance with Article Two, Section
VII(A)(2)(a) of the Plan (a "Cashless Exercise"), the Parent shall provide
notice to the Principal Stockholders and the Escrow Agent of such Cashless
Exercise, including the number of shares of Parent Common Stock surrendered in
payment of the Exercise Price of such Roll-Over Options and the date of such
issuance. After receipt of written instructions from the Parent, a copy of which
the Parent shall provide to the Principal Stockholders, the Escrow Agent shall
promptly (i) release to the Principal Stockholders a number of Option Escrow
Shares equal to the number of shares surrendered by the Optionee in payment of
the Exercise Price and (ii) release to the Parent a number of Option Escrow
Shares equal to the number of shares issued to the Optionee by the Parent.
(c) Upon the expiration or forfeiture of any Roll-Over Options
(each such event an "Option Termination"), the Parent shall provide notice to
the Principal Stockholders and the Escrow Agent of such Option Termination,
including the number of shares of Parent Common Stock that would have been
issuable prior to such Option Termination and the date of such Option
Termination. After receipt of written instructions from the Parent, a copy of
which the Parent shall provide to the Principal Stockholders, the Escrow Agent
shall release to the Principal Stockholders a number of Option Escrow Shares
equal to the number of shares of Parent Common Stock that would have been
issuable upon exercise of any such expired or forfeited Roll-Over Options.
(d) In the event that Parent makes any adjustments to the Roll-Over
Options that result in such Roll-Over Options becoming Adjusted Options, the
Parent shall provide notice to the Principal Stockholders and the Escrow Agent
of such adjustment. After receipt of written instructions from the Parent, a
copy of which the Parent shall provide to the Principal Stockholders, the Escrow
Agent shall promptly release to the Principal Stockholders a number of
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Option Escrow Shares equal to the aggregate number of shares of Parent Common
Stock that are issuable upon exercise of any such Adjusted Options and the
Parent shall have no further obligations under this Escrow Agreement with
respect to such Adjusted Options, including but not limited to under this
Section 2.
3. CONCERNING THE PARENT COMMON STOCK.
3.1. Conversions, Dividends, Stock Splits, Mergers, Etc.
(a) So long as any of the Option Escrow Shares are held by the
Escrow Agent hereunder, (i) all cash dividends and distributions paid or made in
respect of the Option Escrow Shares held by the Escrow Agent shall be paid to
the Principal Stockholders as and when distributed, and (ii) all other dividends
and distributions paid or made in respect of the Option Escrow Shares held by
the Escrow Agent (including without limitation all dividends and distributions
made in connection with any recapitalization, reclassification, split,
combination or exchange or shares) shall be held by the Escrow Agent as Option
Escrow Shares as applicable. All stock dividends shall be issued in the name of
the Principal Stockholders and shall be endorsed in blank for transfer and
deposited with the Escrow Agent as Option Escrow Shares hereunder.
(b) If the Parent shall enter into any transaction in which shares
of Parent Common Stock are converted into the right to receive cash, securities
or other property the Principal Stockholders may, in his or her sole discretion,
take all actions necessary or advisable in connection with such transactions,
including, without limitation, with respect to the execution and delivery of any
letters of transmittal or similar documents relating to such transaction and the
exercise of any dissenter's rights in respect thereof, and the Escrow Agent
shall cooperate with the Principal Stockholders in connection with effecting
such action, including, without limitation, by releasing directly to the Parent
for conversion in connection with such transaction any Option Escrow Shares to
be delivered with such letters of transmittal.
Any securities received by the Principal Stockholders in respect of
Option Escrow Shares in such a transaction ("Replacement Securities") shall be
deposited directly into the Escrow Account, and the Principal Stockholders shall
provide stock powers, duly endorsed in blank by the Principal Stockholders, with
respect thereto. Any such Replacement Securities shall be held and distributed
as though they were Option Escrow Shares hereunder.
Any cash or property other than securities received by the Principal
Stockholders in respect of Option Escrow Shares in such a transaction (the
"Escrowed Property") shall be initially deposited with the Escrow Agent, and the
Escrow Agent shall promptly notify the Parent and the Principal Stockholders of
the such deposit. After the Parent has received such notice, the Parent shall
instruct the Escrow Agent in writing to promptly distribute to the Principal
Stockholders the Escrowed Property, PROVIDED, that no Escrowed Property shall be
distributed to the Principal Stockholders, and no instructions with respect
thereto shall be given by the Parent, if such a distribution would cause the
number of Option Escrow Shares to be reduced below the Minimum Escrow Number.
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(c) In the event that any tender or exchange offer for shares of
Parent Common Stock is commenced at any time at which there remain Option Escrow
Shares, the Principal Stockholders may, in his or her sole discretion, direct
Escrow Agent to cause the Option Escrow Shares to be duly tendered into such
tender or exchange offer. Any Replacement Securities or Escrowed Property
received in respect of such tendered Option Escrow Shares shall be held and
released in the manner specified in Section 3.1(b) hereof.
3.2. Voting Rights. All voting rights of the shares of Parent
Common Stock held by the Escrow Agent shall be vested in the Principal
Stockholders unless and until such shares of Parent Common Stock are released
pursuant to Section 2 hereof.
4. INVESTMENT OF ESCROWED FUNDS. Until the termination of this Escrow
Agreement and the release of the Option Escrow Shares and other property held by
the Escrow Agent pursuant hereto, the Escrow Agent shall, invest the Escrowed
Funds in Fidelity Treasury Money Market Fund #77, unless otherwise instructed in
writing by Principal Stockholders, invest and reinvest any portion of the
escrowed property held by the Escrow Agent hereunder which consists of cash or
cash equivalents (the "Escrowed Funds"). 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 Principal Stockholders Representatives direct
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 reasonably require. The Escrow Agent shall not be liable for failure
to invest or reinvest funds absent sufficient written direction. Unless the
Escrow Agent is other otherwise directed in such written instructions, the
Escrow Agent may use a broker-dealer of its own selection, including a
broker-dealer owned by or affiliated with the 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. It is expressly agreed and
understood by the parties hereto that the Escrow Agent shall not in any way
whatsoever be liable for losses on any investments, including, but not limited
to, losses from market risks due to premature liquidation or resulting from
other actions taken pursuant to this Escrow Agreement. Any interest or other
income earned from the investment of the Escrowed Funds shall be immediately
payable to the Principal Stockholders to whom such Escrowed Funds are
attributable.
5. TAX RELATED TERMS.
5.1. Tax Reporting. For tax reporting purposes, all interest or
other income earned from the investment of the Escrow Funds in any tax year
shall (i) to the extent such interest or other income is distributed by the
Escrow Agent to any person or entity pursuant to the terms of this Escrow
Agreement during such tax year, be allocated to such person or entity, and (ii)
otherwise shall be allocated to such person or entity that receives income based
on the Escrow Funds or Option Escrow Shares.
5.2. Certification of Tax Identification Number. Each of the
Principal Stockholders and the Parent hereby agree to provide the Escrow Agent
with certified tax identification numbers by each signing and returning a Form
W-9 (or Form W-8, in case of non-U.S. persons) to the Escrow Agent prior to the
date on which any income earned on the
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investment of the Escrow Funds is credited to the Escrow Funds. The Principal
Stockholders and the Parent understand that, in the event their tax
identification numbers are not certified to the Escrow Agent, the Internal
Revenue Code, as amended from time to time, may require withholding of a portion
of any interest or other income earned on the investment of the Escrow Funds.
6. RESPONSIBILITY OF ESCROW AGENT. The Escrow Agent shall not be
responsible for the genuineness of any signature or document presented to it
pursuant to this Escrow Agreement and may rely conclusively upon and shall be
protected in acting upon any judicial order or decree, certificate, notice,
request, consent, statement, instruction or other instrument reasonably believed
by it in good faith to be genuine or to be signed or presented by the proper
person hereunder, or duly authorized by such person or properly made.
Notwithstanding anything to the contrary in this Escrow Agreement, prior to
taking any action hereunder, the Escrow Agent may, if in doubt regarding its
duties and obligations, seek instructions from the Parent and the Principal
Stockholders, and if such instructions are in conflict, the Escrow Agent may
seek instructions or other relief (including but not limited to interpleader)
from a court of competent jurisdiction, and further may request such evidence,
documents, certificates or opinions as it may deem appropriate. The Escrow Agent
shall be entitled to retain counsel both to advise it and in connection with any
court action, and such counsel's reasonable attorneys' fees shall be borne
equally by the Principal Stockholders on the one hand and the Parent on the
other. The Escrow Agent shall be entitled to act in reliance upon the advice of
counsel in all matters pertaining to this Escrow Agreement, and shall not be
liable for any action taken or omitted by it in good faith in accordance with
such advice. The Escrow Agent shall not be responsible for any of the agreements
contained herein except the performance of its duties as expressly set forth
herein. The duties and obligations of the Escrow Agent hereunder shall be
governed solely by the provisions of this Escrow Agreement, and the Escrow Agent
shall have no duties other than the duties expressly imposed herein and shall
not be required to take any action other than in accordance with the terms
hereof. The Escrow Agent shall not be bound by any notice of, or demand with
respect to, any waiver, modification, amendment, termination, cancellation,
rescission or supersession of this Escrow Agreement, unless in writing and
signed by the Parent, the Principal Stockholders and the Escrow Agent. In the
event of any controversy or dispute hereunder or with respect to any question as
to the construction of this Escrow Agreement, or any action to be taken by the
Escrow Agent hereunder, the Escrow Agent shall incur no liability for any action
taken or suffered in good faith, its liability hereunder to be limited solely to
gross negligence or willful misconduct on its part. The Parent and the Principal
Stockholders (in the case of the Principal Stockholders, in the event of their
negligence or willful misconduct only) agree to indemnify and hold the Escrow
Agent harmless, and further to protect and defend the Escrow Agent (with counsel
selected by the Escrow Agent) against any losses, liabilities and damages
incurred by the Escrow Agent as a consequence of any action taken or omitted to
be taken by it in the performance of its obligations hereunder (including,
without limitation, the reasonable fees and disbursements of counsel), with the
exception of any losses, liabilities and damages arising from the Escrow Agent's
gross negligence or willful misconduct. The representations and obligations of
the Principal Stockholders and the Parent to the Escrow Agent in this Escrow
Agreement shall survive the termination of this Escrow Agreement and shall be
applicable whether or not The Chase Manhattan Bank is serving as Escrow Agent.
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7. FEES OF ESCROW AGENT. Parent hereby agrees with the Principal
Stockholders and the Escrow Agent to pay the Escrow Agent for its services
hereunder in accordance with the Escrow Agent's fee schedule attached as
Schedule 7 hereto and to pay all out-of-pocket expenses reasonably incurred by
the Escrow Agent in connection with the performance of its duties and
enforcement of its rights hereunder and otherwise in connection with the
preparation, operation, administration and enforcement of this Escrow Agreement,
including, without limitation, attorney's fees, brokerage costs and related
expenses incurred by the Escrow Agent but specifically excluding taxes payable
by the Escrow Agent with respect to the receipt of its fees hereunder. The
foregoing notwithstanding, the Parent and the Principal Stockholders shall be
jointly and severally liable to the Escrow Agent for the payment of all such
fees and expenses. In the event the Parent and the Stockholders for any reason
fail to pay any such fees and expenses as and when the same are due, such unpaid
fees and expenses shall be charged to and set off and paid from the Escrow
Account by the Escrow Agent without any further notice.
8. NOTICES AND COMMUNICATIONS. All notices or other communications
hereunder shall be in writing and shall be deemed given if delivered personally
or mailed by prepaid registered or certified mail (return receipt requested) or
by telecopy, cable, telegram or telex addressed as follows:
(a) If to the Principal Stockholders, to:
Xxxxxxxx Xxxxxx
Telecom Technologies, Inc.
0000 Xxxxx Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
(b) If to Parent, to:
Sonus Networks, Inc.
0 Xxxxxxxx Xxx.
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: General Counsel
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Copy to:
Xxxxxxx Xxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxx, Esq. and
Xxxxx X. Xxxxxxx, Esq.
(c) If to Escrow Agent, to:
The Chase Manhattan Bank
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxxxx
Copy to:
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Attention:
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9. TERM; AMENDMENTS; SUCCESSORS. Except as otherwise provided herein,
this Escrow Agreement shall continue until the later of December 31, 2002 and
the date on which all of the Option Escrow Shares have been distributed as
provided in Section 2 hereof, PROVIDED that the Parent and the Principal
Stockholders may earlier terminate this Escrow Agreement upon their mutual
written consent. This Escrow Agreement may be amended only as provided in
Section 6 hereof and shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns.
10. COUNTERPARTS. This Escrow Agreement may be executed in any number of
counterparts, each of which shall be an original and all of which taken together
shall constitute one and the same instrument. In making proof of this Escrow
Agreement it shall be necessary to produce or account for only one such
counterpart signed by or on behalf of the party sought to be charged herewith.
11. SUCCESSOR ESCROW AGENT. The Escrow Agent may resign upon thirty (30)
days' prior written notice to the Parent and the Principal Stockholders. Upon
the resignation of the Escrow Agent, the Parent and the Principal Stockholders
shall appoint a successor escrow agent or otherwise provide for the disposition
of shares or other property held by the Escrow Agent by notice in writing to the
Escrow Agent. The Escrow Agent's sole responsibility after such 30-day notice
period expires shall be to hold the Escrowed Shares and Escrow Funds (without
any obligation to reinvest the same) and to deliver the same to a designated
substitute escrow agent, if any, or in accordance with the directions of a final
order or judgment of a court
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of competent jurisdiction, at which time of delivery the Escrow Agent's
obligations hereunder shall cease and terminate. The incumbent Escrow Agent
shall deliver to the successor escrow agent the stock certificates representing
the Option Escrow Shares and any other property held by it in escrow hereunder,
less any property sold or liquidated by it to pay its delinquent, unpaid fees
and expenses, as provided in said notice.
12. ENTIRE AGREEMENT. This Escrow Agreement, except with respect to the
Parent and the Principal Stockholders, contains the entire agreement and
understanding of the parties with respect to the transactions contemplated
hereby. No prior agreement, either written or oral, shall be construed to
change, amend, alter, repeal or invalidate this Escrow Agreement.
13. REPRESENTATIONS OF THE PARENT AND THE PRINCIPAL STOCKHOLDERS. Each
of the Parent and the Principal Stockholders represents and warrants to the
Escrow Agent that it or they has the power and authority to enter into this
Escrow Agreement and to carry out its or their obligations hereunder, that it or
they has duly authorized, executed and delivered this Escrow Agreement, and this
Escrow Agreement is its or their valid and binding obligation.
14. GOVERNING LAW. The validity, enforceability and construction of
this Escrow Agreement shall be governed by the laws of the State of Delaware.
15. SCOPE OF UNDERTAKING. The Escrow Agent's duties and responsibilities
in connection with this Escrow Agreement shall be purely ministerial and shall
be limited to those expressly set forth in this Escrow Agreement. The Escrow
Agent is not a principal, participant or beneficiary in any transaction
underlying this Escrow Agreement and shall have no duty to inquire beyond the
terms and provisions hereof. The Escrow Agent shall have no responsibility or
obligation of any kind in connection with this Escrow Agreement or the Escrowed
Shares and Escrow Funds other than as expressly set forth herein and shall not
be required to deliver the Escrowed Shares and Escrow Funds or any part thereof
or take any action with respect to any matters that might arise in connection
therewith, other than to receive, hold, invest, reinvest and deliver the
Escrowed Shares and Escrow Funds as herein provided. Without limiting the
generality of the foregoing, it is hereby expressly agreed and stipulated by the
parties hereto that the 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 Parent or
Principal Stockholders or any of them. The Escrow Agent shall not be liable for
any error in judgment, any act or omission, any mistake of law or fact, or for
anything it may do or refrain from doing in connection herewith, except for,
subject to Section 6(a) hereinabove, its own willful misconduct or gross
negligence. It is the intention of the parties hereto that the 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.
16. TERMINATION. This Escrow Agreement shall terminate upon the
disbursement, in accordance hereto, of the Escrowed Shares and Escrowed Funds in
full; PROVIDED, HOWEVER, that in the event all fees, expenses, costs and other
amounts require to be
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paid to the Escrow Agent hereunder are not fully and finally paid prior to
termination, the provisions of Sections 6 and 7 hereof shall survive the
termination hereof.
17. FUNDS TRANSFER. (a) In the event funds transfer instructions are
given (other than in writing at the time of execution of the 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 Parent or
the Principal Stockholders, as applicable, 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.
(b) 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 the beneficiary being paid, or the transfer of funds to a bank
other than the beneficiary's bank or an intermediary bank, designated.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the undersigned have executed this Escrow
Agreement as an instrument under seal as of the day and year first written
above.
SONUS NETWORKS, INC.
By: /s/ Xxxxxx Xxxxx
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Xxxxxx Xxxxx, President
[SIGNATURES CONTINUE ON FOLLOWING PAGE(S)]
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Attest: PRINCIPAL STOCKHOLDERS
/s/ Xxxxxxxx Xxxxxx
------------------------ ---------------------------------
Xxxxxxxx Xxxxxx
Attest:
/s/ Xxxxx Xxxxxx
------------------------ ---------------------------------
Xxxxx Xxxxxx
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Attest: THE CHASE MANHATTAN BANK
as Escrow Agent
/s/ May Mg By: /s/ Xxxx Xxxxxxxx
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Name: Xxxx Xxxxxxxx
Title: Assistant Vice
President & Trust
Officer
Address:
[SIGNATURES CONTINUE ON FOLLOWING PAGE(S)]
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