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Exhibit 99
ESCROW AGREEMENT
THIS ESCROW AGREEMENT ("Agreement") dated as of February 26, 1997 is by
and among BT Capital Partners, Inc., a Delaware corporation ("BT"), ▇▇▇▇▇ ▇.
▇▇▇▇▇, individually ("▇▇▇▇▇" and, together with BT, "Sellers"), ▇▇▇▇▇ ▇. ▇▇▇▇▇
in the capacity as agent for Sellers ("Sellers' Agent"), ▇▇▇▇▇ Enterprises,
Inc., a Delaware corporation ("Buyer"), and Texas Commerce Bank National
Association, as Escrow Agent (the "Escrow Agent").
W I T N E S S E T H:
WHEREAS, Sellers (together with certain other individuals and entities)
and Buyer have entered into a Stock Purchase Agreement dated as of February 26,
1997 (the "Purchase Agreement"), pursuant to which Buyer has agreed to purchase
all of the equity securities of Prism Enterprises, Inc., a Delaware corporation
(the "Company");
WHEREAS, pursuant to Sections 8.2(f) of the Purchase Agreement it is a
condition of Buyer's obligations to perform the Purchase Agreement that Sellers,
Buyer and the Escrow Agent shall have executed and delivered this Agreement; and
WHEREAS, at the Closing under the Purchase Agreement (as defined
therein), Sellers shall cause to be deposited with the Escrow Agent hereunder a
portion of the cash consideration to be paid pursuant to Section 2.3 of the
Purchase Agreement, to be held and applied in accordance with the provisions
hereof;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties hereto agree as follows:
ARTICLE I
THE ESCROW ACCOUNT
SECTION 1.01. Establishment of Escrow Account. The Escrow Agent agrees
to establish a segregated account (the "Escrow Account") at Texas Commerce Bank
National Association, and to receive for deposit therein any funds deposited by
or on behalf of Sellers. At the time of the Closing under the Purchase
Agreement, Buyer shall transmit and deliver to the Escrow Agent, for deposit in
the Escrow Account, immediately available funds in the amount of $500,000 (the
"Escrow Deposit"). The Escrow Deposit shall be held for the benefit of Sellers
and Buyer in the Escrow Account and applied, in accordance with this Agreement,
to protect and secure certain rights of Buyer pursuant to or arising under
Section 5.1(b) of the Purchase Agreement.
SECTION 1.02. Authorized Investments. At any time during the existence
of the Escrow Account, such portion of the Escrow Deposit not then needed for
the making of payments to Buyer pursuant to the provisions of Article II hereof
shall be invested by the Escrow Agent, upon written instruction by Sellers'
Agent, in (i) a money market fund whose assets are securities backed by the full
faith and credit of the U.S. Government and have maturities of 90 days or less
and which fund permits withdrawal on one
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business day's notice ("Money Market Mutual Fund"), (ii) direct obligations of,
or obligations fully insured or guaranteed by, the United States of America or
any agency thereof, having maturities not extending beyond 90 days from date of
purchase, (iii) short-term commercial paper having the highest rating for
short-term commercial paper assigned by any two nationally recognized
organizations regularly engaged in rating the investment quality of such
commercial paper, or (iv) other investments approved in writing by Buyer and
Sellers. Any securities purchased by or investments made by the Escrow Agent
shall be held in nominee form. During the term of this Agreement, all income
with respect to the Escrow Deposit shall be for the account of Sellers and shall
be paid to Sellers upon termination of the Escrow Account. All investments of
the Escrow Deposit pursuant to this Agreement shall be at the risk and for the
benefit of Sellers. If Sellers' Agent fails to instruct the Escrow Agent
concerning the investment of any of the Escrow Deposit, then the Escrow Agent
shall invest such Escrow Deposit in a Money Market Mutual Fund. Upon written
instruction by Sellers' Agent, the Escrow Agent is hereby authorized and
directed by Sellers and Buyer to sell any such investments as shall be necessary
to make any disbursements required hereunder to be made to Buyer.
SECTION 1.03. Payments to Sellers. The Escrow Agent shall reserve in
the Escrow Account such portion of the Escrow Deposit (up to the entire amount
thereof) as is needed to satisfy the amount of any Loss or Litigation Expense
relating thereto, indemnifiable under Section 5.1(b) or 5.1(c) of the Purchase
Agreement (the "Acquisition Tax Liability"). Upon final resolution of the
Acquisition Tax Liability and filing of appropriate amended or original returns,
whether by agreement with the Internal Revenue Service, the expiration of
applicable statutes of limitation or otherwise, any portion of the Escrow
Deposit which has not been applied to the satisfaction of the Acquisition Tax
Liability shall be distributed seventy-five percent (75%) to BT and twenty-five
percent (25%) to ▇▇▇▇▇. The terms "Loss" and "Litigation Expense" shall have the
meanings assigned to them in the Purchase Agreement.
SECTION 1.04. Rights to Escrow Deposit. The Escrow Deposit in the
Escrow Account shall be for the exclusive benefit of Buyer and Sellers, and
their respective successors and assigns, and no other person, firm or
corporation shall have any right, title or interest therein; and any claim of
any person to the Escrow Deposit, or any part thereof, shall be subject and
subordinate to the prior right thereto and lien of Buyer and Sellers.
SECTION 1.05. Joint Instructions. Notwithstanding any provision
contained herein to the contrary, the Escrow Agent is authorized and directed to
transfer the Escrow Deposit only in accordance with the joint written
instructions of Sellers and Buyer or the award of any arbitrator pursuant to
Section 10 of the Purchase Agreement.
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ARTICLE II
CLAIM
Section 2.01. Notice of Claim. In the event that Buyer shall claim that
there has occurred any event (the "Event") constituting a Loss with respect to
the Acquisition Tax Liability, Buyer shall give written notice of such Event to
the Escrow Agent and Sellers' Agent; provided, however, that the omission to
give such notice to Sellers' Agent shall not relieve Sellers from any liability
which they may have for the Acquisition Tax Liability, except to the extent that
Sellers are prejudiced by the failure to give such notice. Such notice shall
specify the Event claimed and the Loss incurred or likely to be incurred in
connection with such Event. To the extent such Loss is fixed or liquidated in
amount, the notice shall so state and such fixed or liquidated amount shall be
deemed to be the amount of such Loss (to the extent so fixed or liquidated)
against the Escrow Deposit. To the extent the amount of such Loss is not fixed
or liquidated, the notice shall so state and, in such event, such Loss (to the
extent not fixed or liquidated) shall be deemed asserted against the Escrow
Deposit; provided that no payment shall be made on account of the unfixed or
unliquidated portion of such Loss until the amount of such portion is fixed or
liquidated.
Section 2.02. Payment of Undisputed Claims. If a claim is not disputed
by Sellers, then Sellers' Agent and Buyer shall notify the Escrow Agent in
writing of such fact and following receipt of such notice Escrow Agent is hereby
authorized and directed to pay to Buyer the amount of such claim from the Escrow
Deposit, in the following manner: (i) at once to the extent such claim is fixed
or liquidated and (ii) to the extent not so fixed or liquidated, at such time as
the unliquidated or unfixed portion thereof has become liquidated or fixed.
Section 2.03. Disputed Claims. If Sellers' Agent shall, within 15 days
after receipt of notice of a claim hereunder, notify Buyer and the Escrow Agent
in writing that he disputes any claim described in such notice, then Buyer, on
the one hand, and Sellers' Agent, on the other hand, shall endeavor to settle
and compromise such claim. Any liability established by reason of any such
settlement or compromise shall be paid and satisfied from the Escrow Deposit (it
being understood that no such payment and satisfaction shall affect any rights
to payments in respect of other claims that Buyer may have hereunder or under
the Purchase Agreement). Buyer shall be reimbursed from the Escrow Deposit for
any expense or cost (including reasonable legal fees and expenses) to the extent
incurred by Buyer in successfully establishing the validity or amount of any
claim hereunder and shall be directly responsible for any such expense or cost
of Sellers to the extent incurred by it or them in successfully denying the
validity or establishing the amount of any claim hereunder.
Section 2.04. Claimants' Rights Reserved. Buyer shall have the right to
assert claims made pursuant to this Article II against the Escrow Deposit from
time to time and no assertion or disposition of any such claim shall in any
respect affect the right of Buyer to assert any other related or unrelated claim
under this Article II or to exercise any other right under the Purchase
Agreement.
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ARTICLE III
THE ESCROW AGENT
SECTION 3.01. Appointment of Escrow Agent. Sellers, Sellers' Agent and
Buyer hereby appoint Texas Commerce Bank National Association, to serve as
Escrow Agent, and the Escrow Agent hereby accepts, under the terms of this
Agreement, such appointment and the agency created hereby.
SECTION 3.02. Resignation and Removal of Escrow Agent. The Escrow Agent
may resign by giving notice in writing of such resignation to each other party
hereto, specifying a date not less than 60 days after the date of such notice
when such resignation shall become effective. The Escrow Agent may be removed at
any time with the written consent of each of the other parties hereto. If the
Escrow Agent shall resign or be removed, Sellers' Agent and Buyer shall appoint,
as soon as practicable, a successor Escrow Agent. Any successor Escrow Agent
shall be deemed to have qualified as Escrow Agent and to have accepted the
responsibilities hereunder when such successor shall have executed multiple
counterparts of this Agreement and shall have delivered one counterpart to each
of Sellers' Agent and to Buyer. Upon such qualification and acceptance, the
rights, powers, duties and obligations of the original Escrow Agent hereunder
shall be possessed and assumed by the successor Escrow Agent with the same
effect as though such successor had originally been the Escrow Agent under this
Agreement.
SECTION 3.03. Maintenance of Records; Reports. The Escrow Agent shall
maintain adequate records relating to amounts in the Escrow Account, and shall
deliver quarterly reports to the other parties hereto identifying and specifying
the status of any investments of Escrow Deposit and specifying the balance of
amounts held in the Escrow Account.
SECTION 3.04. Liability of Escrow Agent. The Escrow Agent undertakes to
perform such duties and obligations and only such duties and obligations as are
expressly set forth herein, and no implied duties or obligations shall be read
into this Agreement. The Escrow Agent may rely upon any instrument or signature
the Escrow Agent believes in good faith to be genuine and to have been presented
or signed by the proper party or parties. The Escrow Agent may consult with
counsel and any written advice or opinion of such counsel shall be full and
complete authorization and protection in respect of any action taken, suffered
or omitted to be taken by it hereunder in good faith and in accordance with such
advice or opinion. The Escrow Agent shall not have any liability or
responsibility in connection with any representations, warranties or covenants
of other parties contained in, or any other provisions of, the Purchase
Agreement.
SECTION 3.05. Indemnification. Sellers hereby agree to indemnify the
Escrow Agent against any and all liabilities attributable to any act or omission
of Sellers that may arise by reason of its acting as Escrow Agent under this
Agreement excluding, however, liabilities arising out of the Escrow Agent's
negligence. Buyer hereby agrees to indemnify the Escrow Agent against any and
all liabilities attributable to any act or omission of
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Buyer that may arise by reason of its acting as Escrow Agent under this
Agreement excluding, however, liabilities arising out of the Escrow Agent's
negligence.
SECTION 3.06. Fees and Expenses. (a) For its services hereunder, the
Escrow Agent shall be entitled to a fee of $1,500.00 per year. No increase in
the rate of any fee charged by the Escrow Agent shall be valid hereunder unless
previously approved in writing by Sellers' Agent and Buyer. All of such fees
shall be paid by Sellers. In addition to such fees, Sellers shall reimburse the
Escrow Agent for all reasonable expenses, disbursements and advances, including
reasonable attorneys fees, incurred by the Escrow Agent in connection with
carrying out its ordinary duties to maintain the Escrow Account and delivering
funds therefrom pursuant to this Agreement.
(b) Sellers agree that if the Escrow Agent shall incur or
suffer any other reasonable costs, charges, damages or attorneys' fees on
account of being Escrow Agent hereunder or on account of having received the
Escrow Deposit hereunder (including, without limitation, costs, charges, damages
and reasonable attorneys' fees as a result of litigation involving this
Agreement or the Escrow Deposit), then such costs, charges, damages or fees
(including, without limitation, reasonable attorneys' fees incurred by the
Escrow Agent in connection with any such litigation) shall be paid by Sellers.
(c) Notwithstanding the foregoing provisions of this Section
3.06 and any other provision of this Agreement, the Escrow Agent hereby
expressly acknowledges and agrees that it shall have no lien or other right, nor
any claim, on the Escrow Deposit or any interest or income thereon in respect of
amounts owed or which may be owed to the Escrow Agent by Sellers or Buyer.
3.07 Reliance on Documents, Etc.
(a) The Escrow Agent may conclusively rely, as to the truth of the
statements and correctness of the opinions expressed therein, on certificates or
opinions furnished to the Escrow Agent.
(b) The Escrow Agent shall not be liable for any error of judgment made
in good faith, unless it shall be proved that the Escrow Agent was negligent in
ascertaining the pertinent facts.
(c) No provisions of this Agreement shall require the Escrow Agent to
expend or risk its own funds or otherwise incur any financial liability for
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity satisfactory to it against such
risks or liability is not assured to it.
(d) The Escrow Agent may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, note,
security, or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties. Without limiting the
generality of the foregoing statement, the Escrow Agent
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need not examine the amount or validity of any claim, but is protected in acting
upon receipt of written instructions which appear to be signed by Buyer and
Sellers. The Escrow Agent shall not be bound to make any investigation into the
facts or matters stated in a resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, note,
security or other paper or document supplied by Buyer and Sellers.
(e) The Escrow Agent may consult with counsel, and the written advice
of such counsel or any opinion of counsel shall be full and complete
authorization and protection with respect to any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon.
(f) The Escrow Agent may exercise any of the powers hereunder and
perform any duties hereunder either directly or by or through agents or
attorneys of the Escrow Agent.
Buyer, Sellers, Sellers' Agent and the Escrow Agent agree that the
Escrow Agent may seek adjudication of any adverse claim, demands or controversy
over its persons as well as funds on deposit, in either a Federal or State
District Court located in Bexar County, Texas, waive personal service of any
process, and agree that service of process by certified or registered mail,
return receipt requested, to the address set forth in Section 4.01 of this
Agreement shall constitute adequate service. Buyer, Sellers and the Escrow Agent
further agree that the Escrow Agent has the right to file a ▇▇▇▇ of Interpleader
in any court of competent jurisdiction to determine the rights of any person
claiming interest herein.
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. Notices. All notices, certificates and other
communications required or permitted hereunder shall be in writing and given in
person, by fax, cable, telex or telegrams, or by certified mail, postage
prepaid, addressed as follows:
if to BT:
BT Capital Partners, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
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if to Buyer:
▇▇▇▇▇ Enterprises, Inc.
One Atlantic Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
▇▇▇▇▇▇ & Bird
One Atlantic Center
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
if to ▇▇▇▇▇ or
Sellers' Agent: c/o Prism Enterprises, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇ ▇. ▇▇▇▇▇▇▇, III
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Escrow Agent:
Texas Commerce Bank National Association
▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
All notices and communications hereunder sent by mail shall be effective 72
hours after deposit as aforesaid in United States mail, and all other notices
and communications hereunder shall be effective upon receipt; provided, however,
that notice of change of address shall be effective only upon receipt.
SECTION 4.02. Representations and Warranties. Sellers and Sellers'
Agent represent to Buyer and the Escrow Agent, Buyer represents and warrants to
Sellers and Sellers' Agent and the Escrow Agent, and the Escrow Agent represents
and warrants to the other parties to this Agreement that:
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(i) if it is a corporation, it is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, has the requisite power to execute, deliver and perform its
obligations under this Agreement and has duly authorized the execution, delivery
and performance of this Agreement, and in the case of the Sellers' Agent, he has
the capacity and all necessary authority to execute, deliver and perform this
Agreement in his capacity as Sellers' Agent; and
(ii) this Agreement has been duly executed and
delivered by it and constitutes its valid and binding agreement except as
enforceability thereof may be limited by bankruptcy, insolvency, moratorium or
other similar laws of general application affecting the enforceability of
creditors' rights generally or general principles of equity.
SECTION 4.03. Amendments; Waivers. None of the provisions of this
Agreement may be modified or amended, nor any compliance therewith be waived,
without the written consent of the other parties hereto.
SECTION 4.04. Severability. If any one or more of the covenants or
agreements provided in this Agreement to be performed on the part of any party
hereto should be determined by a court of competent jurisdiction to be contrary
to law, such covenant or agreement shall be deemed and construed to be severable
from the remaining covenants and agreements contained herein and shall in no way
affect the validity of the remaining provisions of this Agreement.
SECTION 4.05. Termination. This Agreement shall terminate upon the
occurrence of the earlier of (i) agreement on the part of Sellers and Buyer and
(ii) payment by the Escrow Agent of all of the Escrow Deposit in accordance with
this Agreement. Notwithstanding any termination of this Agreement, the
provisions of Section 3.04, Section 3.05, Section 3.06 and Section 3.07 shall
survive such termination and remain in full force and effect.
SECTION 4.06. Successors and Assigns. All of the covenants and
agreements of the parties contained in this Agreement shall be binding upon, and
inure to the benefit of, their respective heirs, executors, legal
representatives, successors and assigns.
SECTION 4.07. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas.
SECTION 4.08. Headings. The headings of sections and paragraphs of this
Agreement are for convenience only and shall not affect the interpretation of
this Agreement.
SECTION 4.09. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, and all of
which together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, this Agreement has been executed and delivered by
or on behalf of each of the parties hereto as of the day and year first above
written.
BUYER:
▇▇▇▇▇ ENTERPRISES, INC.
By: /s/ ▇. ▇. ▇▇▇▇▇▇
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Title: President
SELLERS:
BT CAPITAL PARTNERS, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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Title: Managing Director
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇
Individually and as Sellers' Agent
ESCROW AGENT:
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION
as Escrow Agent
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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Title: Vice President
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