ESCROW AGREEMENT
This Escrow Agreement (hereinafter this "AGREEMENT") is executed on
this _____ day of October, 1997.
BY AND AMONG:
(I) U.S. Bank National Association dba Colorado National Bank, in its capacity
as escrow agent (hereinafter the "ESCROW AGENT");
(II) __________, a __________, and UIH Argentina, Inc. ("UIHA"), a Colorado
corporation (collectively, the "SELLERS"); and
(III) ___________, an Argentine corporation (the "BUYER").
The Sellers and the Buyer will be collectively and indistinctly referred to
herein as the "PARTIES".
WHEREAS
The Parties have executed a Stock Purchase Agreement, dated as of October ___,
1997 (hereinafter the "Stock Purchase Agreement"), under which the Sellers have
sold to Buyer, and Buyer has acquired from Sellers, all of Sellers' equity
interests in certain Argentine companies.
By way of compensation for said purchase, Buyer bound itself to pay Sellers the
selling price and Sellers bound themselves to compensate Buyer for certain items
or matters that may cause damage to Buyer.
For the purposes described in the above paragraph, Sellers have committed to
establish a deposit as security, in the manner as may be legally required to
secure, whenever applicable, that Buyer will be paid the indemnification
foreseen in the executed Stock Purchase Agreement.
Therefore, Sellers have proposed and Buyer has accepted that the Escrow Agent
perform the duties inherent in such capacity.
FOR ALL THE AFOREMENTIONED, THE PARTIES AND THE ESCROW AGENT, BY MUTUAL CONSENT
AND SUBJECT TO THE COVENANTS AND CONDITIONS BELOW, AGREE AS FOLLOWS:
ARTICLE ONE: DEFINITIONS
The terms below defined shall, as used in this Agreement, mean:
BANK: shall mean Colorado National Bank.
BUSINESS DAY: shall mean a day that the major banks are open for business in
Denver, Colorado, USA and Buenos Aires, Argentina.
EFFECTIVE DATE: shall mean October ___, 1997, by which date the Escrow Funds
must be actually transferred to and deposited in the Escrow Account.
ESCROW ACCOUNT: shall mean such account/s to be opened at the Bank, with such
characteristics foreseen in Exhibit I to this Agreement.
ESCROW FUNDS: shall mean __________ United States Dollars (US$__________) that
are transferred in escrow to serve as guarantee as provided in the Stock
Purchase Agreement.
SELLERS' REPRESENTATIVE: shall mean UIHA or such other person as Sellers may
designate in writing in the future. Sellers grant the Sellers' Representative
sufficient power to interpret and/or modify and/or execute this Agreement and to
sign any agreement related to the same.
STOCK PURCHASE AGREEMENT: shall mean the Stock Purchase Agreement executed
between Sellers and Buyer on October ___, 1997, from which this Agreement is
derived.
ARTICLE TWO: PURPOSE
2.1. Buyer commits to transfer to the Escrow Agent the Escrow Funds so that the
Escrow Agent shall, in furtherance of this Agreement, convey the ownership of
the Escrow Funds and proceeds therefrom, in favor of Sellers and/or reconvey
said ownership in favor of Buyer, as the case may be, in accordance with
provisions hereunder.
2.2. The Escrow Agent will be responsible for maintaining, administering and
distributing the Escrow Funds.
2.3. Sellers shall be benefited with the interest accrued on the Escrow Funds to
the extent such interest is not required to be transferred to Buyer as provided
in Article Nine hereof.
ARTICLE THREE: APPOINTMENT OF ESCROW AGENT
To all effects foreseen in Article Two hereof, Buyer and Sellers appoint the
Escrow Agent. Likewise, the Escrow Agent accepts such appointment in accordance
with the terms and conditions hereof.
ARTICLE FOUR: TRANSFER OF THE PROPERTY IN ESCROW
4.1. Buyer irrevocably agrees to transfer the Escrow Funds to the Escrow Agent
in accordance with the terms and conditions of the Stock Purchase Agreement. The
transfer of the ownership in escrow shall inure for the benefit of the Parties,
as provided hereunder, with the Parties therefore becoming the sole
beneficiaries of the escrow hereunder established, to the extent, for the time
and under the terms hereunder established.
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4.2. The Escrow Agent shall give notice to Buyer and Sellers' Representative on
the Effective Date, about the compliance or lack of compliance with the transfer
of the Escrow Funds in the manner foreseen in Section 4.1, to all applicable
effects.
ARTICLE FIVE: ESTABLISHMENT AND OPERATION OF THE ESCROW ACCOUNT
On the Effective Date the Escrow Agent will open the Escrow Account with the
Bank. All net amounts received by the Escrow Agent as a consequence of the
provisions hereunder shall be credited into the Escrow Account.
ARTICLE SIX: INVESTMENTS
6.1. The Escrow Agent will invest and re-invest the Escrow Funds deposited with
the Escrow Account and all interest accrued on such investments, as provided in
Exhibit I hereto, notwithstanding provisions under Section 2.3 as to the
ownership of said interest. The proceeds from such investments will increase the
balance standing on the Escrow Account. Any instructions from the Parties to the
Escrow Agent with respect to the investment of the Escrow Funds shall be given
in writing.
6.2. The Escrow Agent shall, for as long as this Agreement shall remain in
force, maintain current the entry of all transactions made on the Escrow
Account, describing all deposits made and the existing balances. Within the
first ten (10) days of each calendar month, the Escrow Agent shall make
available to the Parties an Escrow Account statement showing the transactions
recorded thereon, including a description of all deposits and balances existing
on the account.
6.3. Upon written request received from any Party, the Escrow Agent will deliver
to each Party, through such persons therefor designated by them, all such
information, clarifications, explanations and/or documentation related to the
transactions on the Escrow Account. The Escrow Agent will allow the Parties and
their independent advisors, during the Escrow Agent's working hours, reasonable
access to its records related to the Escrow Funds and the Escrow Account, as may
be required by any of the Parties, for the purposes of inspecting the books and
records related to the Escrow Account, to the extent so allowed by the
applicable laws and regulations.
6.4. The Escrow Agent commits to maintain the Escrow Account open for as long as
this Agreement shall remain effective, in accordance with the terms and
conditions under this Article.
ARTICLE SEVEN: CERTAIN DUTIES OF THE PARTIES
Notwithstanding other duties that may be applicable to the Parties as provided
hereunder, each Party commits to execute and deliver all such documents and
carry out all such acts, at its sole expense, as may be reasonably required by
the Escrow Agent during the life of this Agreement.
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ARTICLE EIGHT: LIABILITIES OF ESCROW AGENT; INDEMNITY
8.1. The Escrow Agent commits to comply with the duties entrusted to it under
this Agreement, acting in good faith in its capacity as escrow agent. The Escrow
Agent and its directors, officers, employees or agents will be liable only for
such facts, actions or inactions as may deviate from the purpose of this
Agreement and as may derive from their fault or fraud so adjudged through a
final judgment issued by the competent courts. No action contrary to this
Agreement or applicable legislation may be required from the Escrow Agent. The
Escrow Agent will in no event be liable for acts performed in compliance with
the instructions given by the Parties.
8.2. The Escrow Agent will only be liable for such duties hereunder established.
With respect to issues not expressly herein provided for, the Escrow Agent will
be bound to carry out only such acts and actions which are of a preserving
nature. The Escrow Agent will, if applicable, adopt such measures as the Parties
may jointly instruct in a letter substantially in the form set forth in Exhibit
II to this Agreement; whenever such joint instruction shall be contrary to
provisions under this Agreement, the Escrow Agent will proceed to act or fail to
act as per the received instruction, which instruction shall prevail over the
Agreement. Until the Escrow Agent has received such instruction, it will adopt,
with respect to such issues, the proper preserving measures.
8.3. The Escrow Agent shall not be bound to file or continue any suit, action or
court or administrative proceeding with relation to the Escrow Funds, unless the
Escrow Agent shall have been instructed accordingly by all Parties, in which
event the Escrow Agent shall be indemnified and held harmless against the
consequences from any such process, suit, action or proceeding.
8.4. Sellers and Buyer shall hold the Escrow Agent harmless and, if applicable,
indemnify the Escrow Agent, its officers, directors and controlling shareholders
against any loss, claim, damages, liability or expense (including legal fees and
expenses) resulting from this Agreement except in the event of fraud or gross
fault so adjudged through a final judgment issued by competent courts.
ARTICLE NINE: INSTRUCTIONS TO THE ESCROW AGENT
9.1. The Escrow Agent shall proceed to transfer the full ownership of all or
part of the Escrow Funds as follows:
(i) If the Escrow Agent receives a letter, substantially in the form set
forth in Exhibit II to this Agreement, purportedly signed by Buyer and
Sellers' Representative, with signatures and legal status duly certified
by notary public, describing the amount of Escrow Funds to be released,
then within 96 hours after the Escrow Agent receives such letter the
Escrow Agent will release such amount as directed in such letter.
(ii) The Escrow Agent will release to Sellers' Representative on December
1, 1997 the Escrow Funds in excess of $__________ then on deposit in the
Escrow Account.
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(iii) If the Escrow Agent has not released all of the Escrow Funds 12
months after the Effective Date, then at that time the Escrow Agent will
release the remainder of the Escrow Funds to Sellers' Representative.
(iv) The Escrow Agent will release all interest accrued on the Escrow Funds
to Buyer and Sellers' Representative at the time of the final release of
Escrow Funds under this Section 9.1, and such release of accrued interest
will be made to Buyer and Sellers' Representative in proportion to the
cumulative amount of the portion of the Escrow Funds released to them.
9.2. With respect to the procedures described in Section 9.1, the Escrow Agent
does not and will not incur any liability whatsoever for the release of the
Escrow Funds so long as the Escrow Agent complies with such procedures, in which
case any such liability will be borne by the applicable Parties.
ARTICLE TEN: CONFIDENTIALITY
This Agreement, the operations contemplated hereunder and all such information
related to such operations as the Escrow Agent may obtain in the performance of
its duties are strictly confidential and must be kept secret; they may only be
used by the Escrow Agent, its directors, officers, employees, agents and legal
counsels for the purpose of this Agreement. Accordingly, the Escrow Agent must
have the proper commitments from its directors, officers, employees, agents and
external advisors. This section will not apply to or limit any Party's ability
to make public announcements or disclosures as it may consider necessary or
appropriate pursuant to the reporting requirements of U.S.A. securities laws or
other applicable law, and will not limit Buyer's ability to disclose this
Agreement in connection with sales of assets or joint ventures or financing
arrangements of Buyer or its affiliates.
ARTICLE ELEVEN: EXPENSES AND TAXES
11.1. Except as set forth in Section 11.2, all taxes, rates, contributions,
expenses, costs and any other expenditure that arises or may arise in the future
as a consequence hereof will be exclusively borne by Buyer and Sellers'
Representative in proportion to the cumulative amount of the portion of the
Escrow Funds released to them. The Escrow Agent will be authorized to debit from
the Escrow Account all the amounts mentioned in this Article.
11.2. All costs incurred on account of the reception and deposit of the Escrow
Funds according to the provisions hereof and the transfer and credit thereof to
the Escrow Account with the Bank as well as those involved in the opening and
maintenance of same, will be borne by Buyer. The Parties agree to and accept all
the exchange, investment and any other kind of operations concerning the
management of the Escrow Funds as well as the cost thereof, to be made by the
Escrow Agent in accordance with the management instructions received in this
Agreement as well as any other operations to be made by the Escrow Agent to
credit the proper funds upon the termination hereof.
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ARTICLE TWELVE: ESCROW VALIDITY
This Agreement will become effective on the Effective Date and will be in force
and valid, in principle, for a 12-month term as from the Effective Date;
notwithstanding the aforesaid this Agreement may be extended as many times as
may be applicable for the term agreed to by Sellers' Representative and Buyer in
a joint notice to the Escrow Agent.
ARTICLE THIRTEEN: REPLACEMENT OF ESCROW AGENT; TERMINATION
13.1. The Escrow Agent may be replaced if any of the following events occurs:
(i) The Escrow Agent resigns, which the Escrow Agent may do at any time by
giving written notice to all Parties pursuant to Article Seventeen hereof.
Such resignation shall be effective (a) 30 days after such notice has been
deposited in the mail or (b) in the event of initial facsimile
transmission, 30 days after the sending of such facsimile. If a successor
escrow agent has not been appointed within such 30-day period, the Escrow
Agent may petition any court of competent jurisdiction or may interplead
the Parties in a proceeding for the appointment of a successor Escrow
Agent, and all fees, including but not limited to extraordinary fees
associated with the filing of interpleader, and expenses associated
therewith shall be payable by the Parties.
(ii) In the event that Escrow Agent files a petition for a creditors
preventive meeting or is subject to bankruptcy proceedings or applies for
its own bankruptcy or sponsors in court or out of court agreements with
its creditors or if it were unable to pay its debts upon maturity, even
before the commencement of the aforesaid proceedings or in the event of
Escrow Agent's dissolution or liquidation.
(iii) In the event that Escrow Agent fails to comply with any of its
obligations hereunder and fails to remedy such default in a ten-day term
counted as from the date of written notice by the Parties accordingly.
and/or
(iv) At any time if the Buyer and the Sellers' Representative agree in
writing.
13.2. In any of the events provided under Section 13.1, this Agreement may be
terminated by express notice to that effect at least thirty days in advance of
any such termination. At the end of such thirty-day term, the Escrow Agent must
make a final liquidation and deliver all the documentation corresponding to the
Escrow Account and it will be released from its responsibilities and obligations
hereunder, except for its obligation to render accounts and the responsibilities
concerning the obligations arising during the validity hereof, except where the
termination of the Agreement and the replacement of the Escrow Agent were with
cause. Buyer and Sellers' Representative will appoint a new Escrow Agent within
the aforesaid thirty-day period.
13.3. This Agreement will likewise terminate in advance when any change in
applicable legislation renders this Agreement illegal or illegitimate or if due
to any other reason the fulfillment hereof becomes impossible.
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13.4 At the end of the term hereof, including the extensions, if any, the
ownership of the Escrow Funds the title wherein has not been fully transferred
to the Buyer, or previously released in favor of Sellers' Representative, will
be transferred to Seller as provided in Section 2.1.
ARTICLE FOURTEEN: ESCROW AGENT'S COMPENSATION
The remuneration of the Escrow Agent for the services rendered in connection
with this Agreement is fixed in the amount of Two Thousand dollars ($2,000) in
advance, per year or any portion thereof by way of direct commission payable by
the Buyer.
ARTICLE FIFTEEN: EXERCISE OF RIGHTS
The Escrow Agent declares that it will exercise all the rights and obligations
arising from this Agreement in full accordance with the instructions received
and established hereunder. The Escrow Agent may act or abstain from acting, at
its discretion.
ARTICLE SIXTEEN: MISCELLANEOUS
16.1. The Escrow Agent may deduct from the Escrow Account any amounts referred
to in Section 11.1 and any other expenditure incurred as a result of the
extension(s) of this Agreement, provided that such amounts for the whole time
that this Agreement is in force beyond the original term will not exceed the
amount of US$2,000 (Two Thousand U.S. Dollars) per year in which case the Escrow
Agent will ask for the Parties' prior written consent.
16.2. If at any time one or more of the provisions hereof is or becomes null and
void, illegal or unenforceable in any respect under any applicable provision,
the validity, legality and enforceability of the other provisions will not be
affected thereby in any manner whatsoever.
16.3. This Agreement and the other documents mentioned or provided for hereunder
constitute the full agreement between the Parties with respect to the matters
which are the purpose hereof.
16.4. This Agreement may be executed in any number of counterparts or
counterpart signature pages, each of which will be deemed an original but all of
which, together, will constitute one and the same instrument.
16.5. This Agreement, the rights and obligations of the parties hereto, and any
claims or disputes relating thereto will be governed by and construed in
accordance with the laws of the State of Colorado.
ARTICLE SEVENTEEN: NOTICES
NOTICES. Pursuant to the effects arising from this Agreement, the Escrow Agent
establishes its domicile at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, the
Buyer at __________, and the Sellers' Representative at ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, where all notices served will be valid. Notwithstanding
the foregoing, the Parties undertake to send copies of any notices served by
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them (i) by delivery of same in person to the intended addressee, (ii) by
sending such notice by Federal Express or another reputable private
international courier service (a "Qualified Courier") for overnight (or its
nearest equivalent) delivery to the intended addressee or (iii) by facsimile
transmission to such Party at the facsimile number set forth for such Party
below provided that a copy of same is deposited with a Qualified Courier for
overnight delivery to the intended addressee, in each case for delivery to the
address of the intended addressee as set forth below (or at such other address
or fax number as may be designated by such Party as herein provided) to the
officers mentioned hereinafter.
(a) Escrow Agent
Colorado National Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Phone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) Buyer
__________________________
__________________________
__________________________
__________________________
Tel: __________________
Fax: __________________
Copy to:
__________________________
__________________________
__________________________
__________________________
Tel: __________________
Fax: __________________
(c) Sellers' Representative
UIH Argentina, Inc.
▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and/or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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Copy to:
UIH Argentina, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
W. ▇▇▇▇ ▇▇▇▇▇▇, Esq.
Holme ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
1700 Lincoln, Suite 4100
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
All notices, summons and requests will be effective upon such personal delivery
or upon confirmation of delivery by facsimile transmission provided that
delivery to the Qualified Courier is effected within three Business Days
thereafter. In all other cases, notices, summons and requests will be effective
three Business Days after having been deposited with a Qualified Courier for
overnight (or its nearest equivalent) delivery. Rejection or other refusal to
receive, or the inability to deliver because of changed address of which no
notice was given as herein required, will be deemed to be receipt of the notice,
summons or request sent.
ARTICLE EIGHTEEN: ASSIGNMENT
No Party hereto may assign, transfer, negotiate or give in guarantee any of its
rights or obligations under this Agreement, except as otherwise provided with
respect to termination in Article Thirteen above.
ARTICLE NINETEEN: DISPUTE RESOLUTION
Any dispute, controversy or claim arising out of or relating to this Agreement
will be settled by the Arbitration Board of the Buenos Aires Stock Exchange, in
accordance with generally accepted procedures. The place of arbitration will be
Buenos Aires, Argentina, and in all of the arbitration the usual procedures
followed by such tribunal will be used. The arbitration award will be in U.S.
dollars and will include interest as from the date of the action which gave rise
to such arbitration award. The arbitration award will be final and binding upon
the Parties, and judgment may be entered thereon upon the application of any
Party in any court of competent jurisdiction. An appeal may be lodged against
the arbitration award pursuant to the provisions of the Civil and Commercial
Procedures Code of the Federal Capital of the Republic of Argentina. Other costs
of arbitration (including the fees and expenses of the arbiters) will be borne
by the losing Party unless the arbitration award provides otherwise.
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In witness whereof, the Parties and the Escrow Agent have caused this Agreement
to be executed as of the date first written above.
SELLERS
__________
_________________________________
By: ________________________
Its: ________________________
UIH ARGENTINA, INC.
_________________________________
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Its: President
BUYER
__________
_________________________________
By: ________________________
Its: ________________________
ESCROW AGENT
U.S. BANK NATIONAL ASSOCIATION
dba COLORADO NATIONAL BANK
_________________________________
By: ________________________
Its: Trust Officer
EXHIBIT I
INVESTMENT PROGRAM
The Parties in full accordance with, and to all purposes under, the executed
Escrow Agreement instruct the Escrow Agent so that it may carry out and develop
the following investment program in connection with the Escrow Funds, in the
manner and conditions set forth below:
I) Escrow Accounts: According to the provisions of Article One of the Escrow
Agreement (Definitions) the Escrow Account in which the Escrow Funds will be
initially deposited on the Effective Date in order to give an actual launching
to the executed Escrow Agreement, will be any of the following:
Bank: First Bank, N.A., Minneapolis, MN
ABA Routing No.: ▇▇▇▇▇▇▇▇▇
Account No.:
Account Name: First Trust National Association
For Further Credit Account No.:
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Ref:
II) The Escrow Funds will be invested by the Escrow Agent in any of the
following:
a) money market funds;
b) any of the following so long as they are rated BBB or better (or the
equivalent) by a public rating agency such as ▇▇▇▇▇'▇ or Standard &
Poor's: treasury notes, corporate bonds and notes, commercial paper,
asset-backed securities; and
c) mutual funds investing solely in the items specified in clauses (a) and/or
(b) above.
III) Any instructions to the Escrow Agent relating to a change in the investment
of the Escrow Funds will be made by the Parties in writing. Until the Escrow
Agent has received such an investment instruction, the Escrow Funds will remain
in the investment in which they are invested, notwithstanding the provisions of
clause (II) above.
IV) Pursuant to Section 6.2 of the Escrow Agreement, within the first ten (10)
days of each calendar month, the Escrow Agent shall make available to the
Parties an Escrow Account statement showing the transactions recorded thereon,
including a description of all deposits and balances existing on the account.
EXHIBIT II
NOTICE
[Date]
Dear Sirs,
We refer to the Escrow Agreement dated October ___, 1997 (the "AGREEMENT") by
and among U.S. Bank National Association dba Colorado National Bank as Escrow
Agent, __________, and UIH Argentina, Inc., as Sellers, and __________ as Buyer.
Capitalized terms used but not defined herein have the same meaning given such
terms in the Agreement.
By these presents and in accordance with the provisions of Article Nine of the
Agreement, the Parties instruct the Escrow Agent to transfer [part] [the whole]
of the Escrow Funds as follows:
Amount: US$
This notice, with the signature(s) of the undersigned and the incumbency
certified by a Notary, exempts the Escrow Agent from any liability arising from
the transfer of the Escrow Funds made hereunder.
Yours truly
Signature of the Sellers' Representative and the Buyer