EXHIBIT 99.1
ESCROW AGREEMENT
This ESCROW AGREEMENT (this "Agreement") is made and entered into as of
January 4, 2002, by and among ALLTEL Information Services, Inc., an Arkansas
corporation ("Buyer"), Euronet USA Inc., an Arkansas corporation ("Parent"), EFT
Network Services, LLC, an Arkansas limited liability company ("Seller"), and
J.P. Morgan Trust Company, National Association, organized under the laws of the
United States of America ("Escrow Agent").
WITNESSETH:
THEREFORE, in consideration of the mutual promises and covenants contained
in the Purchase Agreement (as defined herein) and herein, the parties
agree as follows:
The following terms shall have the definitions set forth below:
"Escrow Fund" or "Escrow Funds" shall mean an amount equal to Six Hundred
Fifty Thousand Dollars ($650,000) that is deposited with Escrow Agent, as
increased by any earnings received thereon and as reduced by any disbursements,
amounts withdrawn in accordance with this Agreement, or losses on investments.
"Escrow Obligations" shall mean (i) the obligation of Seller to pay to
Buyer the amount by which the Final Net Working Capital is less than the
Estimated Net Working Capital, if any, under Section 2(e)(v) of the Purchase
Agreement, and (ii) the indemnity obligations of Parent and Seller set forth in
the Purchase Agreement for all amounts payable or owing to Buyer with respect
thereto and Parent's and Seller's indemnity obligations set forth in this
Agreement.
"Purchase Agreement" shall mean the Asset Purchase Agreement dated as of
the date hereof among Buyer, Parent and Seller.
Terms not specifically defined herein shall have the meaning given to them
in the Purchase Agreement.
ARTICLE I
Escrow Acknowledgements
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1.1 Escrow Fund. On the date of this Agreement, Buyer shall deliver to
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Escrow Agent to hold in escrow, as security and collateral for the Escrow
Obligations, cash in the amount of Six Hundred Fifty Thousand Dollars
($650,000). The Escrow Fund shall be held as an escrow fund and shall not be
subject to any lien, attachment, or any other judicial process of any creditor
of any party hereto. The Escrow Fund shall be invested in accordance with
Section 1.3. The Escrow Agent agrees to hold the Escrow Fund in an escrow
account subject to the terms and conditions of this Agreement.
1.2 Tax Identification Number. Each party hereto, except Escrow Agent,
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shall provide Escrow Agent with its Tax Identification Number (TIN) as assigned
by the Internal Revenue Service. All interest or other income earned on the
Escrow Fund shall be allocated and paid as provided herein and reported by the
recipient to the Internal Revenue Service as having been so allocated and paid.
1.3 Investment of Escrow Funds. All Escrow Funds shall be invested in
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the name as Escrow Agent or its nominee for the benefit of the Buyer, Parent and
Seller hereunder. The Escrow Agent may invest the Escrow Funds in any of the
following: a) one or more portfolios offered by J.P. Morgan Fund Distributors,
Inc., for which affiliates of and J.P. Morgan Trust Company, N.A. provide
investment advisory and other services for a fee as described in the prospectus
for these funds which has been provided to the Buyer, Parent and Seller; b)
demand deposit or time deposit with the Escrow Agent, or c) such other
instruments as may be specifically approved in writing by Buyer, Parent and
Escrow Agent. The Escrow Agent shall have the right to liquidate any investments
held in order to provide funds necessary to make required payments under this
Escrow Agreement. The Escrow Agent in its capacity as escrow agent hereunder
shall not have any liability for any loss sustained as a result of any
investment prior to its maturity of for the failure of the parties to give the
Escrow Agent instructions to invest or reinvest the Escrow Fund or any earnings
thereon. In the event that, at any time during the term of this Agreement, the
Escrow Agent is not in possession of written instructions signed by Buyer and
Parent directing the investment or reinvestment of any of the Escrow Funds, the
Escrow Agent shall automatically and forthwith invest such funds in the
investments specified above in this Section 1.4(b) until the Escrow Agent has
received appropriate written instructions signed by Buyer and Parent.
ARTICLE II
Escrow Fund
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2.1 Release of Escrow Funds. Except to the extent there is a pending
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claim by Buyer in respect of any of the Escrow Obligations (an "Indemnifiable
Claim") which has not been finally resolved pursuant to the terms of this
Agreement, and subject to Section 2.2 below, the balance of the Escrow Funds
shall be released from escrow hereunder and delivered to the Seller on the first
anniversary of the date of this Agreement.
2.2 Releases Pending Claims. If there is a pending Indemnifiable Claim
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at the time of a scheduled escrow release under Section 2.1, such release shall
be reduced by the amount of the pending Indemnifiable Claim until such time as
the Indemnifiable Claim is resolved, with the reduction of released Escrow Funds
determined by Section 3.2 hereof, and Buyer is authorized to instruct Escrow
Agent of such reduction pursuant to the procedures set forth in Sections 3.3 of
this Agreement. The amount to be retained in the Escrow Fund to satisfy claims
that may be pending on the scheduled escrow release date shall be determined by
Buyer in good faith, subject to the objection of Parent, in accordance with
Section 3.3.
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ARTICLE III
Indemnification
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3.1 Parent's and Seller's Liabilities. The Escrow Funds shall serve as
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collateral for all amounts payable or owing by Parent and/or Seller to Buyer
with respect to the Escrow Obligations ("Indemnifiable Amounts"), subject to the
indemnity limitations set forth in the Purchase Agreement.
3.2 Third Party Claims. With respect to any claims or demands by third
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parties, whenever Buyer shall have notice that such a claim or demand has been
asserted or threatened against Buyer which would or could constitute a basis for
an Indemnifiable Claim hereunder, Buyer shall promptly send concurrent written
notice of its claim to Parent and Escrow Agent pursuant to the procedures set
forth in Section 3.3 of this Agreement (but the failure so to notify Parent
shall not relieve Parent or Seller from liability that it may have hereunder or
under the Purchase Agreement except to the extent that Parent or Seller has been
prejudiced in any material respect by such failure or by any liability it might
otherwise have as a result thereof). Such notice shall state the factual and
legal basis for such claim or demand, supported by any relevant information and
documentation within the knowledge of Buyer which relates thereto, and the total
Indemnifiable Amounts claimed, to the extent known. The rights and duties of
Parent and Seller and Buyer with respect to the defense and settlement of Third
Party claims shall be governed by Section 6(d) of the Purchase Agreement.
3.3 Notice of Claims and Satisfaction Thereof.
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(a) If and whenever during the term of this Agreement Buyer shall claim
an Indemnifiable Claim, Buyer shall send concurrent written notice of its claim
(a "Notice of Claim") to Parent and Escrow Agent. Such Notice of Claim shall
state the basis for each such claim, supported by any relevant information and
documentation with respect thereto known to Buyer, and the total Indemnifiable
Amount to the extent known or determinable.
(b) If Parent shall object to any Indemnifiable Claim pursuant to this
Agreement, Parent shall give concurrent written notice of such objection to
Escrow Agent and Buyer within 30 days after the date the Notice of Claim (which
includes a sum certain Indemnifiable Amount) is given to Parent as determined in
accordance with the provisions of Section 6.1 hereof (the "Notice Date"), and
for a period of at least 30 days after the Notice Date, Escrow Agent shall not
make any delivery of any Escrow Funds to Buyer pursuant to any Section hereof.
If Parent does not give notice of an objection within 30 days after the Notice
Date, or shall have agreed within such 30-day period that such Indemnifiable
Claim should be paid, Escrow Agent shall, promptly after such 30-day period,
cause to be transferred to Buyer that portion of the Escrow Funds equal to the
amount of the Indemnifiable Claim or the entire Escrow Funds if the
Indemnifiable Claim exceeds the Escrow Funds.
(c) In case Parent shall object in writing to any Indemnifiable Claim
or Indemnifiable Claims by Buyer, Parent and Buyer shall attempt in good faith
thereafter to agree upon the rights of the respective parties with respect to
each of such claims. If Parent and Buyer
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should so agree, a memorandum setting forth such agreement shall be prepared and
signed by both parties and shall be furnished to Escrow Agent. Escrow Agent
shall be entitled to rely on any such memorandum and shall distribute the Escrow
Funds or other property from escrow in accordance with the terms thereof. If
Parent and Buyer do not so agree, Escrow Agent shall not distribute the Escrow
Funds from escrow unless and until (i) a memorandum setting forth an agreement
between Buyer and Parent shall be prepared and signed by both parties and shall
be furnished to Escrow Agent, (ii) delivery of a copy of a settlement agreement
executed by the Parent and Buyer setting forth instructions to Escrow Agent as
to the release of the Escrow Funds, or (iii) delivery of a copy of a final
judgment with respect to such Indemnifiable Claim. Escrow Agent shall be
entitled to rely on any such memorandum, settlement agreement or judgment and
thereupon release the Escrow Funds from escrow in accordance with the terms of
such memorandum, settlement agreement or judgment.
ARTICLE IV
Escrow Mechanics
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4.1 Effect of Delivery. Any Escrow Funds delivered out of escrow to
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satisfy the Indemnifiable Amounts in accordance with Sections 3.2 and 3.3 will
be transferred to Buyer.
4.2 Escrow Fees. The fees of Escrow Agent plus any out of pocket
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expenses of Escrow Agent shall be paid from the Escrow Funds in accordance with
the Fee Schedule attached hereto and made a part hereof. Escrow Agent shall have
the right to liquidate any investments held in order to provide funds necessary
to make required payments under this Agreement. It is understood that the fees
and usual charges agreed upon for services of Escrow Agent shall be considered
compensation for ordinary services as contemplated by this Agreement. As between
themselves, the Buyer, on the one hand, and Parent and Seller, on the other
hand, hereby agree that each shall pay one-half of any fees and expenses of
counsel and other reasonable, actual and documented out-of-pocket expenses
reasonably incurred by Escrow Agent in the performance of its duties hereunder
that may arise as a result of any dispute among the parties hereto with respect
to the Escrow Funds. In releasing any amounts hereunder, Escrow Agent may deduct
therefrom and pay to itself the amount of any outstanding fees and expenses
payable by the party to whom the distribution is made pursuant to the terms of
this Agreement.
ARTICLE V
Escrow Agent
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5.1 Authority. Parent, Seller and Buyer hereby appoint Escrow Agent to
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hold all of the Escrow Funds subject to this Agreement until their release in
accordance with this Agreement.
5.2 Responsibilities of Escrow Agent.
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(a) Escrow Agent shall hold and safeguard the Escrow Funds during
the pendency of the Escrow, shall treat such fund as a trust fund in accordance
with the terms of this
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Agreement (not as property of Parent, Seller or Buyer) and shall hold and
dispose of the Escrow Funds only in accordance with the terms hereof.
(b) Escrow Agent shall not be required to institute or defend any
action involving any matters referred to herein or which affects it or its
duties or liabilities hereunder unless it is required to do so by any party to
this Agreement and then only upon receiving indemnity in accordance with Section
5.4 hereto, against any and all claims, liabilities and expenses in relation
thereto.
(c) Escrow Agent shall not be responsible or liable for any act or
omission on its part in the performance of its duties as Escrow Agent under this
Agreement except as such act or omission constitutes gross negligence, willful,
wanton or reckless misconduct, or fraud.
(d) Anything in this Agreement to the contrary notwithstanding, in no
event shall Escrow Agent be liable for special, indirect or consequential loss
or damage of any kind whatsoever (including but not limited to lost profits),
even if Escrow Agent has been advised of the likelihood of such loss or damage
and regardless of the form of action.
5.3 Funds Transfer. In the event funds transfer instructions are given
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(other than in writing at the time of execution of the Agreement), whether in
writing, by telecopier or otherwise, Escrow Agent is authorized to seek
confirmation of such instructions by telephone call-back to the person or
persons designated on Schedule 1 hereto, and Escrow Agent may rely upon the
confirmations of anyone purporting to be the person or persons so designated.
The persons and telephone numbers for callbacks may be changed only in a writing
actually received and acknowledged by Escrow Agent. The parties to this
Agreement acknowledge that such security procedure is commercially reasonable.
It is understood that 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 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.
5.4 Indemnity. Buyer, Parent and Seller hereby jointly and severally agree
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to indemnify Escrow Agent and hold it harmless against any claim which may be
made against it in connection with its actions as Escrow Agent hereunder;
provided that Escrow Agent shall not be indemnified against any such loss,
damage, expense, liability or claim arising out of or based upon its failure to
perform in accordance with this Agreement or arising out of its bad faith,
negligence, or willful failure to perform its obligations.
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ARTICLE VI
Miscellaneous
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6.1 Notices. Any notice or other communication required or permitted to
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be given to the parties hereto shall be in writing and shall be deemed to have
been given if personally delivered (including personal delivery by facsimile),
or two days after mailing by certified or registered mail, return receipt
requested, first class postage prepaid, addressed as follows (or at such other
address as the addressed party may have substituted by notice pursuant to this
Section 6.1):
To Buyer:
ALLTEL Information Services, Inc.
601 South Lake Destiny Road
Suite 300
Maitland, FL 32751
Ph. (407) 875-1818
Fax: (407) 475-0400
Attn: President
ALLTEL Information Services, Inc.
4001 Rodney Parham Road
Little Rock, AR 72212-2496
Ph: (501) 905-8000
Fax: (501) 220-4034
Attention: General Counsel
To the Parent or Seller:
Euronet USA Inc.
17300 Chenal Parkway
Little Rock, Arkansas 72223
Ph: 33-1-41929560
Attn: President
To the Escrow Agent:
J.P. Morgan Trust Company, N.A.
101 California Street, Suite 2725
San Francisco, CA 94111
Ph: (415) 954-2368
Fax: (415) 954-2371
Attn: Jennifer Richardson
E-Mail: jennifer.richardson@chase.com
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6.2 Amendment. The provisions of this Agreement may be waived, altered,
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amended or supplemented, in whole or in part, only by a writing signed by all
the parties hereto.
6.3 Successor to Escrow Agent. If Escrow Agent is for any reason
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unwilling or unable to serve as Escrow Agent during the term of this Agreement,
Escrow Agent may resign as Escrow Agent by giving at least thirty (30) days
prior written notice to each of Buyer and Parent, such resignation to be
effective thirty (30) days following the date such notice is given. In addition,
Buyer and Parent may jointly remove Escrow Agent as escrow agent at any time
with or without cause, by an instrument (which may be executed in counterparts)
given to Escrow Agent, which instrument shall designate the effective date of
such removal. In the event of any such resignation or removal, a successor
escrow agent who is not affiliated with Buyer shall be appointed by Buyer with
the approval of Parent, which approval shall not be unreasonably withheld.
6.4 Termination. This Agreement shall terminate upon the earlier of (a)
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the mutual written express agreement of the parties hereto and (b) when all of
the Escrow Funds have been distributed according to its terms.
6.5 Interpretation. In the event that Escrow Agent shall be uncertain
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as to its duties or rights hereunder or shall receive instructions, claims or
demands from any party hereto which, in its opinion, conflict with any of the
provisions of this Agreement, it shall be entitled to refrain from taking any
action and its sole obligation shall be to keep safely all property held in
escrow until it shall be directed otherwise in writing by all of the other
parties hereto or by a final order or judgment of a court of competent
jurisdiction. The validity, construction, interpretation and enforcement of this
Agreement shall be determined and governed by the laws of the State of Delaware.
All provisions of the Purchase Agreement shall be incorporated herein by
reference as if set forth in their entirety herein.
6.6 Remedies. The rights and remedies of the parties under this
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Agreement and the Purchase Agreement and all other letters, certificates or
documents executed in connection herewith and therewith are cumulative and not
exclusive of any rights, remedies, powers and privilege that may otherwise be
available to the parties hereto.
6.7 Counterparts. This Agreement may be signed in one or more
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counterparts, each of which shall be deemed an original and all of which shall
constitute one agreement.
6.8 Transfer of Interests. Neither Parent nor Seller shall sell,
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transfer, pledge, hypothecate or otherwise dispose of any Escrow Funds, or any
interest therein, prior to the distribution of such Escrow Funds in accordance
with this Agreement.
6.9 Assignment. No party may, without the prior express written consent
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of each other party, assign this Escrow Agreement in whole or in part. Any
company into which Escrow Agent may be merged or converted or with which it may
be consolidated or any company resulting from any merger, conversion or
consolidation to which it shall be a party or any company to which Escrow Agent
may sell or transfer all or substantially all of its escrow/custody
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business, provided such company shall be eligible to serve as Escrow Agent
hereunder, shall be the successor hereunder to Escrow Agent without the
execution or filing of any paper or any further act. This Escrow Agreement shall
be binding upon and inure to the benefit of the respective successors and
assigns of the parties.
(Signature Page Follows)
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IN WITNESS WHEREOF, the parties have signed this Agreement on the day
and year first above written.
ALLTEL INFORMATION SERVICES, INC.,
an Arkansas corporation
By:________________________________________
Name:______________________________________
Title:_____________________________________
EURONET USA INC., an Arkansas corporation
By:________________________________________
Name:______________________________________
Title:_____________________________________
EFT NETWORK SERVICES, LLC, an Arkansas limited
liability company
By: Euronet USA Inc.
By:______________________________________
Name:____________________________________
Title:___________________________________
J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION
By:________________________________________
Name:______________________________________
Title:_____________________________________
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