-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, AyNLadMMPrbKY/dXfuM+yjy/0jwZPvdpx/BsUqO3Z6wxp6IjcXmh+jBpedaZv1je CDN+YwVMj4SQmSwS9onAdQ== 0000950134-94-001464.txt : 19941201 0000950134-94-001464.hdr.sgml : 19941201 ACCESSION NUMBER: 0000950134-94-001464 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19941115 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19941130 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: DSC COMMUNICATIONS CORP CENTRAL INDEX KEY: 0000316004 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE & TELEGRAPH APPARATUS [3661] IRS NUMBER: 541025763 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-10018 FILM NUMBER: 94562710 BUSINESS ADDRESS: STREET 1: 1000 COIT RD CITY: PLANO STATE: TX ZIP: 75075 BUSINESS PHONE: 2145193000 MAIL ADDRESS: STREET 1: 1000 COIT ROAD CITY: PLANO STATE: TX ZIP: 75075-5813 FORMER COMPANY: FORMER CONFORMED NAME: DIGITAL SWITCH CORP DATE OF NAME CHANGE: 19850425 8-K 1 FORM 8-K DATED NOVEMBER 30, 1994 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (date of earliest event reported): November 15, 1994 DSC COMMUNICATIONS CORPORATION -------------------------------------------------------- (Exact name of registrant as specified in its character) DELAWARE 0-10018 54-1025763 ----------------- --------------------- ------------------- (State or other (Commission File No.) (IRS Employer jurisdiction Identification No.) of incorporation) 1000 Coit Road Plano, Texas 75075 - -------------------------------------------------------------------------------- (Address of principal executive offices) (zip code) (214) 519-3000 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) 2 ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS On November 15, 1994 (the "Closing Date"), DSC Communications Corporation, a Delaware corporation ("DSC"), completed the acquisition of NKT Elektronik A/S, a corporation organized and existing under the laws of the Kingdom of Denmark ("NKTE"), pursuant to a Stock Purchase Agreement, as amended, (the "Agreement") with NKT Holdings A/S, a corporation organized and existing under the laws of the Kingdom of Denmark (the "Seller"). The Agreement provided for DSC to purchase all of the outstanding capital stock of NKTE from the Seller for $146,900,000 (the "Purchase Price") in cash. The amount of consideration paid to the Seller was determined through arm's length negotiations between DSC and the Seller and was funded using DSC's existing cash and proceeds from short-term borrowings secured by DSC's existing marketable securities. In connection with DSC's purchase of NKTE, DSC entered into a five year Noncompetition Agreement with the Seller pursuant to which the Seller agreed not to compete with NKTE in the fiber optical telecommunications equipment business. In addition, seven percent of the Purchase Price was escrowed to secure the Seller's indemnification obligations under the Agreement in accordance with the terms of the Escrow Agreement. NKTE, located in Copenhagen, Denmark, designs, develops, manufactures, sells and services a family of optical line transmission systems and is a supplier of Synchronous Digital Hierarchy (SDH) optical transmission equipment. NKTE also develops and manufactures optical fiber amplifiers and advanced network management systems, featuring Telecommunication Management Network (TMN) capabilities. DSC intends to continue the operation of the business of NKTE as conducted prior to the Closing Date. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial Statements of Businesses Acquired. It is impracticable to ------------------------------------------- file the financial statements required by this Item 7(a) at this time because such statements are not available. DSC will file such statements as soon as practicable, but not later than January 29, 1995. (b) Pro Forma Financial Information. It is impracticable to file the pro ------------------------------- forma financial information required by this Item 7(b) at this time because such information is not available. DSC will file such information as soon as practicable, but not later than January 29, 1995. (c) Exhibits. -------- 2.0 Stock Purchase Agreement By and Among DSC Communications Corporation, NKT Holding A/S, and NKT Elektronik A/S dated as of October 20, 1994 incorporated herein by reference from the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 1994 2.1 Amendment No. 1 to Exhibit 2.0 2 3 10.0 Noncompetition Agreement 10.1 Escrow Agreement SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized. DSC COMMUNICATIONS CORPORATION Dated: November 30, 1994 By: /s/ KENNETH R. VINES ----------------------------- Kenneth R. Vines Vice President and Controller, duly authorized officer and principal accounting officer 3 4 INDEX TO EXHIBITS
SEQUENTIALLY EXHIBIT NUMBERED NUMBER DESCRIPTION PAGE - ------- ----------- ------------ 2.0 Stock Purchase Agreement By and Among DSC Communications Corporation, NKT Holding A/S, and NKT Elektronik A/S dated as of October 20, 1994 incorporated herein by reference from the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 1994 2.1 Amendment No. 1 to Exhibit 2.0 10.0 Noncompetition Agreement 10.1 Escrow Agreement
EX-2.1 2 AMENDMENT #1 TO STOCK PURCHASE AGREEMENT 1 EXHIBIT 2.1 AMENDMENT NO. 1 TO STOCK PURCHASE AGREEMENT THIS AMENDMENT NO. 1 TO STOCK PURCHASE AGREEMENT (the "Amendment") amends that certain Stock Purchase Agreement dated as of October 20, 1994 by and among DSC COMMUNICATIONS CORPORATION, a Delaware corporation, NKT HOLDING A/S, a corporation organized and existing under the laws of the Kingdom of Denmark, and NKT ELEKTRONIK A/S, a corporation organized and existing under the laws of the Kingdom of Denmark (as amended by this Amendment, the "Agreement"). The rights of Acquiror under the Agreement have been assigned to P.P.H.S.G. 205 ApS, a private limited company organized and existing under the laws of the Kingdom of Denmark ("Acquiror Sub"). RECITALS A. The text of the Agreement, as executed, contained a number of handwritten changes. B. The parties wish to amend the Agreement in certain respects, as hereinafter set out, and to confirm the final form of the Agreement. AGREEMENTS NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein, the parties agree as follows: 1. All capitalized terms not defined in this Amendment are used with the meanings ascribed to them in the Agreement. 2. Attached hereto as Exhibit A is a transcription of the Agreement, which incorporates (a) the various handwritten changes and riders in the text of the Agreement which was originally signed by the parties, and (b) corrections of various typographical, grammatical and technical drafting errors. The parties agree that the original signature pages shall be appended to copies of the text of the Agreement in the form attached hereto, which shall thereafter constitute the final form of the Agreement. 2 - 2 - 3. Attached hereto as Exhibit B is an update of the Company Disclosure Schedule, as contemplated by Section 5.03 of the Agreement. The matters disclosed in the Supplemental Disclosure Schedule shall be treated as though contained in the Company Disclosure Schedule originally attached to the Agreement. 4. The term "Submarine Liabilities", as defined in Section 6.01(a) of the Agreement, shall not include liabilities and obligations (a) for products which are not cables, or (b) for services which were not related to cable installation or servicing of cables. 5. The definition of "Excluded Businesses" at Section 9.03(h) of the Agreement is hereby amended by the addition of the following sentence: "Notwithstanding the foregoing, transmission equipment sales, installation or services shall not be deemed part of the Excluded Businesses even where conducted in connection with, or included within contracts for the sale, installation or servicing of, copper cables or fiber optics". 6. The parties acknowledge that when the Company commenced operations in 1991, Seller assigned to the Company the existing obligations to customers of the businesses that were thereafter to be conducted by the Company, and the Company assumed such obligations (the "Opening Customer Obligations"). The Opening Customer Obligations (other than the Assumed Obligations) which remain to be performed will be performed by the Company and indemnified by Seller as and to the extent provided for under Article VI of the Agreement. 7. Section 6.01(a) of the Agreement is hereby amended to add the following additional clauses prior to the period ending the final sentence thereof: ", (v) the claim made by Cable & Wireless for approximately GBP 200,000 arising out of the Lanis project, (vi) relating to approximately 600 metres of fiber cables supplied to SEAS as part of the Kontek project, (vii) any import duties relating to the importation into India in 1990 of approximately 326 kilometres of replacement cable in connection with the Indian Railway project, (viii) the Teltec litigation presently pending before the Estre Landsret and any related claims by Teltec arising from the same incident, and (ix) any breaches by the Company or the Continuing Subsidiaries of any representation or warranty contained in the agreements and instruments pursuant to which the Excluded Businesses and Excluded Assets are transferred pursuant to Section 5.04 hereof (and any Indemnified Costs relating to the matters described in this clause (ix) shall be treated as Assumed Obligations)." 8. Section 6.01(e) of the Agreement is hereby amended to add the following sentence at the close thereof: 3 - 3 - "Each Party shall use reasonable commercial efforts to collect under any insurance policy or bond that provides coverage of matters that might otherwise become Indemnified Costs." 9. A new Section 6.01(h) is hereby added to the Agreement as follows: "(h) Claims for indemnity with respect to the matters described in Section 6.01(a) at Clauses v through viii shall be reduced by the amount of any reserves recorded in the Company's books of account as of September 30, 1994 which have been set aside for the projects out of which such claims arose." 10. Each Party shall retain in its archives contracts, documents and all other material (a) relevant to the Agreement or (b) relevant to the tax obligations of any Party, in either case for so long as any other Party can reasonably be expected to have an interest therein. In particular, the Parties shall ensure that all information relating to contracts (including such contracts and their appendices, all correspondence, reports, certificates and minutes of meetings relating thereto) with respect to which a Party may be entitled to claim indemnification from another Party shall be kept on file for as long as any Party may be obligated to indemnify another Party for claims with respect thereto. Each Party shall be allowed full access to, and shall have a right to copy, all such documents when pertinent to an indemnification or tax question, and shall be permitted to interview employees of the Company or any member of the NKT Group in connection therewith. 11. Attached hereto as Exhibit C is a memorandum listing the foreign exchange agreements in effect between Seller and the Company as of the Closing Date. For the convenience of the Company and Acquiror, Seller will permit the Company to roll forward the maturity dates of such agreements in accordance with the Company's prior practices, provided, however, that no revised maturity dates shall extend beyond June 30, 1995. Acquiror and Acquiror Sub shall cause the Company to fulfil its obligations to the Seller under such agreements (and any replacement agreements) on the maturity dates. 12. Acquiror has arranged for certain of the documents made available to it for review prior to Closing (including the Company's contract files) to be encoded on CD-ROM. Acquiror shall provide to Seller a copy of the CD-ROM promptly after the encoding has been completed. 13. The upward adjustment of the Purchase Price pursuant to Section 1.04 of the Agreement in the amount of U.S. Dollar 1,235,000.00 less the U.S. Dollar 100,000.00 adjustment described below, shall be payable by delivery of Acquiror's promissory note for U.S. Dollars 1,135,000.00 payable the day after the Closing Date. The parties have agreed to a downward adjustment of the Purchase Price by U.S. Dollars 100,000.00 in settlement of the following matters: 4 - 4 - a) Acquiror's objection to the treatment of the Company's Polish subsidiary as though it was jointly taxed with the Company for the nine months ending September 30, 1994; and b) Seller's agreement to contribute towards the payment of the Company's management incentive plan for 1994. No further claim shall be made against Seller with respect to the Company's obligations for 1994 on its management incentive plan or on account of bonuses payable to the Company's management conditioned on the occurrence of the Closing under employment agreements described at Article X, items 1-8 of the updated Disclosure Schedule attached as Exhibit B hereto. 14. Except as explicitly amended pursuant to this Amendment, the Agreement remains in full force and effect. WITNESS the following signatures this 15th date of November, 1994. DSC Communications Corporation By: /s/ James L. Donald James L. Donald, Chairman, President and Chief Executive Officer P.P.H.S.G. 205 ApS By: /s/ James L. Donald James L. Donald Chairman of the Board According to Power of Attorney NKT Holding A/S By: /s/ Gerhardt Albrechtsen Gerhardt Albrechtsen Chief Executive Officer and President By: /s/ Knud Rasmussen Knud Rasmussen Member of Executive Board NKT Elektronik A/S By: /s/ Poul Friis Poul Friis Chief Executive Officer and President EXHIBITS EXHIBIT A See Exhibit 2.0 to the Current Report on Form 8-K of DSC Communications Corporation dated November 30, 1994 EXHIBIT B Not included EXHIBIT C Not included EX-10.0 3 NONCOMPETITION AGREEMENT 1 EXHIBIT 10.0 NONCOMPETITION AGREEMENT This Noncompetition Agreement is entered into as of November 15, 1994, by and between DSC Communications Corporation, a Delaware corporation ("Acquiror'), P.P.H.S.G. 205 ApS, a private limited liability company organized and existing under the laws of the Kingdom of Denmark ("Acquiror Sub"), and NKT Holding A/S, a corporation organized and existing under the laws of the Kingdom of Denmark (the" Seller'). RECITALS A. NKT Elektronik A/S, a corporation organized and existing under the laws of the Kingdom of Denmark (the "Company"), is engaged in the business of sale, marketing, development, design, manufacture, and service of fiber optical telecommunications transmission equipment and the design, installation and system integration of submarine cable (the "Business"); B. Seller has agreed to sell, transfer, and convey, and concurrently herewith is selling, transferring, and conveying, to Acquiror Sub, all of the outstanding capital stock of the Company, pursuant to that certain Stock Purchase Agreement (the "Purchase Agreement") dated as of October 20, 1994, by and among Acquiror, Seller and the Company; C. Acquiror has assigned its rights and obligations under the Purchase Agreement to Acquiror Sub; D. Seller possesses valuable knowledge about the Business and operations of the Company; and E. Acquiror has requested that Seller enter into this Agreement as an inducement to Acquiror to enter into and consummate the transactions contemplated by the Purchase Agreement; NOW, THEREFORE, for and in consideration of the mutual covenants and promises herein contained, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: 1. Agreement Not to Compete. In order to protect the goodwill and business interests of the Company, Seller shall not, during the five (5) year period beginning on the date hereof (the "Term of Noncompetition"), directly or indirectly own, engage in, manage, operate, join, or control or participate in the management, operation, or control of, or be connected as a stockholder, director, officer, employee, agent, partner, joint venturer, or otherwise with any business or organization which in any way competes with the Company in the Business; provided, however, that (a) nothing herein shall prohibit Seller from owning or participating in the ownership of or being connected as a stockholder, partner, joint venturer or with any other type of ownership of an equity interest in any entity constituting five per cent (5%) or less of all outstanding ownership interests in such entity, and (b) nothing herein shall restrict Seller in the 2 conduct of any business that is included within the Business but that ceases to be actively conducted by the Company or its subsidiaries during the Term of Noncompetition. 2. Confidential Information. (a) Seller acknowledges that except as provided below, the confidential information, observations, and data obtained or possessed by them concerning the Business of the Company will be the property of the Company and not Seller following the Closing. Therefore, Seller agrees that it will not disclose to any person or use for its own account any of such information, observations, or data unless and to the extent that such information, observations, or data become generally known to and available for use by the public otherwise than as a result of Seller's act or omission to act. Seller agrees to deliver to the Company, at any time the Company may request in writing, all memoranda, notes, plans, records, reports, and other documents (and copies thereof) relating to the Business which it may then possess or have under its control. (b) Notwithstanding the foregoing, the parties acknowledge and agree that Seller shall be entitled to disclose, use and retain copies of the information described in subparagraph (a) above in connection with: (i) the conduct of the Excluded Business and the businesses related to the Excluded Assets, (ii) obligations of Seller under certain contracts and agreements relating both to the business of Seller and the Business, (iii) claims against Seller under the Escrow Agreement, (iv) claims by or against the Seller under Article VI of the Purchase Agreement, and (v) requirements of legal process, law, regulation or policy of any governmental authority or order of a court of competent jurisdiction. 3. Amendments. This Agreement may be amended or modified from time to time, but only by a written instrument executed by all of the parties hereto. 4. Notices. Any notices required or permitted hereunder shall be in writing and shall be deemed given when personally delivered or when sent by registered or certified mail, return receipt requested, addressed to the other party at its, his or her address set forth below, or at such other address as it or he may specify in writing: (a) If to DSC or Acquiror Sub: DSC Communications Corporation 1000 Coit Road Plano, TX 75075-5813 Attention: Pete Waal E-2 3 With a copy (which shall not constitute notice) to: Baker & McKenzie 2001 Ross Avenue Suite 4500 Dallas, TX 75201 Telecopier No.: 214/ 978-3099 Attention: John Kendrick, Esq. Mogens Gaarden Pontoppidan, Philip & Partners Vognmagergade 7 DK-1120 Copenhagen, Denmark Telecopier: 45 33 13 56 43 (b) If to Seller: NKT Holding A/S NKT Alle 1. DK-2605 Bronby Denmark Telecopier No.: 45 43 96 18 20 Attention: With a copy (which shall not constitute notice) to: Jan Schans Christensen Bech-Bruun & Trolle Nerre Farimagsgade 3 1364 Copenhagen Denmark Telecopier: 45 33 15 25 55 Willcox & Savage, P.C. 1800 NationsBank Center One Commercial Place Norfolk Virginia 23510 Telecopier No.: (804) 628-5566 Attention: Keith C. Cuthrell, Jr. 5. Entire Agreement. This Agreement constitutes the entire agreement of the parties and supersedes all prior agreements, discussions, understandings or undertakings, both written or oral, with respect to the subject matter hereof. E-3 4 6. Assignment: Parties Bound. The Company may assign its rights and obligations hereunder to any party succeeding to substantially all of the business and assets of the Business. Seller may not assign any of their obligations hereunder. Any assignment in violation of the foregoing shall be null and void. Subject to the foregoing, this Agreement shall be binding upon the parties hereto and shall inure to the benefit of the parties hereto and their respective heirs, executors, administrators, legal representatives, successors, and assigns. 7. Governing Law. This Agreement shall be governed by and be enforceable under the laws of the Kingdom of Denmark, (regardless of the laws that might otherwise govern under applicable principles of conflicts of law). 8. Non-waiver of Breach. A waiver by any party hereto of a particular breach or default in connection with any provision of this Agreement shall not be deemed a waiver of any subsequent default or breach of the same or any other provision of this Agreement. 9. Invalid Provision. If any provision of this Agreement (including, without limitation, any provision relating to the activities covers by the time period of, or geographic scope of the noncompetition covenants in Section 1 hereof) is held to be illegal, invalid, or unenforceable under present or future laws, such provision shall be severable, and this Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision had never comprised a part of this Agreement, and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by such illegal, invalid, or unenforceable provision or by its severance herefrom. Furthermore, in lieu of such illegal, invalid, or unenforceable provision, there shall be added automatically as a part of this Agreement a provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible and be legal, valid, and enforceable, and the parties hereto hereby request the court or any arbitrator to whom disputes relating to this Agreement are submitted to reform the otherwise enforceable covenant in accordance with the preceding covenant. 10. Headings. The headings in this Agreement are for purposes of reference only and shall not be considered in construing this Agreement. 11. Attorneys' Fees. If any party hereto brings any action, at law or in equity, to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to recover from the other party hereto reasonable attorneys' fees in addition to any other relief to which such party may be entitled. 12. Enforcement of Covenants. Seller agrees that a violation on its part of any covenant contained herein shall cause irreparable damage to the Company and, consequently, Seller further agrees that the Company shall be entitled, as a matter of right, to an injunction out of any court of competent jurisdiction restraining any further violation of such covenant by Seller. Such right to an injunction shall be cumulative and in addition to any other remedies the Company may have at law or in equity, including, but not limited to, recovery of damages or the right to bring an action for specific performance of any covenant contained herein. E-4 5 13. Defined Terms. All capitalized terms in this Agreement and not otherwise defined herein shall have the meaning given them in the Purchase Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. DSC COMMUNICATIONS C0RP0RATI0N By: /s/ James L. Donald Name: James L. Donald Title: Chairman of the Board President and Chief Executive Officer P.P.H.S.G. 205 ApS By: /s/ James L. Donald Name: James L. Donald Title: Chairman of the Board According to Power of Attorney NKT HOLDING A/S By: /s/ Gerhard Albrechtsen Name: Gerhard Albrechtsen Title: President and Chief Executive Officer By: /s/ Knud Rasmussen Name: Knud Rasmussen Title: Member of Executive Board E-5 EX-10.1 4 ESCROW AGREEMENT 1 EXHIBIT 10.1 ESCROW AGREEMENT This Escrow Agreement (this "Agreement") is entered into as of November 15, 1994, by and among DSC Communications Corporation, a Delaware corporation ("DSC"), NKT Holding A/S, a corporation organized and existing under the laws of the Kingdom of Denmark ("Seller"), and Den Danske Bank (the "Escrow Agent"). RECITALS A. DSC and NKT Elektronik A/S, a corporation organized and existing under the laws of the Kingdom of Denmark (the "Company"), and Seller have entered into that certain Stock Purchase Agreement dated October 20, 1994 (the "Purchase Agreement"), a copy of which has been delivered to the Escrow Agent, pursuant to which, among other things, (a) DSC shall acquire all of the outstanding capital stock of the Company from Seller in exchange for US$145,000,000.00 less the amount of any adjustment provided in Section 1.04 of the Purchase Agreement (the "Purchase Price"), (b) Seller has made certain agreements, covenants, representations, and warranties to DSC, and (c) Seller, has agreed to indemnify, defend, and hold harmless DSC, its respective affiliates and the directors, officers and employees (collectively, the "Indemnified Parties") from and against certain "Indemnified Costs" as specified in the Purchase Agreement. B. Pursuant to the terms of the Purchase Agreement, the parties hereto have agreed to enter into this Agreement. C. DSC and Seller desire to appoint the Escrow Agent to act as such pursuant to the terms and conditions set forth herein and the Escrow Agent desires to accept such appointment. NOW, THEREFORE, for valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: ESCROW AGENT ARTICLE I 1.1 Appointment. The Escrow Agent is hereby appointed depositary and escrow agent for the Indemnified Parties and Seller with respect to the Escrow Fund (as hereinafter defined). 1.2 The Escrow Fund. Seller hereby directs DSC to deposit with the Escrow Agent on the Closing Date (as defined in the Purchase Agreement), the amount equal to seven percent (7%) of the Purchase Price (the "Escrow Amount"). Any interest paid on the investments contemplated by Section 5.1 hereof are hereinafter referred to as the "Earned Proceeds." Seller hereby directs that the Escrow Amount and the Earned Proceeds be held and disposed of by the Escrow Agent as herein provided. The Escrow Amount and the Earned Proceeds shall constitute the Escrow Fund hereunder (the "Escrow Fund"), which shall be held and distributed by the Escrow Agent in accordance with the terms and conditions of this Agreement. 2 1.3 Binding Obligations. Except for this Agreement, the Escrow Agent is not a party to, nor is it bound by nor need it give any consideration to the terms or provisions of, any agreement among the Indemnified Parties and Seller. The only duties and responsibilities of the Escrow Agent hereunder shall be to hold the Escrow Fund as Escrow Agent according to the terms and provisions of this Agreement and to dispose of and deliver the Escrow Fund as provided in this Agreement. 1.4 Acts of Escrow Agent. The Escrow Agent may in good faith act or refrain from acting hereunder with respect to any matter referred to herein in full reliance upon and by and with the advice of counsel selected by the Escrow Agent and shall be fully protected in so acting or in refraining from so acting upon the advice of such counsel. The Escrow Agent may rely upon any documents that may be submitted to it in connection with its duties hereunder and that it reasonably believes to be genuine and to have been signed or presented by the proper party or parties. DSC and Seller jointly and severally agree to indemnify the Escrow Agent against any expenses (including reasonable attorneys' fees) or liabilities incurred by the Escrow Agent as a result of acts taken or omitted in good faith by the Escrow Agent pursuant to the terms and conditions hereof. DSC and the Seller will provide the Escrow Agent with documentation covering authorised signatures. 1.5 Disputes. In the event a dispute arises from conflicting demands by the Indemnitees and Seller being made upon the Escrow Fund or any property held by the Escrow Agent hereunder, the Escrow Agent shall have, in addition to all other remedies which it may have at law or in equity, the right to refuse to comply with any such demand without liability for such refusal, until the matter in dispute has been settled by agreement of the parties or settled or resolved in the manner described in Section 4.3 hereof and it has received evidence thereof satisfactory to it. In the event a dispute among the parties hereto cannot be resolved by agreement among them, the Escrow Agent may institute a proceeding or an interpleader action with respect to the amount of the Escrow Fund in dispute. 1.6 Litigation. The Escrow Agent shall not be required to institute legal proceedings of any kind. In the event proceedings are instituted by the Indemnified Parties against Seller or by Seller against the Indemnitees that (a) require additional duties of the Escrow Agent, (b) require court or other appearances by or on behalf of the Escrow Agent, or (c) require the Escrow Agent to incur expenses or make disbursements in the resolution of contested claims against the Escrow Fund, then the Escrow Agent shall be entitled to reimbursement for any reasonable expenses or disbursements, and such reimbursements shall include but not be limited to the reasonable cost of legal services if the Escrow Agent deems it necessary to retain an attorney. The party to this Agreement who is not successful after final resolution of such dispute shall reimburse the Escrow Agent for the expenses and disbursements described in this Section 1.6, or those incurred by the Escrow Agent in connection with any interpleader action described in Section 1.5 hereof, or those fees, expenses, or liabilities for which the Escrow Agent is entitled to Indemnification under Section 1.4 above which arise solely as a result of such dispute. A-2 3 1.7 Fees. The fees of the Escrow Agent shall be comprised of (a) a one time acceptance fee of $ 5,000 and (b) an annual fee of $ 1,000 for each full year during which the Escrow Agent holds the Escrow Fund or any part thereof hereunder. Such fees shall be paid by DSC; provided, however, that any fees charged by the Escrow Agent as transaction fees with respect to investment of the cash in the Escrow Fund at the direction of the Seller as provided in Section 5.1(b) hereof shall be paid by Seller. Notwithstanding the foregoing (but subject to the proviso in the immediately preceding sentence), DSC and Seller shall be jointly and severally liable to the Escrow Agent for any fees or expenses of the Escrow Agent (including, without limitation, reasonable attorneys' fees and court costs) required to be paid, reimbursed, or indemnified hereunder that either the Indemnified Parties or Seller are required to, but do not, pay. ARTICLE II DELIVERY OF ESCROW AMOUNT The Escrow Agent hereby acknowledges that it will receive the Escrow Amount and Earned Proceeds from DSC and that it will provide to Seller written notification of receipt of the Escrow Amount and Earned Proceeds on the date of receipt. The Escrow Agent further acknowledges its acceptance of the authorization herein conferred and agrees to carry out and perform its duties contained herein pursuant to the provisions of this Agreement. ARTICLE III RELEASE OF ESCROW FUND 3.1 Release of Escrow Amount. On the first anniversary of the Closing Date (the "Release Date"), Seller shall be entitled to receive from the Escrow Fund the amount equal to the Escrow Fund then held in escrow less the aggregate amount of all Pending Claim Amounts (as defined herein). 3.2 Procedure for Release. On or after the day that is 16 business days prior to the Release Date, the Seller shall submit to DSC and the Escrow Agent a proposed letter of instruction (the "Release Instruction") addressed to the Escrow Agent. The Release Instruction shall set forth the amount of the Escrow Fund then held in escrow that Seller believes that Seller is entitled to receive under Section 3.1 hereof, together with the calculations by which such amounts were determined. If DSC executes the Release Instruction by written notice to Seller and the Escrow Agent actually received on or before the 14th business day following delivery to DSC of the Release Instruction, the amounts stated in the Release Instruction shall promptly be delivered and released by the Escrow Agent to Seller on the date that is the later of (a) the Release Date, or (b) the date on which DSC executes the Release Instruction. 3.3 Objection. If DSC believes the calculations or amounts contained in the Release Instruction are incorrect, it may object to the Release Instruction by delivering written notice to Seller and the Escrow Agent by written notice to Seller and the Escrow Agent actually received on or before the 14th business day following the date on which the Release Instruction is delivered to DSC, which notice shall set forth the amount of the Escrow Fund, if any, to which DSC A-3 4 believes Seller is entitled, which amount shall thereupon be promptly delivered and released by the Escrow Agent to Seller. In the event DSC makes an objection to the Release Instruction as provided herein, the difference between the amount of the Escrow Fund to which Seller believes that Seller is entitled and the amount of the Escrow Fund to which DSC believes Seller is entitled shall continue to be held in escrow until such dispute is resolved by a written agreement among them or pursuant to Article IV hereof, and in either such case, the amount provided in such written agreement or decision from a proceeding to be paid to Seller shall be promptly paid to Seller by the Escrow Agent following submission of such agreement or decision from a proceeding to the Escrow Agent. 3.4 Access to Information. The Escrow Agent shall, upon request by the Indemnified Parties or Seller, make available to the requesting party access to any books and records or other information in its possession concerning the Escrow Fund. 3.5 Form of Release. The release of the Escrow Fund as provided in the foregoing sections of this Article III shall be made by delivery of such amounts to Seller. From and after such delivery, the Escrow Agent shall be discharged from any further liability or responsibility for such amounts. ARTICLE IV CLAIMS AGAINST ESCROW FUND 4.1 Claim Procedures. Any claim by the Indemnified Parties for Indemnified costs ("Claim") shall be subject to the procedural requirements set forth in Article VI of the Purchase Agreement. On or prior to the Release Date, DSC shall concurrently deliver to the Escrow Agent a copy of any notice to Seller regarding any Claim (a "Claim Notice") provided, however, that the failure of DSC to so promptly notify the Escrow Agent shall not prevent any Indemnified Party from being indemnified or reimbursed for any Indemnified costs arising out of any such Claim except to the extent that the failure to so promptly notify materially damages Seller. Each Claim Notice shall describe in reasonable detail the basis of the Claim and shall indicate the estimated amount of the Indemnified costs that have been or which may be suffered by DSC or any other Indemnified Party, which estimate may be revised from time to time (a "Pending Claim Amount"). The Escrow Agent shall disregard any Claim Notice not actually received on or prior to the Release Date. 4.2 Determination of Claims. The "Determination" of a Claim shall be made as follows: (a) Seller shall have a period of 10 days from the receipt of any Claim Notice to dispute in whole or in part any Claim made in the aforesaid Claim Notice in accordance with the Purchase Agreement by delivering to DSC and the Escrow Agent within such 10 day period a written notice (the "Dispute Notice") describing in reasonable detail the basis for the objection. A-4 5 (b) (i) If the Claim Notice does not involve a third party action (as defined in the Purchase Agreement) then: (A) if Seller does not dispute in whole or in part any Claim within the time herein provided, such Claim or the portion thereof which is not disputed shall be deemed to have resulted in a Determination in favor of the applicable Indemnified Party and Seller will be entitled to be paid an amount out of the Escrow Fund equal to the amount of such Claim as estimated by such Indemnified Party in the Claim Notice as such Claim Notice may be revised from time to time in accordance herewith or the portion thereof which is not disputed and the earnings thereon from the date such Claim Notice was delivered to Seller; and (B) if Seller does dispute any Claim, within the time period herein provided, such Claim or portion thereof which Is disputed shall be resolved in accordance with the Purchase Agreement, which resolution shall constitute a Determination. (ii) If the Claim Notice involves a third party action, then: (A) if Seller does not dispute any third party action within the time herein provided, such third party action shall be deemed to have resulted in a Determination in favor of the applicable Indemnified Party, and the applicable Indemnified Party will be entitled to be paid and/or direct that the third party asserting such third party action be paid, an amount out of the Escrow Fund equal to the amount of Indemnified costs actually incurred by the Indemnified Party in connection with such third party action and the earnings thereon from the date the applicable Claim Notice was delivered to Seller; and (B) if Seller does dispute the third party action within the time herein provided, such dispute shall be limited to the issue of whether such third party action is indemnifiable under Article VI of the Purchase Agreement, and shall be resolved in accordance with the provisions thereof. If such resolution is that the third party action is not indemnifiable, such resolution shall constitute a Determination. If such resolution is that the third party action is indemnifiable, the determination shall be derived from the outcome of such third party action. A-5 6 (c) From time to time after a Determination of a Claim pursuant to Section 4.2(b), DSC may deliver to the Escrow Agent and Seller a certificate of an officer of DSC to the effect that (i) there has been a previous Determination with respect to such Claim, and (ii) as a result of such Determination the applicable Indemnified Party and/or third party is entitled to be paid a specified amount. Such certificate shall attach a copy of the invoice or other documentation supporting the amount of Indemnified costs to be paid. On the third business day after receipt of the notice from DSC, the Escrow Agent shall deliver to DSC, such other lndemnified Party and/or any person designated by DSC, an amount of Indemnified costs, if any, relating to such Claim payable to DSC or such other Indemnified Party pursuant to such notice or certificate plus an amount equal to the earnings thereon accrued from and after the date of the delivery of the Notice of Claim with respect to such Claim. Any payments out of the Escrow Fund, however, has to be confirmed and signed by the Seller. 4.3 Claims Pending on Release Date. If there are pending Claims as of the Release Date, the Escrow Agent shall continue to hold in escrow amounts equal to the aggregate of all Pending Claim Amounts and Interest thereon until the earlier of (a) the Escrow Agent has actually received a written notice from DSC that there exist no further Indemnified costs in respect of such Claims or (b) Seller provides to DSC and the Escrow Agent a notice containing evidence that it is satisfactory to the Escrow Agent in its sole discretion that the Claim has been resolved (and describing the resolution) or the payment of all obligations of Seller for Indemnified Amounts with respect to any resolved claim. DSC covenants and agrees to provide prompt notice to the Escrow Agent once it has a reasonable basis to believe there exist no further Indemnified costs in respect of a Claim. ARTICLE V INVESTMENT AND VOTING MATTERS 5.1 Investments. (a) Interest of any kind on or with respect to the assets comprising the Escrow Fund shall be payable to the Escrow Agent, to be held in escrow pursuant to this Agreement. (b) At the direction of Seller pursuant to this Section 5.1(b), the Escrow Agent may invest cash within the Escrow Fund in one or more of the following: interest bearing current account in USD or DKK and/or time deposits in USD or DKK with Den Danske Bank. ARTICLE VI MISCELLANEOUS 6.1 Notices. All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed to have been duly given or made as of the date delivered, mailed or transmitted, and shall be effective upon actual receipt, if delivered personally or by A-6 7 courier, mailed by registered or certified mail (postage prepaid, return receipt requested) to the parties at the following addresses (or at such other address for a party as shall be specified by like changes of address) or sent by electronic transmission to the telecopier number specified below. Account statements covering the Escrow Fund (account) will be submitted monthly from the Escrow Agent to the parties specified below: (a) If to DSC: DSC Communications Corporation 1000 Coit Road Plano, TX 75075-5813 Attention: Pete Waal With a copy (which shall not constitute notice) to: Baker & McKenzie 2001 Ross Avenue Suite 4500 Dallas, TX 75201 Telecopier No.: 214/978-3099 Attention: John Kendrick, Esq. Mogens Gaarden Pontoppidan, Philip & Partners Vognmagergade 7 DK-1120 Copenhagen, Denmark Telecopier: 45 33 13 56 43 (b) If to the Seller: NKT Holding A/S NKT Alle 1. DK-2605 Brondby Denmark Telecopier No.: 45 43 96 18 20 Attention: President and Chief Executive Officer With copies to (which shall not constitute notice): Jan Schans Christensen Bech-Bruun & Trolle Nerre Farimagsgade 3 1364 Copenhagen Denmark Telecopier: 45 33 15 25 55 A-7 8 Willcox & Savage, P.C. 1800 NationsBank Center One Commercial Place Norfolk Virginia 23510 Telecopier No.: (804) 628-5566 Attention: Keith C. Cuthrell, Jr. (c) If to the Company: NKT Elektronik A/S NKT Alle 85 DK-2605 Brondby Denmark Telecopier No.: 45 43 63 13 20 Attention: President and Chief Executive Officer With copies to, if such notice is prior to the Closing (which shall not constitute notice) to: Jan Schans Christensen Bech-Bruun & Trolle Nerre Farimagsgade 3 1364 Copenhagen Denmark Telecopier 45 33 15 25 55 Willcox & Savage, P.C. 1800 NationsBank Center One Commercial Place Norfolk Virginia 23510 Telecopier No.: (804) 628-5566 Attention: Keith C. Cuthrell, Jr. (d) If to the Escrow Agent: Den Danske Bank Holmens Kanal Branch Corporate Services Holmens Kanal 2 -12 1092 Copenhagen K Denmark or to such other address as any party may have furnished in writing the other parties in the manner provided above. 6.2 Parties Bound. The provisions of this Agreement shall apply to, inure to the benefit of, and be binding upon the parties hereto and their respective heirs, successors, assigns, A-8 9 administrators, executors, and other legal Sellers. In no event may Seller assign any of its rights, privileges, duties, or obligations hereunder. Any assignment in violation of the foregoing shall be null and void. 6.3 Multiple Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which shall be deemed collectively one agreement, but, in making proof hereof, it shall never be necessary to exhibit more than one such counterpart. 6.4 Resignation and Termination. The Escrow Agent may resign as such by delivering written notice to such effect at least 30 days prior to the effective date of such resignation to Seller and DSC. Seller and DSC, acting jointly, may terminate the Escrow Agent from its position as such by delivering written notice to the Escrow Agent to such effect executed by Seller and DSC at least 30 days prior to the effective date of such termination (unless such termination is as a result of the Escrow Agent's breach of its obligations hereunder, in which case the effective date of such termination shall be any date specified in such notice by Seller and DSC). In the event of such resignation by or termination of the Escrow Agent, a successor Escrow Agent shall be appointed by mutual agreement between Seller and DSC and the Escrow Agent which has been so terminated or has so resigned shall promptly deliver to the successor Escrow Agent the entire Escrow Fund (together with copies of all records pertaining thereto) upon presentation of evidence reasonably satisfactory to it of the appointment and authorization of such successor Escrow Agent by Seller and DSC. From and after the appointment of a successor Escrow Agent pursuant to this Section 6.4, all references herein to the Escrow Agent shall be deemed to be to such successor Escrow Agent. 6.5 Entire Agreement; Modifications. This Agreement and the Purchase Agreement constitute the final, exclusive, and complete understanding of the parties with respect to the subject matter hereof and supersede any and all prior agreements, understandings, and discussions with respect thereto. This Agreement may be amended with the written agreement of the Escrow Agent, DSC, and Seller. 6.6 Captions. The captions in this Agreement are for convenience only and shall not be considered a part of or affect the construction or interpretation of any provision of this Agreement. 6.7 Governing Law. This Agreement shall be governed by and enforceable under, and construed in accordance with, the Laws of Denmark, regardless of the Laws that might otherwise govern under applicable principles of conflicts of law. 6.8 Third Party Beneficiaries. Other than the Indemnified Parties, no individual, firm, corporation, partnership, or other entity shall be a third-party beneficiary of this Agreement. 6.9 Remedies Cumulative. The remedies of the parties under this Agreement are cumulative and will not exclude any other remedies to which any party may be lawfully entitled. A-9 10 6.10 Severability. If any provision of this Agreement is held to be illegal, invalid, or unenforceable under present or future laws effective during the term hereof, such provision shall be fully severable and this Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision never comprised a part hereof; and the remaining provisions hereof shall remain in full force and effect and shall not be affected by such illegal, invalid, or unenforceable provision or by its severance herefrom. Furthermore, in lieu of such illegal, invalid, or unenforceable provision, there shall be added automatically as part of this Agreement a provision as similar in its terms to such illegal, invalid, or unenforceable provision as may be possible and be legal, valid, and enforceable. 6.11 Waiver. The waiver by Seller of a breach of this Agreement by the Escrow Agent shall not constitute a waiver of any right or remedy Seller may have with respect to DSC under the Purchase Agreement, or hereunder. The waiver by DSC of a breach of this Agreement by the Escrow Agent shall not constitute a waiver of any right or remedy it may have with respect to Seller under the Purchase Agreement, or hereunder. No delay or failure on the part of any party hereto in exercising any right, power, or privilege under this Agreement or under any other agreement or instrument given or entered into in connection with or pursuant to this Agreement shall impair any such right, power, or privilege or be construed as a waiver of any event of default hereunder or any acquiescence therein. No single or partial exercise of any such right, power, or privilege shall preclude the further exercise of such right, power, or privilege, or the exercise of any other right, power, or privilege. No waiver shall be valid against any party hereto unless made in writing and signed by the party against whom enforcement of such waiver is sought and then only to the extent expressly specified therein. IN WITNESS WHEREOF, each of the parties has executed this Agreement as of the date first above written. DSC COMMUNICATIONS CORPORATION By: /s/ James L. Donald Name: James L. Donald Title: Chairman of the Board, President and Chief Executive Officer NKT HOLDING A/S By: /s/ Knud Rasmussen/Gerhard Albrechtsen Name: Knud Rasmussen/Gerhard Albrechtsen Title: Executive Director/Managing Director A-10 11 NKT ELEKTRONIK A/S By: /s/ Poul Friis/Gerhard Albrechtsen Name: Poul Friis/Gerhard Albrechtsen Title: Managing Director/ Chairman of the Board DEN DANSKE BANK 11.11.1994 By: /s/ Allen Nedergaard/Torben With Name: Allen Nedergaard/Torben With Title: A-11 -----END PRIVACY-ENHANCED MESSAGE-----