Exhibit 10.47
ESCROW AGREEMENT
Dated as of December 18, 1997
by and among
CHASE MANHATTAN BANK AND TRUST COMPANY,
NATIONAL ASSOCIATION
(as Escrow Agent),
CHASE MANHATTAN BANK AND TRUST COMPANY,
NATIONAL ASSOCIATION
(as Trustee)
and
CONCENTRIC NETWORK CORPORATION
THIS ESCROW AGREEMENT (this "Agreement"), dated as of December 18,
1997, among CHASE MANHATTAN BANK AND TRUST COMPANY, NATIONAL ASSOCIATION, as
escrow agent (in such capacity, "Escrow Agent"), CHASE MANHATTAN BANK AND TRUST
COMPANY, NATIONAL ASSOCIATION, as Trustee (in such capacity, "Trustee") under
the Indenture (as defined herein), and CONCENTRIC NETWORK CORPORATION, a
Delaware corporation (the "Company").
WHEREAS, pursuant to the Indenture, dated as of December 18, 1997 (the
"Indenture"), between the Company and Trustee, the Company is issuing
$150,000,000 aggregate principal amount of 12 3/4% Senior Notes due 2007 (the
"Securities").
WHEREAS, as security for its obligations under the Securities and the
Indenture, the Company hereby grants to Escrow Agent, for the benefit of
Trustee, any predecessor Trustee under the Indenture and the holders of the
Securities, a security interest in and lien upon the Escrow Account (as defined
herein).
WHEREAS, the parties have entered into this Agreement in order to set
forth the conditions upon which, and the manner in which, funds will be
disbursed from the Escrow Account and released from the security interest and
lien described above.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Defined Terms. All terms used but not defined herein shall have
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the meanings ascribed to them in the Indenture. In addition to any other
defined terms used herein, the following terms shall constitute defined terms
for purposes of this Agreement and shall have the meanings set forth below:
"Affiliate" of any specified person means any other person which,
directly or indirectly, controls, is controlled by or is under common control
with such specified person. For the purposes of this definition, "control" when
used with respect to any person means the power to direct the management and
policies of such person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise and the terms "affiliated,"
"controlling" and "controlled" have meanings correlative to the foregoing.
"Applied" means that disbursed funds have been applied (i) to the
payment of interest on the Securities, (ii) pursuant to Section 3(c), or (iii)
pursuant to Section 6(b)(iii) hereof.
"Available Funds" means, at any date, (A) the sum of (i) the Pledged
Securities and any funds or U.S. Government Securities (ii) interest earned or
dividends paid on the Pledged Securities and any funds or U.S. Government
Securities, less (B) the aggregate disbursements made prior to such date
pursuant to this Agreement.
"Beneficiaries" see Section 2(b).
"Collateral" see Section 6(a).
"Escrow Account" shall mean the escrow account established pursuant to
Section 2.
"Escrow Account Statement" see Section 2(f).
"Escrow Funds" see Section 6(c).
"Initial Escrow Amount" shall mean $52,395,935.20.
"Interest" has, other than for purposes of Section 2(d)(v), the
meaning set forth in the Indenture.
"Interest Payment Date" means June 15 and December 15 of each year,
commencing on June 15, 1998 until the Securities are paid in full.
"Payment Notice and Disbursement Request" means a notice sent by the
Company to Escrow Agent requesting a disbursement of funds from the Escrow
Account, in substantially the form of Exhibit A hereto. Each Payment Notice and
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Disbursement Request shall be signed by an officer of the Company.
"Pledged Securities" means the U.S. Government Securities, as more
fully described on Schedule I attached hereto, purchased by the Escrow Agent
with a portion of the net proceeds from the offering of the Notes and deposited
into the Escrow Account. The scheduled payments of principal and interest on
the Pledged Securities will be sufficient to provide for the payment in full of
the interest due on the Notes on the first six scheduled Interest Payment Dates
commencing June 15, 1998 and ending December 15, 2000.
"Secured Obligations" see Section 6(a).
"U.S. Government Securities" means direct obligations of, or
obligations guaranteed by, the United States of America for the payment of which
obligations the full faith and credit of the United States is pledged.
2. Escrow Account; Escrow Agent.
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(a) Appointment of Escrow Agent. The Company and Trustee hereby
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appoint Escrow Agent, and Escrow Agent hereby accepts appointment, as escrow
agent, under the terms and conditions of this Agreement.
2.
(b) Establishment of Escrow Account.
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(i) On the Issue Date, Escrow Agent shall establish an escrow
account entitled the "Escrow Account pledged by Concentric Network Corporation
to Chase Manhattan Bank and Trust Company, National Association, as Trustee"
(the "Escrow Account") at its office located at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. The Escrow Account shall be a "securities
account" as such term is defined in Section 8-501(a) of the 1994 Official Text
of Article 8 of the Uniform Commercial Code with conforming amendments to
Article 9 (the "Revised UCC"). All funds, including the Initial Escrow Amount,
Pledged Securities and any U.S. Government Securities accepted by Escrow Agent
pursuant to this Agreement shall be held for the exclusive benefit of Trustee,
any predecessor Trustee under the Indenture and holders of the Securities, as
secured parties hereunder (collectively, the "Beneficiaries"). All such funds
shall be held in the Escrow Account until disbursed or paid in accordance with
the terms hereof. The Escrow Account and all funds held therein, including the
Initial Escrow Amount, the Pledged Securities and any U.S. Government Securities
held by Escrow Agent shall be under the sole dominion and control of Escrow
Agent for the benefit of the Beneficiaries.
(ii) On the Issue Date, the Company shall deliver, or cause the
delivery of, the Initial Escrow Amount to Escrow Agent for deposit into the
Escrow Account against Escrow Agent's written acknowledgment and receipt of the
Initial Escrow Amount. The Escrow Agent shall purchase, or cause to be
purchased, the Pledged Securities, with all or a portion of the Initial Escrow
Amount. The Pledged Securities shall be held by the Escrow Agent and deposited
into the Escrow Account for the exclusive benefit of the Beneficiaries. All
payments of interest and principal on the Pledged Securities shall be deposited
into the Escrow Account to be paid or disbursed in accordance with the terms
hereof or, to the extent permitted by Section 2(d) hereof, reinvested in U.S.
Government Securities.
(c) Escrow Agent Compensation. The Company shall pay to Escrow
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Agent such compensation for services to be performed by it under this Agreement
as the Company and Escrow Agent may agree in writing from time to time. Escrow
Agent shall be paid any compensation owed to it directly by the Company and
shall not disburse from the Escrow Account any such amounts nor shall Escrow
Agent have any interest in the Escrow Account with respect to such amounts.
The Company shall reimburse Escrow Agent upon request for all
reasonable expenses, disbursements, and advances incurred or made by Escrow
Agent in implementing any of the provisions of this Agreement, including
compensation and the reasonable expenses and disbursements of its counsel.
Escrow Agent shall be paid any such expenses owed to it directly by the Company
and shall not disburse from the Escrow Account any such amounts nor shall Escrow
Agent have any interest in the Escrow Account with respect to such amounts.
(d) Investment of Funds in Escrow Account. Any funds on
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deposit in
3.
the Escrow Account which are not invested may be reinvested, at the Company's
option, only upon the following terms and conditions:
(i) Acceptable Investments. All funds deposited or held in the
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Escrow Account at any time shall be invested by Escrow Agent in U.S.
Government Securities in accordance with the Company's written instructions
from time to time to Escrow Agent; provided, however, that (1) the Company
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shall only designate investment of funds in U.S. Government Securities
maturing in an amount sufficient to and/or generating interest income
sufficient to, when added to the balance of funds held in the Escrow
Account, provide for the payment of interest on the outstanding Securities
on each Interest Payment Date beginning on and including June 15, 1998 and
through and including the Interest Payment Date on December 15, 2000 and
(2) any such written instruction shall specify the particular investment to
be made, shall state that such investment is authorized to be made hereby
and in particular satisfies the requirements of the preceding clause (1) of
this proviso, shall contain the certification referred to in Section
2(d)(ii), if required, and shall be executed by an Officer of the Company.
Escrow Agent shall have no responsibility for determining whether funds
held in the Escrow Account shall have been invested in such a manner so as
to comply with the requirements of this clause (i). All U.S. Government
Securities shall be assigned to and held in the possession of, or, in the
case of U.S. Government Securities maintained in book entry form with the
Federal Reserve Bank, transferred to a book entry account in the name of
Escrow Agent for the benefit of the Beneficiaries, with such guarantees as
are customary, except that U.S. Government Securities maintained in book
entry form with the Federal Reserve Bank shall be transferred to a book
entry account in the name of Escrow Agent at the Federal Reserve Bank that
includes only U.S. Government Securities held by Escrow Agent for its
customers and segregated by separate recordation in the books and records
of Escrow Agent. Escrow Agent shall not be liable for losses on any
investments made by it pursuant to and in compliance with such written
instructions. In the absence of instructions from the Company that meet
the requirements of this Section 2(d)(i), Escrow Agent shall have no
obligation to invest funds held in the Escrow Account.
(ii) Security Interest in Investments. No investment of funds in
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the Escrow Account shall be made unless the Company has certified to Escrow
Agent and Trustee that, upon such investment, Escrow Agent will have a
first priority perfected security interest in the applicable investment.
If a certificate as to a class of investments has been provided to Escrow
Agent, a certificate need not be issued with respect to individual
investments in securities in that class if the certificate applicable to
the class remains accurate with respect to such individual investments,
which continued accuracy Escrow Agent may conclusively assume. Promptly
following the date of this Agreement, and on each anniversary of the date
of this Agreement (upon receipt of written notice from Escrow Agent), until
the date upon which the balance of the Available Funds shall have been
reduced to zero, each of Trustee and Escrow Agent shall receive an Opinion
of
4.
Counsel to the Company, dated each such date as applicable, which opinion
shall meet the requirements of Section 314(b) of the United States Trust
Indenture Act of 1939, as amended (the "TIA") and shall comply with Section
1302 of the Indenture.
(iii) Interest and Dividends. All interest earned and dividends
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paid on the Pledged Securities or any funds invested in U.S. Government
Securities shall be deposited in the Escrow Account as additional
Collateral and, if not required to be disbursed in accordance with the
terms hereof, subject to subsections 6(b)(iii), 6(e) and 6(f), shall be
reinvested in accordance with the terms hereof at the Company's written
instruction unless a Default or Event of Default has occurred or Trustee
has notified Escrow Agent that it should only take direction from Trustee
or should no longer take direction from the Company.
(iv) Limitation on Escrow Agent's Responsibilities. Escrow
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Agent's sole responsibilities under this Section 2 shall be (A) to retain
possession of certificated U.S. Government Securities (except, however,
that Escrow Agent may surrender possession to the issuer of any such U.S.
Government Securities for the purposes of effecting assignment, crediting
interest, or reinvesting such security or reducing such security to cash)
and to be the registered or designated owner of the Pledged Securities and
any U.S. Government Securities which are not certificated, (B) to follow
the Company's written instructions given in accordance with Section
2(d)(i), (C) to invest and reinvest funds pursuant to this Section 2(d) and
(D) to use reasonable efforts to reduce to cash such U.S. Government
Securities as may be required to fund any disbursement or payment in
accordance with Section 3. In connection with clause (A) above, Escrow
Agent will maintain continuous possession in the jurisdiction of its
principal place of business of certificated U.S. Government Securities and
cash included in the Collateral and will cause the Pledged Securities and
any uncertificated U.S. Government Securities to be registered in the book-
entry system of, and transferred to an account of Escrow Agent or a sub-
agent of Escrow Agent at, any Federal Reserve Bank. Except as provided in
Section 6, Escrow Agent shall have no other responsibilities with respect
to perfecting or maintaining the perfection of the security interest in the
Collateral and shall not be required to file any instrument, document or
notice in any public office at any time or times. In connection with
clause (D) above and subject to the following sentence, Escrow Agent shall
not be required to reduce to cash any U.S. Government Securities to fund
any disbursement or payment in accordance with Section 3 in the absence of
written instructions signed by an Officer of the Company specifying the
particular investment to liquidate. If no such written instructions are
received, Escrow Agent may liquidate those U.S. Government Securities
having the lowest interest rate per annum or if none such exist, those
having the nearest maturity.
(e) Substitution of Escrow Agent. Escrow Agent may resign by
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giving no less than 15 Business Days prior written notice to the Company and
Trustee. Such
5.
resignation shall take effect upon the later to occur of (i) delivery of all
funds, the Pledged Securities and any U.S. Government Securities maintained by
Escrow Agent hereunder and copies of all books, records, plans and other
documents in Escrow Agent's possession relating to such funds, the Pledged
Securities or any U.S. Government Securities or this Agreement to a successor
escrow agent mutually approved by the Company and Trustee (which approvals shall
not be unreasonably withheld or delayed) and the taking of such other steps as
may be necessary to give the successor escrow agent a first priority security
interest in the Pledged Securities and (ii) the Company, Trustee and such
successor escrow agent entering into this Agreement or any written successor
agreement no less favorable to the interests of the holders of the Securities
and Trustee than this Agreement; and Escrow Agent shall thereupon be discharged
of all obligations under this Agreement and shall have no further duties,
obligations or responsibilities in connection herewith, except as set forth in
Section 4. If a successor escrow agent has not been appointed or has not
accepted such appointment within 20 Business Days after notice of resignation is
given to the Company, Escrow Agent may apply to a court of competent
jurisdiction for the appointment of a successor escrow agent.
(f) Escrow Account Statement. At least 30 days prior to each
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Interest Payment Date, Escrow Agent shall deliver to the Company and Trustee a
statement setting forth with reasonable particularity the balance of funds then
in the Escrow Account and the manner in which such funds are invested ("Escrow
Account Statement"). The parties hereto irrevocably instruct Escrow Agent that
on the first date upon which the balance in the Escrow Account (including the
holdings of all U.S. Government Securities) is reduced to zero, Escrow Agent
shall deliver to the Company and to Trustee a notice that the balance in the
Escrow Account has been reduced to zero.
3. Disbursements.
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(a) Payment Notice and Disbursement Request; Disbursements. Up
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to five business days prior to an Interest Payment Date, the Company may submit
to Escrow Agent, with a copy to Trustee a completed Payment Notice and
Disbursement Request substantially in the form of Exhibit A hereto.
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Escrow Agent's disbursement pursuant to any Payment Notice and
Disbursement Request shall be subject to the satisfaction of the applicable
conditions set forth in Section 3(b). Provided such Payment Notice and
Disbursement Request is not rejected by it, Escrow Agent, as soon as reasonably
practicable on the Interest Payment Date, but in no event later than 12:00 Noon
(New York City time) on the Interest Payment Date, shall disburse the funds
requested in such Payment Notice and Disbursement Request by wire or book-entry
transfer of immediately available funds to the account of Trustee for the
benefit of the Beneficiaries. Escrow Agent shall notify Trustee as soon as
reasonably possible (but not later than two (2) Business Days from the date of
receipt of the Payment Notice and Disbursement Request) if any Payment Notice
and Disbursement Request is rejected and the reason(s) therefor. In the event
such rejection is based
6.
upon nonsatisfaction of the condition in Section 3(b)(I), the Company shall
thereupon resubmit the Payment Notice and Disbursement Request with appropriate
changes.
(b) Conditions Precedent to Disbursement. Escrow Agent's payment
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of any disbursement shall be made only if: (I) the Company shall have submitted,
in accordance with the provisions of Section 3(a), a completed Payment Notice
and Disbursement Request to Escrow Agent substantially in the form of Exhibit A
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with blanks appropriately filled in, and (II) Escrow Agent shall not have
received any notice from Trustee that as a result of an Event of Default the
indebtedness represented by the Securities has been accelerated and has become
due and payable (in which event Escrow Agent shall apply all Available Funds as
required by Section 6(b)(iii)).
(c) The Company Payments. If the Company makes any interest
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payment or portion of an interest payment on the Securities from a source of
funds other than the Escrow Account ("the Company Funds"), the Company may,
after payment in full of such interest payment, direct Escrow Agent to release
to the Company or at the direction of the Company an amount of funds from the
Escrow Account less than or equal to the amount of the Company Funds so
expended. Upon receipt of a request from the Company (including the certificate
described in the following sentence), Escrow Agent will pay over to the Company
the requested amount. Concurrently with any release of funds to the Company
pursuant to this Section 3(c), the Company will deliver to Escrow Agent a
certificate signed by an authorized signatory of the Company stating that such
release has been duly authorized by all necessary corporate action, and does not
contravene, or constitute a default under, any provision of applicable law or
regulation or of the Certificate of Incorporation of the Company or of any
agreement, judgment, injunction, order, decree or other instrument binding upon
the Company or result in the creation or imposition of any Lien on any assets of
the Company.
(d) If at any time the principal of and interest on the
Collateral exceeds 100% of the amount sufficient, in the written opinion of a
nationally recognized firm of independent accountants selected by the Company
and delivered to Escrow Agent and Trustee, to provide for payment in full of the
interest on outstanding Securities on each Interest Payment Date beginning on
and including June 15, 1998 and through and including the Interest Payment Date
on December 15, 2000 (or, in the event one or more interest payments have been
made thereon, an amount sufficient to provide for the payment in full of any and
all interest payments on the Securities then remaining, up to and including the
fourth scheduled interest payment), the Company may direct Escrow Agent and
Trustee to release any such overfunded amount to the Company or to such other
party as the Company may direct. Upon receipt of written instructions executed
by the Company in the form of an Officers' Certificate, Trustee shall pay, or
shall cause the payment, over to the Company or the Company's designee, as the
case may be, any such overfunded amount.
4. Limitation of Escrow Agent's Liability; Responsibilities of
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Escrow Agent.
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7.
Escrow Agent's responsibility and liability under this Agreement shall be
limited as follows: (i) Escrow Agent does not represent, warrant or guaranty to
the holders of the Securities from time to time the performance of the Company;
(ii) Escrow Agent shall have no responsibility to the Company or the holders of
the Securities or Trustee from time to time as a consequence of performance or
non-performance by Escrow Agent hereunder, except for any bad faith, gross
negligence or willful misconduct of Escrow Agent; (iii) the Company shall remain
solely responsible for all aspects of the Company's business and conduct; and
(iv) Escrow Agent is not obligated to supervise, inspect or inform the Company
or any third party of any matter referred to above. In no event shall Escrow
Agent be liable (i) for acting in accordance with or relying upon any
instruction, notice, demand, certificate or document from the Company or any
entity acting on behalf of the Company, (ii) for any consequential, punitive or
special damages, (iii) for the acts or omissions of its nominees,
correspondents, designees, subagents or subcustodians, (iv) for an amount in
excess of the value of the Escrow Account, valued as of the date of deposit or
(v) for the validity, sufficiency or priority of this Agreement or any
Collateral or other security furnished hereby.
No implied covenants or obligations shall be inferred from this
Agreement against Escrow Agent, nor shall Escrow Agent be bound by the
provisions of any agreement beyond the specific terms hereof. Specifically and
without limiting the foregoing, Escrow Agent shall in no event have any
liability in connection with its investment, reinvestment or liquidation, in
good faith and in accordance with the terms hereof, of any funds, the Pledged
Securities or U.S. Government Securities held by it hereunder, including without
limitation any liability for any delay not resulting from gross negligence or
willful misconduct in such investment, reinvestment or liquidation, or for any
loss of principal or income incident to any such delay.
Escrow Agent shall be entitled to rely upon any judicial or
administrative order or judgment, upon any opinion of counsel or upon any
certification, instruction, notice, or other writing delivered to it by the
Company or Trustee in compliance with the provisions of this Agreement without
being required to determine the authenticity or the correctness of any fact
stated therein or the propriety or validity of service thereof. Escrow Agent
may act in reliance upon any instrument comporting with the provisions of this
Agreement or signature believed by it to be genuine and may assume that any
person purporting to give notice or receipt or advice or make any statement or
execute any document in connection with the provisions hereof has been duly
authorized to do so.
At any time Escrow Agent may request in writing an instruction in
writing from the Company (other than any disbursement pursuant to Section
6(b)(iii)), and may at its own option include in such request the course of
action it proposes to take and the date on which it proposes to act, regarding
any matter arising in connection with its duties and obligations hereunder;
provided, however, that Escrow Agent shall state in such request that it
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believes in good faith that such proposed course of action is consistent with
another identified provision of this Agreement. Escrow Agent shall not be
liable to the Company for acting without the
8.
Company's consent in accordance with such a proposal on or after the date
specified therein if (i) the specified date is at least four Business Days after
the Company receives Escrow Agent's request for instructions and its proposed
course of action, and (ii) prior to so acting, Escrow Agent has not received the
written instructions requested from the Company.
At the expense of the Company, Escrow Agent may act pursuant to the
advice of counsel chosen by it with respect to any matter relating to this
Agreement and (subject to clause (ii) of the first paragraph of this Section 4)
shall not be liable for any action taken or omitted in accordance with such
advice.
Escrow Agent shall not be called upon to advise any party as to
selling or retaining, or taking or refraining from taking any action with
respect to, any securities or other property deposited hereunder.
In the event of any ambiguity in the provisions of this Agreement with
respect to any funds, securities or property deposited hereunder, Escrow Agent
shall be entitled to refuse to comply with any and all claims, demands or
instructions with respect to such funds, securities or property, and Escrow
Agent shall not be or become liable for its failure or refusal to comply with
conflicting claims, demands or instructions. Escrow Agent shall be entitled to
refuse to act until either any conflicting or adverse claims or demands shall
have been finally determined by a court of competent jurisdiction or settled by
agreement between the conflicting claimants as evidenced in a writing,
satisfactory to Escrow Agent, or Escrow Agent shall have received security or an
indemnity satisfactory to Escrow Agent sufficient to save Escrow Agent harmless
from and against any and all loss, liability or expense which Escrow Agent may
incur by reason of its acting. Escrow Agent may in addition elect in its sole
option to commence an interpleader action or seek other judicial relief or
orders as Escrow Agent may deem necessary. The costs and expenses (including
reasonable attorney's fees and expenses) incurred in connection with such
proceedings shall be paid by, and shall be deemed an obligation of the Company.
No provision of this Agreement shall require Escrow Agent to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder.
Escrow Agent shall not incur any liability for not performing any act
or fulfilling any duty, obligation or responsibility hereunder by reason of any
occurrence beyond the control of Escrow Agent (including but not limited to any
act or provision of any present or future law or regulation or governmental
authority, any act of God or war, or the unavailability of the Federal Reserve
Bank wire or telex or other wire or communication facility).
5. Indemnity. The Company shall indemnify, hold harmless and defend
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Trustee and Escrow Agent and their respective directors, officers, agents,
employees and controlling persons, from and against any and all claims, actions,
obligations, liabilities and
9.
expenses, including reasonable defense costs, reasonable investigative fees and
costs, reasonable legal fees, and claims for damages, arising from Trustee's or
Escrow Agent's performance or non-performance, or in connection with Escrow
Agent's acceptance of appointment as Escrow Agent under this Agreement, except
to the extent that such liability, expense or claim is solely and directly
attributable to the bad faith, gross negligence or willful misconduct of any of
the foregoing persons. The provisions of this Section 5 shall survive any
termination, satisfaction or discharge of this Agreement as well as the
resignation or removal of Escrow Agent.
6. Grant of Security Interest; Instructions to Escrow Agent.
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(a) The Company hereby irrevocably grants a first priority
security interest in and lien on, and pledges to Escrow Agent for the ratable
benefit of the Beneficiaries, all of the Company's right, title and interest in
the Escrow Account, and all property now or hereafter placed or deposited in, or
delivered to Escrow Agent for placement or deposit in, the Escrow Account,
including, without limitation, the Pledged Securities, all funds held therein,
all U.S. Government Securities held by (or otherwise maintained in the name of)
Escrow Agent pursuant to Section 2, and all proceeds thereof as well as all
rights of the Company under this Agreement (collectively, the "Collateral"), in
order to secure all obligations and indebtedness of the Company under the
Indenture, the Securities, this Agreement and any other obligation, now or
hereafter arising, of every kind and nature, owed by the Company under the
Indenture or the Securities to the holders of the Securities or to Trustee or
any predecessor Trustee (the "Secured Obligations"). Escrow Agent hereby
acknowledges Trustee's security interest and lien as set forth above. The
Company shall take or direct the Escrow Agent to take all actions necessary on
its part to insure the continuance of a first priority security interest in the
Collateral in favor of Trustee in order to secure all such obligations and
indebtedness.
(b) The Company and Trustee hereby irrevocably instruct Escrow
Agent to, and Escrow Agent shall:
(i) (A) maintain sole dominion and control over the Pledged
Securities, funds and any U.S. Government Securities in the Escrow Account
for the benefit of Trustee to the extent specifically required herein, (B)
maintain, or cause its agent within the jurisdiction of its principal place
of business to maintain, possession of all certificated U.S. Government
Securities purchased hereunder that are physically possessed by Escrow
Agent in order for Trustee to enjoy a continuous perfected first priority
security interest therein under the law of the State of New York (the
Company hereby agreeing that in the event any certificated U.S. Government
Securities are in the possession of the Company or a third party, the
Company shall use its best efforts to deliver all such certificates to
Escrow Agent), (C) comply with all directions furnished by the Company
pursuant to paragraph (a) of this Section 6 to cause Escrow Agent to enjoy
a continuous perfected first priority security interest under any
applicable Federal and State of New York law in all U.S. Government
Securities purchased hereunder that are
10.
not certificated and (D) maintain the Collateral free and clear of all
liens, security interests, safekeeping or other charges, demands and claims
against Escrow Agent of any nature now or hereafter existing in favor of
anyone other than Trustee (other than tax liens for taxes not yet due and
payable);
(ii) promptly notify Trustee if Escrow Agent receives written
notice that any person other than Escrow Agent has a lien or security
interest upon any portion of the Collateral other than as permitted in
clause (i) of this Section 6(b); and
(iii) in addition to disbursing amounts held in escrow pursuant
to any Payment Notice and Disbursement Requests given to it pursuant to
Section 3, upon receipt of written notice from Trustee of the acceleration
of the maturity of the Securities, and direction from Trustee to disburse
all Available Funds to Trustee, as promptly as practicable, disburse all
funds held in the Escrow Account to Trustee and transfer title to all U.S.
Government Securities held by Escrow Agent hereunder to Trustee. In
addition, upon an Event of Default (as defined in the Indenture) and for so
long as such Event of Default continues, Trustee may, and Escrow Agent
shall on behalf of Trustee when instructed by Trustee, exercise in respect
of the Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a
secured party under the UCC or other applicable law, and Trustee may, and
Escrow Agent shall on behalf of Trustee when instructed by Trustee, also
upon obtaining possession of the Collateral as set forth herein, without
notice to the Company except as specified below, sell the Collateral or any
part thereof in one or more parcels at public or private sale, at any
exchange, broker's board or at any of Trustee's offices or elsewhere, for
cash, on credit or for future delivery, and upon such other terms as
Trustee may deem commercially reasonable. The Company acknowledges and
agrees that any such private sale may result in prices and other terms less
favorable to the seller than if such sale were a public sale. The Company
agrees that, to the extent notice of sale shall be required by law, at
least ten (10) days' notice to the Company of the time and place of any
public sale or the time after which any private sale is to be made shall
constitute reasonable notification. Trustee shall not be obligated to make
any sale regardless of notice of sale having been given. Trustee may
adjourn any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned.
The lien and security interest provided for by this Section 6 shall
automatically terminate and cease as to, and shall not extend or apply to, and
Trustee and Escrow Agent shall have no security interest in, any funds disbursed
by Escrow Agent whether for payment of interest or to the Company pursuant to
this Agreement to the extent not inconsistent with the terms hereof.
Notwithstanding any other provision contained in this Agreement, Escrow Agent
shall act solely as Trustee's agent in connection with its duties under this
Section 6 or any other duties herein relating to the Escrow Account or the
Pledged Securities or any funds or U.S.
11.
Government Securities held thereunder. Escrow Agent shall not have any right to
receive compensation from Trustee and shall have no authority to obligate
Trustee or to compromise or pledge its security interest hereunder. Accordingly,
Escrow Agent is hereby directed to cooperate with Trustee in the exercise of its
rights in the Collateral provided for herein.
(c) Any money and U.S. Government Securities collected by
Trustee pursuant to Section 6(b)(iii) shall be applied as provided in Section
1023 of the Indenture. Any surplus of such cash or cash proceeds held by Trustee
and remaining after indefeasible payment in full of all the obligations under
the Indenture (the "Escrow Funds") shall be paid over to the Company upon the
Company request or as a court of competent jurisdiction may direct.
(d) The Company will execute and deliver or cause to be executed
and delivered, or use its best efforts to procure, all stock powers, proxies,
assignments, instruments and other documents, deliver any instruments to Trustee
and take any other actions that are necessary or desirable to perfect, continue
the perfection of, or protect the first priority of Trustee's security interest
in and to the Collateral, to protect the Collateral against the rights, claims,
or interests of third persons or to effect the purposes of this Agreement. The
Company also hereby authorizes Trustee to file any financing or continuation
statements with respect to the Collateral without the signature of the Company
(to the extent permitted by applicable law). The Company will pay all reasonable
costs incurred in connection with any of the foregoing. It is expressly
understood and agreed that Trustee has no duty to determine whether to file or
record any document or instrument relating to Collateral.
(e) The Company hereby appoints Trustee as its attorney-in-fact
with full power of substitution to do any act which the Company is obligated
hereto to do, and Trustee may, but shall not be obligated to, exercise such
rights as the Company might exercise with respect to the Collateral and take
any action in the Company's name to protect Trustee's security interest
hereunder.
(f) If at any time Escrow Agent shall receive an "entitlement
order" (within the meaning of Section 8-102(a)(8) of the Revised UCC) issued by
Trustee and relating to the Escrow Account, Escrow Agent shall comply with such
entitlement order without further consent by the Company or any other person.
7. Termination. This Agreement and the security interest in the
-----------
Collateral evidenced by this Agreement shall terminate automatically and be of
no further force or effect upon the payment in full in cash of all interest
(including any Additional Interest) due through the Interest Payment Date
occurring on December 15, 2000 and the Collateral shall promptly be paid over
and transferred to the Company; provided, however, that the obligations of the
-------- -------
Company under Section 2(c) and Section 5 (and any existing claims thereunder)
shall survive termination of this Agreement and the resignation of Escrow Agent
for a period of one year. At such time, Escrow Agent shall, pursuant to a
certificate of an officer of the Company, reassign
12.
and redeliver to the Company all of the Collateral hereunder that has not been
sold, disposed of, retained or applied by Escrow Agent in accordance with the
terms of this Agreement and the Indenture. Such reassignment and delivery shall
be without warranty by or recourse to Escrow Agent in its capacity as such,
except as to the absence of any liens on the Collateral created by or arising
through Escrow Agent, and shall be at the sole expense of the Company.
8. Representations and Warranties.
------------------------------
The Company hereby represents and warrants that:
(a) The execution, delivery and performance by the Company of this
Agreement are within the Company's corporate powers, have been duly
authorized by all necessary corporate action, and do not contravene, or
constitute a default under, any provision of applicable law or regulation
or of the Certificate of Incorporation of the Company or of any material
agreement, judgment, injunction, order, decree or other instrument binding
upon the Company or result in the creation or imposition of any Lien on any
assets of the Company, except for the security interests granted under this
Agreement.
(b) The Company is the beneficial owner of the Collateral, free and
clear of any Lien or claims of any person or entity (except for the
security interest, granted under this Agreement). No financing statement
covering the Collateral is on file in any public office other than the
financing statements, if any, filed pursuant to this Agreement.
(c) This Agreement has been duly executed and delivered by the
Company and assuming the due authorization and valid execution and delivery
of this Agreement by Trustee and Escrow Agent and enforceability of this
Agreement against Escrow Agent and Trustee in accordance with its terms,
constitutes a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as such
enforceability may be limited by (i) the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally, (ii) general principles of equity
and commercial reasonableness or, (iii) the exculpation provisions and
rights to indemnification hereunder may be limited by U.S. federal and
state securities laws and public policy considerations and (iv) the waiver
of rights and defenses contained in Sections 15(j) and 15(o).
(d) Upon the delivery to Escrow Agent of the certificates or
instruments, if any, representing the Collateral and the filing of
financing statements, if any, required by the Uniform Commercial Code (the
"UCC"), and the transfer and pledge to Escrow Agent of the Collateral and
the acquisition by Escrow Agent of a security entitlement thereto in
accordance with Section 6, the pledge of the Collateral pursuant to this
Agreement creates a valid and perfected first priority security interest in
and to the Collateral, securing the
13.
payment of the Secured Obligations for the benefit of the Beneficiaries,
enforceable as such against all creditors of the Company and any persons
purporting to purchase any of the Collateral from the Company other than as
permitted by the Indenture.
(e) No consent of any other person and no consent, authorization,
approval, or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required either (i) for the
pledge by the Company of the Collateral pursuant to this Agreement or for
the execution, delivery or performance of this Agreement by the Company
(except for any filings necessary to perfect Liens on the Collateral) or
(ii) for the exercise by Trustee of the rights provided for in this
Agreement or the remedies in respect of the Collateral pursuant to this
Agreement, except, in each case, as may be required in connection with such
disposition by laws affecting the offering and sale of securities.
(f) No litigation, investigation or proceeding of or before any
arbitrator or governmental authority is pending or, to the knowledge of the
Company, threatened by or against the Company with respect to this
Agreement or any of the transactions contemplated hereby.
(g) The pledge of the Collateral pursuant to this Agreement is not
prohibited by any applicable law or governmental regulation, release,
interpretation or opinion of the Board of Governors of the Federal Reserve
System or other regulatory agency (including, without limitation,
Regulations G, T, U and X of the Board of Governors of the Federal Reserve
System).
9. Covenants.
---------
The Company covenants and agrees with the Beneficiaries from and after
the date of this Agreement until the earlier of payment in full in cash of (A)
all interest due through the Interest Payment Date occurring on December 15,
2000 or (B) all obligations due and owing under the Indenture and the Securities
in the event such obligations become due and payable prior to the payment of the
first six scheduled interest payments on the Securities:
(a) The Company agrees that it will not (i) sell or otherwise dispose
of, or grant any option or warrant with respect to, any of the Collateral
or (ii) create or permit to exist any Lien upon or with respect to any of
the Collateral (except for the lien created pursuant to or permitted under
this Agreement) and at all times will be the sole beneficial owner of the
Collateral.
(b) The Company agrees that it will not (i) enter into any agreement
or understanding that restricts or inhibits Trustee's rights or remedies
hereunder, including, without limitation, Trustee's right to sell or
otherwise dispose of the Collateral other than
14.
any agreement with the Trustee or (ii) fail to pay or discharge any tax,
assessment or levy of any nature not later than five days prior to the date
of any proposed sale under any judgment, writ or warrant of attachment with
regard to the Collateral.
10. Power of Attorney.
-----------------
In addition to all of the powers granted to Trustee pursuant to
Article 6 of the Indenture, the Company hereby appoints and constitutes Trustee
as the Company's attorney-in-fact to exercise to the fullest extent permitted by
law all of the following powers upon and at any time after the occurrence and
during the continuance of an Event of Default: (i) collection of proceeds of
any Collateral; (ii) conveyance of any item of Collateral to any purchaser
thereof; (iii) giving of any notices or recording of any Liens under Section 6;
(iv) making of any payments or taking any acts under Section 11; and (v) paying
or discharging taxes or Liens levied or placed upon the Collateral, the legality
or validity thereof and the amounts necessary to discharge the same to be
determined by Trustee in its sole discretion, and such payments made by Trustee
to become the obligations of the Company to Trustee, due and payable immediately
upon demand. Trustee's authority hereunder shall include, without limitation,
the authority to endorse and negotiate any checks or instruments representing
proceeds of Collateral in the name of the Company, execute and give receipt for
any certificate of ownership or any document constituting Collateral, transfer
title to any item of Collateral, sign the Company's name on all financing
statements (to the extent permitted by applicable law) or any other documents
deemed necessary or appropriate by Trustee to preserve, protect or perfect this
security interest in the Collateral and to file the same, prepare, file and sign
the Company's name on any notice of Lien, to take any other actions arising from
or incident to the powers granted to Trustee in this Agreement. This power of
attorney is coupled with an interest and is irrevocable by the Company.
11. Trustee May Perform.
-------------------
If the Company fails to perform any agreement contained herein,
Trustee may itself perform, but shall not be obligated to, or cause performance
of, such agreement, and the reasonable expenses of Trustee incurred in
connection therewith shall be payable by the Company under Section 13 hereof.
12. No Assumption of Duties; Reasonable Care.
----------------------------------------
The rights and powers granted to Trustee hereunder are being granted
in order to preserve and protect Trustee's and the holders' of Securities
security interest in and to the Collateral granted hereby and shall not be
interpreted to, and shall not, impose any duties on Trustee in connection
therewith other than those expressly imposed under applicable law. Except as
provided by applicable law or by the Indenture, Trustee shall be deemed to have
exercised reasonable care in the custody and preservation of the Collateral in
its possession if the
15.
Collateral is accorded treatment substantially equal to that which Trustee
accords similar property in similar situations, it being understood that Trustee
shall not have any responsibility for (i) ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other matters
relative to any Collateral, whether or not Trustee has or is deemed to have
knowledge of such matters or (ii) taking any necessary steps to preserve rights
against any parties with respect to any Collateral; provided, however, that
nothing contained in this Agreement shall relieve Trustee of any
responsibilities as a securities intermediary under applicable law. The Trustee
is entering into this Agreement solely in its capacity as Trustee under the
Indenture, and not in its individual capacity, and shall be entitled to the
rights, protections and exculpations furnished to it under the Indenture,
including, without limitation, Article 6 thereof, in addition to (and not in
limitation of) any rights, protections or exculpations furnished to it under
this Agreement.
13. Expenses.
--------
The Company will upon demand pay to Trustee the amount of any and all
reasonable expenses, including, without limitation, the reasonable fees,
expenses and disbursements of its counsel, experts and agents retained by
Trustee that Trustee may incur in connection with (i) the administration of this
Agreement, (ii) the custody or preservation of, or the sale of, collection from,
or other realization upon, any of the Collateral, (iii) the exercise or
enforcement of any of the rights of the Beneficiaries hereunder, or (iv) the
failure by the Company to perform or observe any of the provisions hereof.
14. Security Interest Absolute.
--------------------------
All rights of the Beneficiaries and security interests hereunder, and
all obligations of the Company hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of the Indenture or
any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Secured Obligations, or any other
amendment or waiver of or any consent to any departure from the Indenture;
(c) any exchange, surrender, release or nonperfection of any
Liens on any other collateral for all or any of the Secured Obligations; or
(d) to the extent permitted by applicable law, any other
circumstance which might otherwise constitute a defense available to, or a
discharge of, the Company in respect of the Secured Obligations or of this
Agreement.
16.
15. Miscellaneous.
-------------
(a) Waiver. Any party hereto may specifically waive any breach
------
of this Agreement by any other party, but no such waiver shall be deemed to have
been given unless such waiver is in writing, signed by the waiving party and
specifically designating the breach waived, nor shall any such waiver constitute
a continuing waiver of similar or other breaches.
(b) Invalidity. If for any reason whatsoever any one or more of
----------
the provisions of this Agreement shall be held or deemed to be inoperative,
unenforceable or invalid in a particular case or in all cases, such
circumstances shall not have the effect of rendering any of the other provisions
of this Agreement inoperative, unenforceable or invalid, and the inoperative,
unenforceable or invalid provision shall be construed as if it were written so
as to effectuate, to the maximum extent possible, the parties' intent.
(c) Assignment. This Agreement is personal to the parties
----------
hereto, and the rights and duties of any party hereunder shall not be assignable
except with the prior written consent of the other parties. Notwithstanding the
foregoing, this Agreement shall inure to and be binding upon the parties and
their successors and permitted assigns.
(d) Benefit. The parties hereto and their successors and
-------
permitted assigns, but no others, shall be bound hereby and entitled to the
benefits hereof; provided, however, that the Beneficiaries (including holders of
------- -------- -------
the Securities) and their assigns shall be entitled to the benefits hereof and
to enforce this Agreement.
(e) Time. Time is of the essence with respect to each provision
----
of this Agreement.
(f) Entire Agreement; Amendments. This Agreement and the
----------------------------
Indenture contain the entire agreement among the parties with respect to the
subject matter hereof and supersede any and all prior agreements, understandings
and commitments, whether oral or written. Any amendment or waiver of any
provision of this Agreement and any consent to any departure by the Company from
any provision of this Agreement shall be effective only if made or duly given in
compliance with all of the terms and provisions of the Indenture, and none of
Escrow Agent, Trustee or any holder of Securities shall be deemed, by any act,
delay, indulgence, omission or otherwise, to have waived any right or remedy
hereunder or to have acquiesced in any Default or Event of Default or in any
breach of any of the terms and conditions hereof. Failure of Escrow Agent,
Trustee or any holder of Securities to exercise, or delay in exercising, any
right, power or privilege hereunder shall not operate as a waiver thereof. No
single or partial exercise of any right, power or privilege hereunder shall
operate as a waiver thereof. No single or partial exercise of any right, power
or privilege hereunder shall preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. A waiver by the Escrow
Agent, Trustee or any holder of Securities of any right or remedy
17.
hereunder on any one occasion shall not be construed as a bar to any right or
remedy that Escrow Agent, Trustee or such holder of Securities would otherwise
have on any future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of any
rights or remedies provided by law.
(g) Notices. All notices and other communications required or
-------
permitted to be given or made under this Agreement shall be in writing and shall
be deemed to have been duly given and received when actually received,
including: (a) on the day of hand delivery; (b) three business days following
the day sent, when sent by United States certified mail, postage and
certification fee prepaid, return receipt requested, addressed as set forth
below; (c) when transmitted by telecopy with verbal confirmation of receipt by
the telecopy operator to the telecopy number set forth below; or (d) one
business day following the day timely delivered to a next-day air courier
addressed as set forth below:
To Escrow Agent:
Chase Manhattan Bank and Trust Company, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
To Trustee:
Chase Manhattan Bank and Trust Company, National Association
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
To the Company:
Concentric Network Corporation
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
18.
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address as the specified entity most recently may have
designated in writing in accordance with this Section.
(h) Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
(i) Captions. Captions in this Agreement are for convenience
--------
only and shall not be considered or referred to in resolving questions of
interpretation of this Agreement.
(j) GOVERNMENT LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY
----------------------------------------------------------
TRIAL; WAIVER OF DAMAGES.
------------------------
(i) THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED UNDER
THE LAWS OF THE STATE OF NEW YORK, AND ANY DISPUTE ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THE COMPANY, ESCROW AGENT, TRUSTEE AND THE HOLDERS OF SECURITIES IN
CONNECTION WITH THIS AGREEMENT, AND WHETHER ARISING IN CONTRACT, TORT,
EQUITY OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS
(AS OPPOSED TO THE CONFLICTS OF LAWS PROVISIONS) AND DECISIONS OF THE STATE
OF NEW YORK.
(ii) THE COMPANY AGREES THAT TRUSTEE SHALL, IN ITS CAPACITY AS
TRUSTEE OR IN THE NAME AND ON BEHALF OF ANY HOLDER OF SECURITIES, HAVE THE
RIGHT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TO PROCEED AGAINST THE
COMPANY OR ITS PROPERTY IN A COURT IN ANY LOCATION REASONABLY SELECTED IN
GOOD FAITH (AND HAVING PERSONAL OR IN REM JURISDICTION OVER THE COMPANY OR
ITS PROPERTY, AS THE CASE MAY BE) TO ENABLE TRUSTEE TO REALIZE ON SUCH
PROPERTY, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF
TRUSTEE. THE COMPANY AGREES THAT IT WILL NOT ASSERT ANY COUNTERCLAIMS,
SETOFFS OR CROSSCLAIMS IN ANY PROCEEDING BROUGHT BY TRUSTEE TO REALIZE ON
SUCH PROPERTY OR TO ENFORCE A JUDGMENT OR OTHER COURT
19.
ORDER IN FAVOR OF TRUSTEE, EXCEPT FOR SUCH COUNTERCLAIMS, SETOFFS OR
CROSSCLAIMS WHICH, IF NOT ASSERTED IN ANY SUCH PROCEEDING, COULD NOT
OTHERWISE BE BROUGHT OR ASSERTED. THE COMPANY WAIVES ANY OBJECTION THAT IT
MAY HAVE TO THE LOCATION OF THE COURT IN WHICH TRUSTEE HAS COMMENCED A
PROCEEDING DESCRIBED IN THIS PARAGRAPH INCLUDING, WITHOUT LIMITATION, ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS.
(iii) THE COMPANY, ESCROW AGENT AND TRUSTEE EACH WAIVE ANY RIGHT
TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT, OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH
THIS AGREEMENT. INSTEAD, ANY DISPUTES RESOLVED IN COURT WILL BE RESOLVED IN
A BENCH TRIAL WITHOUT A JURY,
(iv) THE COMPANY AGREES THAT NONE OF ESCROW AGENT, TRUSTEE OR
ANY HOLDER OF SECURITIES SHALL HAVE ANY LIABILITY TO THE COMPANY (WHETHER
SOUNDING IN TORT, CONTRACT OR OTHERWISE) FOR LOSSES SUFFERED BY THE COMPANY
IN CONNECTION WITH, ARISING OUT OF, OR IN ANY WAY RELATED TO, THE
TRANSACTIONS CONTEMPLATED AND THE RELATIONSHIP ESTABLISHED BY THIS
AGREEMENT, OR ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH,
UNLESS IT IS DETERMINED BY A FINAL AND NONAPPEALABLE JUDGMENT OF A COURT
THAT IS BINDING ON ESCROW AGENT, TRUSTEE OR SUCH HOLDER OF SECURITIES, AS
THE CASE MAY BE, THAT SUCH LOSSES WERE THE RESULT OF ACTS OR OMISSIONS ON
THE PART OF ESCROW AGENT, TRUSTEE OR SUCH HOLDER OF SECURITIES, AS THE CASE
MAY BE, CONSTITUTING BAD FAITH, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
(v) TO THE EXTENT PERMITTED BY APPLICABLE LAW, AND EXCEPT AS
OTHERWISE PROVIDED IN THIS AGREEMENT, THE COMPANY WAIVES ALL RIGHTS OF
NOTICE AND HEARING OF ANY KIND PRIOR TO THE EXERCISE BY THE TRUSTEE OR ANY
HOLDER OF SECURITIES OF ITS RIGHTS DURING THE CONTINUANCE OF AN EVENT OF
DEFAULT TO REPOSSESS THE COLLATERAL WITH JUDICIAL PROCESS OR TO REPLEVY,
ATTACH OR LEVY UPON THE COLLATERAL OR OTHER SECURITY FOR THE SECURED
OBLIGATIONS. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE COMPANY WAIVES
THE POSTING OF ANY BOND OTHERWISE REQUIRED OF ESCROW AGENT, TRUSTEE OR ANY
HOLDER OF SECURITIES
20.
IN CONNECTION WITH ANY JUDICIAL PROCESS OR PROCEEDING TO OBTAIN POSSESSION
OF, REPLEVY, ATTACH OR LEVY UPON THE COLLATERAL OR OTHER SECURITY FOR THE
SECURED OBLIGATIONS, TO ENFORCE ANY JUDGMENT OR OTHER COURT ORDER ENTERED
IN FAVOR OF ESCROW AGENT, TRUSTEE OR ANY HOLDER OF SECURITIES, OR TO
ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY RESTRAINING ORDER OR PRELIMINARY
OR PERMANENT INJUNCTION, THIS AGREEMENT OR ANY OTHER AGREEMENT OR DOCUMENT
BETWEEN THE COMPANY ON THE ONE HAND AND ESCROW AGENT, TRUSTEE AND/OR THE
HOLDERS OF SECURITIES ON THE OTHER HAND.
(k) No Adverse Interpretation of Other Agreements. This
----------------------------------------------
Agreement may not be used to interpret another pledge, security or debt
agreement of the Company or any subsidiary thereof. No such pledge, security or
debt agreement may be used to interpret this Agreement.
(l) Benefits of Agreement. Nothing in this Agreement, express or
---------------------
implied, shall give to any person, other than the parties hereto and their
successors hereunder, and the holders of Securities, any benefit or any legal or
equitable right, remedy or claim under this Agreement.
(m) Interpretation of Agreement. All terms not defined herein or
---------------------------
in the Indenture shall have the meaning set forth in the applicable Uniform
Commercial Code, except where the context otherwise requires. To the extent a
term or provision of this Agreement conflicts with the Indenture, the Indenture
shall control with respect to the subject matter of such term or provision.
Acceptance of or acquiescence in a course of performance rendered under this
Agreement shall not be relevant to determine the meaning of this Agreement even
though the accepting or acquiescing party had knowledge of the nature of the
performance and opportunity for objection.
(n) Survival of Provisions. All representations, warranties and
----------------------
covenants of the Company contained herein shall survive the execution and
delivery of this Agreement, and shall terminate only upon the termination of
this Agreement.
(o) Waivers. The Company waives presentment and demand for
-------
payment of any of the Secured Obligations, protest and notice of dishonor or
default with respect to any of the Secured Obligations, and all other notices to
which the Pledgor might otherwise be entitled, except as otherwise expressly
provided herein or in the Indenture.
(p) Agent for Service; Submission to Jurisdiction; Waiver of the
------------------------------------------------------------
Immunities. By the execution and delivery of this Agreement, the Company (i)
----------
acknowledges that it has, by separate written instruments, designated and
appointed CT Corporation System,
21.
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ("CT Corporation System") (and any successor
entity), as its authorized agent upon which process may be served in any suit or
proceeding arising out of or relating to this Agreement that may be instituted
in any federal or state court in the Borough of Manhattan, City of New York,
State of New York or brought under federal or state securities laws, and
represent and warrant that CT Corporation System has accepted such designation,
(ii) submit to the jurisdiction of any such court in any such suit or proceeding
and (iii) agree that service of process upon CT Corporation System and written
notice of said service to the Company in accordance with the provisions of this
Agreement shall be deemed in every respect effective service of process upon the
Company in any such suit or proceeding. The Company further agrees to take any
and all action, including the execution and filing of any and all such documents
and instruments, as may be necessary to continue such designation and
appointment of CT Corporation System in full force and effect for as long as any
of the Securities remain outstanding (subject to the limitation set forth in
clause (i)); provided, however, that the Company may, and to the extent CT
-------- -------
Corporation System ceases to be able to be served on the basis contemplated
herein shall, by written notice to the Escrow Agent and the Trustee, designate
such additional or alternative agent for service of process that (i) maintains
an office located in the Borough of Manhattan, City of New York, State of New
York, and (ii) is either (x) United States counsel for the Company or (y) a
corporate service company which acts as agent for service of process for other
persons in the ordinary course of its business. Such written notice shall
identify the name of such agent for service of process and the address of the
office of such agent for service of process in the Borough of Manhattan, City of
New York, State of New York.
To the extent that the Company has or hereafter may acquire any
immunity from jurisdiction of any court of any jurisdiction in which the Company
owns or leases property or assets or the United States or the State of New York,
or from any legal process (whether through service of notice, attachment prior
to judgment, attachment in aid of execution, execution or otherwise) with
respect to itself or its property and assets or this Agreement or the Escrow
Account or actions to enforce judgments in respect of any thereof, the Company
hereby irrevocably waives such immunity in respect of its obligations under the
above-referenced documents, to the extent permitted by law.
[Signature Page Follows]
22.
IN WITNESS WHEREOF, the parties have executed and delivered this
Escrow Agreement as of the day first above written.
CHASE MANHATTAN BANK AND TRUST
COMPANY, NATIONAL ASSOCIATION
/s/ Chase Manhattan Bank and Trust Company,
National Association
______________________________________________
as Escrow Agent
By: /s/ Chase Manhattan Bank and Trust Company,
National Association
___________________________________________
Name:
Title:
CHASE MANHATTAN BANK AND TRUST
COMPANY, NATIONAL ASSOCIATION
/s/ Chase Manhattan Bank and Trust Company,
National Association
______________________________________________
as Trustee
By: /s/ Chase Manhattan Bank and Trust Company,
National Association
____________________________________________
Name:
Title:
CONCENTRIC NETWORK CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
_______________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
23.
SCHEDULE I
PLEDGED SECURITIES
INTEREST DUE ON
FIRST 6 INTEREST
SECURITY MATURITY CUSIP YIELD PRICE COST PAYMENT DATES
-------- -------- ----- ----- ----- ---- ----------------
US Strip 5/15/98 ▇▇▇▇▇▇▇▇▇ 5.40% 97.84 $9,355,460.80
US Strip 11/15/98 ▇▇▇▇▇▇▇▇▇ 5.55% 95.13 $9,097,860.52 9,562,000
US Strip 5/15/99 ▇▇▇▇▇▇▇▇▇ 5.60% 92.51 $8,846,188.68 9,562,000
US Strip 11/15/99 ▇▇▇▇▇▇▇▇▇ 5.60% 89.98 $8,605,226.28 9,562,000
US Strip 5/15/00 ▇▇▇▇▇▇▇▇▇ 5.62% 87.50 $8,366,941.24 9,562,000
US Strip 11/15/00 ▇▇▇▇▇▇▇▇▇ 5.66% 85.00 $8,129,038.68 9,562,000
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Total Purchase Price: $52,400,716.20
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26.