Exhibit 4.3
ESCROW AGREEMENT
This ESCROW AGREEMENT (this "Agreement"), dated as of February 14,
1997, among U.S. Trust Company of Texas, N.A., as escrow agent (in such
capacity, the "Escrow Agent"), U.S. Trust Company of Texas, N.A., as Trustee (in
such capacity, the "Trustee") under the Indenture (as defined herein), and
OpTel, Inc., a Delaware corporation (the "Company").
R E C I T A L S :
A. Pursuant to the Indenture, dated as of February 14, 1997 (the
"Indenture"), between the Company and the Trustee, the Company is issuing
$225,000,000 aggregate principal amount of its 13% Senior Notes Due 2005 (the
"Series A Securities") and authorizing the issuance of 13% Senior Notes Due
2005, Series B (the "Series B" Securities," and together with the Series A
Securities, the "Securities").
B. As security for its obligations under the Securities and the
Indenture, the Company hereby grants to the Trustee, for the benefit of the
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).
C. 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.
A G R E E M E N T :
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 capitalized terms used but not defined herein
shall have 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).
"Available Funds" means (A) the sum of (i) the Initial Escrow Amount
and (ii) interest earned or dividends paid on the funds in the Escrow Account
(including holdings of U.S. Government Securities), less (B) the aggregate
disbursements previously made pursuant to this Agreement.
"Collateral" shall have the meaning given in Section 6(a) hereof.
"Escrow Account" shall mean the escrow account established pursuant
to Section 2.
"Escrow Account Statement" shall have the meaning given in
Section 2(f).
"Initial Escrow Amount" shall mean $79,609,219.
"Interest Payment Date" means February 15 and August 15 of each
year, commencing on August 15, 1997 until the Securities are paid in full.
"Issue Date" has the meaning set forth in the Indenture.
"Payment Notice and Disbursement Request" means a notice sent by the
Trustee to the Escrow Agent requesting a disbursement of funds from the Escrow
Account, in substantially the form of Exhibit A hereto. Each Payment Notice and
Disbursement Request shall be signed by an officer of the Trustee.
"U.S. Government Securities" means securities that
are direct obligations of the United States of America for the
payment of which its full faith and credit is pledged.
2. Escrow Account; Escrow Agent.
(a) Appointment of Escrow Agent. The Company and the Trustee hereby
appoint the Escrow Agent, and the Escrow Agent hereby accepts appointment, as
escrow agent, under the terms and conditions of this Agreement.
(b) Establishment of Escrow Account. On the Issue Date, the Escrow
Agent shall establish an escrow account entitled the "Escrow Account pledged by
OpTel, Inc. to U.S. Trust Company of Texas, N.A., as Trustee" (the "Escrow
Account") at its office located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇. All funds accepted by the Escrow Agent pursuant to this Agreement shall
be held for the exclusive benefit of the 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, the funds held therein and any U.S. Government Securities held by the
Escrow Agent shall be under the sole dominion and control of the Escrow Agent
for the benefit of the Beneficiaries. On the Issue Date, the Company shall
deliver the Initial Escrow Amount to the Escrow Agent for deposit into the
Escrow Account against the Escrow Agent's written acknowledgment and receipt of
the Initial Escrow Amount.
(c) Escrow Agent Compensation. The Company shall pay to the Escrow
Agent such compensation for services to be performed by it under this Agreement
as the Company and the Escrow Agent may agree in writing from time to time. The
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.
The Company shall reimburse the Escrow Agent upon request for all
reasonable expenses, disbursements, and advances incurred or made by the Escrow
Agent in implementing any of the provisions of this Agreement, including
compensation and the reasonable expenses and disbursements of its counsel. The
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.
(d) Investment of Funds in Escrow Account. Funds deposited in the
Escrow Account shall be invested and reinvested only upon the following terms
and conditions:
(i) Acceptable Investments. All funds deposited or held in the
Escrow Account at any time shall be invested by the Escrow Agent in U.S.
Government Securities in accordance with the Initial Instructions annexed
hereto as Schedule A and thereafter, if necessary, the Company's written
instructions from time to time to the Escrow Agent; provided, however,
that the Company 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
August 15, 1997 and through and including the Interest Payment Date on
February 15, 2000; provided, further, however, that 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 proviso and Section
2(d)(v), shall contain the certification referred to in Section 2(d)(ii),
if required, and shall be executed by an Officer of the Company. 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 (i.e., TRADES), transferred to a book
entry account in the name of, the Escrow Agent, for the benefit of the
Trustee, 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
the Escrow Agent at the Federal Reserve Bank that includes only U.S.
Government Securities held by the Escrow Agent for its customers and
segregated by separate recordation in the books and records of the Escrow
Agent. The Escrow Agent shall not be liable for losses on any investments
made by it pursuant to and in compliance with such instructions. In the
absence of qualifying instructions from the Company that meet the
requirements of this Section 2(d)(i), the Escrow Agent shall have no
obligation to invest funds held in the Escrow Account.
(ii) Security Interest in Investments. No investment of funds in the
Escrow Account shall be made unless the Company has certified to the
Escrow Agent and the Trustee that, upon such investment, the Trustee 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 the 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 the Escrow Agent may
conclusively assume. On the Issue Date, and on each thereafter until the
date upon which the balance of the Available Funds shall have been reduced
to zero, each of the Trustee and the Escrow Agent shall receive an Opinion
of Counsel to the Company, dated each such date as applicable, which
opinion shall meet the requirements of Section 314(b) of the Trust
Indenture Act of 1939, as amended (the "TIA") and shall comply with
Section 12.02 of the Indenture.
(iii) Interest and Dividends. All interest earned and dividends paid
on funds invested in U.S. Government Securities shall be deposited in the
Escrow Account as additional Collateral for the exclusive benefit of the
Beneficiaries and, if not required to be disbursed in accordance with the
terms hereof, shall be reinvested in accordance with the terms hereof at
the Company's written instruction.
(iv) Limitation on Escrow Agent's Responsibilities. The Escrow
Agent's sole responsibilities under this Section 2 shall be (A) to retain
possession of certificated U.S. Government Securities (except, however,
that the Escrow Agent may surrender possession to the issuer of any such
U.S. Government Security 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 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, the Escrow Agent will maintain
continuous possession in the State of New York of certificated U.S.
Government Securities and cash included in the Collateral and will cause
uncertificated U.S. Government Securities to be registered in the
book-entry system of, and transferred to an account of the Escrow Agent or
a sub-agent of the Escrow Agent at, the Federal Reserve Bank of New York.
Except as provided in Section 6, the Escrow Agent shall have no other
responsibilities with respect to perfecting or maintaining the perfection
of the Trustee's 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, the 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, the 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.
(v) Manner of Investment. Funds deposited in the Escrow Account
shall initially be invested in accordance with the Initial Instructions
(attached hereto as Schedule A), which is in a manner such that there will
be sufficient funds available without any further investment by the
Company to cover all interest due on the outstanding Securities, as such
interest becomes due, for each Interest Payment Date occurring from the
Issue Date
and ending on (and including) February 15, 2000, provided that such
investments shall have such maturities and/or interest payment dates such
that funds will be available with respect to each such Interest Payment
Date no later than the time the Escrow Agent is required to disburse such
funds to the Trustee pursuant to Section 3(a). The 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 (v).
(e) Substitution of Escrow Agent. The Escrow Agent may resign by
giving no less than 20 Business Days prior written notice to the Company and the
Trustee. Such resignation shall take effect upon the later to occur of (i)
delivery of all funds and U.S. Government Securities maintained by the Escrow
Agent hereunder and copies of all books, records, plans and other documents in
the Escrow Agent's possession relating to such funds or U.S. Government
Securities or this Agreement to a successor escrow agent mutually approved by
the Company and the Trustee (which approvals shall not be unreasonably withheld
or delayed) and (ii) the Company, the 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 the Trustee than
this Agreement; and the 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, the 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
Interest Payment Date, the Escrow Agent shall deliver to the Company and the
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 the 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,
the Escrow Agent shall deliver to the Company and to the Trustee a notice that
the balance in the Escrow Account has been reduced to zero.
3. Disbursements.
(a) Payment Notice and Disbursement Request; Disbursements. The
Trustee shall, at least five business days prior to an Interest Payment Date,
submit to the Escrow Agent a
completed Payment Notice and Disbursement Request substantially in the form of
Exhibit A hereto.
The 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, the 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 the Trustee
for the benefit of the Beneficiaries. The Escrow Agent shall notify the 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 upon nonsatisfaction of the condition in
Section 3(b)(I) below, the Trustee shall thereupon resubmit the Payment Notice
and Disbursement Request with appropriate changes.
(b) Conditions Precedent to Disbursement. The Escrow Agent's payment
of any disbursement shall be made only if: (I) the Trustee shall have submitted,
in accordance with the provisions of Section 3(a) herein, a completed Payment
Notice and Disbursement Request to the Escrow Agent substantially in the form of
Exhibit A with blanks appropriately filled in and (II) the Escrow Agent shall
not have received any notice from the 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 the Escrow Agent shall apply all
Available Funds as required by Section 6(b)(iii)).
(c) Retired Securities. In the event a portion of the Securities has
been retired by the Company and submitted to the Trustee for cancellation and
there is no Default or Event of Default under the Indenture, funds representing
the lesser of (A) any funds remaining in the Escrow Account that are in excess
of the amount sufficient to pay interest through and including February 15, 2000
on the Securities not so retired and (B) the interest payments which have not
previously been made on such retired Securities for each Interest Payment Date
through the Interest Payment Date to occur on February 15, 2000 shall, upon the
written request of the Company to the Escrow Agent and the Trustee, be paid to
the Company upon compliance with the release of collateral provisions of the TIA
and upon receipt by the Escrow Agent of a notice relating thereto from the
Trustee.
4. Escrow Agent.
(a) Limitation of the Escrow Agent's Liability; Responsibilities of
the Escrow Agent. The Escrow Agent's responsibility and liability under this
Agreement shall be limited as follows: (i) the Escrow Agent does not represent,
warrant or guaranty to the holders of the Securities from time to time the
performance of the Company; (ii) the Escrow Agent shall have no responsibility
to the Company or the holders of the Securities or the Trustee from time to time
as a consequence of performance or non-performance by the Escrow Agent
hereunder, except for any gross negligence or willful misconduct of the Escrow
Agent; (iii) the Company shall remain solely responsible for all aspects of the
Company's business and conduct; and (iv) the Escrow Agent is not obligated to
supervise, inspect or inform the Company or any third party of any matter
referred to above.
No implied covenants or obligations shall be inferred from this
Agreement against the Escrow Agent, nor shall the Escrow Agent be bound by the
provisions of any agreement beyond the specific terms hereof. Specifically and
without limiting the foregoing, the 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 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.
The Escrow Agent shall be entitled to rely upon any judicial order
or judgment, upon any written opinion of counsel or upon any certification,
instruction, notice, or other writing delivered to it by the Company or the
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. The 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 the Escrow Agent may request in writing an instruction
in writing from the Company, 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 the Escrow Agent shall state in such request
that it believes in good faith that such proposed course of action is consistent
with another identified provision of this Agreement. The Escrow Agent shall not
be
liable to the Company for acting without the Company's consent in accordance
with such a proposal on or after the date specified therein if (i) the specified
date is at least two business days after the Company receives the Escrow Agent's
request for instructions and its proposed course of action, and (ii) prior to so
acting, the Escrow Agent has not received the written instructions requested
from the Company.
The Escrow Agent may act pursuant to the written 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(a)) shall not be liable
for any action taken or omitted in accordance with such advice.
The 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 or property deposited hereunder, the Escrow Agent
shall be entitled to refuse to comply with any and all claims, demands or
instructions with respect to such funds or property, and the Escrow Agent shall
not be or become liable for its failure or refusal to comply with conflicting
claims, demands or instructions. The 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 the
Escrow Agent, or the Escrow Agent shall have received security or an indemnity
satisfactory to the Escrow Agent sufficient to save the Escrow Agent harmless
from and against any and all loss, liability or expense which the Escrow Agent
may incur by reason of its acting. The Escrow Agent may in addition elect in its
sole option to commence an interpleader action or seek other judicial relief or
orders as the Escrow Agent may deem necessary.
No provision of this Agreement shall require the Escrow Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder.
5. Indemnity. The Company shall indemnify, hold harmless and defend
the Escrow Agent and its directors, officers, agents, employees and controlling
persons, from and against any and all claims, actions, obligations, liabilities
and expenses, including defense costs, investigative fees and costs, legal fees,
and claims for damages, arising from the Escrow Agent's performance or
non-performance, or in connection with its acceptance or appointment as Escrow
Agent, under this Agreement, except to the extent that such liability, expense
or
claim is solely and directly attributable to the 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 the Escrow Agent.
6. Grant of Security Interest; Instructions to Escrow Agent.
(a) The Company hereby irrevocably grants a first priority security
interest in and lien on, and pledges, assigns and sets over to the Trustee 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 the Escrow Agent for placement or deposit in, the
Escrow Account, including, without limitation, all funds held therein, all U.S.
Government Securities held by (or otherwise maintained in the name of) the
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 and any other obligation, now or hereafter arising, of
every kind and nature, owed by the Company under the Indenture to the holders of
the Securities or to the Trustee or any predecessor Trustee. The Escrow Agent
hereby acknowledges the Trustee's security interest and lien as set forth above.
The Company shall take all actions necessary on its part to insure the
continuance of a first priority security interest in the Collateral in favor of
the Trustee in order to secure all such obligations and indebtedness.
(b) The Company and the Trustee hereby irrevocably instruct the
Escrow Agent to, and the Escrow Agent shall: (i) (A) maintain sole dominion and
control over funds and U.S. Government Securities in the Escrow Account for the
benefit of the Trustee to the extent specifically required herein, (B) maintain,
or cause its agent within the State of New York to maintain, possession of all
certificated U.S. Government Securities purchased hereunder that are physically
possessed by the Escrow Agent in order for the 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 the
Escrow Agent), (C) take all steps specified by the Company pursuant to paragraph
(a) of this Section 6 to cause the Trustee 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 not
certificated and (D) maintain the Collateral free and clear of all liens,
security interests, safekeeping or other charges, demands and claims against the
Escrow Agent of any nature now
or hereafter existing in favor of anyone other than the Trustee; (ii) promptly
notify the Trustee if the Escrow Agent receives written notice that any Person
other than the Trustee has a lien or security interest upon any portion of the
Collateral; and (iii) in addition to disbursing amounts held in escrow pursuant
to any Payment Notice and Disbursement Requests given to it by the Trustee
pursuant to Section 3, upon receipt of written notice from the Trustee of the
acceleration of the maturity of the Securities, and direction from the Trustee
to disburse all Available Funds to the Trustee, as promptly as practicable,
after following, if it so chooses, the procedures set forth in the fourth
paragraph of Section 4(a), disburse all funds held in the Escrow Account to the
Trustee and transfer title to all U.S. Government Securities held by the Escrow
Agent hereunder to the Trustee. 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 the Trustee shall have no security interest in, any
funds disbursed by the Escrow Agent to the Company pursuant to this Agreement to
the extent not inconsistent with the terms hereof. Notwithstanding any other
provision contained in this Agreement, the Escrow Agent shall act solely as the
Trustee's agent in connection with its duties under this Section 6 or any other
duties herein relating to the Escrow Account or any funds or U.S. Government
Securities held thereunder. The Escrow Agent shall not have any right to receive
compensation from the Trustee and shall have no authority to obligate the
Trustee or to compromise or pledge its security interest hereunder. Accordingly,
the Escrow Agent is hereby directed to cooperate with the Trustee in the
exercise of its rights in the Collateral provided for herein.
(c) Any money and U.S. Government Securities collected by the
Trustee pursuant to Section 6(b)(iii) shall be applied as provided in Section
5.06 of the Indenture. Any surplus of such cash or cash proceeds held by the
Trustee and remaining after indefeasible payment in full of all the obligations
under the Indenture shall be paid over to the Company or to whomsoever may be
lawfully entitled to receive such surplus or as a court of competent
jurisdiction may direct.
(d) Upon demand, the Company will execute and deliver to the Trustee
such instruments and documents as the Trustee may deem necessary or advisable to
confirm or perfect the rights of the Trustee under this Agreement and the
Trustee's interest in the Collateral. The Trustee shall be entitled to take all
necessary action to preserve and protect the security interest created hereby as
a lien and encumbrance upon the Collateral.
(e) The Company hereby appoints the Trustee as its attorney-in-fact
with full power of substitution to do any act which the Company is obligated
hereto to do, and the Trustee
may exercise such rights as the Company might exercise with respect to the
Collateral and take any action in the Company's name to protect the Trustee's
security interest hereunder. In addition to the rights provided under Section
6(b)(iii) hereof, upon an Event of Default as defined in the Indenture and for
so long as such Event of Default continues, the Trustee may 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 the Trustee may 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 the Trustee's offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the 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. The Trustee shall not be
obligated to make any sale regardless of notice of sale having been given. The
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.
7. Termination. This Agreement shall terminate automatically ten
(10) days following disbursement of all funds remaining in the Escrow Account
(including U.S. Government Securities), unless sooner terminated by agreement of
the parties hereto (in accordance with the terms hereof and not in violation of
the Indenture; provided, that the Trustee may not agree to terminate unless it
has received the consent of 100% of the holders of all of the Securities
outstanding); 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 the Escrow Agent; provided,
further, however, that until such tenth day, the Company will cause this
Agreement (or any permitted successor agreement) to remain in effect and will
cause there to be an escrow agent (including any permitted successor thereto)
acting hereunder (or under any such permitted successor agreement).
8. 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. This Agreement may be amended only in
accordance with Article Nine of the Indenture and further by a writing signed by
a duly authorized representative of each party hereto.
(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:
U.S. Trust Company of Texas, N.A.
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Attention: Corporate Trust Department
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Delivery Instructions:
The Chase NYC/Trust, ABA number ▇▇▇▇▇▇▇▇▇
UST-NY Account No. 9201073195
Further Credit U.S. Trust of Texas, account
number ▇▇▇▇▇▇▇▇
To Trustee:
U.S. Trust Company of Texas, N.A.
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Attention: Corporate Trust Department
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
To the Company:
OpTel, Inc.
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▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
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) Choice of Law. The existence, validity, construction, operation
and effect of any and all terms and provisions of this Agreement shall be
determined in accordance
with and governed by the laws of the State of New York, without regard to
principles of conflicts of laws, except to the extent United States federal law
is applicable to the perfection and priority of security interests in U.S.
Government Securities. The parties to this Agreement hereby agree that
jurisdiction over such parties and over the subject matter of any action or
proceeding arising under this Agreement may be exercised by a competent Court of
the State of New York, or by a United States Court, sitting in New York City.
The Company hereby submits to the personal jurisdiction of such courts, hereby
waives personal service of process upon it and consents that any such service of
process may be made by certified or registered mail, return-receipt requested,
directed to the Company at its address last specified for notices hereunder, and
service so made shall be deemed completed five (5) days after the same shall
have been so mailed, and hereby waives the right to a trial by jury in any
action or proceeding with the Escrow Agent. All actions and proceedings brought
by the Company against the Escrow Agent relating to or arising from, directly or
indirectly, this Agreement shall be litigated only in courts within the State of
New York.
(k) Representations and Warranties. (i) The Company hereby
represents and warrants that this Agreement has been duly authorized, executed
and delivered on its behalf and constitutes the legal, valid and binding
obligation of the Company. The execution, delivery and performance of this
Agreement by the Company does not violate any applicable law or regulation to
which the Company is subject and does not require the consent of any
governmental or other regulatory body to which the Company is subject, except
for such consents and approvals as have been obtained and are in full force and
effect.
(ii) Each of the Escrow Agent and the Trustee hereby represents and
warrants that this Agreement has been duly authorized, executed and delivered on
its behalf and constitutes its legal, valid and binding obligation.
IN WITNESS WHEREOF, the parties have executed and delivered this
Escrow Agreement as of the day first above written.
ESCROW AGENT: U.S. TRUST COMPANY OF TEXAS,
N.A., as Escrow Agent
By:________________________________
Name:
Title:
TRUSTEE: U.S. TRUST COMPANY OF TEXAS,
N.A., as Trustee
By:________________________________
Name:
Title:
COMPANY: OPTEL, INC.
By:________________________________
Name:
Title:
By:________________________________
Name:
Title:
EXHIBIT A
Form of Payment Notice and Disbursement Request
[Letterhead of the Trustee]
[Date]
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Attention: Corporate Trust Department
Re: Disbursement Request No. ____
[indicate whether revised]
Ladies and Gentlemen:
We refer to the Escrow Agreement, dated as of February 14, 1997 (the
"Escrow Agreement") among you (the "Escrow Agent"), the undersigned as Trustee,
and OPTEL, INC., a Delaware corporation (the "Company"). Capitalized terms used
herein shall have the meaning given in the Escrow Agreement.
This letter constitutes a Payment Notice and Disbursement Request
under the Escrow Agreement.
[choose one of the following, as applicable]
[The undersigned hereby notifies you that a scheduled interest
payment in the amount of $__________ is due and payable on ____________, ____
and requests a disbursement of funds contained in the Escrow Account in such
amount to the Trustee.]
[The undersigned hereby notifies you that Securities equalling
$__________ in aggregate principal amount have been retired and authorizes you
to release $__________ of funds in the Escrow Account to the Company (to an
account designated by the Company in writing), which amount represents the
amount permitted to be released in accordance with Section 3(c) of the Escrow
Agreement.]
[The undersigned hereby notifies you that there has been an
acceleration of the maturity of the Securities. Accordingly, you are hereby
requested to disburse all remaining funds contained in the Escrow Account to the
Trustee such that the balance in the Escrow Account is reduced to zero.]
In connection with the requested disbursement, the undersigned
hereby notifies you that:
1. [The Securities have not, as a result of an Event of Default (as
defined in the Indenture), been accelerated and become due and payable.]
2. All prior disbursements from the Escrow Account have been
Applied.
3. [add wire instructions]
The Escrow Agent is entitled to rely on the foregoing in disbursing
funds relating to this Payment Notice and Disbursement Request.
, as Trustee
By: ___________________________
Name:
Title:
Schedule A
[initial investment instructions]
Salomon Brothers Inc.
________________________________________________________________________________
OpTel, Inc.
Purchase of Treasury Principal Strips for Escrow Account
Transactions Summary:
Trade Date: 2/13/97
Settlement Date: 2/14/97
U.S. Trust Company of Texas, N.A. (Escrow Agent) purchases the Treasury
Principal Strips noted below on behalf of OpTel as specified in the Escrow
Agreement between the Escrow Agent and OpTel.
Face Amount Maturity Yield Price Cost CUSIP
--------------------------------------------------------------------------------
1 $14,707,000 15-Aug-97 5.200% 97.452000% $14,332.266 ▇▇▇▇▇▇▇▇▇
2 $14,625,000 15-Feb-98 5.515% 94.691007% $13,848,560 ▇▇▇▇▇▇▇▇▇
3 $14,625,000 15-Aug-98 5.655% 91.962000% $13,449,443 ▇▇▇▇▇▇▇▇▇
4 $14,625,000 15-Feb-99 5.780% 89.215000% $13,047,694 ▇▇▇▇▇▇▇▇▇
5 $14,625,000 15-Aug-99 5.855% 86.552000% $12,658,230 ▇▇▇▇▇▇▇▇▇
6 $14,625,000 15-Feb-00 5.925% 83.918000% $12,273,008 ▇▇▇▇▇▇▇▇▇
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Total: $79,609,199
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