ESCROW AND
SECURITY AGREEMENT
Dated as of February 28, 1997
From
▇▇▇▇▇▇ COMMUNICATIONS CORPORATION
AS PLEDGOR
to
UNITED STATES TRUST COMPANY OF NEW YORK
AS TRUSTEE
T A B L E O F C O N T E N T S
PAGE
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SECTION 1. DEFINITIONS; APPOINTMENT; DEPOSIT AND INVESTMENT . . . . . . . . 2
1.2 APPOINTMENT OF THE TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . 3
1.3 PLEDGE AND GRANT OF SECURITY INTEREST . . . . . . . . . . . . . . . . . 3
1.4. DEPOSIT OF ESCROWED FUNDS . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2. SECURITY FOR OBLIGATION . . . . . . . . . . . . . . . . . . . . 4
SECTION 3. DELIVERY OF COLLATERAL. . . . . . . . . . . . . . . . . . . . . 4
SECTION 4. MAINTAINING THE CASH COLLATERAL ACCOUNT . . . . . . . . . . . . 5
SECTION 5. INVESTING OF AMOUNTS IN THE CASH COLLATERAL ACCOUNT . . . . . . 5
SECTION 6. DELIVERY OF COLLATERAL INVESTMENTS; FILING. . . . . . . . . . . 5
SECTION 7. DISBURSEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 8. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . 10
SECTION 9. FURTHER ASSURANCES. . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 10. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 11. POWER OF ATTORNEY . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 12. NO ASSUMPTION OF DUTIES; REASONABLE CARE. . . . . . . . . . . . 13
SECTION 13. INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 14. REMEDIES UPON EVENT OF DEFAULT. . . . . . . . . . . . . . . . . 14
SECTION 15. EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ii
SECTION PAGE
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SECTION 16. SECURITY INTEREST ABSOLUTE. . . . . . . . . . . . . . . . . . . 15
SECTION 17. MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . . . . 16
17.1. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
17.2. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS. . . . . . . . . . . . 17
17.3. SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
17.4. HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
17.5. COUNTERPART ORIGINALS. . . . . . . . . . . . . . . . . . . . . . . . 17
17.6. BENEFITS OF ESCROW AND SECURITY AGREEMENT. . . . . . . . . . . . . . 17
17.7. AMENDMENTS, WAIVERS AND CONSENTS . . . . . . . . . . . . . . . . . . 17
17.8. INTERPRETATION OF AGREEMENT. . . . . . . . . . . . . . . . . . . . . 18
17.9. CONTINUING SECURITY INTEREST; TERMINATION. . . . . . . . . . . . . . 18
17.10. SURVIVAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . 18
17.11. WAIVERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
17.12. AUTHORITY OF THE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . 19
17.13. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
17.14. FINAL EXPRESSION . . . . . . . . . . . . . . . . . . . . . . . . . . 19
17.15. RIGHTS OF HOLDERS OF THE NOTES . . . . . . . . . . . . . . . . . . . 19
17.16. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY
TRIAL; WAIVER OF DAMAGES. . . . . . . . . . . . . . . . . . . . . . 20
ESCROW AND SECURITY AGREEMENT
This ESCROW AND SECURITY AGREEMENT (this "ESCROW AND SECURITY
AGREEMENT") is made and entered into as of February 28, 1997 by and among ▇▇▇▇▇▇
COMMUNICATIONS CORPORATION, an Oklahoma corporation (the "PLEDGOR"), having its
principal office at ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED, ALEX. ▇▇▇▇▇ & SONS INCORPORATED, FIRST
UNION CAPITAL MARKETS CORP. and NATIONSBANC CAPITAL MARKETS, INC., acting as the
Placement Agents (collectively, the "PLACEMENT AGENTS"), in favor of United
States Trust Company of New York, a banking and trust company duly organized and
existing under the laws of the State of New York ("U.S. TRUST"), having an
office at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, as trustee (the "TRUSTEE")
for the holders (the "HOLDERS") of the Notes (as defined herein) issued by the
Pledgor under the Indenture referred to below.
W I T N E S S E T H
WHEREAS, the Pledgor and the Placement Agents are parties to a
Placement Agreement dated February 25, 1997 (the "PLACEMENT AGREEMENT"),
pursuant to which the Pledgor will issue and sell to the Placement Agents
$160,000,000 in aggregate principal amount of 113/4% Senior Notes due 2007 (the
"NOTES");
WHEREAS, the Pledgor and the Trustee, have entered into that certain
indenture dated as of the date hereof (as amended, restated, supplemented or
otherwise modified from time to time, the "INDENTURE"), pursuant to which the
Pledgor is issuing the Notes on the date hereof; and
WHEREAS, pursuant to the Placement Agreement and the Indenture, the
Pledgor is required to deposit on the Closing Date (as defined in the Placement
Agreement) $155,200,000 (the "ESCROWED FUNDS") with the Trustee to be held by
the Trustee for the benefit of the Holders of the Notes to secure the Pledgor's
obligation to (i) provide for payment in full of the first four scheduled
interest payments due on the Notes, (ii) secure repayment of the principal,
premium and interest on the Notes in the event that the Notes become due and
payable prior to such time as the first four scheduled interest payments thereon
shall have been paid in full, (iii) make an Offer to Purchase (as defined in the
Indenture) for $60 million principal amount of Notes (a "SPECIAL REPURCHASE
OFFER") in the
2
event that either the Maryland 2 Acquisition (as defined in the Indenture) or
the Horizon Properties Acquisition (as defined in the Indenture) is not
consummated by March 31, 1997 (the "TERMINATION DATE") and (iv) redeem all of
the Notes in the event that neither the Maryland 2 Acquisition nor the
Horizon Properties Acquisition is consummated by the Termination Date
(collectively, the "OBLIGATIONS");
WHEREAS, the Pledgor has opened a non-interest bearing cash collateral
account (the "CASH COLLATERAL ACCOUNT) with U.S. Trust at its office at ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ Account No. ▇▇▇-▇▇▇-▇▇ in the name of the Pledgor
but under the sole dominion and control of the Trustee and subject to the terms
of this Escrow and Security Agreement; and
WHEREAS, to secure the Obligations of the Pledgor, the Pledgor has
agreed to (i) pledge to the Trustee for its benefit and the ratable benefit of
the Holders of the Notes, a security interest in the Escrowed Funds and the
Collateral (as hereinafter defined) and (ii) execute and deliver this Escrow and
Security Agreement in order to secure the payment and performance by the Pledgor
of all the Obligations.
AGREEMENT
NOW, THEREFORE, in consideration of the premises herein contained, and
in order to induce the Holders of the Notes to purchase the Notes, the Pledgor,
the Placement Agents and the Trustee hereby agree, for the benefit of the
Trustee and for the ratable benefit of the Holders of the Notes, as follows:
SECTION 1. DEFINITIONS; APPOINTMENT; DEPOSIT AND INVESTMENT.
1.1 DEFINITIONS.
"ACQUISITION" shall mean the Maryland 2 Acquisition or the Horizon
Properties Acquisition, as the context requires.
"CASH EQUIVALENTS" means any of the following, to the extent owned by
the Pledgor free and clear of all liens other than liens created hereunder:
(a) U.S. Government Obligations, (b) insured certificates of deposit of or
time deposits with any commercial bank that (i) is a member of the Federal
Reserve System, (ii) issues (or the parent of which issues) commercial
paper rated as described in clause (c), (iii) is organized under the laws
of the United States or any State thereof and (iv) has combined capital and
surplus of at least $1 billion or (c) commercial paper in an aggregate
amount of no more than $5 million per issuer outstanding at any time,
issued by any corporation organized under the laws of any State of the
United States and rated
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at least "Prime-1" (or the then equivalent grade) by ▇▇▇▇▇'▇ Investors
Service, Inc. or "A-1" (or the then equivalent grade) by Standard & Poor's
Ratings Service.
"OFFICERS' CERTIFICATE" shall mean a certificate signed by the
President or any Vice President of the Pledgor stating that (i) the Bank
Facility Agreement (as defined in the Indenture) has been consummated and
is in full force and effect and there are no defaults in existence under
the Bank Facility Agreement, (ii) all FCC and any other required
governmental consents and approvals with respect to the Acquisition have
been obtained, (iii) the Acquisition has been consummated or will be
consummated on the date of the release of such funds and (iv) the corporate
reorganization pursuant to which the Company became the holding company
parent of ▇▇▇▇▇▇ Operating Company has been consummated with the approval
of the FCC.
"OPINIONS OF COUNSEL" shall mean an opinion of ▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇
substantially in the form attached hereto as Exhibit B and an opinion of
Wilkinson, Barker, ▇▇▇▇▇▇ & ▇▇▇▇▇ substantially in the form attached hereto
as Exhibit C. As to factual matters, each of ▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇ and
Wilkinson, Barker, ▇▇▇▇▇▇ & ▇▇▇▇▇ may rely on a certificate signed by the
President or any Vice President of the Pledgor and attached to its opinion.
"TRUSTEE" shall mean the Person named as the "Trustee" in the first
paragraph of this Agreement until a successor Trustee shall have become
such, and thereafter "Trustee" shall mean the Person who is then the
Trustee hereunder.
All defined terms used herein without definition shall have the
respective meanings ascribed to them in the Indenture. Unless otherwise defined
herein or in the Indenture, terms used in Articles 8 or 9 of the Uniform
Commercial Code as in effect in the State of New York (the "U.C.C.") are used
herein as therein defined.
1.2 APPOINTMENT OF THE TRUSTEE. The Pledgor and the Placement
Agents hereby appoint the Trustee as Trustee in accordance with the terms
and conditions set forth herein and the Trustee hereby accepts such
appointment.
1.3 PLEDGE AND GRANT OF SECURITY INTEREST. The Pledgor hereby
pledges to the Trustee for its benefit and for the ratable benefit of the
Holders of the Notes, and grants to the Trustee for its benefit and for the
ratable benefit of the Holders of the Notes, a continuing first priority
security interest in and to all of the Pledgor's right, title and interest
in, to and under the following (hereinafter collectively referred to as the
"COLLATERAL"), whether characterized as investment property, general
intangibles or otherwise: (a) the Cash Collateral Account, all funds held
therein and all certificates and instruments, if any, from time to time
representing or evidencing the
4
Cash Collateral Account, (b) all Collateral Investments (as hereinafter
defined) and all certificates and instruments, if any, representing or
evidencing the Collateral Investments, and any and all securities
entitlements to the Collateral Investments, and any and all related
securities accounts in which security entitlements to the Collateral
Investments are carried (c) all notes, certificates of deposit, deposit
accounts, checks and other instruments from time to time hereafter
delivered to or otherwise possessed by the Trustee for or on behalf of the
Pledgor in substitution for or in addition to any or all the then existing
Collateral, (d) all interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the then existing Collateral,
and (e) all proceeds of any and all of the foregoing Collateral (including,
without limitation, proceeds that constitute property of the types
described in clauses (a) - (d) of this Section 1.3) and, to the extent not
otherwise included, all cash.
1.4. DEPOSIT OF ESCROWED FUNDS. The Pledgor shall deposit, or
cause to be deposited, all Escrowed Funds into the Cash Collateral Account.
SECTION 2. SECURITY FOR OBLIGATION. This Escrow and Security
Agreement secures the prompt and complete payment and performance when due
(whether at stated maturity, by acceleration or otherwise) of all the
Obligations.
SECTION 3. DELIVERY OF COLLATERAL. (a) All certificates or
instruments representing or evidencing the Collateral, including, without
limitation, amounts invested as provided in Section 5, shall be delivered to and
held by or on behalf of the Trustee pursuant hereto and shall be in suitable
form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
sufficient to convey a valid security interest in such Collateral to the Trustee
or shall be credited to a securities account (the "COLLATERAL INVESTMENTS
ACCOUNT") designated by the Trustee. For the better perfection of the Trustee's
rights in and to the Collateral, the Pledgor shall forthwith, upon the pledge of
any Collateral hereunder, cause all such Collateral, including the Collateral
Investments Account and all other accounts representing a security entitlement
to or containing any Collateral (including, without limitation, any Collateral
Investments) to be registered in the name of the Trustee or such of its nominees
as the Trustee shall direct, and to be under the sole dominion and control of
the Trustee, which dominion and control shall be agreed to and acknowledged by
any securities intermediary holding any such account in an acknowledgement in
the form of Exhibit D hereto, subject only to the revocable rights specified in
Section 7. In addition, the Trustee shall have the right at any time to
exchange certificates or instruments representing or evidencing the Collateral
for certificates or instruments of smaller or larger denominations.
5
SECTION 4. MAINTAINING THE CASH COLLATERAL ACCOUNT. (a) So long as
any Obligation shall remain unpaid, the Pledgor will maintain the Cash
Collateral Account with U.S. Trust.
(b) It shall be a term and condition of the Cash Collateral Account,
notwithstanding any term or condition to the contrary in any other
agreement relating to the Cash Collateral Account, and except as otherwise
provided by the provisions of Section 7 and Section 14, that no amount
(including interest on Collateral Investments) shall be paid or released to
or for the account of, or withdrawn by or for the account of, the Pledgor
or any other Person from the Cash Collateral Account.
The Cash Collateral Account shall be subject to such applicable laws, and such
applicable regulations of the Board of Governors of the Federal Reserve System
and of any other appropriate banking or governmental authority, as may now or
hereafter be in effect.
SECTION 5. INVESTING OF AMOUNTS IN THE CASH COLLATERAL ACCOUNT. If
requested by the Pledgor, the Trustee will, subject to the provisions of
Section 7 and Section 14, from time to time (a) invest amounts on deposit in the
Cash Collateral Account in such Cash Equivalents in the name of the Trustee as
the Pledgor may select and the Trustee may approve and (b) invest interest paid
on the Cash Equivalents referred to in clause (a) above, and reinvest other
proceeds of any such Cash Equivalents that may mature or be sold, in each case
in such Cash Equivalents in the name of the Trustee, as the Pledgor may select
and the Trustee may approve (the Cash Equivalents referred to in clauses (a) and
(b) above being collectively "COLLATERAL INVESTMENTS"); PROVIDED, HOWEVER, that
(a) following the consummation of the first Acquisition, the amount on deposit
in the Collateral Investments Account must include U.S. Government Obligations
sufficient to provide for the payment in full of the first four scheduled
interest payments on $100 million principal amount of Notes and (b) following
the consummation of the second Acquisition or the consummation of the Special
Repurchase Offer, the amount on deposit in the Collateral Investments Account
shall be U.S. Government Obligations sufficient to provide for the payment in
full of the first four scheduled interest payments, on all of the Notes then
outstanding. Interest and proceeds that are not invested or reinvested in
Collateral Investments as provided above shall be deposited and held in the Cash
Collateral Account. In no event shall the Trustee be liable for any loss in the
investment or reinvestment of amounts held in the Cash Collateral Account.
SECTION 6. DELIVERY OF COLLATERAL INVESTMENTS; FILING. (a) The
Trustee shall become the holder of the Collateral Investments and of any and all
security entitlements to the Collateral Investments, through action by the
Federal Reserve Bank of New York ("FRBNY") or another securities intermediary,
as confirmed (in writing or electronically or otherwise in accordance with
standard industry practice) to the Trustee by FRBNY or such other securities
intermediary (i) indicating by book-entry that the Collateral Investments or a
security
6
entitlement thereto has been credited to the Collateral Investments Account,
or (ii) acquiring the Collateral Investments or a security entitlement
thereto for the Trustee and accepting the same for credit to the Collateral
Investments Account.
(b) Prior to or concurrently with the execution and delivery hereof
and prior to the transfer to the Trustee of Collateral Investments (or
acquisition by the Trustee of any security entitlement thereto), as provided in
subsection (a) of this Section 6, the Trustee shall establish the Collateral
Investments Account on its books as an account segregated from all other
custodial or collateral accounts at its office at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇. Upon transfer of the Collateral Investments to the Trustee (or
the Trustee's acquisition of a security entitlement thereto), as confirmed to
the Trustee by FRBNY or another securities intermediary, the Trustee shall make
appropriate book entries indicating that the Collateral Investments and/or such
security entitlement have been credited to and are held in the Collateral
Investments Account. Subject to the other terms and conditions of this Escrow
and Security Agreement, all Collateral Investments held by the Trustee pursuant
to this Escrow and Security Agreement shall be held in the Collateral
Investments Account subject (except as expressly provided in subsections
7(a)-7(e) and 7(g) hereof) to the exclusive dominion and control of the Trustee
and exclusively for the benefit of the Trustee and for the ratable benefit of
the Holders of the Notes and segregated from all other funds or other property
otherwise held by the Trustee.
(c) All Collateral shall be retained in the Cash Collateral Account
and the Collateral Investments Account pending disbursement pursuant to the
terms hereof.
(d) Concurrently with the execution and delivery of this Agreement,
the Trustee is delivering to the Pledgor and the Placement Agents a duly
executed certificate, in the form of EXHIBIT A hereto, of an officer of the
Trustee, confirming the Trustee's establishment and maintenance of the
Collateral Investment Account and its receipt and holding of the Collateral
Investments or a security entitlement thereto and the crediting of the
Collateral Investments or such security entitlement to the Collateral Investment
Account, all in accordance with this Escrow and Security Agreement.
(e) Concurrently with the execution and delivery of this Agreement,
the Pledgor is delivering to the Trustee acknowledgement copies or stamped
receipt copies of proper financing statements, duly filed on or before the
Closing Date under the Uniform Commercial Code of the State of New York and the
State of Oklahoma, covering the Collateral described in this Escrow and Security
Agreement.
SECTION 7. DISBURSEMENTS. The Trustee shall hold the assets in
the Cash Collateral Account and the Collateral Investments Account and release
the same, or a portion thereof, only as follows:
7
(a) At least five Business Days prior to the due date of any of the
first four scheduled interest payments on the Notes, the Pledgor may,
pursuant to written instructions executed by the Pledgor (an "ISSUER ORDER"),
direct the Trustee to release from the Cash Collateral Account and pay to the
Holders of the Notes proceeds sufficient to provide for payment in full of
such interest then due on the Notes. Upon receipt of an Issuer Order, the
Trustee will take any action necessary to provide for the payment of the
interest on the Notes in accordance with the payment provisions of the
Indenture to the Holders of the Notes from (and to the extent of) proceeds of
the Escrowed Funds in the Cash Collateral Account. Nothing in this Section 7
shall affect the Trustee's rights to apply the Collateral to the payments of
amounts due on the Notes upon acceleration thereof.
(b) If the Pledgor makes any interest payment or portion of an
interest payment for which the Collateral is security from a source of funds
other than the Cash Collateral Account ("PLEDGOR FUNDS"), the Pledgor may,
after payment in full of such interest payment or portion thereof from
proceeds of the Collateral or such Pledgor Funds or both, direct the Trustee
to release to the Pledgor or to another party at the direction of the Pledgor
(the "PLEDGOR'S DESIGNEE") proceeds from the Cash Collateral Account in an
amount less than or equal to the amount of Pledgor Funds applied to such
interest payment. Upon receipt of an Issuer Order by the Trustee, the
Trustee shall pay over to the Pledgor or the Pledgor's Designee, as the case
may be, the requested amount from proceeds in the Cash Collateral Account.
Concurrently with any release of funds to the Pledgor pursuant to this
Section 7(b), the Pledgor shall deliver to the Trustee a certificate signed
by an officer of the Pledgor stating that such release has been duly
authorized by the Pledgor and will not contravene any provision of applicable
law or the Certificate of Incorporation of the Pledgor or any material
agreement or other material instrument binding upon the Pledgor or any of its
subsidiaries or any judgment, order or decree of any governmental body,
agency or court having jurisdiction over the Pledgor or any of its
subsidiaries or result in the creation or imposition of any Lien on any
assets of the Pledgor, except for the security interest granted under the
Escrow and Security Agreement.
(c) Upon receipt by the Trustee prior to 9:00 A.M. New York City
time on the Termination Date of an Officers' Certificate and Opinions of
Counsel with respect to the first Acquisition, the Trustee shall immediately
disburse proceeds from the Cash Collateral Account such that the amount
remaining in the Cash Collateral Account equals (i) an amount sufficient to
purchase U.S. Government Obligations in such amount as will be sufficient
upon receipt of scheduled interest and principal payments on such securities,
in the opinion of a nationally recognized firm of independent public
accountants selected by the Pledgor, to provide for payment in full of the
first four scheduled interest payments due on $100 million principal amount
of Notes plus (ii) $60.6 million plus the amount of interest that would
accrue on the $60.0 million principal amount of Notes from the Closing Date
to April 30, 1997 to, or at the written direction of, the Pledgor by the
close of business on the date such Opinions of
8
Counsel and Officers' Certificate are received by the Trustee; PROVIDED,
HOWEVER, that if such directions, the Opinions of Counsel and Officers'
Certificate are received by the Trustee (i) on a day other than a Business
Day or (ii) after 9:00 A.M. local time on such date, then, in either
instance, the Trustee shall disburse the proceeds by the close of business on
the next Business Day (unless such date is the Closing Date in which case the
Trustee shall nevertheless disburse the proceeds immediately). The Pledgor
agrees to use the disbursed proceeds to consummate the Acquisition on the
date of such release or to repay indebtedness under the Bank Facility
Agreement if the Acquisition was financed with such indebtedness; PROVIDED
that the Pledgor may retain up to $7.55 million of such proceeds.
(d) If the Trustee receives, prior to 9:00 A.M. New York City time
on the Termination Date, an Officers' Certificate and Opinions of Counsel
with respect to the second Acquisition, the Trustee shall immediately
disburse from the Cash Collateral Account to, or at the written direction of,
the Pledgor by the close of business, on the date such Opinions of Counsel
and Officers' Certificate are received by the Trustee, proceeds to the extent
the U.S. Government Obligations held in the Collateral Investment Account
exceed the amount sufficient upon the receipt of scheduled interest and
principal payments on such securities, in the opinion of a nationally
recognized firm of independent public accountants selected by the Pledgor, to
provide for payment in full of the first four scheduled interest payments due
on all Notes then outstanding.
(e) (i) On the Termination Date, if one, but not both Acquisitions
have been consummated prior to such date, the Pledgor shall mail a notice to
the Trustee and each Holder of the Notes stating that the Pledgor is making a
Special Repurchase Offer for $60 million principal amount of the Notes on a
date no earlier than 30 days and no later than 60 days after the Termination
Date (the "PURCHASE DATE"), at 101% of the principal amount thereof plus
accrued interest thereon from the Closing Date to the Purchase Date (the
"PURCHASE PRICE"), and shall state that such Notes must be surrendered to the
Trustee in order to collect the Purchase Price.
(ii) On the Purchase Date, the Trustee shall release proceeds from the
Cash Collateral Account to the Paying Agent to be used to repurchase Notes
surrendered in the Special Repurchase Offer and the Trustee shall release
proceeds to the Pledgor to the extent that the U.S. Government Obligations
held in the Collateral Investment Account exceed the amount sufficient upon
the receipt of scheduled interest and principal payments on such
securities, in the opinion of a nationally recognized firm of independent
public accountants selected by the Pledgor, to provide for payment in full
of the first four scheduled interest payments due on all Notes then
outstanding. The Special Repurchase Offer shall be made as specified in
the Indenture.
9
(iii) On the Termination Date, if neither the Maryland 2
Acquisition nor the Horizon Properties Acquisition has been consummated
prior to such date, the Trustee shall mail a notice by first class mail to
each Holder's last address as it appears on the Security Register (as
determined in the Indenture) stating that all of the outstanding Notes
shall be redeemed within ten days after the Termination Date (the
"REDEMPTION DATE"), at 101% of the principal amount thereof plus accrued
interest thereon from the Closing Date to the Redemption Date (the "SPECIAL
REDEMPTION PRICE"), and shall state that the Notes must be surrendered to
the Trustee in order to collect the Special Redemption Price.
(iv) On the Business Day prior to the Redemption Date, the Trustee
shall release all Collateral to the Paying Agent. The Notes shall be
redeemed as specified in the Indenture.
(f)(i) In the event, for any reason, the amount of Collateral to be
released is insufficient to pay the aggregate Purchase Price to repurchase
the portion of the Notes as provided for in Section 5(e)(i) hereof, the
Pledgor shall, on or prior to the Purchase Date, deposit with the Paying
Agent the amount of funds necessary to permit such Notes to be repurchased in
accordance with the provisions of the Indenture.
(ii) In the event, for any reason, the amount of Collateral to be
released is insufficient to pay the aggregate Special Redemption Price to
redeem all of the outstanding Notes, the Pledgor shall, on or prior to the
Redemption Date, deposit with the Paying Agent the amount of funds
necessary to permit all outstanding Notes to be redeemed in accordance with
the provisions of the Indenture.
(g) If at any time following the consummation of the second
Acquisition or the Special Repurchase Offer, 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
Pledgor and delivered to the Trustee, to provide for payment in full of the
first four scheduled interest payments due on the Notes, the Pledgor may
direct the Trustee to release any such overfunded amount to the Pledgor or to
such other party as the Pledgor may direct. Upon receipt of an Issuer Order
the Trustee shall pay over to the Pledgor or the Pledgor's Designee, as the
case may be, any such overfunded amount.
(h) Upon payment in full of the first four scheduled interest
payments on the Notes in a timely manner, the security interest in the
Collateral evidenced by this Escrow and Security Agreement will automatically
terminate and be of no further force and effect and the Collateral shall
promptly be paid over and transferred to the Pledgor. Furthermore, upon the
release of any Collateral from the Cash Collateral Account in accordance with
the terms of this Escrow and Security Agreement, whether upon release of
Collateral to Holders as payment of
10
interest or otherwise, the security interest evidenced by this Escrow and
Security Agreement in such released Collateral will automatically terminate
and be of no further force and effect.
(i) At least three Business Days prior to the due date of any of
the first four scheduled interest payments on the Notes, the Pledgor
covenants to give the Trustee (by Issuer Order) notice as to whether payment
of interest will be made pursuant to Section 7(a) or 7(b) and as to the
respective amounts of interest that will be paid pursuant to Section 7(a) or
7(b). If no such notice is given, the Trustee will act pursuant to Section
7(a) as if it had received an Issuer Order pursuant thereto for the payment
in full of the interest then due.
(j) The Trustee shall not be required to liquidate any Collateral
Investment in order to make any scheduled payment of interest or any release
hereunder unless instructed to do so by Issuer Order or pursuant to Section
14 hereof.
(k) Nothing contained in Section 1, Section 5, this Section 7 or
any other provision of this Agreement shall (i) afford the Pledgor any right
to issue entitlement orders with respect to any security entitlement to the
Collateral Investments or any securities account in which any such security
entitlement may be carried, or otherwise afford the Pledgor control of any
such security entitlement or (ii) otherwise give rise to any rights of
Pledgor with respect to the Collateral Investments, any security entitlement
thereto or any securities account in which any such security entitlement may
be carried, other than the Pledgor's rights under this Escrow and Security
Agreement as the beneficial owner of collateral pledged to and subject to the
exclusive dominion and control (except as expressly provided in Sections
7(a), (b), (c), (d), (e), (f) and (g) hereof) of the Trustee in its capacity
as such (and not as a securities intermediary). The Pledgor acknowledges,
confirms and agrees that the Trustee holds a security entitlement to the
Collateral Investments solely as trustee for the Holders of the Notes and not
as a securities intermediary.
SECTION 8. REPRESENTATIONS AND WARRANTIES. The Pledgor hereby
represents and warrants that:
(a) The execution and delivery by the Pledgor of, and the performance
by the Pledgor of its obligations under, this Escrow and Security Agreement
will not contravene any provision of applicable law or the Certificate of
Incorporation of the Pledgor or any material agreement or other material
instrument binding upon the Pledgor or any of its subsidiaries or any
judgment, order or decree of any governmental body, agency or court having
jurisdiction over the Pledgor or any of its subsidiaries, or result in the
creation or imposition of any Lien on any assets of the Pledgor, except for
the security interests granted under this Escrow and Security Agreement; no
consent, approval, authorization or order of, or qualification with, any
governmental body or agency is required (i) for the performance by the
Pledgor of its
11
obligations under this Escrow and Security Agreement, (ii) for the pledge
by the Pledgor of the Collateral pursuant to this Escrow and Security
Agreement or (iii) except for any such consents, approvals, authorizations
or orders required to be obtained by the Trustee (or the Holders) for
reasons other than the consummation of this transaction, for the exercise
by the Trustee of the rights provided for in this Escrow and Security
Agreement or the remedies in respect of the Collateral pursuant to this
Escrow and Security Agreement.
(b) The Pledgor is the beneficial owner of the Collateral, free and
clear of any Lien or claims of any person or entity (except for the
security interests granted under this Escrow and Security Agreement). No
financing statement covering the Pledgor's interest in the Collateral is on
file in any public office other than the financing statements, if any,
filed pursuant to this Escrow and Security Agreement.
(c) This Escrow and Security Agreement has been duly authorized,
validly executed and delivered by the Pledgor and (assuming the due
authorization and valid execution and delivery of this Escrow and Security
Agreement by the Trustee and enforceability of the Escrow and Security
Agreement against the Trustee in accordance with its terms) constitutes a
valid and binding agreement of the Pledgor, enforceable against the Pledgor
in accordance with its terms, except as (i) the enforceability hereof may
be limited by bankruptcy, insolvency, fraudulent conveyance, preference,
reorganization, moratorium or similar laws now or hereafter in effect
relating to or affecting creditors' rights or remedies generally, (ii) the
availability of equitable remedies may be limited by equitable principles
of general applicability and the discretion of the court before which any
proceeding therefor may be brought, (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 Section 14(b), Section 17.11 and
Section 17.16 hereof may be limited by applicable law.
(d) Upon the delivery to the Trustee of the certificates or
instruments, if any, representing or evidencing the Collateral, the filing
of financing statements, if any, required by the UCC in the appropriate
offices in the State of New York and Oklahoma, and the transfer and pledge
to the Trustee of the Collateral and the acquisition by the Trustee of a
security entitlement thereto, in accordance with Section 3, the pledge of
and grant of a security interest in the Collateral securing the payment of
the Obligations for the benefit of the Trustee and the Holders of the Notes
will constitute a first priority perfected security interest in such
Collateral, enforceable as such against all creditors of the Pledgor (and
any persons purporting to purchase any of the Collateral from the Pledgor),
other than as permitted by the Indenture.
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(e) There are no legal or governmental proceedings pending or, to the
best of the Pledgor's knowledge, threatened to which the Pledgor or any of
its subsidiaries is a party or to which any of the properties of the
Pledgor or any such subsidiary is subject that would materially adversely
affect the power or ability of the Pledgor to perform its obligations under
this Escrow and Security Agreement or to consummate the transactions
contemplated hereby.
(f) The pledge of the Collateral pursuant to this Escrow and Security
Agreement is not prohibited by law or governmental regulation (including,
without limitation, Regulations G, T, U and X of the Board of Governors of
the Federal Reserve System) applicable to the Pledgor.
(g) No Event of Default exists.
SECTION 9. FURTHER ASSURANCES. The Pledgor will, promptly upon
request by the Trustee (which request the Trustee may submit at the direction
of the Holders of a majority in principal amount of the Notes then
outstanding), execute and deliver or cause to be executed and delivered, or
use its reasonable best efforts to procure, all assignments, instruments and
other documents, deliver any instruments to the Trustee and take any other
actions that are necessary or desirable to perfect, continue the perfection
of, or protect the first priority of the Trustee's security interest in and
to the Collateral, to protect the Collateral against the rights, claims, or
interests of third persons (other than any such rights, claims or interests
created by or arising through the Trustee) or to effect the purposes of this
Escrow and Security Agreement. The Pledgor also hereby authorizes the Trustee
to file any financing or continuation statements in the United States with
respect to the Collateral without the signature of the Pledgor (to the extent
permitted by applicable law). The Pledgor will promptly pay all reasonable
costs incurred in connection with any of the foregoing within 45 days of
receipt of an invoice therefor. The Pledgor also agrees, whether or not
requested by the Trustee, to take all actions that are necessary to perfect
or continue the perfection of, or to protect the first priority of, the
Trustee's security interest in and to the Collateral, including the filing of
all necessary financing and continuation statements, and to protect the
Collateral against the rights, claims or interests of third persons (other
than any such rights, claims or interests created by or arising through the
Trustee).
SECTION 10. COVENANTS. The Pledgor covenants and agrees with the
Trustee and the Holders of the Notes that from and after the date of this
Escrow and Security Agreement until the earlier of payment in full in cash of
(x) each of the first four scheduled interest payments due on the Notes under
the terms of the Indenture or (y) all obligations due and owing under the
Indenture and the Notes in the event such obligations become due and payable
prior to the payment of the first four scheduled interest payments on the
Notes:
13
(a) that (i) it will not (and will not purport to) sell or otherwise
dispose of, or grant any option or warrant with respect to, any of the
Collateral or (ii) it will not create or permit to exist any Lien upon or
with respect to any of the Collateral (except for the security interests
granted under this Escrow and Security Agreement and any Lien created by or
arising through the Trustee) and at all times will be the sole beneficial
owner of the Collateral; or
(b) that it will not (i) enter into any agreement or understanding
that restricts or inhibits or purports to restrict or inhibit the Trustee's
rights or remedies hereunder, including, without limitation, the Trustee's
right to sell or otherwise dispose of the Collateral or (ii) fail to pay or
discharge any tax, assessment or levy of any nature with respect to the
Collateral not later than five days prior to the date of any proposed sale
under any judgment, writ or warrant of attachment with respect to the
Collateral.
SECTION 11. POWER OF ATTORNEY. In addition to all of the powers
granted to the Trustee pursuant to the Indenture, the Pledgor hereby appoints
and constitutes the Trustee as the Pledgor's attorney-in-fact (with full
power of substitution) 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: (a) collection of proceeds of any
Collateral; (b) conveyance of any item of Collateral to any purchaser
thereof; (c) giving of any notices or recording of any Liens under Section 6
hereof; and (d) 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 the Trustee in its sole reasonable
discretion, and such payments made by the Trustee to become part of the
Obligations of the Pledgor to the Trustee, due and payable immediately upon
demand. The Trustee's authority under this Section 11 shall include, without
limitation, the authority to endorse and negotiate any checks or instruments
representing proceeds of Collateral in the name of the Pledgor, execute and
give receipt for any certificate of ownership or any document constituting
Collateral, transfer title to any item of Collateral, sign the Pledgor's name
on all financing statements (to the extent permitted by applicable law) or
any other documents deemed necessary or appropriate by the Trustee to
preserve, protect or perfect the security interest in the Collateral and to
file the same, prepare, file and sign the Pledgor's name on any notice of
Lien, and to take any other actions arising from or incident to the powers
granted to the Trustee in this Escrow and Security Agreement. This power of
attorney is coupled with an interest and is irrevocable by the Pledgor.
SECTION 12. NO ASSUMPTION OF DUTIES; REASONABLE CARE. The rights and
powers granted to the Trustee hereunder are being granted in order to preserve
and protect the security interest of the Trustee and the Holders of the Notes in
and to the Collateral granted hereby and shall not be interpreted to, and shall
not impose any duties on the Trustee in connection therewith other than those
expressly provided herein or imposed under applicable
14
law. Except as provided by applicable law or by the Indenture, the Trustee
shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession if the Collateral is
accorded treatment substantially equal to that which the Trustee accords
similar property held by the Trustee for similar accounts, it being
understood that the Trustee in its capacity as such shall not have any
responsibility for (a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities or other matters relative to any
Collateral, whether or not the Trustee has or is deemed to have knowledge of
such matters, (b) taking any necessary steps to preserve rights against any
parties with respect to any Collateral or (c) investing or reinvesting any of
the Collateral, provided, however, that nothing contained in this Agreement
shall relieve the Trustee of any responsibilities as a securities
intermediary under applicable law.
SECTION 13. INDEMNITY. The Pledgor shall indemnify, hold harmless
and defend the Trustee and its directors, officers, agents and employees,
from and against any and all claims, actions, obligations, liabilities and
expenses, including reasonable defense costs, reasonable investigative fees
and costs, and reasonable legal fees and damages arising from the Trustee's
performance as Trustee under this Escrow and Security Agreement, except to
the extent that such claim, action, obligation, liability or expense is
directly attributable to the bad faith, gross negligence or wilful misconduct
of such indemnified person.
SECTION 14. REMEDIES UPON EVENT OF DEFAULT. If any Event of
Default under the Indenture or default hereunder (any such Event of Default
or default being referred to in this Escrow and Security Agreement as an
"EVENT OF DEFAULT") shall have occurred and be continuing:
(a) The Trustee and the Holders of the Notes shall have, in addition
to all other rights given by law or by this Escrow and Security Agreement
or the Indenture, all of the rights and remedies with respect to the
Collateral of a secured party under the UCC in effect in the State of New
York at that time. In addition, with respect to any Collateral that shall
then be in or shall thereafter come into the possession or custody of the
Trustee, the Trustee may and, at the direction of the Holders of a majority
in principal amount of the Notes then outstanding, shall, sell or cause the
same to be sold at any broker's board or at public or private sale, in one
or more sales or lots, at such price or prices as the Trustee may deem
best, for cash or on credit or for future delivery, without assumption of
any credit risk. The purchaser of any or all Collateral so sold shall
thereafter hold the same absolutely, free from any claim, encumbrance or
right of any kind whatsoever created by or through the Pledgor. Unless any
of the Collateral threatens, in the reasonable judgment of the Trustee, to
decline speedily in value or is or becomes of a type sold on a recognized
market, the Trustee will give the Pledgor reasonable notice of the time and
place of any public sale thereof, or of the time after which any private
sale or other intended disposition is to be made. Any sale
15
of the Collateral conducted in conformity with reasonable commercial
practices of banks, insurance companies, commercial finance companies, or
other financial institutions disposing of property similar to the Collateral
shall be deemed to be commercially reasonable. Any requirements of
reasonable notice shall be met if such notice is mailed to the Pledgor as
provided in Section 17.1 hereof at least ten (10) days before the time of
the sale or disposition. The Trustee or any Holder of Notes may, in its
own name or in the name of a designee or nominee, buy any of the Collateral
at any public sale and, if permitted by applicable law, at any private
sale. All expenses (including court costs and reasonable attorneys' fees,
expenses and disbursements) of, or incident to, the enforcement of any of
the provisions hereof shall be recoverable from the proceeds of the sale or
other disposition of the Collateral.
(b) The Pledgor further agrees to use its reasonable best efforts to
do or cause to be done all such other acts as may be necessary to make such
sale or sales of all or any portion of the Collateral pursuant to this
Section 14 valid and binding and in compliance with any and all other
applicable requirements of law. The Pledgor further agrees that a breach
of any of the covenants contained in this Section 14 will cause irreparable
injury to the Trustee and the Holders of the Notes, that the Trustee and
the Holders of the Notes have no adequate remedy at law in respect of such
breach and, as a consequence, that each and every covenant contained in
this Section 14 shall be specifically enforceable against the Pledgor, and
the Pledgor hereby waives and agrees not to assert any defenses against an
action for specific performance of such covenants except for a defense that
no Event of Default has occurred.
SECTION 15. EXPENSES. The Pledgor will upon demand pay to the
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 the Trustee, that the Trustee may incur in
connection with (a) the review, negotiation and administration of this Escrow
and Security Agreement, (b) the custody or preservation of, or the sale of,
collection from, or other realization upon, any of the Collateral, (c) the
exercise or enforcement of any of the rights of the Trustee and the Holders
of the Notes hereunder or (d) the failure by the Pledgor to perform or
observe any of the provisions hereof.
SECTION 16. SECURITY INTEREST ABSOLUTE. All rights of the Trustee
and the Holders of the Notes and security interests hereunder, and all
obligations of the Pledgor 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;
16
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to any departure from the Indenture;
(c) any exchange, surrender, release or non-perfection of any Liens
on any other collateral for all or any of the 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 Pledgor in respect of the Obligations or of this Escrow and Security
Agreement.
SECTION 17. MISCELLANEOUS PROVISIONS.
17.1. NOTICES. Any notice or communication shall be sufficiently
given if in writing and delivered in person or mailed by first class mail,
commercial courier service or telecopier communication, addressed as follows:
IF TO THE PLEDGOR:
▇▇▇▇▇▇ Communications Corporation
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
WITH A COPY TO:
McAfee & ▇▇▇▇ A Professional Corporation
Two Leadership Square, 10th floor
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
IF TO THE PLACEMENT AGENTS:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Mr. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
WITH A COPY TO:
Shearman & Sterling
17
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
IF TO THE TRUSTEE:
United States Trust Company of New York
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇
17.2. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS. This Escrow and
Security Agreement may not be used to interpret another pledge, security or debt
agreement of the Pledgor or any subsidiary thereof. No such pledge, security or
debt agreement (other than the Indenture) may be used to interpret this Escrow
and Security Agreement.
17.3. SEVERABILITY. The provisions of this Escrow and Security
Agreement are severable, and if any clause or provision shall be held invalid,
illegal or unenforceable in whole or in part in any jurisdiction, then such
invalidity or unenforceability shall affect in that jurisdiction only such
clause or provision, or part thereof, and shall not in any manner affect such
clause or provision in any other jurisdiction or any other clause or provision
of this Escrow and Security Agreement in any jurisdiction.
17.4. HEADINGS. The headings in this Escrow and Security Agreement
have been inserted for convenience of reference only, are not to be considered a
part hereof and shall in no way modify or restrict any of the terms or
provisions hereof.
17.5. COUNTERPART ORIGINALS. This Escrow and Security Agreement may
be signed in two or more counterparts, each of which shall be deemed an
original, but all of which shall together constitute one and the same agreement.
17.6. BENEFITS OF ESCROW AND SECURITY AGREEMENT. Nothing in this
Escrow and Security Agreement, express or implied, shall give to any person,
other than the parties hereto and their successors hereunder, and the Holders of
the Notes, any benefit or any legal or equitable right, remedy or claim under
this Escrow and Security Agreement.
17.7. AMENDMENTS, WAIVERS AND CONSENTS. Any amendment or waiver of
any provision of this Escrow and Security Agreement and any consent to any
departure by the Pledgor from any provision of this Escrow and Security
Agreement shall be effective only if made or duly given in compliance with all
of the terms and provisions of the Indenture, and neither the Trustee nor any
Holder of Notes shall be deemed, by any act, delay, indulgence,
18
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 the Trustee or any Holder of
Notes to exercise, or delay in exercising, any right, power or privilege
hereunder shall not preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. A waiver by the Trustee or
any Holder of Notes of any right or remedy hereunder on any one occasion
shall not be construed as a bar to any right or remedy that the Trustee or
such Holder of Notes 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.
17.8. INTERPRETATION OF AGREEMENT. All terms not defined herein or
in the Indenture shall have the meaning set forth in the UCC, except where the
context otherwise requires. To the extent a term or provision of this Escrow
and Security 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 Escrow and Security
Agreement shall not be relevant to determine the meaning of this Escrow and
Security Agreement even though the accepting or acquiescing party had knowledge
of the nature of the performance and opportunity for objection.
17.9. CONTINUING SECURITY INTEREST; TERMINATION. (a) This Escrow
and Security Agreement shall create a continuing security interest in and to the
Collateral and shall, unless otherwise provided in the Indenture or in this
Escrow and Security Agreement, remain in full force and effect until the payment
in full in cash of the Obligations. This Escrow and Security Agreement shall be
binding upon the Pledgor, its transferees, successors and assigns, and shall
inure, together with the rights and remedies of the Trustee hereunder, to the
benefit of the Trustee, the Holders of the Notes and their respective
successors, transferees and assigns.
(b) This Escrow and Security Agreement shall terminate upon the
payment in full in cash of the Obligations. At such time, the Trustee shall,
pursuant to an Issuer Order, reassign and redeliver to the Pledgor all of the
Collateral hereunder that has not been sold, disposed of, retained or applied by
the Trustee in accordance with the terms of this Escrow and Security Agreement
and the Indenture. Such reassignment and redelivery shall be without warranty
by or recourse to the Trustee in its capacity as such, except as to the absence
of any Liens on the Collateral created by or arising through the Trustee, and
shall be at the reasonable expense of the Pledgor.
17.10. SURVIVAL PROVISIONS. All representations, warranties and
covenants of the Pledgor contained herein shall survive the execution and
delivery of this Escrow and Security Agreement, and shall terminate only upon
the termination of this Escrow and Security
19
Agreement. The obligations of the Pledgor under Sections 13 and 15 hereof
shall survive the termination of this Agreement.
17.11. WAIVERS. The Pledgor waives presentment and demand for
payment of any of the Obligations, protest and notice of dishonor or default
with respect to any of the Obligations, and all other notices to which the
Pledgor might otherwise be entitled, except as otherwise expressly provided
herein or in the Indenture.
17.12. AUTHORITY OF THE TRUSTEE. (a) The Trustee shall have and be
entitled to exercise all powers hereunder that are specifically granted to the
Trustee by the terms hereof, together with such powers as are reasonably
incident thereto. The Trustee may perform any of its duties hereunder or in
connection with the Collateral by or through agents or employees and shall be
entitled to retain counsel and to act in reliance upon the advice of counsel
concerning all such matters. Except as otherwise expressly provided in this
Escrow and Security Agreement or the Indenture, neither the Trustee nor any
director, officer, employee, attorney or agent of the Trustee shall be liable to
the Pledgor for any action taken or omitted to be taken by the Trustee, in its
capacity as Trustee, hereunder, except for its own bad faith, gross negligence
or willful misconduct, and the Trustee shall not be responsible for the
validity, effectiveness or sufficiency hereof or of any document or security
furnished pursuant hereto. The Trustee and its directors, officers, employees,
attorneys and agents shall be entitled to rely on any communication, instrument
or document believed by it or them to be genuine and correct and to have been
signed or sent by the proper person or persons. The Trustee shall have no duty
to cause any financing statement or continuation statement to be filed in
respect of the Collateral.
(b) The Pledgor acknowledges that the rights and responsibilities of
the Trustee under this Escrow and Security Agreement with respect to any action
taken by the Trustee or the exercise or non-exercise by the Trustee of any
option, right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Escrow and Security Agreement shall, as between
the Trustee and the Holders of the Notes, be governed by the Indenture and by
such other agreements with respect thereto as may exist from time to time among
them, but, as between the Trustee and the Pledgor, the Trustee shall be
conclusively presumed to be acting as agent for the Holders of the Notes with
full and valid authority so to act or refrain from acting, and the Pledgor shall
not be obligated or entitled to make any inquiry respecting such authority.
17.13. Intentionally Omitted.
17.14. FINAL EXPRESSION. This Escrow and Security Agreement,
together with the Indenture and any other agreement executed in connection
herewith, is intended by the
20
parties as a final expression of this Escrow and Security Agreement and is
intended as a complete and exclusive statement of the terms and conditions
thereof.
17.15. RIGHTS OF HOLDERS OF THE NOTES. No Holder of Notes shall have
any independent rights hereunder other than those rights granted to individual
Holders of the Notes pursuant to Section 6.07 of the Indenture; PROVIDED that
nothing in this subsection shall limit any rights granted to the Trustee under
the Notes or the Indenture.
17.16. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY
TRIAL; WAIVER OF DAMAGES. (a) THIS ESCROW AND SECURITY 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 PLEDGOR, THE TRUSTEE AND THE HOLDERS OF THE
NOTES IN CONNECTION WITH THIS ESCROW AND SECURITY AGREEMENT, AND WHETHER ARISING
IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK. NOTWITHSTANDING THE FOREGOING: (i) THE MATTERS
IDENTIFIED IN 31 C.F.R. Sections 357.10 AND 357.11 (AS IN EFFECT ON THE DATE OF
THIS AGREEMENT) SHALL BE GOVERNED SOLELY BY THE LAWS SPECIFIED THEREIN.
(b) THE PLEDGOR HAS APPOINTED CT CORPORATION SYSTEM ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇ AS ITS AGENT FOR SERVICE OF PROCESS IN ANY SUIT, ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT AND FOR ACTIONS BROUGHT UNDER U.S.
FEDERAL OR STATE SECURITIES LAWS BROUGHT IN ANY FEDERAL OR STATE COURT LOCATED
IN THE CITY OF NEW YORK AND AGREES TO SUBMIT TO THE JURISDICTION OF ANY SUCH
COURT. INTENTIONALLY OMITTED.
(c) THE PLEDGOR AGREES THAT THE TRUSTEE SHALL, IN ITS CAPACITY AS
TRUSTEE OR IN THE NAME AND ON BEHALF OF ANY HOLDER OF NOTES, HAVE THE RIGHT, TO
THE EXTENT PERMITTED BY APPLICABLE LAW, TO PROCEED AGAINST THE PLEDGOR OR THE
COLLATERAL IN A COURT IN ANY LOCATION REASONABLY SELECTED IN GOOD FAITH (AND
HAVING PERSONAL OR IN REM JURISDICTION OVER THE PLEDGOR OR THE COLLATERAL, AS
THE CASE MAY BE) TO ENABLE THE TRUSTEE TO REALIZE ON SUCH COLLATERAL, OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE TRUSTEE. THE
PLEDGOR AGREES THAT IT WILL NOT ASSERT ANY COUNTERCLAIMS, SETOFFS OR CROSSCLAIMS
IN ANY PROCEEDING BROUGHT BY THE TRUSTEE TO REALIZE ON SUCH PROPERTY OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE
21
TRUSTEE, EXCEPT FOR SUCH COUNTERCLAIMS, SETOFFS OR CROSSCLAIMS WHICH, IF NOT
ASSERTED IN ANY SUCH PROCEEDING, COULD NOT OTHERWISE BE BROUGHT OR ASSERTED.
THE PLEDGOR WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE
COURT IN THE CITY OF NEW YORK ONCE THE 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.
(d) THE PLEDGOR AGREES THAT NEITHER ANY HOLDER OF NOTES NOR (EXCEPT
AS OTHERWISE PROVIDED IN THIS ESCROW AND SECURITY AGREEMENT OR THE INDENTURE)
THE TRUSTEE IN ITS CAPACITY AS TRUSTEE SHALL HAVE ANY LIABILITY TO THE PLEDGOR
(WHETHER ARISING IN TORT, CONTRACT OR OTHERWISE) FOR LOSSES SUFFERED BY THE
PLEDGOR IN CONNECTION WITH, ARISING OUT OF, OR IN ANY WAY RELATED TO, THE
TRANSACTIONS CONTEMPLATED AND THE RELATIONSHIP ESTABLISHED BY THIS ESCROW AND
SECURITY 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 THE TRUSTEE OR SUCH HOLDER OF NOTES, AS THE CASE MAY
BE, THAT SUCH LOSSES WERE THE RESULT OF ACTS OR OMISSIONS ON THE PART OF THE
TRUSTEE OR SUCH HOLDERS OF NOTES, AS THE CASE MAY BE, CONSTITUTING BAD FAITH,
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
(e) TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE PLEDGOR WAIVES
THE POSTING OF ANY BOND OTHERWISE REQUIRED OF THE TRUSTEE OR ANY HOLDER OF NOTES
IN CONNECTION WITH ANY JUDICIAL PROCESS OR PROCEEDING TO ENFORCE ANY JUDGMENT OR
OTHER COURT ORDER PERTAINING TO THIS ESCROW AND SECURITY AGREEMENT OR ANY
RELATED AGREEMENT OR DOCUMENT ENTERED IN FAVOR OF THE TRUSTEE OR ANY HOLDER OF
NOTES, OR TO ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY RESTRAINING ORDER OR
PRELIMINARY OR PERMANENT INJUNCTION, THIS ESCROW AND SECURITY AGREEMENT OR ANY
RELATED AGREEMENT OR DOCUMENT BETWEEN THE PLEDGOR ON THE ONE HAND AND THE
TRUSTEE AND/OR THE HOLDERS OF THE NOTES ON THE OTHER HAND.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Pledgor, the Placement Agents and the Trustee
have each caused this Escrow and Security Agreement to be duly executed and
delivered as of the date first above written.
Pledgor:
▇▇▇▇▇▇ COMMUNICATIONS CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name:
Title:
Placement Agents:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
ALEX. ▇▇▇▇▇ & SONS INCORPORATED
FIRST UNION CAPITAL MARKETS CORP.
NATIONSBANC CAPITAL MARKETS, INC.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
By:
--------------------------------
Name:
Title:
Trustee:
UNITED STATES TRUST COMPANY
OF NEW YORK, as Trustee
By:
--------------------------------
Name:
Title: