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EXHIBIT 4.11
COMPANY SENIOR NOTE ESCROW ACCOUNT AGREEMENT
This COMPANY SENIOR NOTE ESCROW ACCOUNT AGREEMENT (the "Agreement"),
dated as of May 31, 1996, among The Bank of New York, a New York banking
corporation, as escrow agent (in such capacity, the "Escrow Agent"), The Bank of
New York, a New York banking corporation, as trustee (in such capacity, the
"Senior Note Trustee") under the Senior Note Indenture (as defined herein), The
Bank of New York, a New York banking corporation, as trustee (in such capacity,
the "Convertible Note Trustee") under the Convertible Note Indenture (as defined
herein), and Petersburg Long Distance Inc., an Ontario corporation (the
"Company").
RECITALS
A. Pursuant to the Indenture, dated as of May 31, 1996 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"Senior Note Indenture"), among the Company, the corporations acting as
guarantors and named therein (the "Senior Note Guarantors") and the Senior Note
Trustee, the Company is issuing $123,000,000 aggregate principal amount at
Stated Maturity of its 14% Senior Discount Notes due 2004 (the "Senior Notes").
B. Pursuant to the Indenture, dated as of May 31, 1996 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"Convertible Note Indenture"), among the Company, the corporations acting as
guarantors and named therein (the "Convertible Note Guarantors", the Convertible
Note Guarantors and the Senior Note Guarantors are collectively called the
"Guarantors") and the Convertible Note Trustee, the Company is issuing
$26,500,000 aggregate principal amount of its 9% Convertible Subordinated Notes
due 2006 (the "Convertible Notes").
C. As security for its obligations, among other things, under the
Senior Notes and the Senior Note Indenture and as security for its obligations,
among other things, under the Convertible Notes and the Convertible Note
Indenture, the Company is required to enter into a Company Senior Note Security
and Pledge Agreement of even date herewith (the "Company Senior Note Security
Agreement"), with the Senior Note Trustee, the collateral agent named therein
(the "Senior Note Collateral Agent") and the Convertible Note Trustee in which
the Company is granting liens on certain collateral described therein (the
"Senior Note Collateral").
D. As security for its obligations, among other things, under the
Senior Notes and the Senior Note Indenture and as security for its obligations,
among other things, under the Convertible Notes and the Convertible Note
Indenture, the Company is required to deposit the Initial Escrow Amount (as
defined
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herein) in a special, segregated and irrevocable account in the name of and
beneficially owned by the Company which is pledged to, and to be under the sole
dominion and control of, the Senior Note Trustee, acting for its benefit and the
equal and ratable benefit of the Holders of the Senior Notes, and the
Convertible Note Trustee, acting for its benefit and the equal and ratable
benefit of the Holders of the Convertible Notes (the "Company Senior Note Escrow
Account") pending the reinvestment of such amounts in accordance with the Senior
Note Indenture.
E. Under the terms of the Senior Note Indenture and the Company
Senior Note Security Agreement, the Company is required to deposit all
dividends, distributions, payments and proceeds of the Senior Note Collateral
consisting of cash or cash equivalents in the Company Senior Note Escrow Account
pending the reinvestment of such amounts in accordance with the Senior Note
Indenture.
F. As security for its obligations, among other things, under the
Senior Notes and the Senior Note Indenture and as security for its obligations,
among other things, under the Convertible Notes and the Convertible Note
Indenture, the Company is required to enter into a Company Convertible Note
Security and Pledge Agreement of even date herewith with the Convertible Note
Trustee, the collateral agent named therein (the "Convertible Note Collateral
Agent") and the Senior Note Trustee, in which the Company is granting Liens on
and a security interest in all of the Preferred Stock of Technocom Limited, an
Irish corporation and a subsidiary of the Company, directly or indirectly owned
by the Company and certain other Collateral described therein (the "Convertible
Note Collateral").
G. 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 Company Senior Note Escrow Account and released from the
security interest and Liens described above.
AGREEMENT
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. Terms used herein and not defined herein shall
have the meanings as defined in the Senior Note 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:
"Affiliates" of any specified person means (i) any other person
which, directly or indirectly, is in control of, is controlled by or is under
common control with such specified person
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or (ii) any other person who is a director or officer (A) of such specified
person, (B) of any subsidiary of such specified person or (C) of any person
described in clause (i) above or (iii) any person in which such person has,
directly or indirectly, a 5% or greater voting or economic interest or the power
to control. For purposes of this definition, control of a person means the
power, directly or indirectly, to direct or cause the direction of the
management or policies of such person whether through the ownership of voting
securities or by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Applied" means that disbursed funds have been applied pursuant to
Section 3(a) or pursuant to Section 6(b) (iii).
"Available Funds" means (A) the sum of (i) all amounts deposited in
the Company Senior Note Escrow Account from time to time and (ii) interest
earned or dividends paid on the funds in the Escrow Accounts (including holdings
of Eligible Cash Equivalents), less (B) the aggregate disbursements previously
made pursuant to this Agreement.
"Collateral" shall have the meaning given in Section 6(a) hereof.
"Company Senior Note Escrow Account" shall have the meaning given in
Section 2(b).
"Convertible Note Trustee" shall include any successor trustee
appointed pursuant to the Convertible Note Indenture.
"Default" means a "Default" as defined in Section 1.1 of the Senior
Note Indenture until the Senior Notes are no longer outstanding and the Senior
Note Indenture has been satisfied and discharged, in which case a "Default"
means a "Default" as defined in Section 1.1 of the Convertible Note Indenture if
not then satisfied and discharged.
"Disbursement Request" means a notice sent by the Company to the
Escrow Agent requesting a disbursement of funds from any Escrow Account, in
substantially the form of Exhibit A hereto. Each Disbursement Request shall be
signed by the Chairman of the Board, a Vice Chairman of the Board, the Chief
Executive Officer, the Chief Operating Officer, the Chief Financial Officer or
any Vice President of the Company.
"Eligible Cash Equivalents" means (i) securities issued or directly
and fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof), (ii) time deposits,
certificates of deposit, or Eurodollar deposits of any commercial bank organized
in the United
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States having capital and surplus in excess of $500,000,000, (iii) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clause (i) above entered into with any bank meeting the
qualifications specified in clause (ii) above, (iv) direct obligations issued by
any state of the United States of America or any political subdivision of any
such state or any public instrumentality thereof maturing, or subject to tender
at the option of the holder thereof within ninety days after the date of
acquisition thereof and, at the time of acquisition having a rating of A or
better from Standard & Poor's or A-2 or better from Moody's, (v) commercial
paper issued by the parent corporation of any commercial bank organized in the
United States having capital and surplus in excess of $500,000,000 and
commercial paper issued by non-bank issuers rated A-1 by Standard & Poor's or
P-1 by Moody's and in each case maturing within 270 days after the date of
acquisition, (vi) overnight bank deposits and bankers' acceptances at any
commercial bank organized in the United States having capital and surplus in
excess of $500,000,000, (vii) deposits available for withdrawal on demand with a
commercial bank organized in the United States having capital and surplus in
excess of $500,000,000 and (viii) investments in money market funds
substantially all of whose assets comprise securities of the types described in
clauses (i) through (vi).
"Eligible Institution" means a commercial banking institution that
has combined capital and surplus of not less than $500,000,000 its equivalent in
foreign currency, whose debt is rated "A" (or higher) or the equivalent rating
according to Standard & Poor's or Moody's at the time as of which any investment
or rollover therein is made.
"Escrow Accounts" means the Company Senior Note Escrow Account and
the Leasing Company Escrow Accounts.
"Escrow Account Statement" shall have the meaning given in Section
2(g).
"Escrow Agent" shall have the meaning set forth in the preamble to
this Agreement.
"Event of Default" means an "Event of Default" as defined in Section
6.1 of the Senior Note Indenture until the Senior Notes are no longer
outstanding and the Senior Note Indenture and the Senior Note Collateral
Documents have been satisfied and discharged, in which case "Event of Default"
means an "Event of Default" as defined in Section 1.1 of the Convertible Note
Indenture if not then satisfied and discharged.
"Initial Escrow Amount" shall mean $46,000,000 of the net proceeds
received by the Company from the sale of the Units pursuant to the Purchase
Agreement.
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"Interest Payment Date" means June 1 and December 1 of each year,
commencing on June 1, 1999, until the Senior Notes are paid in full.
"Issue Date" means June 12, 1996.
"Leasing Company" means initially PLD Asset Leasing Limited and PLD
Capital Limited, each a special purpose Cypriot corporation, a Wholly-Owned
Restricted Subsidiary and a Guarantor and any other Person constituting a
Leasing Company for purposes of the Senior Note Indenture.
"Leasing Company Escrow Account" means the escrow account
established pursuant to Section 2(b) of each Leasing Company Escrow Account
Agreement.
"Leasing Company Escrow Account Agreement" means initially that
certain Leasing Company Escrow Account Agreement of even date herewith among the
Escrow Agent, the Trustee and PLD Asset Leasing Limited, and that certain
Leasing Company Escrow Account Agreement of even date herewith among the Escrow
Agent, the Trustee and PLD Capital Limited and any Leasing Company Senior Note
Escrow Account Agreement executed by a Leasing Company in the future.
"Senior Note Trustee" shall include any successor Trustee appointed
pursuant to the Senior Note Indenture.
"Trustees" means, collectively, the Convertible Note Trustee and the
Senior Note Trustee.
2. Senior Note Escrow Account; Escrow Agent.
(a) Appointment of Escrow Agent. The Company and the Trustees 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 Company Senior Note Escrow Account. Concurrent
with the execution and delivery hereof, the Escrow Agent shall establish and
maintain in the name of the Company at The Bank of New York, a special,
segregated and irrevocable escrow account designated "Senior Note Escrow Account
pledged by Petersburg Long Distance Inc. to The Bank of New York, as Trustee"
(the "Company Senior Note Escrow Account"). All funds accepted by the Escrow
Agent pursuant to this Agreement shall be deposited in the name of and
beneficially owned by the Company and pledged to, and under the sole dominion
and control of, the Senior Note Trustee, acting for its benefit and the equal
and ratable benefit of the Holders of the Senior Notes and the Convertible Note
Trustee, acting for its benefit and the equal and ratable benefit of the Holders
of the Convertible Notes. All such funds shall be held in the Company
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Senior Note Escrow Account until disbursed in accordance with the terms hereof.
The Company Senior Note Escrow Account, the funds held therein and any Eligible
Cash Equivalents held by the Escrow Agent in which such funds are invested shall
be beneficially owned by the Company and pledged to and under the sole dominion
and control of the Senior Note Trustee, acting for its benefit and the equal and
ratable benefit of the Holders of the Senior Notes, and the Convertible Note
Trustee, acting for its benefit and the equal and ratable benefit of Holders of
the Convertible Notes. Concurrently with the execution and delivery hereof, the
Company shall deliver the Initial Escrow Amount to the Escrow Agent for deposit
into the Company Senior Note Escrow Account against the Escrow Agent's written
acknowledgement and receipt of the Initial Escrow Amount.
(c) The Company shall provide notice to the Collateral Agent and the
Trustee of the source of any moneys deposited to the Senior Note Escrow Account
by reference to the applicable provisions of the Senior Note Indenture and shall
keep an ongoing record of the amounts so deposited and disbursed in accordance
with this Escrow Agreement. It shall be the Company's responsibility to satisfy
the Collateral Agent as to the accounting for the Escrow Account, with a view to
ensuring that the amounts required to be calculated for any disbursement are
ascertainable. The Company shall also from time to time specify in writing what
funds and/or Eligible Cash Equivalents contained in the Company Senior Note
Escrow Account and/or the Leasing Company Escrow Accounts are designated as
satisfying the requirements of Section 11.4(m) of the Senior Note Indenture and
Section 11.8(l) of the Convertible Note Indenture.
(d) 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 Company Senior Note 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 Company Senior Note Escrow Account any such
amounts.
The provisions of this Section 2(d) shall survive termination of
this Agreement.
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(e) Investment of Funds in the Company Senior Note Escrow Account.
Pending investment thereof in accordance with the Senior Note Indenture (and the
Convertible Note Indenture, if the Senior Notes are no longer outstanding and
the Senior Note Indenture has been satisfied and discharged), funds deposited in
the Company Senior Note Escrow Account shall be invested and reinvested only
upon the following terms and conditions:
(i) Acceptable Investments. All funds deposited or held in the
Company Senior Note Escrow Account at any time shall be invested, at the
direction of the Company except during the continuance of a Default or an
Event of Default, and at the direction of the Senior Note Trustee, if any
of the Senior Notes are outstanding, or the Convertible Note Trustee, if
the Senior Notes are no longer outstanding and the Senior Note Indenture
has been satisfied and discharged, during the continuance of a Default or
an Event of Default, by the Escrow Agent in Eligible Cash Equivalents
which constitute Permitted Investments for the Company in accordance with
the Company's or the applicable Trustee's written instructions, as
applicable, from time to time to the Escrow Agent; provided, however, that
any such written instruction shall specify the particular Investment to be
made, shall contain the certification referred to in Section 2(e)(ii), if
required, and shall be executed by any officer of the Company. All
Eligible Cash Equivalents shall be assigned to and held in the possession
of, or, in the case of Eligible Cash Equivalents maintained in book entry
form with the Federal Reserve Bank, transferred to a book entry account in
the name of, the Escrow Agent, as pledgee, with such guarantees as are
customary, except that Eligible Cash Equivalents 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 Eligible Cash Equivalents held by the Escrow Agent for its
customers and segregated by separate recordation in the books and records
of the Escrow Agent.
(ii) Security Interest in and Lien on Investments. No
investment of funds in the Company Senior Note Escrow Account shall be
made unless the Company has certified to the Escrow Agent and the Trustees
that, upon such investment, each of the Senior Note Trustee and the
Convertible Note Trustee will have a first priority perfected Lien and
security interest for the benefit of the Senior Note Trustee and the equal
and ratable benefit of the Holders of the Senior Notes and for the benefit
of the Convertible Note Trustee and the equal and ratable benefit of the
Holders of the Convertible Notes in the applicable Investment. A
certificate as to a class of investments need not be issued with respect
to individual investments in securities in that class if the certificate
applicable to the class remains accurate with
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respect to such individual investments, which continued accuracy the
Escrow Agent may conclusively assume. Promptly after the Issue Date, and
within 3 months after the anniversary of the Issue Date, until the payment
in full of the Senior Notes in accordance with the terms thereof and of
the Senior Note Indenture, and all other Obligations then due and owing
under the Senior Notes, the Senior Note Indenture, this Agreement and the
other Senior Note Collateral Documents, each of the Trustees and the
Escrow Agent shall receive an Opinion of Counsel, 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").
(iii) Interest and Dividends. All interest earned and
dividends paid on funds invested in Eligible Cash Equivalents shall be
deposited in the Company Senior Note Escrow Account as additional
Collateral beneficially owned by the Company and pledged to the Senior
Note Trustee, acting for its benefit and the equal and ratable benefit of
the Holders of the Senior Notes, and to the Convertible Note Trustee,
acting for its benefit and the equal and ratable benefit of the Holders of
the Convertible Notes, and shall be reinvested in accordance with the
terms hereof.
(iv) Limitation on Escrow Agent's Responsibilities. The Escrow
Agent's sole responsibilities under this Section 2 shall be (A) to retain,
or cause its agent in the State of New York to retain, possession of
certificated Eligible Cash Equivalents (except, however, that the Escrow
Agent may surrender possession to the issuer of any such Eligible Cash
Equivalent for the purpose of effecting assignment, crediting interest, or
reinvesting such security or reducing such security to cash) and to be the
registered or designated owner of Eligible Cash Equivalents which are not
certificated, (B) to follow the Company's or the applicable Trustee's
written instructions, as applicable, given in accordance with Section
2(e)(i), (C) to invest and reinvest funds pursuant to this Section 2(e)
and (D) to use reasonable efforts to reduce to cash such Eligible Cash
Equivalents as may be required to fund any disbursement or payment in
accordance with Section 3. In connection with clause (i) above, the Escrow
Agent will maintain, or cause its agent in the State of New York to
maintain, continuous possession in the State of New York of certificated
Eligible Cash Equivalents and cash included in the Collateral and will
cause uncertificated Eligible Cash Equivalents 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 both Trustees' Liens and security interest in the Collateral and
shall not be required
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to file any instrument, document or notice in any public office at any
time or times. In connection with clause (D) above, the Escrow Agent shall
not be required to reduce to cash any Eligible Cash Equivalents 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 unless a Default or Event of Default
has occurred and is continuing, in which case such written instructions
shall be signed by a Trust Officer of the Senior Note Trustee or, if no
Senior Notes are then outstanding and the Senior Note Indenture has been
satisfied and discharged, of the Convertible Note Trustee. If no such
written instructions are received, the Escrow Agent shall liquidate those
Eligible Cash Equivalents having the lowest interest rate per annum,
regardless of maturity, or if none such exist, those having the nearest
maturity. The Escrow Agent shall have no duty to determine whether or not
to file or record any document or instrument in connection with this
Agreement, but will follow the instructions of the applicable Trustee.
(f) Substitution of Escrow Agent. The Escrow Agent may resign by
giving not less than 30 days' prior written notice to the Company and the
Trustees. Such resignation shall take effect upon the later to occur of (i)
delivery of all funds and Eligible Cash Equivalents 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 Eligible Cash
Equivalents or this Agreement to a successor Escrow Agent mutually approved by
the Company and the Trustees (which approvals shall not be unreasonably withheld
or delayed) and (ii) the Company, the Trustees 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 Senior Notes, the Holders of
the Convertible Notes and the Trustees 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 30 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.
(g) Escrow Account Statement. At least 30 days prior to each
Interest Payment Date, the Escrow Agent shall deliver to the Company, the
Trustees and the applicable escrow agent for each Leasing Company Escrow Account
a statement setting forth with reasonable particularity the balance of funds
then in the Company Senior Note Escrow Account and the manner in which such
funds are invested (the "Senior Note Escrow Account Statement"). The parties
hereto irrevocably instruct the Escrow Agent that on the first date
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upon which the balance in the Company Senior Note Escrow Account (including the
holdings of all Eligible Cash Equivalents) is reduced to zero, the Escrow Agent
shall deliver to the Company and to the Trustees a notice that the balance in
the Company Senior Note Escrow Account has been reduced to zero.
3. Disbursements.
(a) Disbursement Request; Disbursements. (i) At least two Business
Days prior to an Interest Payment Date, the Company and the Senior Note Trustee
shall submit to the Escrow Agent a completed Disbursement Request substantially
in the form of Exhibit A hereto requesting funds from the Company Senior Note
Escrow Account in an amount equal to the interest owed on the Senior Notes under
the Senior Note Indenture for payment of such interest on such Interest Payment
Date, unless the Company has disbursed and the Senior Note Trustee has received
funds from the Company in such amount on or before such date for such interest
payment. Nevertheless, any funds or Eligible Cash Equivalents (or the proceeds
or reinvestments thereof) previously designated in an Officer's Certificate
delivered pursuant to Section 2(c) of this Agreement as representing funds or
Eligible Cash Equivalents designated to satisfy the requirements of Section
11.4(m) of the Senior Note Indenture and Section 11.8(l) of the Convertible Note
Indenture requiring the Company and the Leasing Companies to retain in the
Escrow Accounts at all times after November 30, 1998 shall not be disbursed to
the Company or any Leasing Company except as permitted in such Section 11.4(m)
and Section 11.8(l). Provided that any such Disbursement Request is not rejected
by it, the Escrow Agent, at least on (or if the Senior Note Trustee and the
Escrow Agent are the same entity, two Business Days after) receipt of such
Disbursement Request, shall disburse the funds requested in such Disbursement
Request by wire or book-entry transfer of immediately available funds to such
Trustee. The Escrow Agent shall notify the Senior Note Trustee as soon as
reasonably possible if any such Disbursement Request is rejected and the
reason(s) therefor.
(ii) In addition, the Company may submit a completed Disbursement Request
for a release of funds to the Company or a Leasing Company, as applicable, from
the Senior Note Escrow Account, provided that (i) the applicable conditions set
forth in Section 11.4 of the Senior Note Indenture and Section 11.8 of the
Convertible Note Indenture until such time as the Convertible Notes are no
longer outstanding and the Convertible Note Indenture has been satisfied and
discharged have been satisfied for such release to the Company or a Leasing
Company, as applicable, (ii) the Company shall have delivered to the Senior Note
Trustee the applicable Officers' Certificate required by such Section 11.4 on or
before such disbursement date and (iii) the Senior Note Trustee has executed the
certification contained in the Disbursement Request. Provided that any such
Disbursement Request is not
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rejected by it, the Escrow Agent at least two (2) Business Days after the
receipt of such Disbursement Request shall disburse the funds requested in such
Disbursement Request by wire or book-entry transfer of immediately available
funds to the Company or a Leasing Company, as applicable. The Escrow Agent shall
notify the Senior Note Trustee and the Company as soon as reasonably possible if
any such Disbursement Request is rejected and the reason(s) therefor.
(iii) If an Event of Default under the Senior Note Indenture has occurred
and is continuing, the Senior Note Trustee shall be entitled unilaterally to
initiate withdrawals by executing a Disbursement Request which will be
substantially similar to the form of Exhibit A but which need only to be
executed by the Senior Note Trustee.
(iv) If the Escrow Agent receives a written notice from the Senior Note
Trustee, acknowledged by the Convertible Note Trustee, that the Senior Notes
have been paid in full and all other obligations then due and owing under the
Senior Note Indenture, the Guarantees of the Senior Note Guarantors contained
therein, and the other Senior Note Collateral Documents have been paid in full,
the Senior Note Indenture has been satisfied and discharged and the Convertible
Notes remain outstanding and not paid in full, all funds and Eligible Cash
Equivalents then held in the Company Senior Note Escrow Account shall be
withdrawn and transferred to the escrow agent under the Company Convertible Note
Escrow Agreement or such other place as the Convertible Note Trustee directs in
such acknowledgment. This disbursement shall be made whether or not an Event of
Default (as defined in the Convertible Note Indenture) has occurred and is
continuing.
(b) Conditions Precedent to Disbursement. Subject to Section 4 and
any mandatory provisions of applicable law, the Escrow Agent shall make the
payments to be made pursuant to a completed Disbursement Request if (i) the
Company shall have submitted, in accordance with the provisions of Section 3(a)
herein, such Disbursement Request to the Escrow Agent substantially in the form
of Exhibit A with blanks appropriately filled in containing the signed
certification of the Senior Note Trustee included in such form and (ii) the
Escrow Agent shall not have received any notice from the Senior Note Trustee
that as a result of an Event of Default the Indebtedness represented by the
Senior Notes 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) No Distributions. Provided that no Event of Default has occurred
and is continuing, the Company shall initiate all requests for withdrawals of
funds from the Company Senior Note Escrow Account by executing a Disbursement
Request and submitting such request to the Senior Note Trustee. However, the
Company shall not be entitled to direct the Escrow Agent to make
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distributions from the Company Senior Note Escrow Account except upon
certification by the Senior Note Trustee on a Disbursement Request that the
applicable conditions of the Senior Note Indenture and the Convertible Note
Indenture have been satisfied, as provided in Section 3(a). The Senior Note
Trustee shall not, except following an Event of Default, be entitled
unilaterally to initiate withdrawals.
(d) Deposits Irrevocable. Any deposits made into the Company Senior
Note Escrow Account hereunder shall be irrevocable and the amount of such
deposits and any instrument or security held in the Company Senior Note Escrow
Account hereunder and all interest thereon shall be held in trust by the Escrow
Agent and applied solely as provided herein.
4. 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 Senior Notes or the Holders of the
Convertible Notes 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
Senior Notes, the Holders of the Convertible Notes or the Trustees from time to
time as a consequence of performance or non-performance by the Escrow Agent
hereunder, except for any 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 Eligible
Cash Equivalents held by it hereunder, including without limitation any
liability for any delay not resulting from 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 either
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
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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.
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) 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 under this
Agreement, except to the extent that such liability, expense or claim is
directly attributable to the negligence or willful misconduct of any of the
foregoing persons. The provisions of this Section shall survive any termination,
satisfaction or discharge of this Agreement as well as the resignation or
removal
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of the Escrow Agent. The provisions of this paragraph 5 shall survive the
termination of this Agreement.
6. Grant of Liens and 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 Senior Note
Trustee, acting for its benefit and the equal and ratable benefit of the Holders
of the Senior Notes, and to the Convertible Note Trustee, acting for its benefit
and the equal and ratable benefit of the Holders of the Convertible Notes, all
of the Company's right, title and interest in the Company Senior Note Escrow
Account, and all property now or hereafter placed or deposited in, or delivered
to the Escrow Agent for placement or deposit in, the Company Senior Note Escrow
Account, including, without limitation, all funds held therein, all Eligible
Cash Equivalents 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 Senior Notes
and any other obligation, now or hereafter arising, of every kind and nature,
owed by the Company or the Senior Note Guarantors under the Senior Note
Indenture, the related guarantees thereunder or the Senior Note Collateral
Documents to the Holders of the Senior Notes or to the Senior Note Trustee and
all obligations and indebtedness of the Company or the Convertible Note
Guarantors under the Convertible Note Indenture, the related guarantees
thereunder or the Convertible Note Collateral Documents to the Holders of the
Convertible Notes or the Convertible Note Trustee. The Escrow Agent hereby
acknowledges the Trustees' 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 and Lien on the Collateral in favor of
the Trustees in order to secure all such obligations and indebtedness.
(b) The Company and the Trustees hereby irrevocably instruct the
Escrow Agent to, and the Escrow Agent shall, (i) (A) at all times maintain sole
dominion and control over funds and Eligible Cash Equivalents in the Company
Senior Note Escrow Account, acting for the benefit of the Trustees to the extent
specifically required herein, (B) maintain, or cause its agent within the State
of New York to maintain, possession of all certificated Eligible Cash
Equivalents purchased hereunder that are physically possessed by the Escrow
Agent in order for the Trustees 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 Eligible Cash Equivalents 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
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15
the Company pursuant to paragraph (a) above to cause the Trustees to enjoy a
continuous perfected first priority security interest and Liens under the New
York Uniform Commercial Code and any applicable law of the State of New York in
all Eligible Cash Equivalents 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 Trustees;
(ii) promptly notify the Trustees if the Escrow Agent receives written notice
that any Person other than the Trustees has or claims to have a Lien on or
security interest in any portion of the Collateral and (iii) in addition to
disbursing amounts held in escrow pursuant to any Disbursement Requests given to
it by the Trustees pursuant to Section 3(a)(iv), upon receipt of written notice
from the Senior Note Trustee of the acceleration of the maturity of the Senior
Notes, and direction from the Senior Note Trustee to disburse all Available
Funds to the Senior Note Trustee, as promptly as practicable disburse all funds
held in the Company Senior Note Escrow Account to the Trustee and transfer title
to all Eligible Cash Equivalents held by the Escrow Agent hereunder to the
Senior Note Trustee. The Escrow Agent shall not have any right to receive
compensation from either Trustee and is without any authority to obligate either
Trustee or to compromise or pledge its security interest and Lien hereunder.
Accordingly, the Escrow Agent is hereby directed to cooperate with the Trustees
in the exercise of their respective rights in the Collateral provided for
herein.
(c) Any money and Eligible Cash Equivalents collected by the Senior
Note Trustee pursuant to Section 6(b)(iii) shall be applied as provided in
Section 6.9 of the Senior Note Indenture.
(d) Upon demand, the Company will execute and deliver to either
Trustee such instruments and documents as such Trustee may reasonably deem
necessary or advisable to confirm or perfect the rights of the Trustees under
this Agreement and the Trustees' interest in the Collateral. The Trustees 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 each Trustee as its attorney-in-fact
with full power of substitution, exercisable upon the occurrence and during the
continuance of a Default or Event of Default, to do any act which the Company is
obligated hereto to do, and each Trustee may, but shall not be obligated to,
exercise such rights as the Company might exercise with respect to the
Collateral and take any action in the Company's name to protect the Trustees'
Liens and security interest hereunder. In addition to the rights provided under
Section 6(b) (iii) hereof, upon an Event of Default as defined in the Senior
Note Indenture and for so long as such Event of Default continues, the Senior
Note Trustee may exercise in respect of the Collateral, in addition to other
rights and remedies
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16
provided for herein or otherwise available to it, all the rights and remedies of
a secured party under the New York Uniform Commercial Code or other applicable
law, and the Senior Note 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
Senior Note Trustee's offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Senior Note 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 Senior
Note Trustee shall not be obligated to make any sale regardless of notice of
sale having been given. The Senior Note Trustee may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned. The Senior Note Trustee shall give to the
Convertible Note Trustee copies of notices sent to the Company, as well as any
other notices required by applicable law to be given to a Lienholder. If the
Senior Notes are no longer outstanding and the Senior Notes Indenture has been
satisfied and discharged, the foregoing rights and remedies may be exercised by
the Convertible Note Trustee.
7. Termination. This Agreement shall terminate automatically ten
(10) days following disbursement of all funds remaining in all the Escrow
Accounts (including Eligible Cash Equivalents) and the payment in full of the
Senior Notes and all other Obligations then due and owing under the Senior Note
Indenture, the guarantees thereunder and the Senior Note Collateral Documents,
unless sooner terminated by agreement of the parties hereto (in accordance with
the terms hereof, not in violation of the Senior Note Indenture; the Senior Note
Trustee may not agree to terminate this Agreement unless it has received the
consent of 100% of the Holders of all of the Senior Notes outstanding and the
Convertible Note Trustee may not agree to terminate this Agreement unless it has
received the consent of 100% of the Holders of all of the Convertible Notes
outstanding); provided, however, that the obligations of the Company under
Section 2(d) and Section 5 (and any existing claims thereunder) shall survive
termination of this Agreement or 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).
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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. Nothing herein shall restrict the Escrow
Agent from performing its duties through a sub-agent.
(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 Holders of the Senior Notes and their
permitted assigns and the Holders of the Convertible Notes and their permitted
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, the Senior Note
Indenture and the Convertible Note 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 IX of the Senior Note
Indenture and Article IX of the Convertible Note 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, regardless of when and whether
received, either: (a) on the day of hand delivery; (b) three Business Days
following the day
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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:
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
Telecopy: 000-000-0000 or 5917
To each Trustee:
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
Telecopy: 000-000-0000 or 5917
To the Company:
Petersburg Long Distance Inc.
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
XXXXXX X0X 0X0
Attention: Chairman
Telecopy: 000-000-0000
Telephone: 000-000-0000
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.
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(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; Waiver of Jury Trial. 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 law. 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 hereby waives, to the extent permitted by applicable law, 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. The Company waives any objection that it
may have to the location of the court in which the Escrow Agent 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.
(k) Authority of the Company; Valid and Binding Agreement. 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.
(l) Authority of the Escrow Agent and the Trustees; Valid and
Binding Agreement. Each of the Escrow Agent and the Trustees 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.
(m) Agent for Service; Submission to Jurisdiction; Waiver of
Immunities. By the execution and delivery of this Agreement, the Company (i)
acknowledges that it has, by separate written instrument, irrevocably designated
and appointed CT Corporation System, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (or
any successor), as its authorized agent upon which process may be served in any
suit or proceeding arising out of or relating to this Agreement that may be
instituted in any federal or state court in the State of New York, or brought
under federal or state securities
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laws, and acknowledges that CT Corporation System has accepted such designation,
(ii) submits to the jurisdiction of any such court in any such suit or
proceeding, and (iii) agrees that service of process upon CT Corporation System
(or any successor) and written notice of said service to the Company (mailed or
delivered to Messrs. Xxxxxx, Xxxxx & Xxxxxxx LLP, 0000 Xxx Xxxxx Xxxxxx,
Xxxxxxxxxxxx, XX 00000, Attention: E. Xxxxx Xxxxxxxx, Esq.) shall be deemed in
every respect effective service of process upon the Company in any such suit or
proceeding. The Company further agrees to take any and all action, including the
execution and filing of any and all such documents and instruments, as may be
necessary to continue such destination and appointment of CT Corporation System
(or any successor) in full force and effect so long as any of the Senior Notes
shall be outstanding.
To the extent that the Company has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service of notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, it
hereby irrevocably waives such immunity in respect of its obligations under this
Agreement, to the extent permitted by law.
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IN WITNESS WHEREOF, the parties have executed and delivered this
Company Senior Note Escrow Account Agreement as of the day first above written.
ESCROW AGENT: THE BANK OF NEW YORK,
as Escrow Agent
By: /s/ XXXXXX X. XXXXXXXX
------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Assistant Treasurer
SENIOR NOTE TRUSTEE: THE BANK OF NEW YORK,
as Senior Note Trustee
By: /s/ XXXXXX X. XXXXXXXX
------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Assistant Treasurer
CONVERTIBLE NOTE TRUSTEE: THE BANK OF NEW YORK,
as Convertible Note Trustee
By: /s/ XXXXXX X. XXXXXXXX
------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Assistant Treasurer
COMPANY: PETERSBURG LONG DISTANCE INC.
By: /s/ XXXXX XXXX
------------------------------
Name: Xxxxx Xxxx
Title: Chairman
22
EXHIBIT A
Form of Disbursement Request
[Letterhead of the Company]
[Date]
The Bank of New York
000 Xxxxxxx Xxxxxx
Floor 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
Re: Disbursement Request No.
[indicate whether revised]
Ladies and Gentlemen:
We refer to the Company Senior Note Escrow Account Agreement, dated
as of May 31, 1996 (the "Company Senior Note Escrow Agreement") among you (the
"Escrow Agent"), The Bank of New York as Senior Note Trustee, The Bank of New
York as Convertible Note Trustee and Petersburg Long Distance Inc., an Ontario
corporation (the "Company"). Capitalized terms used herein shall have the
meaning given in the Company Senior Note Escrow Agreement.
This letter constitutes a Payment Notice and Disbursement Request
under the Company Senior Note Escrow Agreement.
The undersigned hereby notifies you that the Company has requested,
and has satisfied the conditions contained in Section __ of the Senior Note
Indenture for, the release of $______, from the Senior Note Escrow Account which
was deposited on __________ as a result of [specify source of deposit, i.e.,
asset sale of [type of asset] for Net Cash Proceeds of $_________, which amount
will be invested or used as follows:
.
In connection with the requested disbursement, the undersigned
hereby notifies you that:
1. The Senior Notes have [not], as a result of an Event of Default
(as defined in the Senior Note Indenture), been accelerated and become due
and payable.
2. An opinion of counsel as required by the Senior Note
Indenture is delivered herewith.
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3. The Collateral Documents have been delivered to the
Trustee.
4. [add wire instructions].
The Escrow Agent is entitled to rely on the foregoing in disbursing
funds relating to this Disbursement Request.
PETERSBURG LONG DISTANCE INC.
By:_________________________
Name:
Title:
The Senior Note Trustee hereby certifies to the Escrow Agent that it
has received the applicable Officers' Certificate described in Section 11.4 of
the Senior Note Indenture for the release of the funds to be disbursed pursuant
to the foregoing Disbursement Request.
THE BANK OF NEW YORK,
as Senior Note Trustee
By:________________________
Name:
Title:
The Convertible Note Trustee hereby certifies to the Escrow Agent
that it has received the applicable Officers' Certificate described in Section
11.8 of the Convertible Note Indenture for the release of the funds to be
disbursed pursuant to the foregoing Disbursement Request.
THE BANK OF NEW YORK,
as Convertible Note Trustee
By:________________________
Name:
Title:
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