EXHIBIT 4.6
ESCROW AGREEMENT
This ESCROW AGREEMENT (this "Agreement"), dated as of October
17, 1997, among The Chase Manhattan Bank, as escrow agent (in such capacity,
the "Escrow Agent"), The Chase Manhattan Bank, as Trustee (in such capacity,
the "Trustee") under the Indenture (as defined herein), and RCN Corporation, a
Delaware corporation (the "Company").
R E C I T A L S :
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A. Pursuant to the Indenture, dated as of October 17, 1997 (the
"Indenture"), between the Company and the Trustee, the Company is issuing
$225,000,000 aggregate principal amount of its 10% Senior Notes Due 2007 (the
"Series A Securities") and authorizing the issuance of 10% Senior Notes Due
2007, Series B (the "Series B" Securities," and together with the Series A
Securities, the "Securities").
B. As security for its obligations under the Securities and the
Indenture, the Company hereby grants to the Trustee, for the benefit of the
Trustee, any predecessor Trustee under the Indenture and the holders of the
Securities, a security interest in and lien upon the Escrow Account (as
defined herein).
C. The parties have entered into this Agreement in order to set
forth the conditions upon which, and the manner in which, funds will be
disbursed from the Escrow Account and released from the security interest and
lien described above.
A G R E E M E N T :
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NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Defined Terms. All capitalized terms used but not
defined herein shall have the meanings ascribed to them in the Indenture. In
addition to any other defined terms used herein, the following terms shall
constitute defined terms for purposes of this Agreement and shall have the
meanings set forth below:
"Affiliate" of any specified person means any other person
which, directly or indirectly, controls, is controlled by or is under
common control with such specified person. For the purposes of this
definition, "control" when used with respect to any person means the power
to direct the management and policies of such person, directly or
indirectly, whether through the ownership of voting securities, by contract
or otherwise and the terms "affiliated," "controlling" and "controlled" have
meanings correlative to the foregoing.
"Applied" means that disbursed funds have been applied (i) to
the payment of interest on the Securities, (ii) pursuant to Section 3(c) or
(iii) pursuant to Section 6(b)(iii).
"Available Funds" means (A) the sum of (i) the Initial Escrow
Amount and (ii) interest earned or dividends paid on the funds in the Escrow
Account (including holdings of U.S. Government Securities), less (B) the
aggregate disbursements previously made pursuant to this Agreement.
"Collateral" shall have the meaning given in Section 6(a)
hereof.
"Escrow Account" shall mean the escrow account established
pursuant to Section 2.
"Escrow Account Statement" shall have the meaning given in
Section 2(f).
"Initial Escrow Amount" shall mean $61,250,000.00.
"Interest Payment Date" means April 15 and October 15 of each
year, commencing on April 15, 1998 until the Securities are paid in full.
"Issue Date" has the meaning set forth in the Indenture.
"Payment Notice and Disbursement Request" means a notice sent
by the Trustee to the Escrow Agent requesting a disbursement of funds from the
Escrow Account, in substantially the form of Exhibit A hereto. Each Payment
Notice and Disbursement Request shall be signed by an officer of the Trustee.
"U.S. Government Securities" means securities that are direct
non-callable obligations of the United States of America or securities the
timely payment of whose principal and interest is unconditionally guaranteed
by the full faith and credit of the United States of America.
2. Escrow Account; Escrow Agent.
(a) Appointment of Escrow Agent. The Company and the Trustee
hereby appoint the Escrow Agent, and the Escrow Agent hereby accepts
appointment, as escrow agent, under the terms and conditions of this
Agreement.
(b) Establishment of Escrow Account. On the Issue Date, the
Escrow Agent shall establish an escrow account entitled the "Escrow Account
pledged by the Company to The Chase Manhattan Bank, as Trustee" at its office
located at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention Global
Trust Services. All funds accepted by the Escrow Agent pursuant to this
Agreement shall be held for the exclusive benefit of the Trustee, any
predecessor Trustee under the Indenture and holders of the Securities, as
secured parties hereunder (collectively, the "Beneficiaries"). All such funds
shall be held in the Escrow Account until disbursed or paid in accordance with
the terms hereof. The Escrow Account, the funds held therein and any U.S.
Government Securities held by the Escrow Agent shall be under the sole
dominion and control of the Escrow Agent for the benefit of the Beneficiaries.
On the Issue Date, the Company shall deliver the Initial Escrow Amount to the
Escrow Agent for deposit into the Escrow Account against the Escrow Agent's
written acknowledgment and receipt of the Initial Escrow Amount.
(c) Escrow Agent Compensation. The Company shall pay to the
Escrow Agent such compensation for services to be performed by it under this
Agreement as the Company and the Escrow Agent may agree in writing from time
to time. The Escrow Agent shall be paid any compensation owed to it directly
by the Company and shall not disburse from the Escrow Account any such
amounts.
The Company shall reimburse the Escrow Agent upon request for
all reasonable expenses, disbursements, and advances incurred or made by the
Escrow Agent in implementing any of the provisions of this Agreement,
including compensation and the reasonable expenses and disbursements of its
counsel. The Escrow Agent shall be paid any such expenses owed to it directly
by the Company and shall not disburse from the Escrow Account any such
amounts.
(d) Investment of Funds in Escrow Account. Funds deposited in
the Escrow Account shall be invested and reinvested only upon the following
terms and conditions:
(i) Acceptable Investments. All funds deposited or held in
the Escrow Account at any time shall be invested by the Escrow Agent
in U.S. Government Securities in accordance with the Initial
Instructions annexed hereto as Schedule A and thereafter, if
necessary, the Company's written instructions from time to time to the
Escrow Agent; provided, however, that the Company shall only designate
investment of funds in U.S. Government Securities maturing in an
amount sufficient to and/or generating interest income sufficient to,
when added to the balance of funds held in the Escrow Account, provide
for the payment of interest on the outstanding Securities on each
Interest Payment Date beginning on and including April 15, 1998 and
through and including the Interest Payment Date on October 15, 2000;
provided, further, however, that any such written instruction shall
specify the particular investment to be made, shall state that such
investment is authorized to be made hereby and in particular satisfies
the requirements of the preceding proviso and Section 2(d)(v), shall
contain the certification referred to in Section 2(d)(ii), if
required, and shall be executed by an Officer of the Company. All
U.S. Government Securities shall be assigned to and held in the
possession of, or, in the case of U.S. Government Securities
maintained in book entry form with the Federal Reserve Bank (i.e.,
TRADES), transferred to a book entry account in the name of, the
Escrow Agent, for the benefit of the Trustee, with such guarantees as
are customary, except that U.S. Government Securities maintained in
book entry form with the Federal Reserve Bank shall be transferred to
a book entry account in the name of the Escrow Agent at the Federal
Reserve Bank that includes only U.S. Government Securities held by
the Escrow Agent for its customers and segregated by separate
recordation in the books and records of the Escrow Agent. The Escrow
Agent shall not be liable for losses on any investments made by it
pursuant to and in compliance with such instructions. In the absence
of qualifying written instructions from the Company that meet the
requirements of this Section 2(d)(i), the Escrow Agent shall have no
obligation to invest funds held in the Escrow Account.
(ii) Security Interest in Investments. Promptly after the
Issue Date (but in no event later than five business days), and on
each anniversary of the Issue Date thereafter until the date upon
which the balance of the Available Funds shall have been reduced to
zero, each of the Trustee and the Escrow Agent shall receive an
Opinion of Counsel to the Company, dated each such date as applicable,
to the effect that the Trustee has a perfected security interest in
the Collateral, which opinion shall meet the requirements of Section
314(b) of the Trust Indenture Act of 1939, as amended (the "TIA") and
shall comply with Section 13.02 of the Indenture.
(iii) Interest and Dividends. All interest earned and
dividends paid on funds invested in U.S. Government Securities shall
be deposited in the Escrow Account as additional Collateral for the
exclusive benefit of the Beneficiaries and, if not required to be
disbursed in accordance with the terms hereof, shall be reinvested in
accordance with the terms hereof at the Company's written instruction.
(iv) Limitation on Escrow Agent's Responsibilities. The
Escrow Agent's sole responsibilities under this Section 2 shall be (A)
to retain possession of certificated U.S. Government Securities
(except, however, that the Escrow Agent may surrender possession to
the issuer of any such U.S. Government Security for the purposes of
effecting assignment, crediting interest, or reinvesting such security
or reducing such security to cash) and to be the registered or
designated owner of U.S. Government Securities which are not
certificated, (B) to follow the Company's written instructions given
in accordance with Section 2(d)(i), (C) to invest and reinvest funds
pursuant to this Section 2(d) and (D) to use reasonable efforts to
reduce to cash such U.S. Government Securities as may be required to
fund any disbursement or payment in accordance with Section 3. In
connection with clause (A) above, the Escrow Agent will maintain
continuous possession in the State of New York of certificated U.S.
Government Securities and cash included in the Collateral and will
cause uncertificated U.S. Government Securities to be registered in
the book-entry system of, and transferred to an account of the Escrow
Agent or a sub-agent of the Escrow Agent at, the Federal Reserve Bank
of New York. Except as provided in Section 6, the Escrow Agent shall
have no other responsibilities with respect to perfecting or
maintaining the perfection of the Trustee's security interest in the
Collateral and shall not be required to file any instrument, document
or notice in any public office at any time or times. In connection
with clause (D) above and subject to the following sentence, the
Escrow Agent shall not be required to reduce to cash any U.S.
Government Securities to fund any disbursement or payment in
accordance with Section 3 in the absence of written instructions
signed by an Officer of the Company specifying the particular
investment to liquidate. If no such written instructions are
received, the Escrow Agent may liquidate those U.S. Government
Securities having the lowest interest rate per annum or if none such
exist, those having the nearest maturity.
(v) Manner of Investment. Funds deposited in the Escrow
Account shall initially be invested in accordance with the Initial
Instructions (attached hereto as Schedule A), which is in a manner
such that there will be sufficient funds available without any further
investment by the Company to cover all interest due on the outstanding
Securities, as such interest becomes due, for each Interest Payment
Date occurring from the Issue Date and ending on (and including)
October 15, 2000, provided that such investments shall have such
maturities and/or interest payment dates such that funds will be
available with respect to each such Interest Payment Date no later
than the time the Escrow Agent is required to disburse such funds to
the Trustee pursuant to Section 3(a). The Escrow Agent shall have no
responsibility for determining whether funds held in the Escrow
Account shall have been invested in such a manner so as to comply with
the requirements of this clause (v).
(e) Substitution of Escrow Agent. The Escrow Agent may resign
by giving no less than 20 Business Days prior written notice to the Company
and the Trustee. Such resignation shall take effect upon the later to occur
of (i) delivery of all funds and U.S. Government Securities maintained by the
Escrow Agent hereunder and copies of all books, records, plans and other
documents in the Escrow Agent's possession relating to such funds or U.S.
Government Securities or this Agreement to a successor escrow agent mutually
approved by the Company and the Trustee (which approvals shall not be
unreasonably withheld or delayed) and (ii) the Company, the Trustee and such
successor escrow agent entering into this Agreement or any written successor
agreement no less favorable to the interests of the holders of the Securities
and the Trustee than this Agreement; and the Escrow Agent shall thereupon be
discharged of all obligations under this Agreement and shall have no further
duties, obligations or responsibilities in connection herewith, except as set
forth in Section 4. If a successor escrow agent has not been appointed or has
not accepted such appointment within 20 Business Days after notice of
resignation is given to the Company, the Escrow Agent may apply to a court of
competent jurisdiction for the appointment of a successor escrow agent.
(f) Escrow Account Statement. At least 30 days prior to each
Interest Payment Date, the Escrow Agent shall deliver to the Company and the
Trustee a statement setting forth with reasonable particularity the balance of
funds then in the Escrow Account and the manner in which such funds are
invested ("Escrow Account Statement"). The parties hereto irrevocably
instruct the Escrow Agent that on the first date upon which the balance in the
Escrow Account (including the holdings of all U.S. Government Securities) is
reduced to zero, the Escrow Agent shall deliver to the Company and to the
Trustee a notice that the balance in the Escrow Account has been reduced to
zero.
3. Disbursements.
(a) Payment Notice and Disbursement Request; Disbursements.
The Trustee shall, at least five business days prior to an Interest Payment
Date, submit to the Escrow Agent a completed Payment Notice and Disbursement
Request substantially in the form of Exhibit A hereto.
The Escrow Agent's disbursement pursuant to any Payment Notice
and Disbursement Request shall be subject to the satisfaction of the
applicable conditions set forth in Section 3(b). Provided such Payment Notice
and Disbursement Request is not rejected by it, the Escrow Agent, as soon as
reasonably practicable on the Interest Payment Date, but in no event later
than 12:00 Noon (New York City time) on the Interest Payment Date, shall
disburse the funds requested in such Payment Notice and Disbursement Request
by wire or book-entry transfer of immediately available funds to the account
of the Trustee for the benefit of the Beneficiaries. The Escrow Agent shall
notify the Trustee as soon as reasonably possible (but not later than two (2)
business days from the date of receipt of the Payment Notice and Disbursement
Request) if any Payment Notice and Disbursement Request is rejected and the
reason(s) therefor. In the event such rejection is based upon nonsatisfaction
of the condition in Section 3(b)(I) below, the Trustee shall thereupon
resubmit the Payment Notice and Disbursement Request with appropriate changes.
(b) Conditions Precedent to Disbursement. The Escrow Agent's
payment of any disbursement shall be made only if: (I) the Trustee shall have
submitted, in accordance with the provisions of Section 3(a) herein, a
completed Payment Notice and Disbursement Request to the Escrow Agent
substantially in the form of Exhibit A with blanks appropriately filled in and
(II) the Escrow Agent shall not have received any notice from the Trustee that
as a result of an Event of Default the indebtedness represented by the
Securities has been accelerated and has become due and payable (in which event
the Escrow Agent shall apply all Available Funds as required by Section
6(b)(iii)).
(c) Retired Securities. In the event a portion of the
Securities has been retired by the Company and submitted to the Trustee for
cancellation and there is no Default or Event of Default under the Indenture,
funds representing the lesser of (A) any funds remaining in the Escrow Account
that are in excess of the amount sufficient to pay interest through and
including October 15, 2000 on the Securities not so retired and (B) the
interest payments which have not previously been made on such retired
Securities for each Interest Payment Date through the Interest Payment Date to
occur on October 15, 2000 shall, upon the written request of the Company to
the Escrow Agent and the Trustee, be paid to the Company upon compliance with
the release of collateral provisions of the TIA and upon receipt by the Escrow
Agent of a notice relating thereto from the Trustee.
4. Escrow Agent.
(a) Limitation of the Escrow Agent's Liability;
Responsibilities of the Escrow Agent. The Escrow Agent's responsibility and
liability under this Agreement shall be limited as follows: (i) the Escrow
Agent does not represent, warrant or guaranty to the holders of the Securities
from time to time the performance of the Company; (ii) the Escrow Agent shall
have no responsibility to the Company or the holders of the Securities or the
Trustee from time to time as a consequence of performance or non-performance
by the Escrow Agent hereunder, except for any gross negligence or willful
misconduct of the Escrow Agent; (iii) the Company shall remain solely
responsible for all aspects of the Company's business and conduct; and (iv)
the Escrow Agent is not obligated to supervise, inspect or inform the Company
or any third party of any matter referred to above.
No implied covenants or obligations shall be inferred from this
Agreement against the Escrow Agent, nor shall the Escrow Agent be bound by the
provisions of any agreement beyond the specific terms hereof. Specifically
and without limiting the foregoing, the Escrow Agent shall in no event have any
liability in connection with its investment, reinvestment or liquidation, in
good faith and in accordance with the terms hereof, of any funds or U.S.
Government Securities held by it hereunder, including without limitation any
liability for any delay not resulting from gross negligence or willful
misconduct in such investment, reinvestment or liquidation, or for any loss of
principal or income incident to any such delay.
The Escrow Agent and its agents shall be entitled to rely upon
any judicial order or judgment, upon any written opinion of counsel or upon
any certification, instruction, notice, or other writing delivered to it by
the Company or the Trustee in compliance with the provisions of this Agreement
without being required to determine the authenticity or the correctness of any
fact stated therein or the propriety or validity of service thereof. The
Escrow Agent may act in reliance upon any instrument comporting with the
provisions of this Agreement or signature believed by it to be genuine and may
assume that any person purporting to give notice or receipt or advice or make
any statement or execute any document in connection with the provisions hereof
has been duly authorized to do so.
At any time the Escrow Agent may request in writing an
instruction in writing from the Company, and may at its own option include in
such request the course of action it proposes to take and the date on which it
proposes to act, regarding any matter arising in connection with its duties
and obligations hereunder; provided, however, that the Escrow Agent shall state
in such request that it believes in good faith that such proposed course of
action is consistent with another identified provision of this Agreement. The
Escrow Agent shall not be liable to the Company for acting without the
Company's consent in accordance with such a proposal on or after the date
specified therein if (i) the specified date is at least two business days
after the Company receives the Escrow Agent's request for instructions and its
proposed course of action, and (ii) prior to so acting, the Escrow Agent has
not received the written instructions requested from the Company.
The Escrow Agent may act pursuant to the advice of counsel
chosen by it with respect to any matter relating to this Agreement and
(subject to clause (ii) of the first paragraph of this Section 4(a)) shall not
be liable for any action taken or omitted in accordance with such advice. The
Escrow Agent may act through agents, attorneys, custodians and nominees and is
not responsible for the actions of such agents, attorneys, custodians and
nominees if chosen by it with due care.
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 and expenses,
investigative fees and costs, legal fees and expenses, and claims for damages,
arising from the Escrow Agent's performance or non-performance, or in
connection with its acceptance or appointment as Escrow Agent, under this
Agreement, except to the extent that such liability, expense or claim is
solely and directly attributable to the gross negligence or willful misconduct
of any of the foregoing persons. The provisions of this Section 5 shall
survive any termination, satisfaction or discharge of this Agreement as well
as the resignation or removal of the Escrow Agent.
6. Grant of Security Interest; Instructions to Escrow
Agent.
(a) The Company hereby irrevocably grants a first priority
security interest in and lien on, and pledges, assigns and sets over to the
Trustee for the ratable benefit of the Beneficiaries, all of the Company's
right, title and interest in the Escrow Account, and all property now or
hereafter placed or deposited in, or delivered to the Escrow Agent for
placement or deposit in, the Escrow Account, including, without limitation,
all funds held therein, all U.S. Government Securities held by (or
otherwise maintained in the name of) the Escrow Agent pursuant to Section
2, and all proceeds thereof as well as all rights of the Company under this
Agreement (collectively, the "Collateral"), in order to secure all
obligations and indebtedness of the Company under the Indenture, the
Securities and any other obligation, now or hereafter arising, of every
kind and nature, owed by the Company under the Indenture to the holders of
the Securities or to the Trustee or any predecessor Trustee. The Escrow
Agent hereby acknowledges the Trustee's security interest and lien as set
forth above. The Company shall take all actions necessary on its part to
insure the continuance of a first priority security interest in the
Collateral in favor of the Trustee in order to secure all such obligations
and indebtedness.
(b) The Company and the Trustee hereby irrevocably instruct the
Escrow Agent to, and the Escrow Agent shall: (i) (A) maintain sole dominion
and control over funds and U.S. Government Securities in the Escrow Account
for the benefit of the Trustee to the extent specifically required herein, (B)
maintain, or cause its agent within the State of New York to maintain,
possession of all certificated U.S. Government Securities purchased hereunder
that are physically possessed by the Escrow Agent in order for the Trustee to
enjoy a continuous perfected first priority security interest therein under
the law of the State of New York (the Company hereby agreeing that in the
event any certificated U.S. Government Securities are in the possession of the
Company or a third party, the Company shall use its best efforts to deliver all
such certificates to the Escrow Agent), (C) take all steps specified by the
Company pursuant to paragraph (a) of this Section 6 to cause the Trustee to
enjoy a continuous perfected first priority security interest under any
applicable Federal and State of New York law in all U.S. Government Securities
purchased hereunder that are not certificated and (D) maintain the Collateral
free and clear of all liens, security interests, safekeeping or other charges,
demands and claims against the Escrow Agent of any nature now or hereafter
existing in favor of anyone other than the Trustee; (ii) promptly notify the
Trustee if the Escrow Agent receives written notice that any Person other than
the Trustee has a lien or security interest upon any portion of the Collateral;
and (iii) in addition to disbursing amounts held in escrow pursuant to any
Payment Notice and Disbursement Requests given to it by the Trustee pursuant
to Section 3, upon receipt of written notice from the Trustee of the
acceleration of the maturity of the Securities, and direction from the Trustee
to disburse all Available Funds to the Trustee, as promptly as practicable,
after following, if it so chooses, the procedures set forth in the fourth
paragraph of Section 4(a), disburse all funds held in the Escrow Account to
the Trustee and transfer title to all U.S. Government Securities held by the
Escrow Agent hereunder to the Trustee. The lien and security interest
provided for by this Section 6 shall automatically terminate and cease as to,
and shall not extend or apply to, and the Trustee shall have no security
interest in, any funds disbursed by the Escrow Agent to the Company pursuant
to this Agreement to the extent not inconsistent with the terms hereof.
Notwithstanding any other provision contained in this Agreement, the Escrow
Agent shall act solely as the Trustee's agent in connection with its duties
under this Section 6 or any other duties herein relating to the Escrow Account
or any funds or U.S. Government Securities held thereunder. The Escrow Agent
shall not have any right to receive compensation from the Trustee and shall
have no authority to obligate the Trustee or to compromise or pledge its
security interest hereunder. Accordingly, the Escrow Agent is hereby directed
to cooperate with the Trustee in the exercise of its rights in the Collateral
provided for herein.
(c) Any money and U.S. Government Securities collected by the
Trustee pursuant to Section 6(b)(iii) shall be applied as provided in Section
5.06 of the Indenture. Any surplus of such cash or cash proceeds held by the
Trustee and remaining after indefeasible payment in full of all the
obligations under the Indenture shall be paid over to the Company or to
whomsoever may be lawfully entitled to receive such surplus or as a court of
competent jurisdiction may direct.
(d) Upon demand, the Company will execute and deliver to the
Trustee such instruments and documents as the Trustee may deem necessary or
advisable to confirm or perfect the rights of the Trustee under this Agreement
and the Trustee's interest in the Collateral. The Trustee shall be entitled
to take all necessary action to preserve and protect the security interest
created hereby as a lien and encumbrance upon the Collateral.
(e) The Company hereby appoints the Trustee as its
attorney-in-fact with full power of substitution to do any act which the
Company is obligated hereto to do, and the Trustee may exercise such rights as
the Company might exercise with respect to the Collateral and take any action
in the Company's name to protect the Trustee's security interest hereunder. In
addition to the rights provided under Section 6(b)(iii) hereof, upon an Event
of Default as defined in the Indenture and for so long as such Event of
Default continues, the Trustee may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party under the UCC
or other applicable law, and the Trustee may also upon obtaining possession of
the Collateral as set forth herein, without notice to the Company except as
specified below, sell the Collateral or any part thereof in one or more
parcels at public or private sale, at any exchange, broker's board or at any
of the Trustee's offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Trustee may deem commercially
reasonable. The Company acknowledges and agrees that any such private sale
may result in prices and other terms less favorable to the seller than if such
sale were a public sale. The Company agrees that, to the extent notice of
sale shall be required by law, at least ten (10) days' notice to the Company
of the time and place of any public sale or the time after which any private
sale is to be made shall constitute reasonable notification. The Trustee
shall not be obligated to make any sale regardless of notice of sale having
been given. The Trustee may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned.
7. Termination. This Agreement shall terminate
automatically ten (10) days following disbursement of all funds remaining
in the Escrow Account (including U.S. Government Securities), unless
sooner terminated by agreement of the parties hereto (in accordance with
the terms hereof and not in violation of the Indenture; provided, that the
Trustee may not agree to terminate unless it has received the consent of
100% of the holders of all of the Securities outstanding); provided,
however, that the obligations of the Company under Section 2(c) and Section
5 (and any existing claims thereunder) shall survive termination of this
Agreement and the resignation of the Escrow Agent; provided, further,
however, that until such tenth day, the Company will cause this Agreement
(or any permitted successor agreement) to remain in effect and will cause
there to be an escrow agent (including any permitted successor thereto)
acting hereunder (or under any such permitted successor agreement).
8. Miscellaneous.
(a) Waiver. Any party hereto may specifically waive any breach
of this Agreement by any other party, but no such waiver shall be deemed to
have been given unless such waiver is in writing, signed by the waiving party
and specifically designating the breach waived, nor shall any such waiver
constitute a continuing waiver of similar or other breaches.
(b) Invalidity. If for any reason whatsoever any one or more
of the provisions of this Agreement shall be held or deemed to be inoperative,
unenforceable or invalid in a particular case or in all cases, such
circumstances shall not have the effect of rendering any of the other
provisions of this Agreement inoperative, unenforceable or invalid, and the
inoperative, unenforceable or invalid provision shall be construed as if it
were written so as to effectuate, to the maximum extent possible, the parties'
intent.
(c) Assignment. This Agreement is personal to the parties
hereto, and the rights and duties of any party hereunder shall not be
assignable except with the prior written consent of the other parties.
Notwithstanding the foregoing, this Agreement shall inure to and be binding
upon the parties and their successors and permitted assigns.
(d) Benefit. The parties hereto and their successors and
permitted assigns, but no others, shall be bound hereby and entitled to the
benefits hereof; provided, however, that the Beneficiaries (including holders
of the Securities) and their assigns shall be entitled to the benefits hereof
and to enforce this Agreement.
(e) Time. Time is of the essence with respect to each
provision of this Agreement.
(f) Entire Agreement; Amendments. This Agreement and the
Indenture contain the entire agreement among the parties with respect to the
subject matter hereof and supersede any and all prior agreements,
understandings and commitments, whether oral or written. This Agreement may be
amended only in accordance with Article Nine of the Indenture and further by a
writing signed by a duly authorized representative of each party hereto.
(g) Notices. All notices and other communications required or
permitted to be given or made under this Agreement shall be in writing and
shall be deemed to have been duly given and received when actually received,
including: (a) on the day of hand delivery; (b) three business days following
the day sent, when sent by United States certified mail, postage and
certification fee prepaid, return receipt requested, addressed as set forth
below; (c) when transmitted by telecopy with verbal confirmation of receipt by
the telecopy operator to the telecopy number set forth below; or (d) one
business day following the day timely delivered to a next-day air courier
addressed as set forth below:
To Escrow Agent:
The Chase Manhattan Bank
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Attention: Global Trust Services
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
To Trustee:
The Chase Manhattan Bank
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Attention: Global Trust Services
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
To the Company:
RCN Corporation
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Attention: Chief Executive Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address as the specified entity most recently may have
designated in writing in accordance with this Section.
(h) Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
(i) Captions. Captions in this Agreement are for convenience
only and shall not be considered or referred to in resolving questions of
interpretation of this Agreement.
(j) Choice of Law. The existence, validity, construction,
operation and effect of any and all terms and provisions of this Agreement
shall be determined in accordance with and governed by the laws of the State
of New York, without regard to principles of conflicts of laws, except to the
extent United States federal law is applicable to the perfection and priority
of security interests in U.S. Government Securities. The parties to this
Agreement hereby agree that jurisdiction over such parties and over the subject
matter of any action or proceeding arising under this Agreement may be
exercised by a competent Court of the State of New York, or by a United States
Court, sitting in New York City. The Company hereby submits to the personal
jurisdiction of such courts, hereby waives personal service of process upon
it and consents that any such service of process may be made by certified or
registered mail, return-receipt requested, directed to the Company at its
address last specified for notices hereunder, and service so made shall be
deemed completed five (5) days after the same shall have been so mailed, and
hereby waives the right to a trial by jury in any action or proceeding with
the Escrow Agent. All actions and proceedings brought by the Company against
the Escrow Agent relating to or arising from, directly or indirectly, this
Agreement shall be litigated only in courts within the State of New York.
(k) Representations and Warranties. (i) The Company hereby
represents and warrants that this Agreement has been duly authorized, executed
and delivered on its behalf and constitutes the legal, valid and binding
obligation of the Company. The execution, delivery and performance of this
Agreement by the Company does not violate any applicable law or regulation to
which the Company is subject and does not require the consent of any
governmental or other regulatory body to which the Company is subject, except
for such consents and approvals as have been obtained and are in full force
and effect.
(ii) Each of the Escrow Agent and the Trustee hereby
represents and warrants that this Agreement has been duly authorized,
executed and delivered on its behalf and constitutes its legal, valid and
binding obligation.
IN WITNESS WHEREOF, the parties have executed and delivered
this Escrow Agreement as of the day first above written.
ESCROW AGENT: THE CHASE MANHATTAN BANK,
as Escrow Agent
By:
----------------------------
Name:
Title:
TRUSTEE: THE CHASE MANHATTAN BANK,
as Trustee
By:
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Name:
Title:
COMPANY: RCN CORPORATION
By:
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Name:
Title:
By:
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Name:
Title:
EXHIBIT A
Form of Payment Notice and Disbursement Request
[Letterhead of the Trustee]
[Date]
The Chase Manhattan Bank
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Attention: Corporate Trust Department
Re: Disbursement Request No. ____
[indicate whether revised]
Ladies and Gentlemen:
We refer to the Escrow Agreement, dated as of October 17, 1997
(the "Escrow Agreement") among you (the "Escrow Agent"), the undersigned as
Trustee, and RCN Corporation, a Delaware corporation (the "Company").
Capitalized terms used herein shall have the meaning given in the Escrow
Agreement.
This letter constitutes a Payment Notice and Disbursement
Request under the Escrow Agreement.
[choose one of the following, as applicable]
[The undersigned hereby notifies you that a scheduled interest
payment in the amount of $__________ is due and payable on ____________, ____
and requests a disbursement of funds contained in the Escrow Account in such
amount to the Trustee.]
[The undersigned hereby notifies you that Securities equalling
$__________ in aggregate principal amount have been retired and authorizes you
to release $__________ of funds in the Escrow Account to the Company (to an
account designated by the Company in writing), which amount represents the
amount permitted to be released in accordance with Section 3(c) of the Escrow
Agreement.]
[The undersigned hereby notifies you that there has been an
acceleration of the maturity of the Securities. Accordingly, you are hereby
requested to disburse all remaining funds contained in the Escrow Account to
the Trustee such that the balance in the Escrow Account is reduced to zero.]
In connection with the requested disbursement, the undersigned
hereby notifies you that:
1. [The Securities have not, as a result of an Event of
Default (as defined in the Indenture), been accelerated and become due and
payable.]
2. All prior disbursements from the Escrow Account have been
Applied.
3. [add wire instructions]
The Escrow Agent is entitled to rely on the foregoing in
disbursing funds relating to this Payment Notice and Disbursement Request.
The Chase Manhattan Bank, as
Trustee
By:
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Name:
Title:
Schedule A
[initial investment instructions]
