EXHIBIT 4.5
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XXXXXXXX XXXXXXX XXXXXXXXXXXXX X.X.,
XXXXXX XXXXXX TRUST COMPANY OF NEW YORK,
as Escrow Agent and
Securities Intermediary
AND
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
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ESCROW AGREEMENT
Dated as of December 3, 1998
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150,000 Units Consisting of 13 1/4% Senior Notes due 2008
and Warrants to Purchase 1,000,050 Class B Shares
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ESCROW AGREEMENT
This ESCROW AGREEMENT (this "Agreement"), dated as of December 3,
1998, among United States Trust Company of New York, a New York banking
corporation, as escrow agent and securities intermediary (in such capacities,
the "Escrow Agent"), United States Trust Company of New York, as Trustee (in
such capacity, the "Trustee") under the Indenture (as defined herein), and
VersaTel Telecom International N.V. (formerly known as VersaTel Telecom B.V.), a
company organized under the laws of The Netherlands (the "Company").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to the Unit Agreement, dated as of December 3, 1998 (the "Unit
Agreement"), between the Company and United States Trust Company of New York, as
Unit Agent (in such capacity, the "Unit Agent"), VersaTel is issuing 150,000
Units (the "Units") consisting of $1,000 aggregate principal amount of its 13
1/4% Senior Notes due 2008 (the "Notes") and one warrant to purchase 6.667 Class
B Shares of the Company, par value NLG 0.10 per share (the "Class B Shares").
The Notes are to be issued under an indenture, dated as of December 3, 1998 (the
"Indenture"), between the Company and the Trustee. The warrants are to be issued
under a Warrant Agreement, dated as of December 3, 1998, between the Company and
United States Trust Company of New York, as Warrant Agent.
WHEREAS, as security for its obligations under the Notes and the
Indenture, the Company hereby grants to the Trustee and any predecessor Trustee
under the Indenture (any such Trustee acting in the name and on behalf of the
Beneficiaries (as defined herein)) for the benefit of the Beneficiaries, a
security interest in and lien upon the Escrow Account (as defined herein).
WHEREAS, the parties have entered into this Agreement in order to
set forth the conditions upon which, and the manner in which, funds will be
disbursed from the Escrow Account (as defined herein) and released from the
security interest and lien described above.
A G R E E M E N T
NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Defined Terms. All terms used but not defined herein shall
have the meanings ascribed to them in the Indenture. All terms defined in the
UCC (as defined herein) and not otherwise defined herein shall have the
respective meanings given to those terms in the UCC, except where the context
otherwise requires. 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:
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"Agent" means, with respect to the Escrow Account at any date,
any investment advisor or advisors appointed by the Company from time to time,
with notice in writing to the Escrow Agent and the Trustee. Only those persons
identified in an Officers' Certificate of the Agent delivered to the Escrow
Agent at the time of notice of appointment as Agent, or any such persons
identified in a further certificate delivered by an authorized person at the
Agent to the Escrow Agent, shall be authorized to instruct the Escrow Agent
pursuant to the terms of this Agreement.
"Applied" means that disbursed funds have been applied (i) to the
payment of interest on the Notes, (ii) pursuant to Section 3(c) hereof or (iii)
pursuant to Section 6(b)(iii) hereof.
"Available Funds" mean, with respect to each Escrow Account at
any date, (A) the sum of (i) the Pledged Securities and any funds or Cash
Equivalents and (ii) interest earned or dividends paid on the Pledged Securities
and any funds or Cash Equivalents, less (B) the aggregate disbursements made
prior to such date in accordance with the terms of this Agreement.
"Beneficiaries" shall have the meaning set forth in Section
2(b)(ii).
"Cash Equivalents" mean, with respect to the Escrow Account, (i)
U.S. dollars and (ii) U.S. Government Securities having maturities of not later
than May 15, 2001.
"Collateral" shall have the meaning set forth in Section 6(a).
"Escrow Account" means the escrow account established for the
benefit of the Trustee, any predecessor Trustee under the Indenture and the
holders of the Notes pursuant to Section 2(b)(i).
"entitlement holder" means a Person which is both an "entitlement
holder" (as defined in UCC Section 8-102(a)(7)) and an "entitlement holder" (as
defined in 31 C.F.R. ss. 357.2 or, as applicable, the corresponding Federal
Book-Entry Regulations).
"Escrow Funds" shall have the meaning set forth in Section 6(c).
"Federal Book-Entry Regulations" means (a) the federal
regulations contained in Subpart B ("Treasury/Revenue Automated Debt Entry
System (TRADES)" governing Book-Entry Securities consisting of U.S. Treasury
bonds, notes and bills) and Subpart D ("Additional Provisions") of 31 C.F.R Part
357, 31 C.F.R. ss. 357.10 through ss. 357.14 and ss. 357.41 through ss.357.44
(including related defined terms in 31 C.F.R. ss. 357.2); and (b) to the extent
substantially identical to the federal regulations referred to in clause (a)
above (as in effect from time to time), the federal regulations governing other
U.S. Government Securities.
"Initial Escrow Amount" means $[46,500,000].
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"Interest Payment Date" means May 15 and November 15 of each
year, commencing on May 15, 1999 until the Notes are paid in full.
"Issue Date" means the date on which the Notes are originally
issued under the Indenture.
"Payment Notice and Disbursement Request" means a notice signed
by an Officer of the Company sent by the Company to the Escrow Agent requesting
a disbursement of funds from an Escrow Account, in substantially the form of
Exhibit A hereto.
"Pledged Securities" mean, the U.S. Government Securities
purchased by the Company and deposited in the Escrow Account.
"Secured Obligations" shall have the meaning set forth in Section
6(a).
"securities intermediary" means a Person that is both a
"securities intermediary" (as defined in UCC Section 8-102(a)(14)) and a
"securities intermediary" (as defined in 31 C.F.R. ss. 357.2 or, as applicable,
the corresponding Federal Book-Entry Regulations).
"UCC" shall mean the Uniform Commercial Code as in effect from
time to time in the State of New York.
"U.S. Government Securities" mean direct obligations of, or
obligations guaranteed by, the United States of America for the payment of which
obligations or guarantee the full faith and credit of the United States is
pledged and are not callable or redeemable at the option of the issuer thereof,
which obligations in each case, are governed by the Federal Book-Entry
Regulations.
2. Escrow Account; Escrow Agent.
(a) Appointment of Escrow Agent. The Company and the Trustee
hereby appoint United States Trust Company of New York as the Escrow Agent, and
United States Trust Company of New York, hereby accepts such appointment under
the terms and conditions of this Agreement.
(b) Establishment of the Escrow Account.
(i) On the Issue Date, the Escrow Agent shall establish an escrow
account in the name of the Trustee entitled the "Escrow Account pledged by
VersaTel Telecom International N.V. to United States Trust Company of New York,
as Trustee, acting in the name and on behalf of the Beneficiaries" at its office
located at United States Trust Company of New York, 000 Xxxx 00xx Xxxxxx, Xxx
Xxxx, XX. The Escrow Account shall be a "securities account" as such term is
defined in the UCC.
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(ii) All U.S. dollar funds, including the Initial Escrow Amount,
Pledged Securities and any Cash Equivalents accepted by the Escrow Agent
pursuant to this Agreement shall be held by the Escrow Agent for the Trustee for
the exclusive benefit of the holders of the Notes, 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.
(iii) On the Issue Date, the Company shall deliver, or cause the
delivery of, either (x) the Initial Escrow Amount to the Escrow Agent for
deposit into the Escrow Account against the Escrow Agent's written
acknowledgement and receipt of the Initial Escrow Amount, and the Escrow Agent
shall purchase pursuant to written instructions of the Company or its Agent,
Pledged Securities, with all or a portion of the Initial Escrow Amounts, or (y)
the Pledged Securities and deliver or cause to be delivered such Pledged
Securities to the Escrow Agent for deposit into the Escrow Account against the
Escrow Agent's written acknowledgement and receipt of such Pledged Securities.
Such Pledged Securities shall be held by the Escrow Agent acting in the name and
on behalf of the Beneficiaries and deposited into the Escrow Account for the
exclusive benefit of the Beneficiaries. All payments of interest and principal
on the Pledged Securities shall be deposited into the Escrow Account to be paid
or disbursed in accordance with the terms hereof or, to the extent permitted by
Section 2(d)(i) hereof, reinvested in Cash Equivalents.
(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 nor
shall the Escrow Agent have any interest in the Escrow Account with respect to
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 any of the Escrow Account any such amounts nor shall
the Escrow Agent have any interest in the Escrow Account with respect to such
amounts.
(d) Investment of Funds in the Escrow Account. Any funds on
deposit in the Escrow Account which are not invested may be invested or
reinvested, at the Company's option, only upon the following terms and
conditions:
(i) Acceptable Investments with respect to the Escrow Account.
All funds deposited or held in the Escrow Account at any time shall be invested
by the Escrow Agent in Cash Equivalents in accordance with the written
instructions of the Company or its Agent from time to time to the Escrow Agent;
provided, however, that (A) the Company or its Agent shall only designate
investment of funds in Cash Equivalents maturing in an amount sufficient to
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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 Notes on each Interest Payment Date beginning on and including May
15, 1999 and through and including the Interest Payment Date on May 15, 2001,
and the Company or its Agent shall designate, and hereby designates, that all
cash which may from time to time be placed or deposited in or credited,
transferred or delivered to such Escrow Account, be invested as promptly and to
the fullest extent practicable in U.S. Government Securities; and (B) any such
written instructions shall specify the particular investment to be made, shall
state that such investment is authorized to be made hereby and in particular
satisfies the requirements of the preceding clause (A) of this proviso, shall
contain the certification referred to in Section 2(d)(ii), if required, and
shall be executed by an Officer of the Company. 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 (i). All such Cash Equivalents shall be assigned to and held in the
possession of, or, in the case of 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 for the benefit of the Beneficiaries, except that 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 Cash Equivalents 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 written
instructions. In the absence of instructions from the Company that meet the
requirements of this Section 2(d)(i), the Escrow Agent shall have no obligation
to invest funds held in the Escrow Account.
(ii) Security Interest in Investments. No investment of funds in
the Escrow Account shall be made unless the Company has certified to the Escrow
Agent and the Trustee that, upon such investment, the Trustee (acting in the
name and on behalf of the Beneficiaries as appropriate) will have a first
priority perfected security interest in the applicable investment. On the date
of this Agreement, and on each anniversary thereof (upon receipt of written
notice from the Escrow Agent), until the date upon which the balance of the
Available Funds with respect to each Escrow Account shall have been reduced to
zero, each of the Trustee and the Escrow Agent shall receive an Opinion of
Counsel to the Company, dated such date as applicable, which opinion shall
confirm the foregoing and in respect to the Escrow Account, shall meet the
requirements of Section 314(b) of the United States Trust Indenture Act of 1939,
as amended (the "TIA") and shall comply with Sections 11.4 and 11.5 of the
Indenture. If a certificate or opinion as to a class of investments has been
provided to the Escrow Agent, a certificate or opinion need not be issued with
respect to individual investments in securities in that class if the certificate
or opinion applicable to the class remains accurate with respect to such
individual investments, which continued accuracy the Escrow Agent may
conclusively assume.
(iii) Interest and Dividends. All interest earned and dividends
paid on the Pledged Securities in the Escrow Account or any funds invested in
Cash Equivalents in the
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Escrow Account 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, subject to subsections 6(b)(iii),
6(e) and 6(f), shall be reinvested in accordance with paragraph 2(d)(i) above,
acknowledged by the Trustee, in accordance with the terms hereof unless the
Trustee has provided written notice to the Escrow Agent that a Default or Event
of Default under the Indenture has occurred or the Trustee has notified the
Escrow Agent that it should only take direction from the Trustee or should no
longer take direction from the Company in which case the Escrow Agent shall take
directions from the Trustee.
(iv) Limitation on the Escrow Agent's Responsibilities. The
Escrow Agent's sole responsibilities under this Section 2 shall be (A) to retain
possession of certificated Cash Equivalents and to be the registered or
designated owner of the Pledged Securities and any Cash Equivalents which are
not certificated, (B) to follow written instructions of the Company or its Agent
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 Cash Equivalents as may be required to fund any disbursement or
payment in accordance with Section 3. In connection with clause (d)(iv)(A)
above, the Escrow Agent will maintain continuous possession in the jurisdiction
of its principal place of business of certificated Cash Equivalents and cash
included in the Collateral and will cause the Pledged Securities and any
uncertificated dollar 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, any Federal Reserve Bank. Except as provided in Section 6, the
Escrow Agent shall have no other responsibilities with respect to perfecting or
maintaining the perfection of the security interest in the Collateral and shall
not be required to file any instrument, document or notice in any public office
at any time or times. In connection with clause (d)(iv)(A) above and subject to
the following sentence, the Escrow Agent shall not be required to reduce to cash
any 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. If no such written
instructions are received, the Escrow Agent may liquidate those Cash Equivalents
having the lowest interest rate per annum or if none such exist, those having
the nearest maturity.
(e) Substitution of the 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, the Pledged Securities and any 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, the
Pledged Securities or any Cash Equivalents 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
Notes and the Trustee than this Agreement and the taking of such other steps as
may be necessary to give the successor escrow agent a first priority security
interest in the Pledged Securities, and the Escrow Agent shall thereupon
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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 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. 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 Cash Equivalents) 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. No
later than five Business Days prior to an Interest Payment Date, the Company
shall submit to the Escrow Agent with respect to the Notes, acknowledged by the
Trustee, 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
11:00 a.m. (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 practicable (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 reasons(s) therefor.
In the event such rejection is based upon nonsatisfaction of the condition in
Section 3(b)(I), the Company shall thereupon resubmit the Payment Notice and
Disbursement Request with appropriate changes.
(b) Conditions Precedent to Disbursement. The Escrow Agent's
payment of any disbursement shall be made only if: (I) the Company shall have
submitted, in accordance with the provisions of Section 3(a), a completed
Payment Notice and Disbursement Request to 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 written notice from the Trustee that as a result of
an Event of Default under the Indenture the indebtedness represented by the
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)).
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(c) Company Payments. If the Company makes any interest payment
or portion of an interest payment on the Notes from a source of funds other than
the Escrow Account ("Company Funds"), the Company may, after payment in full of
such interest payment, direct the Escrow Agent to release to the Company or at
the direction of the Company an amount of funds from the Escrow Account less
than or equal to the amount of Company Funds so expended. Upon receipt of a
request from the Company (including the certificate described in the following
sentence), the Escrow Agent will pay over to the Company the requested amount.
Concurrently with any release of funds to the Company pursuant to this Section
3(c), the Company will deliver to the Escrow Agent an Officers' Certificate
stating that such release has been duly authorized by all necessary corporate
action, and does not contravene, or constitute a default under, any provision of
applicable law or regulation or of the Articles of Association of the Company or
of any agreement, judgment, injunction, order, decree or other instrument
binding upon the Company or result in the creation or imposition of any Lien on
any assets of the Company.
(d) If at any time the principal of and interest on the
Collateral exceeds 101% of the amount sufficient, in the written opinion of an
internationally recognized firm of independent accountants selected by the
Company and delivered to the Escrow Agent and the Trustee, to provide for
payment in full of the interest on the outstanding Notes on each Interest
Payment Date beginning on and including May 15, 1999 and through and including
the Interest Payment Date on May 15, 2001 (or, in the event one or more interest
payments have been made thereon, an amount sufficient to provide for the payment
in full of any and all interest payments on the Notes then remaining, up to and
including the fifth scheduled interest payment), the Company may direct the
Escrow Agent and the Trustee to release any such overfunded amount to the
Company or to such other party as the Company may direct. Upon receipt of
written instructions executed by the Company in the form of an Officers'
Certificate, the Escrow Agent shall pay, or shall cause the payment, over to the
Company or the Company's designee, as the case may be, any such overfunded
amount.
(e) It is understood that the Escrow Agent and the Beneficiary's
bank in any funds transfer may rely solely upon any account numbers or similar
identifying number provided by either of the other parties hereto in accordance
with the provisions of this Agreement to identify (i) the Beneficiary, (ii) the
Beneficiary's bank, or (iii) an intermediary bank. The Escrow Agent may apply
any of the Escrow Collateral under its control for any payment order it executes
using any such identifying number, even where its use may result in a Person
other than the Beneficiary being paid, or the transfer of funds to a bank other
than the Beneficiary's bank or a designated intermediary bank.
4. Escrow Agent.
(a) Limitation of the Escrow Agent's Liability; Responsibilities
of the Escrow Agent. Except as otherwise provided herein (and in any event,
without prejudice to the Escrow Agent's representations, warranties, covenants
and agreements in its capacity as securities intermediary contained herein), the
Escrow Agent's responsibility and liability under
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this Agreement shall be limited as follows: (i) the Escrow Agent does not
represent, warrant or guaranty to the holders of the Notes from time to time the
performance of the Company; (ii) the Escrow Agent shall have no responsibility
to the Company or holders of the Notes or the Trustee from time to time as a
consequence of performance or non-performance by the Escrow Agent hereunder,
except for any bad faith, gross negligence or wilful 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. In no event shall the Escrow Agent be liable (x) for acting
in accordance with or relying upon any instruction, notice, demand, certificate
or document from the Company or any entity acting on behalf of the Company
delivered in accordance with the terms hereof, (y) for any consequential,
punitive or special damages or (Z) for an amount in excess of the value of the
Escrow Account valued as of the date of deposit.
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, the Pledged
Securities or Cash Equivalents held by it hereunder, including without
limitation any liability for any delay not resulting from bad faith, gross
negligence or wilful 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 or
administrative order or judgment, upon any opinion of counsel or upon any
certification, instruction, notice or other writing delivered to it by the
Company or 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 or refrain from acting 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 (other than with respect to any
disbursement pursuant to Section 6(b)(iii)), and may at its own option but in no
case is obliged to, 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 received the Escrow Agent's request for
instructions and its
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proposed course of action, and (ii) prior to so acting, the Escrow Agent has not
received the written instruction requested from the Company.
At the expense of 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 preceding paragraph) shall not
be liable for any action taken or omitted in good faith and without gross
negligence or wilful misconduct 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, securities 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, securities 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
hold 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. The costs and expenses (including reasonable attorney's fees and
expenses) incurred in connection with such proceedings shall be paid by, and
shall be deemed an obligation of, the Company.
No provision of this Agreement shall require 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.
The Escrow Agent shall not incur any liability for not performing
any act or fulfilling any duty, obligation or responsibility hereunder by reason
of any occurrence beyond the control of the Escrow Agent (including but not
limited to any act or provision of any present or future law or regulation or
governmental authority, any act of God or war, or the unavailability of the
Federal Reserve Bank wire).
5. Indemnity. The Company shall indemnify, hold harmless and, if
required or requested by the Trustee or the Escrow Agent, defend the Trustee and
the Escrow Agent, as the case may be, and their respective directors, officers,
agents, employees and controlling Persons, from and against any and all claims,
actions, obligations, liabilities and expenses, including reasonable defense
costs, reasonable investigative fees and costs, reasonable legal
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fees, and claims for damages, arising from the Trustee's or the Escrow Agent's
performance or non-performance, or in connection with the Escrow Agent's
acceptance of appointment as Escrow Agent under this Agreement, except (i) to
the extent that such liability, expense or claim is solely and directly
attributable to the bad faith, gross negligence or wilful misconduct of any of
the foregoing Persons or (ii) to the extent that any such claim, action,
obligation, liability or expense arises from the Escrow Agent's performance or
non-performance (including, without limitation, its failure to perform or
observe its obligations) as securities intermediary hereunder, to the extent
that such liability, expense or claim is solely and directly attributable to the
bad faith, negligence or wilful misconduct of the Escrow Agent. The provisions
of Section 2(c) and 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 the Escrow Agent.
(a) The Company hereby irrevocably grants a first priority
security interest in and lien on, and pledges, assigns, transfers 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 credited to, or transferred or delivered
to the Escrow Agent for placement or deposit in, or credit to the Escrow
Account, including, without limitation, all of the following (whether consisting
of certificated or uncertificated securities, accounts, chattel paper,
documents, financial assets, security entitlements, other investment property,
general intangibles, instruments, deposit accounts, bank accounts, securities
accounts or other collateral accounts, money, proceeds or other items comprising
such property), whether now owned by the Company or hereafter acquired and
whether now existing or hereafter coming into existence: the Pledged Securities,
all funds held therein, all Cash Equivalents held by (or otherwise maintained in
the name of) the Escrow Agent pursuant to Section 2, all rights of the Company
under this Agreement and all proceeds of the Collateral (including, without
limitation, all interest, dividends or other earnings, income, collections and
distributions from or in respect of investments or reinvestments, of the
Collateral) (collectively, the "Collateral"), in order to secure all obligations
and indebtedness of the Company under the Indenture, the Notes and any other
obligation, now or hereafter arising, of every kind and nature, owed by the
Company under the Indenture or the Notes to the holders of the Notes or to the
Trustee or any predecessor Trustee (the "Secured Obligations"). 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) in respect of the Collateral, (A) maintain the Escrow Account
for the sole dominion and control (including, without limitation, "control"
within the meaning of UCC Section 9-115) of the Trustee, in the name and on
behalf of the Beneficiaries, over the Pledged
12
Securities, any Cash Equivalents and any and all other property in the Escrow
Account for the benefit of the Trustee, (B) maintain, or cause its agent within
the jurisdiction of its principal place of business to maintain, possession of
all certificated Cash Equivalents 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 laws of the State
of New York pursuant hereto and pursuant to any instructions received pursuant
hereto (the Company hereby agreeing that in the event any certificated 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 reasonable steps specified by the Company pursuant to
paragraphs (a) and (b) of this Section 6 to cause the Trustee, acting in the
name and on behalf of the Beneficiaries, to enjoy a continuous perfected first
priority security interest under any applicable law of the State of New York in
all Cash Equivalents purchased hereunder that are not certificated and (D) use
its best efforts to maintain the Collateral free and clear of any security
interests senior to the security interest created hereby in favor of the Trustee
and use reasonable efforts to 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 has a lien or security interest upon any portion
of the Collateral other than the liens created hereby;
(iii) in addition to disbursing amounts held in escrow pursuant
to any Payment Notice and Disbursement Requests given to it pursuant to Section
3, upon receipt of written notice from the Trustee of the acceleration of
maturity of the Notes, and direction from the Trustee to disburse all Available
Funds to the Trustee, as promptly as is practicable, disburse all funds held in
the Escrow Account to the Trustee and transfer title to all Cash Equivalents
held by the Escrow Agent hereunder to the Trustee. In addition, upon an Event of
Default under 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
13
such sale may, without further notice, be made at the time and place to which it
was so adjourned; and
(iv) comply in all respects with its covenants and agreements
contained in Section 8.
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 and the Escrow Agent shall have no security interest in, any
funds disbursed by the Escrow Agent whether for payment of interest on the Notes
or to the Company pursuant to this Agreement to the extent not inconsistent with
the terms hereof. Notwithstanding any other provision contained in this
Agreement, the Escrow Agent shall act solely as the Trustee's agent in
connection with its duties herein relating to the Escrow Account or the Pledged
Securities or any funds or Cash Equivalents 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 Cash Equivalents collected by the Trustee
pursuant to Section 6(b)(iii) shall be applied as provided in Section 6.13 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 (the "Escrow Funds") shall be paid over to the Company or as a court
of competent jurisdiction may direct.
(d) The Company will execute and deliver or cause to be executed
and delivered, or use its best efforts to procure, all stock powers, proxies,
assignments, instruments and other documents, deliver any instruments to the
Trustee and take any other actions that are necessary or desirable to perfect,
continue the perfection of, or protect the first priority of the Trustee's
security interest in and to the Collateral, to protect the Collateral against
the rights, claims, or interests of third parties or to effect the purposes of
this Agreement. The Company also hereby authorizes the Trustee to file any
financing or continuation statements with respect to the Collateral without the
signature of the Company (to extent permitted by applicable law). The Company
will pay all reasonable costs incurred in connection with any of the foregoing.
It being understood that the Trustee has no duty to determine whether to file or
record any document or instrument relating to 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 hereby to do, and the 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 Trustee's
security interest hereunder.
14
(f) If at any time the Escrow Agent shall receive an "entitlement
order" (within the meaning of Section 8-102(a)(8) of the UCC) issued by the
Trustee and relating to the Escrow Account, the Escrow Agent shall comply with
such entitlement order without further consent by the Company or any other
Person.
7. Termination. This Agreement and the security interest in the
Collateral evidenced by this Agreement shall terminate automatically and be of
no further force or effect upon the payment in full in cash of all interest
(including any Additional Amounts, if any and Liquidated Damages, if any) due
through the Interest Payment Date occurring on May 15, 2001, and the remaining
Collateral, if any, shall promptly be paid over and transferred to the Company;
provided, however, that the obligations of the Company under Section 2(c),
Section 5 and Section 13 (and any existing claims thereunder) shall survive
termination of this Agreement and the resignation of the Escrow Agent. At such
time, the Escrow Agent shall, pursuant to an Officer's Certificate stating that
no Default or Event of Default is then continuing and that all required payments
have been made delivered by the Company, reassign and redeliver to the Company
all of the Collateral hereunder that has not been sold, disposed of, retained or
applied by the Escrow Agent in accordance with the terms of this Agreement. Such
reassignment and delivery shall be without warranty by or recourse to the Escrow
Agent in its capacity as such, except as to the absence of any Liens on the
Collateral created by the Escrow Agent, and shall be at the sole expense of the
Company.
8. Representations and Warranties.
(a) The Company hereby represents and warrants that:
(i) The execution, delivery and performance by the Company of
this Agreement are within the Company's corporate powers, have been duly
authorized by all necessary corporate action, and do not contravene, or
constitute a default under, any provision applicable law or regulation
or the Articles of Association of the Company or any agreement,
judgment, injunction, order, decree or other instrument binding upon the
Company or result in the creation or imposition of any Lien on any
assets of the Company, except for the security interests granted under
this Agreement.
(ii) Prior to delivering the same pursuant hereto, the Company is
the beneficial owner of the Collateral, free and clear of any Lien or
claims of any Person or entity (except for the security interest,
granted under this Agreement). No financing statement covering the
Collateral is on file in any public office other than the financing
statements, if any, filed pursuant to this Agreement.
(iii) This Agreement has been duly executed and delivered by the
Company and assuming the due authorization and valid execution and
delivery of this Agreement by the Trustee and the Escrow Agent and
enforceability of this Agreement against the Escrow Agent and the
Trustee in accordance with its terms, constitutes a valid and binding
obligation of the Company, enforceable against the Company in accordance
15
with its terms, except that the enforcement thereof may be limited by
(w) the effect of any applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally,
(x) general principles of equity (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair
dealing, (y) the exculpation provisions and rights to indemnification
hereunder may be limited by U.S. federal and state securities laws and
public policy considerations and (iv) the waiver of rights and defenses
contained in Section 15 (j) hereof.
(iv) The Company will deliver, or cause to be delivered, such
Pledged Securities to the Escrow Agent in such amount as shall be
sufficient upon scheduled interest and principal payments of such
Pledged Securities to provide for the payment in full of the first five
scheduled interest payments on the Notes (excluding any Additional
Amounts or Liquidated Damages).
(v) Upon the delivery to the Escrow Agent of the certificates or
instruments, if any, representing the Collateral and the filing of
financing statements, if any, required by the UCC and the transfer and
pledge to the Escrow Agent of the Collateral and the acquisition by the
Escrow Agent of a security entitlement thereto in accordance with
Section 6, the pledge of the Collateral pursuant to this Agreement
creates a valid and perfected first priority security interest in and to
the Collateral, securing the payment of the Company's Secured
Obligations for the benefit of the Beneficiaries, enforceable as such
against all creditors of the Company and any Persons purporting to
purchase any of the Collateral from the Company other than as permitted
by the Indenture.
(vi) No consent of any other Person and no consent,
authorization, approval, or other action by, and no notice to or filing
with, any governmental authority or regulatory body is required either
(x) for the pledge by the Company of the Collateral pursuant to this
Agreement or for the execution, delivery or performance of this
Agreement by the Company (except for any filings necessary to perfect
Liens on the Collateral) or (y) for the exercise by the Trustee of the
rights provided for in this Agreement or the remedies in respect of the
Collateral pursuant to this Agreement, except, in each case, as may be
required in connection with such disposition by laws affecting the
offering and sale of securities.
(vii) No litigation, investigation or proceeding of or before any
arbitrator or governmental authority is pending or, to the knowledge of
the Company, threatened by or against the Company with respect to this
Agreement or any of the transactions contemplated hereby, other than as
described in the Offering Memorandum, dated November 17, 1998.
(viii) The pledge of the Collateral pursuant to this Agreement is
not prohibited by any applicable law or governmental regulation,
release, interpretation or opinion of
16
the Board of Governors of the Federal Reserve System or other regulatory
agency (including, without limitation, Regulations G, T, U and X of the
Board of Governors of the Federal Reserve System) or any comparable or
other laws, regulations or rules of any other government or governmental
agency or body in The Netherlands.
(b) The Escrow Agent represents, warrants, covenants and agrees:
(i) the Escrow Agent is a securities intermediary and it shall
act as such with respect to the Escrow Account, the Collateral and the
Trustee, which is (and which the Escrow Agent as securities intermediary
shall treat as) the entitlement holder and has (and which the Escrow
Agent as securities intermediary shall treat as the person with) sole
dominion and control (including, without limitation, "control" within
the meaning of UCC Section 9-115) over the Escrow Account and the
Collateral.
(ii) all Collateral (other than cash) will be deemed to
constitute "financial assets" (as defined in UCC Section 8-102(a)(7) and
the Trustee will be entitled to all rights and remedies to which an
entitlement holder or a person in control of financial assets is
entitled pursuant to Part 5 of UCC Article 8 and UCC Article 9.
(iii) the Escrow Agent, as securities intermediary, (x) agrees to
credit to the Escrow Account any and all assets and properties (but only
the assets and properties) required to be transferred, placed, delivered
or credited therein or thereto, (y) represents, warrants, covenants and
agrees (a) that it is and will remain a "Participant", and (b) that it
maintains and will continue to be eligible to maintain and to maintain a
"Participant's Securities Account" (as such terms are defined in 31
C.F.R. ss. 357.2 or, as applicable, the corresponding Federal Book-Entry
Regulations) with the Federal Reserve Bank of New York.
(iv) the Escrow Agent will maintain the Escrow Account and the
Collateral in the State of New York.
9. Covenants.
(a) The Company covenants and agrees with the Beneficiaries from
and after the date of this Agreement until the earlier of payment in
full in cash of (1) all interest due through the Interest Payment Date
occurring on May 15, 2001 or (2) all obligations due and owing under the
Indenture and the Notes in the event such obligations become due and
payable prior to the payment of the first five scheduled interest
payments on the Notes:
(A) The Company agrees that it will not (i) sell or
otherwise dispose of, or grant any option or warrant with
respect to, any of the Collateral or (ii) create or permit
to exist any Lien upon or with respect to any of
17
the Collateral (except for the Lien created pursuant to
this Agreement) and at all times will be the sole
beneficial owner of the Collateral.
(B) The Company agrees that it will not (i) enter into any
agreement or understanding that purports to or may
restrict or inhibit the Trustee's rights or remedies
hereunder, including, without limitation, the Trustee's
right to sell or otherwise dispose of the Collateral or
(ii) fail to pay or discharge any tax, assessment or levy
of any nature not later than five days prior to the date
of any proposed sale under any judgment, writ or warrant
of attachment with regard to the Collateral.
(b) The Company covenants and agrees with the Beneficiaries that
it will promptly make all filings which may be necessary or appropriate
in the United States which are or may be required to create a valid and
perfected first priority security interest in and to the Collateral.
10. Power of Attorney.
In addition to all of the powers granted to the Trustee pursuant
to Article 7 of the Indenture, the Company hereby appoints and constitutes the
Trustee as the Company's attorney-in-fact to exercise to the fullest extent
permitted by law all of the following powers upon and at any time after the
occurrence and during the continuance of an Event of Default: (i) collection of
proceeds of any Collateral; (ii) conveyance of any item of Collateral to any
purchaser thereof; (iii) giving of any notices or recording of any Liens under
Section 6; (iv) making of any payments or taking any acts under Section 11; and
(v) paying or discharging taxes or Liens levied or placed upon the Collateral,
the legality or validity thereof and the amounts necessary to discharge the same
to be determined by the Trustee in its sole discretion, and such payments made
by the Trustee to become the obligations of the Company to the Trustee, due and
payable immediately upon demand. The Trustee's authority hereunder shall
include, without limitation, the authority to endorse and negotiate any checks
or instruments representing proceeds of Collateral in the name of the Company,
execute and give receipt for any certificate of ownership or any document
constituting Collateral, transfer title to any item of Collateral, sign the
Company's name on all financing statements (to the extent permitted by
applicable law) or any other documents deemed necessary or appropriate by the
Trustee to preserve, protect or perfect this security interest in the Collateral
and to file the same, prepare, file and sign the Company's name of any notice of
Lien, to take any other actions arising from or incident to the powers granted
to the Trustee in this Agreement. This power of attorney is coupled with an
interest and is irrevocable by the Company.
11. Trustee May Perform.
If the Company fails to perform any agreement contained herein,
the Trustee may itself perform, but shall not be obligated to, or cause
performance of, such agreement,
18
and the reasonable expenses of the Trustee incurred in connection therewith
shall be payable by the Company under Section 13 hereof.
12. No Assumption of Duties; Reasonable Care.
The rights and powers granted to the Trustee and Escrow Agent
hereunder are being granted in order to preserve and protect the Trustee's and
the holders' of Notes security interest in and to the Collateral granted hereby
and shall not be interpreted to, and shall not, impose any duties on the Trustee
and Escrow Agent in connection therewith other than those imposed under
applicable law. Except as provided by applicable law or by the Indenture, the
Trustee and Escrow Agent shall be deemed to have exercised reasonable care in
the custody and preservation of the Collateral in its possession if the
Collateral is accorded treatment substantially equal to that which the Trustee
accords similar property in similar situations, it being understood that the
Trustee and Escrow Agent shall not have any responsibility for (i) ascertaining
or taking action with respect to calls, conversions, exchanges, maturities,
tenders or other matters relative to any Collateral, whether or not the Trustee
or Escrow Agent has or is deemed to have knowledge of such matters or (ii)
taking any necessary steps to preserve rights against any parties with respect
to any Collateral.
13. Expenses.
The Company will upon demand pay to the Trustee the amount of any
and all reasonable expenses, including, without limitation, the reasonable fees,
expenses and disbursements of its counsel, experts and agents retained by the
Trustee that the Trustee may incur in connection with (i) the administration of
this Agreement, (ii) the custody or preservation of, or the sale of, collection
from, or other realization upon, any of the Collateral, (iii) the exercise or
enforcement of any of the rights of the Beneficiaries hereunder or (iv) the
failure by the Company to perform or observe any of the provisions hereof.
14. Security Interest Absolute.
To the extent permitted by applicable law, all rights of the
Beneficiaries and security interests hereunder, and all obligations of the
Company hereunder, shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of the Indenture or
any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Secured Obligations, or any other
amendment or waiver of or any consent to any departure from the
Indenture;
(c) any exchange, surrender, release or nonperfection of any
Liens on any other collateral for all or any of the Secured Obligations;
or
19
(d) to the extent permitted by applicable law, any other
circumstance which might otherwise constitute a defense available to, or
a discharge of, the Company in respect of the Secured Obligations or of
this Agreement.
15. Miscellaneous.
(a) Waiver. Any party hereto may specifically waive any breach of
this Agreement by any other party, but no such waiver shall be deemed to
have been given unless such waiver is in writing, signed by the waiving
party and specifically designating the breach waived, nor shall any such
waiver constitute a continuing waiver of or for 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 effect, 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 Notes) 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, with
respect to the Trustee and the Company, the Indenture, contain the
entire agreement among the parties with respect to the subject matter
hereof and supersede any and all prior agreements, understandings and
commitments, whether oral or written. Any amendment or waiver of any
provision of this Agreement and any consent to any departure by the
Company from any provision of this Agreement shall be effective only if
made or duly given in compliance with all of the terms and provisions of
the Indenture, and none of the Escrow Agent, the Trustee or any holder
of Notes shall be deemed, by any act, delay, indulgence, omission or
otherwise, to have waived any right to remedy hereunder or to have
acquiesced in any Default or Event of Default under the
20
Indenture or in any breach of any of the terms and conditions hereof.
Failure of the Escrow Agent, the Trustee or any holder of Notes to
exercise, or delay in exercising, any right, power or privilege
hereunder shall not operate as a waiver thereof. Written notice of any
amendment shall be promptly provided by the Company to its Agent. No
single or partial exercise of any right, power or privilege hereunder
shall operate as a waiver thereof. No single or partial exercise of any
right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any right, power or privilege. A
waiver by the Escrow Agent, the Trustee or any holder of Notes of any
right or remedy hereunder on any one occasion shall not be construed as
a bar to any right or remedy that the Escrow Agent, the Trustee or such
holder of Notes would otherwise have on any future occasion. The rights
and remedies herein provided are cumulative, may be exercised singly or
concurrently and are not exclusive of any rights or remedies provided by
law.
(g) Notices. Any notices or other communications required or
permitted hereunder shall be in writing, and shall be sufficiently given
if made by hand delivery, by telecopier or first-class mail, postage
prepaid, addressed as follows:
if to the Company:
VersaTel Telecom International N.V.
Xxxxxxxxxxx 00
0000 XX Xxxxxxxxx-X.X.
Xxx Xxxxxxxxxxx
Facsimile No: 00-00-000-00-00
Attention: Xxx Xxxxxxxxx
with a copy to:
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No: 212-848-7179
Attention: Xxxx X. Xxxxxxxx, Xx. Esq.
if to the Escrow Agent or Trustee:
United States Trust Company of New York
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Corporate Trust Administration
21
Each of the Company, the Escrow Agent and the Trustee by written
notice to each other such Person may designate additional or different addresses
for notices to such Person. Any notice or communication to the Company, the
Escrow Agent and the Trustee, shall be deemed to have been given or made as of
the date so delivered if personally delivered; when receipt is acknowledged, if
telecopied; and five (5) calendar days after mailing if sent by first class
mail, postage prepaid (except that a notice of change of address shall not be
deemed to have been given until actually received by the addressee). All notices
with respect to the Escrow Agent will be deemed to have been given on the date
received by the Escrow Agent.
(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) GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY
TRIAL; WAIVER OF DAMAGES.
(i) EACH PARTY HERETO AGREES THAT, FOR ALL PURPOSES OF
THIS AGREEMENT (INCLUDING, WITHOUT LIMITATION, FOR
PURPOSES OF AND WITHIN THE MEANING OF XXX XXXXXXX 0-
000, XXX SECTIONS 9-103(6) AND 31 C.F.R.ss.357.11 (OR, AS
APPLICABLE, THE CORRESPONDING FEDERAL BOOK-ENTRY
REGULATIONS), THIS AGREEMENT (INCLUDING, WITHOUT
LIMITATION, THE CREATION, PERFECTION, EFFECTS OF
PERFECTION AND PRIORITY OF THE LIENS AND SECURITY
INTERESTS OF THE TRUSTEE ON AND IN THE ESCROW ACCOUNT
AND THE COLLATERAL AND THE ESTABLISHMENT AND
MAINTENANCE OF THE ESCROW AGENT'S PARTICIPANT'S
SECURITIES ACCOUNT AND THE ACCOUNTS) AND THE RIGHTS,
INTEREST, DUTIES AND OBLIGATIONS OF THE PARTIES UNDER
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK,
EXCLUDING (TO THE GREATEST EXTENT PERMITTED BY LAW)
ANY RULE OF LAW THAT WOULD CAUSE THE APPLICATION OF
THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF
NEW YORK. EACH PARTY HERETO IRREVOCABLY WAIVES ANY
OBJECTION ON THE GROUNDS OF VENUE, FORUM NON-
CONVENIENS OR ANY SIMILAR GROUNDS. THE COMPANY
HEREBY IRREVOCABLY DESIGNATES AND APPOINTS CT
CORPORATION SYSTEM (THE "AUTHORIZED AGENT"), AS ITS
----------------
AUTHORIZED AGENT UPON WHOM PROCESS MAY BE SERVED IN
22
ANY SUCH SUIT OR PROCEEDING. THE COMPANY REPRESENTS THAT IT
HAS NOTIFIED THE AUTHORIZED AGENT OF SUCH DESIGNATION AND
APPOINTMENT AND THAT THE AUTHORIZED AGENT HAS ACCEPTED THE
SAME IN WRITING. THE COMPANY HEREBY IRREVOCABLY AUTHORIZES AND
DIRECTS ITS AUTHORIZED AGENT TO ACCEPT SUCH SERVICE. THE
COMPANY FURTHER AGREES THAT SERVICE OF PROCESS UPON ITS
AUTHORIZED AGENT AND WRITTEN NOTICE OF SAID SERVICE TO THE
COMPANY MAILED BY FIRST CLASS MAIL OR DELIVERED TO ITS
AUTHORIZED AGENT SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE
SERVICE OF PROCESS UPON THE COMPANY IN ANY SUCH SUIT OR
PROCEEDING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY
PERSON TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE COMPANY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY
FEDERAL OR STATE COURT IN THE BOROUGH OF MANHATTAN IN THE CITY
XX XXX XXXX, XXXXXX XXX XXXXX XX XXX XXXX, XXXXXX XXXXXX OF
AMERICA, IN ANY SUIT OR PROCEEDING BASED ON OR ARISING UNDER
THIS ESCROW AGREEMENT, AND IRREVOCABLY AGREES THAT ALL CLAIMS
IN RESPECT OF SUCH SUIT OR PROCEEDING MAY BE DETERMINED IN ANY
SUCH COURT.
(ii) THE COMPANY AGREES THAT THE TRUSTEE SHALL, IN ITS
CAPACITY AS THE TRUSTEE OR IN THE NAME AND ON BEHALF
OF ANY HOLDER OF NOTES, HAVE THE RIGHT, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, TO PROCEED AGAINST THE
COMPANY OR ITS PROPERTY IN A COURT IN ANY LOCATION
REASONABLY SELECTED IN GOOD FAITH (AND HAVING
PERSONAL OR IN REM JURISDICTION OVER THE COMPANY OR
ITS PROPERTY, AS THE CASE MAY BE) TO ENABLE THE TRUSTEE
TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A JUDGMENT
OR OTHER COURT ORDER ENTERED IN FAVOR OF THE TRUSTEE.
THE COMPANY AGREES THAT IT WILL NOT ASSERT ANY
COUNTERCLAIMS, SETOFFS OR CROSSCLAIMS IN ANY
PROCEEDING BROUGHT BY THE TRUSTEE TO REALIZE ON SUCH
PROPERTY OR TO ENFORCE A JUDGMENT OR OTHER COURT
ORDER IN FAVOR OF THE TRUSTEE, EXCEPT FOR SUCH
COUNTERCLAIMS, SETOFFS OR CROSSCLAIMS WHICH, IF NOT
ASSERTED IN ANY SUCH PROCEEDING, COULD NOT OTHERWISE
BE BROUGHT OR ASSERTED. THE COMPANY WAIVES ANY
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE
COURT IN WHICH THE TRUSTEE HAS COMMENCED A
23
PROCEEDING DESCRIBED IN THIS PARAGRAPH INCLUDING,
WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF
VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS.
(iii) TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE
COMPANY AND THE TRUSTEE EACH WAIVE ANY RIGHT TO
HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE,
WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE
ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN
THEM IN CONNECTION WITH THIS AGREEMENT. INSTEAD, ANY
DISPUTES RESOLVED IN COURT WILL BE RESOLVED IN A BENCH
TRIAL WITHOUT A JURY.
(iv) THE COMPANY AGREES THAT NONE OF THE ESCROW AGENT,
THE TRUSTEE OR ANY HOLDER OF NOTES SHALL HAVE ANY
LIABILITY TO THE COMPANY (WHETHER SOUNDING IN TORT,
CONTRACT OR OTHERWISE) FOR LOSSES SUFFERED BY THE
COMPANY IN CONNECTION WITH, ARISING OUT OF, OR IN ANY
WAY RELATED TO, THE TRANSACTIONS CONTEMPLATED AND
THE RELATIONSHIP ESTABLISHED BY THIS AGREEMENT, OR ANY
ACT, OMISSION OR EVENT OCCURRING IN CONNECTION
THEREWITH, UNLESS IT IS DETERMINED BY A FINAL AND
NONAPPEALABLE JUDGMENT OF A COURT THAT IS BINDING ON
THE ESCROW AGENT, THE TRUSTEE OR SUCH HOLDER OF
NOTES, AS THE CASE MAY BE, THAT SUCH LOSSES WERE THE
RESULT OF ACTS OR OMISSIONS ON THE PART OF THE ESCROW
AGENT, THE TRUSTEE OR SUCH HOLDER OF NOTES, AS THE
CASE MAY BE, CONSTITUTING BAD FAITH, GROSS NEGLIGENCE
OR WILFUL MISCONDUCT.
(v) TO THE EXTENT PERMITTED BY APPLICABLE LAW, AND EXCEPT
AS OTHERWISE PROVIDED IN THIS AGREEMENT, THE COMPANY
WAIVES ALL RIGHTS OF NOTICE AND HEARING OF ANY KIND
PRIOR TO THE EXERCISE BY THE TRUSTEE OR ANY HOLDER OF
NOTES OF ITS RIGHTS DURING THE CONTINUANCE OF AN EVENT
OF DEFAULT TO REPOSSESS THE COLLATERAL WITH JUDICIAL
PROCESSOR TO REPLEVY, ATTACH OR LEVY UPON THE
COLLATERAL OR OTHER SECURITY FOR THE SECURED
OBLIGATIONS. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, THE COMPANY WAIVES THE POSTING OF ANY BOND
OTHERWISE REQUIRED OF THE ESCROW AGENT, THE TRUSTEE
OR ANY HOLDER OF NOTES IN CONNECTION WITH ANY
24
JUDICIAL PROCESS OR PROCEEDING TO OBTAIN POSSESSION OF,
REPLEVY, ATTACH OR LEVY UPON THE COLLATERAL OR OTHER SECURITY
FOR THE SECURED OBLIGATIONS, TO ENFORCE ANY JUDGMENT OR OTHER
COURT ORDER ENTERED IN FAVOR OF THE ESCROW AGENT, THE TRUSTEE
OR ANY HOLDER OF NOTES, OR TO ENFORCE BY SPECIFIC PERFORMANCE,
TEMPORARY RESTRAINING ORDER OR PRELIMINARY OR PERMANENT
INJUNCTION, THIS AGREEMENT OR ANY OTHER AGREEMENT OR DOCUMENT
BETWEEN THE COMPANY ON THE ONE HAND AND THE ESCROW AGENT, THE
TRUSTEE AND/OR THE HOLDERS OF NOTES ON THE OTHER HAND.
(vi) IN FURTHERANCE OF THE FOREGOING, EACH PARTY HERETO
AGREES THAT REGARDLESS OF ANY PROVISION IN ANY OTHER
AGREEMENT, THE "SECURITIES INTERMEDIARY'S JURISDICTION"
(WITHIN THE MEANING OF UCC SECTIONS 8-110 AND 9-103(b)
AND 31 C.F.R.ss.357.11 (OR, AS APPLICABLE, THE
CORRESPONDING FEDERAL BOOK-ENTRY REGULATIONS) OF THE
ESCROW AGENT WITH RESPECT TO THE ESCROW ACCOUNT AND
THE COLLATERAL IS THE STATE OF NEW YORK.
(vii) THE PROVISIONS OF THIS SECTION 15(J) ARE INTENDED TO BE
EFFECTIVE UPON THE EXECUTION OF THIS ESCROW AGREEMENT WITHOUT
ANY FURTHER ACTION BY THE COMPANY, THE ESCROW AGENT OR THE
TRUSTEE AND THE INTRODUCTION OF A TRUE COPY OF THIS ESCROW
AGREEMENT INTO EVIDENCE SHALL BE CONCLUSIVE AND FINAL EVIDENCE
AS TO SUCH MATTERS.
(k) No Adverse Interpretation of Other Agreements. This Agreement
may not be used to interpret another pledge, security or debt agreement
of the Company or any subsidiary thereof. No such pledge, security or
debt agreement may be used to interpret this Agreement.
(l) Benefits of Agreement. Nothing in this Agreement, express or
implied, shall give to any Person, other than the parties hereto and
their successors hereunder, and the holders of Notes, any benefit or any
legal or equitable right, remedy or claim under this Agreement.
(m) Interpretation of Agreement. All terms not defined herein or
in the Indenture shall have the meaning set forth in the UCC, except
where the context otherwise requires. To the extent a term or provision
of this Agreement conflicts with the Indenture, the Indenture shall
control with respect to the subject matter of such term
25
or provision. Acceptance of or acquiescence in a course of performance
rendered under this Agreement shall not be relevant to determine the
meaning of this Agreement even though the accepting or acquiescing party
had knowledge of the nature of the performance and opportunity for
objection.
(n) Survival of Provisions. All representations, warranties and
covenants of the Company contained herein shall survive the execution
and delivery of this Agreement, and shall terminate only upon the
termination of this Agreement.
(o) Waivers. The Company waives presentment and demand for
payment of any of the Company's Secured Obligations, protest and notice
of dishonor or default with respect to any of the Company's Secured
Obligations, and all other notices to which the Company might otherwise
be entitled, except as otherwise expressly provided herein or in the
Indenture.
(p) 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 instruments,
designated and appointed CT Corporation System, 0000 Xxxxxxxx, Xxx Xxxx,
XX 00000 (the "Authorized Agent") (and any successor entity), as its
authorized agent upon which process may be served in any suit or
proceeding arising out of or relating to this Agreement that may be
instituted in any federal or state court in the Borough of Manhattan,
The City of New York, State of New York or brought under federal or
state securities laws, and represent and warrant that the Authorized
Agent has accepted such designation, (ii) submits to the jurisdiction of
any such court in any such suit or proceeding and (iii) agree that
service of process upon the Authorized Agent and written notice of said
service to the Company in accordance with the provisions of this
Agreement shall be deemed in every respect to be effective service of
process upon the Company in any such suit or proceeding. The Company
further agrees to take any and all action, including the execution and
filing of any and all such documents and instruments, as may be
necessary to continue such designation and appointment of CT Corporation
System in full force and effect for as long as any of the Notes remain
outstanding (subject to the limitation set forth in clause (i));
provided, however, that the Company may, and to the extent CT
Corporation System ceases to be able to be served on the basis
contemplated herein shall, by written notice to the Escrow Agent and the
Trustee, designate such additional or alternative agent for service of
process that (i) maintains an office located in the Borough of
Manhattan, The City of New York, State of New York, and (ii) is either
(x) United States counsel for the Company or (y) a corporate service
company which acts as agent for service of process for other Persons in
the ordinary course of its business. Such written notice shall identify
the name of such agent for service of process and the address of the
office of such agent for service of process in the Borough of Manhattan,
The City of New York, State of New York.
26
To the extent that the Company has or hereafter may acquire any
immunity from jurisdiction of any court of (i) any jurisdiction in which
the Company owns or leases property or assets, (ii) United States or the
State of New York or (iii) The Netherlands or from any legal process
(whether through service of notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) with respect to
itself or its property and assets or this Agreement or the Escrow
Account or actions to enforce judgments in respect of any thereof, the
Company hereby irrevocably waives such immunity in respect of its
obligations under the above-referenced documents, to the extent
permitted by law.
(q) U.S. Dollar Judgment Currency. U.S. dollars are the sole
currency of account and payment for all sums payable by the Company
under or in connection with the Escrow Account including damages. Any
amount received or recovered in a currency other than dollars (whether
as a result of, or the enforcement of, a judgment or order of a court of
any jurisdiction, in the winding-up or dissolution of the Company or
otherwise) by the Escrow Agent or the Trustee in respect of any sum
expressed to be due to it from the Company shall only constitute a
discharge to the Company to the extent of the dollar amount which the
recipient is able to purchase with the amount so received or recovered
in that other currency on the date of that receipt or recovery (or, if
it is not practicable to make that purchase on that date, on the first
date on which it is practicable to do so). If that dollar amount is less
than the dollar amount expressed to be due to the recipient under this
Agreement, the Company shall indemnify it against any loss sustained by
it as a result. If that dollar amount is greater than the dollar amount
expressed to be due to the recipient under this Agreement, the Company
shall be entitled to the amount of such excess. In any event, the
Company shall indemnify the recipient against the cost of making any
such purchase. For the purposes of this paragraph, it will be sufficient
for the Escrow Agent or Trustee to certify in a satisfactory manner
(indicating the sources of information used) that it would have suffered
a loss had an actual purchase of dollars been made with the amount so
received in that other currency on the date of receipt or recovery (or,
if a purchase of dollars on such date had not been practicable, on the
first date on which it would have been practicable, it being required
that the need for a change of date be certified in the manner mentioned
above). These indemnities constitute a separate and independent
obligation from the Company's other obligations, shall give rise to a
separate and independent cause of action, shall apply irrespective of
any indulgence granted by the Escrow Agent and Trustee, and shall
continue in full force and effect despite any other judgment, order,
claim or proof for a liquidated amount in respect of any sum due under
the Escrow Account.
(r) Notwithstanding any other provision of this Agreement, in no
event shall the Escrow Agent be liable for special, indirect or
consequential losses or damages of any kind whatsoever (including but
not limited to lost profits), even if the Escrow Agent has been advised
of the likelihood of such loss or damage and regardless of the form of
action.
27
(s) Each party hereto, except the Escrow Agent, shall provide the
Escrow Agent, as soon as practicable, with their Tax Identification
Number as assigned by the Internal Revenue Service. All interest or
other income earned under the Escrow Agreement shall be allocated and
paid as provided herein and reported by the recipient to the Internal
Revenue Service as having been so allocated and paid.
(t) Notwithstanding any other provision of this Agreement, prior
to termination hereof as contemplated by Section 7, any instruction by
the Company to the Escrow Agent with respect to the Escrow Account or
the Collateral shall be effective only to the extent acknowledged or
expressly permitted (in each case, in writing by notice of the Trustee
to the Escrow Agent) by the Trustee.
SECTION 16. Successors. All agreements of the Company in this
Agreement shall bind its successors. All agreements of the Escrow Agent in this
Agreements shall bind its successors.
IN WITNESS WHEREOF, the parties have executed and delivered this
Escrow Agreement as of the day first above written.
VERSATEL TELECOM INTERNATIONAL
N.V.
By: /s/ R. Xxxx Xxxxx
--------------------------------
Name: R. Xxxx Xxxxx
Title: Managing Director
UNITED STATES TRUST COMPANY OF NEW
YORK, as Escrow Agent and Securities
Intermediary
By: /s/ Xxxx Xxxxxxxx
--------------------------------
Name: Xxxx Xxxxxxxx
Title: Vice President
UNITED STATES TRUST COMPANY OF NEW
YORK, as Trustee
By: /s/ Xxxx Xxxxxxxx
--------------------------------
Name: Xxxx Xxxxxxxx
Title: Vice President
EXHIBIT A
Form of Payment Notice and Disbursement Request
[Letterhead of the Company]
{Date}
United States Trust Company of New York
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Re: Disbursement Request No. ____
Ladies and Gentlemen:
We refer to the Escrow Agreement, dated as of December 3, 1998 (the
"Escrow Agreement"), among you (the "Escrow Agent"), United States Trust Company
of New York, as the Trustee (the "Trustee"), and VersaTel Telecom International
N.V., a company organized under the laws of The Netherlands (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 or more of the following, as applicable}
{The undersigned hereby notifies you that a scheduled interest payment
in the amount of $________ is due and payable on __________, ___ with respect to
the Notes and requests a disbursement of funds contained in the Escrow Account
in such amount to the Trustee.}
{The undersigned hereby notifies you and certifies to you that the
release of [$________ of funds from the Escrow Account] to the Company (to an
account designated by the Company in writing), is currently permitted to be
released in accordance with Section 3(c) of the Escrow Agreement, a duly
executed Officers' Certificate which complies with the requirements of the
applicable Section of the Escrow Agreement and with the Indenture is attached
hereto, and such amount shall be so remitted to the Company.}
{The undersigned hereby notifies you that the Escrow Agreement has been
terminated in accordance with Section 7 thereof, a duly executed Officers'
Certificate which complies with the requirements of the applicable Section of
the Escrow Agreement and with the Indenture is attached hereto, and requests
that you release the remaining Collateral contained in the Escrow Account to the
Company.}
2
{The undersigned hereby notifies you that there has been an acceleration
of the maturity of the Notes. 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 Notes have not, as a result of an Event of Default under 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.
VERSATEL TELECOM
INTERNATIONAL N.V.
By:
-----------------------
Name:
Title:
ACKNOWLEDGED BY
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
By:
-------------------
Name:
Title: