EXHIBIT 10.87
ESCROW AGREEMENT
ESCROW AGREEMENT, dated as of July 25, 2002 (the "Agreement"),
between ICG Communications, Inc., a Delaware corporation (the "Company"),
Xxxxxxxxx L.L.C., a Delaware limited liability company ("Xxxxxxxxx"),
Xxxxxx Xxxxxxx & Co., Incorporated, a Delaware corporation ("Xxxxxx
Xxxxxxx", and together with Xxxxxxxxx, the "Purchasers") and JPMorgan Chase
Bank (the "Escrow Agent").
WHEREAS, this Agreement is being entered into in connection with
(i) the Second Amended Joint Plan of Reorganization of ICG Communications,
Inc. and its Affiliated Debtors and Debtors in Possession, as modified (the
"Plan"; capitalized terms used but not defined herein have the respective
meanings specified in the Plan), (ii) the Credit Agreement, dated the date
hereof (the "Credit Agreement"), among the Company and the banks, financial
institutions and other institutional lenders listed on the signature pages
thereof as the Initial Lenders (the "Initial Lenders"), Royal Bank of
Canada as collateral agent (the "Collateral Agent") and as administrative
agent (the "Administrative Agent"), and Wachovia Bank, National Association
as documentation agent (the "Documentation Agent"), and (iii) the Note and
Warrant Purchase Agreement, dated the date hereof (the "Note and Warrant
Purchase Agreement"), between the Company, Xxxxxxxxx and Xxxxxx Xxxxxxx;
and
WHEREAS, pursuant to the terms of the Note and Warrant Purchase
Agreement, the Company is selling $25,000,000 aggregate principal amount of
its 14% Senior Subordinated Notes Due July, 2006 (the "Notes") and the
Purchasers are receiving Warrants (the "Warrants"), Nominal Warrants (the
"Nominal Warrants") and the Notes. Concurrently with the closing of such
sale, (i) the Purchasers will deposit with the Escrow Agent, as hereinafter
provided, $25,000,000 in cash and (ii) the Company will deposit with the
Escrow Agent, as hereinafter provided, the Notes, the Warrants and the
Nominal Warrants. Pursuant to the Credit Agreement and in accordance with
the Plan, $25,000,000 (the "Required Amount") of the Escrowed Funds (as
hereinafter defined) will be used to fund certain of the obligations
outstanding to the Initial Lenders on the date that the Plan becomes
effective (the "Effective Date"); and
WHEREAS, the Escrow Agent will hold the Escrowed Property (as
hereinafter defined) in escrow and release such Escrowed Property pursuant
to the terms hereof on or prior to October 31, 2002 or such later date as
(i) the Company, (ii) the Purchasers, (iii) the agent for the Lenders under
the Pre-Petition Credit Agreement and (iv) the Creditors' Committee shall
agree to in writing (the "Deadline Date" and such written agreement, the
"Deadline Extension").
Accordingly, the Company, the Purchasers and the Escrow Agent
agree as follows:
1. Delivery and Acceptance of Escrowed Property. (a) Concurrently
with the execution and delivery hereof, the Purchasers shall deposit
$25,000,000 with the Escrow Agent (the "Escrowed Funds") and the Company
shall deposit the Notes, Warrants and Nominal Warrants with the Escrow
Agent (the "Escrowed Notes and Warrants").
(b) The Escrow Agent shall accept the Escrowed Funds and the
Escrowed Notes and Warrants and shall hold such funds and the proceeds
thereof and such Notes, Warrants and Nominal Warrants in separate
identifiable accounts for disbursement in accordance with the provisions
hereof (the "Escrow Accounts"). The Escrowed Funds, the proceeds of such
Escrowed Funds and the Escrowed Notes and Warrants shall constitute the
"Escrowed Property." The Escrow Agent further agrees to invest any portion
of the Escrowed Property that is comprised of cash in an account at
JPMorgan Chase Bank yielding LIBOR minus 50 basis points (the "Trust
Account"). Such investments in the Trust Account must, when added to the
balance of the Escrowed Property without the reinvestment thereof or sale
prior to maturity, provide cash to the Escrow Agent in an amount at least
equal to the Required Amount on the Effective Date. Temporarily uninvested
funds shall not earn or accrue interest.
(c) The obligation of the Escrow Agent to make the payments and
transfers required by this Escrow Agreement shall be limited to the
Escrowed Property and any other moneys on deposit in the Escrow Account
pursuant to this Escrow Agreement. The Escrow Agent shall not be liable for
any loss resulting from any investment made pursuant to this Agreement in
compliance with the provisions hereof.
2. Disbursement of Escrowed Property. (a) Prior to the hearing
(the "Confirmation Hearing") before the United States Bankruptcy Court for
the District of Delaware (the "Bankruptcy Court") at which the Company will
seek entry of an order confirming the Plan (as defined in the Note and
Warrant Purchase Agreement) (the "Confirmation Order"), such order to be
substantially in the form attached hereto as Exhibit A, the Company shall
make available to Purchasers the documents to be delivered pursuant to
Section 3A of the Note and Warrant Purchase Agreement and the Purchasers
shall have a reasonable opportunity to review such documents. At least
three hours prior to the time the Confirmation Hearing is scheduled to
commence, the Company shall deliver to the Purchasers the deliveries
referenced in Section 3A of the Note and Warrant Purchase Agreement,
including a release notice to the Escrow Agent in the form attached hereto
as Exhibit B (the "Joint Escrow Release Notice") executed by the Company.
Provided that the documents referred to in Section 3A of the Note and
Warrant Purchase Agreement have been made available to the Purchasers as
set forth in the first sentence of this Section 2(a), the Purchasers shall
then promptly deliver to the Company a Joint Escrow Release Notice executed
by the Purchasers. Upon entry of the Confirmation Order and subsequent
receipt by the Escrow Agent of a copy of the Confirmation Order and the
Joint Escrow Release Notice executed by the Purchasers and the Company, the
Escrow Agent will deliver (i) the Escrowed Funds to the Collateral Agent,
(ii) the Notes, Warrants and Nominal Warrants to the Purchasers and (iii)
the proceeds from the Escrowed Funds to the Company. If the Purchasers fail
to deliver the Joint Escrow Release Notice as provided herein, then upon
the execution of an order by the Bankruptcy Court (an "Escrow Release
Order") directing the Escrow Agent to so release the Escrowed Property, the
Escrow Agent will deliver (i) the Escrowed Funds to the Collateral Agent,
(ii) the Notes, Warrants and Nominal Warrants to the Purchasers and (iii)
the proceeds from the Escrowed Funds to the Company. Nothing herein shall
obligate the Escrow Agent to solicit any of the documents referenced in
this Section 2(a).
(b) Notwithstanding the foregoing, in the event that, on or before
the Deadline Date, the Confirmation Order shall not have been entered by
the Bankruptcy Court, nor shall the Joint Escrow Release Notice have been
executed by the Purchasers and the Company, nor shall an Escrow Release
Order have been entered, the Escrow Agent will return as promptly as
practicable, but in no event later than two Business Days, (i) 90% of all
of the Escrowed Funds and the proceeds of such Escrowed Funds to Xxxxxxxxx,
(ii) 10% of all of the Escrowed Funds and the proceeds of such Escrowed
Funds to Xxxxxx Xxxxxxx and (iii) the Notes, Warrants and Nominal Warrants
to the Company; provided, however, that in the event there shall be pending
as of the Deadline Date any dispute regarding the Escrowed Property,
including, without limitation, a dispute regarding the satisfaction of any
of the conditions to release of the Escrowed Property set forth in the
foregoing Section 2(a), the Escrowed Property shall not be released by the
Escrow Agent unless and until directed to do so by order of the Bankruptcy
Court.
(c) The Company shall promptly deliver any Deadline Extension to
the Escrow Agent.
3. Termination. Upon the release of all Escrowed Property in
accordance with Section 2 hereof, this Agreement shall terminate.
4. Indemnity. The Company agrees to indemnify the Escrow Agent,
and its officers, directors, employees and agents, for, and to hold it and
each of them harmless against, any loss, liability or expense arising out
of or in connection with this Agreement and carrying out its duties
hereunder, including the cost and expenses of defending itself against any
claim of liability; provided, however, that the Company will not be liable
for indemnification or otherwise for any loss, liability or expense to the
extent arising out of the gross negligence, willful misconduct or bad faith
of the Escrow Agent.
5. Modifications, Waivers and Amendments. The Escrow Agent shall
not be bound by any modification, amendment, termination (except as
provided in Section 3), cancellation, rescission or supersession of this
Agreement unless the same shall be in writing and signed by the parties
hereto, and, if its rights, duties, immunities or indemnities as Escrow
Agent are affected thereby, unless it shall have given its prior written
consent thereto. This Agreement may not be modified, amended or terminated
(except as provided in Section 3) without the written consent of the
Initial Lenders.
6. Settlement of Disputes Regarding Ownership. Any dispute which
may arise under this Agreement with respect to the delivery and/or
ownership or right of possession of the Escrowed Property shall be settled
either by mutual agreement of the parties (evidenced in writing and signed
by the parties hereto) or by a final order, decree or judgment of the
United States Bankruptcy Court for the District of Delaware.
7. Concerning the Escrow Agent. (a) The fee of the Escrow Agent
hereunder is as set forth on Schedule I attached hereto, which fee shall be
nonrefundable and paid in advance by the Company. The Company also agrees
to pay on demand the costs and expenses of the Escrow Agent, including the
reasonable fees and expenses of counsel selected by the Escrow Agent, other
than the costs and expenses reimbursed pursuant to Section 4, incurred in
connection with its duties hereunder.
(b) The Escrow Agent shall exercise the same degree of care toward
the Escrowed Property as it exercises toward its own similar property and
shall not be held to any higher standard of care under this Agreement, nor
be deemed to owe any fiduciary duty to the Company.
(c) The Escrow Agent may act upon any instrument or other writing
believed by it in good faith to be genuine and to have been signed or
presented by the proper person, and shall not be liable to any party hereto
in connection with the performance of its duties hereunder, except for its
own negligence, willful misconduct or bad faith. The duties of the Escrow
Agent shall be determined only with reference to this Agreement and
applicable laws and the Escrow Agent is not charged with any knowledge of,
or any duties or responsibilities in connection with, any other document or
agreement. If in doubt as to its duties and responsibilities hereunder, the
Escrow Agent may consult with counsel and shall be protected in any action
taken or omitted in good faith in reliance on the advice or opinion of such
counsel.
(d) The Escrow Agent may execute any of its powers or
responsibilities hereunder and exercise any rights hereunder either directly
or by or through its agents or attorneys.
(e) Nothing in this Agreement shall be deemed to impose upon the
Escrow Agent any duty to qualify to do business or to act as agent or
otherwise in any jurisdiction other than the State of New York.
(f) The Escrow Agent shall not be responsible for and shall not be
under a duty to examine into or pass upon the validity, binding effect,
execution or sufficiency of this Agreement, any agreement amendatory or
supplemental hereto or of any certificates delivered to it hereunder.
(g) The Escrow Agent makes no representation as to the validity,
value, genuineness or collectability of any security or other document or
instrument held by or delivered to it.
(h) 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.
(i) The Escrow Agent shall have the right at any time to resign
hereunder by giving written notice of its resignation to the Company at the
address set forth herein or at such other address as the Company shall
provide, at least 30 days prior to the date specified for such resignation to
take effect. Upon the effective date of such resignation, all cash and other
payments and all other property then held by the Escrow Agent hereunder shall
be delivered by it to a successor escrow agent. If no successor escrow agent
is appointed, the Escrow Agent may apply to a court of competent jurisdiction
for such appointment.
(j) If the Escrow Agent should at any time be confronted with
inconsistent claims or demands to the Escrowed Property, the Escrow Agent
shall have the right, but not the duty, to interplead the parties in the
United States Bankruptcy Court for the District of Delaware and request that
such court determine the respective rights of the parties with respect to the
Escrowed Property. In the event the Escrow Agent no longer holds any Escrowed
Property, it shall be released from any obligation or liability as a
consequence of any such claims or demands.
(k) In the event fund transfer instructions are given (other than in
writing at the time of the execution of the Agreement), whether in writing, by
telecopier or otherwise the Escrow Agent is authorized to seek confirmation of
such instructions by telephone call-back to the person or persons designated
on the call-back schedule attached hereto, and the Escrow Agent may rely upon
the confirmations of anyone purporting to be the person or persons so
designated. The persons and telephone numbers for call-backs may be changed
only in writing actually received and acknowledged by the Escrow Agent. If the
Escrow Agent is unable to contact any of the authorized representatives
identified in the Call-Back Schedule, the Escrow Agent is hereby authorized to
seek confirmation of such instructions by telephone call-back to any one or
more of a party's executive officers, ("Executive Officers"), which shall
include the titles of Chief Executive Officer and Executive Vice President,
General Counsel and Secretary, as the Escrow Agent may select. Such "Executive
Officer" shall deliver to the Escrow Agent a fully executed Incumbency
Certificate, and the Escrow Agent may rely upon the confirmation of anyone
purporting to be any such officer. The Escrow Agent and the beneficiary's bank
in any funds transfer may rely solely upon any account numbers or similar
identifying numbers provided by the Purchaser or the Seller to identify (i)
the beneficiary, (ii) the beneficiary's bank, or (iii) an intermediary bank.
The Escrow Agent may apply any of escrowed funds for any payment order it
executes using any such identifying number, even when 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 an intermediary bank designated. The
parties to this Agreement acknowledge that such security procedure is
commercially reasonable.
(l) Upon execution of this agreement, each party shall provide the
Escrow Agent with a fully executed W-8 or W-9 Internal Revenue Service form,
which shall include their Tax Identification Number (TIN) 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.
(m) Any corporation into which the Escrow Agent in its individual
capacity may be merged or converted or with which it may be consolidated, or
any corporation resulting from any merger, conversion or consolidation to
which the Escrow Agent in its individual capacity shall be a party, or any
corporation to which substantially all the corporate trust business of the
Escrow Agent in its individual capacity may be transferred, shall be the
Escrow Agent under this Escrow Agreement without further act.
(n) Anything in this agreement to the contrary notwithstanding, in no
event shall the Escrow Agent be liable for special, indirect or consequential
damage of any kind whatsoever (including but not limited to lost profits),
even if the Escrow Agent has been advised for the likelihood for such loss or
damage and regardless of the form of action. The parties hereto acknowledge
that the foregoing indemnities shall survive the resignation or removal of the
Escrow Agent or the termination of this agreement.
8. Notices. All notices required to be given hereunder shall be in
writing and shall be deemed given when received at the following addresses
until such time as the parties hereto designate a different or additional
address or addresses:
To the Company:
ICG Communications, Inc.
000 Xxxxxxxxx Xxxxx Xxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
With a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois)
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxx
Facsimile: (000) 000-0000
To the Purchasers:
Xxxxxxxxx L.L.C.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx Xxxxxxx
Facsimile: (000) 000-0000
Xxxxxx Xxxxxxx & Co., Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxx
Facsimile: (000) 000-0000
In each case with a copy to:
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxxxxx
Facsimile: (000) 000-0000
To the Escrow Agent:
JPMorgan Chase Bank
000 Xxxx 00xx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx Xxxxx
Facsimile: (000) 000-0000/8156
9. Miscellaneous. (a) This Agreement sets forth exclusively the
duties of the Escrow Agent with respect to any and all matters pertinent
hereto and no implied duties or obligations shall be read into this Agreement
against the Escrow Agent.
(b) This Agreement may be executed in any number of counterparts,
each of which shall be an original and all of which when taken together shall
constitute one agreement.
(c) This Agreement shall be governed by the laws of the State of New
York but without giving effect to applicable principles of conflicts of law to
the extent that the application of the laws of another jurisdiction would be
required thereby.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the day first written above.
ICG COMMUNICATIONS, INC.
By:
--------------------------------------------
Name:
Title:
XXXXXXXXX L.L.C.
By:
--------------------------------------------
Name:
Title:
XXXXXX XXXXXXX & CO., INCORPORATED
By:
--------------------------------------------
Name:
Title:
JPMORGAN CHASE BANK
as Escrow Agent
By:
--------------------------------------------
Name:
Title:
Exhibit A to Escrow Agreement
Form of Confirmation Order
(to be attached)
Exhibit B to Escrow Agreement
Form of Joint Escrow Release Notice
JPMorgan Chase Bank
000 Xxxx 00xx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxx
[ ], 2002
Ladies and Gentlemen:
The undersigned refer to the Escrow Agreement dated as of July [ ],
2002 (the "Agreement", the terms defined therein being used herein as therein
defined), by and among the Company and the Purchasers, and hereby give you
joint notice that the Bankruptcy Court has entered the Confirmation Order
which is attached hereto as Exhibit I and that the Escrowed Property is to be
immediately released pursuant to the terms of the Agreement.
Very truly yours,
ICG COMMUNICATIONS, INC.
By:_________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer
XXXXXXXXX L.L.C.
By:_________________________________
Name:
Title:
XXXXXX XXXXXXX & CO., INCORPORATED
By:_________________________________
Name:
Title:
CC: Xxxxxxx X. Xxxx, Esq., Skadden, Arps, Slate, Xxxxxxx & Xxxx
Xxxxxx Xxxxxxxx, Esq., Xxxxxxx Xxxx & Xxxxx LLP
Xxxxx X'Xxxxxxxx, Esq., Shearman & Sterling
Xxxxxxx Xxxxx, Esq., Wachtell, Lipton, Xxxxx & Xxxx
Xxxxxx Xxxxxxxxx, Esq., Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
