Exhibit 10.2
ESCROW AGREEMENT
This ESCROW AGREEMENT (the "Agreement"), dated as of December 2, 1996,
----------
among The Chase Manhattan Bank, as escrow agent (the "Escrow Agent", which term
------------
includes a successor thereto in such capacity), Marine Midland Bank, a New York
banking corporation, as Trustee (the "Trustee", which term includes a successor
thereto in such capacity) under the Indenture (as defined herein), and Omnipoint
Corporation, a Delaware corporation (the "Company").
-------
RECITALS
A. Pursuant to the Indenture, dated as of December 2, 1996 (the
"Indenture"), between the Company and the Trustee, the Company is issuing
----------
$200,000,000 aggregate principal amount of its 11 5/8% Series A Senior Notes due
2006 (the "Notes").
-----
B. As security for its obligations under the Notes and the Indenture,
the Company has agreed to grant to the Trustee, for the ratable benefit of the
holders of the Notes, a security interest in and lien upon the Escrow Account
(as defined herein) in accordance with this Agreement.
C. The parties have entered into this Agreement in order to set forth
the conditions upon which, and the manner in which, funds will be disbursed from
the Escrow Account and released from the security interest and lien described in
Section 6(a) of this Agreement.
AGREEMENT
NOW, THEREFORE, for good and valuation consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Defined Terms. 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:
1
"Affiliates" means, as applied to any Person (as defined in the
----------
Indenture), any other Person directly or indirectly controlling, controlled by,
or under direct or indirect common control with, such Person. For purposes of
this definition, "control" (including, with correlative meanings, the terms
"controlling," "controlled by" and "under common control with"), as applied to
any Person, means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise.
"Applied" means that disbursed funds have been applied (i) pursuant to
-------
Section 3(a), (ii) pursuant to Section 3(c) or (iii) pursuant to Section
6(b)(iii).
"Available Funds" means (A) the sum of (i) the Initial Escrow Amount
---------------
and (ii) interest earned or dividends paid on the funds in the Escrow Account
(including holdings of Temporary Cash Investments), less (B) the aggregate
disbursements previously made pursuant to this Agreement.
"Collateral" shall have the meaning given in Section 6(a) hereof.
----------
"Escrow Account" shall mean the escrow account established pursuant to
--------------
Section 2.
"Escrow Account Statement" shall have the meaning given in Section
------------------------
2(f).
"Escrow Agent" shall have the meaning set forth in the preamble to
------------
this Agreement.
"Initial Escrow Amount" shall mean $37,366,072.00
---------------------
"Interest Payment Date" means February 15 and August 15 of each year
---------------------
commencing on February 15, 1997 until the Notes are paid in full (or if any such
day is not a Business Day (as defined in the Indenture) the next succeeding
Business Day.)
2
"Issue Date" means December 2, 1996.
----------
"Payment Notice and Disbursement Request" means a notice sent by the
---------------------------------------
Trustee to the Escrow Agent requesting a disbursement of funds from the Escrow
Account, in substantially the form of Exhibit A hereto. Each Payment Notice and
Disbursement Request shall be signed by an officer of the Trustee.
"Temporary Cash Investment" means any of the following: direct
-------------------------
obligations of the United States of America or any agency thereof or obligations
fully and unconditionally guaranteed by the United States of America or any
agency thereof not having a maturity of more than two years from the date of
acquisition, (ii) time deposit accounts, certificates of deposit and money
market deposits maturing within 180 days of the date of acquisition thereof
issued by a bank or trust company which is organized under the laws of the
United States of America or any state thereof, and which bank or trust company
has capital surplus and undivided profits aggregating in excess of $50 million
and has outstanding debt which is rated "A" (or such similar equivalent rating)
or higher by at least one nationally recognized statistical rating organizing
(as defined in Rule 436 under the Securities Act of 1933) or any money-market
fund sponsored by a registered broker dealer or mutual fund distributor, (iii)
repurchase obligations with a term of not more than 30 days for underlying
securities of the types described in clause (ii) above entered into with a bank
meeting the qualifications described in clause (ii) above, (iv) commercial paper
maturing not more than 90 days after the date of acquisition, issued by a
corporation (other than an Affiliate of the Company) organized and in existence
under the laws of the United States of America or any state thereof with a
rating at the time as of which any investment therein is made of "P-1" (or
higher) according to Xxxxx'x Investors Service, Inc. or "A-1" (or higher)
according to Standard & Poor's Ratings Services, and (v) securities with
maturities of six months or less from the date of acquisition issued or fully
and unconditionally guaranteed by any state, commonwealth or territory of the
United States of America, or by any political subdivision or taxing authority
3
thereof and rated at least "A" by Standard & Poor's Ratings Services or Xxxxx'x
Investors Service, Inc.
2. Escrow Account; Escrow Agent.
----------------------------
(a) Appointment of Escrow Agent. The Trustee hereby appoint the
---------------------------
Escrow Agent, and the Escrow Agent hereby accepts appointment, as escrow agent,
under the terms and conditions of this Agreement. The Company hereby consents
to such appointment.
(b) Establishment of Escrow Account. Concurrent with the
-------------------------------
execution and delivery hereof, the Escrow Agent shall establish the Escrow
Account designated "Escrow Account pledged by Omnipoint Corporation to Marine
Midland Bank, as Trustee" at its office located at 000 Xxxx 00xx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000. All funds accepted by the Escrow Agent pursuant to this
Agreement shall be held for the exclusive benefit of the Trustee, for the
ratable benefit of the holders of the Notes. All such funds shall be held in the
Escrow Account until disbursed in accordance with the terms hereof. The Escrow
Account, the funds held therein and any Temporary Cash Investments held by the
Escrow Agent shall be under the sole dominion and control of the Escrow Agent
for the benefit of the Trustee for the ratable benefit of holders of the Notes,
and all such funds and Temporary Cash Investments shall be held by the Escrow
Agent separate and apart from all other funds of or held by the Escrow Agent.
Concurrently with the execution and delivery hereof, the Company shall deliver
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.
(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 in accordance with such agreement(s) between the Company and the Escrow
Agent and shall not disburse from the Escrow Account any such amounts (except to
the extent that the Company is entitled to such amounts under this Agreement
4
and the Company directs in writing the payment of any such amount to the Escrow
Agent).
The Company shall reimburse the Escrow Agent upon request for all
reasonable and actual out-of-pocket 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 in accordance with such agreement(s) between
the Company and the Escrow Agent and shall not disburse from the Escrow Account
any such amounts (except to the extent that the Company is entitled to such
amounts under this Agreement and the Company directs in writing the payment of
any such amount to the Escrow Agent).
(d) Investment of Funds in Escrow Account. Funds deposited in
-------------------------------------
the Escrow Account shall be invested and reinvested only upon the following
terms and conditions:
(i) Acceptable Investments. All funds deposited or held in the
----------------------
Escrow Account at any time shall be invested by the Escrow Agent in
Temporary Cash Investments in accordance with the Company's written
instructions from time to time to the Escrow Agent; provided, however, that
-------- -------
the Company shall only designate Temporary Cash Investments generating
interest income which the Company reasonably determines at such times is
sufficient to, when added to the Escrow Account, provide for the payment of
interest on the outstanding Notes on each Interest Payment Date beginning
on and including February 15, 1997, and through and including the Interest
Payment Date on August 15, 1998; provided, further, however, that any such
-------- ------- -------
written instruction shall specify the particular investment to be made,
shall state that such investment is authorized to be made hereby and in
particular satisfies the requirements of the preceding proviso, shall
contain the certification referred to in Section
5
2(d)(ii), if required, and shall be executed by any officer of the Company,
provided, further, however, that in no event shall the Escrow Agent have
-------- ------- -------
an independent obligation to invest the funds deposited or held in the
Escrow Account at any time absent written instructions from the Company.
All Temporary Cash Investments shall be assigned to and held in the
possession of, or, in the case of Temporary Cash Investments 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 ratable benefit of the
Trustee for the benefit of the holders of the Notes, with such guarantees
as are customary, except that Temporary Cash Investments 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 Temporary Cash Investments held by the Escrow Agent for
its customers and segregated by separate recordation in the books and
records of the Escrow Agent.
(ii) Security Interest in 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 will
have a first priority perfected security interest in the applicable
investment. A certificate as to a class of investments need not be issued
with respect to individual investments in securities in that class if the
certificate applicable to the class remains accurate with respect to such
individual investments, which continued accuracy the Escrow Agent may
conclusively assume. On the Issue Date, and on each August 1 thereafter
until the date upon which the balance of the Available Funds shall have
been reduced to zero, each of the Trustee and the Escrow Agent shall
receive an Opinion of Counsel (as such term is defined in the Indenture) to
the Company, dated each
6
such date as applicable, which opinion shall meet the requirements of
Section 314(b) of the Trust Indenture Act of 1939, as amended (the "TIA").
---
(iii) Interest and Dividends. All interest earned and dividends
----------------------
paid on funds invested in Temporary Cash Investments shall be deposited in
the Escrow Account as additional Collateral for the exclusive benefit of
the Trustee for the ratable benefit of the holders of the Notes and shall
be reinvested in accordance with the terms hereof at the Company's written
instruction and subject to disbursement as provided herein.
(iv) Limitation on Escrow Agent's Responsibilities. The Escrow
---------------------------------------------
Agent's sole responsibilities under this Section 2 shall be (A) to retain
possession of certificated Temporary Cash Investments (except, however,
that Escrow Agent may surrender possession to the issuer of any such
security for the purpose of effecting assignment, crediting interest, or
reinvesting such security or reducing such security to cash) and to be the
registered or designated owner of Temporary Cash Investments which are not
certificated, (B) to follow the Company's written instructions given in
accordance with Section 2(d)(i), (C) to invest and reinvest funds pursuant
to this Section 2(d) and (D) to use reasonable efforts to reduce to cash
such Temporary Cash Investments as may be required to fund any disbursement
or payment in accordance with Section 3. In connection with clause (A)
above, the Escrow Agent will maintain continuous possession in the State of
New York of certificated Temporary Cash Investments and cash included in
the Collateral and will cause uncertificated Temporary Cash Investments to
be registered in the book-entry system of, and transferred to an account of
the Escrow Agent or a sub-agent of the Escrow Agent at, the Federal Reserve
Bank of New York. Except as provided in Section 6, the Escrow Agent
7
shall have no other responsibilities with respect to perfecting or
maintaining the perfection of the Trustee's security interest in the
Collateral and shall not be required to file any instrument, document or
notice in any public office at any time or times, and (E) to keep accurate
and detailed records of all investments, receipts, disbursements and other
transactions involving the Escrow Account. In connection with clause (D)
above the Escrow Agent shall not be required to reduce to cash any
Temporary Cash Investments 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
shall liquidate those Temporary Cash Investments having the lowest interest
rate per annum, regardless of maturity, or if none such exist, those having
the nearest maturity.
(v) Manner of Investment. Funds deposited in the Escrow Account
--------------------
shall initially be invested in a manner such that the Company reasonably
determines at such time that there will be sufficient funds available
without any further investment by the Company to cover all interest due on
the outstanding Notes, as such interest becomes due, for each Interest
Payment Date occurring from the Issue Date and ending on (and including)
August 15, 1998. The Escrow Agent shall have no responsibility for
determining whether funds held in the Escrow Account shall have been
invested in such a manner so as to comply with the requirements of this
clause (v).
(e) Substitution of Escrow Agent. The Escrow Agent may resign by
----------------------------
giving no less than 30 days' prior written notice to the Company and the
Trustee. Such resignation shall take effect upon the later to occur of (i)
delivery of all funds and Temporary Cash Investments maintained by the Escrow
Agent hereunder and copies of all books, records, plans and other documents
8
in the Escrow Agent's possession relating to such funds or Temporary Cash
Investments or this Agreement to a successor escrow agent mutually approved by
the Company and the Trustee (which approvals shall not be unreasonably withheld,
delayed or conditioned) 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 Escrow Agent shall thereupon be discharged of all
obligations under this Agreement and shall have no further duties, obligations
or responsibilities in connection herewith, except as set forth in Section 4. If
a successor escrow agent has not been appointed or has not accepted such
appointment within 30 days after notice of resignation is given to the Company,
the Escrow Agent may apply to a court of competent jurisdiction for the
appointment of a successor escrow agent.
(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 Collateral
then held by the Escrow Agent, including the balance of funds then in the Escrow
Account, and the manner in which such funds are invested (the "Escrow Account
--------------
Statement"). The books and records of the Escrow Agent with respect to the
---------
Escrow Account shall be open to inspection and audit at reasonable times during
reasonable business hours by the Trustee and the Company or their respective
representatives. 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 Temporary Cash Investments) 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.
------------------------------------------------------
After an Interest Payment Date, the Trustee shall within five days of receipt by
the Trustee of the amount described in clause (i) of this sentence or an
Officers' Certificate as required in
9
clause (ii) of this sentence, submit to the Escrow Agent a completed Payment
Notice and Disbursement Request substantially in the form of Exhibit A hereto;
provided, (i) the Company has disbursed and the Trustee has received funds from
--------
the Company in an amount equal to the interest owed on the Notes under the
Indenture for payment of such interest on such Interest Payment Date or (ii) the
Trustee has received an Officers' Certificate (as defined in the Indenture) from
the Company that the Company has disbursed funds in the amount and manner set
forth in clause (i) of this sentence.
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). The Escrow Agent, within three (3)
Business Days after receipt of such Payment Notice and Disbursement Request,
subject to the conditions described in Section 3(b), 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 Company. The
Escrow Agent shall notify the Trustee and the Company as soon as reasonably
possible (but not later than two (2) Business Days from the date of receipt of
the Payment Notice and Disbursement Request) if any Payment Notice and
Disbursement Request is rejected and the reason(s) therefor. In the event such
rejection is based upon nonsatisfaction of the condition in Section 3(b)(i)
below, the Trustee shall thereupon resubmit the Payment Notice and Disbursement
Request with appropriate changes.
(b) Conditions Precedent to Disbursement. The Escrow Agent's
------------------------------------
payment of any disbursement shall be made only if (i) the Trustee shall have
submitted, in accordance with the provisions of Section 3(a) herein, a completed
Payment Notice and Disbursement Request to the Escrow Agent substantially in the
form of Exhibit A with blanks appropriately filled in and (ii) at any time prior
to the requested disbursement, the Escrow Agent shall not have received any
notice from the Trustee that as a result of an Event of Default (as defined in
the Indenture) the indebtedness represented by the Notes has been accelerated
and has become due and payable (in which
10
event the Escrow Agent shall apply all Available Funds as required by Section
6(b)(iii)).
(c) Retired Notes. In the event a portion of the Notes has been
-------------
retired by the Company and submitted to the Trustee for cancellation and there
is no Default or Event of Default under the Indenture, funds representing the
lesser of (A) the excess of the amount sufficient to pay interest through and
including August 15, 1998 on the Notes not so retired and (B) the interest
payments which have not previously been made on such retired Notes for each
Interest Payment Date through the Interest Payment Date to occur on August 15,
1998 shall, upon written request of the Company to the Escrow Agent and the
Trustee, be paid to the Company upon compliance with the release of collateral
provisions of the TIA and upon receipt by the Escrow Agent of a notice relating
thereto from the Trustee.
4. Escrow Agent.
------------
(a) Limitation of the Escrow Agent's Liability;
-------------------------------------------
Responsibilities of the Escrow Agent. The Escrow Agent's responsibility and
------------------------------------
liability under this Agreement shall be limited as follows: (i) the Escrow Agent
does not represent, warrant or guaranty to the holders of the Notes from time to
time the performance of the Company or the Trustee; (ii) the Escrow Agent shall
have no responsibility to the Company or the holders of the Notes or the Trustee
from time to time as a consequence of performance or nonperformance by the
Escrow Agent hereunder, except for any gross negligence or willful misconduct of
the Escrow Agent; (iii) the Company shall remain solely responsible for all
aspects of the Company's business and conduct; and (iv) the Escrow Agent is not
obligated to supervise, inspect or inform the Company or any third party of any
matter referred to above.
No implied covenants or obligations shall be inferred from this
Agreement against the Escrow Agent, nor shall the Escrow Agent be bound by the
provisions of any agreement beyond the specific terms hereof. Specifically and
without limiting the foregoing, the Escrow Agent shall in no event have any
liability in connection
11
with its investment, reinvestment or liquidation, in good faith and in
accordance with the terms hereof, of any funds or Temporary Cash Investments
held by it hereunder, including without limitation any liability for any delay
not resulting from gross negligence or willful misconduct in such investment,
reinvestment or liquidation, or for any loss of principal or income incident to
any such delay.
The Escrow Agent shall be entitled to rely upon any judicial order or
judgment, upon any written opinion of counsel or upon any certification,
instruction, notice, or other writing delivered to it by the Company or the
Trustee in compliance with the provisions of this Agreement without being
required to determine the authenticity or the correctness of any fact stated
therein or the propriety or validity of service thereof. The Escrow Agent may
act in reliance upon any instrument comporting with the provisions of this
Agreement or signature believed by it to be genuine and may assume that any
person purporting to give notice or receipt or advice or make any statement or
execute any document in connection with the provisions hereof has been duly
authorized to do so.
The Escrow Agent may act pursuant to the written advice of counsel
chosen by it with respect to any matter relating to this Agreement and (subject
to Section 4(a)(ii)) shall not be liable for any action taken or omitted in
accordance with such advice.
The Escrow Agent shall not be called upon to advise any party as to
selling or retaining, or taking or refraining from taking any action with
respect to, any securities or other property deposited hereunder.
In the event of any ambiguity in the provisions of this Agreement with
respect to any funds or property deposited hereunder, the Escrow Agent shall be
entitled to refuse to comply with any and all claims, demands or instructions
with respect to such funds or property, and the Escrow Agent shall not be or
become liable for its failure or refusal to comply with conflicting claims,
demands or instructions. The Escrow Agent shall be entitled to refuse to act
until either any conflicting or adverse claims or demands shall have been
finally deter-
12
mined by a court of competent jurisdiction or settled by agreement between the
conflicting claimants as evidenced in a writing, satisfactory to the Escrow
Agent, or the Escrow Agent shall have received security or an indemnity
satisfactory to the Escrow Agent sufficient to save the Escrow Agent harmless
from and against any and all loss, liability or expense which the Escrow Agent
may incur by reason of its acting. The Escrow Agent may in addition elect in its
sole option to commence an interpleader action or seek other judicial relief or
orders as the Escrow Agent may deem necessary.
No provision of this Agreement shall require the Escrow Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder.
5. Indemnity. The Company shall indemnify, hold harmless and defend
---------
the Escrow Agent and its directors, officers, agents, employees and controlling
persons, from and against any and all claims, actions, obligations, liabilities
and expenses, including defense costs, investigative fees and costs, legal fees,
and claims for damages, arising from the Escrow Agent's performance under this
Agreement, except to the extent that such liability, expense or claim is
attributable to the gross negligence or willful misconduct of the Escrow Agent
or any of the other foregoing persons. Anything in this agreement to the
contrary notwithstanding, in no event shall the Escrow Agent be liable for
special, indirect or consequential loss or damage 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; provided, however, that in no event shall "lost profits" be construed to
-------- -------
include interest or dividends on funds in the Escrow Account (including holdings
of Temporary Cash Investments) not earned due to the gross negligence or wilful
misconduct of the Escrow Agent in its performance of its duties hereunder. The
provisions of this Section shall survive any termination, satisfaction or
discharge of this Agreement as well as the resignation or removal of the Escrow
Agent.
13
6. Grant of Security Interest; Instructions to Escrow Agent.
--------------------------------------------------------
(a) The Company hereby irrevocably grants a first priority
security interest in and pledges, assigns and sets over to the Trustee for the
ratable benefit of the holders of the Notes all of the Company's right, title
and interest in the Escrow Account, and all property now or hereafter placed or
deposited in, or delivered to the Escrow Agent for placement or deposit in, the
Escrow Account, including, without limitation, all funds held therein, all
Temporary Cash Investments held by (or otherwise maintained in the name of) the
Escrow Agent pursuant to Section 2, and all proceeds thereof as well as all
rights of the Company under this Agreement (collectively, the "Collateral"), in
----------
order to secure all obligations and indebtedness of the Company under the Notes
and any other obligation, now or hereafter arising, of every kind and nature,
owed by the Company under the Indenture to the holders of the Notes or to the
Trustee. The Escrow Agent hereby acknowledges the Trustee's security interest
as set forth above. The Company shall take all actions necessary on its part to
insure the continuance of a first priority security interest in the Collateral
in favor of the Trustee in order to secure all such obligations and
indebtedness.
(b) The Company and the Trustee hereby irrevocably instruct the
Escrow Agent to, and the Escrow Agent shall, (i) (A) maintain sole dominion and
control over the Collateral, including any funds and Temporary Cash Investments
in the Escrow Account, for the benefit of the Trustee to the extent specifically
required herein, (B) maintain, or cause its agent within the State of New York
to maintain, possession of all certificated Temporary Cash Investments purchased
hereunder that are physically possessed by the Escrow Agent in order for the
Trustee to enjoy a continuous perfected first priority security interest therein
under the law of the State of New York (the Company hereby agreeing that in the
event any certificated Temporary Cash Investments 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 or in the case of a third party provide a
custodial letter agreement in form and sub-
14
stance satisfactory to the Company), (C) take all steps specified in writing by
the Company pursuant to paragraph (a) above to cause the Trustee to enjoy a
continuous perfected first priority security interest under the New York Uniform
Commercial Code and any applicable law of the State of New York in all Temporary
Cash Investments purchased hereunder that are not certificated and (D) maintain
the Collateral free and clear of all liens, security interests, safekeeping or
other charges, demands and claims against the Escrow Agent of any nature now or
hereafter existing in favor of anyone other than the Trustee; (ii) promptly
notify the Trustee if the Escrow Agent receives written notice that any person
other than the Trustee has a lien or security interest upon any portion of the
Collateral and (iii) in addition to disbursing amounts held in escrow pursuant
to any Payment Notice and Disbursement Requests given to it by the Trustee
pursuant to Section 3, upon receipt of written notice from the Trustee of the
acceleration of the maturity of the Notes, and direction from the Trustee to
disburse all Available Funds to the Trustee, as promptly as practicable disburse
all funds held in the Escrow Account to the Trustee and transfer title to all
Temporary Cash Investments held by the Escrow Agent hereunder to the Trustee.
The lien and security interest provided for by this Section 6 shall
automatically terminate and cease as to, and shall not extend or apply to, and
the Trustee shall have no security interest in, any funds disbursed by the
Escrow Agent to the Company pursuant to this Agreement to the extent not
inconsistent with the terms hereof. Notwithstanding any other provision
contained in this Agreement, the Escrow Agent shall act solely as the Trustee's
agent in connection with its duties under this Section 6; provided, however,
that the Trustee shall not be liable or responsible for the acts or omissions of
the Escrow Agent. The Escrow Agent shall not have any right to receive
compensation from the Trustee and is without any 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 Temporary Cash Investments collected by the Trustee
pursuant to Section
15
6(b)(iii) shall be applied as provided in Section 6.10 of the Indenture.
(d) Upon demand, the Company will execute and deliver to the Trustee
such instruments and documents as the Trustee may reasonably deem necessary or
advisable to confirm or perfect the rights of the Trustee under this Agreement
and the Trustee's interest in the Collateral. The Trustee shall be entitled to
take all necessary action to preserve and protect the security interest created
hereby as a lien and encumbrance upon the Collateral; provided, however, that
absent written direction from the Company, the Trustee shall have no duty or
obligation to take any action pursuant to this subparagraph (d).
(e) The Company hereby appoints the Trustee as its attorney-in-fact
with full power of substitution to do any act which the Company is obligated
hereto to do, except that the Trustee shall not direct the investment of any
monies on deposit in the Escrow Account, and the Trustee may exercise such
rights as the Company might exercise with respect to the Collateral and take any
action in the Company's name to protect the Trustee's security interest
hereunder. In addition to the rights provided under Section 6(b)(iii) hereof,
upon an Event of Default as defined in the Indenture and for so long as such
Event of Default continues, the Trustee may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party under
the New York Uniform Commercial Code 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
16
(10) days' notice to the Company of the time and place of any public sale or the
time after which any private sale is to be made shall constitute reasonable
notification. The Trustee shall not be obligated to make any sale regardless of
notice of sale having been given. The Trustee may adjourn any public or private
sale from time to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place to which it
was so adjourned.
7. Termination. This Agreement shall terminate automatically ten
-----------
(10) days following disbursement of all funds remaining in the Escrow Account
(including the proceeds of any Temporary Cash Investments), unless sooner
terminated by agreement of the parties hereto (in accordance with the terms
hereof, not in violation of the Indenture). The Trustee may not agree to
terminate this Agreement unless it has received the consent of 100% of the
holders of all of the Notes outstanding; provided, however, that the obligations
of the Company under Section 2(c) and Section 5 (and any existing claims
thereunder) shall survive termination of this Agreement or the resignation or
removal of the Escrow Agent; provided, further, however, that until such tenth
day, the Company will cause this Agreement (or any permitted successor
agreement) to remain in effect and will cause there to be an escrow agent
(including any permitted successor thereto) acting hereunder (or under any such
permitted successor agreement).
8. Miscellaneous.
-------------
(a) Waiver. Any party hereto may specifically waive any
------
breach of this Agreement by any other party, but no such waiver shall be deemed
to have been given unless such waiver is in writing, signed by the waiving party
and specifically designating the breach waived, nor shall any such waiver
constitute a continuing waiver of similar or other breaches.
(b) Invalidity. If for any reason whatsoever any one or more of
----------
the provisions of this Agreement shall be held or deemed to be inoperative,
unenforceable or invalid in a particular case or in all cases, such
circumstances shall not have the effect of
17
rendering any of the other provisions of this Agreement inoperative,
unenforceable or invalid, and the inoperative, unenforceable or invalid
provision shall be construed as if it were written so as to effectuate, to the
maximum extent possible, the parties' intent.
(c) Assignment. This Agreement is personal to the parties
----------
hereto, and the rights and duties of any party hereunder shall not be assignable
except with the prior written consent of the other parties. Notwithstanding the
foregoing, this Agreement shall inure to and be binding upon the parties and
their successors and permitted assigns.
(d) Benefit. The parties hereto and their successors and
-------
permitted assigns, but no others, shall be bound hereby and entitled to the
benefits hereof; provided, however, that the holders of the Notes and their
permitted assigns shall be entitled to the benefits hereof and to enforce this
Agreement to the same extent as the Trustee, subject to the provisions of the
Indenture.
(e) Time. Time is of the essence with respect to each provision
----
of this Agreement.
(f) Entire Agreement; Amendments. This Agreement and the
----------------------------
Indenture contain the entire agreement among the parties with respect to the
subject matter hereof and supersede any and all prior agreements, understandings
and commitments, whether oral or written. This Agreement may be amended only in
accordance with Article IX of the Indenture and further by a writing signed by a
duly authorized representative of each party hereto.
(g) Notices. All notices and other communications required or
-------
permitted to be given or made under this Agreement shall be in writing and shall
be deemed to have been duly given and received, regardless of when and whether
received, either: (a) on the day of hand delivery; (b) three Business Days
following the day sent, when sent by United States certified mail, postage and
certification fee prepaid, return receipt requested, addressed as set forth
below; (c) when transmitted by telecopy with verbal confirmation of receipt by
the
18
telecopy operator to the telecopy number set forth below; or (d) one business
day following the day timely delivered to a next-day air courier addressed as
set forth below, except with respect to the Escrow Agent as to which notices
shall be deemed to have been given on the date received by the Escrow Agent:
To Escrow Agent:
The Chase Manhattan Bank
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Escrow Administration
15th Floor
Telecopy: 000-000-0000
To Trustee:
Marine Midland Bank
000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Telecopy: 000-000-0000
Telephone: 000-000-0000
To the Company:
Omnipoint Corporation
0000 X. 00xx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
or at such other address as the specified entity most recently may have
designated in writing in accordance with this Section.
(h) Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
19
(i) Captions. Captions in this Agreement are for convenience
--------
only and shall not be considered or referred to in resolving questions of
interpretation of this Agreement.
(j) Choice of Law; Waiver of Jury Trial. The existence,
-----------------------------------
validity, construction, operation and effect of any and all terms and provisions
of this Agreement shall be determined in accordance with and governed by the
laws of the State of New York, without regard to principles of conflicts of law.
The parties to this Agreement hereby agree that jurisdiction over such parties
and over the subject matter of any action or proceeding arising under this
Agreement may be exercised by a competent Court of the State of New York, or by
a United States Court, sitting in New York City. The Company hereby waives the
right to a trial by jury in any action or proceeding with the Escrow Agent.
(k) Authority of the Company; Valid and Binding Agreement. The
-----------------------------------------------------
Company hereby represents and warrants that this Agreement has been duly
authorized, executed and delivered on its behalf and constitutes the legal,
valid and binding obligation of the Company. The execution, delivery and
performance of this Agreement by the Company does not violate any applicable law
or regulation to which the Company is subject and does not require the consent
of any governmental or other regulatory body to which the Company is subject,
except for such consents and approvals as have been obtained and are in full
force and effect.
(l) Authority of the Escrow Agent and the Trustee; Valid and
--------------------------------------------------------
Binding Agreement. Each of the Escrow Agent and the Trustee hereby represents
-----------------
and warrants that this Agreement has been duly authorized, executed and
delivered on its behalf and constitutes its legal, valid and binding obligation.
(m) Agent for Service; Submission to Jurisdiction; Waiver of
--------------------------------------------------------
Immunities. By the execution and delivery of this Agreement, the Company (i)
----------
hereby irrevocably designates and appoints Xxxxxxx X. Xxxxxx (or any successor),
as its authorized agent upon which process
20
may be served in any suit or proceeding arising out of or relating to this
Agreement that may be instituted in any federal or state court in the State of
New York, or brought under federal or state securities laws, and acknowledges
that Xxxxxxx X. Xxxxxx has accepted such designation, (ii) submits to the
jurisdiction of any such court in any such suit or proceeding, and (iii) agrees
that service of process upon Xxxxxxx X. Xxxxxx (or any successor) and written
notice of said service to the Company (mailed or delivered to its Chief
Financial Officer at the Company's principal office in Arlington, Virginia),
shall be deemed in every respect effective service of process upon the Company
in any such suit or proceeding. The Company further agrees to take any and all
action, including the execution and filing of any and all such documents and
instruments, as may be necessary to continue such destination and appointment of
Xxxxxxx X. Xxxxxx (or any successor) in full force and effect so long as any of
the Notes shall be outstanding.
To the extent that the Company has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service of notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, it
hereby irrevocably waives such immunity in respect of its obligations under this
Agreement, to the extent permitted by law.
(n) Taxes. The Company shall provide the Escrow Agent with its
-----
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.
(o) Reliance on Oral Confirmation. In the event funds transfer
-----------------------------
instructions are given (other than in writing at the time of 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 Schedule 1 hereto, and the Escrow Agent may
rely upon the confirmations of anyone purport-
21
ing to be the person or persons so designated. The persons and telephone numbers
for call-backs may be changed only in a writing actually received and
acknowledged by the Escrow Agent. The parties to this Agreement acknowledge that
such security procedure is commercially reasonable.
(p) Reliance on Account Numbers. 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 to identify (i) the beneficiary, (ii) the beneficiary's
bank, or (iii) an intermediary bank. The Escrow Agent may apply any of the
escrowed funds 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 an intermediary bank designated.
(q) Successor to Parties. Any corporation into which the Escrow
--------------------
Agent or the Trustee in their respective individual capacities may be merged or
converted or with which they may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Escrow Agent or the
Trustee in their respective individual capacities shall be a party, or any
corporation to which substantially all the corporate trust business of the
Escrow Agent or the Trustee in their respective individual capacities may be
transferred, shall be the Escrow Agent or Trustee, as the case may be, under
this Escrow Agreement without further act.
(r) Other Business with Escrow Agent. Nothing contained herein
--------------------------------
shall be deemed to prohibit the Company from conducting other business with the
Escrow Agent.
22
IN WITNESS WHEREOF, the parties have executed and delivered this
Escrow Agreement as of the day first above written.
ESCROW AGENT: THE CHASE MANHATTAN BANK,
as
Escrow Agent
By: /s/ Xxxx Siacchitano
----------------------
Name: Xxxx Xxxxxxxxxxxx
Title: Vice President
TRUSTEE: MARINE MIDLAND BANK, as
Trustee
By: /s/ Xxxxx Xxxxxx
-------------------------
Name:Xxxxx Xxxxxx
Title: Corporate Trust Officer
OMNIPOINT CORPORATION
COMPANY:
By: /s/ Xxxxxxx Xxxxxx
-------------------------
Name: Xxxxxxx Xxxxxx
Title: Chief Financial Officer
23
Schedule 1
Telephone Number(s) for Call-Backs and Person(s)
Designated to Confirm Funds Transfer Instructions
-------------------------------------------------
If to Company:
Name Telephone Number
---- ----------------
1. Xxxxxxx X. Xxxxxx (000) 000-0000
2. Xxxxxxx Xxxxx (000) 000-0000
If to the Trustee:
Name Telephone Number
---- ----------------
1. Xxxxx Xxxxxx (000) 000-0000
2. Xxxxx X. Xxxxx (000) 000-0000
3. Xxxxxxx X. Xxxxx (000) 000-0000
Telephone call-backs shall be made to each Company and Trustee if joint
instructions are required pursuant to the Agreement.
24
EXHIBIT A
Form of Payment Notice and Disbursement Request
[Letterhead of the Trustee]
[Date]
[Escrow Agent]
[Address]
Attention: [ ]
Re: Disbursement Request No.
[indicate whether revised]
Ladies and Gentlemen:
We refer to the Escrow Agreement, dated as of December 2, 1996 (the
"Escrow Agreement") among you (the "Escrow Agent"), the undersigned as Trustee,
and Omnipoint Corporation, a Delaware corporation (the "Company"). Capitalized
terms used herein shall have the meaning given in the Escrow Agreement.
This letter constitutes a Payment Notice and Disbursement Request
under the Escrow Agreement.
[Choose one of the following, as applicable]
[The undersigned hereby notifies you that a scheduled interest payment
in the amount of $______ has been made by the Company on _____________, 199__
and requests a disbursement of funds contained in the Escrow Account in such
amount to the Company pursuant to Section 3 (a) of the Escrow Agreement (to an
account designated by the Company in writing).]
[The undersigned hereby notifies you that Notes equaling $____________
in aggregate principal amount have been retired and authorizes you to release
$_________ of funds in the Escrow Account to the Company (to an account
designated by the Company in writing), which amount
25
represents the amount permitted to be released in accordance with Section 3(c)
of the Escrow Agreement.]
[In accordance with Section 6(b)(iii) of the Escrow Agreement, 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 (as
defined in the Indenture), been accelerated and become due and payable.]
2. All prior disbursements to the Trustee from the Escrow Account
have been applied.
3. [add Wire instructions for payment to Trustee.]
The Escrow Agent is entitled to rely on the foregoing in disbursing
funds relating to this Payment Notice and Disbursement Request.
MARINE MIDLAND BANK, as Trustee
By:
----------------------------
Name:
Title:
26
